Holding

The definition of "agricultural produce" in s.2(a) is inclusive and covers khandsari sugar, making the levy of market fee and licence fee valid and non‑discriminatory.

Summary

The petitioners, owners of khandsari sugar factories in Uttar Pradesh, challenged the applicability of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (as amended in 1970) to their product, arguing that what they produce is "khandsari sugar" and not "khandsari" covered by the Act, and that the levy of market fee and licence fee violates Articles 14, 19(1)(f), 31, 265 and 301 of the Constitution. The Court examined the definition of "agricultural produce" in s.2(a) of the Act, the statutory meaning of "khandsari" versus "khandsari sugar", and the object of the legislation. It held that the definition is inclusive, that khandsari sugar falls within the scope of "khandsari" for the purposes of the Act, and that the levy is a valid fee, not a prohibited tax. The Court further found no discrimination under Art.14 and rejected the contention that the Act's sole purpose is to protect agricultural producers. Consequently, the petitions were dismissed and the market fee and licence requirements remained enforceable.

Issues considered

Whether the product manufactured by the petitioners (khandsari sugar) is covered by the definition of "agricultural produce" in s.2(a) of the U.P. Krishi Utpadan Mandi Adhiniyam.
Whether s.2(a) of the Act is discriminatory and violative of Art.14 of the Constitution.
Whether the levy of market fee under s.17(iii) constitutes an unlawful tax in violation of Art.19(1)(f), Art.31, Art.265 and Art.301.
Whether the object of the Act is limited to protecting agricultural producers, thereby excluding industrial producers like the petitioners.
Whether the provisions of the Act involve excessive delegation of legislative power.

Legislation cited

Constitution of Indias. 14, s. 19(1)(f), s. 19(1)(g), s. 265, s. 301, s. 31
Essential Commodities Act, 1955s. 3
Sugarcane (Control) Order, 1966s. 2(d), s. 2(f)
Sugar (Special Duty) Act, 1959s. 2(c)
U.P. Khandsari Sugar Manufacturing Order, 1967s. 2(f), s. 3, s. 3(4)
U.P. Khandsari Sugar Manufacturing Order, 1977s. 2(f)
U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (as amended by U.P. Amendment Act 10 of 1970)s. 12, s. 17(iii), s. 2(a), s. 2(p), s. 40, s. 5

Subjects

agricultural producekhandsari sugarmarket feelicence feediscriminationArticle 14Article 19U.P. Krishi Utpadan Mandi Actessential commoditiesstatutory interpretationlegislative intent

Judgment

P66

A
RATHI KHANDSARI UDYOG ETC.

v.
STATE OF U.P. AND ORS. ETC.
B
February i2, 1985.

[S. MURTAZA FAZAL ALI, A. VAJIADARAJAN AND M.P.
THAKKAR, JJ.J

c Constitution of India, 1950-Artic/es 14, 19(1) ( f) and (g), 31, 265
a•d 301.

U.P. Erlshl Utpadan Mnndl Adhinlyam Act, 1964, ss. 2 (al, 2(p), 17
(Ill), and Rule 67 of the Rules made under s. 40 of the Act-S. 2(a)-Agricul·
turo/ Produce-Amendment thereof by U.P. Kri>hi Utpada11 Mandi (Amendment
and Validation) Act 1970-"Khandsari Sugar" manufactured by open pan
D proress-Whethtr different from "Khandsarl" produced by agriculturists
ind/genous/y-S. 2 (p)-'Producer'-Whether excludes the article produced by
the petitioners from the coverage of the A.ct-S. 17 (Ui)-Market Commiltee
(Mandi Samlti)-Whether competent to levy and collect Market fee-Rule
67-Whether petlrloners liable to obtain licence and pay licence fee-Protec.
tion of producers from exploitation-Whether principal object of the Act.

I Essential Commodities Act, 1955, s.3-U.P. Khandsarl Man,facruring
Orrier, 1975-CI. 2(f)-"Khandsari Sngar"-Scope of.

Section 2(a)-Validity of-Whet%er violative of Arts. 14, 19(]) <fl and
(g), 31, 265 and 301 of the Constitution.

F An Ordinance, U.P. Krishi Utpadan Mandi Adbiniyam, 1964 (Amend~
ment and Validation Ordinance No. 1969) passed on November 5, 1969
amended the definition of "'agricultural producen embodied ins. 2(a) of tbe
UP. Krishi Utpadan Mandi Adhiniyam Acit 1964 and 'gur, rab, shakkar,
khandsari and jaggery' were included in the amended definition. This
Ordinance was subsequently converted into U .P. Krishi Utpadan Mandi
(Amendment an:J Validation) Act 1970. Thus 'Kbandsari' stood covered
by the definition of s. 2 (a) or the Aci so amended.

The petitioners, who are owner& of Kbandsari factories, have alleged
that what they produce is "Khandsari Sugar" and not 'Kbandsari', which •
is covered by the definition of rragricuhural produce". It was contended;
(1) that they are not liable to obtain a licence under Rulo 67 of the Rules
H framed under s. 40 of the Act or to pay the licence fees (Rs. 100 per

'
RATH! KHANDSARI v. U. P. STATE 961

annum) payable for such licence; (2) that the Market Committee (Mandi A
Samiti) constitutrd under s. 12 of the Act caooot lcvv and collect market
ree of l % of the value, under s. I 7(iii) of the Act, on the transactions in
respect of what they produce, from the traders who purchase the product
from them ; and (3) that s. 2 (a) of the Act is discriminatory and violative
of Article J 4 of the Constitution.

• Dismissing the petitions, B

HELD ; (Per Ma}otiry)

1. The definition e1nbodied ins. 2(a) of the Act is an inclusive
one. It io terms provides that 'Khandsari' is included within the coverage
of •ragricultural produce". The Act, however, does not define the term c
~Khandsari'. It is not sufficient to contend that what the petitioners
produce is "Khandsari Sugar" and not 'Kbandsari'. It has also to be
shown by them that what they produce is popularly or commercia11y known
"· ;
as "Khandsari Sugar" and not as "Khandsari". And thus they have faiJed
to establish. It is not shown that "Khandsari Sugar" is the nomenclature
employed in the world of trade and commerce in respect of their product.
Neither the traders, nor the consumers are shown to have done so in their
day-to·day dealings. [989F.H; 990A] D
2. The term ''Khandsari Sugar" owes its origin to U .P. KHAND-
SARI SUGAR M~NUFACTURING ORDER of 1977 issued under s. 3
of the ESSENTIAL COMMODITIES ACT, 1955. "Khaosari Sugar"
was defined by cl. 2(f) of the said Order as meaning ''sugar containing more
) than 90% sucrose and manufactured by open pan process including beJs."
It is a statutory defi11ition enacted for the rpurpose of the aforesaid Control E
Order which uses the expression "Khandsari Sugar". Jt has nothing lo do
with the mc-aning and content of the term 'Kbandsari' as used by the trade
in U .P. [9908.C]

2. (i) It is unnecessary for the present purpose to cite all the deci·
sions. Or to undertake a journey through the factual hinterland of each

r
decision. Or to turn the beadli1hts on the observations made in each of F
the decisions. For, the principle, though garbed in different apparel, is
simply this. In legislations pertaining to the world of business and
commerce, the dictionary to refer to is the dictionary of the inhabitant' of
tOat world. What they understand by the term 'Khandsari' is precisely
what that term meaOs in the statute designed to regulate their dealings and
transactions. The best test therefore is to ask the question what they
themselves have understood by the term 'Khandsari, how they themselves
have interpreted it, and on what basis they themselves have moulded their G
own conduct, for all these years. The factory owners similarly situated as
petitioners as also the traders in general have understood the term 'Khand-
sari' as being applicable to the Khandsari produced by the factories by
open pan process as also to Kbandsari prooduced indigenously. [990E·G]

CommisH"oner of Income-tax, Andhra Pradesh v. Taj Mahal Hotel,
( 1971) 82 l.T.R. 44 at p, 47 and Porrils & Spencer (Asia\ Ltd. v. State of
flarf""a, (1979] I $.C.R. 545, relied on, H
968 SUPREME COURT REPORTS (198') 2 l.C.R

A 2. (ii) Inclusion of Kbandsari in tlie definition or '' aa;ricultural
produce'' by virtue of amendment of s. 2(a) was challenaed by a few
commission agents carrying on business of sale and P1Jrchase of Khandsari
in 1969 by instituting writ petitions in the High Court of Allahabad. How.
ever, none of the grounds of challenge pertained to the aspect relating to
the meaning and content of the term 'Kbandsari'. The petitions were dis.
missed by a Single Judge and that decision was confirmed by the Division
B Bench. [989C-D]

2. (iii) Factory owners producing Kbaudsari have been obtaining
licence under the Act and paying, without demur, market fee at t%
of the
value since 1969·70 till 1981, when fresh challenge was made through the
instant petitions. For more than ton years even the petitioners have not
felt that 'Khandsari' means something other than what they produce. It
c is not shown that in the popular or commercial sense, the product i1 not
known as 'Kbaadsari' but is known as "Khandsari Sugar". The term
"Khandsari Sugar" saw the light of day seven years after the Act was
enacted in 1970 when U.P. Khandsari Sugar Order of 1977 was born and
the artificial nomeOclature was coined for the restricted purpose or tho
order. There is no material even to bhow that this nomenclature was
known to the petitioners or to the traders tbemselvi;s there to before.
D [990H; 991C; E·F]
3. The Legislature has in terms encompa.;sed 'Kbandsari~ within the
definition of s. 2(a) of the Act. And the term 'Khandsari' is sufficiently
wide to cover all varieties of Khandsari including the article produced by
the factories like those of the petitioner~. Besides, the basic premise
assumed by the petitioners that the object of th~ Act is merely to protect
. ,
E
the producers from exploitation is fallacio'l~. This is one of the objects
and not the sole or only object of the A;:t. The Act has many more
"
t bjects and a much wider horizooJ and even transactions where both the
sides are traders and neither side is agriculturist, are brought within the
coverage of the Act. [992A-D]

Ram<sh Chandra v. State of U.P., [1980] 3 S.C.R. 104 and Ramesh
Chandra Kachardas Porwal & Ors. v. State of Maharashtra & Ors. etc., (1981]
F 2 S.C.R. 866, relied on.

There is nothing in the definition of 'Producer' contained ins. 2(p)
of the Act which would justify overriding the clear language of the statutes
read in the light of the perspective of the Act and the history of the levy.
While the term 'Khandsari' has not been defined, it is obviously wide
enough to cover Khandsari produced by any process regardlei;;s of its quality
G or variety. [994D·E]

S. This Court bas had several occasions to deal with a similar
problem in the context of taxing statutes. And this Court has consistently
taken the view that in the matter of classification the Legislature bas a
wide discretion in selecting the persons or objects it will tax, and that a
statute is not open to attack on the ground that it taxes some persons or
objects and not others. 'Everythina-or-nothing• argument is basicatly
H fallacious. For, the Legislature may tax or regulate the trade in some
RATH! KHANDSARI V. U. P. STATB 969

objects and not io others. Or may bring within its net some objects A
initially and may cast the net wider later on. Or may ta1 or regulate the
trade in only such objects which it considers expedient or worthwhile. The
decision, essentially a policy decision, may depend on several factors. Factors,
such as, the felt necessity for such an impost or regulation of a trade in a
particular article, likely impact of the decision on the trade, industry, or
consumer, viability of the same from the stand point of its own management
resources. Or from the angle of the net advantage to be secured in the B
balance-sheet of pros and coos taking into account the 1lnticipated adminis-
trative and management in1puts required tu be invested in the e2erci1e. In
substance, it is a policy decision turning on numerous and complex factors.
[99B-E)

5. (i) It is not for this Court to question why Khandsari produced
by the petitioners is included when sua:ar produced by the Mills is not so c
included, It iS not a question to which we can legitimately address
ourselvei, for. essentially it is a question of legislative wisdom and legis-
lativ1 policy dictated by countless and complelll considerations. The Court
' cannot, and wi11 not, substitute its own wisdom in place of the legislative
wisdolD; in such matters. The Court will not impose on itself this responsi-
bility, if not for any other reason, than for the reason that it is beyond its
province. Hence s. 2(a) of the Act is not discriminatory and violative of D
Article 14. [9960-H; 997A)

East India Tobacco Co. v. Stai. of Andhra Pradesh, [1963) 1 S.C.R.
404, relied on.

. , Willie on Constitutional Law p. 857, referred to.
Per A. Yaradarajan, J. (Dissenting) E
)
1. What the petitioners produce in their modern Khandiiiari mills
by the open pan process is Khandsari Sugar, an industrial product like
plantation whiti;;; sugar and not Kbandsari which is produced by agricul-
tural producers in the indigeoous method and the levy of market fee on
sales or khandsari sugar under the Adbiniyam is unwarranted as the Adhi-
niyam is int ended for the protection of agricultural producers in the disposal F
of their products and only Kbandsari produced by agricultural producers is
included in the definition of agricllltural produce" in 1. 2(a) thereof and not
Khandsari sugar. [986F-O)

2. A manufacturer producing Khaodsari Sugar by the modern
method in the open pan process is not a producer within the meaning of
s. 2(p) of the Adhiniyam. [980E]
G
3. The object of the Adhiniyam as seen from the prefatory note and
preamble is to protect the agricultural producer from exploitation.
Protection of any industrial producer is not the object of the Adhiniyam.
[9790)
4. The Khandsari Sugar produced by the petitioners in their mills with
the aid of power in the open pan process by employing large number of
employees to whom the Industrial Disputes Act, Minimum Wages Act,
Factories Act. Employees Provident Fund Act and similar enactments apply H
1170 SUPl!.EME COURT REPORTS (198SJ 2 s.c.R.

A is an industrial product which is very different from Kbandsari produced by
agriculturists or sugarcane growers in the old indigenous method. [982E·F]

5. The Adhiniyam originally intended to protect the interests of
agricultural producers has not become a marketing legislation utider entry

B
28 of List II in the Seventh Schedule by the mere fJct of inclusion of one
or more industrial products in the definition of agricultural produce in
-'. ..
s. 2(a) of the Adhiniyam. [983~; 984A]

6. The prefatory note and the preamble can be looked into in the
present case as there is dispute between the parties on the question whether
"khandsari 1ugar" produced by the petitioners, which is not included in
c the schedule or definition of agricultural product! in the Adhiniyam~ while
"K.haodsari" is mentioned in the definition of agricultural produce ins. 2(a)
thereof can be the subject matter of levy of market fee under the Adhi·
niyam. [984F·G]

7. The principle underlying the levy of tax cannot be made appli.
D cable to the levy of market fee under the Adhiniyam. Both Plantation
While Sugar and Khaodsari Sugar are industrial products and there is
discrimination against Khandsari _Sugar in seeking to subject it to the levy
under the Adhiniyam leaving out plantation White Sugar. [988Bj

Laxml Khandsarl Etc. v. State ofU.P. & 01hers, (1981] 3 SCR, 92
E Paunakram v. State of Punjab, AIR 1975 SC 187 and Andhra Sugars ltd.
& A.nr. 11c. v. State of Andhra Pradesh & Ors., [1968] 1 SCR, 705,
referred to.

ORIGINAL JURISDICTION: WP. Nos. 1347·60/81, 132-143, 3405-

,
16, 3420-22, 3423-25 of 1980, 806-18 of 1981,4251, 95C0·05, 9511-13,
9514of1981, 21-23,37-43, 45-56, 63, 91-lli, 166·67, 174, 181-192of
F
1982, 407-11 of 1979, 412-415, 416-18 of 1979, 193•220, 237-48, 825-
36, 721-722of1982, 723-39, 319-30,969-78, 2171-73of 1982and3864-
69of J980,1227-33of 1981,5520-22of 1980, 1001-07of1981, 1109-30,
1384, 1453-62, 1469 of 1981, 805-24, 866, 972, 1453-62, li498, 4667-68,
975-83, 854, 984, 1469-78, 787, 1319.24, 1400-.02, 1504·05, 1608-11,
1621-25, 1934-63, 2172-77, 2228-31, 2251-53, 2374-75, 2327-61,
G 2556-65, 2612-13, 2625-27, 2624, 3070-88, 3178-95, 985, 4158-65,
4527-32, 5113-19, 9196-98 of 1982, 5727, 8397, 9583, 9719-22 of
1982, 8262-67 of 1981, 10039, 10223 of 1982, 2682-84 of 1983, 3885-
86 of 1983, 66-67, 68·69, 1139-2759 of 1983, 2379 of 1982, 27 ,3,
1119 of 1983, 7993 of 1982, 1172 of 1983, 6498 of 1982.

H (Under Article 32 of the Constitution of India)
l!A1BI KHAl'<DMln v. u. P. STA1E (Varadarajan, J.) 971

FOR THE APPEARING PARTIES A

Shantr Bhushan, R. K. Garg P. R. Mridul R. K. Jain, Pradeep
Kumar Jain, B. R. Kapoor, S. R. Srivastava, P. H. Parekh, Miss
Nisha Srivastava, Hemani Sharma, Miss Indu Sharma, K. K. Mohan,
and Geetanjali Mohan.
B
~ 0. P. Rana, D. D. Thakur, E. C. Agarawala, Raju Ramachan-
dran, R. Sathish, V. K. Pandita and R. Rana

Dr. L. M. Singhvi, L. N Sinha, Y. S. Chita/e, and G. N.
Dlkshit.
c
Miss Shobha Dikshit, Pradeep Mishra, S. K. Ku/shrestha, and
A. M. Singhvi, Advocates Ravindra Bana, Sarva Mltlra, Rajiv Datta,
B. B Tawak/ey, R. B. Mehrotra, Pramod Swarup, R. N. Poddar &
N. N. Sharma.
D
The following Judgments were delivered

VARADARAJAN, J. Writ Petitions 1347 to 1360 of 1981 and
• Writ Petition 174 of 1982 are by manufacturers of khandsari sugar
in the open pan process and sellers thereof in Uttar Pradesh. Writ
Petitions 21 to 23 of 1982, Writ Pe1itions 3178 to 3195 of 1982, Writ E
Petitions 3178 to 3195of1982, Writ Petitions 4527 to 4532 of 1982
and Writ Petition 3890 of 1983 are by traders in that product in
U. P. The pleadings in W. Ps. 1347 to 1360of1981 were referred
to by the learned counsel for the parties when common arguments
were advanced in all the writ petitions. Therefore, the pleadings
in those writ petitions alone are referred to in this judgment. F

These W. Ps. 1347 to 1360 of 1981 under Article 32 of the
Constitution are for declaring the provisions of the U. P. Krishi
Utpadan Mandi Adhiniyam, 1964 as ultra vires the Constitution
and for restraining the respondents from realising market fee and
licence fee from the petitioners under the provisions of that Adhini- G
yam (hereinafter referred to as 'the Adhiniyam').

The case of the petitioners/firms which manufacture Khandsari
' sugar by the open pan process in the State of Uttar Pradesh and sell
the same in that State is this:
H
SUPRllME C08RT RBPORRS (1985) 2 S.C.R.

A In the process of manufacture of Khandsari sugar there is not
only a physical change of the sugarcane used but also a chemical
change and the white crystalline sugar of 90 per cent sucros purity
is obtained after drying, grading and vagging by eliminating all the
ingredients of sugarcane except sucros. But in the case of desi
khandsari, gur,jaggery, rab and shakkar which are all manufactured
B from raw sugarcane juice, pectins, live saps, motals, minerals, nitro-
genous compounds, waxes and salts are not removed and there is no
chemical change in the manufacturing process. The Adhiniyam was
enacted to reduce multiple trade charges and provide amenities to
the producers and sellers of agricultural produce, for certification
of accurate weights and scales and for the establishment of market
c committees to ensure that the agricultural producer has a say in the
matter of utilisation of the market funds. The Adhiniyam applies
to agricultural products which according to s. 2 (a) are 'such items
of produce of agriculture, horticulture, viticulture, sericulture,
pisciculture, animal husbandary or forest, as are specified in the
D schedule, and include anadmixture of two or more such items and
alio include any such item in processed form and further include
gur, rah, shakkar, Khandsari and jaggery'. The Adhiniyam does
not define khandsari sugar but it is defined in clause 2 of the U. P.
Khandsari Sugar (Levy) Order, 1975 as "whole crystalline sugar
containing more than 90 per cent and manufactured at a sulphitation •
E unit by open pan process including a bet''. The khandsari sugar
produced by the petitioners who hold licence for operating hydrau-
lic power crushers is not khandsari but crystalline sugar as pro-
duced by sugar mills. The sugar produced by the petitioners is
physically and chemically different from sugarcane which is one
of the items specified in the schedule to the Adhiniyam and also
F from gur, rab, jaggery and khandsari and cannot be treated as a
processed form of sugarcane. Therefore, the Adhiniyam cannot
apply to the product manufactured by the petitioners which is
plantation white sugar. The petitioners/firms which are producers
of sugar are not liable to pay market fee under the Adhiniyam, s. 17
(iii) (b) whereof provides that the market committee shall have
G power to levy and collect market fee which shall be payable on
transactions of sale of specified agricultural produce in the market
area at such rates being not less than one per cent and not more
than one and a half per cent of the price of the agricultural produce
so sold as the State Government may specify by notification.

Section 17 (iii) is ultra vires the Constitution as it permits
H excessive delegation of legiilative power and does not lay down any
RATH! l::HANDSARl v. u. P. STATE (Varadarajan, J.) 973

., guideline for the State Government fixing the market fees and only A
market committees rendering services can determine the quantum
of market fees. The illegal levy of market fees on the petitioners is
violative of Articles 19 (l) (f) and 301 of the Constitution. The
action of the respondents in seeking to apply the provisions of the
Adhiniyam to the petitioners leaving out other manufacturers simi-
larly situate is violative of Art. 14 of the Constitution. Section 8 B
of the Adhiniyam is violative of Art. 14 as it does not provide any
guideline regarding the basis on which the State Government can
include or exclude any agricultural produce from the list of notified
commodities under s. 6.

The market fees and licence fees are in the natnre of payments c
for services rendered. But the market committees render no service
at all to the petitioners and therefore the levies are really in the
nature of tax. The levies deprive the petitioners of their right to
property without any authority of law and are therefore violative of
Arti8les 265, 31 and 19 (1) (f) and (g) of the Constitution. It is in
D
these circumstances that the petitioners have prayed for declaration
of the provisions of the Adhiniyam as being ultra vires the Consti-
tution and for the issue of a writ of mandamus restraining the res-
pondents from reahsing market fee and licence fee from the peti-
tioners under the Adhiniyam.
E
The contentions of the Mandi Samiti/respondents who oppose
the petitions are these:

The petitioners who are manufactucers of khandsari/khandsari
sugar are fully covered by the Adhiniyam in view of the definition
of'agricultural produce' in s. 2 (a). Khandsari is mentioned in
schedule 'Kha' to the notification No. 584/XII-8-104/76 dated F
11.4.1978. Khandsari sugar is not sugar as is evident from the defini-
tion of sugar in s. 2 (f) of the Sugar (Regulation of Production) Act.
1961 according to which sugar means any form of sugar whether
wholly or partially manufactured but does not include khandsari
sugar, that is to say, sugar in the manufacture of which neither a
vacuum pan procesi nor a vacuum operator is employed; or palmyra G
sugar, that is to say, sugar manufactured from jaggery obtained by
boiling the juice of.palmyra palm. 'Khandsari' is the short form of
'Khandsari sugar' in the Adhiuiyam and the notification, and there
is nothing like khandsari different from khandsari sugar in any of
the concerned laws or in common parlance. There is only one
khandsari and it is call~d khandsari sugar and it is manufactured H
974 SUPREME COURT REPORTS [1985) 2 s.c.a.

A by mechanical power process, The word 'sugar' has been used
everywhere for the sugar manufactured by the vacuum pan process
by mills and factories and the words 'khandsari sugar' have been
used for the material produced by open pan process In the
Sugarcane (Control) Order, 1966 by clause 2 (d), khandsari sugar is
defined as sugar produced by the open pan process. Kbandsari
sugar is defintd in clause 2 If) of the U. P. Khandsari Sugar Manu-
facturing Order, 1967 as sugar containing more than 90 per cent
sucros and manufactured by the open pan proces~ including bels.

There is no chemical change in the proc,ss adopted by the
petitioners in the manufacture of Khandsari sugar and there is no-
c thing like desi Khandsari sugar. What the petitioners call desi
khandsari is shqkkar produced by manual efforts. It is true that
khandsari sugar manufactured by the petitioners contains more than
90 per cent sucros but it is denied that the sugar manufactured by the
petitioners is not khandsari or that it is crystalline sugar as producej
by sugar mills or that the khandsari sugar produced by the petitioners
D
is not physically and chemically different from the sugar produced
by mills. The produce manufactured by the petitioners is processed
form of sugarcane, namely, sugarcane from which the chaff has
been removed and the sweet material has been retained for human
consumption. Gur, rab, jaggcry and khandsari sugar are all manu-
factured by the open pan process while sugar produced by mills is I
E manufactured by the vacuum pan process. The producers of khand-
sari sugar by open pan process and the producers of sugar by
vacuum pan process have to .take out licences under different orders,
namely, U. P .. Khandsari Sugar Manufacturing Order, 1967 and
u. P. Vacuum Pan Sugar Factories Licensing Order, 1969. Thus,
khandsari sugar produced by the petitioners is different from sugar
F produced by sugar mills and it is folly covered by s. 2 (a) of the
Adhiniyam.
Market fee is not claimed from the petitioners in any manner
different from the one stipulated in s. 17 (iii) (b) of the Adhiniyam.
Section 17 (iii) (b) is .10t ultra vires the Constitution and does not
G suffer from any excessive delegation of legislative power. The levy
of market fee and licence fee is not violative of any constitutional
provision. Art. 19 (0 (f) does not exist any longer and Art. 301
does not confer any fundamental right on the petitioners. There is
no discrimination against the petitioners and s. 8 of the Adhiniyam
is not violative of Art. 14. The market fee and licence fee are fees
H
RATHI KHANDSARI v. u. P. STATE (Varadarajan, J.) 975

and not taxes. A major portion of the funds of the market commi- A
ttees is applied for development of the market area.

The Rajya Krishi Utpadan Mandi Parishad (hereinafter
referred to as 'the Parishad'), impleaded as respondent in the peti-
tions has filed separate counter-affidavit raising similar contentions
as ihe market committees. The additional contentions raised by B
that Board which also opposes the petitions are these :

The original definition of agricultural produce in s. 2 (a) of
the Adhiniyam did not contain the words "and further includes gur,
rab, shakkar, khandsari and jaggery". These words were added in
the definition by the U. P. Amendment Act IO of 1970 in order to
c
remove anomalies in the words "processed agricultural produce".
The Government issued the said notification No. 584/XII-8-IO 1/76
dated 11. 4. 1978 after considering all the objections raised, specifi-
cally mentioning Khandsari along with gur, rab, shakkar and jaggery
in the list of 1!5 commodities liable for the levy of market fees.
D
The sale of khandsari is free without any Government control and
it is effected in the market areas by commission agents by mutual
negotiation or open auction while a large part of the sugar produced
by the vacuum pan process is controlled by the Central Government.
Sugar and khandsari are distinct and different from each other. The
sugar produced in vacuum pan process is stmdarised as per India E
Sugar Standards and graded into A30, B30, C30, 030, E30, A29, B29
C29, 029 and E29 whereas khandsari sugar produced by the open
pan process is called khandsari, khandsari sugar, rab and sugar in
the market. There is no levy on khandsari and it is sold in the
open market whereas 65 per cent of the sugar produced in the mills
by the vacuum pan process is taken by the Central Government for F
feeding !he public distribution system by levy and the remaining 35
per cent alone is left with the factories for free sale through whole-
sale dealers approved under the control orders. The producers of
khandsari sugar are not liable to pay the impugned market fee.
They arc liable to pay it only if they also hold licences as commis-
sion agents or wholesale dealers and sell the product.
G
Mr. Shanti Bhushan, learned counsel for the petitioners advan-
\l~d a.q;umcnts in thesepetitions under three main heads, namely
(i) whether khandsari sugar manufactured by the petitioners in their
mills by the open pan process is an agricultural produce, covered by
the Adhiniyam as amended by the U. P. Act 10 of 1970; (ii) whe-
ther khandsari sugar manufactured by the petitioners in their II
916 SUPREMI! COURT REPORTS (1985) 2 S.C.R.

A industrial units employing a large number of workmen to whom the )
Industrial Disputes Act, Employees Provident Fund Act, Factories
Act and Minimum Wages Act apply and which is subject to levy of
excise duty under the Sugar (Special Excise Duty) Act, 1959 is
subject to the levy of market fee under the Adhiniyam aud (iii)
whether pn account of the interpretation cf the Adhiniyam, khand-
ll
sari sugar manufactured by the petitioners could be said to be
subje~t to the levy of market fee under the Adhiniyam there is any
difference between khandsari sugar produced by the petitioners in
the open pan process, and the plantation white sugar produced by
the other mills in the vacuum pan process, and there is no discri-
mination between khandsari sugar sought to be subjected to the
c
levy of market fee under the Adhiniyam and the plantation white
sugar produced by the vacuum pan process which is not subject to
the levy under the Adhiniyam. He clubbed his arguments on points
(i) and (ii) and submitted that khandsari sugar produced by the
petitioners in their mills by the open pan proeess is not an agricul-
D tural produce contemplated to be covered by the provisions of the
Adhiniyam for the purpose of levy of the market fee as it is not
produced by the agricultural producer but produced in mill; emplo-
ying modern methods though under the open pan process. On the
third point _he submitted that there is no difference between the
khandsari sugar produced by the petitioners in their mills by the
E open pan process and the plantation white sugar produced by the
other mills by the vacuum pan pr0cess except that khandsari sugar
is produced by the open pan process while the plantation white sugar
is produced by the vacuum pan process and the difference in the
composition of the two products is only as regards CAO, filterability
and conductivity and consequently there is discrimination hit by
F Art. 14 of the Constitution in leaving plantation white sugar out
of the levy and seeking to subject the khandsari sugar produced by
the petitioners-mills alone to the levy of market fee under the
Adhiniyam.
1
-~
On the other hand, Mr. L. N. Sinha, learned counsel for the
Parishad submitted that the original object of the Adhiniyam was
G
protection of agricultural produce as originally defined in the Adhi-
niyam and that the position has changed now and it has become a
marketing legislation covered by entry 28 of List II (Market) of the
Seventh Schedule to the Constitution. He further submitted that
if the Adhiniyam has become a marketing legislation as contended
by him industrial produce also can be included in the schedule of
H produce appended to the Adhiniyam and khandsari is gen11s and
RATH! KH\NDSARI v. u. P. STATE (Varadarajan, J.) 977

khandsari sugar is a specie and it is liable to be subjected to the A
levy of market fee under the Adhiniyam. As regards discrimination
Mr. Sinha submitted that similarity is one thing and identity is
another and that Art. 14 will be attracted only in the cas1 of identity
and there is difference between khandsari sugar and plantation
white sugar and therefore there is no question of discrimination.
B
Mr. D. D. Thakur, learned counsel for the Market Committees
submitted that it is not the only object of the Adhiniyam to benefit
the agricultural producer, but a number of other objects are notice-
able in the Adhiniyam and that if the object is to protect the agri-
cultural producer alone the levy of market fee would have been
confined to the first sale alone. He further submitted that the c
Adhiniyain covers sales by producers to traders and sales by traders
to other traders subject to the requirement that what is sold is an
agricultural produce and no market fee is leviable on retail sales etc.
having regard to the proviso to s. 17 of the Adhiniyam. He sub-
mitted that the levy is not on khandsari producers but on khandsari
traders and that what is contained in the preamble to the Adhiniyam D
is slightly different from the scheme of the Adhiniyam, and s. 2 (a)
of the Adhiniyam has to be looked into independently of the pre-
amble which in turn oan be looked into only in case of ambiguity.
He too submitted that khandsari is a jlenus and khandsari sugar is
a specie. He however admitted that agriculturists producing
khaudsari without the use of power need not obtain licence for its E
manufacture while producers of khandsari •ugar by the open pan
process in the khandsari industry are bound to obtain licence. He
contended that what is produced by the petitioners would fall within
the ambit of s. 2 (a) of the Adhiniyam. On the question of discri-
mination he submitted that plantation white sugar manufactured by
F
the vacuum pan process does not rcquiro regulation, unlike khand-
sari sugar produced by the open pan process and that if that is so
there is no question of di;crimination in not subjecting the plan-
tation white sugar to the levy of market fee under the Adhiniyam.

Dr. Y. S. Chitale, learned counsel for the Parishad, Samiti
and Mandi, the rrspondents in W. Ps. 1348 to 1360 of 1981 sub- G
1 mitted that s. 2 (a) of the Adhiniyam deals also with traders as
held in Laxmi Khandsari Etc. Etc. vs. St•te of U. P. and Others(l)
and that what the petitioners produce is khandsari though it may

(!) [1981] 3 S. C. R 92.
ff
978 SUPRBME COURT REPORTS [1985) 2 S.C.R.

A be more refined than khandsari produced by the agriculturists with-
out the aid of power. On the question of discrimination he sub·
mitted that whatever w;s considered necssary to be regulated was
included in the schedule to the Adhiniyam and that there is no
discrimination in not subjecting plantation white sugar produced by
the vacuum pan process to the levy of market fee under the
B
Adhiniyam.

The prefatory note to the Adhiniyam as extracted from the
Statement of Objects and Reasons may be noted. It reads:

"The present chaotic state of affai~s as obtaining in
c agricultural produce markets is an acknowledged fact.
There are innumerable charges, levies and exactions which
the agricultural producer is required to pay without having
any say in the proper utilisation of the amount so paid by
him. In matters of dispute between the seller and the buyer
the former is generally put at a disadvantage by being
D given arbitrary awards. The producer is also denied a large
part of his produce by manipulation and defective use of
weights and scales in the market. The Government of India
and the various committees and commissions appointed to
study the condition of agricultural markets in the country
have also been inviting the attention of the State Govern-
E
ment from time to time towards improving the conditions
of these markets. The proposal to enact a marketing legis-
lation was first taken up in 1938; but it could not go
through as the then Ministry went out of office soon after
its inception. The Planning Commission stressed long ago
that legislation in respect of regulation of markets should
F be enacted and enforced by 1955-56. Most of the other
States have already passed legislation in this respect. The '
proposed measure to regulate the markets in this State has
been designed with a view to achieving the following
direction-

G
(i) to reduce the multiple trade charges, levies and
exactions charged at present from the producer-
sellers;

(ii) to provide for the verification of accurate weights
and scales and see that the producer-seller is not
ff denied his legitimate due;
RATH! KHANDSARI v. u. P. STATE (Varadarajan, J.) 979

(iii) to establish market committees in which the A
agricultural producer will have his due representa-
tion;
(iv) to ensure that the agricultural producer has hJS
say in the utilisation of market funds for the
improvement of the market as a whole; iB
(v) to provide for fair settlement of disputes relating
to the sale of agricultural produce;

(vi) to provide amenities to the producer-seller in the
market;

(vii) to arrange for better storage facilities; c
1
(viii) to stop inequitable and unauthorised charges and
levies from the producer-seller; and

(ix) to make adequate arrangements for market intelli-
gence with a view to posting the agricultural D
producer with the latest position in respect of the
markets dealing with his produce".
(emphasis supplied)
•
The prefatory note shows that the object of the Adhiniyam is
to save the agricultural producer from innumerable charges, levies E
and exactio'ls and to enable him to have a say in the proper utili&a-
tion of the amounts paid by him, to reduce the multiple charges,
levies exactions charged from producer-sellers and generally to help
the agricultural producer to sell his produce to his best advantage.
The objects set out in the prefatory note are reflected in a concised
form in the preamble to the Adhiniyam which says that it is "An
Act to provide for the regulation of sale and purchase of agricultural F

r
produce and for the establishment, superintendence and control of
markets therefor in Uttar Pradesh". The preamble also speaks of
the necessity to provide for the regulation of sale and purchase of
agricultural produce and the establishment, superintendence and
control of markets therefor in Uttar Pradesh. Thus the object of the G
Adhiniyam as seen from the prefatory note and preamble is to
protect the agricultural producer from exploitation. Protection of
1 any industrial producer is not the object of the Adhiniyam .
•
Section 2(p), of the Adhiniyam defines a "producer" as
meaning "a person who, whether by himself or through hired H
980 SUPREMll COURT RllPORTS [1985) 2 s.c.R.

A labour, produces, rears or catches any agricultural produco, not
beini: ~ producer who also worb as a trader, broker or data!, com-
mi,.ion agent or arhatiya or who is otherwise ordinarily en.ga~ed m
the businHs of storage of agricultural produce". Agricultural produce
is defined in s. 2(a) of the Adhiniyam as meaning "such items of
produce of agricaltur, horticulture, viticulture, ai:riculture, siriculture,
B
pisciculture, animale husbandary or forest as are specified in the
schedule and includes admixture of two or more of such items and
also includes any such item in processed form and further includes
gur, rab, shakkar, khandsari and jaggery". The words "and further
includes gur, rab, shakkar, khandsari and jaggery" have been
introduced into s. 2(a) of the Adhiniyam by the U.P. Amendment
c Act 10 of 1970. Trader is defined in s. 2(y) of the Adhiniyam as
meaning "a person who is engaged in buying or selling agricultural
•
produce as a principal or as a duly authorised agent of one or more
principals and includes a person engaged in producing agricultural
produce". Thus it is seen from the definition of producer and trader
in the Adhiniyam that emphasis is on the product produced, reared
D or caught by agriculturists whether by their own or through hired
labour and that such producer does not include a producer who also
works as a trader, broker, dalal, commission agent or arhatiya or
who is otherwise ordinarily engaged in the business of storag11 of
agricultural produce. Therefore, it is not possible to hold that a
manufacturer producing khandsari sugar by the modern method in
E the open pan process is a producer within the meaning of s. 2(p) of
the Adhiniyam. The schedule to the Adhiniyam consists of 17 S items
including paddy, honey, silk, eggs and ghee which were in the
schedule from the inception. But, as stated earlier "K.handsari" is
one of the items introduced into the definition of agricultural
produce in s. 2(a) of the Adhiniyam by the Amendment Act 10 of .
F
19 70. It is •een from Annexure VIII to the counter-affidavit of the ~
respondent-Parishad filed in W. Ps. 1347-1360 of 1981 that "The I
technique of sugar manufactured through the indigenous process
without the use of complicated machinery has been known in this
country from time immemorial. The sngar thus produced i• known
as khandsari". In the counter-affidavit of Shri Ram Sharan, Deputy ,
G
Director (Marketing) of the Parishad filed for the petitioners'
additional affidavit it is admitted that farmers and sugarcane &rowers
produce, what he calls, khandsari sugar with the help of small 1
electric motors, diesel engines or their own tractors. Mr. Shanti •
Bhushan submitted that khandsari introduced in s. 2(a) of the
Adhiniyam by the Amendment Act 10 of 1'70 is khandsari produced
l!.ATHI l:HANDSARI v. u.P. STATE (Varadarajan, J.) 981

by agriculturists and sugarcane growers in the old and primitive A
method and not khandsari >Ugar produced in khandsari mills in the
modern sulphitation open pan process.

Annexure VI to the counter-affidavit filed by the Parishad in
W. Ps 1347-1360of1981 is the report of the Director of National
. I > Sugar Institute, Government of India, Kanpur regarding the B
approximate composition of khandsari sugar produced by the modern
sulphitation process and that of plantation white sugar produeed by
the vacuum pan sugar factories. It is extracted for ready reference :

Particulars Vacu 1m pan sugar Khandsari sugar c
Pol 99.8 to 99.95 99.4 to 99.9
... j
Reducing sugars 0.04 to 0.25 0.10 to 0.40
CAO (Mg/JOO gm) 10 to 35 45 to 80
SO' (ppm) 2.25 5.25
D
Viscosity CP 20.30 20.30
Conductivity x JO' 3 to 15 50 to 200
Turbidity% I0 to 30 40 to 70
Filterahility (FK) 0.3 to 2.5 50 to 400
Shape of crystals Monoclinic Flattened or
E
cuboid
Moisture 0.04 to 0.15 00.15 to 0.50
Water insoluble % by wt.
Colour OD 400-0D 500 0.02 to 0 05 0.04 to 0.015

F
It is seen from this report that the difference between planta-
tion white sugar produced by the vacuum pan process and khandsari
sugar produced by the open pan process in their composition is
marked only as regards CAO, filterability, and condnctivity and that
the other items are more or less the same. In the aforesaid counter-
affidavit of Shri Ram Sharan it is stated that "khandsari produced G
by sulphur units and khandsari produced by non-sulphur units is
similar in process, raw-materials and sucros contents. There may be
slight difference in colour and cry>talline nature of the substance
which is attributable to the better clarification method and better
equipment adopted by &ulphur units which are all improvements and
which create no difference in the nature of the product, i.e. H
khandsari".
982 SUPREME COURT REPORTS [\985] 2 S.C.R.

A In the counter.affidavit of Shri Zorawar Singh, Secretary,
Krishi Utpadan Mandi Samiti, Moradabad filed in W P.1359 of 1981
it is admitted that the juice of sugarcane boiled in the open pan by
the producers and the khandsari sugar manufactured by them contains
more than 90 per cent sucros. In Annexure VIII to the counter-
affidavit filed in W.P. 1347-1360 of 1981 it is staled that the impro-
B ved proce5S of khandsari manufacture as evolved by the Gur and
Khandsari Research Scheme of the N~tional Sugar Institute, Kanpur
is a simplified form of the single sulphitation process as employed in
the vacuum pan factories and that as a result of the improvements it
is now possible to get a recovery of 7.5 to 8.0 per cent of sugar on
cane of average quality and the first sngar produced is quite com-
c parable to ordinary grade crystal sugar produced by the vacuum pan
process. That process which has been set out in that Annexure
though briefly is quite elaborate and not far different from the one > ..
adopted in the manufacture of plantation white sugar by the vacuum
pan process. On an inspection of the samples of khandsari sugar and
D plantation white sugar produced in the Court during the arguments
in these writ petitions it was noticed that both khandsari sugar and
plantation white sugar are wbite in colour and crystalline in form
though the plantation white sugar is a little more lustrous than
khandsari sugar. But khandsari produced by the agriculturists or
sugarcane growers in the mdigenous method is powdery iri form and
E yellowish in colour. In these circumstances, I am of the opinion that
khandsari sugar produced by the petitioners in their mills with the
aid of power in the open pan process by employing large number of
employees to whom the Industrial D(sputes Act, Minimum Wages
Act, Factories Act, Employees Provident Fund Act and similar
enactments apply is an industrial product which is very different
from khandsari produced by agriculturists of sugarcane growers in
F
the old indigenous method.
According to s. 2(d) of the Sugarcane tControll Order, 1966
khandsari sugar means sugar produced by the open pan process.
According to s. 2(f) of the U.P. Khandsari Sugar Manufacturers
Licensing Order, 1967 khandsari means sugar containing more than
90 per cent sucros and manufactured by the open pan process.
Section 3 of that Order makes it obligatory to obtain a licence for
G the manufacture of khandsari sugar. Section 3(4) (a) of that Order
regulates the khandsari sugar manufacturing industry in the best
mterests of that industry. As mentioned above, it is admitted that no
licence is necessary for the manufacture of khandsaii by the agricul-
turists or producers of sugarcane in the indigenous method without
the use of power. It is not disputed that khandsari sugar produced
h~ th.e petitioners is subject to excise duty under the Sugar (Special
RATHi KHANDSARI •• U.P. STATE (Varaaarajan, J.) 983

Duty) Act, 1959. Clause (ii) of s. 2(c) of that Act illustrates one of A
the sugars not subjected to the duty, namely, palmyra sugar, that is
to say, sugar manufactured from jaggery obtained by boiling the
juice of palmyra palm. The word 'sugar' has been too broadly
employed in the Sugar (Special Duty) Act, 1959. But it is significant
to note that in the Sugarcane (Control) Order, 1966 and the U.P. B
Khand<ari Sugar Manufacturers Licensing Order, 1967, what is
covered is khandsari sugar, whereas what bas been introduced into
s 2(al of the Act by the Amendment Act 10 of 1970 is "khandsari".
Thus it would appear that what is sought to be subjected to the levy
of market fee under the Adhiniyam is khandsari produced by the
agriculturist or producer of sugarcane in the old indigenous method
c
and not khandsari sugar produced by persons like the petitioners in
their modern mills by the open pan process.

Mr. Lal Narain Sinha, appearing for the Parishad and Mr.
Thakur appearing for the Market Committees have, in my view,
D
conceded by their submission that khandsari is genus and khandsari
sugar is a speci that what the petitioners produce in their mills by
the open pan process is ·'khandsari sugar" and not "khandsari". Dr.
Chitale appearing for the respondents in W. Ps. 1318·60of1981 has
'also done so but in a slightly different way by saying that what the
.. ' petitioners produce is khandsari, whether it is more or less refined E
than khandsari as such. Mr. Sinha conceded in the course of his
arguments that protection of the agricultural producer was the
object when the original idea of the Adhiniyam started and he
submitted that the object has now become widened and it is now
not a legislation for protecting the interests of only agricultural
producers and that it has become a marketing legislation under entry F
28 of List JI in the Seventh Schedule to the Constitution and
industrial products also can be included in the schedule.· There is a
- ->- further implied submission in this argument of Mr. Sinha that
khandsari sugar is an industrial product as it undoubtedly is. If the
original. idea as indicated in the prefatory note and preamble of the
Adhiniyam was to protect the interests of agricultural producers in
G
disposing of his products such as paddy, rice, silk, eggs, honey, fish
and the like, and the Adhiniyam was enacted with that object in
my view, it cannot be converted into a general marketing legislation
I by the mere inclusion of industrial products, not possible of produc-
> tion by agricultural producers, either in the schedule or in the
definition of agricultural produce in s. 2 <a) of the Adhiniyam.
Therefore, it is not possible to accept the argument of ·Mr. Sinha
that the Adhiniyam originally intended to protect the interests of 11
agricultural producers has become 11 marketing legislation under
984 · SUPRIMB COli'RT REPORTS [1985] 2 s.c.R;
I
A entry 28:•of List II in tlu: Seventh Schedule by the meire.f..ctof
inclusion of one or more industrial products in the defi'.tiliori of
:igricultu~al produce. in s 2 Ca) of the Adhiniyam. · ·' .

. .· . Mr.· Thakur submitted that it is not the only pnrpose of
the· .Adhi~iyam to protect the interests of the agricultural producer,
B that a number of other objects are sought to be achieved by the .
·Adhiniyam .and that if the object of the Adhiniyam was to protect
'the interests' of agricultural producers alone,.the levy of market fee
would have been confined to first sales of agricultural produce. Mr.
Thakur would diiis say that the only object of the Adhini} am is not
"protection of the interests of the agricultural .producer in the -
c disposal 'of his produrts to his best advantage. The question whether
the levy of market fee under the Adhiniyam ·is at a single point or
whether it is a multi·point levy was not elaborated by Mr. Thakur.
Therefore, it is not po8'ible : to . draw any inference from his
submission based on .the point of levy of market fee under the Act
L
though it was pointed out by him that under the scheme of the
D Adhiniyam sales by ·p~oducers to traders and by traders tci other
traders but. not retail sales to consumers are subject to the levy of
market fee. provided that the produce sold is agricultural produce.
Mr. Thakur submitted that the levy under the AdhiniyamJs on· the
· khandsari trader and not on khandsari producer. That would be so
if the item ·with reference to. which levy is made is one produced by
an agricultural producer to protect whose. interests the Adhiniyam
has been enacted. Khandsari sugar produced by the petitioners in
their mills by the open pan process is not an agricultural produce
bui·. an fiidustrial produce. Mr. Thakur is right in his submission
that the p'reamble could be looked into only in the case of ambiguity.
The prefatory note and the preamble can be looked into only in the
F present case as there is dispute between the parties on the question
·• whether ·~'khllndsari sugar"_produced by the petitioners, which is )
;,ot inclned i~ th~ schedule or definition of agricultural produce in
the ·Adhi~iyam, 'Nhile "khandsari" is mentioned in the definition of
agricultural .produce in s. 2(a) thereof can be the.subject matter of
levy of market foe under the· Adhiniyam. 1t is not possible to accept
the. submission _of Dr Chitale that what the petitioners produce is
G an agri'cultural produce, be it more or less refined than kuandsari .
. What the. petitioners produce in their modern mills by the open pan
process is khandsari sugar, an industrial produce, and not an.
- agrirultural produce which is produced by . agriculturists. 'It is
admitted. by, Dr. Chitale that the petitioners' factories are working
under licences and that it is not obligatory on agricultural producers
n producing khandiari in the indigenous method to obtain licences for
producing the slime.
RATI!I KHANDSAR! •• U.P. STATS (Varadarajan, J.) 985

Reference is made at page 3 in the judgment of my learned A
brother Thakkar, J. in these Writ Petitions, to the judgment of a
Division Bench of the Allahabad High Court in Special Appeal
No. 175 of i 973 filed against the decision of a Single Judge of that
court in W.P. No. 4636 of 1969. It is Annexure II to the counter-
affidavit of the Parishad in W.P. 1350 etc. of 1981. The reliefs
claimed in that Writ Petition were a writ of certiorari quashing the B
U.P. Ordinance 8 of 1979 which was replaced by the Amendment
Act 10 of 1970 and a writ of mandamus directing the respondents
State of Uttar Pradesh and others not to enforce the Ordinance
against the petitioners therein. The appellants in that case were
commission agents carrying on business in the sale and purchase of
gur, shakkar and khandsari in the New Mandi, Muzaffarnagar. The
State Government issued a notification dated 8.11.1968 under s. 5
c
O) of the Adhiniyam declaring their intention to regulate the sale
and purchase of specified agricultural produce in the areas including
the New Mandi, Muzaffarnagar. That notification included among
other things gur, rab, shakkar and khandsari. After the issue of that
notification the Mandi Samiti authorities required the writ petitioners D
in that case to obtain licences for carrying on their business in gur,
rab, shakkar and khandsari. Thereupon, a writ petition, out of
which Special Appeal No. 49 of 1969 arose, was filed by one Nanak
Chand, challenging the enforcement of the Adhiniyam against him.
In that appeal, decided on 11.3.1969 a Division Bench of the High
• Court held that gur, rab and jaggery are not agricultural produce E
within the meaning of s. 2{a). It was after that decision that
Ordinance No. 8 of 1970 was promulgated including gur, rab,
shakkar, khandsari and jaggery in s. 2 (a) of the Adhiniyam. The
points raised in the aforesaid Special Appeal No. 175 of 1973 were:
(I) The State Legislature was not competent to enlarge the difinition
of agricultural produce so as to include gur, rab, shakkar, khandsari
and jaggery within the term "agricultural produce"; (2) The State
Legislature had no legislative competence to enact the UP. Amend-
ment Act 10 of 1970 as that Act was with reference to subject of
industries the control of which lay with the Union Government as
declared by Parliament by law to be expedient in the public interest
within the meaning of entry 52 of List I to the Seventh Schedule: G
(3) The provisions of the Amendment Act IO of 1970 are repugnant
to the Industries Development and Regulation Act, 1951; (4) The
provisions of the Amendment Act 10of1970 are discriminatory as
vacuum pan sugar is not included in the definition of agricultural
produce ins. 2(aJ; and {5) The provisions of the Amendment Act 10
of 1970 infringe the fundamental right guaranteed by Art. 19(1) (f)
H
and (g) of the Constitution.
~86 SUPREME CTUkT kEl'ORRS [198S] 2. s.C.R

A The High Court held in Special App<al No. 175 of 1973 relying t
upon tliis Court's decision in Paunakram v. State of Punjab(l) that
in view of the extended definition of agricultural produce after the
Amendment Act 10 of 1970 an enquiry whether gur, rab, shakkar
and khandsari are agricultural produce or not is beyond the purview
of the Court and that there is no discrimination as there is essential
ll difference between gur, rab, shakkar and khandsari under one head
and vacuum pan sugar on the other, as the former are manufactured
by the open pan process and the latter is manufactured by the
vacuum pan process and the vacuum pan process sugar industry is
in existence since 1931 and involves big sugar factories whereas
industries producing khandsari sugar by open pan process are of
c recent origin and those units carry on small scale business. In my
view, theso may be good reasons for not subjecting khandsari sugar
to the levy of market fee and subjecting plantation white sugar to
the levy. It is not necessary to refer to the decision of the High
Court on the other three points. It is sufficient to say that in my
view that decision relates to the necessity to obtain a licence under
D
the Adhiniyam for dealing in khandsari sugar and certain other com-
modities introduced into the definition of agricultural produce by
the Ordinance which was replaced by the U.P. Amendment Act IO
of 1970 and it had nothing to do with the liability of khandsari
sugar manufacturers-sellers to pay market fee under the Adhiniyam.
E
Ill these circumstances, I hold that what the petitioners
produce in their modern khandsari mills by the open pan process is
khandsari sugar, an industrial product like plantation white sugar
and not khandsari which is produced ·by agricultural producers in
the indigenous method and that the levy of market fee on sales of
F khandsari sugar under the Adhiniyam is unwarranted as the
Adhiniyam is intended for the protection of agricultural producers
in the disposal of their products and only khandsari produced by
agricultural producers is included in the definition of agricultural
produce in s. 2(a) thereof and not khandsari sugar.
On the question of discrimination, Mr. Shanti Bhushan submit·
G ted that plantation white sugar produced is by the vacuum pan
process, in the same manner as khandsari sugar is produced by the
open pan process and that there is no major difference between the
two industrial products and there is discrimination in &o far as
plantation white sugar is not sought to be subjected to the levy of
market fee under the Adhiniyam where only khandsari sugar is
H

IV AIR 1995 SC 187.
RATH! KHANDSARI v. u.P. STATE (Varadarajan, J.) 987

sought t ' be subjected to the levy. He submitted that the difference A
in the process of manufacture alone is not a distingnishing factor
and that the difference in the process of manufacture cannot be a
ground for holding that there is no discrimination if the levy could

-
be made on khandsari sugar under the Adhiniyam, leaving planta-
tion white sugar out of its purview. He further submitted that B
' plantation white sugar is produced in larger quantity than khandsari
sugar and that traders in plantation white sugar also derive advan-
tage by the use of the market area in the whole of the State of Uttar
Pradesh which has been divided into 250 market areas and no part
of that State is left uncovered by the Adhiniyam. In this connection,
Mr. Shanti Bhushan invited the attention of this Court to the c
decision in Laksmi Khandsari etc. etc. v. State of U.P. ana Ors.(1)
where it is observed at page 94 that the restriction may be partial,
complete, permanent or temporary but this must bear a close nexus
with the object sought to be achieved. As stated earlier, Mr. Sinha
submitted that the two products must be identical for attracting the
D
bllr of Art. 14 of the Constitution and that similarity alone will not
do. But it must be remembered that the Adhiniyam is concerned
with the levy of market fee on a variety of products, namely,
agricultural produce and that if khandsari sugar produced by the
petitioners in their mills by the open pan process out of sugarcane
juice could be brought under the purview of the Adhiniyam it is
• difficult to understand how plantation white sugar for the production
E

of which also sugarcane is the raw material could be exempted from
the levy. The levy of market fee could not be said to depend upon
the exact chemical composition of the commodity. Mr. Thakur
submitted that plantation white sugar produced by the vacuum pan
process does not require regulation and, therefore, there is no F
discrimination in not subjecting it to the levy nnder Adhiniyam.
Similarly, Dr. Chitale submitted that whatever was considered
necessary to be regulated was brought under the Adhiniyam and
that there is no discrimination. It is not possible to accept this
submission of Mr. Thakur and Dr. Chitale. Plantation white sugar
does not require less regulation than khandsari sugar. Reference was G
made to this Court's decision in Andhra Sugars Ltd. and Anr. etc. v.
State of Andhra Pradesh and Ors.(') where it has been heid that
factories producing plantation white sugar by the vacuum pan

H
(I) [1981] 3 SCR 92 at 94.
(2) [1968] l SCR. 705.
988 SUPREME COURT REPORTS (1985) 2 S C.R.

A process and khandsari units producing sugar by the open pan process
are distinct and separate unit;. That case related to imposition of
tax on sugar and exemption of khandsari and jaggery from the levy.
The principle underlying the levy of tax cannot be made applicable
to the levy of market fee under the Adhiniyam. Both plantation
white sugar and khandsari sugar are indnstrial products and there is
B clear discrimination, in my view, against khandsari sugar in seeking
to subject it to the levy under the Adhiniyam leaving out plantation
white sugar.
For the reasons mentioned above I am of the op in ion that the
Writ Petitions deserve to succeed. They are accordingly allowed but
C without any order as to costs.

THAll:ltAR, J. The petitioners in the Present group of fourteen
Writ Petitions under Art. 32 of the Constitution of India, are
owners of Khandsari factories in Uttar Pradesh. They seek appro-
priate relief on the premise that what they produce is 'Khandsari
D Sugar' and not 'Khandsari' which is covered by the definition of
'Agricultural Produce' in section 2(a) of U.P. Krishi Utpadan
Mandi Adhiniyam Act, 1964 (hereinafter referred to as the 'Act')
which reads as under :

"agricultural produce" means such items of produce
of agriculture, horticulture, viticulture, apiculture, sericul-
E ture, pisciculture; animal husbandry or forest as are speci-
fied in the Schedule, and includes admixture of two or
more of such items, and also includes any suoh item in
processed form, and further includes gut, rab, shakkar,
khandsari and jaggery;
F Accordingly they contend that they are not liable to obtain a
licence under Rule 67 of the Rules framed in exercise of powers
under section 40 of the Act or to pay the licence fees (Rs. I 00 per
annum) payable for such licence. So also they contend that the
Market Committee (Mandi Samiti) constituted under section 12
of the Act cannot levy and collect market fee of I % of the value,
G under section 17 <iii) of the Act, on the transactions in respect of
what they produce, from the traders who purchase the product from
them.

Resistence to the regulation of the trade in 'Khandsari' and
the collection of market fees thereon dates back to 1969. It was on
U November 5, 1969 that an Ordinance, U.P. Krishi Utpadan Mandi
RATHI KHANDSARI f. U.P. STATE (Thakkar, J.) 989

Adhiniyam, 1964 (Amendment and validation Ordinance No. 1969) A
was passed, whereunder, the definition of 'agricultural produce'
embodied in section 2(a) of the Act was amended by including 'gur,
rab, shakkar, khandsari and jaggery'. The said Ordinance was
subsequently converted into U.P. Krishi Utpadan Mandi (Amend·
ment and Validation) Act of 1970. Thus, 'Khandsari' stood covered
B
> ' by the definition of section 2(a) of the Act so amended. And this
provided the starting point of resistance in the form of a Writ Peti·
tion on the part of a few Commission Agents carrying on the busi·
ness of sale and purchase of Khandsari. They instituted a Writ
Pe!ition, being Misc. Writ Petition No. 4835 of 1969 in the High
Ccurt of Allahabad, challenging the validity of the inclusion of c
'Khandsari' in the definition of 'agricultural produce' contained in

. section 2(a). The challenge was made on several groullds but no
distinction was sought to be made between Khandsari produced
indigenously on the one hand and Khandsari produced in the
factories like the petitioners' factories on the other hand, by calling
the latter as 'Khandsari Sugar'. A learned single Judge, by his D
judgment and order dated February 18, 1972, repelled the challenge
and dismissed the Writ Petition. A Division Bench of the
Allahabad High Court confirmed the decision in Special Appeal No.
175 of 1973 on September 7, 1977.
> '

The matter appears to have rested there till 1981. Market
E
fees were being collected in respect of 'Khandsari' produced by the
factories like the Petitioners' factories under the Act ever since
1969-70. So also the factory owners were obtaining the requisite
licence under the Act since 1969·70. Eleven years later, some of
the factory owners, petitioners herein, have woken up to the prob-
lem and have renewed the challenge by way of the present petitions. F
The definition embodied in section 2(a) of the Act is an inclusive
one. It in terms provides that 'Khandsari' is included within the
coverage of "agricultural produce". The Act however does not
define the term 'Khandsari'. The owners of the 'Khandsari facto·
ries', petitioners herein, therefore contend that what they produce
is "Kb.andsari Sugar" and not 'Khandsari'. But then it is not G
sufficient for the petitioners to describe their product as "Khand-
sari Sugar" ia order to successfully contend that it is not 'Khandsari'.
It is [urther more necessary for them to show that what they produce
is popularly or commercially known as "Khandsari Sugar" and not
as 'Khandsari'. And this they have failed to establish. It is not
shown that "Khandsari Sugar" is the nomenclatu.re employed in the
ti
990 SUPl.l!MI! COURT REPORTS t1985] 2 s.c.R.
A world of trade-and commerce in respect of their product. Neither the
traders, nor the consumers are shown to have done so in their day-
to-day dealings.

It appears that the term "Kbandsari Sugar" owes its origin to
U.P. KHANDSARI SUGAR MANUFACTURING ORDER of 1977
B issued under section 3 of the ESSENTIAL COMMODITIES ACT,
1955. But then "Khansari Sugar" was defined by clause 2(fJ of the
said order as meaning "sugar containing more than 90% sucrose
and manufactured by open pan process including bels." It is a statu-
tory definition enacted for the 'purpose' of the aforesaid Control
Orcer issued under section 3 of the Essential Commodities Act
c which Control Order uses the expression 'Khandsari Sugar'. It has
nothing to do with the meaning and content of the term 'Kha~dsari'
as used by the trade in U.P. Since the term 'Khandsari' has not
been defined by the Act, it must be construed in its popular sense.
That is to say in the sense in which people conversant with the
subject.matter with which the statute is dealing, would attribute to it.
D This principle of construction has been affirmed and reaffirmed by
this Court in Commissioner of Income-tax, Andhra Pradesh v.
Taj Mahal Hot•l( 1> and Porrits & Spencer (Asia) Ltd. v. State
of Haryana<2> as also in nume~ous other decisions. It is unnece-
ssary for the present purpose to cite all the decisions. Or ta under-
take a journey through the factual hinterland of each decision. Or •
to turn the headlights on the observations made in each of the deci-
sions. For, the principle, though garbed in different apparel, is
simply this. In legislations pertaining to the world of business and
commerce, the dictionary to refer to is the dictionary of the inhabi.
tants of that world. What they understand by the term 'Kbandsari'
is precisely what thatterm means in the statute designed to regulate
I their dealings and transactions. The best test, therefore, is to ask
the question what they themselves have understood by the term
'Khandsan', how they themselves have interpreted it, and on what
basis they themselves have moulded their own conduct, for all these
years. The factory owners similarly situated as petitioners as also
the traders in general have understood the term 'Khandsari' as
G being applicable to the Kbandsari produced by the factories by open
pan process as also to Khandsari produced indigenously. They
have been obtaining licence under the Act and paying market [

(I) [1971] 82 l.T.R. 44 at p. 47.
(2) [1979] 1 S.C.R. S4S.
B
RATH! KHANDSARI v. u.P. STAIB (Thakkar, J.) 991

fee at l %of the value since 1969-70 till 1981 without demur. Even A
though the coverage of 'Khandsari' by virtue of the definition of
section 2(a) as amended in 1969-70 was challenged in 1969 it was
not on this ground. As mentioned earlier, the challenge initiated in
1969 ended m 1979 with the decision of the Division Bench of the
Allahabad High Court rendered in Special Appeal No. 175 of 1973.
A copy of this judgment has been placed on record of the present
group of petitions at Annexure IL It is not necessary to advert to
8
the judgment in detail for the purposes of the discussion of the
present point. Suffice it to say that the challenge was made on
five grounds indicated in the judgment and that none of these
grounds pertained to the aspect relating to the meaning and content
of the term 'Kh:rndsari'. Thus, for more than ten years even the
petitioners have not felt that 'Khandsari' means something other c
... ' than what they produce. The petitioners have not established that
their produce is marketed under a different name in the market.
There is no material for holding that the petitioners sell their
product under the name "Khandsari Sugar" to the traders.
Or that the traders inter se in transacting their business
refer to the same as Khandsari Sugar. Or that any consumer D
desirous of purchasing factory produced Khandsari would ask for
"Khandsari Sugar". It is not shown that either the petitioners or
the traders or the consumers refer to the product as "Khandsari
Sugar". Nor is it shown that it is not marketed under the name
'Khandsari'. In other words, it is not shown that in the popular or
commercial sense, the product is LJot known as 'Khandsari', but is E
knowo as Khandsari Sugar. In this context one significant fact
needs to be stressed, namely, that the term "Khandsari Sugar" saw

-
the light of day seven years after the Act was enacted in 1970 when
U.P Khandsari Sugar Order of 1977 was born and the artificial
;. nomenclature was coined for the restricted purpose of the Order.
F
There is no material even to show that this nomenclature was known
to ,be petitioners or to the traders themselves theretobefore. The
contention that the article produced by the petitioners is not Khand-
sari must, therefore, be firmly and unhesitatingly negatived.

The legislature, it is also argued, 'could not have intended' to
G
cover the produce turned out by producers like the petitioners.
The principal object of the Act is to protect the preducers from
exploitation. Those who own or run Kbandsari units, like the
petitioners, engaged in large scale production with the aid of relati-
vely modern plant and machinery worth lacs of rupees, and employ
a large number of workers, need no such protection. Such is the H
992 SUPREME COURT REPORTS [1985] 2 s.c.a.

A argument. In our opinion the argument is untenable. The legis-
lature has in terms encompassed 'Khandsari' within the definition
of section 2(a) of the Act. And the term 'Khandsari' is sufficiently
wide to cover all varieties of Khandsari mcluding the article produ-
ced by the factories like those of the petitioners. Besides, the basic
premise assumed by the petitioners that the object of the Act is
B merely to protect the producers from exploitation is fallacious.
Of course, one of the main objects of the Act is to protect the
producers from being cheated by unscrupulous traders in the matter
of price, weight, payment, unlawful market charges etc. and to
render them immune from exploitation as indicated by the 'prefa-
tory note' and by the provisions contained in sections l 6(i), (ii),
c
(iii), (iv), (viii) etc. While this is one of the objects of the Act, it
is not the sole or only object of the Act. The Act has many more
objects and a much wider perspective such as development of new
market areas, efliciont collection of rlata, and processing of arrivals
in Mandis with a view to enable the World Bank to give substantial
economic assistance to establish various markets m Uttar Pradesh,
D as also protection of consumers and even traders from being exploi-
ted in the matter of quality, weight and price This needs no
elaboration in view of the pronouncements of thts Court. For
instance in Ramesh Chandra v. State of U.P.(') this Court has
observed thus :-
"The long title of the Act in hcates that it is an Act
E "to provide for the regulation of sale and purchase of
agricultural produce and for the establishment, superinten-
dance, and control of markets therefor in Uttar Pradesh."
From the Objects and Reasons of the enactment it would
appear that this Act was passed for the development of new
market areas and for efficient data collection and processing
F of arrfra/s in the Mandis to enable the World Bank to give a
substantial help for the establishment of various markets in
the state of Uttar Pradesh. In other States the Act is
mainly meant to protect an agriculturist producer from
being exploited when he comes to the Mandis for selling
his agricultural produce. As pointed out by the High
G Court certain other transactions also have been roped in the
levy of the fee, in which both sides are traders and neither
side is an agriculturist. This has been done for the effec-

H (1) [1980) 3 S.C.R. 104
RATH! l:HANDSARI v. U.P. STATE (Thakkar, J.) 993

tive implementation of the scheme of establishment of A
markets mainly for tbr benefit of the producers."
(Emphasis added)
And in Ramesh Chandra Kachardas Porwal & Ors. v. State
of Maharashtra & Ors. etc.Pl it has been stated that:-

"It is true the<t one of the principal objects sought to B
be achieved by the Act is the securing of a fair price to the
agricultnrist for his produce, by the elimination of middle-
men and other detracting factors. But, ft would be wholly
incorrect to say that th• only object of the Act is to secure
a fair price to the agriculturist. As the Jong title of the
Act itself says, the Act is intended to regulate the market-
c
ing of agricultural and certain other produce. The
marketing of agricultural produ~e is not confined to the
first transaction of sale by the producer to the trader
but must necessarily include all subsequent transactions in
the course of the movement of the commodity into the
ultimate bands of the consumer, so long, of course, as the D
commodity retains its original character as agricultural
produce. While middlemen are sought to be eliminated,
it is wrong co view the Act as one aimed at legitimate and
• genuine traders. Far from it. The regulation and control
order is as much for their benefit as it is for the benefit
of the producer and the ultimate consumer. The elimina- E
tion of middlemen is as much in the interest of the trader
as it is in the interest of the producer. Promotion of
grading and standardisation of agricultnral produce is as
much to his benefit as to the benefit of the producer or

-
consumer. So also proper weighment. The provision for
F
settlement of disputes ariiing out of transactions connected
with the marketing of agricultural produce and ancillary
matters is also for the benefit of the trader. It is because
af these and 1·arious other sen-ices performed by the Market
Committee for the benefit of the trader that the trader is
required to pay a fee. It is, therefore, clear that the regu- 0
lation of marketing contemplated by the Act involves
benefits too traders to in a large way. It is also clear to
our mind that the regulation of marketing of agricultural
produce, if confined to the sales by producers within the
market area to tradets, will very soon lead to its circum-

.(I) (1981) 2 S.C.R. 866 ff
994 SPRBMB COURT REPORTS [1985) 2 s.c.R.

vention in the guise of sales by traders to traders or import
A of agricultural produce from outside the market area to
within the market area."

In the face of these pronouncements it cannot be success-
fully urged that the object of the Act is merely to protect the
producer from exploitation. As pointed out in the aforesaid deci-
B sions, while the analogous Acts in other States had a limited
perspective, so far as Uttar Pradesh is concerned, the Act has a j-
much wider horizon, and even transactions where both the sides are
traders and neither side is an agriculturist, are brought within the
coverage of the Act. There is, therefore, no merit in this nuance
of the challenge.
c
The petitioners have next contended that having regard to the
definition of 'Producer' contained in section 2{p) of the Act, this
Act could not have been intended to cover the article produced by
them. We do not see anything in the definition which would
justify overriding the clear language of the statute read in the
u light of the perspective of the Act and the history of the levy.
While the term 'Khandsari' bas not been defined it is obviously
wide enough to cover Khandsari produced by any process regard-
less of its quality or variety. As d_iscussed earlier, one of the
objects of the Act inter alia is to protect the consumer as also
the trader. We need not reiterate the reasoning articulated by us
E a moment ago in dealing with the first facet of this argument.
The argument based on the supposed intendment of the Act, in
our opinion; is wholly misconceived. We have, therefore, no
hesitation in repelling this contention

Las!Iy section 2( a) of the Act has been challenged on the
F
ground that it is discriminatory and violative of Art. 14- They
have contended that section 2(a) of the Act, in so far as it .I,- - -
includes Khandsari in the definition of agricultural produce and
thereby subjects the trade in the said product to regulation under
the relevant provision of the Act is ultra vires Art. 14 of the
G Constitution of India inasmuch as it introduces a hostile discri-
mination. According to the petitioners, the article produced by
them, which they call Khandsari sugar. is almost indistinguish-
able from the plantation sugar mills. Whether the article produ-
ced by the petitioners is very much similar to plantation sugar
or not. is a moot question. The other side has controverted
this averment. The process of manufacture is different. The
II market priCll of Khands>1ri is lower dependins on the quality.
RATHI KHANDSARI ~. u.P. STA1E (Thakkar, J.) 995

The most inferior variety would be more like the Khandsari A
produced by the indigenous process (yellowish in colour and
powdery in form) and would fetch a lesser price in the market.
It would appear from the affidavit that the most superior variety
might perhaps be approximate in appearance to the plantation
sugar manufactured by the sugar mills but would all the same
fetch a somewhat lesser price than the price fetched by plantation B
sugar It is a different commercial product known by a different
name in the trade. Be that as it may, the argument that unless
both are regulated i.nd:r the Act. Art. 14 would be offended, is
meritless. This Court has had several occasions to deal with a
similar problem in the context of taxing statutes And this Court
has consistently taken the view that in the matter of classification c
the Legislature has a wide discretion in selecting the persons or
objects it will tax, and that a statute is not open to attack on
the ground that it taxes some persons or objects and not
others. 'Everything-or-nothing' argument is basically fallacious.
For, the Legislature may tax or regulate the trade in some objects
and not in others. Or may bring within its net some objects D
initially and may cast the net wider later on. Or may tax or
regulate the trade in only such objects which it considers expe-
dient or worthwhile. The decision, essentially a policy decision,
may depend on several factors. Factors, such as, the felt nece-
ssity for such an impost or regulation of a trade in a particular
article, likely impact of the decision on the trade, industry, or E
consumer, viability of the same from the stand point of its own
management resources Or from the angle of the net advantage
to be secured in the balance sheet of pros and cons taking into
account the anticipated administrative and management inputs
required to be invested in the exercise. In substance, it is a
policy decision turning on numerous and complex factors. In
F
East India Tobacco Co. v. State of Andhra Pradeslz( 1l this Court has
quoted with approval the following pass•ge from Willis on
Constitutional Law(') :

"A State does not have to tax everything in order
to tax something. It is allowed to pick and choose G
districts, objects, persons, methods and even rates for
taxation if it does so reasonable . . . . The Supreme

(l) [1963) 1 S.C.R- 404
(2) Willis on Constitutianal Law p. 857
996 SUPREME COURT REPORTS [1985] 2 S C.R.
A
Court has been practical and has permitted a very wide
latitude In classification for taxation."

And this Court has turned down the plea that in order lo
respect Art 14, both varieties of tobacco ( virginia tobacco on
B the one hand and country tobacco on the other) must be taxed
or none. says the Court ;

"if a State can validly pick and choose one
commodity for taxation and that is not open to attack
under Article 14, the same result must follow when
c the State picks up one category of goods and subjects
it to taxation."

In the matter of market regulation also Khandsari and
Mill sugar are governed by different regulations As a matt er of )

fact mill sugar is subject to control and regulation of no mean
D order under Sugar (Control) Order of 1966 whereunder the sugar
mills are obliged to make available a significant quantity of sugar
by way of levy at stipulated prices which are very much lower
than prevailing open market prices. •Khandsari' produced by the
petitioners was not subject to similar control, for a]l these years.
The producers of Khandsari like petitioners, it is obvious, have
E benefited thereby. It is true that for a short period Khandsari
was also subjected to levy under Khandsari Sugar (Levy) Order
of 1981 on a relatively small portion of its production. That
however makes little difference from the standpoint of chalJenge
to section 2( a) of the Act on the ground that Mill sugar is not
included in the definition of 'agricultural produce' and not 'sub-
F
jected to the provisions of the Act. So also the mere fact that
both are sweetening agents wil! not justify condemnation of the
classification which is based on a totality of the factors of diffe-
rent1at1on There is therefore no substance in the challenge from
the standpoint of Art. 14 of the Constitution of Tndia. It is
not for this Court to question why Khandsari produced by the
G petitioners is incJuded when sugar produced by the Mills is not
so included. It is not a question to which we can legitimately
address ourselves, for, essentially it is a question of legislative
wisdom and legislative policy dictated by countless and complex
comiderations. The Court cannot, and will not, substitute its own
wisdom in place of the legislative wisdom in such matters. The
H
RAmi KHANDSARI v. u. P. STATE (Thakkar, J.) 997

Court will not impose on itself this responsibility, if not for any A
other reason, than for the reason that it is beyond its province.
The arguments advanced on this wavelength need not, therefore,
detain usny a longer.

The petitions, accordingly, fail. Rule issued in each of the
petitions. will stand discharged There will be no order regarding B
costs. Interim orders will stand vacated.

In view of the majority decision, all the writ petitions are
dismissed. There will be no order regarding corts. Interim orders
will stand vacated.

A.P.J. Petitions dismisesd

\
•