M/S Siel Ltd. & Ors. v. Union of India & Ors.

Read this case wherein the validity of an Act was challenged on the ground that the State Legislature lacked competence to pass the same and unreasonable restrictions were being imposed.
COURTSupreme Court of India
JUDGES/CORAMJustice M.M. Punchi and Justice V. Manohar


The appellants have challenged the constitutional validity of the U.P. Sheera Niyartaran Adhiniyam 1964 on the ground that the State Legislature lacked competence to pass the Act. They have also challenged the restrictions imposed on the sale of molasses under the said Act and the said orders made there under as unreasonable restrictions violates Article 19(1)(g) as also Article 301, being restrictions which affect in the state, freedom of trade. In this case Supreme Court supported the view of UP Act on basis of the fact that state has the competency to regulate the activities of the state government. In this case the author has mixed argument against the judgement of the court. Even though the power or competency to make law is what extends it works in the question of law under the constitution.


The facts of the case are as follows: M/S SIEL LTD is the petitioner who put case before the Allahabad high court which dismissed by the court because of that they appealed before the Supreme Court by challenging the constitutionality of the UP act and the Shreeni Yantran Adhiniyam. The occasion for this challenge appears to have arisen on account of orders passed by the Controller of No 1 asses/Excise Commissioner, U.P. under Section 8 of the said Act read with Rule 22, and dated 13th of August 1983, 22nd of October, 1993 and 1st of January, 1994. Under Section 8 to the said Act the Controller may by order require the occupier of any sugar factory to sell and supply in the prescribed manner such quantity of molasses to such person, as may be specified in the order, and the occupier shall, notwithstanding any contract, comply with the order. Under Section 10 the occupier of a sugar factory shall sell molasses in respect of which an order under Section 8 has been made at a price not exceeding that prescribed in the Schedule. Under sub-section (2) of Section 10 the State Government may, by notification in the Gazette, amend the Schedule if such amendment is necessitated by reason of any variation in the cost of storage of molasses or loading or shunting charges of molasses in tank wagons or in order to bring the prices of molasses in conformity with the prices, if any, fixed by the Government of India. Under the said orders of the Controller dated 13.8.1993, 22.10.1993 and 1.1.1994, different percentages of graded molasses were reserved in the State of U.P. The reserved quantity under the said orders was required to be sold at prices fixed by the State Government under the notification issued under sub-section (2) of Section 10 at the relevant time.

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The main issues in the case were:

  1. Whether the state legislature has competence to pass the Act in the name of Sheera Niyatran Adhiniyam?
  2. Whether the Act has ambiguity under the Art 19 (1) (g) and 301?

Summary of court decision and judgment

From the valid pointed out by the respondents that in public interest an industry, in the present case, the sugar industry, can be required to make a supply to another industry of their product or by-product. Looking to all the circumstances, the U.P. Sheera Niyantaran Adhiniyam 1964 and the State notifications of 13.8.1993, 22.10.1993 and 1.1.1994 having been held by the High Court as not violate Article 19(1)(g) of the Constitution, we are inclined to agree with the findings so arrived at by the High Court. In the premises these appeals are dismissed with costs.


Article 254 expressly deals with a situation under Clause 2, where the law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament, or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has been given his assent, prevail in the State subject to the proviso contained therein in this case at earlier stage itself the president gave the position of reserved to Uttar Pradesh and Bihar which make the state competency to make law from concurrent list even though the union government enacted new law. Because such reason that repeal of the union (molasses control) Act does not affect the liberty given to the state under concurrent.

  • In the point of economically, the policy formulated by the UP government is to improve the attraction of investors in that industry by controlling over to certain limit makes that industry good economic earn.
  • As well as court failed to notice the regulation related to this industry accepted by union government at first 1961 because at that time it was limited and didn’t control the trade and commerce extremely but this new amendment took the charge at large which affects the industry to take free decision in lesser numbers. Even though the state have the competency to make policy still it extendS to limited powers which doesn’t affect the fundamental right of the constitution.
  • In this case court need to look into two definition which are more important than the definition of industry. Those are ‘restriction’, regulation and prohibition. In this view art 19(1)(g) says no person has a right to prohibit the lawful profession but can regularise or restrict to some extent.
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There is a proverb that “seeing the tiger, cat burned his own skin”. even though Bihar watch out the case dealings and the decision of Allahabad high court concurrent decision of the supreme court also they put the case before a court which leads to dismissal of the court along with the cost for wasting the quality time of the court. Bihar case is like causing unnecessary and well-known answers for namesake or to show off the majority of that particular industry have common intention against such Act but this failed due to the public interest. Coming back to this case, the judgement of the Supreme Court is correct but failed to give certain suggestions to the state to amend the Act in order to maintain it under the private rights of every citizen by way of defining them. If the court focused on that definition clause it may remove some of the lacunae in following future cases to forward.