' MUHAMMAD MUJEEBULLAH SIDDIQUI, J.-- Common questions of fact and law are involved in all the petitions and therefore, all the petitions have been heard together and are disposed of by this single consolidated order.
2. All the petitioners are Sugar Mills engaged in the manufacture and sale of sugar. The raw material is sugarcane, which is purchased by them from the cane groweRs. For the sake of brevity the facts are being taken from Constitutional Petition No,D-1364 of 1998.
3. The sugar industry is regulated by the Government. The case of the petitioners is that initially the entire purchase of sugarcane by the petitioners from the growers, its pricing, sale of the end- product i,e, sugar and its pricing, were fully controlled by the Government of Sindh. The Government had earmarked areas and growers from where factories were to purchase the sugarcane. With the, purchase of entire sugar produced by a particular mill at the fixed price. Some profit was ensured as their entire manufactured product was guaranteed to be sold. In ' consideration of the Government's commitment to acquire the entire sugar manufactured by the sugar, mills, they agreed to share profits with the groweRs. This profit sharing formula was by way of payment of "quality premium" by the sugar mills to the groweRs. The idea behind the scheme was that the Government intended to encourage the cultivation of superior sugarcane and the quality premium was an incentive, which was paid over and above the purchase price.
4. In fixing the entitlement of the growers in quality premium" the following formula was evolved:- "(a) A particular percentage was fixed as "bench mark" i,e, base. In Sindh the "bench mark" was and has always been at 8.7%.
(b) In case, the recovery of sucrose content i,e, sugar, from the sugarcane supplied by the growers exceeded the "bench mark", the growers became entitled 'to "quality premium" at a particular price-rate multiplied by the recovery in excess of the "bench -mark". The price-rate. In the year 1982 was at the rate of 9 paisas per maund for every 0.1% (or part thereof) increase over and above the "bench mark". Thereafter different price rates have been prescribed. The Government of Pakistan Food and Agriculture Division, devised a formula under the Sugar Policy for 1982-83 to the effect that 'quality premium' at the rate of 9 paisas per maund of cane for each 0.1% of excess recovery over the recovery assumed in the official price formula should be allowed 'and paid at the end of the season. This premium will not be admissible for non-approved varieties. The premium would be worked out on the basis of a crushing season of 16C days. However, if the crushing season is prolonged due tc excess production of cane in the mil zones, the entire crushing season may be taken as the base for calculating the excess recovery. For the crushing season 1983-84 the "quality premium" payable to cane growers at the end of crushing season was fixed at 11 paisas per maund of the cane for each above base level at 8.7%. For the crushing season 1984-85 the minimum price of sugarcane was fixed at the rate of 9.15 per maund under section 16 of the Sugar Factories Control Act, 1950. Under same section 'quality premium' was fixed at the rate of 11 paisas per maund of cane 'for each 0.1% of excess sucrose recovery above 8.7%. For the crushing season 1988- 89, the minimum price of sugarcane was fixed at Rs.12.00 per maund and "quality premium" was fixed at the rate of 12 paisas per maund of cane for each 0.1% of excess sucrose recovery above 8.7%. For the crushing season 1989-90, the minimum price of sugarcane was fixed at the rate of 14 rupees per forty kilograms and the 'quality premium' was fixed at the rate of 19 paisas per 40 kilograms for each 0.1 % of excess sucrose recovery above 8.7%.
' For the crushing season 1990-91, the minimum price of sugarcane was fixed at the rate of Rs.15 and 75 paisas and the `quality premium' was fixed at the rate of 19 paisas per 40 kilograms for each 0.1 % of excess sucrose recovery above 8.7%.
' In the crushing season 1993-94, the minimum price of sugarcane was fixed at the rate of Rs.18 and 25 paisas per forty kilograms and the 'quality premium' was fixed at the rate of 22 paisas per 40 kilograms for each 0.1% of excess sucrose recovery above 8.7%.
' In the crushing season 1994,95, the minimum price of sugarcane was fixed at the rate of Rs.20 and 75 paisas per forty kilograms and the 'quality premium' was fixed at the rate of 27 paisas per 40 kilograms for each 0.1% of excess sucrose recovery above 8.7%.
' In this year it was further directed that in case the mills pay prices more than the support price but the differential is less than the quality premium, the farmers should be compensated.
' In the crushing season 1995-96, the minimum price of sugarcane was fixed at the rate of Rs.21 and 75 paisas per forty kilograms while the 'quality premium' remained same as per crushing season 1994-95. In the crushing season 1997-98, the minimum price of sugarcane was fixed at the rate of Rs.36 per forty kilograms and the 'quality premium' was fixed at the rate of 32 paisas per 40 kilograms of cane for each 0.1% of excess sucrose recovery above 8.7%.
5. The petitioners have contended that initially the payment of "quality premium" was not backed by any legal authority but was based on voluntary agreement of the petitioneRs. It was further contended that the agreement was based on commercial consideration. According to them, although many growers did not supply cane of higher recovery above the bench mark 'but even those growers were paid quality premium. In the crushing season 1983-84 the respondent No,1, the Government of Sindh, issued a letter to the .Effect that in future no sugar stocks of any Sugar Mills would be purchased by them and the mills would be free to sell sugar in the open market. Thus, the benefits and incentives which were available to the petitioners were taken away. Previously when the Provincial Government used to purchase the entire stock they used to make payment of 70% in advance enabling the petitioners to pay promptly the cost of sugarcane to the growers, to meet the costs of manufacture of sugar, management and debt- servicing charges and to make advance payments of excise duty without which clearance of sugar from a sugar factory was not permissible under the Central Excise Laws. The balance 30% of price was payable within one week of the delivery and/or lifting against allocation orders of the respondent No,l. In spite of withdrawal of the benefits and incentives to the petitioners, the respondent No,2 (Cane Commissioner) demanded payment of quality premium. Similar was the position in Province of. Punjab, where a Writ Petition No,5828 of 1981 was filed and the Lahore High.
Court declared the demand of quality premium to be illegal and lacking any sanction in law.
Similar petitions were filed in the Province of Sindh in the High Court of Sindh being C.Ps. Nos.555 and 539 of 1984 and ad interim orders were issued restraining the respondents from taking coercive action but the petitions were not pressed having been rendered infructuous, because Martial Law Authorities, had taken away the jurisdiction of the Court. The plea of the sugar mills before Lahore High Court and Sindh High Court, inter alia was that section 16(1) of the Sugar Factories Control Act, 1950, empowers the Provincial Government to fix a minimum price and did not authorise the Government to direct the factories/mills to pay quality premium and share profits with the groweRs. Consequent, to the issuance of writ by the Lahore High Court, amendments were piloted by the Provinces of Sindh and Punjab, in the Sugar Factories Control Act, 1950.
6. In the Province of Sindh, the Governor through the Sugar Factories Control (Amendment)
Ordinance, 1985 (Ordinance II of 1985) dated 19-2-1985 introduced subsection (v) of section 16 of the Sugar Factories Control Act, 1950, whereby the Provincial Government was empowered to issue directions to the Sugar Factories to pay quality premium at the end of the crushing season at such rate as may be specified by the Provincial Government in proportion to the sucrose recovery of each factory in excess of base level sucrose contents determined by the Provincial Government from time to time.
7. In the Province of Punjab, similar provision was made by insertion of section 16-A in the Sugar Factories Control Act, 1950. Eventually section 16-A was enacted through an Act of the Provincial Assembly of Punjab.
8. The vires of the section 16-A enacted in the Province of Punjab was challenged in the Lahore High Court, 'in Writ Petition No,8460 of 1992 and the LahoFe.High Court struck down the same vide judgment reported as Fauji Sugar Mills v. Province of Punjab 1996 CLC 592.
9. It is further contended by the petitioners that although the Sindh (Ordinance II of 1985) expired by the efflux of time and thereafter there had been no legislation authorizing the respondents Nos.1 and 2 to collect quality premium or to direct sugar mills for payment of the same to the growers but the petitioners were being compelled to pay the same without lawful authority. The petitioners have contended that the respondent No,I are intending to issue fresh notifications containing directions for payment of quality premium to the growers and hence these petitions.
10. The petitioners have contended in the grounds contained in the Memo. Of Petitions that subsection (v) of section 16 of the Sugar Factories Control Act, 1950, is bad and unconstitutional for the following reasons:--
(a) It 'confers upon the Provincial Government naked, arbitrary and uncontrolled powers to prescribe bench mark i,e, the base, the rate, manner and time in which quality premium is to be paid. It suffers from excessive and impermissible delegation of poweRs. The Bench mark is determined on uniform and flat base although the sucrose contents differ from area to area and the average recovery percentage of the individual sugar mill located even in the same area zone are bound to vary according to 'many factors including climatic conditions, soil predicament, variety of the cane, disease, availability of water, cultiv.Ation pattern, method of harvesting and freshness or otherwise of the cane dispatched to the sugar mills. Thus according to the petitioneRs.
Section 16(v) of the Sugar Factories Control Act, 1950, treats unequal in an equal manner and'thus militates against Article 25 of the Constitution being discriminatory in nature.
(b) The demand of quality premium is expropriatory and confiscatory in nature and is violative of Articles 18, 23 and 24 of the Constitution.
(c) Originally the payment of quality premium was on voluntary basis. The Government used to protect the interests of growers as well as sugar manufacturers by prescribing the support price of the sugarcane and payment of quality premium on, one hand and guaranteeing profits to the sugar mills on the other hand by purchasing the entire production at reasonable price.
Subsequently, the Government left the sale of sugar at the mercy of market forces, but continued to regulate the purchase, price of the cane and subsection (v) of section 16 of the Sugar Factories Control Act. 1950 was added which presupposes profits earned by sugar mills. The assumption is illegal, unrealistic and improper. Thus, while the sugar mills even on incurring losses are required to pay quality premium out of imaginary profits which are in fact non-existing.
(d) The entire insistence of the .Respondents to share profits by, way of quality premium is against the spirit of contractual relationship in Islam. Once a contract of purchase of sugarcane is finalized between the sugar mills and the growers at an agreed price, no other person can intervene to change the terms of contract or compel for departure therefrom by coercing the sugar mills to pay high price by payment of quality premium. Thus unilateral change in the contractual terms and prices agreed upon the sugar mills and the growers is violative of Article 2A of the Constitution.
(e) The high yield from the sugarcane is due to better and modern plant and machinery employed by the sugar mills and not due to any action or omission of the groweRs. The growers are given the benefit of quality premium on an incorrect assumption that higher sucrose content above the bench mark is due to supply of better cane whereas the same is due to better technology employed by the sugar mills who have invested huge sums to acquire such technological advancement.
(f) The idea behind paying quality premium has been to reward the growers who supply better quality of cane. The average recovery ranges from 9.5% to 9.7%. Thus, the bench mark at 8.7% would mean that the criteria fixed to reward the growers is even below than the average recovery.
' After the striking down of section 16-A in the Province of Punjab by the Lahore High Court no quality premium is levied and the insistence to pay quality premium in Sindh is discriminatory and violative of Article 25 of the Constitution. The sugar mills in, Punjab stand on better footing than in Sindh.
11. The petitioners have therefore prayed that section 16(v) of the Sugar Factories Control Act, 1950, may be declared to be unconstitutional and of no legal effect and a permanent injunction restraining the respondents from issuing any notification/demand for payment of quality premium.
They have further prayed for the refund of the payments made by the petitioneRs.
12. In the comments filed on behalf of respondent No,3, the Federation of Pakistan, through Ministry of Food, Agricultural and Livestock, it is averred that the Ministry authorized to submit recommendations to the Cabinet/Economic Coordination Committee (ECC) for fixing the support price of sugarcane and related payments in pursuance of the Cabinet/ECC decisions and to issue direction to the Provincial Governments for implementation of the decisions of the Cabinet/ECC.
The Provincial Governments were asked to implement the payment of quality premium by the sugar mills to the growers as a part of fiscal package approved by the ECC. It is contended that the sugar mills in the Province of Sindh have average recovery in excess of bench mark at 8.7% and therefore, they are in a position to pay the quality premium to the groweRs. It is denied that the mills in the Province of Sindh are suffering losses.
13. The respondent No,2 in his comments has contended that the purpose of payment of quality premium is to improve the cane quality by giving incentive to the growers out of the profit gained by the sugar mills. It is not denied that the Government had discontinued the purchase of sugar from the sugar mills. It is denied that the bench mark and the amount of quality premium is being determined in arbitrary manner.
14. Mr. Farogh Naseem, Advocate has addressed the leading arguments on behalf of all the petitioners and Mr. Fazale Ghani Khan, Advocate has adopted his arguments. He initially argued that subsection (5) of section 16 of the Sugar Factories Control Act, 1950, was introduced through the Sugar Factories Control Amendment Ordinance, 1985 and the Ordinance has lapsed, therefore, the notifications issued pertaining to the payment of quality premium are without jurisdiction and unlawful. He maintained that the above Ordinance was not protected under the Revival of Constitution Order, 1985. However, he subsequently conceded that the amending Ordinance was protected under Article 270-A of the Constitution of Islamic Republic of Pakistan. The learned counsel thereafter submitted that the provision contained in subsection (v) of section 16, is violative of the fundamental rights guaranteed under Articles 18 and 25 of the Constitution. He further contended that the provision is expropriatory and confiscatory in nature. According to him the transaction pertaining to the sale and purchase of the sugarcane is completed once the petitioners pay off the growers the purchase price agreed between them. The payment of sugar premium amounts to payment of sale consideration over and above the agreed sale consideration and this second time payment is nothing but expropriation. He has contended that the concept of freedom of contract is implied in the Constitution and by virtue of Article 2A of the Constitution, such contracts cannot be interfered with ' by any authority being un-Islamic in nature. A third party such as the Government cannot disturb the finalized contract of sale and purchase between the growers and the petitioneRs, In support of his contention he has placed reliance 'on the judgment of Honourable Supreme Court, in the case of Commissioner of Income-tax v. Seimen A.G. PLD 1991 SC 368.
15, He has next contended that section 16(v) of the Sugar Factories Control Act, 1950, confers naked and arbitrary powers on the Provincial Government without any guideline and is therefore, completely ultra vires. He has next contended that bench mark of 8.7% is violative of Article 25 of the Constitution. According to him this flat rate is clearly ultra vires since the recoveries and yields vary from place to place, season to season and cane to cane. In support of his contention, he has placed reliance on several judgments including Mis. Shervani Sugar Syndicate v. Government of India AIR 1979 Allahabad 394, I.A. Sherwani v. Government of Pakistan 1991 SCM R 1041 and InamurRehman v. Federation of Pakistan 1992 SCM R 563.
16. He has mainly placed reliance on the judgment of Lahore High Court in the case of Fauji Sugar Mills v. Province of Punjab 1996 CLC 592, whereby section 16-A, inserted by Sugar Factories Control Punjab (Amendment) Act (II of 1991.) was declared to be un-Constitutional and invalid piece of legislation.
' On the other hand, learned advocates for the respondents have supported the validity and constitutionality of subsection (v) of section 16 introduced by the Sugar` Factories Control (Amendment) Ordinance, 1985, in the Province of Sindh. They have contended that it is a profit sharing scheme and the sugar premium is a part of price just like a surcharge. They have contended that the sugar premium is paid out of , the profit earned by the sugar mills and not otherwise. According to them admitted position is that the idea behind the payment of quality premium is to encourage the cultivation of superior sugarcane and the quality premium is an incentive in this regard, whereby an amount over and above the minimum purchase price fixed by the Government is paid. They have contended that the petitioners have admitted in the memo. Of petition that this practice was in vogue from the year 1982-83 and initially it was being paid in pursuance of an agreement and after the insertion of subsection (v) of section 16 of the Sugar Factories Control Act, 1950, under the statute law in accordance with the notifications issued thereunder. It was further contended that the scheme of quality premium is neither violative of Article 18 nor 25 of the Constitution as it is required to be paid as incentive for cultivation of high quality sugarcane and then only the quality premium is to be paid. They have contended that it is based on reasonable classification whereby a bench mark has been fixed at 8.7% and is in the nature of profit sharing and ensures reasonable profit to the sugar mills as well as payment of reasonable.Price for hard work and producing of high quality sugarcane by the groweRs, According to them, it is in the nature of welfare legislation both for the sugar mills as well as for the growers and thus, any enactment directed towards the insuring of justice cannot be unIslamic. On the contrary the Islam enjoins upon Government to insure the reasonable payment to everybody for his labour and further creates an obligation on the State to curb the exploitation of one class of people by the other. They have contended that the profit accruing from the additional sucrose is divided amongst mill owners and the cane groweRs, For this purpose, the notification contains the formula, which cannot be termed as arbitrary or unreasonable. They have further contended that in fact the quality premium "is part of price to the growers of a particular area producing high quality sugarcane. They have further submitted that the quality premium is paid if at the end of season sucrose content is found to be more than 8.7% and thus, the sugar, mills know, in advance that in case of recovery of sucrose in excess of 8.7% they have to pay the quality premium to the growers and thus it is not violative of any fundamental rights and on the contrary it is necessary to uphold the rights of the groweRs,
18. We have carefully considered the contentions raised before us and the material placed on record.
19. Before dilating on the contentions raised by the learned advocates for the parties, it would be appropriate to reproduce section 16 of the Sugar Factories Control Act, 1950, which reads as follows:-- "16. Power to Provincial Government to fix minimum price.--- (i) The Provincial Government after consultation with the Board, may by notification, determine in respect of any area the minimum price to be paid by occupiers of factories or purchasing agents for cane purchased in that area either generally or related to the sugar contents of the cane or direct that such minimum price shall be calculated in the manner prescribed.
(ii) The Provincial Government may, from time to time, vary, by notification, the price fixed under subsection (i).
The occupier of a factory or a purchasing agent shall not make' any deduction from the amount due for the cane sold to him by a cane grower or a 'cane growers' Cooperative Society, except such deductions as may be prescribed or as the Provincial Government may, by notification, from time to time allow.
(iv) The Provincial Government may after consultation with the Board, by notification, direct that in addition to the minimum price to be paid for cane, the occupier of a factory, shall pay for special varieties of cane to be specified in the notification and which the cane grower or 'cane growers'
Cooperative Society has agreed to supply, such additional price as the Provincial Government may direct.
(v) The Provincial Government may direct the factories to pay quality premium at the end of the crushing season at such rate as may be specified by the Provincial Government in proportion to the sucrose recovery of each factory in excess of base level sucrose contents determined by the Provincial Government, from time to time."
20. Now we will take up the judgments cited before us during the course of arguments. In the case of Commissioner of Income-tax v. Siemen A.G. PLD 1991 SC 365, leave to appeal was granted for reexamination of the question decided by the Peshawar High Court. "Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was justified in finding that the return on capital paid by Telephone Industries of Pakistan Limited to Siemens A.G. On the holding of the latter in the share capital of the former was not dividend within the meaning of the definition given in section 2(6-A) of the Income Tax Act, 1922."
21. The Peshawar High Court had decided the question in negative and had held that the disputed amount was dividend. The case of Department was that the amount so paid was in .The nature of interest.
22. While deciding the appeal Honourable Supreme Court observed that the questions being examined were related to the interpretation of statute and held that, so long as existing statutes are not brought in conformity with the Injunctions of Islam, their interpretation, application and enforcement wherein discretionary judicial elements were involved, only that course would be adopted which was in accord with the Islamic philosophy, its common law and jurisprudence.
' Reference was made to Article 227 of the Constitution and the judgments in the case of Muhammad Bashir PLD 1982 SC 139 and Mian Aziz A. Shaikh PLD 1989 SC 613. With reference to the judgment in the case of Mian Aziz A. Sheikh, it was observed that, a fundamental principle was established that when two contracting parties agree to do something by a mutual valid contract or intend doing so, and it is not prohibited by Islam, a third party, like the Income Tax Department or for that matter the Court has no power to modify either the contract or with what they intended to do with it. Reliance in this regard was placed on verse (1) in Chapter Maida and on Versa (34)
Chapter Alisra'a. The law as laid down in the case of Said Kamal Shah PLD 1986 Supreme Court 360, was also referred. With regard to the prohibition against third party intervention in mutual contract.
Reliance was placed on the Hadith of Holy Prophet that, "People be left alone in their mutually agreed transactions;" so that they be blessed by Allah through free circulation of (wealth) amongst themselves, (Bokhari; Kitabul-Baua-No,3709); Abu Daud; Kitabul Ajara No,3442). The principle laid down in the case of Said Kamal Shah PLD 1986 SC 360, to the effect that when parties by mutual free consent enter into a valid contract, then the third party had no right to intervene either to frustrate the contract or to change its nature was reiterated. However, it was added that question relating to exceptions has been dealt with separately on the basis of Islamic principles of Zarroorat, Zarar and public interest such as State Policy, State Necessity etc. Has been dealt with in the case of Qazilbash Waqf v. Chief Land Commissioner PLD 1990 SC 99. It was concluded that on the touchstone of Islamic Rules of Interpretation, under the present Constitutional set-up the Courts are bound to apply in preference to the contrary, so-called accepted rules of interpretation under the other jurisprudence concepts and the Income Tax Authorities cannot change the nature of the contract intended by the parties thereto under the pretext that the rule of interpretation of a fiscal law in this behalf, is different.
23. The learned advocates for the petitioners have submitted that applying the above principles to the facts of the present case the situation which emerges is that a sale price is agreed between the sugar mills owners and the sugarcane groweRs, Requirement of paying any amount over and above, the agreed price would amount to interference with the concluded agreements between the two parties which is violative of the law relating to the contract under the Islamic dispensation and is contrary to Article 4 of the Constitution which guarantees the enjoyment of the protection of law and to be treated in accordance with law which is inalienable right of every citizen, wherever he may be and of every other person for the time being within Pakistan. Mr. Farogh Naseem, learned counsel for the petitioners has submitted that under Article 4(2) of the Constitution particular emphasis has been laid on the point that no action detrimental to the life, liberty, body, reputation or property of any person, shall be taken except in accordance with the law and no person shall be prevented from or be hindered in doing that which is not prohibited by law; and no person shall be compelled to do that which the law does not require him to do. He has submitted that-under Article 18 of the Constitution of Islamic Republic of Pakistan, it is fundamental right of every citizen to enter upon any lawful profession or occupation, and to conduct any lawful trade or business. The learned counsel has emphasized that fundamental right guaranteed under Article 18 of the Constitution, ensures the unhindered conduct of any lawful trade or business and subsection
(v) of section 16 empowering the Provincial Government to direct the sugar factories to pay quality premium amounts to causing hindrance in the conduct of lawful trade and business and amounts to interference with the concluded contracts. Thus, it is violative of the provisions contained in Article 18 of the Constitution.
24. We will consider the contentions raised by the learned advocates for the petitioners presently.
For the time being we will consider the principles laid down in the case of Qazilbash Waqf v. Chief Land Commissioner PLD 1990 SC 99, which has been referred to in the case of Siemen A.G. (supra).
The judgment in the case of Siemen A.G. Was authored by his Lordship Muhammad Afzal Zullah, C.J. And in the case of Qazilbash Waqf (referred to above) his lordship Mr. Justice Muhammad Afzal Zullah, J. (as his lordship then was referred to Verse (7) of Surah 59-Alhashr, which contains a principle that the wealth should not 'remain with and circulate amongst the rich people only. It was interpreted to imply that wealth should circulate not only amongst the rich people but it has to circulate also amongst others so as to achieve the higher/est well being of the maximum. It was held that "The context and the language are clear enough to indicate that Qur'an did not intend restricting the circulation of the wealth amongst the affluent only. No doubt the right to property did not permit it to be taken away from them, but measures were needed to make it circulate amongst others also; as many and as much possible. Thus without the slicing away or appropriation of property or even for that matter taking away the entire surplus earnings, the intention was to create more total wealth in the community so as to make it available to the greatest possible number. Levelling up of all without levelling down of the affluent, was the aim. In the same judgment his lordship Naseem Hasan Shah, J., referred to a paper presented by Maulana Mufti Muhammad Shafi, in International Islamic Conference and observed that the other fundamental principle of Islam, which must be borne in mind is that it seeks to usher in a society based on Al-Adl Wal Ehsan. It has been further observed that "Al-Adl" in the context of this discussion means social balance or equilibrium in social and economic relations. It was further observed that, in Islam individual, freedom is subordinated to the social responsibilities cast on man, by the ethical principles enunciated in the Holy Qur'an." His lordship Naseem Hasan Shah, J., held as follows:-- "From the above discussion it is manifest that in Islam the full exercise by the owner of his rights in his property has been appropriately subordinated to this social responsibility.
' Furthermore, once the Islamic State enters upon the task of restoring the `rights' (Haqq) of the 'deprived' and the 'oppressed' with a view to realizing the ethical, principles enunciated in the Holy Qur'an the 'distance' between the rich and the poor will be reduced. The view taken that this distance can be corrected through the strict enforcement of the system of Zakat, Ushr and proper adherence to the system of inheritance prescribed by Islam is true only to a point. In a society like Pakistan, which has been raised on feudalistic capitalistic principles for centuries to reduce the gulf between the rich and the poor and restore the social balance it would be essential for the State to intervene to discharge its responsibilities and amongst its responsibilities it has to ensure that the society's demand for such basic requirements as health, education, livelihood, land housing are satisfied. For enforcing the system of Al-Adl Wal Ehsan and to ensure a social equilibrium in the society the ideal social behaviour is not egoistic self-glorification but a commitment to ameliorating the lot of the least-privileged in the society. Accordingly, in the situation as it presents itself today in Pakistan even large scale State intervention to restrain individual greed so that social welfare is maximized cannot be declared to be against the Injunctions of the Holy Qur'an."
25. His lordship Justice Naseem Hasan Shah, further held as follows:-- "It should be remembered that the message of Islam is eternal and must, therefore, always remain open to the searching intellect of man, and earlier concepts subjected to suitable modifications in the light of the circumstances prevailing at any given time. On this view of the matter, elaborating the above mentioned concept of necessity I would think that where the Alul Amar reaches the conclusion that owing to the tremendous difference existing between the very big landlords and the petty tenants who work on their land the condition of these tenants has become miserable and unless their lot is bettered and agriculture made a more profitable vocation there would be a danger of social upheaval and political unrest and there is dire political necessity and it is in the supreme national interest to take suitable remedial steps to prevent such a disaster; he would be justified in taking all necessary steps to obviate it. The question whether such a necessity exists and what steps should be taken which will be suitable and necessary in this behalf would also be a matter for the Alul Amar to decide."
26. In the same judgment his lordship Justice Shafi-ur-Rehman, while referring to the provisions contained in Article 38 of the Constitution observed that, "The cash wealth of the individuals have throughout the Muslim World been subjected to taxes, the richer paying more than the poor and much of these taxes are spent on welfare of the poor, the destitute and those not well provided for.
Where the cash earnings of an individual have already been subjected to such a graded, escalating tax, it cannot be said that other wealth cannot be brought under similar control.
27. In the case of Elahi Cotton Mills Ltd. And others v. Federation of Pakistan and others (1997) 76 Tax 5, his lordship Mr. Justice Ajmal Mian, referred to the following principles deduced from the case- law in the case of I.A. Sharwani and others v. Government of Pakistan 1991 SCM R 1041:--
(i) That equal protection of law does not envisage that every citizen is to be treated alike in all circumstances, but it contemplates that persons similarly situated or similarly placed are to be treated alike;
(ii) that reasonable classification is permissible but it must be founded on reasonable distinction or reasonable basis;
(iii) that different laws can validly be enacted for different sexes, persons in different age groups, persons having different financial standings, and persons accused of heinous crimes;
(iv) that no standard of universal application to test reasonableness of a classification can be laid down as what may be reasonable classification in a particular set of circumstances, may be unreasonable in the other set of circumstances;
(v) that a law applying to one person or one class of persons may be Constitutionally valid if there is sufficient basis or reason for it, but a classification which is arbitrary and is not founded on any rational basis is no classification as to warrant its exclusion from the mischief of Article 25;
(vi) that equal protection of law means that all persons equally placed be treated alike both in privileges conferred and liabilities imposed;
(vii) that in order to make a classification reasonable, it should be based---
(a) on an intelligible differentia which distinguishes persons for things that are grouped together from those who have been left out;
(b) that the differentia must have rational nexus to the object sought to be achieved by such classification."
28. The ratio in the case of Inamur Rehman v. Federation of Pakistan 1992 SCM R 563 was also reiterated as follows:-- "However, at the same time, it was held that the law should be saved rather than be destroyed and the Court must lean in favour of upholding the constitutionality of a legislation. It was further held that the rule of Constitutional interoperation was that there was a presumption in favour of the constitutionality of the legislative enactments, but where there was on face of a statute no classification at all and no visible differentia with reference to the object of the enactment as regards the person or persons subject to its provisions, then the presumption was displaced."
29. The law is laid down in the case of Government of Pakistan and others v. Muhammad Ashraf and others PLD 1993 SC 176 was also referred with approval. The relevant facts in the cited case were that the purchase price of Soybean Oil in the market was Rs,284 per maund and the average sale price per maund was Rs,339.15 per maund with the result that the respondents could earn a profit of Rs,45/35 per maund. However, the duty was imposed and the respondents were forced to pay Rs,87.79 per maund. Consequently, they were to sell Soyabean Oil at a loss of Rs,42/60 per maund. Such imposition of duty was struck down by the High Court of Sindh and the Honourable Supreme Court while upholding the judgment of Sindh High Court held as follows:-- "From the aforesaid, the contention of Mr. Fakhruddin G. Ebrahim is fully supported by the case-law cited by him, so far as the Indian jurisdiction is concerned that any legislation whereby either the prices of marketable commodities are fixed in such a way as to bring them below the cost of production and thereby make it impossible for a citizen to carry on his business; or tax is imposed in such a way so as to result in acquiring property of those on whom the incidence of taxation fell, then such legislation would be, violative of the fundamental right to carry on business or to hold property as guaranteed in the Indian Constitution and thereby be rendered unconstitutional. We were not referred to any case-law contrary to what has been relied upon, by the learned Deputy Attorney-General. There is no reason for taking a different view so far our Constitution is concerned and therefore on the same principle the imposition of duty would be open to challenge qua its Constitutionality or validity."
30. In the case of Elahi Cotton Mills Ltd. (supra) the Honourable Supreme Court, inter alia deduced the following principles of law:--
(ii) That Courts while interpreting laws relating to economic activities view the same with greater latitude than the laws relating to civil rights such as freedom of speech, religion etc., keeping in view the complexity of economic problems which do not admit of solution through any doctrinaire or strait jacket formula as pointed out by Holmes, J. In one of his judgments.
(iii) That Frankfurter J. In Morey v. Doud (1957) US 457 has remarked that "in the utilities, tax and economic regulation cases, there are good reasons for judicial self-restraint if not judicial deference to the legislative judgment".
(iv) That the Legislature is competent to classify persons or properties into different categories subject to different rates of tax. But if the same class of property similarily situated is subject to an incidence of taxation, which results in inequality amongst holders of the same kind of property, it is liable to be struck down on account of infringement of the fundamental right relating to equality.
(vi) That the tests of the vice of discrimination in a taxing law are less rigorous. If there is equality and uniformity within each group founded on intelligible differentia having a rational nexus with the object sought to be achieved by the law, the Constitutional mandate that a law should not be discriminatory is fulfilled.
(vii) That while interpreting Constitutional provisions Courts should keep in mind, social setting of the country, growing requirements of the society/nation, burning problems of the day and the complex issues facing the people, which the Legislature in its wisdom through legislation seeks to solve. The judicial approach should be dynamic rather than static, pragmatic and not pedaritic and elastic rather than rigid."
31. In the case of Pakistan Tobacco Company Ltd. 1999 SCM R 382 a provision in the MLO No,487, issued by Martial Law Administrator, Zone-B to the effect that. "The weighted average price of tobacco for the crop of any year to be paid by a Tobacco Company to the tobacco growers shall not be lower than the weighted average price paid to them for the crop of the immediately preceding year", was assailed. The Honourable Supreme Court held that no exception can be taken to the provision as it is founded on reasonable classification based on an intelligible differentia having rational nexus with the object sought to be achieved by such classification. The object of the above provision of law is to ensure that the growers, get minimum price of a particular grade of tobacco which should not be less than what a tobacco company had paid in the preceding year for the same grade of tobacco by its own volation. It was observed that there was no compulsion on the part of a tobacco company to pay more than that has been fixed as the minimum price for a particular grade of tobacco by the Provincial Government under section 8 of the Pakistan Tobacco Board Ordinance, 1968,which authorizes the Central Government to fix the minimum price below which and the maximum price above which the tobacco of various grades shall not be bought or sold for consumption within Pakistan or for export. However, if a tobacco company opts to pay more than the minimum price so fixed for a particular grade of tobacco, it is required to pay at least the same price for the same grade next year by virtue of the above provision of the ML,O.
The Honourable Supreme Court further observed that, the object of the law makers seems to be to safeguard the interest of the tobacco, growers who belong to a downtrodden/ economically oppressed class. It was further held that: "It is a commendable piece of legislation and the fundamental rights are to be construed in a manner which should advance social justice/economic justice and not to throttle the same on technicalities. With these observations the Honourable Supreme Court dismissed the petition directly filed under Article 184(3) of the Constitution of Islamic Republic of Pakistan.
32. In the case of Shervani Sugar Syndicate Ltd. v. Union of India and another AIR 1979 All ahabad 394, a notification issued by the Central Government under Sugarcane (Control) Order, 1966 came for consideration. The Central Government issued notification fixing the basic minimum price of sugarcane for the crushing season 1978-79 at Rs,10 per quintal linked to a recovery of 8.5% or below and a premium of 11.7647 paisa per quintal for every 0.1 % increase in recovery over 8.5%. Different prices were fixed for different sugar factories for sugarcane that they may purchase. The provisions contained in clause (3) of the Sugarcane (Control) Order, 1966 were as follows:-- "The Central Government may, after consultation with such authorities, bodies or associations as it may deem fit, by notification in the official Gazette, from time to time, fix the minimum price of sugarcane to be paid by producers of sugar or their agents for the sugarcane purchased by them, having regard
(a) the cost of production of sugarcane;
(b) the return to the grower from alternative crops and the general trend of prices of agricultural commodities;
(c) the availability of sugar to the consumer at a fair price;
(d) the price at which sugar produced from sugarcane is sold by producers of sugar, and
(e) the recovery of sugar from sugarcane: Provided that the Central Government or, with the approval of the Central Government, the State Government may, in such circumstances and subject to such conditions as it may specify, allow a suitable rebate in the price so fixed.
Explanation.--- (1) Different prices may be fixed for different areas or different quantities or varieties of sugarcane."
33. It was urged before the Allahabad High Court that the Central Government is empowered to fix the minimum price of sugarcane only after consultation with such authorities, bodies or associations as it may deem fit. The consultation should not be a mere empty formality but it should provide an opportunity to the interested parties to consider and weigh each other's viewpoint. The authorities, bodies or associations with whom the Central Government holds consultation must be chosen honestly so that views of all concerned parties are placed before it. It was contended that before issuing the impugned notification no genuine consultation was held with the sugar factory owners or their association who were vitally interested in fixation of the price.
Plea taken on behalf of the Government was that the minimum price was fixed on the recommendations of the Agricultural Price Commission, an expert body appointed by the Goverriment to advise it on fixation of prices of agricultural commodities including sugarcane. It was held that the representation made by the Sugar Mills Association was fully considered and therefore, the grievance that proper consultation was not done was without substance. The fixation of basic minimum price was challenged on the ground that the Government totally ignored or failed to take into consideration the relevant factors set out in clause (3) of the Sugarcane (Control) Order, 1966. It was further observed that basic minimum price of sugarcane fixed in the earlier year was arbitrary and further enhancement of the price was not justified as cost of production of sugarcane has not increased. Material was placed before the Allahabad High Court that in the precedent year the sugar factories paid much more than the minimum price fixed by the Central Government and therefore, the contentions were not accepted. One of the considerations for fixing the minimum price was the recovery of sugar from the sugarcane and the objection in this regard was repelled for the reason that in the representation made by the Sugar Mills the practice of taking the recovery of preceding year was not objected to but was accepted as the correct basis. The learned Judges of the Allahabad High Court observed that, having accepted the basis for a long number of years, the petitioners cannot be permitted to turn round and take a different stand at this stage.
34. It was contended on behalf of the Government that, it has to keep in view the economy of the thousands of cultivators on whom the economy of the State depends. The Control Order was framed for safeguarding the interest of the cultivators so that they get reasonable price for their crop. There was another direction that the Sugar Mills were required to pay for the sugarcane of the last season -and consume the same first before starting current crushing season of the crop and had to purchase the same on the basic minimum price for the current year. It was contended that the recovery of the cane for the last season was less than 7%. It was held by, the Allahabad High Court that to compel the Sugar Mills to pay for the old sugarcane at the enhanced rate during the current season for a stuff which would yield less sugar than the average and that too at a time when the price of sugar has fallen considerably below the level prevailing in the preceding year, does not appear to be just and fair. It clearly smacks of arbitrariness and seems to be motivated by extraneous considerations. Such direction in the notification was struck down.
35. The Supreme Court of India considered the question pertaining to the authority vested in the State to impose reasonable restriction on the exercise of the rights conferred under the Indian Constitution and the power to regulate and govern any trade, business, commerce and industry. In the case of Express Newspaper (Pvt.) Ltd. v. Union of India AIR 1958 SC 578. Justice N.H. Bhagwati, of the Supreme Court of India in his erudite judgment considered the contentions if the restrictions imposed were unreasonable and have the effect of destroying the business of the petitioner. The proposition of law in the case of Stone v. Farmers Loan and Trust Co. (1885) 116 US 307, was referred as follows:-- "From what has thus been said it is not to be inferred that this power of limitation or regulation is itself without limit. This power to regulate is not a power to destroy, and limitation is not the equivalent of confiscation."
36. Similar observations of the Judicial Committee of the Privy Council in the Municipal Corporation of the City of Toronto v. Virgo, 1896 AC 88 and Attorney-General for Ontario v. Attorney-General for the Dominion 1896 AC 348, were also referred as under:-- "But their lordships think there is a marked distinction to be drawn between the prohibition or prevention of a trade and the regulation or governance of it and indeed a power to regulate and govern seems to imply the continued existence of that which is sought to be regulated or governed."
37. The observations of the Supreme Court of India in the case of Saghir Ahmed v. State of U.P. AIR 1954 SC 728, was also considered. The observation was as follows:-- "Be that as it may, although in our opinion the normal use of the word 'restriction' seems to be in the sense of 'limitation' and not `extinction' we would on this occasion prefer not to express any final opinion on this matter and the Court ultimately wound up by saying that 'whether the restrictions are reasonable or not would depend to a large extent on the nature of the trade and the conditions prevalent in it."
38. Ultimately Justice N.H. Bhagwati, speaking for the Supreme Court of India, in the case of Express Newspaper Ltd., observed as under:-- "Even if the provisions of the impugned Act would not necessarily have the effect of destroying the business of the petitioners but of crippling it and making it impossible for the petitioners to continue the same except under onerous conditions, they would have the effect of curtailing their circulation and drive them to seek Government aid and thereby impose an unreasonable burden on their right to carry on business and would come within the ban of Article 19(1)(g) read with Article 13(2) of the Constitution."
39. Article 19(1)(g) of the Indian Constitution reads as under:- "All citizens shall have the right 19(1)(g) to practise any profession or to carry on any occupation, trade or business."
The above Article of the Indian Constitution deals with the same subject as dealt with in Article 18 of the Constitution of Islamic Republic of Pakistan.
40. Article 13 of the Indian Constitution; is similar in various aspects to Article 8 of the Constitution of Islamic Republic of Pakistan.
41. This brings us to the Single Bench judgment of Lahore High Court in the case of Fauji Sugar Mills v. Province of the Punjab 1996 CLC 592, on which great emphasis has been laid by the learned advocates for the petitioners, for the reason that it deals with the similar provisions of law. It was contended before the Lahore High Court that the amendment in the nature of section 16-A was unconstitutional and against the law as the .Respondents are only empowered to fix the purchase price of sugarcane under subsection (1) of section 16 and in case of special varieties of cane to direct payment of additional price. It was further contended that this can be termed as statutory contract between the petitioner and with the Government and that the former are only liable to pay the price determined under section 16(i) and additional price under section 16(iv) in the case of special varieties of cane and no other financial obligation such as quality premium. It was also urged that the amendment is uncertain, vague, arbitrary, unreasonable and also suffers from the vices of excessive delegation.
42. The learned Single Judge of the Lahore High Court observed that notifications, were issued as envisaged under section 16(1)(ii) of the Sugar Factories Control Act, 1950 but no notification was issued under section 16(iv) and therefore, it was not understandable how the respondents were insisting upon the petitioners for the payment of extra price in the form of quality premium. It was further observed that: "This alone is sufficient to hold that the action of respondents in raising this extra demand is not only arbitrary but illegal and un-Constitutional. The petitioners are liable to pay only the price for cane under subsection (i) and additional price under subsection (iv) of section 16 and no other extra demand can be raised upon them.
43. After making the above observations, the learned Single Judge proceeded on to examine section 16-A.
44. The learned Single Judge then dilated on the connotation of the expression "premium". He referred to Black's Law Dictionary, according to which premium is defined as a reward for an act done. A bounty or bonus; a consideration given to invite a loan or a bargain, as the consideration paid to the assignor by the assignee of a lease, or to the transferor by the transferee of shares of stock, etc. The expression "premium" was considered with reference to the Legal Thesaurus by William C. Burton, and Ballentine's Law Dictionary. The Single Judge after referring to the definition of the word "premium" in the above dictionary observed that the meaning of premium is a reward or a bonus for an act done and the persons so doing is entitled to such reward. He further observed that: "If the petitioners are achieving higher percentage of sucrose contents than the base level fixed by the respondents then it is the petitioners alone entitled to claim premium from the Government and not the other round. But in the above illustration I am of the considered opinion that, the petitioners cannot claim such a premium because there is no such agreement with the respondents. Similarly they cannot be asked to pay some extra money for the simple reason that they are doing something good by obtaining higher percentage of sucrose. Some of the petitioners have vehemently raised that they have installed very valuable and latest machineiy for producing sugar as compared to the other factory owners and this is the basis for obtaining higher sucrose contents and instead of rewarding, they are being punished to pay the quality premium in the form of additional price which no system of law would permit on facts and circumstances of the case.
The plea of petitioners that they have already paid the price of sugarcane under section 16(I) of the Act and, therefore, they cannot be compelled twice to pay the additional price of the same sugarcane is valid and has to be accepted. They are agreeable to pay the additional price for special varieties Of sugarcane provided the same is specified in the notification under section 16(i) of the Act which, as stated above, is not the case of respondent in anyone of the writ petitions. On this ground along, extra demand by the respondent/Cane Commissioner against the petitioners is without lawful authority and stands on no better footings than without jurisdiction".
45. The learned Single Judge, further observed that the provisions contained in subsections (i) and
(iv) of section 16 are independent of each other and Governmeht can only charge price of sugarcane generally under section 16(i) and additional price under section 16(iv) in case of special varieties which must be specified in the notification which admittedly, is not issued. This being the case, the petitioners in law, are not liable to pay any extra demand in the form of quality premium.
The learned Single Judge, after referring a judgment of Supreme Court of India, in the case of M/s. "Devi Das Gopal Krishnan v. State of Punjab and others, AIR 1967 SC 1895, which pertains to the levy of sales tax, observed that there cannot be any tax twice on the same goods and then proceeded on to hold that, the facts of the case under consideration stood on much higher footing and the petitioners cannot be asked to pay extra price of sugarcane, by way of quality premium, for which price was already paid.
46. Thereafter learned Single Judge observed as follows:- "After analyzing the various provisions of the Act, it is amply demonstrated that there is no legal sanction behind the amendment and that in any case the same infringes the Fundamental Right 18 of the Constitution of the Islamic Republic of Pakistan, 1973 according to which every citizen shall have the right to enter upon any lawful profession or occupation and to conduct any lawful trade or business. The impugned amendment directing the petitioners to pay extra illegal demand as in the nature of a clog on their business activity and by no stretch of imagination the same is covered by any provision of this Article regulating the business or trade, nor the same can be called reasonable restriction."
47. The learned Single Judge, then referred to the judgment of Supreme Court of India in the case of Messrs Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh and others, AIR 1954 SC 224, and held as under:-- "Viewing the impugned amendment in this context, there can be no manner of doubt that the said provision has no nexus with any provisions or scheme of the Act. Nor there was any intention of the Legislature that petitioners should be compelled to pay the price of sugarcane at two stages once when they had purchased the same as against price and secondly when they achieve higher sucrose contents. In other words, there is no provision in the existing law applicable to the purchase of cane by the petitioners that apart from price, the quality premium has also to be paid. Any such amendment would be in conflict with the Fundamental Right 18 of the Constitution and has to be struck down."
48. The learned Single Judge, then concluded that the amendment in question is not only unconstitutional as it offends Fundamental Right 18 but also the existing law covering the purchase of sugarcane by the petitioneRs, The impugned amendment, therefore, is not enforceable as against the petitioners for payment of quality premium and the same is struck down and consequently all notifications and demands raised by the statutory functionaries are equally without jurisdiction.
49. Thereafter the learned Single Judge referred to the contention raised on behalf of the petitioners that the amendment in question suffers from inherent vice of excessive delegation as it does not provide any reasonable formula for determining the base level of sucrose contents and also the rate at which the differential has to be paid. However, the learned Single Judge gave no finding on the proposition for the reason that, it does not arise after impugned amendment is held to be without jurisdiction. In spite of this observation that the proposition does not arise, the learned Single Judge referred to the few cases cited at the bar and thereafter observed that, "there cannot be two opinions that the amendment is in the nature of a naked exercise of power by the respondent/Government to direct the petitioners to pay quality premium which is bad in law and un-Constitutional. Ultimately, the provisions contained in section 16-A of the Sugar Factories Control Act, 1950 (as applicable to the Province of Punjab) was held un-Constitutional and invalid piece of legislation.
50. In the light of judgments cited above, we proceed to examine the contentions on the basis whereof the petitioners have sought striking down of section 16(v) of the Sugar Factories Control Act, 1950, pertaining to the payment of quality premium and the notifications issued thereunder.
51. The first contention is that the provisions empowering the Provincial Government to issue direction for payment of quality premium over and above the minimum price fixed under section 16(i) of the Sugar Factories Control Act, 1950 is un-Islamic and is thus violative of Article 2A of the Constitution of Islamic Republic of Pakistan. Reliance in this regard has been placed on the judgment of Honourable Supreme Court of Pakistan, in the case of Siemens A.G. (supra). Mr. Farogh Naseem, has submitted that with the fixation of minimum price of the sugarcane through the notification in pursuance of section 16(i) of the Sugar Factories Control Act, 1950 (hereinafter referred to as the Sugar Act) and the settlement of price between the Sugar Mills and the Sugarcane Growers, a concluded contract comes into existence and thereafter no interference is warranted by any authority including Federal and the Provincial Legislature with the said concluded contract and/or to increase the burden on the Sugar Mills in any manner or form.
According to learned counsel the provision empowering the Provincial Government to issue direction for the payment of quality premium amounts to interference with the concluded contract and enhancing the financial burden of the Sugar Mills by interfering with the concluded contract.
52. Before we proceed to examine whether the provisions contained in section 16(v) of the Sugar Act, is un-Islamic or not it would be appropriate to examine the nature and extent of the contract which comes into existence between the Sugar Mills and sugarcane growers with the settlement of price of the sugarcane in pursuance of the notification prescribing minimum price under section 16(i), of the Sugar Act. Section 16 has already been reproduced in the earlier part of this judgment and a perusal thereof shows that under the said provision, the Provincial Government is empowered to determine in respect of any year the minimum price to be paid by occupiers of factories or purchasing agents for cane purchased in that area either generally or related to the sugar contents of the cane or direct that such minimum price shall be calculated in the manner prescribed. For the sake of convenience notification dated 24th September, 1990, issued under subsection (ii) of section 16 and subsection (v) of section 16 of the Sugar Act, are reproduced below:-- NOTIFICATION I ' No,8 (142) SO (Ext)/89.X.--- In exercise of the powers conferred by subsection (ii) of section 16 of the Sugar Factories Control Act, 1950, as applicable to Sindh, the Government of Sindh are pleased to determine for the whole Province of Sindh, the minimum price of sugarcane at the rate of fifteen rupees and seventy-five paisas per forty kilograms for the crushing season 1990-91.
' No,8(142)S0(Ext)/89.X:--- In exercise of the powers conferred by subsection (v) of section 16 of the Sugar Factories Control Act, 1950, as applicable to Sindh, the Government of Sindh are pleased to direct the Sugar Factories in the Province to pay quality premium to the cane growers at the end of the crushing season 1990-91 at the rate of nineteen paisas per forty kilograms of cane for each 0.1 per cent. (including fraction thereof to be calculated pro rata) of excess sucrose recovery above 8.7 per cent. Determined on over all sucrose recovery basis of each mill."
53. A perusal of the above notification shows that the direction pertaining to the minimum price of sugarcane and the payment of quality premium has been issued simultaneously. This practice has been in vague from year to year. Thus, the Sugar Mills are neither taken by surprise nor they are called upon to enter into a contract pertaining to the minimum price of the sugarcane without knowledge that in case of sucrose recovery in excess of 8.7% they are required to pay the quality premium. They are not asked to enter into second contract after concluding one contract pertaining to minimum price at some earlier point of time. The principle of interpretation of statutes as well as interpretation of instruments/documents envisages that the entire scheme of law and the instruments/documents are to be considered in totality and no part thereof is to be construed, interpreted or considered in isolation or independent to the other provisions of law or other" parts of the instrument/document. Thus, section 16 of the Sugar Factories Control Act, is to be considered in its entirety and no provision thereof is to be read in isolation. Likewise no part of notification issued under section 16 is to be considered in isolation, ignoring other parts thereof. Thus, we are not persuaded to agree' with the submissions of learned advocates for the petitioners that, with the settlement of minimum price of the sugarcane between the sugar mills and the sugarcane growers a concluded contract totally independent in nature comes into existence. We are of the considered opinion that, the two parts of the notification first, determining the minimum price of sugarcane and the other determining the quality premium are be paid in case of recovery of sucrose in excess of bench mark, are the part of the same process under which a contract is concluded between the Sugar Mills and the sugarcane groweRs, Both parts of the notification form part of a single contract between the sugar mills and the sugarcane growers and the entire notification inclusive of the direction contained under subsection (ii) of section 16 and subsection
(v) of section 16 form part of the same concluded contract. Thus, the learned counsel for the petitioners have build-up the edifice of their argument, that with the settlement of minimum price of sugarcane a concluded contract comes into existence and the direction for payment of quality premium is alienate to the concluded contract amount amounts to interference with a concluded contract, is based on wrong premises and without foundation. Both parts of the notification form part of the same contract. In one part the minimum price of the sugarcane is settled which when read with the second part of the notification leaves no scintilla of doubt that the minimum price of the sugarcane is linked to the recovery of sucrose and up to the bench mark of 8.7% the minimum price would be as determined in the first part of the notification and in case of recovery of sucrose in excess of the bench mark of 8.7% further price which is named as quality premium is to be paid to the cane groweRs, The price settled under first part of the contract is to be paid immediately or within the period stipulated between the parties to the contract and the quality premium envisaged in second part is to be paid at the end of the crushing season if the recovery of sucrose is in excess of the bench mark. The first part of the contract pertaining to the minimum price of sugarcane is not contingent on the happening of any other fact, while the second part is contingent on the recovery of sucrose in excess of the bench mark. In this manner the price to be paid to the sugarcane growers of a particular area by the Sugar Mills is in two parts, one, at the time of purchasing of the sugarcane and the other at the end of the crushing season if the recovery of sucrose is in excess of 8.7%. The first part comprises the normal transaction of sale and purchase and the second part is in the nature of profit sharing between the mills owners and the sugarcane groweRs, The main chunk of the profit is to be taken by the Sugar Mills owners while a minor part thereof is to pass on to the sugarcane growers as an incentive for growing better quality of the sugarcane, for their hard labour and improving their quality of life, economic and social conditions. The notifications issued under subsections (i)/(ii) and (v) of section 16 of Sugar Act are similar in effect as issued by Central Government of India and considered by Allahabad High Court in the case of Shervani Sugar Syndicate Ltd. (supra). Thus, we are persuaded to agree with the contention of learned advocates appearing for the respondents that the payment of quality premium is a part of the whole transaction constituting contract between the Sugar Mills owners and the Sugarcane Growers and is in the nature of profit sharing.
54. After holding that the direction for payment of quality premium is part of single consolidated contract and no separate transaction totally independent and separate of the settlement of minimum price take place and consequently does not amount to interference with a concluded contract as alleged, we proceed to examine if the provisions contained in section 16(v) of the Sugar Act can be termed as un-Islamic. Reliance has been placed on Article 2A and Article 227 of the Constitution, therefore, they are reproduced below for the sake of convenience:-- ' Article 2A The Objectives Resolution.--- Whereas sovereignty over the entire universe belongs to Allah Almighty alone and the authority which He has delegated to the State of Pakistan, through its people for being exercised within the limits prescribed by Him is a sacred trust; ' This Constituent Assembly representing the people of Pakistan resolves to frame a Constitution for the sovereign independent State of Pakistan; ' Wherein the State shall exercise its powers and authority through the chosen representatives of the people; ' Wherein the principles of democracy, freedom, equality, tolerance and social justice as enunciated by Islam shall be fully observed; ' Wherein the Muslims shall be enabled to order their lives in the individual and collective spheres in accordance with the teachings and requirements of Islam as set out in the Holy Qur'an and the Sunnah; ' Wherein adequate provision shall be made for the minorities to profess and practise their religions and develop their cultures; ' Wherein the territories now included in or in accession with Pakistan and such other territories as may hereafter be included in or accede to Pakistan shall form a Federation wherein the units will be autonomous with such boundaries and limitations on their powers and authority as may be prescribed.
' Wherein shall be guaranteed fundamental rights including equality of status, of opportunity and before law, social, economic and political justice, and freedom of thought, expression, belief, faith, worship and association, subject to law and public morality; ' Wherein adequate provisions shall be made to safeguard the legitimate interest of minorities and backward and depressed classes; ' Wherein The independence of the Judiciary shall be fully \ secured; ' Wherein the integrity of the territories of the Federation, its independence and all its rights including its sovereign rights on land, sea and air shall be safeguarded; ' So that the people of Pakistan may prosper and attain their rightful and honoured place amongst the nations of the World and make their full contribution towards international peace and progress and happiness of humanity.
' Article 227. Provisions relating to the Holy Qur'an and Sunnah.-- (1) All existing laws shall be brought in conformity with the Injunctions of Islam as laid down in the Holy Qur'an and Sunnah, in this part referred to as the Injunctions of Islam, and no law shall be enacted which is repugnant to such Injunctions.
(2) Effect shall be given to the provisions of clause (1) only in the manner provided in this part.
(3) Nothing in this part shall affect the personal laws of non-Muslim citizens or their status as citizens.
55. Articles 3 and 38 have also been referred by the learned advocates for the respondents and therefore, these articles are also reproduced below:--
(3) Elimination of exploitation.--- The State shall ensure the elimination of all forms of exploitation and the gradual fulfilment of the fundamental principles, from each according to his ability to each according to his work.
38. Promotion of social and economic well-being of the people.--- The State shall---
(a) secure the well-being of the people, irrespective of sex, caste, creed or race, by raising their standard of living, by preventing the concentration of wealth and means of production and distribution in the hands of a few to the detriment of general interest and by ensuring equitable adjustment of rights between employers and employees, and landlords and tenants;
(b) provide for all citizens, within the available resources of the country, facilities for work and adequate livelihood with reasonable rest and leisure;
(c) provide for all persons employed in the service of Pakistan or otherwise, social security by compulsory social insurance or other means;
(d) provide basic necessities of life, such as food, clothing, housing, education and medical relief, for all such citizens, irrespective of sex, caste, creed or race, as are permanently or temporarily unable to earn their livelihood on account of infirmity, sickness or unemployment;
(e) reduce disparity in the income and earnings of individuals, including persons in the various classes of the service of Pakistani and
(t) eliminate Riba as early as possible.
56. Articles 3 of the Constitution of Islamic Republic of Pakistan is contained in Part I which is introductory and Article 38 in Chapter II of the Constitution, which pertains to the principles of policy. However by now it stands settled that the provisions contained in other chapters of the Constitution are to be interpreted in such a way that they are in consonance with the principles of policy contained in Chapter II of the Constitution. The directive principles are but an amplification of the preamble to the Constitution which basis the authority of the Constitution on the solemn resolve of the people to secure to all its citizens justice in the social, economic and political fields.
The principles of State Policy can always be called in aid for interpretation of any legal provision or instrument. Interpretation which seeks to comply or advance principles of State Policy is always to be adopted as against interpretation which goes against such principles.
57. We will examine the issue, if the provisions contained in section 16(v) of the Sugar Act are un- Islamic on the touchstone of the provisions contained in Articles 2 A, 3 and 38 of the Constitution and shall adhere to the principles embodied in Article 227 of the Constitution.
58. Article 2A of the Constitution contains the Objectives Resolution which was moved by one of the founding fathers of this country Honourable Mr. Liaquat Ali Khan, the first Prime Minister of Pakistan in the Constituent Assembly of Pakistan on 7-3-1949. While moving the resolution he delivered an illuminating, and erudite speech dealing with various provisions of the Objectives Resolution. We would like to reproduce few excerpts from the speech of Honourable Mr. Liaquat Ali Khan, dealing with the matter pertaining to the social justice as enunciated by Islam, which are as follows:- "In the matter of social justice as well, Sir, I would point out that Islam has a distinct contribution to make. Islam envisages a society in which social justice means neither charity nor regimentation.
Islamic social justice is based upon fundamental laws and concept which guarantee to man a life free from want and rich in freedom. It is for this reason that the principles of democracy, freedom, equality, tolerance and social justice have been further defined by giving to them a meaning which, in our view, is deeper and wider than the usual connotation of these words."
"Mr. President, it has become fashionable to guarantee certain fundamental rights, but I assure you that it is not our intention to give these rights with one hand and take them away with the other. I have said enough to show that we want to build up a truly liberal Government where the greatest amount of freedom will be given to all its-membeRs, Everyone will be equal before the law, but this does not mean that his personal law will not be protected. We believe in the equality of status and justice. It is our firm belief and we have said this from many a platform that Pakistan does not stand for vested interests or the wealthy classes. It is our intention to build up an economy on the basic principles of Islam which seeks a better distribution of wealth and the removal of want.
Poverty and backwardness--" All that stands in the way of the achievement of his fullest stature by man must be eradicated from Pakistan. At present our masses are poor and illiterate. We must raise their standards of life, and free them from the shackles of poverty and ignorance."
59. Participating in the deliberations on the Objectives Resolution, another founding father of Pakistan and a great Islamic Scholar, Maulana Shabbir Ahmed Osmani, dilated upon the Objectives Resolution on 9-3-1949. A passage dealing with the principles of social justice as enunciated by Islam and the responsibilities of an Islamic State, is reproduced as under:-- "The Islamic State, when it attains to its highest degree of excellence, is called a Pious State (Hukumat-i-Rashda). The term `Rushd' denotes the highest standard of excellence that a Government can possibly attain to. It means that the Government, the administrative machinery and the people are all pious. According to the Holy Qur'an the real aim of the Islamic State is to exhort all within its sphere of authority to do good and to shun evil. The Islamic State brings about an equitable distribution of wealth by employing methods peculiar to it and distinct from communistic practices. It wants to keep capital in circulation, but this object is achieved in consonance with moral and legal principles and with due regards to justice, moderation and general goodwill. The Islamic State does not stand for abolition of private property and allows capital fund to a certain extent. For surplus wealth a Milli Bait-ul-Mal (Public Treasury) is maintained, on which all have equal claims. This equitable distribution of wealth keeps the balance even between wealth and penury."
60. Taking guidance from the provisions contained in Article 2A, and the responsibilities of Islamic State, with reference thereto, as explained by the mover and supporter of Objectives Resolution in the Constituent Assembly of Pakistan as well as Articles 3, 38, 227 and the law as laid down by the Honourable Supreme Court, in the case of Siemens A.G. (supra) and Qazilbash Waqf (supra), we are of the considered opinion that, the provisions contained in section 16(v) of the Sugar Act, is neither contrary to any provision of Qur'an and Sunnah (at least no such provision has been brought to our notice) and the ratio of Honourable Supreme Court in the case of Siemens A.G, is not attracted to the facts and circumstances of this case. Instead, the law as laid down in the case of Qazilbash Trust is fully attracted to the issue under consideration. Not only the provisions contained in section 16(v) of the Sugar Act are not violative of any Islamic Injunctions and the Articles of the Constitution on which reliance has been placed by the learned advocates for the petitioners, but on the contrary it is in discharge of obligation of an Islamic State and is in consonance with the Constitutional requirements. It is provided in Article 2A that in the State of Pakistan Principles of Democracy, freedom, equality, tolerance and social justice as enunciated by Islam shall be fully observed and the Muslims shall be enabled to order their lives in the individual and collective spheres in accordance with the teachings and requirements of Islam as set out in the Holy Qur'an and the Sunnah. Article 3 of the Constitution enjoins upon the State to ensure the elimination of all forms of exploitation and the gradual fulfilment of the fundamental principle, from each according to his ability to each according to his vork.
61. Article 38 of the Constitution contains one of the basic principle of policy to the effect that the State shall secure the well-being of the people by raising their standard of living, by preventing the concentration of wealth and means of production and distribution in the hands of a few to the detriment of general interest and by ensuring equitable adjustment of rights between employers and employees, and landlord and tenants. It further places an onerous obligation on the State to provide for all citizens within the available resources of the country facilities for work and adequate livelihood and further reduce disparity in the income and earnings of individuals. Although the Principles of Policy are not to be enforced through the Courts of law but while considering if any provision of law is in consonance with the Fundamental Rights guaranteed in the Constitution or is violative of the Fundamental Rights, the Courts are always required to keep in view the Principles of Policy enshrined in the Constitution. While considering the validity of a law on the touchstone of Fundamental Rights, it is required to be examined whether the impugned law is in consonance with the purposes sought to be achieved by pursuing the principles of policy.
62. When the provisions contained in section 16(v) of the Sugar Act are examined on the touchstone of the provisions contained in the various Articles of the Constitution referred to above, and the Injunctions of Qur'an and Sunnah as elaborated by the Honourable Supreme Court in the case of Qazilbash Trust, we find that the provisions pertaining to the payment of quality premjum neither amounts to interference with a concluded contract nor it is violative of Injunctions of the Qur'an and Sunnah. On the contrary it is in consonance with the principles of social and economic justice as enunciated by Islam and is aimed at the reduction of disparity in the income and earnings of individuals and to improve the standard of living of the groweRs, It is aimed at preventing the concentration of wealth in the hands of few. It is directed towards the elimination of a form of exploitation and is meant to fulfil the fundamental principle, from each according to his ability to each according to his work.
63. We are of the considered opinion that, it is one of the measures needed to make the circulation of wealth in all the segments of society and is intended to create more total wealth in the community so as to make it available to the greatest possible number. Borrowing from the observation made by His Lordship Naseem Hasan Shah, J., in the case of Qazilbash Trust, "it is aimed at levelling up all without levelling down of affluent". We respectfully follow the views held by Moulana Mufti Muhammad Shafi, as reproduced by Honourable Justice Naseem Hasan Shah, in the case of Qazilbash Trust, that the fundamental principle of Islam, which must be borne in mind that it seeks to usher in a society based on Al-Adl Wal Ehsan. In the context of social justice Al-Adl means social balance or equilibrium in social and economic relations. In Islam the individual freedom occupies a prominent role but is always subordinated to the social responsibilities cast on man by the ethical principles enunciated in the Holy Qur'an. In order to achieve this result, the Islamic State is not only empowered but required to enter upon the task of restoring the rights of the deprived and the oppressed so as to reduce the distance between rich and the poor. Thus, it would be essential for the State to intervene, to discharge its responsibilities of ensuring social equilibrium and commitment to ameliorate the lot of the least privileged in the society. Honourable Mr. Justice Naseem Hasan Shah, has observed that in order to achieve the above object, in the situation as at present it is today in Pakistan, even large scale State intervention to restrain individual greed so that social welfare is maximized cannot be declared to be against the Injunctions of the Holy Qur'an.
64. For the foregoing reasons, we are not persuaded to agree with the submissions of learned counsel for the petitioners that the provisions contained in section 16(v) of the Sugar Act are violative of Article 2A of the Constitution or is in contravention of the Injunctions contained in Holy Qur'an and Sunnah.
65. This brings us to the contentions that the provisions contained in section 16(v) of the Sugar Act are violative of the provisions contained in Article 4 of the Constitution which ensures the enjoyment of the protection of law and to be treated in accordance with the law read with Article 18 of the Constitution, which provides that subject to such qualifications, as may be prescribed by law every citizen have the right to enter upon any lawful profession or occupation and to conduct any lawful trade or business. Deliberating on these provisions Mr. Farogh Naseem, leading counsel for the petitioners has contended that the provisions contained in section 16(v) of the Sugar Act are detrimental to the right of property vested in the petitioneRs, He has further contended that the fundamental right guaranteed under Article 18 of the Constitution ensures unhindered conduct of any lawful trade or business and the provisions contained in subsection (v) of section 16 of the Sugar Act, empowering the Provincial Government to direct the sugar factories to pay quality premium amounts to causing hindrance in the conduct of lawful trade and business. Emphasizing on his contention he has maintained that the provisions are confiscatory and expropriatory in nature. In this regard he has placed reliance on the dictum laid down by the Honourable Supreme Court in the case of Government of Pakistan E and others v. M. Ashraf PLD 1993 SC 176.
66. After giving an anxious consideration to the contentions raised by the learned advocates, for the petitioners, we are not persuaded to agree with their submissions. In the cited case such exorbitant duty was imposed on the import of Soyabean Oil, that on admitted facts, the importers were bound to suffer losses. In these circumstances, a Division Bench of this Court struck down the imposition of duty and the Honourable Supreme Court upheld the decision holding that any legislation whereby either the prices of marketable commodities are fixed in such a way as to bring them below the cost of production and thereby make it possible for the citizen to carry on his business then such legislation would be violative of the fundamental right to carry on business or to hold property as guaranteed in the Constitution.
67. So far, the provisions contained in subsection (v) of section 16 of the Sugar Act are concerned, it does not envisage any such situation. The directions issued for payment of quality premium under this provision of law does not lead to any such result. ##TSE##
68. As already discussed the Provincial Government is empowered to fix the minimum price of the sugarcane under subsection (i) of section 16 either generally or related to the sugar contents of the cane. Subsection (v) of section 16 of the Sugar Act, specifically empowers the Provincial Government to direct the factories to pay quality premium at the end of crushing season at such rate as may be prescribed by the Provincial Government in proportion to the sucrose recovery of each factory in excess of base level sucrose contents determined by the Provincial Government, from time to time. Thus, the provision in subsection (v) of section 16 is confined to the sugar contents of the cane. A narration of the historical facts in the earlier part of this judgment shows that, initially the Provincial Government used to determine the minimum price of the sugarcane under subsections (i) and (ii) of section 16 of the Sugar Act, and the quality premium was paid in pursuance of agreement between the Sugar Factories and the Growers/Government. This payment of quality premium was admittedly based on profit sharing formula. Subsequently a necessity was felt to provide a legal backing to the profit sharing formula, commonly known as payment of quality premium and therefore, subsection (v)- of section 16 was enacted. The sugar factories including the petitioners have been paying the quality premium for a number of years in pursuance of voluntary agreement and subsequently in pursuance of the notification issued by the Provincial Government under subsection (v) of section 16. The situation has not undergone any change with the enactment of subsection (v) of section 16 of the Sugar Act, except that a legal cover has been provided to the profit sharing formula. The fact remains that the minimum price before the enactment of subsection (v) of section 16 and thereafter, remained confined to the recovery of sucrose up to the bench mark of 8.7% and the payment of quality premium which is a profit sharing formula comes into operation at the end of the crushing season if the sucrose recovery by any sugar factory is found in excess of the bench mark of 8.7%. The sugar factories have never suffered any losses on account of payment of quality premium which is paid always out of the profits. Thus, the ratio of judgment in the case of M. Ashraf and others (supra) is not attracted. No hindrance has ever been caused to the petitioners in pursuing their business with the payment of quality premium and it has never been shown to be detrimental to the right of property and right to conduct the business. The contention that the provisions contained in subsection (v) of section 16 are violative of Articles 4 and 18 of the Constitution, are therefore, repelled.
69. This brings us to the contention that the provisions contained in subsection (v) of section 16 of the Sugar Act, is violative of Article 25 of the Constitution, which guarantees equality before law and equal protection before law. We have already reproduced the law laid down by the Honourable Supreme Court in the case of Ellahi Cotton Mills and the ease of I.A. Sharwani and others 1991 SCM R 1041. It has been held that the equal protection of law does not envisage that, every citizen is to be treated alike in all circumstances, but it contemplates that persons similarly situated or similarly placed are to be treated alike. It has been further held that the reasonable classification is permissible but it must be founded on reasonable distinction or reasonable basis. It has been further held that a law applying to one person or one class of persons may be Constitutionally valid if there is sufficient basis or reason for it. But a classification which is arbitrary and is not founded on any rational basis is no classification as to warrant its exclusion from the mischief of Article 25. It has been further held that in order to make a classification reasonable it should be based on an intelligible differentia which distinguishes persons or things that are grouped together from those who have been left out and that the differentia must have rational nexus to the object sought to be achieved by such classification.
70. Now keeping these principles in view, we find that for the purpose of payment of quality premium a reasonable classification has been made and criteria has been fixed with the object to create a balance and equilibrium in different segments of a society and with the purpose of circulation of wealth and preventing the concentration of wealth and the exploitation of the groweRs, It is further aimed at improving the lot of the deprived class of growers and to provide them due share of their hard labour and work and to ensure the improvement of their standard of living by providing a profit sharing formula when the recovery of sucrose is in excess of the bench mark determined by the Provincial Government. Thus, the provisions contained in subsection (v) of section 16 cannot be held to be violative of the provisions contained in Article 25 of the Constitution.
The contention is without substance and is hereby repelled.
71. The last contention of the learned advocates for the petitioners is that the delegation of authority to the Provincial Government in subsection (v) of section 16 suffers from excessive delegation and is arbitrary because no guidelines are specified. We do not find any substance in the contention because a bare perusal of subsection (v) of section 16 of the Sugar Act shows that the Provincial Government has been empowered to direct the Sugar Factories to pay quality premium at the end of crushing season at such rate as may be specified by the Provincial Government in proportion to the sucrose recovery of each factory in excess of base level sucrose contents determined by the Provincial Government. Thus, it contains sufficient criteria and is linked to the recovery of sucrose in excess of the base level and not otherwise. It cannot be termed as arbitrary or suffering from excessive delegation. The criteria of sucrose recovery in determining the return to the sugarcane growers for the supply of sugarcane is not a new one and has been invoked in the Sub-Continent for about half a century. Mr. Farogh Naseem, has cited the judgment of Allahabad High Court in the case of Shervani Sugar Syndicate Ltd. (supra), in which notification issued under the Indian Sugarcane (Control) Order, 1966, came for consideration. In clause (3) of the Sugarcane (Control) Order, 1966, several factors were required to be considered and one of them was the recovery of sugar from the sugarcane.
72. While considering the validity and vires of the provisions contained in subsection (v) of section 16, we have kept in view the law laid down by the Honourable Supreme Court in the case of Inamur Rehman v. Federation of Pakistan 1992 SCM R 563, which has been reproduced in para.28 of this judgment.
73. We are also guided by the principles enunciated by the Honourable Supreme Court of Pakistan in the case of Pakistan Tobacco Company Ltd. 1999 SCM R 382, which has been extensively reproduced in para.31 of this judgment. In the case of Pakistan Tobacco Company Ltd., the Honourable Supreme Court took notice of the fact that a practice which is consistently followed for number of years is relevant factor to consider the validity and reasonableness when assailed by any one of the parties. Similar view was taken by the Allahabad High Court in the case of Shervani Sugar Syndicate Ltd.
74. In the end, we Will consider the Single Bench judgment of the Lahore High Court in the case of Fauji Sugar Mills (supra). In the cited case the pleas were raised before the learned Single Judge of the Lahore High Court that section 16-A of the Sugar Act (as enacted in the Province of Punjab) was un-Constitutional, as the provision empowered to fix the purchase price of sugarcane under subsection (i) and special varieties of cane under subsection (iv) and the Sugar Factories could not be saddled with any other financial obligation. It was further urged that the amendment was uncertain, vague, arbitrary, unreasonable and suffered from excessive delegation.
75. The learned Single Judge observed that, it was not understandable as to how, the Provincial Government was insisting for payment of quality premium without issuance of notifications under subsection (iv) of section 16. The learned Single Judge, then examined the connotation of expression "premium" and held that the meaning of premium was reward or bonus and observed that if the petitioners were achieving higher sucrose contents than base level then the sugar factories were entitled to claim premium and not the groweRs, The learned Single Judge observed that the plea of the petitioners that they have already paid the price of sugarcane under section 16(i) of the Act and therefore, they cannot be compelled twice to pay additional price of the sugarcane is valid and has to be accepted.. He thus held that the demand of quality premium was without jurisdiction. He thereafter, held that there is no legal sanction behind the amendment and it infringed the Fundamental Right 18 of the Constitution as it was in the nature of clog on their business activity.
76. We have carefully considered, all the reasons prevailing with the learned Single Judge of the Lahore High Court, for striking down the provisions contained in section 16-A of the Sugar Act (as applicable to the Province of Punjab). With all due deference to the learned Single Judge, we have not been able to pursuade ourselves to agree with the views of the learned Single Judge. We are, of the considered opinion that, various aspects considered by us in this judgment were not canvassed before the learned Single Judge of the Lahore High Court and thus, could not be considered. For instance, the plea that, direction for payment of quality premium was a profit sharing formula was not raised and thus, remained out of consideration. The result was that the various Articles in the Constitution, referred to by us, in the earlier part of this judgment, enjoining upon the Government to frame laws to reduce the gap between various segments of the society and to ensure the elimination of all forms of exploitation and to provide to everybody according to his work and the responsibilities of an Islamic State to ensure the distribution of wealth and restrict the concentration thereof in few hands were not considered at all. It appears that, the main consideration which prevailed with the learned Single Judge in striking down section 16-A of the Sugar Act (as applicable to the Province of Punjab) was that it amounted to payment of price for the purchase of sugarcane at different stages. We have repelled this contention raised before us and have already held that it does not amount to the payment of price twice at different stages and have further held that it does not amount to interference with the concluded contract. We have further held that the provision is neither arbitrary nor suffers from excessive delegation. We further find that the learned Single Judge while striking down the provisions contained did not consider the law as laid down by the Honourable Supreme Court in the case of Ellahi Cotton Mills Ltd. (supra) and in the case of Pakistan Tobacco Company Ltd., (supra). The learned Single Judge did not consider that the Courts are always slow in striking down a law duly enacted by the Legislature for the reason that the law should be saved rather than destroyed and the Court must lean to upholding the constitutionality of legislation. The Honourable Supreme Court has clearly held in the case of Inam-ur-Rehman (supra) that the Rule of Constitutional Interpretation was that there was a presumption in favour of the constitutionality of the legislative enactments. The learned Single Judge, further did not consider that prior to the legislative enactments the quality premium was being paid voluntarily on the basis of agreement between the Sugar Factories and the sugarcane growers/Government, and therefore, the law in this behalf could not be termed as arbitrary, unreasonable, confiscatory, expropriatory or amounting to payment of the price twice at different stages. The learned Single Judge of the Lahore High Court, while holding that the provision contained in section 16-A of the Sugar Act (as applicable to the Province of Punjab) was in conflict with the fundamental right under Article 18 of the Constitution and has to be struck down, placed reliance on the judgment of the Supreme Court of India in the case of M/s. Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh and others AIR 1954 SC 224.
' We have gone through this judgment from Indian jurisdiction and we have found that, the ratio of the judgment by the Supreme Court of India is that, when a power is conferred on an officer which is arbitrary, unregulated, unguided and is left entirely to the discretion of the particular person to do or not to do something conferment of such uncontrolled power cannot be held to be reasonable.
The Supreme Court of India, further held that, the legislation, which is arbitrary or excessively invades the right, cannot be said to contain the quality of reasonableness, and unless it strikes a proper balance between the freedom guaranteed under Article 19(1)(g) and the social control permitted by clause (vi) of Article 19, it must be held to be wanting in reasonableness. In the light of these principles the Supreme Court of India proceeded to examine the provisions contained in Uttar Pradesh Coal Control Order, 1953. The Supreme Court of India struck down clause 4(3) of the above Order for the reason that, it conferred arbitrary, uncontrolled and unguided powers in the Licensing Authority which was absolute in nature. However, on the touchstone of same principle, the Supreme Court of India upheld the validity of clauses 7 and 8 of the said Order which conferred powers on the State Coal Controller to require any person holding, stock of coal to sell whole or any part of the stock to such person or class of persons and on such terms and prices as may be determined in accordance with the provisions of clause 8 and the provisions contained in clause 8 provided that no person acting on behalf of licensee shall sell, agree to sell or offer for sale, coal at a price exceeding the price to be declared by the Licensing Authority in accordance with the formula given in Schedule III. According to clause 8 a profit of 10% was allowed on the landed cost.
Prior to that, the coal dealers had a margin of 20% profit on the sale of soft coke and 15% profit on the sales of hard coke and steam coal. The Supreme Court of India held that clauses 7 and 8 of the Coal Control Order do not impose any unreasonable restrictions upon the freedom of trade and therefore, cannot be held to be invalid. We are constrained to observe th4t the learned Single Judge of the Lahore High Court has not applied the correct ratio of the Indian Supreme Court judgment.
77. For the reasons stated above, we are not able to agree with the II view held by the learned Single Judge of the Lahore High Court in the II case of Fauji Sugar Mills (supra).
78. For the foregoing reasons, we do not find any substance in the petitions, which stand dismissed accordingly.