Gauhati High Court
Assam Salt Merchant'S Association vs State Of Assam And Anr. on 13 June, 1996
Equivalent citations: AIR1997GAU10, AIR 1997 GAUHATI 10, (1997) 1 GAU LR 49
ORDER J.N. Sarma, J.
1. This writ application has been filed challenging the Notification dated 11-12-1995 issued by the State of Assam whereby price of iodized salt was refixed with effect from 18-9-1995. It is stated that this price was fixed without taking into consideration the relevant factors and without even considered the statutory price, namely, of Railway freight, cost of loading and unloading etc. The petitioner further prayed that freight should be considered on "to payee" basis. On 15-3-1991 Government issued a notification constituting a committee for fixation of the price of the salt. The said committee includes at least two representatives of the petitioners. The committee held meeting and discussions were held about fixation of the price of salt. The Committee fixed the price of salt, the ex-Railway Yard price was fixed at Rs. 57.52P per 75 Kg Bag of iodized salt in respect of Zone-A. On 18-8-1994. the authority issued a letter refixing the price of salt on 1-4-1994 which was issued in supersession of the earlier letter dated 1-9-1993 on at which time the price was fixed at Rs. 63.36 per 75 Kg. bag as Ex-Railway Yard price for Zone-A. On 15-2-1994 the authority issued a W.T. Message whereby an increase by Rs. 7/- per 75 Kg. bag was allowed over the price fixed by the Department's letter dated 18-8-1994 on ad hoc basis. Thereafter on 22-12-1994 the letter was issued showing the ad hoc price specifically increasing Rs. 7/ - per 75 Kg. bag. The respondents thereafter again revised the price of salt by granting an ad hoc increase of Rs. 9.37 per 75 Kg. bag. Over and above the price fixed on 12-12-1994 and accordingly the ad hoc price was shown as increase of Rs. 16.37P over and above the price fixed on 18-8-1994. oH 21-3-1995 aW.T. Message was issued granting ad hoc increase in price. However, in granting the ad hoc price in respect of Item Nos. 3 and 4 the break-up has been changed without approval of the Commitee and as a result the sub-wholesellor and retailer suffered badly. It is stated that after issuance of the W.T. Message dated 21-3-1995, the Railway freight has been revised with effect from 1-4-1995 and it has been increased from Rs. 7/- to Rs. 8/- per 75 Kgs. bag. On 24-4-1995 the petitioner submitted a letter for refixation of price of salt with effect from 1-4-1995 granting increase in respect of Railway freight. On 15-5-1995 W.T. Message was issued whereby the authority decreased the price of salt by Rs. 14.27P. per 75 Kgs. bag. It is stated that this W.T. Message was issued without the approval of the Committee and no meeting of the Committee was held. A representation was made and it was clarified that the price fixed vide Message dated 23-3-1995 would be applicable only to consignment indented and purchased prior to 31-3-1995. But after 30-11-1994 again a representation was made urging for increase of rates in view of the increase in Railway freight. It is submitted on behalf of Respondents:--
(i) The petitioner Association does not represent all the salt Traders of the State of Assam. They are interested only for looking after the interest of Salt Merchants. But the Government have to look after the interest of. the general public throughout the State of Assam including the interest of all Salt Merchants too.
(ii) The petitioner Association did not furnish either their Registration number or the list of the members of the Association and the bye-laws of the Association in the writ petition with an ill intention to keep fixed on 18-8-1994. On 21-3-1995 a W.T. Message was issued granting ad hoc increase in price. However, in granting the ad hoc price in respect of Item Nos. 3 and 4 the break-up has been changed without approval of the Committee and as a result the sub-wholeseller and Retailer suffered badly. It is stated that after issuance of the W.T. Message dated 21-3-1995 the Railway freight has been revised with effect from 1-4-1995 and it has been increased from Rs. 7/- to Rs. 8/-per 75 Kgs. bag. On 24-4-1995, the petitioner submitted a letter for refixation of price of salt with effect from 1-4-1995 granting increase in respect of Railway freight. On 15-5-1995 a W.T. Message was issued whereby the authority decreased the price of salt by Rs. 14.27P per 75 Kgs. bag. It is stated that this W.T. Message was issued without the approval of the Committee and no meeting of the Committee was held. A representation was made and it was clarified that the price fixed vide message dated 23-3-1995 would be applicable only to consignment indented and purchased prior to 31-3-1995. But after 30-11-1994 again a representation was made urging for increase of rates in view of the increase in Railway freight on 17-7-1995 submitted letter giving a work sheet in accordance with the work sheet prepared by the Committee in 1991. On 21-7-1995 the petitioner submitted another letter enclosing representations filed by its two members. On the same date the petitioner submitted another letter for fixation tion of the price of salt immediately. However, as nothing was done petitioner filed Civil Rule No. 3372/95. Thereafter on 29-8-1995 this Court passed Judgment directing respondents to fix the price of salt within one week from the date of receipt of the order. On 31-8-1995 the petitioner submitted copy of the Judgment dated 29-8-1995 to the respondents. On 18-9-1995 a meeting of the Committee to review and determine the price of salt was held. Two members of the petitioner were also invited to submit their points of view which they did. On 26-9-1995 the petitioner incorporating the views of the members along with a detailed chart for fixation of the price of salt submitted to the respondents. On 30-11-1995 the petitioner submitted another letter to the respondents reiterating some of the facts which appears to have not been considered in the said minutes. On 11-12-1995 two notifications were issued, one for crushed iodised salt in respect of 75 Kgs. bags and another in respect of 1 Kg. packet and from the notification it appears that in respect of crushed iodised salt, respondents failed to consider various aspects. At the commencement of the meeting on 18-9-1995, the respondents had handed over some papers which reveal the cost of iodised salt at source as well as the increased freight rate. It is clear from the papers furnished as well as the minutes of the meeting that the price of salt varied from 250/- M.T. to Rs. 450/ - per M.T. and the average is taken it comes to Rs. 350/ -per M.T., but the respondents fixed the same at Rs. 300/- per M.T. which comes to Rs. 22.50 per 75 Kg. bag whereas it should be Rs. 26.25 per 75 Kg. bag. As per the commendation of the Committee the price of iodised salt has been fixed at Rs. 7.50 per bag although the average should be Rs. 7.75 per bag. The Committee had fixed the cost of loading and other incidental charges at Rs. 3/- per bag in 1991 and the present Committee fixed it at Rs. 1.50 in spite of escalation in price and other supervision charges. Railway freight was fixed at Rs. 34.02 i.e. the freight as on 1-4-1994 that to on paid basis although it is not possible for traders to pay such huge freight. On 6-4-1995 notification was issued fixing loading and unloading charges without weighing at Rs. 1.05 per bag and at Rs. 0.77 per packets but the Committee arbitrarily fixed the charge at Rs. 0.77 per bag. Surface transportation of salt to godown including loading and unloading was fixed at Rs. 4 in 1991, i.e. Rs. 3/- carrying cost and Re. 1/- loading and unloading charge. The present transportation charge comes to Rs. 4.39 per bag and loading and unloading Rs. 2.10 and as such it should be Rs. 6.49 whereas the petitioner claimed only Rs. 6.10 but the same was fixed by the Committee at Rs. 4.54. The profit margin should be 5% as traders are to pay 2% as bank interest and .25% as draft charges and so nobody can do business at a margin of 2.5%, the percentage fixed by the respondents. Transportation charges from godown with incidental charge is fixed at Rs. 8/- per bag which was Rs. 7/- per bag in 1991 although the same should be Rs. 10/- per bag in view of the increase in transportation loading and unloading charges.
2. It is stated that affidavit-in-oposition has been filed. But the same is not available in the record. An affidavit-in-reply has been filed. At the time of argument the learned Government Advocate produced before me an instruction received by her in writing and that instruction states inter alia as follows:--
"(1) The petitioner Association does not represent all the salt Traders of the State of Assam. They are interested only for looking after the interest of salt Merchants as stated in para-1 to the writ petition. But Govt. have to look after the interest of the general public throughout the State of Assam including the interest of all Salt Merchants too.
(2) The petitioner Association did not furnish either their Registration number or the list of the members of the Association and the bye laws of the Association in the writ petition with an ill-intention to keep the Hon'ble Court in dark about the actual strength of the Association. In fact, the petitioner Association represents a few members of salt mediants of the State and therefore they do not have any right to file this writ petition on behalf of all salt traders of State of Assam.
(3) The State Govt. Used to receive 88 B.G. rakes of Iodised salt as Stale Zonal Quota annually from the salt Commissioner, Govt. of India, with.effect from 1-1-1996 the quota has been raised to 101 B.G. rakes. Govt. procures the iodised salt rakes from West Coast through their nominee who act as handling agents as per terms and conditions of the notice inviting applications from intending importers/handling agents (specimen copy enclosed). The concerned handling agents must possess a valid import licence under A.T.A. (L& C) Order, 1982 and have to execute a deed of agreement before procuring the salt.
(4) As per Clauses 2(c) and 2(r) of the deed of agreement (Specimen copy enclosed) the disposal of salt within the State has to be made as per fixation of prices of iodised salt as decided by the-State Govt. in Food and Civil Supplies Department. And the Second party i.e. handling agent is hereby bound to abide by any directives that may be issued by the State Govt. and the Director of Food and Civil Supplies from time to time. Therefore the fixation of price of iodised salt in State Zonal Quota is a matter of public policy and the Hon'ble High Court under its writ jurisdiction cannot interfere with this matter as indicated in the Hon'ble Courts Judgment dated 29-8-1995 passed in C.R. No. 3372/95. Moreover, the Salt Importers are at liberty to apply or not to apply for appointment as handling agent of State Zonal Quota of iodised Salt if the terms and conditions of Tender Notice as well as deed of Agreement are not acceptable as the case may be to them and after appointment as handling agents they are bound to abide by the terms and conditions of the deed of agreement.
(5) In the instant writ petition the petitioner Association has failed to make out a case in regard to infringement of their fundamental rights. Prior to this writ petition, the petitioner Association had come up with another writ application being C.R. No. 3372/95 before this Hon'ble High Court which inter alia relates to fixation of price of Iodised Salt in the State. The Hon'ble High Court by Us Judgment dated 29-8-1995 (Annexure VI to this writ petition) disposed of the writ petition under C.R. No. 3372/95 with the suggestion to State Govt. to reconsider the re-fixation of price of Iodised Salt.
(6) Accordingly a meeting of the Committee to Review and Determine the Price of Iodised Salt in the State was held on 18-9-1995 wherein the representatives of the petitioner Association were duly heard by the Committee. The Committee after considering all the aspects including their suggestions have refixed the prices of Iodised Salt (Annexure 'X' and 'Y' (A) to the writ petition) on proper application of judicious mind keeping in view the larger public interest of the common" consumers as well as of the nominees and agents of the State.
(7) Therefore, there was no violation of principles of natural justice or fundamental and legal rights of the petitioner's Association as alleged in the writ petition. Further, the committee after hearing the representatives of the petitioner Association had examined the parameters/items which were taken into account by the earlier Committee in 1991 and made the recommendations as indicated at Annexure-VII to the writ petition. Therefore the question of illegal and arbitrary action of respondents in fixing the prices of iodised salt does not arise.
In view of the facts and circumstances Stated above, it may be informed to the Hon'ble High Court that Government as a matter of public policy can fix the prices of iodised salt considering all aspects and also by giving due regard to the Hon'ble High Court's Judgment dated 29-8-1995 passed in C.R. No. 3372/95. Moreover, the petitioner Association has failed to make out a case regarding infringement of their fundamental rights and therefore, the writ petition is liable to be rejected with cats."
3. Smt. Hazarika, the learned Govt. Advocate submits that this court in exercise of power of Judicial Review cannot question the policy decision of the Government, if it is found that the Executive has acted within the powers and function assigned under the Constitution, the Court should not delve into the policy decision. In support of it she relied on the following decisions:-- (i) AIR 1989 SC 1899 (Asif Hameed v. State of Jammu and Kashmir, With State of Jammu and Kashmir v. Rajeev Mahajan, With Rajeev Mahajan, v. State of Jammu and Kashmir, With Jyoti Kumari v. State of Jammu and Kashmir wherein she relies in Paragraphs 17, 19 and 21. They inter alia state as follows:--
"17. Before adverting to the controversy directly involved in these appeals we may. have a fresh look on the inter se functioning of the three organs of democracy under our Constitution. Although the doctrine of separation of powers has not been recognised under the Constitution in its absolute rigidity but the Constitution makers have meticulously defined the functions of various organs of the State. Legislature, executive and judiciary have to function within their own spheres demarcated under the Constitution. No organ can usurp the functions assigned to another. The Constitution trusts to the Judgment of these organs to function and exercise their discretion by strictly following the procedure prescribed therein. The functioning of democracy depends upon the strength and independence of each of its organs. Legislature and executive, the two facets of people's will, they have all the powers including that of finance. Judiciary has no power over sword or the purse nonetheless it has power to ensure that the aforesaid two main organs of State function within the constitutional limits. It is the sentinel of democracy. Judicial review is a powerful weapon to restrain unconstitutional exercise of power by the legislature and executive. The expanding horizon of judicial review has taken in its fold the concept of social and economic justice. While exercise of powers by the legislature and executive is subject to judicial restraint, the only check on our own exercise of power is the self imposed discipline of judicial restraint.
19. When a State action is challenged, the function of the Court is to examine the action in accordance with law and to determine whether the legislature or executive has acted within the powers and functions assigned under the Constitution and if not the Court must strike down the action. While doing so the Court must remain within its self imposed limits. The Court sits in judgment on the action of a coordinate branch of the Government. White exercising power of judicial review of administrative action the Court is not an appellate authority. The Constitution does not permit the Court to direct or advise the executive in matters of policy or to sermonize qua any matter which under the Constitution lies within the sphere of legislature or executive provided these authorities do not transgress their constitutional limits or statutory powers.
21. The High Court's directions for consti-tuting "Statutory Independent Body" obviously mean that the State Legislature must enact a law in this respect. The Constitution has laid down elaborate procedure for the legislature to act thereunder. The legislature is supreme in its own sphere under the Constitution. It is solely for the legislature to consider as to when and in respect, of what subject matter, the laws are to be enacted. No directions in this regard can be issued to the legislature by the Courts. The High Court was, therefore, patently in error in issuing directions in Jyotshana Sharma's case and reiterating the same in the judgment under appeal."
4. (ii) AIR 1990 SC 1277, Sitaram Sugar Co. Ltd. v. Union of India, With U.P. State Sugar Corporation Ltd. v. Union of India, wherein the Supreme Court, inter alia pointed out as follows:--
"57. Judicial review is not concerned with matters of economic'policy. The Court does not substitute its judgment for that of the legislature or its agents as to matters within the province of either. The Court does not supplant the "feel of the expert" by its own views. When the legislature acts within the sphere of its authority and delegates power to an agent, it may empower the agent to make findings of fact which are conclusive provided such findings satisfy the test of reasonableness. In all such cases, judicial inquiry is confined to the question whether the findings Of fact are reasonably based on evidence and whether such findings are consistent with the laws of the land. As stated by Jagannatha Shetty, J. in Gupta Sugar Works, AIR 1987 SC 2351 at p 2352 (supra).
"58. Price fixation is not within the province of the Courts. Judicial function in respect of such matters is exhausted when there is found to be a rational basis for the conclusions reached by the concerned authority. As stated by Justice Cardozo in Mississippi Valey Barge Line Company v. United States of America, (1933) 292 US 282-290 : 78 Law Ed 1260, 1265:
"The structure of a rate schedule calls in peculiar measure for the use of that enlightened judgment which the Commission by training and experience is qualified to form ....... It is not the province of a Court to absorb this function to itself. ....... The judicial function is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body."
5. (iii) 1993 (1) SCC 445, : (1993 AIR SCW 683), (Sterling Computers Limited v. M. and N. Publications Ltd. and United Database (India) Pvt. Ltd. v. M and N Publications Ltd. and United India Periodicals Pvt. Ltd. v. M and N Publications Ltd.) wherein the Supreme Court pointed out that "That the decision taken by the Public Authority in Commercial/Contractual transactions of State or its instrumentality is open to judicial review -- Decision making process is open to judicial review. The Court cannot act as an Appellate authority, but if the process is violative of Article 14 the Court can strike down the decision and action taken pursuant thereto." The Court pointed out inter alia, as follows;--
"Even while taking decision in respect of commercial transactions a public authority must be guided by relevant considerations and not by irrelevant ones. If such decision is influenced by the extraneous considerations, which it ought not to have taken into account, the ultimate decision is bound to be vitiated, even if it is established that such decision had been taken without bias. There is nothing paradoxical in imposing legal limits on such authorities by Courts even in contractual matters because the whole concept of unfettered discretion is inappropriate to a public authority, who is expected to exercise such powers only for public good."
6. In the instant case this matter relates to price fixation and the price was fixed by the authority by taking into account the relevant factors. There may be some deficiency here and thereto, that will not allow this Court to interfere with such a decision in view of the fact that this Court does not have the expertise to say that the price fixed by the authority is absolutely erroneous. The petitioners cannot suffer in view of the price fixation made by the authority as the petitioners are at liberty either to accept or not to accept the Iodized salt brought by the State Government. If they feel that by accepting such price they are not in a position to earn pofift they may not enter the arena. But they cannot ask the Government to fix the price in a different manner. It is not a case where the petitioners are parting with some property at a price deliberatley fixed on the lower side. The State Government is bringing the Iodized salt and they want that salt to be sold at a particular price. The petitioners are not compelled to enter the field and having entered the field they now cannot make a grievance that the price fixed by the authority is on the lower side. Accordingly there is no merit in this writ application and the same is dismissed.
7. However, I leave the parties to bear their own costs.