Punjab-Haryana High Court
Batala Cooperative Sugar Mills Ltd. ... vs Union Of India And Another on 7 November, 2013
Author: Rameshwar Singh Malik
Bench: Rameshwar Singh Malik
Civil Writ Petition No. 18816 of 2011 1
& other connected cases
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
Civil Writ Petition No. 18816 of 2011
Date of Decision: 7.11.2013
Batala Cooperative Sugar Mills Ltd. Batala
.....Petitioner.
Versus
Union of India and another
.....Respondents.
2 Civil Writ Petition No. 18919 of 2011
Bhogpur Cooperative Sugar Mills Limited
.....Petitioner.
Versus
Union of India and another
.....Respondents.
3. Civil Writ Petition No. 19497 of 2011
Morinda Cooperative Sugar Mills Limited
.....Petitioner.
Versus
Union of India and another
.....Respondents.
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 2
& other connected cases
4. Civil Writ Petition No. 3824 of 2012
Nawanshahar Cooperative Sugar Mills Limited
.....Petitioner.
Versus
Union of India and another
.....Respondents.
CORAM: HON'BLE MR.JUSTICE RAMESHWAR SINGH MALIK
Present: Mr. Vikas Singh, Advocate
for the petitioner.
Mr. Mohan Jain, Additional Solicitor General of India with
Mr. Alakh Alo Srivastava, Advocate,
Mr. Dinesh Thakur, Advocate
Mr. Arastu Chopra, Advocate
Mr. Fateh Singh Saini, Advocate
Mr. Onkar Singh Batalvi, Special Senior Counsel and
Ms. Kamla Malik, Advocate
***
1.Whether Reporters of local papers may be allowed to see the judgment?
2. To be referred to the Reporters or not?
Whether the judgment should be reported in the Digest?
RAMESHWAR SINGH MALIK J.
This order will dispose of four identical writ petitions bearing
CWPs No. 18816 of 2011 (Batala Cooperative Sugar Mills Ltd. Vs.
Union of India and another), CWP No. 18919 of 2011 (Bhogpur
Cooperative Sugar Mills Ltd. Vs.Union of India and another), CWP
No. 19497 of 2011 (Morinda Cooperative Sugar Mills Limited Vs.
Union of India and another) and CWP No. 3824 of 2012
(Nawanshahar Cooperative Sugar Mills Limited Vs. Union of India
and another). All the four writ petitions are arising out of the similar
set of facts and same questions of law are involved. The impugned
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 3
& other connected cases
order dated 8.8.2011 (Annexure P-9) is common in all the four writ
petitions. Subsequent recovery order dated 23.8.2011 is common in
three cases whereas in CWP No. 3824 of 2012, order dated
24.1.2012 (Annexure P-10) has been additionally passed, but on the
similar lines and in terms of the above said order dated 8.8.2011
(Annexure P-9). However, for the facility of reference, facts are being
culled out from CWP No. 18816 of 2011.
Facts first.
A brief narration of the essential facts would be required to
unravel the controversy involved in all these writ petitions. The
petitioners herein are the sugar mills located in the State of Punjab
and challenging the validity of order dated 8.8.2011 (Annexue P-9)
which was passed by respondent No.1 dismissing the
representations of the petitioners, which they filed in compliance of
the orders dated 12.8.2010 (Annexuer P-6) passed by a Division
Bench of this Court deciding together five Letter Patent Appeals.
The core question involved in all these four cases relates to
the validity of fixation of levy sugar price under the Sugar (Price
Determination for 1972-73) Production Order 1972 ('1972 Order' for
short). Petitioners alleged that levy sugar price fixed by respondent
No.1 was on lower side and detrimental to their interest. Sugar being
an essential commodity, is regulated by the provisions of Essential
Commodities Act 1955 ('1955 Act' for short) and the rules/orders
issued thereunder. Exercising its powers under Section 3 (3C) of
1955 Act, respondent No.1 issued an order dated 7.11.1972
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 4
& other connected cases
alongwith schedule-1 (Annexure P-1), thereby determining different
prices for different grades of levy sugar for different states and
relevant extract of the schedule, reads as under:-
"SCHEDULE-I
Ex-Factory (Rupees per quintal)
Grade wise for I.S.S. Grades
(Exclusive of Excise duty)
Area A-30 D-30 E-30 A-29 D-29 E-29
B-30 B-29
C-30 C-29
Punjab 153.36 152.21 151.66 152.3 15U6 150.86"
Feeling aggrieved against the above said fixation of levy
sugar price allegedly on the lower side, petitioner sugar mills
approached this Court by way of four writ petitions bearing CWP No.
780, 781, 782 and 766 of 1973. It is undisputed fact on record that
price of sugar was controlled under 1972 Order issued under the
1955 Act. The concept of levy sugar came to be introduced in the
year 1967, under which 60% sugar was to be supplied by the sugar
mills at a fixed price and the remaining could be sold in the open
market at a free price. In the month of December 1971, sugar mills
associations agreed to supply 60% which came to be increased to
63.5%, of the total sugar produced at the rate of `150 per quintal and
the balance could be sold in open market. Out of 63.5% of the total
quantity to be supplied by the sugar mills at a fixed price, 3.5% was
kept reserved for export commitment of the Central Government.
Order Annexure P-1 came to be issued fixing price of levy sugar at
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 5
& other connected cases
different rates specified in the schedule attached to the order for
different grades of sugar and for different States. The rates fixed for
the State of Punjab have been extracted here-in-above.
Owing to the nature of controversy pertaining to the fixation
of levy sugar price and changing circumstances, including the
increase in the production of sugarcane, manufacturing cost and
other relevant factors, Union of India set up Tariff Commission, which
submitted its report in the year 1969. It was recommended by the
Commission that to fix uniform rates throughout the country was
neither practical nor feasible, because of different fact situation of
every State. Fixation of price was recommended on the basis of
zones.
Accordingly, sugar policy had to be reviewed from time to
time, keeping in view the demand and supply, export commitment
and reasonable incentive to the manufacturers as well as to the cane
growers. Thus, policy of partial decontrol was thought to be the most
appropriate alternative of the complete control and decontrol, so as
to enable the sugar mills to pay a higher price for sugarcane than the
minimum statutory price as an incentive to the cane growers.
Simultaneously, sugar mills were going to be compensated by sale of
their balance production of sugar in the open market on higher price
than the levy sugar price fixed by the Central Government.
When the situation improved in the first half of 1971, it was
thought appropriate to remove the control on price. However,
because of increase in the price, coupled with another important
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 6
& other connected cases
event, i.e. strained relations with Pakistan resulting into conflict, it
was again considered necessary to control the price. An
understanding was arrived at between the sugar mill owners and the
Central Government for supply of 63.5.% sugar through fair price
shops @ `150 per quintal for a period of six months w.e.f. 1.1.1972
till emergency would last, whichever was earlier. However, in the
year 1972, when the sugar mills started expressing their reservation
to continue with the supply at the fixed rate of `150/-, a control order
came to be issued w.e.f. 1.7.1972. During this period, the Tariff
Commission was also asked to conduct a fresh enquiry into the
changed circumstances with special reference to the cost structure of
sugar industries. In the above said factual backdrop, order Annexure
P-1 came to be issued by the Union of India, fixing levy sugar price in
terms of 1972 Order.
The above said four writ petitions remained pending for
regular hearing before this Court for quite some time. In the
interregnum, the Hon'ble Supreme Court rendered the judgments in
M/s Shri Sitaram Sugar Co. Ltd. and another Vs. Union of India
and others, AIR 1990 SC 1277 and Shri Malaprabha Co-op. Sugar
Factory Ltd. Vs. Union of India and another, AIR 1994 SC 1311,
besides other judgments on the subject. When the above said four
writ petitions came up for hearing, all the writ petitions were
dismissed by a Single Bench of this Court, vide order dated
19.1.2001 (Annexure P-5) relying upon the above said two judgments
of the Hon'ble Supreme Court. The order dated 19.1.2001
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 7
& other connected cases
dismissing the four writ petitions was challenged by the petitioners
before the LPA Bench, vide LPA No. 1253, 1254, 1259 and 1956 of
2001. After hearing the parties at length and without setting aside
the above said order dated 19.1.2010 as such, the Division Bench
disposed of all the LPAs vide common order dated 12.8.2010
(Annexure P-6) granting liberty to the petitioners to make a
representation to the Secretary, Ministry of Agriculture (Department
of Food), who was directed to consider the same and pass an
appropriate order dealing with the points which may be raised.
As a consequence and in compliance of above said order
dated 12.8.2010 passed by the LPA Bench, petitioners moved their
respective representations before the respondent authorities.
Petitioners appeared before the competent authority, i.e. the
Secretary (Food and Public Distribution), who heard the parties, but
contentions raised on behalf of the petitioners did not find favour with
him. Consequently, he passed the impugned order dated 8.8.2011
(Annexure P-9). Hence these writ petitions.
Notice of motion was issued and pursuant thereto, written
statement on behalf of the respondents was filed. That is how, this
Court is seized of the matter.
Learned counsel for the petitioners vehemently contended
that respondent No.2 has proceeded on an erroneous approach,
while passing the impugned order dated 8.8.2011 (Annexure P-9),
not appreciating the issues raised on behalf of the petitioners and
also ignoring the true import of the mandatory provisions of Section 3
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 8
& other connected cases
(3C) of 1955 Act. He further submits that price for levy sugar for the
years 1972-73 fixed @ `151.36 per quintal was inadequate on the
face of it, which ought to have been fixed taking into consideration
the price paid by the petitioners sugar mills for the sugarcane and
also the actual manufacturing cost. Placing reliance on a
comparative study of the sugarcane price provided at Annexure P-3
by the Central Government and Annexure P-4 fixed by the State
Government, he submits that respondent No.2 failed to consider and
appreciate the factors provided under Section 3 (3C) of 1955 Act
while passing the impugned order. He places heavy reliance on the
judgment of the Hon'ble Supreme Court in Mahalakshmi Sugar
Mills Company Limited Vs. Union of India and others AIR 2009
SC 792 and submits that respondent No.2 has failed to appreciate
the true import of the judgment only because of observations made in
para 66 of it, thus, misunderstood the ratio thereof.
He also submits that since Clause 5 A was inserted in the
sugarcane control order w.e.f. 1.10.1974 the same will not be
applicable in the present cases. He next contended that the
judgments of the Hon'ble Supreme Court in Mahalaxmi's case
(supra), was fully applicable in the present case wherein the State
Advisory Price ('SAP' for short), has been held to be one of the
relevant factors to be taken into consideration by the Central
Government for fixing the levy sugar price. He submits that the
judgments of the Hon'ble Supreme Court in Panipat Cooperative
Sugar Mills Vs. Union of India, (1973) 1 SCC 129 as well as in
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 9
& other connected cases
Anakapalle Co-op. Agrl. and Industrial Society Ltd. Etc. Vs.
Union of India and others, (1973) 2 SCC 435 are not applicable in
the present case. Regarding interest, he submits that under the Levy
Sugar Price Equalisation Fund Act, 1976 ('1976 Act' for short),
petitioners are being charged exorbitant rate of interest, i.e. 15% per
annum. He submits that since the petitioners had been pursuing
their bonafide litigation right from 1973, they could be charged only
@ 12.5.%. Finally, he prays for setting aside the impugned order by
allowing the present writ petitions.
Per contra, learned Additional Solicitor General of India
submits that all the points raised by the petitioners were dealt with
and decided strictly in accordance with the peculiar fact situation,
statutory provisions contained in Section 3 (3C) of 1955 Act and the
law laid down by the Hon'ble Supreme Court in Panipat Cooperative
Sugar Mills' case (supra) and Anakapalle's case (supra), which were
the Constitution Bench judgments of the Hon'ble Supreme Court. He
further submits that Mahalaxmi's case (supra), was clearly
distinguishable on facts as it was pertaining to the determination of
price of sugar for the years 1983 to 1985. Further, clause 5 (A)
introduced in 1972 Order w.e.f. 1.10.1974, dealing with additional
price for sugar purchased on or before 1.10.1974, was subject matter
of consideration before the Hon'ble Supreme Court in Mahalakhsmi's
case (supra), which was not the issue involved herein. He next
contended that it was only the Central Government, which was
competent to fix the levy sugar price and the higher price of the
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 10
& other connected cases
sugarcane, if any, fixed by the State Government would be totally
immaterial.
Placing heavy reliance on the above said two Constitution
Bench judgments of the Hon'ble Supreme Court in Panipat
Cooperative Sugar Mill's case (supra) and Anakapalle's case (supra),
learned Additional Solicitor General of India contended that since the
levy sugar price was determined in accordance with the provisions of
1955 Act and 1972 Order, there was hardly any scope for
interference by this Court. Regarding interest, he placed reliance on
a Division Bench order dated 3.5.2013 of Allahabad High Court in
Bajaj Hindusthan Ltd. Vs. Union of India through Secretary Food
& Consumer Affairs rendered in case number (miscellaneous) 1196
of 1999 as well as the Division Bench judgment dated 15.6.2007 in
Union of India and others Vs. Sir Shadi Lal Enterprises and
others passed in LPA No. 292 of 2001, which came to be upheld by
the Hon'ble Supreme Court vide order dated 3.3.2008, dismissing the
Special Leave to Appeal (C) No. 15747 and 15748 of 2007. He
submits that since the rate of interest was statutory in nature
provided under 1976 Act, petitioners were bound to pay the same.
He prays for dismissal of the writ petitions.
Having heard the learned counsel for the parties at
considerable length, after careful perusal of the record of the case
and giving thoughtful consideration to the rival contentions raised,
this Court is of the considered opinion that in view of the given fact
situation of the case and the law laid down by the Hon'ble Supreme
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 11
& other connected cases
Court of India, no interference is warranted at the hands of this
Court, while exercising its writ jurisdiction under Articles 226/227 of
the Constitution of India. To say so, reasons are more than one,
which are being recorded hereinafter.
Following are the three questions of law that fall for
consideration of this Court:-
i) Whether the impugned order fixing the levy sugar
price for the year 1972-73 was contrary to the
provisions of Section 3(3C) of 1955 Act;
ii) Whether the impugned order dated 8.8.2011
(Annexure P-9) passed by respondent No.2 was
arbitrary; and
iii) Whether the petitioners were under legal
obligation to pay the statutory interest provided
under the 1976 Act.
It is an admitted position on record that issue involved
herein pertains to the determination of levy sugar price for the year
1972-73 by the Central Government. How the competent authority
came at this figure, i.e. Rs. 151.63 per quintal? Details in this regard
have been given in Annexure P-3 at page 46 and 47 of the paper
book and the same read as under:-
EX-FACTORY PRICE OF LEVY SUGAR (D-29 GRADE) FOR
1972-73
SEASON EXCLUDING EXCISE DUTY
Particulars Punjab
1. Driage % cane (actual for 1971-72) 0.19
2. Cane Price (Rs./QTL. of cane) 8.362
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 12
& other connected cases
3. Cane cess/purchase tax (Rs./ Qtl. of cane) 0.241
4. Cooperative Society (Rs./Qtl. Of cane) 0.041
5. Total (2+3+4) 8.644
6. Driage on 5 at %age in 1 0.016
7. Cane Price including Gess, Comm. and Driage 8.660
8. Recovery percent 8.70
9. Duration (Days) 98
Rupees Per Quintal of Sugar
99.54
Charges (on General Schedule)
ii) Variable 1.16
iii) Semi-variable 12.84
iv) Fixed 18.12
12. Sub-Total 132.45
13. Exoalations including return thereon
a. 2nd Wage Board Award 2.14
b. Additional Depreciation 0.44
c. Railway freight -i) original -
-ii) Additional -
d. All escalation including full impact of bonus on it 1.73
e. Packing 1.30
f. Additional Bonus 4.33% i) On original wages 0.72
ii) On 2nd Wage Board Award 0.09
g. Increase in power Fuel repairs and maintenance etc. 0.44
14. Return (including Intt). 12.05
15. Grand Total (12+13+14) 151.36"
Since the principal question revolves around the
interpretation of Section 3 (3C) of 1955 Act, it would be appropriate to
refer to the relevant provisions of Section 3 (3C) and the same read
as under:-
"(3-C). Where any producer is required by an
order made with reference to clause (f) of subsection (2)
to sell any kind of sugar (whether to the Central
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 13
& other connected cases
Government or a State Government or to an officer or
agent of such Government or to any other person or
class of persons) and either no notification in respect of
such sugar has been issued under sub-section (3-A) or
any such notification, having been issued, has ceased to
remain in force by efflux of time, then, notwithstanding
anything contained in sub-section (3), there shall be paid
to that producer an amount therefore which shall be
calculated with reference to such price of sugar as the
Central Government may, by order, determine, having
regard to-
(a) the minimum price, if any, fixed for
sugarcane by the Central Government under this
section;
(b) the manufacturing cost of sugar;
(c) the duty or tax, if any, paid or payable
thereon:
and
(d) the securing of a reasonable return on the
capital employed in the business of
manufacturing sugar, and different prices
may be determined from time to time for
different areas or for different factories or for
different kinds of sugar.
Explanation -For the purposes of this sub-
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 14
& other connected cases
section, "producer" means a person carrying
on the business of manufacturing sugar."
A bare perusal of the above said provisions of law leaves no
room for doubt that it was only the Central Government, which was
competent to fix the levy sugar price, of course, keeping in view the
relevant factors provided under Section 3 (3C) of 1955 Act.
A conjoint reading of the figures contained in Annexure P-3,
provisions of Section 3 (3C) of 1955 Act, both reproduced hereinabove and
the impugned order Annexure P-9 as well as the Division Bench judgment
dated 12.8.2010 (Annexure P-6) passed by this Court, would make it clear
that respondent No.2 considered all the relevant factors in accordance with
the provisions of Section 3 (3C) of 1955 Act, peculiar facts of the present
case and other relevant attending circumstances before passing the self
contained impugned order dated 8.8.2011 (Annexure P-9), in meticulous
compliance of the judgment dated 12.8.2010 passed by the LPA Bench of
this Court. The order is not only speaking one, but is supported with sound
reasoning. Each and every minute detail has been discussed, considered
and appreciated in the right perspective by respondent No.2, while passing
the impugned order Annexure P-9, which has not been found to be
suffering from any vice of arbitrariness. Having said that, this Court feels
no hesitation to conclude that respondent No.2 committed no error either
on facts or in law and the impugned order deserves to be upheld.
Before coming at the judicious conclusion, respondent No.2 has
first referred to the factual background of the case, then he discussed the
issues raised before him on behalf of the petitioners and decided the same
in meticulous compliance of the order dated 12.8.2010 passed by the LPA
Bench of this Court. The relevant extract of the order passed by
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 15
& other connected cases
respondent No.2 reads as under:-
" From the material on record, it is found that
prior to the issuing of the order of 1972, an informal,
arrangement was reached by the Central Government
with the sugar industry and a scheme was brought into
effect from the 1st January, 1972 under which the industry
agreed to voluntarily make available 60% of the monthly
releases of sugar at a fixed price of Rs. 150 per quintal
ex-factory exclusive of excise duty for D-30 Grade for
distribution to domestic consumers through fair-price
shops. Similarly, a further 3.5% of the monthly releases
were also made available by the factories for meeting
export commitments. The rest of the monthly release
was available for free sale in the open market.
The agreement with the industry was to remain
valid for the duration of the Emergency in the wake of
Indo-Pak conflict of 1971 or far a period of six months
whichever was shorter. The Indian Sugar Mills
Association informed the Central Government on 13th
June, 1972 (When the emergency was still in force), that
some factories were unwilling to continue the voluntary
arrangement beyond 30th June, 1972 and that it had not
been possible for the Association to recommend any
other scheme. The prices of sugar had also been
steadily rising. Therefore, in order to ensure that the
domestic consumers continue to procure a reasonable
portion of their requirements of sugar at a fair prices, the
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 16
& other connected cases
Central Government resorted to the provisions of the EC
At and issued the Sugar (Price Determination) Order
1972 on 15th June, 1972, wherein-under, the price for D-
29 levy sugar was fixed at Rs. 145.71 per quintal in
respect of factories located in the State of Punjab in
respect of the sugar season 1971-72. The Sugar (Price
Determination for 1972-73 Production) Order, 1972 for
the sugar season 1972-73, was issued on 7th Nov., 1972
having due regard to the following additional elements in
the cost of production, over and above the escalations
recommended earlier by the Tariff Commission:-
(i) A higher minimum cane price which
had been increased by about 20% over the minimum
price notified for the sugar season 1971-72.
(ii) Increase in the bank lending rates.
(iii) Increase in the Statutory Minimum
Bonus from 4 to 8.33%
The Price for the D-29 Grade levy sugar in respect of the
factories located in the State of Punjab was fixed at Rs.
151.36 per quintal.
The prices of levy sugar for the sugar year 1972-73 were
fixed after taking into consideration the factors mentioned
in sub-section (3C) of section 3 of the Essential
Commodities Act, 1955 and were in accordance with the
formula laid down by the Tariff Commission, 1969. The
important aspects of the price fixation then as adopted
are briefly explained below:-
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 17
& other connected cases
(a) The minimum sugarcane price for
1972-73 had been fixed by the Government at Rs. 8 per
quintal linked to a recovery of 8.5% with a premium of
9.4. paise for every 0.1.% increase in the recovery over
8.5% in accordance with the principle of full
proportionality. The weighted average cane price for
each zone has been calculated at this rate on the basis
of the estimates furnished by the factories for the year
1972-73.
xx xx xx
Further, the sugar mills have now worked out their ex-
factory prices based on the actual price of sugarcane
paid by them. Sub-section (3C) of section (3), however,
permits taking into consideration only of the minimum
price of sugar cane while arriving at the price of levy
sugar.
Xx xx xx
M/s Malwa Sugar Mills (now Cosmos Industries
Ltd.) have referred to the judgment dated 22.9.1993 in
the case of Malaprabaha Cooperative Sugar Factory Ltd.
And judgment dated 31.3.2008 in the case of
Mahalakshmi Sugar mills Company Ltd of Hon'ble
Supreme Court to justify taking into consideration of the
actual price of sugar cane in the determination of the
price of levy sugar for the year 1972-73. The said
judgments are not applicable to the levy sugar prices for
the year 1972-73 since the Malaprabha judgment dated
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 18
& other connected cases
22.9.1993 was concerned with fixation of price for the
years 1974-75 to 1979-80 only by taking into
consideration the additional price of sugarcane under
clause 5A of the Sugarcane (Control) Order, 1966. The
said clause 5A was inserted in the sugarcane (Control)
Order 1966 with effect from 1.10.1974 only and,
therefore, is not relevant to the prices of sugarcane for
the sugar season 1972-73. Further, Hon'ble Supreme
Court had specifically directed the Central Government to
re-fix the prices for levy sugar for the sugar years 1974-
75 to 1979 -80 and not passed any orders with regard to
appeals pertaining to other sugar years disposed of
through the said judgment dated 22.9.1993. The parties
representing, therefore, cannot claim any benefit from the
decision of Hon'ble Supreme Court in the case of
Malprabaa Co-operative Sugar Mills. Similarly, no
benefits can be claimed by the parties representing on
the basis of judgment dated 31.3.2008 of Hon'ble
Supreme Court in the case of Mahalakshmi Sugar mills
Co. Ltd. Since parties representing were not a party to
the said case. Hon'ble Supreme Court while laying down
the law for the future had kept the direction confined only
to the parties before the Court including the interveners.
The said case was applicable to the sugar years 1983-84
and 1984-85 only.
Xx xx xx
The Central Government while determinig the
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 19
& other connected cases
price of levy sugar for the sugar season 1972-73 had
given due consideration to the factors mentioned in sub-
section (3C) of section 3 of the Essential Commodities
Act 1955 like increase in the minimum price of
sugarcane, incidence of co-operative societies
commission, weighted average recovery and weighted
average duration based on estimates obtained from
factories for the 1972-73 season, escalation
recommended by the Tariff Commission and the
incidence of additional bonus. The Central Government
had also taken into account a higher amount in
consideration as return on the capital employed. The
prices had, therefore, been determined strictly in
accordance with the provisions of sub-section (3C) of
section 3 of the Essential Commodities Act. 1955. in
view of this and position stated hereinabove, the
representations filed by sugar mills for revision of the
prices of levy sugar for the sugar year 1972-73 cannot be
accepted. The sugar mills are directed to immediately
pay to the Central Government the excess price realized
in terms of the interim order of Hon'ble High Court of
Punjab and Haryana together with interest thereon, if not
already done, under the Levy Sugar Prices Equalization
Fund Act, 1972.
A careful reading of the above said reasons assigned by
respondent No.2, while passing the impugned order would show that the
impugned order has been passed after due application of mind. The
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 20
& other connected cases
impugned order is based on true facts of the case and correct appreciation
of codified as well as judgemade law. The judgments rendered by the
Constitution Benches of the Hon'ble Supreme Court in Panipat
Cooperative Sugar Mill's case (supra) and Anakapalle's case (supra) have
been rightly followed by respondent No.2, at the time of passing the
impugned order. In this view of the matter, decision making process
adopted by respondent No.2 has been found to be factually correct and
legally justified. Thus, it cannot be said that respondent No.2 acted without
jurisdiction or proceeded on a misconceived approach, therefore, the
impugned order deserves to be upheld for this reason also.
The judgment dated 12.8.2010 (Annexure P-6) rendered by the
LPA Bench of this Court had virtually put the controversy to rest. However,
indulgence was shown to the petitioners granting them liberty to approach
the respondent authorities by way of appropriate representations, only
because the Division Bench could not be assisted adequately by the
learned counsel for the parities, in the alleged absence of proper and
complete instructions from their respective clients. The relevant operative
part of the judgment dated 12.8.2010 passed by the LPA Bench, reads as
under:-
"17. Having noticed the resume of facts
and the historical developments, we find that as per stand
of the Central Government, controlled price was fixed
having due regard to relevant factors i.e. minimum price
for sugarcane, manufacturing cost, tax payable and
reasonable return on capital employed. Return has been
taken at 12.05%, which was applicable to the case of the
appellants.
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 21
& other connected cases
18. In Cynamide India Limited, it was observed
that price fixation was neither the function nor the forte of
the Court. Though the Court had the jurisdiction to enquire
into the question whether relevant considerations were
gone into, the Court could not re-evaluate the
considerations even if price was injurious to some
manufacturer or producer. The observations in the
judgment are :-
"Price fixation is neither the function nor the forte of the
Court. We concern ourselves neither with the policy nor
with the rates. But we do not totally deny ourselves the
jurisdiction to inquire into the question, in appropriate
proceedings, whether relevant considerations have gone
in and irrelevant consideration kept out of the
determination of the price. For example, if the legislature
has decreed the pricing policy and prescribed the factors
which should guide the determination of the price, we will,
if necessary, inquire into the question whether the policy
and the factors are present to the mind of the authorities
specifying the price. But our examination will stop there.
We will go no further. We will not deluge ourselves with
more facts and figures. The assembling of the raw
materials and the mechanics of the price fixation are the
concern of the executive and we leave it to them. And, we
will not revaluate the considerations even if the prices are
demonstrably injurious to some manufacturers or
producers. The Court will, of course, examine if there is
any hostile discrimination. That is a different 'cup of tea'
altogether."
What the learned Signal Judge appears to have held is
that the matter was covered by this principle followed in
Shri Sitaram Sugar Co. Limited.
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 22
& other connected cases
19. No doubt Shri Malaprabha Coop.Sugar
Factory Limited was concerned with fixation of price for
the years 1974-75 to 1979-80 and was distinguishable to
that extent, the fact remains that except for the issue of
Clause 5A of the Sugarcane Control Order, in other
respects, fixation of price of sugar was upheld and to this
extent learned Single Judge was justified in holding that
the issue was covered by judgments in Shri Sitaram
Sugar Co.Limited and Shri Malaprabha Coop.Sugar
Factory Limited. In the present case, Clause 5A of the
Sugarcane Control Order is not applicable, the same
having been introduced after 1.10.1974.
20. We have also noticed above that price of sugar
for the year 1972-73 was upheld by the Hon'ble Supreme
Court in Anakappale Coop. Agricultural and Industrial
Society Limited and Allahabad High Court in Deoria
Sugar Mills. As regards judgment of Delhi High Court,
the same relates to the year 1980-81.
21. Thus, though we are of the view that no
particular point has been shown to us which may justify
interference with the fixation of price under the impugned
order, learned counsel for the appellants stated that in
absence of proper instructions from his client, he could
not raise some of the points which he could have raised if
he had all the instructions. Learned counsel for the
respondents was also unable to properly assist the court
for want of instructions as stated by him. Order of stay has
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 23
& other connected cases
been operative for the last almost 37 years. We do not
find any ground to further adjourn the matter to enable the
counsel to seek instructions. Number of adjournments
have already been granted. Still, while closing the matter
as far as this Court is concerned, we consider it proper to
give indulgence to the appellants to make a
representation to the Secretary, Ministry of Agriculture
(Department of Food) who may consider the same and
pass an appropriate order dealing with the points which
may be raised within three months from the date of
receipt of the said representation and a copy of this order.
Interim order granted by this Court which was continued
during pendency of these appeals will continue till such an
order is passed. On passing of such an order, interim
order so granted will cease to operate, subject to such
order that may be passed on the representation.
22. The appeals are disposed of accordingly.
Before arriving at the above said conclusion, the LPA Bench
discussed, considered and appreciated all the relevant facts of the case,
because it was not a short order, but a detailed judgment covering every
aspect of the matter. Further, on the issue of difference between notified
price and free market price sugar, the LPA Bench observed as under:-
"Due to wide difference between the notified
price and the free market price of sugar, the manufacturer
gets sufficient margin which enables him to pay a higher
price for sugarcane."
During the course of hearing, learned counsel for the petitioners
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 24
& other connected cases
could not substantiate any of his arguments, so as to make out a case for
interference at the hands of this Court. The basic fallacy in the arguments
raised by the learned counsel for the petitioner was that he wanted this
Court to follow the judgment of the Hon'ble Supreme Court in Mahalakshmi
Sugar Mill's Case (supra), which was rendered by a Bench of two judges
in different set of circumstances relating to determination of price of sugar
for the sugar years 1983-84 & 1984-85 and also while interpreting the
scope of Clause 5A, which came to be inserted in 1972 Order w.e.f.
1.10.1974, whereas issue involved herein, as noticed hereinabove,
pertains to the determination of levy sugar price for the year 1972-73.
Another fallacious argument raised by the learned counsel for the
petitioners was that two Constitution Benches of the Hon'ble Supreme
Court in Panipat Cooperative Sugar Mill's case (supra) and Anakapalle's
case (supra), were distinguishable. However, after careful perusal of the
abovesaid two judgments, it was found that the issue involved before the
Constitution Benches of the Hon'ble Supreme Court was pertaining to the
determination of price of levy sugar for the year 1970-71, i.e. before
introducing Clause 5A in 1972 Order. Further, in Anakapalle's case
(supra), the issue that fell for consideration before the Hon'ble Supreme
Court was exactly the same, which is involved herein. Thus, the argument
raised by the learned counsel for the petitioner in this regard has been
found to be without any merit and cannot be accepted, as such.
Learned counsel for the petitioner places heavy reliance on the
judgment of the Hon'ble Supreme Court in Mahalakshmi Sugar Mill's case
(supra), but the same has been found to be distinguishable on facts. The
distinguishing features are clear from the bare reading of para Nos. 6, 46
and 66 of AIR, which read as under:-
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 25
& other connected cases
"In these appeals, we are concerned with the
determination of price of sugar for the sugar years 1983-84
and 1984-85.
xx xx xx
Determination of a price is required to be carried
out keeping in view certain factors specified therein. The
term "having regard to" plays an important role in the
matter of construction of the relevant provisions of the Act.
If a price is determined without applying the principles
underlying the factors enunciated in Section 3(3C) of the
Act, the superior courts can issue requisite direction.
Xx xx xx
That is how the Central Government itself
understood the decision of this Court in Malaprabha-I. It
explicitly said so in the counter affidavit filed in Bharat
Sugar Mills. Indisputably, for the purpose of determination
of the price of levy sugar, it called for the relevant materials
from each of the owner of the sugar mill. It is, therefore,
too late in the day for the Central Government to contend
contra."
Since the above said judgment in Mahalakshmi's case (supra)
was rendered on entirely different set of facts involving the issue of
determination of price of sugar for the years 1983-84, 1984-85 as well as
deciding the scope and ambit of Clause 5A , which was inserted w.e.f.
1.10.1974 in the 1972 Order, the same has been found to be clearly
distinguishable on facts and is no help to the petitioners.
In view of the foregoing discussion, the answer to the first
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 26
& other connected cases
question posed above is and has to be an emphatic no. It is so said,
because the impugned orders fixing the levy sugar price for the year 1972-
73 have not been found to be contrary to the provisions of Section 3 (3C)
of 1955 Act. In this regard, a bare perusal of the details given in Annexure
P-3, reproduced hereinabove, will make it clear that the respondent
authorities considered all the relevant factors while determining the levy
sugar price, strictly in accordance with the provisions of Section 3 (3C) of
1955 Act
On the same analogy, answer to the second question posed
hereinabove, also goes in favour of the respondents and against the
petitioners, because the impugned order dated 8.8.2011 passed by
respondent No.2 has been found to be factually correct and legally
justified.
The abovesaid view taken by this Court also finds support from
the Constitution Bench judgments in Panipat Cooperative Sugar Mill's case
(supra) and Anakapalle's case (supra) as well as the judgments of the
Hon'ble Supreme Court in Union of India and another Vs. Cynamide
India Limited and another (1987) 2 SCC 720 and Gupta Sugar Works
Vs. State of U.P. And others, 1987 (supp) SCC 476.
The relevant observations made by the Hon'ble Supreme Court
in para Nos. 24 and 30 of the judgment in Panipat cooperative sugar mill's
case (supra), which can be gainfully followed in the present case, read as
under:-
In order to appreciate the meaning of clauses
(a), (b), (c) and (d), it must be remembered that ever since
control on sugar was imposed, Government had set up
expert committees to work out cost-schedules and fair
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 27
& other connected cases
prices. Starting in the beginning with an All-India cost-
schedule worked out on the basis of the total production of
sugar, the factories were later grouped together into zones
or regions and different cost-schedules for different zones
or regions were constructed on the basis of which fair
prices were worked out at which sugar was distributed and
sold. The Tariff Commission in 1958 and the Sugar
Enquiry Commission in 1965 had worked out the zonal
cost-schedules on the basis of averaged recovery and
duration, the minimum and not the actual price of cane,
the averaged conversion costs and recommended a
reasonable return on the capital employed by the industry
in the business of manufacturing sugar. This experience
was before the legislature at the time when sub- sec. 3C
was inserted in the Act. The legislature therefore
incorporated the same formula in the new sub-section as
the basis for working out the price. The purpose behind
enacting the new sub-section was three-fold, to provide an
incentive to increase production of sugar, encourage ex-
pansion of the industry, to devise a means by which the
cane producer could get a share in the profits of the
industry through prices for his cane higher than the
minimum price fixed and secure to the consumer
distribution of at least a reasonable quantity of sugar at a
fair price.-Whether these objectives have, through, the
working of the new sub- section, been realised or not is a
different, matter. But there can be no doubt that these
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 28
& other connected cases
were the objectives, for which the sub-section was
passed. The incentive to secure, increased production and
expansion of the industry was to leave a certain portion of
the stock free for sale in the open market, the assumption
being that the industry would get a better price in such
market than the price determined under the formula
incorporated in sub-section 3C.
Xx xx xx
The basis of a fair price would have to be built
on a reasonably efficient and economic representative
cross-section on whose workings cost-schedules would
have been worked out and the price to be determined by
Government under sub-sec. 3C would have to be built. A
claim that such a price has to be determined unit-wise and
a reasonable return has to be ensured to each unit or that
such a price with such a return would be in respect of that
part of its stock required to be sold under sub-sec. 2(f)
would appear to be inconsistent with the concept of partial
control, the background in which it was evolved and the
objects which it attempted to secure. Such a policy meant
determination of a fair price on the basis of which a
producer would be paid for part of his stock required to be
sold to Government. Such a price would have to be
determined having regard to the four factors set out in the
sub-section. Though factors (a) and (c) would be static,
factor (b) would largely depend on variables, such as
duration and recovery, the prices of fuel, labour etc.
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 29
& other connected cases
differing from zone to zone and sometimes within the
zone, necessitating averaging and costing by selecting a
representative cross-section of units for that purpose and
arriving at a cost-schedule which would do justice to the
weak and the strong alike. If this be the true meaning of
clause (b), it must mean securing a reasonable return to
the industry and not to each unit, irrespective of whether it
is economic or reasonably efficient or not, or only in
respect of its stock required to be compulsorily sold to
Government. A unit-wise fixation of price as suggested by
counsel, and payment on the basis of a price so worked
out would mean perpetuating inefficiency and
mismanagement, and depriving the partial control policy
of the incentives for economy and efficiency inherent in it.
We are, therefore, satisfied both on the language of the
sub-section, the background in which it was enacted and
the mischief the legislature sought to remedy through its
working that the true, construction is that a fair price has
to be determined in respect of the entire produce,
ensuring to the industry a reasonable return on the capital
employed in the business of manufacturing sugar. But this
does not mean that Government can fix any arbitrary
price, or a price fixed on extraneous considerations or
such that it does not secure a reasonable return on the
capital employed in the industry. Such a fixation would at
once evoke a challenge, both on the ground of its being
inconsistent with the guidelines built in the sub-section
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 30
& other connected cases
and its being in contravention of Arts. 19(1)(f) and (g), and
31.
Similarly, the law laid down by the Hon'ble Supreme Court in
Anakapalle's case (supra), aptly apply to the facts of the present case.
The relevant observations made in para 31 of the judgment are as under:-
"Sub-section 3C itself lays down the various
components of determining the price of sugar. Clauses
(a), (b) and( c) relate to the total cost which consists of the
minimum price of sugar-cane as fixed by the government,
the manufacturing cost and the duty or tax. Clause (d)
relates to the return on the capital employed. The very
fact that clause (a) provides that the minimum price fixed
for the sugarcane has to be taken into account shows that
the actual cost is immaterial. Moreover under this sub-
section price can be fixed according to certain zones.
While doing so it is altogether impossible to take the
actual cost of each manufacturer or producer and fix the
price accordingly. In such a case the methods followed by
the Tariff Commission have stood the test of time and the
sub-section itself incorporates or embodies the principles
which have been followed in price fixation of sugar. It is
not therefore possible to say that the principles which the
Tariff Commission followed in fixing the prices for different
zones are either not recognised as valid principles for
fixing prices or that simply because in case of some
factories the actual cost was higher than the one fixed for
the zone in which that factory was situate the fixation of
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 31
& other connected cases
price became illegal and was not in accordance with the
provisions of sub-s. (3C). It has not been denied that the
majority of sugar producers have made profits on the
whole and have not suffered losses. It is only some of
them which assert that their actual cost is far in excess of
the price, fixed. That can hardly be a ground for striking
down the price fixed for the entire zone provided it has
been done in accordance with the accepted principles.
The methods employed by the Tariff Commission 1969 in
preparing the cost schedules as also the formulae for
working out cost schedules for the future are fully set out
in the Commission's report and have been also discussed
in the connected case (supra). We need not go over the
same matters again."
The law laid down by the Hon'ble Supreme Court in Cynamide
India's case (supra) was followed by the LPA Bench, while rendering the
above said judgment dated 12.8.2010 (Annexure P-6) and the relevant
operative part thereof, has been reproduced hereinabove. Para 4 of the
judgment of the Hon'ble Supreme Court in Cynamide India's case (supra),
is not being reproduced here again, for the sake of brevity and in order to
avoid repetition.
The Hon'ble Supreme Court in para 4, 8, 11 and 12 of the
judgment in Gupta Sugar Work's case (supra), held as under:-
This will be the parametre and the limitation of
inquiry by Courts whenever the price fixation of any
essential commodity is called into question. The Court
does not act like a Chartered accountant nor acts like an
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 32
& other connected cases
Income- Tax officer. The Court is not concerned with any
individual case or any particular problem. The Court only
examines whether the price determined was with due
regard to considerations provided by the statute. And
whether extraneous matters have been excluded from
determination.
Xx xx xx
In this view of the matter, the primary consideration in the
fixation of price would be the interest of consumers rather
than that of the producers. Moreover, we think that since
the petitioners are allowed to sell freely at any rate they
like the remaining 50% of the sugar (after excluding the
50% which they have to give for levy) as also the produce
by the second and third process, the loss if any caused to
the petitioners would be minimal.
Xx xx xx
The exercise provided under the Act was
intended ultimately to serve the interest of consumers. It is
fundamental in the entire scheme of the Act. But then, the
interest of the industry as a whole cannot be left out. It is
also required to be borne in mind. The levy price of sugar
should ensure reasonable return to the industry. That is
one of the guidelines provided under sub-section 3C of
Section 3 of the Essential Commodities Act. But that does
not mean that the interest of producers should outweigh
the interest of consumers. It would be tilting the balance
too much. Such a contention in our opinion, also runs
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 33
& other connected cases
afoul of our earlier analysis.
It is true that there is no express reference to
Panipat and Anakapalle in the judgment in New India
Sugar Works. But the judgment need not be a digest of
cases. It need not be written like a thesis. The decision in
New India Sugar Works may be brief, but not less
predictable on the principles of Panipat and Anakapalle.
There this Court found the levy price reasonable even
from the point of view of the industry. This Court took into
consideration the liberty reserved to manufacturers to sell
freely 50% of the Sugar manufactured and also 100% of
the produce by 2nd and 3rd processes. This Court was of
opinion that by such a free sale the industry could get
reasonable return. We agree with this conclusion and see
no reason for reconsideration.
In view of the law laid down by the Hon'ble Supreme Court,
referred to hereinabove, this Court feels no hesitation to conclude that
respondent authorities have arrived at judicious conclusion, while taking
into consideration all the relevant factors, including manufacturing cost at
the time of determining the levy sugar price, because of which no fault can
be found with the impugned order Annexure P-9, passed by respondent
No.2 and the same deserves to be upheld.
Now coming to the third question posed hereinabove, the
relevant provisions of 1976 Act contained in Section 2 (b) (ii) and Section 3
(3) (b), which are relevant in the present cases, read as under:-
"In this Act, unless the context otherwise
requires:-
xx xx xx
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 34
& other connected cases
(b) "excess realization", in
relation to each grade of levy sugar:-
xx xx xx
(ii) includes any realization representing
the difference between the controlled price and the price
allowed by the court by an interim order, if such interim
order is set aside, whether by the court which made the
order or in appeal or revision.
Xx xx xx
3 (3) (b) the interest due on so much of the amount of
any excess realization made on or after the date of such
commencement as is not credited to the Fund together
with interest at the aforesaid rate of twelve and a half per
cent per annum within sixty days from the date on which
such amount was realized shall be at the rate of 15% per
annum from the date such amount was realized by the
producer."
The above said provisions of law fell for consideration before the
Division Bench of Allahabad High Court in M/s Bajaj Hindusthan
Limited's case (supra) and the relevant observations made in the
judgment, read as under:-
"At the very outset, Mr. K.C.Kaushik, learned
Additional Solicitor General of India submits that the
petitioner has challenged the demand of interest of excess
realization of levy sugar price for the year 1973-74. He
further submits that this question has already been decided
by the Delhi High Court, vide its judgment dated 4.12.2000
in Writ Petition No 5274 of 2000, Sir Shadilal Enterprises
Ltd. And others versus Union of India and others that the
interest on excess realization of levy sugar price is payable
by this sugar company, but, in the said case, w.e.f., the date
of judgment, whereby the fixation of price for the year 1982-
83 (involved in that writ petition) was upheld by the High
Court in the case of Modi Industries.
Kumar Amit Being aggrieved, the Union of India preferred an
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 35
& other connected cases
appeal before the Division Bench. Thereafter, vide its
judgment dated 15.6.2007, it was directed that the fixation
of price of levy sugar stands covered by the decision in the
case of Malaprabha Cooperative Sugar Factory versus
Union of India and that the sugar companies are liable to
pay interest on excess realization of levy sugar price in
pursuance of the interim orders of the High Court with effect
from the date of said excess realization in accordance with
the terms of LSPEF Act. When the Special Leave Petition
against the judgment and order dated 15.6.2007 was
preferred before the Apex court, it was dismissed vide
judgment and order dated 3.3.2008. Under these
circumstances, the instant writ petition has lost its efficacy."
Similar question arose before Delhi High Court in Sir Shadilal's
case (supra) and law laid down in para 12, 18 and 19 of the judgment, is
as under:-
"On the pleadings in the present case, the
following issues arise for determination:-
xx xx xx xx
(ii) on the question of payment of interest
on the excess realisation, what is the effect of the LSPEF
Act, 1984 and is the impugned judgment of the learned
Single Judge sustainable in terms of the said statute
xx xx xx
Turning to the case on hand, not only is there no
challenge to the LPSEF Act, but even in the cross
objections or the written submissions filed by the
respondents they have not questioned the applicability of
the LPSEF Act and the liability to make the payment in
terms thereof. The impugned judgment of the learned
Single Judge also does not notice the provisions of the
LPSEF Act. There is therefore no basis for the contention of
the respondents that the recovery should be restricted to
the 50% of the principal amount. In terms of the LSPEF
Act, 1984 the direction issued by the learned Single Judge
Kumar Amit
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 36
& other connected cases
restricting the interest from the date of judgment in Modi
Industries is unsustainable in law. It has been pointed out in
the affidavit dated 11.3.2002 filed on behalf of the Union of
India in these proceedings that the loss to the Exchequer in
view of the non payment of the excess realistation by the
sugar factories including the respondents herein is in the
excess of Rs. 6.13 crores.
For all of the above reasons, this Court concludes
that in terms of LSPEF Act 1984 interest is payable by he
respondent sugar producers from the dat of the excess
realization is and is not restricted to the period after the
dater of the judgment of the Hon'ble in Modi Industries Ltd.
To this extent the impugned order dated 4.12.2000 of the
learned Single judge is set aside. The cross objections are
without merit and are rejected. The Union of India will now
proceed to recover the balance interest on the excess
realisation by the respondent sugar manufactures for the
year 1982-83 in terms of the LSPEF Act 1984."
In view of the above unambiguous provisions of law contained in
1976 Act reproduced above, interpreted by two Division Benches
judgments, referred to hereinabove, answer to the third question is in the
affirmative. It is held that the petitioners were under legal obligation to pay
the statutory interest as provided under 1976 Act. The petitioners have not
been found to be entitled for any relaxation in this regard. Sympathy of
this Court as sought by the learned counsel for the petitioners would
amount to misplaced sympathy, which would cause unwarranted financial
loss to the public exchequer and will also run counter to the law laid down
by the Hon'ble Supreme Court in M/s Teri Oat Estates (P) Ltd versus
Kumar Amit U.T., Chandigarh and others 2004 (2) SCC 130.
2013.12.09 10:35
I attest to the accuracy and
integrity of this document
Civil Writ Petition No. 18816 of 2011 37
& other connected cases
The relevant observations made by the Hon'ble Supreme
Court in paras No. 36 to 39 in Teri Oat's case (supra), which can be
gainfully followed in the present case, read as under:-
SYMPATHY :
36. We have no doubt in our mind that sympathy
or sentiment by itself cannot be a ground for
passing an order in relation whereto the
appellants miserably fail to establish a legal right.
It is further trite that despite an extra-ordinary
constitutional jurisdiction contained in Article 142
of the Constitution of India, this Court ordinarily
would not pass an order, which would be in
contravention of a statutory provision.
37. As early as in 1911, Farewell L.J. in Latham
v. Richard Johson & Nephew Ltd., (1911-13 AER
reprint p. 117) observed :
"We must be very careful not to allow our
sympathy to affect our judgment with the infant
plaintiff. Sentiment is a dangerous will O' the wisp
to take as a guide in the search for legal
principles."
(See also Ashoke Saha v. State of West Bengal
& Ors., CLT (1999) 2 H.C. 1).
38. In Sairindhri Ddolui v. State of West Bengal,
(2000) 1 SLR 803, a Division Bench of the
Calcutta High Court wherein (one of us Sinha, J.
was a Member), followed the aforementioned dicta.
39. This Court also in C.B.S.E. and Another v. P. Kumar Amit 2013.12.09 10:35 I attest to the accuracy and integrity of this document Civil Writ Petition No. 18816 of 2011 38 & other connected cases Sunil Kumar and Others, [1998] 5 SCC 377 rejecting a contention that great injustice would perpetrate as the students having been permitted to appear at the examination and having been successful and certificates had been issued in their favour, held :
". . . We are conscious of the fact that our order setting aside the impugned directions of the High Court would cause injustice to these students. But to permit students of an unaffiliated institution to appear at the examination conducted by the Board under orders of the Court and then to compel the Board to issue certificates in favour of those who have undertaken examination would tantamount to subversion of law and this Court will not be justified to sustain the orders issued by the High Court on misplaced sympathy in favour of the students. . ."
Reverting back to the facts of the present case and respectfully following the law laid down by the Hon'ble Supreme Court as well as Delhi and Allahabad High Courts in the judgments, referred to hereinabove, the irresistible conclusion is that the petitioners have no case either on facts or in law. The levy sugar price was correctly determined by the respondent authorities after taking into consideration all the relevant factors provided under Section 3(3C) of 1955 Act.
Similarly, the impugned order passed by respondent No.2 was based on true facts and circumstances of the case as well as in accordance with the relevant provisions of law. The impugned action Kumar Amit 2013.12.09 10:35 I attest to the accuracy and integrity of this document Civil Writ Petition No. 18816 of 2011 39 & other connected cases taken on behalf of the respondents has neither been found to be arbitrary nor unreasonable. Further, learned counsel for the petitioners failed to point out any jurisdictional error or patent illegality apparent on record of the case. No substantive argument was put into service by the learned counsel for the petitioners for convincing this Court to take a different view than the one taken hereinabove. Thus, the impugned order dated 8.8.2011 (Annexure P-9) passed by respondent No.2 deserves to be upheld.
No other argument was raised.
Considering the peculiar facts and circumstances of the case noted above, coupled with the reasons aforementioned, this Court is of the considered view that in the given fact situation of the present case, all the four writ petitions are misconceived, bereft of merit and without any substance. Thus, these must fail. No case for interference has been made out.
Resultantly, all the four writ petitions stand dismissed, however, with no order as to costs.
(RAMESHWAR SINGH MALIK) JUDGE 7.11.2013 AK Sharma Kumar Amit 2013.12.09 10:35 I attest to the accuracy and integrity of this document