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3. Besides HINDALCO, there are three other companies which produce and/or manufacture aluminium and its products. These companies are Bharat Aluminium Company Limited, which is a Central Government company the Madras Aluminium Company Ltd., and Indian Aluminium Company Ltd., here inafter referred to as BALCO, MALCO and INDALCO respectively.

4. The production of aluminium in India is of vital importance and it is essential for the growth, development and maintenance of the economy. The Central Government by virtue of its power under Clause (xi) of Section 2 of the Essential Commodities Act, 1955 declared aluminium to be an essential commodity by a notification dated June 29, 1957.

8. In view of the rise in the cost of production, particularly the different tariff rates, the cost of production of the four producers namely, HINDALCO, BALCO, MALCO and INDALCO was different The cost of production of BALCO and MALCO was much higher than that, of HINDALCO and INDALCO.

9. The Control Order as amended up to March 20, 1979 provides fixation of retention price and sale price of aluminium ingots produced by the said four producers. The retention price is fixed having regard to the estimated cost of production. The retention price is to he retained by the producer concerned, As the cost of production of HINDALCO and INDALCO were lower than that of BALCO and MALCO, the retention prices of HINDALCO and INDALCO were lower than the sale price, whereas the retention prices of BALCO and MALCO were higher than the sale price. If BALCO and MALCO were to sell aluminium, they would undoubtedly suffer loss and their industries will go on perpetually at a loss. In order to obviate this difficulty, the Control Order provides a method for fixation of the sale price. If the retention price of any producer is lower than the sale price, he has to pay the difference between the sale price and retention price to the Aluminium Regulation Account maintained by the Controller of Aluminium as provided in the Control Order. On the other hand, if thr., retention price of any producer is higher than the sale price, he would be paid the corresponding difference from the Aluminium Regulation Account. Under this method, the sale price is obtained by dividing the weighted average of the retention prices of aluminium by the total production of aluminium by the four producers. The mechanism of sale price as illustrated by the appellants in para 4.3 of their supplementary affidavit-in-opposition filed in the trial court is as follows:

31. It appears that during the year 1978 till October, 1978, there was little or no increase in the purchase cost of main raw materials and inputs required for the production of aluminium. The Central Government had taken into account the prices of inputs on May 1, 1978 and the power tariff rate as revised subsequently in July 1978, and prices fixed in October 1978 reflected the entire cost of production. In para. 22 (i) of the affidavit in opposition of the appellants affirmed by one Hirak Ghosh, the Deputy Secretary to the Government of India, Ministry of Steel, Mines and Coal (Department of Mines) and Controller of Aluminium, it has been categorically averred that before issuing the impugned notifications the Government examined the increase in the cost of production of HINDALCO and also of other aluminium producers, and that the respective retention prices of the producers, namely, HINDALCO, INDALCO, BALCO and MALCO reflected the increase in the power rates only. A supplementary affidavit-in-opposition affirmed by the said Hirak Ghosh was filed by the appellants with the leave of the learned trial Judge. In para. 11 of the supplementary affidavit-in-opposition, it has also been categorically staled, inter alia, that the Government increased the price of aluminium taking note of the increase in the cost of production due to the increase in the prices of certain essential commodities such as steel, paper, cement, power, coal and petroleum products. Such increase in the prices of each essential commodity was considered by the Government on its own merits.

53. The Government has fixed the sale price of indigenous aluminium which is considered to be fair and within the pecuniary limits of the consumers. The cost of production of HIN-DALCO is lower than the sale price but it is higher so far as BALCO and MALCO are concerned. If BALCO and MALCO have to sell aluminium at the sale price without any subsidy, they will have to close their business, for they cannot be compelled to produce and sell aluminium at a perpetual loss, Closure of their business would seriously, affect, the supply and availability of aluminium. If the supply of Aluminium is such that it cannot meet the demand, mere fixation of the sale price would serve no purpose of the consumers and, consequently, the objectives under Section 3 of the Act cannot be achieved. In order to obviate this difficulty the concept of retention price normally reflecting the cost of production has been introduced. As the retention price fixed for HINDALCO is lower than the sale price, it has to pay to the Aluminium Regulation Account the sum which is the difference between the sale price and the retention price. Such sum will be paid to BALCO and MALCO as subsidy making up the losses that might be suffered by them or, in other words, making up the difference between their respective retention prices and the sale price. Thus, it appears that the steps taken by the Government by the fixation of a retention price for each producer and the sale price and the provision for payment to the Aluminium Regulation Account were necessary in the interests of the consumers so as to maintain supply of aluminium consistent with the demand therefor and to make it available to the consumers at a fair price.