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The Bhopal Sugar Industries Ltd. And ... vs The Union Of India (Uoi) And Ors. on 25 June, 1979 cites

Shree Meenakshi Mills Ltd vs Union Of India on 26 November, 1973

The infirmity of this argument, as pointed out in Meenakshi Mills v. Union of India, is that these two decisions turn on the language of Section 3(3C) of the Essential Commodities Act under which it is statutorily obligatory to ensure to the Industry a reasonable return on the capital employed in the business of manufacturing sugar. These decisions can, therefore, have no application to cases of price fixation under Section 3(1) read with Section 3(2)(c) of the Act. Cases falling under Sub-sections (3-A), (3-B) and (3-C) of Section 3 of that Act belong to a different category altogether."
Supreme Court of India Cites 43 - Cited by 98 - A N Ray - Full Document

Amadalavalasa Cooperative ... vs Union Of India (Uoi) And Anr. on 17 November, 1975

8. The further contention of the learned counsel for the petitioners is that the price fixation by Notification, dated 22nd December 1977, was on the basis of the figures available for the production year 1975-76 and the price fixation was done without any regard to the cost of production in the year 1977-78 and the prevailing price of sugar in that year. It is argued that because of this defect the price fixation was entirely arbitrary and cannot be said to be in accordance with the principles laid down in Sub-section (3-C) of Section 3 of the Act. We have already set out the facts and circumstances as stated in the return leading to the price fixation of levy sugar for the production year 1977-78 by notification, dated 22nd December 1977. The only comprehensive data which the Government had before it was the cost schedules contained in the interim report of the BICP which was submitted in the last week of June 1976 for fixation of ex-factory price of levy sugar of 1975-76 season on the basis of the actual recovery, duration, cane prices paid etc. as well as extra realisations expected from the sale of non-levy sugar of that season. The final report of the BICP which was submitted in November 1976 recommended grouping of sugar factories into price zones on the basis of their performance characteristics in place of geographical zoning. This recommendation was not accepted by the Government, The Government, on the other hand, decided that each factory should be individually considered for the purpose of fixation of price of levy sugar and the BICP was requested to undertake the cost calculations on that basis, It appears that the BICP could not submit its report on this aspect of the matter before the control on sugar was abolished in August 1978. The prices of levy sugar for the production years 1976-77 and 1977-78 were the same as notified for 1975-76 on the basis of the interim report of the BICP submitted in June 1976. It is thus clear that the petitioners' grievance that the fixation of price of levy sugar for the year 1977-78 by notification, dated 22nd December 1977, was not On the basis of any data collected for that year but on the basis of the data for the year 1975-76 is clearly justified. There is also enough material to hold that the data for the year 1975-76 did not hold good for the year 1977-78. In accordance with the data for the year 1975-76, the estimated cost of production per quintal including return of Rs. 13.27 on actual cane price worked out at Rs. 224.93. The estimatetd cost of production, however, for Madhya Pradesh Zone, presumably without even taking into account the retrun on actual capital employed, was Rs. 240 per quintal as stated by the Minister of State in the Ministry of Agriculture and Irrigation on 31st July 1978, in the Parliament; (see Petitioners' Annexure K). Further, the estimated cost of production for the year 1975-76 did not naturally take into account the increased minimum bonus of 8.33 per cent by Ordinance No. 9 of 1977 which came into force on 3rd September 1977, Again, the data for the year 1975-76 takes into consideration the average realisation of free sale sugar for domestic consumption and exports at Rs. 307.14 per quintal, whereas it is admitted in the return (paragraph 17) that the average realisation per quintal of sugar for the year 1976-77 was only Rs. 219.01 for exports and Rs. 277.97 for internal consumption, i.e., much below the average realisation of free sugar in 1975-76. The petitioners further alleged in paragraph 18 of the petition that the average price of free sugar dropped further to Rs. 230 to Rupees 240 per quintal by February 1978 when release order for free sale of sugar was issued in favour of the petitioner company out of the production of 1977-78. It is a matter of common knowledge that the prices went on falling as a result of which sugar was completely decontrolled in August 1978. The fact that the price of free sugar dropped in the year 1977-78 is not denied in the return. From all these facts it is clear that the data for the year 1975-76 which was applied for fixing the price of levy sugar for the year 1977-78 and on the basis of which the levy price for the year 1977-78 was fixed at the same rate as notified for the year 1975-76 had no relation whatsoever to the actual facts which existed in the year 1977-78 and on the basis of which the price of levy sugar for that year ought to have been fixed. Prima facie, therefore, the price fixation for the year 1977-78 by Notification, dated 22nd December 1977, was arbitrary.
Supreme Court of India Cites 22 - Cited by 17 - K K Mathew - Full Document
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