Judgment

SHELAT, J. :- These three appeals, by certificate, arise out of three writ petitions filed in the High Court of Delhi for quashing the Sugar (Price Determination) Order, 1971 made under Sec. 3 (3C) of the Essential Commodities Act, 10 of 1955, and for a direction requiring the Central Government to refix the exfactory price for 1970-71 in respect of Sugar required to be sold to Government under Section 3 (2) (f) of the Act. The High Court dismissed the writ petitions and hence these appeals.

2. The appellants are three public limited companies having factories in Haryana State where they carry on the business of manufacturing and selling sugar, an essential commodity within the meaning of the Act. The Act empowers the Central Government to control the production and distribution inter alia of sugar with the object of maintaining its supply and its equitable distribution.

3. Under Section 3, the Central Government has been authorised to require a manufacturer of sugar to sell to it or to a State Government or any other authorised person either the whole of his stock or part of it at a fair price fixed by it. In pursuance of power reserved to it under Section 3 (2) (f) and Sec. 3 (3C), the Central Government required the sugar factories, including the appellant-companies to sell to it 60 of their production during the year 1970-71 at price fixed by it, the price fixed for the factories in Haryana zone under the impugned order being Rs. 124.63 per quintal.

4. Two principal questions arise in these appeals : (1) what is the true interpretation of Section 3 (3C), and (2) whether the price of Rs. 124.63 was in accordance with the provisions of Section 3 (3-C) ?

5. Before we proceed to consider these questions it would, we think, be better to set out briefly the history of control over sugar production and its distribution and the method followed in the fixation by Government of the fair, or what has for brevity s sake been named, the levy price of sugar.

6. The concept of statutory control over sugar cane is as old as 1934 when the Central Sugar Cane Act, 1934 was enacted. Under that Act and orders passed thereunder Government used to fix the minimum price for cane. Since 1950 and later on under the Sugar Cane (Control) Order, 1955, such minimum price for cane used to be fixed having regard to (a) the cost of production of cane, (b) the return to the growers from alternative crops, and (c) fair price of sugar to the consumer.

7. So far as sugar is concerned, statutory control over it was first imposed in 1942 under the Sugar and Sugar Products Control Order, 1942. The Sugar Controller thereunder regulated production, distribution and prices of sugar. From May 1, 1942, no sugar factory was permitted to effect sales except to authorised persons. This position continued until December 8, 1947, when sugar was decontrolled. In 1949, statutory control was once more imposed under which exfactory price of Rs. 76.35 per quintal for D-24 grade was fixed, as during that year sugar production declined. There was also a substantial diversion of cane to gur and khandsari industry. Control over sugar was relaxed in 1950 in that production over 90 of the total production of each factory was allowed free sale. This policy was subsequently modified and 95 of the average production of each factory during the two preceding years was fixed as basic quota and half of the production in excess of that quota was allowed free sale, while the other half together with the basic quota was reserved for sale at controlled prices. Since conditions appeared to improve, control was taken off in 1952-53, except that a small portion of production was reserved for sale at controlled prices. But as prices spiralled, Government in April 1954 requisitioned 25 of the stock for distribution on a tender basis. During 1954-55 to 1956-57 no controlled prices were fixed. By 1958 the prices began to soar and the Government once more decided to impose control.

8. During 1958