Judgment

MISRA, J. :- The present appeal by certificate is directed against the judgment dated 28th April, 1969 of the High Court of Madhya Pradesh, Indore Bench.

2. The facts leading to this appeal are brief. The respondents are the owners of Jaora Sugar Mills situated at Jaora in the earlier State of Madhya Bharat. The erstwhile State of Jaora merged in the State of Madhya Bharat. After the merger the Madhya Bharat Essential Supplies (Temporary Powers) Act, 1948 came into force. By a notification No. 5163/XXX(49) dated 5th September, 1949 the Madhya Bharat Government in exercise of the powers vested under the said Act included sugar in the list of articles as an essential commodity. By another notification No. 5166/XXX(49) dated the 5th September, 1949 the Madhya Bharat Government delegated its powers to issue orders under the said Act in favour of the Director, Civil Supplies, Madhya Bharat. In exercise of the powers conferred on him under the Madhya Bharat Sugar Control Order, 1949 the Director of Civil Supplies issued a notification No. 7 C. S. 15/50 dated the 14th January, 1950 fixing ex-factory prices for different sugar factories. Under the said notification all sugar factories in Madhya Bharat were to supply and despatch sugar of Grade E-27 at Rs. 32.4.0 per maund F.O.R. destination. The supply price was a little higher than the ex-factory price. The difference between the supply price and till ex-factory price was to be credited to Madhya Bharat Government Sugar Fund.

3. The appellant made several demands on the respondents, the proprietors of the Jaora Sugar Mills, to credit such difference in the account of Madhya Bharat Government Sugar Fund and the respondents ultimately deposited Rs. 50,000/- under protest.

4. On the 10th September, 1953 the respondents instituted a suit in the court of Fifth Additional District Judge, Indore against the erstwhile State of Madhya Bharat for the refund of the sum of Rs. 50,000/- which the respondents had deposited towards Sugar Fund and Rs. 10,000/- towards interest at the rate of 6 per cent per annum from the date of deposit of the aforesaid sum of Rs. 50,000/-. The suit continued against the newly formed State of Madhya Pradesh as provided by law.

5. The grievance of the respondents in the main was that the change and modification made by the Madhya Bharat Government in the definition of essential commodities given in the Act by including sugar therein was against the law, that the Director of Civil Supplies had no authority before 6th September, 1949 to issue the Sugar Control Order, 1949 which had been issued on 5th September, 1944; that the State Government or the Director of Civil Supplies, Madhya Bharat had no power under the Essential Supplies (Temporary Powers Act and the Sugar Control Order to impose a levy styled as Sugar Fund and to recover the same; that the levy and collection of tax/impost styled as Sugar Fund by the Director of Civil Supplies being violative of Art. 265 of the Constitution was. illegal and invalid; that the provisions of Sugar Control Order, 1949 did not empower the Director of Civil Supplies to fix any price other than ex-factory wholesale or retail price or to fix a price which shall be called supply price or to impose and collect levy as Sugar Fund; that it was illegal and unconstitutional for the Director of Civil Supplies to fix different ex-factory prices for different sugar mills in the same State; that it was illegal and unconstitutional to collect money through certain mills for creating Sugar Fund when other factories in the same State were being exempted from doing so; that there was clear discrimination in fixing ex-factory price of sugar in respect of respondents mill lower than ex-factory price fixed for certain other mills in the State without there being a rational ,basis for the same; and that the levy and collection of certain money from the respondents being without lawful authority and without legislative competence, the State was b