Judgement

JAGANNATHA SHETTY, J. :- This is a petition under Article 32 of the Constitution. The petitioner is engaged in the manufacture of Khandsari sugar. The petitioner challenges the validity of the U. P. Khandsari Sugar (Levy) Order, 1981 ("Levy Order"). It was issued in exercise of powers under Section 3 of the Essential Commodities Act, 1955 by virtue of delegation of power by the Central Government under Section 5 of the said Act. The Levy Order requires Khandsari manufacturing units to surrender levy of 50% of the production by sulphitation units in the first process. The balance 50% of that process with the total production by subsequent processes was left free to be sold in the open market by the manufacturing units. The price fixed for the levy Khandsari sugar was Rs. 320/- per quintal.

2. The petitioner challenges the price fixation on the ground that the State Government has not taken into consideration the guidelines in-built in sub-section (3C) of Section 3 of the Essential Commodities Act, 1955. The petitioner alleges that the levy order is unreasonable or excessive restriction on the fundamental rights guaranteed under Articles 19(l)(g) and 14 of the Constitution. It is also the case of the petitioner that the State Government sold the levy sugar by public auction realising large profit and the levy, therefore, was a colourable exercise of the power.

3. Before considering these contentions, we may start with recent observation of O. Chinnappa Reddy, J. in Union of India v. Cynamide India Ltd., AIR 1987 SC 1802 at p. 1805:

"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."

4. This will be the parametres 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 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.

5. In the present case even this limited inquiry appears to be unnecessary. The validity of the same Levy Order was the subject-matter of decision of this Court in New India Sugar Works v. State of Uttar Pradesh, (1981) 3 SCR 29 : (AIR 1981 SC 998).

6. There Fazal Ali, J. who spoke for the Bench observed (at p. 1000 of AIR):

"It was next strongly contended that in fixation of the price of levy sugar the Government has not taken into consideration the fact that the petitioners would undergo a serious loss because the price would not be sufficient even to cover their manufacturing cost. We are, however, unable to agree with this argument. The policy of price control has for its dominant object equitable distribution and availability of the commodity at fair price so as to benef