1. Challenge to the fixation of levy sugar prices under Section 3(3-C) of the Essential Commodities Act, 1955, regarding the inclusion of liabilities under the Sugarcane (Control) Order, 1966. (Para 1 , 4 )
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1997 Supreme(SC) 148
SUPREME COURT OF INDIA
MALAPRABHA COOPERATIVE SUGAR FACTORY LIMITED
Vs.
Union of India
Decided on January 28, 1997
Important Points
The court held that the liability of sugar producers to pay additional cane prices under clause 5-A of the Sugarcane (Control) Order, 1966, is an integral cost element that must be considered under Section 3(3-C) of the Essential Commodities Act, 1955, when fixing levy sugar prices.
Subject
Constitutional Law - Price Control
Act Referred
Headnote
Essential Commodities Act, 1955 – Section 3 (3-C) – Civil (including the above-mentioned two appeals), special leave petitions, writ petitions, transfer petitions and transferred cases challenging the fixation of price of levy sugar, by orders issued of the Essential Commodities Act, 1955, was disposed of by this court by a common judgment – Court held that the impugned orders/notifications were bad as the price was not fixed in accordance with the relevant provisions of law – However, it did not quash the notifications as they would have led to a nebulous situation during the interregnum till refixation of price – Instead of quashing the said notifications it directed the Union of India to amend the notifications taking into account the liability of producers of sugar under clause 5-A of the Sugarcane (Control) Order, 1966, having regard to the factors mentioned in Section 3 (3-C) of the Act – Government was also directed to issue the amended –Held, All these contentions except the last one were raised by the respondents earlier while the above batch of matters, the review applications and the applications for clarification were heard by this court. All those contentions have been rejected and, therefore, it is really not open to the respondents to raise them again – It appears to us that the respondents, like an ordinary litigant, are trying to find excuses for not complying with the judgment of this court merely because it is not palatable to them – Direction given by this court in para 109 of the judgment is quite clear and does not lend itself to two interpretations or any confusion as contended by the respondents. In unambiguous terms this court has directed the government of India to take into account the liability of the manufacturer – Order as regards cane price and refix the price of levy sugar – Obviously, the price of levy sugar has to be fixed having regard to the factors mentioned in Section 3 (3-0 of the Act and, therefore, this court while giving the aforesaid direction also directed them to refix theprice of levy sugar having regard to those factors also – Doubt or confusion, if any, appears to us to be the result of unwillingness of the government to give up its views and accept and implement the decision of this court – Court therefore, allow these applications.
Legal Category Hierarchy
Table of Contents
2. Whether the additional cane price payable under clause 5-A of the Sugarcane (Control) Order, 1966, must be included as a cost element when fixing levy sugar prices. (Para 5 , 6 , 9 , 10 )
3. The court found Section 3(3-C) of the Act and clause 5-A of the Order interconnected, requiring the producer's liability for additional cane price to be considered. (Para 7 , 8 , 11 , 12 )
4. Liabilities created by a pricing policy under the Sugarcane (Control) Order, 1966, must be factored into the cost elements for fixing levy sugar prices under the Essential Commodities Act. (Para 8 , 12 )
5. Applications allowed; government directed to issue supplemental notifications incorporating the additional cane price liability in the refixation of levy sugar prices. (Para 14 )
6. Are Section 3(3-C) of the Essential Commodities Act and clause 5-A of the Sugarcane (Control) Order, 1966, independent?
No, they are interconnected. If the determination of minimum price and fixation of levy sugar price are interconnected, they must be read as a whole rather than as distinct provisions. (Para 7 )
7. How does the liability under clause 5-A of the Sugarcane (Control) Order, 1966, affect the fixation of levy sugar prices?
Clause 5-A creates a liability for producers to share extra realizations from free-sale sugar with cane growers. This liability must be taken into account as a cost element under Factors a and b of Section 3(3-C). (Para 8 , 12 )
8. What is the effect of mopping up extra realizations on the fixation of levy sugar prices?
Mopping up extra realizations from the sale of levy-free sugar is a consideration under Factor d of Section 3(3-C) and serves to depress or reduce the levy sugar price. (Para 7 , 12 )
( 1 ). A batch of Civil (including the above-mentioned two appeals), special leave petitions, writ petitions, transfer petitions and transferred cases challenging the fixation of price of levy sugar for the years 1974-75 to 1979-80, by orders issued under Section 3 (3-C) of the Essential Commodities Act, 1955, was disposed of by this court by a common judgment dated 22/9/1993. This court held that the impugned orders/notifications were bad as the price was not fixed in accordance with the relevant provisions of law. However, it did not quash the notifications as they would have led to a nebulous situation during the interregnum till refixation of price. Instead of quashing the said notifications it directed the Union of India to amend the notifications taking into account the liability of producers of sugar under clause 5-A of the Sugarcane (Control) Order, 1966 (hereinafter referred to as the "1996 Order"), having regard to the factors mentioned in Section 3 (3-C) of the Act. The government was also directed to issue the amended notifications by 31/12/1993.
( 2 ). The Union of India was not satisfied with the judgment and, therefore, filed Review Petitions Nos. 211 and 212 of 1994 on 15/11/1993. They were dismissed on 23/2/1994. The Union of India had also filed an application on 24/12/1993 for directions/clarifications and extension of time. The clarification was sought for on the following ground:
"it is submitted that the decision of this Honble court lends itself to two different interpretations as mentioned below:
(A) The amount of additional cane price payable by sugar factories at the end of each season is to be added to the SMP of sugarcane while computing the element of cost as per Factor a of Section 3 (3-C) of the Essential Commodities Act, 1955 for purposes of price fixation;
(B) The levy sugar prices may be refixed taking into account only Factors a to d of Section 3 (3-C) of the Essential Commodities Act, 1955. "it wanted this court to clarify:
". . . whether the revised levy sugar price should be the sum total of Factors a, b, c and d of Section 3 (3-C) of the Essential Commodities Act in case of price fixation. "
( 3 ). That application was dismissed with costs but the time for implementation of the judgment was extended up to 30/11/1994 peremptorily. In spite of this direction the government did not issue the required notifications within time. It issued the following six notifications on 22/2/1995:
1. No. GSR 76 (E)/ess. Com. /sugar dt. 22/2/1995 1974-75.
2. No. GSR 777 (E)/ess. Com. /sugar dt. 22/2/1995 1975-76.
3. No. GSR 78 (E)/ess. Com. /sugar dt. 22/2/1995 1976-77.
4. No. GSR 79 (E)/ess. Com. /sugar dt. 22/2/1995 1977-78.
5. No. GSR 80 (E)/ess. Com. /sugar dt. 22/2/1995 1978-79.
6. No. GSR 81 (E)/ess. Com. /sugar dt. 22/2/1995 -1979-80.
( 4 ). It is the grievance of the applicants that the said notifications have been issued in disregard and contravention of the judgment of this court inasmuch as the government, while refixing the levy sugar price for the said six years, has failed to include in such refixation the element of additional cane price payable by the producers under clause 5-A of the 1966 Order. They, therefore, want this court to give appropriate directions to the Union of India to forthwith comply fully and effectively with the judgment by issuing supplemental notifications providing for additional levy sugar price. Applicant I in both these applications is the Indian Sugar Mills Association and it has filed the applications on behalf of all its members. Applicants 3 to 33 are some of its members and were parties to the above-referred batch of cases. Though the government, while issuing the said six notifications, did not take into consideration the additional cane price payable by the producers of sugar under clause 5-A yet the stand taken by them is that the said notifications are consistent with the judgment of this court. The contentions raised in this behalf by them are the same as were tak
