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IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
AMRITA SINHA, J.
Indian Jute Mills Association & Another - Petitioners
Versus
Union of India & Others - Respondents
WPA No. 1126 of 2022
Decided On : 11-05-2022
Jute Industry - Jute and Jute Textiles Control Order, 2016 - Clause 3 (3) - Summary of Acts and Sections: The court discussed the Jute and Jute Textiles Control Order, 2016, particularly Clause 3 (3) and 3 (4), which empowers the Jute Commissioner to fix the reasonable price at which raw jute may be purchased or sold, and the factors to be considered while fixing the reasonable price. The court emphasized the obligation of the Jute Commissioner to ensure practical implementation of the notified rate and take necessary steps to prevent illegal activities leading to price hikes.
Fact of the Case:
The Indian Jute Mills Association challenged a notification by the Jute Commissioner fixing the reasonable price of jute, alleging that the price fixed was impractical and led to sustained financial losses for the jute mill owners, resulting in closure of mills and loss of employment. The petitioners sought a writ of Mandamus to withdraw the notification and ensure availability of raw jute at the notified rate.
Finding of the Court:
The court found that the Jute Commissioner has the authority to fix the price of raw jute as per the Control Order, 2016. It emphasized the obligation of the Jute Commissioner to ensure practical implementation of the notified rate and take necessary steps to prevent illegal activities leading to price hikes. The court also highlighted the need for a holistic approach by all stakeholders to revive the jute industry.
Issues: The main issue was the reasonableness of the price fixed by the Jute Commissioner and the practical implementation of the notified rate. The court also addressed the role and obligations of the Jute Commissioner, the impact of price hikes on the jute industry, and the need for cooperation among stakeholders to revive the industry.
Ratio Decidendi: The court held that the Jute Commissioner has the statutory duty and obligation to fix the price of raw jute after considering relevant factors and to adopt necessary methods to implement the said price. It emphasized the need for practical implementation of the notified rate and the prevention of illegal activities leading to price hikes.
Final Decision: The court disposed of the writ petition, directing the Jute Commissioner to take positive steps and adopt stringent measures to implement the notified rate. It also instructed the Jute Commissioner to review and refix the rate if it appears that the notified rate cannot be adhered to. No costs were awarded.
JUDGMENT :
1. The petitioner no. 1, the Indian Jute Mills Association, is a Company incorporated under the provisions of the Companies Act, 1956 represented by the petitioner no 2, being its Secretary. The petitioner no. 1 has thirty-six members and each member represents one jute mill. The Company was incorporated with the object of promoting and looking after the welfare and interest of the jute industry.
2. The petitioners are aggrieved by the Notification dated 30th September, 2021 published by the Jute Commissioner, Ministry of Textiles, in the Gazette of India, Extraordinary whereby the Jute Commissioner fixed the reasonable price of jute in all forms to be in force until 30th June, 2022 or until further orders whichever is earlier.
3. The said notification was published in exercise of the powers conferred under Clause 3 (3) of the Jute and Jute Textiles Control Order, 2016, herein after referred to as the ‘Control Order, 2016’.
4. The Notification mentions that no dealer, trader, agency or supplier or any other person shall sell or offer to sell any person or agency and no person, agency or company shall offer to purchase or purchase any raw jute at a price exceeding the reasonable price mentioned in the Notification.
5. The reasonable price for raw jute in respect of TD-5 variety was fixed at Rs. 6500/- per quintal in the State of West Bengal.
6. The Notification further mentions that the amount of interest /penalty etc. payable, if any, by the purchasers on delayed payments or for any other reasons are matters solely between purchaser and supplier and will be outside/additional to the above ceiling reasonable prices.
7. The petitioners are also aggrieved by the act of the Jute Commissioner restraining the Jute Balers’ Association from publishing quotations exceeding the notified reasonable price.
8. According to the petitioners, the price that has been fixed by the Jute Commissioner is not the reasonable price at which raw jute of the above variety is available in the market. It is the specific contention of the petitioners that raw jute is available in the market at a price higher than that has been fixed by the Jute Commissioner.
9. It has been submitted that the Jute Commissioner does not have the power to direct the Jute Balers’ Association to publish quotation at a fixed price and not the actual price at which raw jute is sold in the open market.
10. It is the further contention of the petitioners that the Jute Commissioner fixed the reasonable price of raw jute without taking into consideration the ground realities. The reasonable price that has been fixed is impractical and is impossible to be implemented by the sellers as well as the purchasers.
11. It has been argued that it is the duty and obligation of the Jute Commissioner to ensure that raw jute is available in the open market at the notified rate. In the event raw jute is sold at a rate higher than the reasonable price mentioned in the notification, then the Jute Commissioner ought to take appropriate steps against the persons responsible for buying/ selling the same.
12. It has been submitted that the price fixed in the notification does not take into consideration the charges on account of freight, transportation, handling and storage cost of raw jute which is contrary to the Control Order, 2016. The price fixed is absurdly low and cannot be implemented even with coercive measures.
13. It has been submitted that the finished products from the said raw jute are purchased in bulk by the Government and the reimbursement is at the rate which has been fixed by the Jute Commissioner. As the price of raw jute has been fixed at such low rate accordingly, the petitioners are not reimbursed the actual price of the finished products. In view of the same, the petitioners are suffering huge losses on regular basis.
14. In view of non-availability of raw jute at the fixed price, the petitioners are compelled to purchase raw jute at higher rates. As the petitioners cannot sell the
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