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High Court Of Delhi
BIHAR SUGAR MILLS ASSOCIATION - Appellant
Versus
UNION OF INDIA - Respondent
Civil 2638 of 2002
Decided On : 05/08/2003
Held:
While, it is true that the levy price fixed by the sugar control order has to be for the entire sugar season, however, if the final sugar price is fixed by the Government after taking into consideration the factors under Section 3 (3C) of the Essential . Commodities Act and also taking into consideration losses which might have been suffered by the sugar mills by sale of sugar at the interim price prior to the fixation of final levy sugar price, there is no scope for interference with the final levy sugar price fixed by the order dated April 13, 1999. There is nothing on record to suggest that while fixing the levy sugar price by notification dated 13th April, 1999 the respondent had not taken into consideration all these factors. In the counter affidavit it is no doubt stated that while notifying the levy sugar price for the 1974-75 sugar season w.e.f 12th July, 1975, under notification dated 22nd February, 1995, the L factor was notified as the levy sugar price for the said sugar season as record of the Directorate of Sugar Office at Krishi Bhawan were lost in a fire that had broke out in the Office of the Directorate, however, in view of the order of the Supreme Court passed on 16th November, 2000 on the application of the contempt filed by the sugar mills that is not material. In view of the order dated 16th November, 2000, passed by the Supreme Court, the question about re-fixation of levy sugar price for the sugar season cannot be reagitated.
The Supreme Court while passing the order dated 16th November, 2000, was dealing with an application of the sugar mills for initiating proceedings for contempt against the respondents and its officials. In that application it was contended by the sugar mills that they were entitled to an increase in the levy sugar price to the full extent of the amount paid under Clause 5A and that the entire amount paid under Clause 5A was required to be added to the price initially fixed by the Government. To this argument of the petitioner the contention of the Government was that prior to 1974, the entire excess realisation of the sale price of sugar at the end of the sugar year used to be taken by the Government. However, the result of incorporation of Clause 5A in the Sugarcane Control Order was that instead of 100% of the excess amount being taken by the Government, 50% of the excess realisation went to the cane growers and 50% was retained by the sugar manufactures. It was observed that in that way, the sugar manufactures were benefited by retaining 50% of the excess realisation whereas prior to 1974, the entire excess realisation used to go to the Government. The Court observed that the working statement produced before the Court by the Government shows that it had taken the retention of 50% of the said realisation while determining price under Section 3 (3C) of the Essential Commodities Act. It was held that since these factors were taken into consideration while fixing the levy sugar price by notification dated April 13, 1999, the directions given by the Court were duly complied with. The Court was, thereforee, of the opinion that neither case for, contempt was made out nor there was any justification for giving directions to the Government to refix the levy sugar price under Section 3(3C) of the Essential Commodities Act. If on consideration of the retention of 50% of the excess realisation of the sale price of sugar by the sugar manufactures, the price has come down to Rs. 206.48 paise, no fault can be found with the same. The Supreme Court having upheld the Sugar Control Order dated 13th April, 1999, there is no scope for this Court to re-examine the question again.
For the foregoing reasons, no case is made out by the petitioner for setting aside the sugar control order dated 13th April, 1999 or to issue a direction to the respondent to refix the levy sugar price for the sugar season 1974-75.
( 1 ) PETITIONER no. 1 which claims to be an association of sugar mills in Bihar and U. P. has filed this writ petition alongwith some of the sugar mills challenging the Sugar (Price Determination for 1974-75 Production) Amendment Order, 1999 issued by the Government of India vide the notification dated 13. 4. 1999. By this notification levy sugar price for the sugar season 1974-75, was revised by the Government pursuant to the judgment of the Supreme Court in Shri Malaprabha Coop. Sugar Factory Ltd. Versus Union of India and another (1994) 1 SCC 648 (in short referred to as `malaprabha-I ) and the judgment of the Supreme Court in IA No. 5-6/1995 in Civil Appeal Nos. 122-123/1981 reported as Shri Malaprabha Coo. Sugar Factory Ltd. Versus Union of India and Another (1997) 10 SCC 216 (in short referred to as `malaprabha-II ). The fixation of levy sugar price for the season 1974-1975 has been challenged on the ground that the same has not been properly fixed by the respondents in accordance with the provisions of Section 3 (3c) of the Essential Commodities Act read with Sugarcane (Control) Order, 1966 and in terms of the guidelines laid down by the Supreme Court in Malaprabha-I and Malaprabha-II. A few facts relevant for deciding this petition are:-
( 2 ) FOR equitable distribution of an essential commodity, including sugar, not only regarding its quantity but also the price to the consumers, the Government under Section 3 of the Essential Commodities Act, is empowered to issue a notification/order fixing the price of an essential commodity. Under Section 3 of the Act, the Government of India issued an order known a Levy Sugar Supply (Control) Order, 1972 (in short referred to as `levy Sugar Order ). This order provides for compulsory supply or sale of sugar from a producer or recognised dealer of a specified quantity to a person or organisation or to such State Governments as it may direct from time to time and at a price not exceeding the price determined under Section 3 (3c) of the Essential Commodities Act. While fixing the price under Section 3 (3c), the Government is required to have regard to the four factors, namely, (i) minimum price of sugarcane (ii) manufacturing cost (iii) taxes and duties and (iv) reasonable return on the capital employed by the sugar factories. The sugar season normally starts from October 1 of every year and continues upto 30th September of the next year. Pending finalisation of the price to be fixed under Section 3 (3c) of the Act, the Government in the first instance notifies the levy sugar price almost at the beginning of the sugar season by way of an interim measure. This interim price is normally the levy sugar price of the last sugar season. In the present case, this Court is concerned with the fixation of the levy sugar price for the sugar season 1974-75. The fixation of levy sugar price involves an elaborate exercise such as forecasting the cane availability for sugar production, duration, recovery etc. Pending finalisation of all these, prices notified for the year 1973-74 were repeated by notification dated November 28, 1974 as an interim measure. It had to be so done because the Government had to release 1974-75 sugar season production. Without such a price fixation, sugar could not have been released and the same would have resulted in disruption of sugar through public distribution system. By notification dated 28. 11. 1974, the Government had fixed the price of levy sugar at Rs. 168. 80paise per quintal. In January, 1975 the Government increased the free sale quantity of sugar from 30 to 35%. However, a decision was taken not to review the price immediately as the increase in free sale quota could have given some relief to the industry by way of higher realisation. By July, 1975, the final working results of the season were available for almost all the zones. The free sale prices were high compared to the levy sugar price and the Government was, therefore, required to
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