The main legal point established in the judgment is that the government has the authority to impose reasonable restrictions on the sale of essential commodities, such as sugar, to ensure fair prices and equitable distribution, and that such restrictions are implemented in the public interest.

JUDGMENT : 

This petition under Article 226 of the Constitution of India has been filed by the petitioner Company which is running a sugar factory seeking following relief:-

(a) To issue a suitable writ, direction or order to respondents restricting them from imposing any restriction on the right of the petitioner to sell any quantity of sugar produced and which the petitioner Company is entitled to sell as free sale sugar in the market.

(b) To direct the respondents 1 and 2 to release the quota of free sale sugar from the stock of current crushing season 2009-2010 to enable the Company to meet the statutory and other indispensable expenditure in the running of the Company.

(c) To direct the respondents to compensate the losses being caused to the producers in case any stock is required to be maintained by the producers for fulfilment of the policy of the Government to maintain the price.

2. The case of the petitioner is that the Central Government in exercise of the powers conferred under section 3 of the Essential Commodities Act, 1955 (for short "the Act") issued the Sugar (Control) Order, 1966 (for short "Control Order"). By invoking powers under clause 4 and 5 of the Control Order the Central Government imposed restriction for the sale or disposal of sugar which is presently to the extent of 20%. The said 20% sugar is termed as levy sugar and the remaining 80% of the sugar is regarded in common parlance as free sale sugar. In the circumstances according to the petitioner it can sell the said 80% free sale sugar to anybody at any time at any price and no restriction on it can be put by the respondents. The grievance of the petitioner is that second respondent Directorate of Sugar has put unreasonable restriction on sale of the said 80% of the sugar which is free sale sugar by issuing directions limiting release of monthly quota thereby putting a rider about sale of the said 80% free sale sugar. It is the case of the petitioner that by such restrictions which have been put by the respondents the petitioner has to suffer irreparable loss as the farmers could not be paid cane price in time. Moreover the petitioner is also required to face paucity of funds to meet its minimum liabilities which is likely to lead for final closure of the unit. In support of the contention that no restrictions can be put by the Central Government for sale of free sale quota the petitioner has placed reliance on the order dated 9-1-2003 passed by a learned Single Judge of this Court in Writ Petition No. 1808/02, Jawaharlal Nehru Sahakari Agricultural Produce Processing Society Limited, Khargone vs. The Union of India and others as also the final order dated 13-7-2004 passed in the said writ petition.

3. The respondents No. 1 and 2 have filed reply in the form of counter affidavit and have stated that the petitioner has misconstrued the non levy sugar to be a sugar of free sale. It is stated that sugar is an essential commodity under the Act. Section 3 of the Act confers powers on the Government to control, production, supply, distribution, etc., of essential commodities. Section 3(1) provides that if the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, [or for securing any essential commodity for the defence of India or the efficient conduct of military operations] it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and commerce therein. In exercise of these powers conferred by section 3 of the Act the Central Government had issued the Sugar Control Order, 1966. Clause 4 of the Control Order confers powers on the Central Government to restrict sale etc. of sugar by producers or importers. Clause 5 empowers the Central Government to issue directions to the producers or importers and dealers of sugar. It has been stated by the responde

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