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1997 DIGILAW 269 (CAL)

Khagendra Chandra Das v. Union of India

1997-07-07

Satyabrata Sinha

body1997
JUDGMENT Satyabrata Sinha, J. All these writ applications involving common questions of law and facts were heard together and are being disposed of by this common judgment. 2. The fact of the matter, however, is noticed only from W.P. No. 1040(W) of 1997. 3. The petitioners are Small Scale Industrial Units and manufacturers of wax candle and for that purpose they are sololy dependent on supply of Paraffin Wax (Type-II) by the Central Government through the State Government. They filed several applications and were allotted a certain quantity of Paraffin Wax as has been detailed in paragraph 6 of the writ petition. The contention of the petitioner is that Paraffin Wax (Type-II) is not available in the market and they have taken loan from different banks for setting up their Small Scale Industrial Units. An order dated 3.1.1997 was issued by the Deputy Secretary to the Government of India relating to the distribution of Paraffin Wax laying down the mode and manner of distribution thereof. It further appears that the Ministry of Petroleum and Natural Gas had issued a notification bearing No. P-19026/6/96-Supp./170 dated 9.1.1997 in exercise of its power conferred upon s. 3 of the Essential Commodities Act regulating the control of price and distribution of paraffin wax. A supplementary affidavit has been filed by the petitioners. The contention of the petitioner is that the Paraffin Wax (Supply, Distribution and Price Fixation) Order 1997 (hereinafter referred to as the said Order of 1997) do not empower the respondents to take any decision for non-allotment of Paraffin Wax Type-II to the candle Manufacturing Units registered on or after 30th May 1986. 4. It has further been stated that the cut off date could not be fixed under the said Order in relation to the petitioners. The learned counsel for the petitioner further urged that the respondent cannot also fix the cut off date arbitrarily, as a result whereof the petitioner would be deprived from the allotment of Paraffin Wax. 5. There are about 268 units manufacturing paraffin wax by refining and processing slack wax supplied to them by Indian Oil Corporation Ltd. They are members of the first petitioner of W.P. No. 1890(W) of 1997. The said manufacturers allegedly are not getting enough slack wax from Indian Oil Corporation Ltd. Slack wax is allegedly also not available in the International market and, thus, the same cannot be imported. The said manufacturers allegedly are not getting enough slack wax from Indian Oil Corporation Ltd. Slack wax is allegedly also not available in the International market and, thus, the same cannot be imported. The capacity of the units to utilise slack wax 32,00 MT whereas allegedly only 6200 MT were being supplied. 6. It has been contended that the said directions of the respondents are illegal. 7. Indian Oil Corporation Limited has filed an affidavit-in-opposition in W.P. No. 1890(W) of 1997 wherein, inter alia, it has been contended that the matter relating to distribution of paraffin wax being within the domain of the Central Government and the said respondent being a Government Company was bound by the directives issued by the Central Government. According to the said respondent, the aforementioned directive has been issued in public interest. It has also denied and disputed the other allegations about non-availability of sufficient quantity of paraffin wax and that the same cannot be imported. 8. The only question which arises for consideration in this application as to whether the said order is valid or not. 9. The Essential Commodities Act, 1955 was enacted to provide in the interest of the general public for the control of production, supply and distribution, trade and commerce in the certain commodities. Paraffin Wax is considered and would be deemed to be declared as an essential commodity in view of coming in force of the said order. Prior to issuance of the said order, another order had been made relating to paraffin wax in the year 1972. Clause 2(c) of the said order defines 'dealer' to mean a person, firm, association of persons, co-operative society approved by Government Oil Company and carrying on directly or otherwise the business of sale or storage for the purpose of sale of paraffin wax. 'Paraffin Wax' has been defined in cl. 2(g) of the said order to mean paraffin wax Type-II or Type-IIA or Type-III as the case may be, conforming to the BIS Specification No. 4654-1993. Clause 2(i) specifies the factors that are required to be taken into consideration for declaring price of controlled paraffin wax. Sub-cl. (ii) specifies the factors for allotment of paraffin wax. Clause 6(1) of the said order provides for allotment of wax by the competent authority. Clause 7 prohibits a person from dealing in paraffin wax except under a licence granted thereunder. Sub-cl. (ii) specifies the factors for allotment of paraffin wax. Clause 6(1) of the said order provides for allotment of wax by the competent authority. Clause 7 prohibits a person from dealing in paraffin wax except under a licence granted thereunder. Clause II empowers the Central Government to issue directions regarding production of paraffin wax or import thereof. Various other restrictions have also been imposed under the said order. Clause 20 of the said order provides a non-obstante clause in terms whereof the same shall have overriding effect over any other order made by the State Government or Union Territory by an officer of such State Government or Union Territory before the commencement of the said order, except as regards anything done or omitted to be done thereunder before such commencement. 10. As noticed hereinbefore in the writ application the petitioner had questioned a policy decision on the part of the Central Government dated 3rd January, 1997 as contained in Annexure 'C' to W.P. 1040(W) of 1997 whereby and whereunder it was, inter alia, laid down as follows :- "(c) Allocation of Paraffin Wax Type-II to those units engaged in the manufacture of candles and registered on or before 30.06.1986 will be restricted at the present level. Allocation of Paraffin Wax Type-III to existing small scale/tiny/match box manufacturing units registered on or before 30.06.86 will also continue to be made at present level. No new registration of other units nor re-assessment of any of the existing units would be permitted. (d) Thus the allocation of Paraffin Wax Type-II in the State Governments will (sic) to the extent of current level of Association for candle manufacture only. The allocation of Paraffin Wax Type-III to the State Government for small scale/tiny match box manufacturing units will stand. (e) The Director of Industries, State Governments/Union Territories should furnish to IOC within six months from the date of issue of this letter, the list of candle manufacture and small scale/tiny match box units registered on or before 30.06.1986 using Paraffin Wax Type-II and Type-III along with details of their capacities and actual average upliftments during January, 1996, December, 1996 to determine the current level of upliftments/allocation. In the interim period, based on details available with all companies, the Oil Companies will continue to release product on ad hoc basis. In the interim period, based on details available with all companies, the Oil Companies will continue to release product on ad hoc basis. In case any major discrepancy is observed between the allocation figures for a particular State/ Union Territory and as per Oil Companies, matter may be referred to Ministry of Petroleum and Natural Gas IOC will co-ordinate all the activities for finalising the State-wise allocations. 11. The said policy decision, according to the petitioner, is violative of Art. 14 of the Constitution in so far as thereby a curtailment of allocation of Paraffin Wax Type-II had been made to the manufacturers started their production after 30th June, 1986, inter alia, on the ground that the said cut off date is arbitrary. 12. Mr. Roy Chowdhury, the learned counsel appearing on behalf of the respondents, on the other hand, submitted that the said directive had been issued by the Central Government in exercise of its power conferred upon it under cl. 11 of the 1972 Order. 13. It is admitted that the Central Government in exercise of its power conferred upon it under s. 3 of the Essential Commodities Act 1955 in super-session of the Paraffin Wax (Supply, Distribution and Price Fixation) Order, 1972 has made an order known as Paraffin Wax (Supply, Distribution and Price Fixation) Order, 1997. The petitioner being manufacturers may or may not be dealers within the meaning of provision of the said order. However, there cannot be any doubt that Paraffin Wax Type-II being a controlled commodity; no supply can be made in relation thereto unless an allotment is made in terms thereof. The said order also brings within its sweep the importers. 14. The aforementioned directive dated 3.1.95 is, therefore, now not in force. Even assuming that the said directives have been issued by the Central Government in exercise of its power under cl. 11 of 1972 Order, keeping in view the fact that 1972 order itself has been repealed and as the new order had come into force, no effect thereto can be given. It is, however, necessary to note that cl. 11 did not empower the Central Government to determine a cut off date. Such a power could be exercised by the Central Government only within the four corners of an order made under the provisions of Essential Commodities Act. 15. It is, however, necessary to note that cl. 11 did not empower the Central Government to determine a cut off date. Such a power could be exercised by the Central Government only within the four corners of an order made under the provisions of Essential Commodities Act. 15. It may also be noticed that by reason of the said order Paraffin Wax Type-I has now become a de-controlled commodity. In that view of the matter, from the date of coming into force of the said order i.e. from 9th January, 1997 all transactions have to be made in terms of the said order in view of cl. 6 thereof. It is useful to note that sub-cl. (2) of cl. 6 mandates upon the competent authority to have regard at the time of issuance of an allotment order, the factors enumerated therein. No restriction has been imposed upon the competent authority to supply Paraffin Wax Type-II to any dealer who had set up their manufacturing unit after 1986. In that view of the matter it is not necessary to go into the question as to whether the said circular letter is unconstitutional or not. 16. The court, there cannot be any doubt, cannot issue a writ allowing any person to do anything which would result in violation of law. The said order has been published in the Gazette and it has come into force with effect from 9th January, 1997 and in that view of the matter, there cannot be any doubt that henceforth all persons coming within the purview of the said order has to act or to carry on business in the said commodity in terms thereof as any violation of any provision of the said order or the condition of licence would attract the penal provision contained is s. 7 of the Essential Commodities Act. There cannot however, by any doubt that import of slack wax is permissible. The said order had to be made evidently keeping in view the acute shortage of paraffin wax in the country. The said order, thus, cannot be said to be bad in law having been issued in public interest. 17. A question has arisen as to whether the respondents could be directed to supply the allotted quantity of wax to the petitioner upto December, 1996. The said order, thus, cannot be said to be bad in law having been issued in public interest. 17. A question has arisen as to whether the respondents could be directed to supply the allotted quantity of wax to the petitioner upto December, 1996. It is an admitted position that the West Bengal Small Industries Corporation is the Distributor of Indian Oil Corporation in respect of essential raw materials. The petitioners had been receiving Paraffin Wax from the said distributor. The petitioners have also got their names enrolled under the West Bengal Small Industries Corporation. They were required to deposit the price of the Paraffin Wax and Transportation and other charges are borne by the said Corporation. However, in December, 1996 they were asked to deposit the transportation cost, which was complied with as such deposit has admittedly been made. 18. There appears to be a dispute as to whether Paraffin Wax could not be supplied to the said Corporation by M/s. Indian Oil Corporation for non-placement of vehicle by 31st December, 1996. Admittedly the writ petitioner had been allotted their respective quotas under 1972 control order wherefor the West Bengal Small Industries Corporation obtained delivery of the quantity of the first three quarters but allegedly IOC by its letter dated 3.12.96 requested it to lift 40 MT of Paraffin Wax Grade-I from at Bombay by 31.12.96 against advance payment and to that effect letters had been sent to its Calcutta Office at 5.P.M. It is stated that one Dodaka Goods Carrier which was to uplift the Paraffin Wax on behalf of the Corporation as per directive or Senior Coordination Manager of IOC Assam Division placed their trucks on 30.12.96 but one Mr. Rao told them to come on 31.12.99 on which they had again gone for receiving of the said material but no material was supplied on the ground that the same was the last date of the calender year. 19. Dr. Tapas Banerjee, the learned Counsel appearing on behalf of the Indian Oil Corporation submitted that upon non-lifting of the said 4th quarter quota of 1996 the same automatically lapsed and there cannot be any question that delivery of Paraffin Wax, Grade-I against the said quota particularly when it had become a free trade product. It may be as has been argued by Dr. It may be as has been argued by Dr. Banerjee that there was no negotiation between the petitioner and IOC but there cannot be any doubt whatsoever that WBSIC being its agent being its distributor, it is bound by the said Corporation's action. The petitioners paid price for the said commodity to the agent of IOC and have also borne the transportation charges and, thus, they were entitled to receive the requisite Paraffin Wax from 1996 4th quota. The dispute between IOC and WBSIC as regards the question as to who is to blame for non-liftment of said quota by 31.12.96 is an internal matter between the said two public sector companies but the petitioners having performed their obligation, cannot be denied or deprived of particularly in view of the fact that Paraffin Wax admittedly is a scarce commodity. It is evident that, the claim of the writ petitioners had been disputed by WBSIC and they intended to give effect the interim order passed by this court. Along with the written submission a delivery order in favour of one M/s Apurba Gravior with Indian Oil Corporation Ltd. Bassein Terminal had been annexed wherefrom it appears that Paraffin Wax, Grade-I on 6.1.97. It is, therefore, not correct to contend that no supply had been made on 31.12.96. It is the case of Indian Oil Corporation that no Paraffin Wax, Grade-II has been supplied after the coming into force after 1997 order. Thus it cannot be accepted that quota of 1996 has lapsed. In any event, the petitioners cannot suffer for no fault on their part. The concerned respondents being State within the meaning of Art. 12 of the Constitution of India were bound to act fairly and reasonably. Furthermore, there cannot be any doubt that this court is not only a court of law but also a court of equity. WBSIC has also supported the case of the petitioner and squarely placed the blame on Indian Oil Corporation. Even assuming that the blame lies on the part of the WBSIC, I am of the opinion that for such an act on its part, the petitioner should not suffer. 20. WBSIC has also supported the case of the petitioner and squarely placed the blame on Indian Oil Corporation. Even assuming that the blame lies on the part of the WBSIC, I am of the opinion that for such an act on its part, the petitioner should not suffer. 20. Such an order can be passed by this court in view of the decisions in Joint Controller of Import and Export, Madras vs. M/s Amin Chand Mutha, reported in AIR 1966 SC 478 , in M/s, Gurcharan Singh Baldev Singh vs. Yashwant Singh & others, reported in 1992(1) SCC 428 and in a decision reported in J.T. 1991(5) SC page 282, which decisions have recently been taken into consideration by this Court in M/s Natraj Enterprises & Anr. vs. Union of India & Ors. (G.A. No. 1721 of 1997) disposed of on 12th June, 1997. 21. In this view of the matter the interim order dated 6.1.1997 is made absolute. 22. These writ applications thus disposed of with the aforementioned direction and observations but there shall be no direction as to cost. Application disposed of.