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2000 DIGILAW 456 (BOM)

Madhukar Sahakari Sakhar Karkhana Ltd. and another v. Union of India and others

2000-07-04

R.J.KOCHAR, V.K.BARDE

body2000
JUDGMENT - V.K. BARDE, J.:---The petitioners have contended that as per the provisions of the Essential Commodities Act, 1955, and the Levy Sugar Supply Control Order, 1979, issued under the said Act, the petitioners are bound to supply sugar to the respondents at the price fixed by the respondent under the Order of 1979. Every year, the levy sugar price is fixed by taking into consideration the various factors as laid down in section 3-C of the Essential Commodities Act, 1955. In the year 1984-85, the policy of partial control of distribution of sugar was in force and the sugar factories manufacturing sugar had to supply sugar as levy sugar to the respondents. 2. The petitioners have further contended that for the year 1984-85, the sugar price determination order was delayed. However, on 31st January, 1985, the Government announced sugar price as per Sugar (Price Determination for 1984-85 Production) Order, 1985. The price for S 30 grade sugar for the State of Maharashtra was determined at Rs. 297.66 Ps. per quintal. This price was, in fact, the price of the previous year's sugar. The price was not fixed by taking into consideration all the factors which were required to be taken into consideration for fixing the price of the sugar manufactured in the year 1984-85. However, the Deputy Secretary of the Government of India, by his letter dated 1st February, 1985, communicated that at the time the new levy prices are announced, the Government will endeavour to adjust, in respect of the quantity of levy sugar delivered by the mills before such revision, the difference, if any, between those prices and the prices just notified. 3. The petitioners have further contended that the petitioners were directed to supply levy sugar in different quantities as per the release orders dated 30-1-1985 (Exhibits "C" and "D"); release order dated 7-2-1985 (Exhibits "E"); and release orders dated 12-2-1985 (Exhibits "F" and "G"), and the petitioner supplied the sugar was per the said five orders. The date of delivery of sugar was mentioned in each of the orders. 4. The petitioners have further contended that on 28th March, 1985, the Central Government fixed the price of levy sugar manufactured in the year 1984-85 as per the Sugar (Price Determination for 1984-85 Production) Second Amendment Order, 1985. The date of delivery of sugar was mentioned in each of the orders. 4. The petitioners have further contended that on 28th March, 1985, the Central Government fixed the price of levy sugar manufactured in the year 1984-85 as per the Sugar (Price Determination for 1984-85 Production) Second Amendment Order, 1985. By this order, the price of levy sugar of S 30 grade for the State of Maharashtra was fixed at Rs. 335.19 Ps per quintal. However, while fixing the price as per this second order, the assurance given in the letter dated 1-2-1985, was not complied. The order mentions that it shall come into force from 1st day of April, 1985 and furthermore, Clause 3 of the order reads as follows :- "Nothing contained in this order shall affect any direction issued under Clause 2 of the Levy Sugar (Control) Order, 1979, before the date of publication of this order in the Official Gazette and the Producer shall be entitled for the undelivered quantity of sugar against the aforesaid direction to such price as provided in the Sugar (Price Determination for 1984-85 Production) Order, 1985, dated the 31st January, 1985." This order gave power to extend the period of validity specified in previous release orders with respect to completing the delivery or dispatch of the quantity of sugar mentioned in the release orders. 5. By the letter dated 1st February, 1985, assurance was given that the Government will endeavour to adjust in respect of quantity of levy sugar delivered prior to 31st March, 1985. No such adjustment is made. The levy sugar which was to be supplied as per the release orders issued prior to 31st March, 1985, was to be supplied as per the price fixed under the order dated 31st January, 1985. The petitioner had demanded the difference in the price payable as per the order dated 28th March, 1985 and order dated 31st January, 1985, which according to the petitioner, amounted to Rs. 7,71,661.57 Ps. However, the respondents refused to pay difference in price. 6. The petitioners, therefore, have prayed that the respondents be directed to pay the price of the sugar supplied for the sugar season 1984-85 in respect of all release orders at the price notified as per the order dated 28th March, 1985 and not as per the order dated 31st January, 1985. 6. The petitioners, therefore, have prayed that the respondents be directed to pay the price of the sugar supplied for the sugar season 1984-85 in respect of all release orders at the price notified as per the order dated 28th March, 1985 and not as per the order dated 31st January, 1985. It is also prayed that the order Exhibit "H" dated 28th June, 1985 extending the date for delivery or discharge of levy sugar till 31st July, 1985, also be set aside. The petitioners have also prayed for payment of price for the sugar at the rate of Rs. 334.54 Ps. per quintal with interest thereon. 7. Respondent Nos. 1, 2 and 4 have filed affidavit in reply. It is contended that the Government has not gone back on the assurance given as per the letter dated 1st February, 1985, while fixing the prices for the sugar manufactured in the year 1984-85. It is contended that after taking into consideration the provisions of section 3-C of the Essential Commodities Act, 1955, the price of the levy sugar which was 65% of the production of the year 1984-85 was fixed by the Government. The normal price worked out to be Rs. 330.54 Ps. per quintal for S 30 grade sugar for the State of Maharashtra. The total production of sugar for the year 1984-85 was 22,63,000 Metric Ton. So 65% of this which was to be purchased as levy sugar came to 14,70,930 Metric Ton. The quota released upto 11-3-1985 was 1,52,878.3 Metric Ton and for that, the price was to be paid at the rate of Rs. 297.66 Ps. per quintal as per the notification dated 31-1-1985. The balance of levy sugar to be supplied was 13,18,071.7 Metric Ton, and as per the order dated 28-3-1985, the price of sugar which as to be supplied as per the release orders after 11-3-1985 was fixed at Rs. 335.19 Ps. as per the notification dated 28-3-1985 and after revised calculation, the price was fixed at Rs. 334.35 Ps. per quintal. All these calculations are given by the respondent in the table appended to the affidavit in reply. 8. Thus, it is the contention of the respondents that to make good the loss suffered by the manufacturers for supplying the sugar as per the release orders prior to 31st March, 1985, instead of fixing the price at Rs. 330.54 Ps. All these calculations are given by the respondent in the table appended to the affidavit in reply. 8. Thus, it is the contention of the respondents that to make good the loss suffered by the manufacturers for supplying the sugar as per the release orders prior to 31st March, 1985, instead of fixing the price at Rs. 330.54 Ps. per quintal, for the remaining sugar to be released in the period after 31st March, 1985, the price of Rs. 334.35 was fixed. Thus, there was increase of Rs. 3.81 Ps. in per quintal price above the normal price of the year 1984-85 and this increase is specifically made to make good the losses suffered for the sugar which was released by the release orders issued till 11-3-1985. The petitioner, therefore, cannot contend that the assurance given in the letter dated 1st February, 1985 is not fulfilled. The adjustment in the price is made and that takes the care of any loss that might have been suffered by the petitioners for the sugar released by the release orders prior to 31st March, 1985. If now the petitioners are paid price at the rate of Rs. 334.35 Ps. per quintal, for the sugar released prior to 31st March, 1985, they will get double benefit and that cannot be given. It is, therefore, prayed that the writ petition be dismissed. 9. The resume of the rival contentions given above, will make it clear that there is only one short point in this matter, as to whether the assurance given in the letter dated 1st February, 1985 by the respondent, is adhered to or not. According to the petitioners, for the entire quota of levy sugar released for the year 1984-85, the price should be Rs. 334.35 Ps. because that is the price fixed for the sugar manufactured in the year 1984-85. The petitioners had to supply sugar as per the release orders issued prior to 31st March, 1985, as per the price which was fixed for the year 1983-84. The petitioners undertook to supply the levy sugar by complying with the release orders only because the assurance was given that there would be price adjustment. The petitioners had to supply sugar as per the release orders issued prior to 31st March, 1985, as per the price which was fixed for the year 1983-84. The petitioners undertook to supply the levy sugar by complying with the release orders only because the assurance was given that there would be price adjustment. However, price order dated 28th March, 1985, makes it clear in Clause No. 3 that the undelivered quantity of sugar which was released on the basis of price fixing order dated 31st January, 1985 will not get the price fixed under the order dated 28th March, 1985. So, the suppliers who supplied the sugar after 31st March, 1985, on the basis of the release orders issued thereafter would get higher price of Rs. 334.35 Ps. While the suppliers who were obedient to supply the sugar as per the release order issued prior to 31st March, 1985 will get the less price and this discrimination has no basis. 10. On the face of it, this argument appears to be correct. But on going through the affidavit in reply of the respondent and especially Tables "A" and "B' are taken into consideration, it would be clear that no such injustice is being caused. 11. The Table annexed at Exhibit "B" with the affidavit in reply by the respondents, is as follows :- Levy prices notified on 28-3-1985 for 1984-85 (S-30 grade of sugar) No. Particulars Zone-Maharashtra 1. Driage Rupees per quintal of Can 2. Cane price 18.283 3. Cane Cess/P. Tax 1.660 4. Co-op. Secy. Commission 5. Total (2 to 4) 19.943 6. Driage on (5) at % in 1 7. Cane cost including driage 19.943 8. Recovery % 11.00 9. Duration (days) 151 Rupees per quintal of sugar 10. Cost of cane 181.30 11. Conversion Cost i) Constant 13.93 ii) Variable 44.54 iii) Semi-variable 0.91 iv) Fixed 50.20 Total (i) to (iv) 109.58 12. Return including interest 39.66 13. Total 330.54 14. Adjustment for releases in February-March 1985 at 4.65* price notified on 31-1-1985 15. Levy price (10+11+12+14) 335.19 This was revised to Rs. 3.81 per quintal and an amendment issued in the notification dated 25-4-85 with a levy price of Rs. 334.35 per quintal. The table shows that the price of the sugar manufactured in the year 1984-85 was arrived at Rs. 330.54 Ps. Levy price (10+11+12+14) 335.19 This was revised to Rs. 3.81 per quintal and an amendment issued in the notification dated 25-4-85 with a levy price of Rs. 334.35 per quintal. The table shows that the price of the sugar manufactured in the year 1984-85 was arrived at Rs. 330.54 Ps. per quintal and that would have been the normal price for the sugar manufactured in the year 1984-85. However, to make the adjustment of the sugar released in February and March 1985, the price was fixed in the beginning by adding Rs. 4.65 Ps. at Rs. 335.19 Ps. This was based on the basis of release upto 21-3-1985 out of 1984-85 production which was estimated at 1,82,331.1 Metric Ton. But the actual release was 1,52,878.3 Metric Ton. So, on revision, it was found that instead of increase of Rs. 4.65 Ps. per quintal, the increase should be of Rs. 3.81 Ps. per quintal on the normal price of Rs. 330.54 Ps. Therefore, the revised price was fixed at Rs. 334.35 Ps. for the levy sugar quota to be released after 31st March, 1985. This position is made clear in the table annexed at Exhibit "A" to the affidavit in reply, which is as follows :- Adjustment in Respect of Lower Price Notified on 31-1-85 for Maharashtra Zone (Pursuant to Letter Dated 1-2-85). Sr. No. PRICE AS NOTIFIED AMENDED ON 28-3-85 ON 25-4-85 1. Total estimated production for 22,63,000 22,63,000 Maharashtra-MT 2. Levy sugar portion at 65 %-MT 14,70,930 14,70,930 3. Release upto 11-3-85 out of 84-85 production-MT 1,82,331.1 1,52,878.3 4. Normal price for 1984-85 (Vide Item 13 in price build up) Rs./qtl. 330.54 330.54 5. Price for 1983-84 (renotified on 31-1-85) Rs./qtl. 297.66 297.66 6. Shortfall per quintal (Item 4-Item 5) Rs. qtl. 32.88 32.88 7. Total shortfall on releases up to 5,99,50,465 5,02,66,38 11-3-85 (Item 3 x Item 6) Rs. 8. Balance levy stock (Item 2-Item 3) MT 12,88,618.9 13,18,071.7 9. Increase in price required to comp- ensate the shortfall (Item 7/Item 8) Rs./qtl. 4.65 3.81 10. Price notified for 1984-85 (Item 4 + Item 9) Rs./qtl. 335.19 334.35 11. Total realisation from levy stock of 1984-85 out of the total estimated production of 1984-85 if normal price Rs. 330.54 applied (Item 2 x Item 4) Rs. In crores 48.62 48.62 12. If levy price Rs. 297.66/qtl. applied for releases upto 11-3-85 (Item 5 x Item 3) Rs. 335.19 334.35 11. Total realisation from levy stock of 1984-85 out of the total estimated production of 1984-85 if normal price Rs. 330.54 applied (Item 2 x Item 4) Rs. In crores 48.62 48.62 12. If levy price Rs. 297.66/qtl. applied for releases upto 11-3-85 (Item 5 x Item 3) Rs. In crores 5.43 4.55 13. If levy price notified on 28-3-85 and amended on 25-4-85 applied for balance levy stock (Item 10 x Item 8) Rs. In crores 43.19 44.07 14. Total realisation which corresponds to Item 11 (Item 12 + Item 13) Rs. In crores 48.62 48.62 Note : Thus even if normal price of Rs. 330.54 per quintal is made applicable with retrospective effect i.e. for the whole levy stock of the estimated production 1984-85 sugar season, the total realisation comes to Rs. 48.62 crores. 12. On scrutinizing these two tables and the stand taken by the respondents in the affidavit in reply, it will be clear that the normal price for the sugar manufactures in the year 1984-85 worked out to be Rs. 330.54 Ps. per quintal. However, as certain quota was released prior to 31st March, 1985, for which the price was paid at the rate of Rs. 297.66 Ps. per quintal, for the remaining quota, the price was announced not at the normal rate of Rs. 330.54 Ps. but at the rate of Rs. 334.35 Ps. This increase in the price is based on the basis of percentage of total quota which was to be released for the year 1984-85 and the actual quota released prior to 31st March, 1985. So, there, is the adjustment of price. Large quota which had remained to be released prior to 31st March, 1985 is given higher price than the normal price and, thus, the loss is compensated, and thus, the difference in two prices, one prior to 31st March, 1985 and another after 31st March, 1985, is adjusted. 13. There is no substance in the contention of the petitioners that the assurance given in the letter dated 1st February, 1985 is not carried out by the Government. While fixing the price for remaining quota of the levy sugar for the year 1984-85, increased price is given than the normal price. In such circumstances, the said taken by the petitioner, with respect to the price of sugar, is not maintainable. 14. While fixing the price for remaining quota of the levy sugar for the year 1984-85, increased price is given than the normal price. In such circumstances, the said taken by the petitioner, with respect to the price of sugar, is not maintainable. 14. The extension of time granted by the order dated 28th June, 1985, upto 31st July, 1985, in such circumstances, cannot be called improper because the undelivered quota of the levy sugar was to be supplied as per the price fixed under the earlier order dated 31st January, 1985. The Director of Sugar, within his powers, has extended the period and all the Sugar Factories must have acted as per this order dated 28th June, 1985. Now, no purpose will be served by quashing that order. So, the other reliefs sought by the petitioners are also not tenable. 15. Hence, the writ petition is dismissed. Rule is discharged. No order as to costs. Petition dismissed. -----