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2007 DIGILAW 1494 (DEL)

UNION OF INDIA v. SARASWATHI INDUSTRIAL SYNDICATE LIMITED

2007-07-26

SANJIV KHANNA

body2007
MUKUNDAKAM SHARMA, CJ, J. ( 1 ) THIS appeal is directed against the judgment and order dated 29th January, 2007 passed by the learned Single Judge whereby the writ petition filed by the respondent herein was allowed. It was inter alia held that price determination under Section 3 (3c) of the Essential Commodities Act, 1955 is inter linked and will include an exercise under clause 5a of the Sugarcane (Control) Order, 1966. ( 2 ) WHILE allowing the writ petition, the learned Single Judge held that the controversy was covered by decisions of the Supreme Court in Malaprabha cooperative Sugar Factory Limited v. Union of India reported in (1994) 1 SCC 648 , Malaprabha Cooperative Sugar Factory Limited v. Union of India reported in (1997) 10 SCC 216 as well as Bharat Sugar Mills Ltd. and Another v. Union of india and Ors. decided on 21st April, 1998 T. C. (Civil) Nos. 15"40 of 1993 and the said decisions were applicable for all years other than 1982-83. ( 3 ) THIS issue was also considered by the Division Bench in the case of Hari Nagar sugar Mills Limited v. Union of India in RA No. 196/2005 in Writ Petition (Civil) no. 2232/1984 disposed of on 19th October, 2006. After examining the controversy in detail, in view of the ratio laid down by the aforesaid two decisions in malaprabha Cooperative Sugar Factory Limited cases (supra) as well as Bharat sugar Mills Ltd. case (supra) it was observed that the said decisions would govern and cover all other years, except for the year 1982-83. For the year 1982-83 judgment in M/s Modi Industries Ltd. v. Union of India reported in 1999 (9) SCC 245 is to the contrary and will apply. Accordingly, the review applications were dismissed holding that both Malaprabha I and Malaprabha II leave no manner of doubt that clause 5a of the Order is an integral part and directly connected with Section 3 (3c) of the Essential Commodities Act. ( 4 ) IN the order dated 19th October, 2006 the counter affidavit filed by Union of india in the case of Bharat Sugar Mills Limited (supra) decided on 21st April, 1998 was quoted. ( 4 ) IN the order dated 19th October, 2006 the counter affidavit filed by Union of india in the case of Bharat Sugar Mills Limited (supra) decided on 21st April, 1998 was quoted. In the said affidavit Union of India has stated that the government was considering the question of revision of levy sugar price for the year 1974-75 to 1979-80 and other subsequent years with the exception of the sugar year 1982-83 in accordance with the decision in Malaprabha -. Further in the case of Bharat Sugar Mills Limited, Union of India had moved an application seeking extension of time for re-fixation of levy sugar price for the seasons 1983-84 and 1984-85 on the ground that Malaprabha case is uniformly applicable case and the exercise involved collection, scrutiny and compilation of massive data. Thus, Union of India had treated the decision in Modi Industries case as applicable and confined to the year 1982-82 only and Malaprabha- I and II were applicable for the rest of years. The ratio and reasoning in Malaprabha-I was also examined and it was held that clause-5a of the order would thus form part of the scheme. Question of mopping the entire excess realisation was examined in malaprabha-II which arose on account of the direction passed in Malaprabha -. The paragraphs 7 and 8 of Malaprabha-II were quoted, which read as under: "7 This Court rejected the contention that Section 3 (3-C) and clause 5-A are totally independent and held that "if the determination of minimum price of sugar and fixation of the price of levy sugar under quantity of sugar to be supplied by the producer are interconnected, then they must be read as a whole and not separately as though each is distinct". With respect to mopping up of extra realisation on sale of free sugar for the purpose of determining price of levy sugar this Court held that according to the new pricing policy containing in clause 5-A the producer became entitled to 50% of such excess realisation from 1-10-1974 and, therefore, it was not open to the Government to mop up his share also while fixing the price of levy sugar. We need not refer to this aspect of mopping up further because that is really not relevant for deciding these applications. We need not refer to this aspect of mopping up further because that is really not relevant for deciding these applications. We may only state that under Factor 'd' of Section 3 (3-C) extra realisation on sale of levy-free sugar is a relevant consideration and, therefore, the Government can take it into account to enable it to fix levy price at a lower level. As explained by this Court in that judgment the effect of mopping up is to depress or reduce the levy sugar price. 8. This Court construed clause 5a as introducing a new pricing policy which conferred a benefit on the producer by providing that he shall be entitled to retain 50% of the extra realization from sale of levy free sugar. At the same time, it created a new liability for him by providing that he shall share the extra realization from sale of levy free sugar with the cane grower on 50:50 basis. In view of this new liability this Court held that the Government was bound to take that also into account while fixing the price "of levy sugar, without specifying as to whether that liability became a component of Factor 'a' of Factor 'b' or both those Factors of Section 3 (3c)" (emphasis supplied ). " ( 5 ) THEREAFTER, it was held in Hari Nagar Sugar Mills and Others (supra) as under: "16. The Supreme Court thereafter proceeded in para 11 to state that all the contentions had already been considered in Malaprabha I except the contention that a three-Judge Bench of the Apex Court on 20. 02. 1996 had upheld the levy price for 1982-83 which would imply that the Apex Court had now accepted the contention of the Government that it is not required to include the additional cane price payable under Clause 5a while determining the price of levy sugar under Section 3 (3c ). The Supreme Court once again emphasized the directions passed in para 109 of the judgment in Malaprabha Case"i whereby the liability of the manufacturers under Clause 5a of the said Order was required to be taken into account as also factors mentioned in Section 3 (3c) of the said act. The Supreme Court once again emphasized the directions passed in para 109 of the judgment in Malaprabha Case"i whereby the liability of the manufacturers under Clause 5a of the said Order was required to be taken into account as also factors mentioned in Section 3 (3c) of the said act. The Order in respect of 1982-83 was held confined to that Order alone as per para 13 of the judgment in Malaprabha"ii's case and an important observation was made in para 12 of the said judgment as under: 17. "clause 5-A being interconnected with Section 3 (3c) this new liability would certainly get projected into Factors 'a' and 'b' of Section 3 (3c ). " 18. In our considered view a reading of both Malaprabha I and II leave no manner of doubt that Clause 5a of the said order has been held to be an integral part and directly connected with Section 3 (3c) of the said Act. It is no doubt true that in the petition as filed, a specific plea of Clause 5a of the said order may not have been urged but a conjoint reading of Malaprabha I and II leave no manner of doubt as to how price fixation has to be done. It is not in dispute that in the present case, challenge is to the price fixation not being in conformity with Section 3 (3c) of the said Act. Thus, as, Clause 5-A is interconnected with Section 3 (3c) of the said Act, any exercise for price determination under Section 3 (3c) would 'require consequences of Clause 5a of the said Code to be necessarily examined. It cannot thus be said that there is absence of substratum on the part of the petitioners to lay challenge on that account. It has also to be appreciated that the Government itself over a period of time has understood the directions of the Supreme Court in the same manner. While examining the pleas of the learned counsel for the parties, reference has been made to the pleadings in Bharat Sugar Mills' case (supra) where the government itself was seeking extension of time to implement the order on the ground that Malaprabha's case I is uniformly applicable to all sugar zones. While examining the pleas of the learned counsel for the parties, reference has been made to the pleadings in Bharat Sugar Mills' case (supra) where the government itself was seeking extension of time to implement the order on the ground that Malaprabha's case I is uniformly applicable to all sugar zones. The government had stated that the exercise relating to 1983-84 and 1984-85 was in progress and the same required collection, scrutiny, compilation and consolidation of massive data. Para 3 of the counter affidavit quoted aforesaid shows that the only exception carved out was for the year 1982-83 in view of specific pronouncement by the Supreme Court for that year and 1985-86. In fact, if one may say, the only exception is for that year in terms of the directions of the Supreme Court and that is further explicit by the order passed in malaprabha. The observations of the Supreme Court were for that year alone. " ( 6 ) THE learned Single Judge, therefore, applied the ratio of the aforesaid decisions to the facts of the case in hand as in the writ petition filed by the respondent relevant years involved were from 1980-81 to 2000-2001 except the year 1982-83. There cannot be any dispute to the fact that so far M/s Modi industries Ltd. (supra) is concerned, the said decision was delivered in relation to the sugar year 1982-83. The said year has been treated as an exceptional year. We find that the ratio of the aforesaid decisions are also squarely applicable to the facts of the present case. ( 7 ) COUNSEL appearing for the respondent, however, states that a different view has been taken subsequently by another Division Bench of this court in Writ petition (Civil) No. 2585/1986), Gangeshwar Limited and Anr. v. Union of India and Ors. . The said decision was rendered on 9th November, 2006. We find that although a decision of the Division Bench of this court in the review application in Hari Sugar Mills and Ors. v. Union of India and Ors. (WP (C) no. 2232/1984) was rendered on 19th October,2006 wherein the Union of India was also a party, yet the said decision was not referred to and was not brought to the notice of the Division Bench, which decided the Writ Petition (Civil) no. 2585/1996 (Gangeshwar Limited and Anr. v. Union of India and Ors. ). (WP (C) no. 2232/1984) was rendered on 19th October,2006 wherein the Union of India was also a party, yet the said decision was not referred to and was not brought to the notice of the Division Bench, which decided the Writ Petition (Civil) no. 2585/1996 (Gangeshwar Limited and Anr. v. Union of India and Ors. ). The law laid down in a decision by a bench of two Judges is binding on subsequent Bench of lessor or co-equal strength (see Central Board of Dawoodi Bohracommunity v. State of Maharashtra (2004) 8 SCC 63. We, therefore, follow the decision in the case of Hari Sugar Mills (supra ). ( 8 ) WE are of the considered opinion that the present appeal is squarely covered by the decision of this court in RP No. 196/2005 in WP (C) No. 2232/1984 titled hari Sugar Mills and Ors. v. Union of India and Ors. decided on 19th October, 2006 and, therefore, we find no reason to take a different view than what was taken in the said case. We, therefore, find no merit in this appeal. The same is dismissed.