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2008 DIGILAW 1297 (BOM)

Rameshwar Sahakari Sakhar Karkhana Ltd. v. Union of India & Ors.

2008-09-09

F.I.REBELLO, K.U.CHANDIWAL

body2008
Judgment K. U. CHANDIWAL, J.- forthwith. 2. The petitioner, a sugar factory seeks direction against the respondent nos.1 to 3, to grant additional quota for non levy sugar, by considering the representations made by the petitioner karkhana. 3. The respondents have filed affidavit of Mr. V. K. Aggarwal and set out the modalities of Government policy, in relation to control on sale of sugar by the sugar factories. It is pointed out. the Central Government, in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955, has issued Sugar (Control) Order, 1966. Clause 4 confers powers on the Central Government to restrict sale, etc. of sugar by the producers. Clause 5 confers power on the Central Government to issue directions to the producers and dealers of sugar. 4. The petitioner says that, due to bumper crop of sugarcane, huge crop of sugarcane is available in the area of operation of the petitioner and, consequently, the petitioner is producing sugar in large quantity. The petitioner has the storage capacity of 1 lac quintals and two temporary sheds of 80,000 quintals of sugar. Due to financial exgencies and inadequate capacity, for storage of sugar, of the petitioner, they have applied to the respondents for releasing additional free sale quota and, inspite of such request being made by the petitioner, the respondents have not considered the same. 5. The petitioners claim that, in similarly placed situations, for other sugar factories, this Court has directed the respondents to release additional free sale sugar in the open market and, the petitioner is similarly situated, like the petitioners in those writ petitions. The petitioner is also facing financial problems and it has taken loans from financial institutions. Rule. Heard 6. We do not wish to advert to the orders passed in Writ Petition No.2546/2007, with writ petition nos.4087/2007 and 5580/ 2007, wherein this Court observed, "we are also aware that orders issued under the Essential Commodities Act are in force and those are followed, however, if those are found to be inadequate and are found insufficient to achieve desired effect, those could be required to be reviewed on the touchstone of Articles 14 and 19 of the Indian Constitution". This Court, in the said petitions, allowed roughly 30 per cent of free sale sugar, to be released for free sale in the open market, to be sold within a period of three months from the date of the order, otherwise the directions were to lapse. 7. The powers contemplated in clauses 4 and 5 of the Sugar (Control) Order, 1966, restricting the sale by a sugar factory has certain basis. The Central Government has to take into consideration the production, stock, requirement, festival seasons and have to maintain a streamlined approach in the prices of the sugar in the country. The free sale sugar is to be disposed of by month to month release orders, in the light of clause 5 of the Sugar (Control) Order, 1966. This mechanism of regulated release of sugar, naturally, helps to keep open market sugar prices at a reasonable level. If the additional sugar quota, as is sought by the present petitioner, is tried to be put in the market, it will definitely destablize the principles of demand and supply. Such exercise will be again creating discrimination to the other sugar growers who are complying with the Rules. A message will be sent that, by approaching the Court, certain sugar factory can get permission to sell its sugar quota in excess of the release orders issued, which naturally, will be amounting to getting unfair advantage over other sugar factories. The restrictions imposed by the Central Government, on the sale of free sugar, is uniformly applied to all the sugar mills in the country which, considered from any angle, is in the public interest and, such reasonable restriction imposed will not be violative of any principles of the Constitution. 8. There is no challenge to the policy decision of the Central Government by petitioners. as the policy decision cannot be said to be arbitrary or capricious or without any logic. The extraordinary jurisdiction vested in this Court under Art.226 cannot be invoked to travel against the provisions of Section 3 (subsection (1) (3D and 3E) of the Essential Commodities Act, 1955 (as amended on 1st June, 2003) read with clauses 4 and 5 of the f Sugar (Control) Order, 1966, coupled with as they are not in violation of the fundamental rights of trade, as mandated under Articles 19(1)(g) of the Constitution. We reiterate, the Central Government has unbridled powers to restrict the sale of sugar under the Statute, and. unless, it is pointed out that such policy is not in the larger interests of the public, we do not wish to interfere with statutory powers of the Central Government. 9. The claim that there is no space left with the petitioner or that, the petitioner is financially over burdened, is factually incorrect as there are monthly releases in favour of the petitioner and, under the Bufferstock policy of the Government of India, the petitioners or, the other sugar factories, get subsidy by way of reimbursement of storage, insurance and, even interest charges. The sugar mills also get additional credit by way of hundred percent valuation of buffer stocks from the bankers instead of 85 per cent on creation of the bufferstock, as the banks do not keep margin on the quantity taken on buffer. 10. In the affidavit of the respondent, it is pointed• out that the Government has decided to dismantle the bufferstock of 30 lac tonnes created for the period of one year from 01-08-2007 to 31-07-2008. Also on its due date i.e. 01-08-2008, the sugar factories are allowed to sell 25 per cent of the stock kept as a buffer out of 30 lac tonne of its dismantling i.e. from 01-08-2008 to 30-09-2008 and the remaining 75 per cent, at any point of time during 2008-2009 sugar season commencing from 1st Oct., 2008, when the requirement of release orders from the Directorate of Sugar for either quantity. It is, thus, clarified by the respondents, there is sufficient availability of non 1evey sugar at the hands of the petitioners over and above their monthly non levy sugar quota which can be sold by them without release orders. 11. In view of what is stated above, the views expressed by this Bench, in the writ petitions cannot be applied with the same parameters to this case and, consequently, there being no scope to challenge the very policy of the Central Government and clauses 4 and 5 of the Sugar (Control) Order, 1966, coupled with Sections 3D, 3E of Essential Commodities Act, no orders are required, to direct the respondents to release the free sale sugar in favour of the petitioner, contrary to the statutory provisions. There is no merit in the petition. Petition is rejected. Rule discharged. Ordered accordingly.