JUDGMENT Hon’ble Ashok Bhushan, J.—All these writ petitions have been filed by different sugar mills challenging the orders passed by the Government of India, Ministry of Consumer Affairs Food and Public Distribution Department (Chief Director Sugar). The issues raised in the writ petitions being common and somewhat related to each other, all the writ petitions have been heard together and are being disposed of by this common judgment. The writ petitions can be broadly classified in two groups. The writ petitions in group ‘A’ are the writ petitions by sugar mills challenging the orders passed by the union of India converting the undelivered/undispatched quantity of non levy sugar as levy sugar with regard to factory-wise monthly quota for different months from September, 2008 to April, 2009. 2. The writ petitions included in group B challenge the order of the Government of India converting the undelivered/undispatched buffer stock which was directed to be disposed of into levy sugar as well as the order of Government of India under Levy Sugar Supply (Control) Order 1979 specifying the quantity of levy sugar out of the production for the year 2008-09 for different sugar mills. 3. For deciding the writ petitions included in group ‘A’, it is sufficient to refer the facts in details with regard to two writ petitions i.e. writ petition No. 28612 of 2009, Rudra Vilas Kisan Sahkari Chini Mills Ltd. v. Union of India and others and writ petition No. 44371 of 2009, Dwarikesh Sugar Industries Ltd. v. Union of India and others. Counter affidavit and rejoinder affidavit have been filed in the aforesaid writ petitions. Brief facts of writ petition No. 28612 of 2009 are; that the petitioner Rudra Vilas Kisan Sahkari Chini Mills Ltd. is a registered cooperative society under the U.P. Cooperative Societies Act, 1965, which is running a sugar mill at Bilaspur district Rampur. The subject matter of the writ petition is conversion of release order issued for free sales sugar quota into levy sugar quota for the month of February, 2009. The subject matter of the writ petition is conversion of release order issued for free sales sugar quota into levy sugar quota for the month of February, 2009. By an order dated 29.1.2009, issued by the Government of India in exercise of the powers conferred under sub Section (3E) of Section 3 of Essential Commodities Act, 1955 along with provision of Sugar (Control) Order, 1966 , Chief Director, Directorate Ministry of Consumer Affairs, Food & Public Distribution permitted the producers/owners of the sugar factories to sell out of production of the year 2008-09 as February, 2009 quota. For the petitioner i.e. Rudra Vilas Kisan Sahkari Chini Mills Bilaspur free sale allocation of February quota was 19237 M.T. The order contemplated that delivery/dispatch of the sugar shall commence from 1.2.2009 and shall be completed by 28.2.2009. The order further contemplated that entire quantity released for the month of February shall be sold within the prescribed validity period and any quantity which remain unsold/undispatched after expiry of the validity period of the order shall stand converted into levy sugar stock. Further violation of condition No. 3 shall be punishable under Section 7 of the Essential Commodities Act, 1955. The petitioner claims to have received the order on 5.2.2009 and lifted only 11220 M.T and 8017 Mt sugar could not be lifted. The petitioners claimed to have sent a representation dated 4.3.2009 praying for extension of time for lifting the quota. An order dated 13.4.2009 was issued to the effect that the petitioner being unable to deliver/dispatch the full quantity of non levy sugar as allocated vide the release order dated 29.8.2009, the unreleased/undelivered quantity of sugar 8017 M.T. has been converted as levy sugar. A show cause notice dated 13.4.2009 is said to be issued with regard to monthly release quota from September, October, November, December, 2008 and January and February, 2009 asking to show cause as to why the undelivered/undispatched quota be not converted into levy sugar. The petitioner claims to have received the show cause notice on 28.4.2009, whereas the order converting February, 2009 quota as levy sugar was received on 17.4.2009. The petitioner claims to have received the show cause notice on 28.4.2009, whereas the order converting February, 2009 quota as levy sugar was received on 17.4.2009. The petitioner has referred to an order passed by this Court in writ petition No. 23029 of 2007, Kisan Cooperative Sugar Factory Ltd. Sarsawa v. Union of India and others dated 15.5.2009, passed by the Division Bench of this Court directing the Chief Director to consider the grievances of the petitioner in pursuance of which order on 13.6.2008, an order was passed by which the Director accepting the claim of the petitioners of that case converted the levy sugar into non levy sugar. The Petitioner’s case in the writ petition is that due to Kanwariya’s Mela and further a news item published on 24.2.2009 that stock limits be soon issued, the entire released quantity could not be sold on. In the counter affidavit filed on behalf of Union of India, it has been stated that under the policy of the Union of India, 10% of the sugar production is requisitioned from the producers as levy sugar and remaining 90% of the sugar is allowed to be sold as free sale sugar through the system of regulated release mechanism policy of the Government. The power under sub-section (3E) of Section 3 of Essential Commodities Act, 1955 read with Sugar (Control) Order, 1966 are exercised not only to make sugar available in reasonable quantity through out the year but also to moderate the sugar prices within a reasonable band. It is stated that in the absence of any sugar distribution mechanism, there is likelihood of a glut in availability of sugar in the market in certain months of the year and shortage in other months resulting in crash of the prices to the detriment of the sugar mills. When prices rise, the Central Government uses the release mechanism to vary the quantity in the market in order to maintain reasonable prices. The regulated release mechanism protects not only the consumer by ensuring the reasonable supply through out the year but also the sugar mills by way of maintaining prices at a steady level. In the monthly relase order, it was clearly contemplated that the entire quota released for the month be delivered disposed of within the validity period and if any quota remained undisposed of the same shall be converted as levy sugar. In the monthly relase order, it was clearly contemplated that the entire quota released for the month be delivered disposed of within the validity period and if any quota remained undisposed of the same shall be converted as levy sugar. The writ petition has been filed praying for quashing the order dated 13.4.2009 by which undelivered quota of February, 2009 has been converted as levy sugar. 4. The facts of writ petition No. 44371 of 2009, Dwarikesh Sugar Industries Ltd. are ; the Dwarikesh Sugar Industries Ltd. is a company defined under the Companies Act, 1956 which is running different units. Two orders dated 28.7.2009 issued by the Government of India in exercise of power under Essential Commodities Act,1955 read with Sugar (Control)Order, 1966 directing for conversion of undelivered/undispatched quantity of non-levy sugar into levy sugar for the month of September to December, 2008 and January and February, 2009. By another order of 28.7.2009, conversion into levy sugar has been directed for undisposed of undelivered quantity for the month of March, 2009. The petitioner’s case in the writ petition is that during the relevant period, the respondents themselves had commanded to sell buffer stock created at a point of time and also to sell certain quantities of free sale sugar in accordance with the monthly release order issued from time to time. It is submitted that the petitioner could not sell the entire monthly released free sale sugar due to reasons beyond the control of the petitioner. The petitioner’s case is that the total allocation of buffer stock for the crushing season 2006-07 was 188.40 M.T. The Central Government thereafter vide order dated 16.4.2008 decided to dismantle buffer stock of 20 lacs tones and further permitted the sugar factories to sell the said quantity of buffer stock in the domestic market from 1st May 2008 onwards till 30th September, 2008 without requirement of release order. Despite adverse conditions, the petitioners were able to sell the buffer stock. The petitioner was also to ensure regular release of free sale/non levy sugar although there was less demand due to heavy rain fall. Further orders were received from the Central Government for dismantling the buffer stock. The petitioner’s case is that according to notification dated 1.3.2002 the proportion of levy sugar was fixed as 10% of the total sugar produce and 90% was free sale sugar. Further orders were received from the Central Government for dismantling the buffer stock. The petitioner’s case is that according to notification dated 1.3.2002 the proportion of levy sugar was fixed as 10% of the total sugar produce and 90% was free sale sugar. The petitioner’s case is that there being already a glut in the market due to lifting of huge buffer stock, the entire monthly release quota from September to March, 2009 could not be sold. There was heavy rain during the aforesaid period causing difficulties regarding transportation. Several bridges and roads were damaged. The petitioner also claims to have submitted representation dated 30.9.2008 bringing into knowledge of the respondents the critical situation faced by the petitioner and prayed for extension of time for disposing the quota. Reference to seizure of 64800 bags of sugar by the Commercial Tax Department of the State on alleged non payment of entry tax has also been made in paragraph 36 of the writ petition. It is stated that the said sugar could be released only in April, 2009 due to which same could not be lifted within the time prescribed. Representations submitted by the U.P. Sugar Mills dated 21.4.2009 and 29.4.2009 have also been referred to. The petitioner has also referred to and relied on interim order dated 18.3.2009, passed in writ petition No. 2239 (MB) of 2009, Kisan Sahkari Chini Mills Ltd. v. Union of India and others, the order dated 10.11.1981 passed by the Bombay High Court in Criminal Misc. Application No. No. 1472 of 1980, Sri Jagdamba Sahakari Sakhar Karkhana Ltd. v. State of Maharashtra, an order of the Bombay High Court dated 27.7.2009, passed in writ petition No. 5120 of 2009, Siddheshwar Sahkari Sakhar Karkhana Ltd. v. Chief Director (Sugar) and another and further order dated 4.8.2009 in the same writ petition disposing of interim application. Counter affidavit has been filed by the Union of India justifying the orders, converting free sale sugar into levy sugar. Powers of the Central Government under the Essential Commodities Act, 1955 read with power under Sugar Control Order 1966 has been relied in passing the order. 5. Counter affidavit has been filed by the Union of India justifying the orders, converting free sale sugar into levy sugar. Powers of the Central Government under the Essential Commodities Act, 1955 read with power under Sugar Control Order 1966 has been relied in passing the order. 5. For deciding writ petitions included in group ‘B’, it is sufficient to refer the fact of writ petition No. 38034 of 2009, M/s J.H.V. Sugar Mills Ltd. v. Union of India and others, writ petition No. 28523 of 2009, Bisalpur Kisan Sahkari Chini Mills Ltd. v. Union of India and others and writ petition No. 44523 of 2009, Kisan Sakhari Chini Mill Ltd. v. Union of India and others. The petitioner is a registered company which manufactures crystal sugar through vacuum pan process. The Central Government in exercise of power under Section 9 of the Sugar Development Fund Act, 1982 framed rules namely; Sugar Development Fund Rules, 1983. Rule 19 of the Sugar Development Fund Rules 1983 has created a buffer stock for the period 1.8.2007 to 30.9.2008 specifying the quantity of 8017.8 M.T. for the petitioners unit. Central Government dismantled the buffer stock by press note dated 1.7.2008 and allowed the sugar factory to sell 25% of the buffer stock in two months i.e. from 1.8.2008 to 30.9. 2008 and remaining 75% at any point of time during the sugar season 2008-09. The petitioner claims to have sold 25% of the dismantled stock. A show cause notice dated 5.3.2009 was issued to the petitioner stating therein that the petitioner had not sold buffer stock for the period October 2008 to Decembere, 2008 i.e. 30% of 75% and hence, violated the order of the Central Government issued under the provisions of Sugar (Control) Order, 1966. The petitioner claims to have submitted a reply on 14.3.2009 stating that they have sold 30% of the 75% for the period October, 2008 to Decembere 2008 hence, has not violated the Control Order. On 20.4.2009 an order was passed by the respondent No. 2 converting the unsold/undispatched 1804 M.T sugar into the levy sugar. Petitioner claims to have filed representations dated 29.4.2009 and 18.7.2009 for reconsideration of the conversion order. A letter dated 9.7.2009 was issued by the Managing Director PCF to District Manager PCF for receiving the levy sugar from the different sugar mills. Petitioner claims to have filed representations dated 29.4.2009 and 18.7.2009 for reconsideration of the conversion order. A letter dated 9.7.2009 was issued by the Managing Director PCF to District Manager PCF for receiving the levy sugar from the different sugar mills. The petitioner by means of writ petition has challenged the order dated 20.4.2009 and 9.7.2009. 6. The facts of writ petition No. 28523 of 2009, Bisalpur Kisan Sahkari Chini Mills v. Union of India and others are; the petitioner is a registered cooperative society running a sugar mill at Bisalpur district Pilibhit. The petitioners have challenged the order dated 17.4.2009 by which the direction has been issued for conversion of 1209.6 M.T. remaining unsold/undispatched quantity out of 2nd dismantled buffer stock as on 30.9.2008 and the further order dated 1.5.2009 by which the specified quantity of levy sugar out of the production of the year 2008-09 in exercise of powers under Levy Sugar Supply (Control) Order 1979 has been directed to be sold to the Government of U.P. Petitioner’s case in the writ petition is that by order dated 7.11.2007, the buffer stock which was to the tune of 6896.5 M.T. for the petitioner’s factory was treated to be dismantled w.e.f. 1.8.2007 and an order was issued for sale of 25% of the buffer stock within two months i.e. from 1st August to 30 September, 2008 and rest 75% during the year 2008-09. The total buffer stock allocated to be sold within two months could not be sold by the petitioner due to flood and heavy rain. The petitioner claims to have sent a letter dated 23.9.2008 and 27.9.2008. A show cause notice dated 6.2.2009 has been issued which was replied on 23.2.2009. An order was passed on 17.4.2009 rejecting the reply and converting the buffer stock of 1209.6 MT into the levy sugar. Another order challenged in the writ petition is the order dated 1.5.2009 by which the quantity of levy sugar has been specified for the year 2008-09 out of the conversion of unsold undispatched quantity of first and second buffer stock of sugar. The order dated 1.5.2009 is only a consequential order to the order dated 17.4.2009. 7. Writ petition No. 44523 of 2009 has been filed by Kisan Sakhari Chini Mill Ltd. challenging the order dated 1.5.2009 which order has been issued for specified quantity of levy sugar out of the production year 2008-09. The order dated 1.5.2009 is only a consequential order to the order dated 17.4.2009. 7. Writ petition No. 44523 of 2009 has been filed by Kisan Sakhari Chini Mill Ltd. challenging the order dated 1.5.2009 which order has been issued for specified quantity of levy sugar out of the production year 2008-09. The averments of the petitioner in the writ petition are; that the petitioner could not sell the second buffer stock quantity hence, the free sale sugar has been converted into levy sugar and order dated 1.5.2009 has been issued for lifting of the sugar as a levy sugar. 8. We have heard Sri Ved Byas Mishra, Sri Shashi Nandan learned Senior Advocate assisted by Sri Yashwant Verma, Sri Shakti Swarup Nigam, Sri C.K. Parekh learned counsel appearing for the petitioners and Dr. Ashok Nigam, learned Additional Solicitor General of India assisted by Sri P.K. Jaiswal, Sri Maya Shankar Srivastava, Sri S.K. Misra and Sri U.N. Sharma for the respondents. 9. The principal submission which has been canvassed by learned counsel for the petitioners challenging the impugned order converting the undisposed undelivered monthly quota/buffer stock into levy sugar is lack of power in respondents to direct for such conversion. The submission of the petitioners is that in exercise of power under the Essential Commodities Act, 1955, Levy Sugar Supply (Control) Order, 1979 has been issued. The notification dated 1.3.2002 has been issued in exercise of power under sub Section (1) read with clause (1) of sub-section (2) of Section 3 of Essential Commodities Act, 1955 directing that every domestic producer and importer of sugar shall sell ten per cent of the sugar produced or imported , with effect from the 1st day of March, 2002 as directed by the Central Government under the Levy Sugar Supply (Control) Order, 1979. The submission is that 10% having been fixed as ceiling for levy sugar by the above notification, no levy sugar can be directed in excess of the 10% hence, the order impugned is not in accordance with the provisions of the Essential Commodities Act, 1955 and the Sugar (Control) Order, 1966 as well as Levy Sugar Supply (Control) Order, 1979. The submission is that 10% having been fixed as ceiling for levy sugar by the above notification, no levy sugar can be directed in excess of the 10% hence, the order impugned is not in accordance with the provisions of the Essential Commodities Act, 1955 and the Sugar (Control) Order, 1966 as well as Levy Sugar Supply (Control) Order, 1979. Elaborating the submission, learned counsel for the petitioners submitted that the levy sugar can be required in accordance with the orders of the Central Government issued under Section 3(2)(f) of the Essential Commodities Act, 1955 and in Levy Sugar Supply (Control) Order, 1979 (hereinafter referred to as ‘1979 Order’), 10% having already been fixed, no further levy can be directed to be increased. The order impugned having not been passed in accordance with 1979 Order, the same is without jurisdiction. It is submitted that there is no provision under the Essential Commodities Act, 1955 or Sugar (Control) Order, 1966 or 1979 Order empowering the Central Government to convert the free sale sugar into levy sugar hence, the order impugned is without any authority. It is further submitted that there were sufficient reasons for the petitioners not being able to deliver/dispose the entire monthly quota/buffer stock released by the Government, the respondents committed error in converting the quota into levy sugar without considering the difficulties and reasons with regard to different petitioners. Reliance has been placed on the order passed by the Bombay High Court dated 27.7.2009 and 4.8.2009 passed in writ petition No. 5120 of 2009, Siddheshwar Sahakari Sakhar Karkhana v. Chief Director (Sugar), Government of India and another copy of which has been filed as Annexure-24 to the writ petition No. 44371 of 2009. It is submitted that the Bombay High Court has granted interim order permitting the dismantled buffer stock to be sold as free sale sugar. It is submitted that the Bombay High Court has granted interim order permitting the dismantled buffer stock to be sold as free sale sugar. Reliance has been placed on an interim order passed by the Division Bench of Lucknow Bench of this Court dated 11.8.2006 passed in writ petition No. 4257 (MB) of 2006, The Seksaria Biswan Sugar Factory Ltd. and another v. Union of India and others and the order dated 18.3.2009 passed in writ petition No. 2239 (MB) of 2009, The Kisan Sahkari Chini Mills Ltd. v. Union of India and others, where as an interim measure, it was directed that free sale sugar shall not be treated as levy sugar and Central Government shall consider issuance of fresh release sugar order within three weeks from the date of production of certified copy of the order or shall show cause within the same period. 10. Learned Counsel for the petitioners further submits that buffer stock was directed to be created and maintained by the Sugar Mills in accordance with the provisions of Sugar Development Fund Act, 1982. The buffer stock of 30 lacs tonnes was created by the Central Government from 1.8.2007 to 31.7.2008 and factory-wise provisional allocation was made by order dated 1.8.2007. Different petitioners were required to maintain specified buffer stock. Further by order dated 20.8.2007, another buffer stock of 20 lacs tonnes was created for a period of one year from 1.5.2007 to 30.4.2008 regarding which factory wise provisional allocation was issued. The buffer stock of 20 lacs tonnes was dismantled by order dated 16.4.2008 and Sugar factories were allowed to sell the quantity held for buffer stock of 20 lacs tonnes in the domestic market during 2007-08 sugar season i.e. from 1.5.2008 onwards till 30.9.2008 without requirement of the release order. It is submitted that due to the aforesaid fact, the factories had to sell the buffer stock due to which the monthly released quota of free sell sugar could not be completely sold of and in some cases even the buffer stock could not be sold of. The respondents without application of mind has issued the impugned order converting the buffer stock into levy sugar. It is further submitted that the impugned order causes prejudice and loss to the sugar factories since they are unable to sell the converted levy sugar as the free sale sugar. The respondents without application of mind has issued the impugned order converting the buffer stock into levy sugar. It is further submitted that the impugned order causes prejudice and loss to the sugar factories since they are unable to sell the converted levy sugar as the free sale sugar. The prices fixed for levy sugar is much less to the market rate of sugar. 11. Dr. Ashok Nigam, Additional Solicitor General of India appearing for the Union of India refuting the submissions of learned counsel for the petitioners, contended that the order impugned is fully in accordance with the power of the Central Government under the Essential Commodities Act, 1955, Sugar Control Order 1966 and Levy Sugar Supply (Control) Order 1979. 12. It is submitted that regulated release mechanism helps to keep the sugar prices in open market at a reasonable level. The Central Government is committed to provide sugar to large number of consumers at reasonable price. Monthly non-levy sugar quota is released with the object to keep the sugar prices under reasonable control. It is submitted that the Government has to maintain the price of sugar in open market at a reasonable level which can be ensured only when the Sugar factories comply with the Government orders and sell their non-levy sugar in the market strictly in accordance with the terms and conditions of the release order and sell the entire released quota within the prescribed validity period. It is submitted that when a sugar factory fails to sell non levy sugar quota as released by the Government within the stipulated time, it violates the provisions of the Essential Commodities Act, 1955, which invites penal action under Section 7 of the Act. However, the Government taking a lenient view has converted the unsold non-levy sugar into levy sugar although the Government under Section 7 of the Essential Commodities Act, 1955 has power to confiscate the entire stock of sugar. It is submitted that the monthly release order normally stipulated that in the event the monthly quota is not sold out within the time allowed, the same shall be converted into levy sugar. It is submitted that all the petitioners were well aware of the aforesaid fact and they cannot take any benefit of their own lapses in not having able to sold up the monthly released quota within the time prescribed. It is submitted that all the petitioners were well aware of the aforesaid fact and they cannot take any benefit of their own lapses in not having able to sold up the monthly released quota within the time prescribed. It is submitted that the petitioners will be getting the value fixed for levy sugar and they cannot be heard in complaining any loss to them. With regard to non-disposal of the buffer stock, the similar submission has been raised by the counsel for the respondents and it is contended that the petitioners having not complied with the release order for sale of the buffer stock conversion into levy sugar is within the power and jurisdiction of the respondents. 13. We have considered the submissions of the learned Counsel for the parties and have perused the record. 14. Before proceeding to consider the submission of the learned Counsel for the parties, it is necessary to refer to relevant provisions of the Essential Commodities Act, 1955 and the Orders issued thereunder with regard to essential commodity of sugar. Essential Commodities Act, 1955 has been enacted to provide, in the interests of the general public, for the control of the production, supply and distribution of, and trade and commerce in certain commodities. Section 3 of the Act empowers the Central Government to control production, supply , distribution, etc. of essential commodities. Section 3(1) and Section 3 (2) (sofar as relevant for the present case) is quoted as below : “3. Power to control production, supply, distribution, etc, of essential commodities,— (1) 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 trade commerce therein. (2) Without prejudice to the generality of the powers conferred by sub-section (1), an order made thereunder may provide,— (a) For regulating by licences, permits or otherwise the production or manufacture of any essential commodity; (b) For bringing under cultivation any waste or arable land whether appurtenant to a building or not for the growing thereon of food crops generally or of specified food-crops, and for otherwise maintaining or increasing the cultivation of food crops generally, or of specified food-crops; (c) For controlling the price at which essential commodity may be bought or sold; (d) For regulating by licences, permits or otherwise the storage, transport distribution, disposal acquisition, use or consumption of, any essential commodity; (e) For prohibiting the withholding from sale of any essential commodity ordinarily kept for sale; (f) For requiring any person holding in stock, or engaged in the production, or in the business of buying or selling, of any essential commodity,— (a)..................... (b)................... Explanation 1.—An order made under this clause in relation to foodgrains, edible oilseeds or edible oilseeds or edible oils, may, having regard to the estimated production, in the concerned area, of such foodgrains edible oil-seeds and edible oils, fix the quantity to be sold the producers in such area and may also fix, or provide for the fixation of such quant on a graded basis, having regard to the aggregate of the area held by, or under cultivation of the producers. Explanation 2.—For the purpose of this clause, “production” with its grammatical variations and cognate expressions includes manufacture of edible oils and sugar.” 15. Section 3 (3) provides that where any person sells any essential commodity in compliance with an order made with reference to clause (f) of sub-section (2), there shall be paid to him the price therefor as provided thereunder. 16. In exercise of powers under Section 3 of the Essential Commodities Act, 1955, the Sugar (Control) Order, 1966 has been issued vide notification dated 10.6.1966. Clauses 4 and 5 which are relevant for the present case are quoted as below : “4. Power to restrict sale, etc. 16. In exercise of powers under Section 3 of the Essential Commodities Act, 1955, the Sugar (Control) Order, 1966 has been issued vide notification dated 10.6.1966. Clauses 4 and 5 which are relevant for the present case are quoted as below : “4. Power to restrict sale, etc. of sugar by producers or importers.—The Central Government may direct that no producer or importer shall sell or agree to sell or otherwise dispose of, or deliver or agree to deliver any kind of sugar or remove any kind of sugar from the bonded godowns of the factory in which it is produced or from the warehouses of the importers except under and in accordance with a direction issued in writing by the Central Government : Provided that this clause shall not affect the pledging of such sugar by any producer or importer in favour of any scheduled bank as defined in clause (e) of Section 2 of the Reserve Bank of India Act, 1934 (2 of 1934) or any corresponding new bank constituted under Section 3 of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 (5 of 1970) and no such bank shall sell the sugar pledged to it except under and in accordance with a direction issued in writing by the Central Government. 5. Powers to issue directions to producers and dealers.—The Central Government may, from time to time, by general or special Order, issue to any producer or importer) or recognized dealer, or any class of producers **(or importers) or recognized dealers, such directions regarding the production, maintenance of stocks, storage, sale, grading, packing, marking, weighment, disposal, delivery and distribution of any kind of sugar as it may deem fit.” 17. Another order which is relevant in the present case is the Levy Sugar Supply (Control) Order, 1979 issued in exercise of the powers under Section 3 of the Essential Commodities Act, 1955. Clause 2 (1) of the 1979 Order is quoted as below : “2. Another order which is relevant in the present case is the Levy Sugar Supply (Control) Order, 1979 issued in exercise of the powers under Section 3 of the Essential Commodities Act, 1955. Clause 2 (1) of the 1979 Order is quoted as below : “2. Power to Issue Directions to Supply Levy Sugar.—(1) The Central Government may, from time to time, by order issue directions to any producer or Importer or recognised dealer to supply levy sugar of such type or grade, in such quantities and from such place of manufacture or storage— (a) to such persons or organisations, in such areas or markets, or (b) to such State Government/Union Territory Administration, as may be specified in the Order.” 18. The Essential Commodities Act, 1955 has been amended by the Essential Commodities (Amendment) Act, 2003 by which Section (3-D) and Section (3-E) have further been substituted in the Act. Section (3-D) and (3-E) are quoted herein below : “(3-D) The Central Government may direct that no producer, importer or exporter shall sell or otherwise dispose of, or deliver any kind of sugar or remove any kind of sugar from the bonded godowns of the factory in which it is produced, whether such godowns are situated within the premises of the factory or outside, or from the warehouses of the importers or exporters, as the case may be, except under and in accordance with the direction issued by the Government : Provided that this sub-section shall not affect the pledging of such sugar by any producer or importer in favour of any schedule bank as defined in clause (e) of Section 2 of the Reserve Bank of India Act, 1934 (2 of 1934) or any corresponding new Bank constituted under Section 3 of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 (5 of 1970), so, however, that no such bank shall sell the sugar pledged to it except under and in accordance with a direction issued by the Central Government. (3-E) The Central Government may, from time to time, by general or special order, direct any producer or importer or exporter or recognised dealer or any class of stocks, storage, sale, grading, packing, marking, weighment, disposal, delivery and distribution of any kind of sugar in the manner specified in the direction." 19. (3-E) The Central Government may, from time to time, by general or special order, direct any producer or importer or exporter or recognised dealer or any class of stocks, storage, sale, grading, packing, marking, weighment, disposal, delivery and distribution of any kind of sugar in the manner specified in the direction." 19. The submission which has been much pressed by the petitioner is that vide notification dated 1.3.2002 in exercise of the power under Section 3(1) and 3(2) (f) of the Act Central Government had directed that every domestic producer and importer of sugar shall sell ten per cent of the sugar produced to the Central Government. It is relevant to extract the notification dated 1.3.2002 which is as follows : “G.S.R. 157(E).—In exercise of the powers conferred by sub-section (1) read with clause (1) of sub-section (2) of Section 3 of the Essential Commodities Act, 1955 (10 of 1955), and in supersession of the Order of the Government of India in the Ministry of Consumer Affairs, Food and Public Distribution (Department of Feed and Public Distribution) number G.S.R. 42(e), dated the 30th January, 2001, except as respects things done or omitted to be done before such supersession, the Central Government hereby directs that every domestic producer and importer of sugar shall sell ten per cent of the sugar produced or imported, as the case may be, with effect from the 1st day of March, 2002, to the Central Government or as directed by the Central Government under the Levy Sugar Supply (Control) Order ,1979, as amended from time to time." 20. The submission is that levy sugar as required by the Central Government by virtue of Section 3 (2) (f) of the Essential Commodities Act, 1955 being only 10%, the Central Government is not empowered to take any further levy sugar from the petitioners. It is contended that 10% is the ceiling of the levy sugar which cannot be violated by the Central Government. Elaborating the submission, it has been further contended that no power has been referred to by the respondents in the counter affidavit or in the impugned order empowering the Central Government to convert the free sale sugar into levy sugar hence, the order is without jurisdiction. The above submission is in two parts. Elaborating the submission, it has been further contended that no power has been referred to by the respondents in the counter affidavit or in the impugned order empowering the Central Government to convert the free sale sugar into levy sugar hence, the order is without jurisdiction. The above submission is in two parts. Firstly the ceiling of 10% as fixed by the notification dated 1.3.2002 cannot be violated nor levy can be enhanced from 10% and consequently there is no power in the Central Government to convert the free sale sugar into levy sugar. 21. Section 3(1) is source of power of the Central Government and sub Section (2) is only illustrative of the general power conferred by sub-section (1). Sub-section (2) begins with the word “without prejudice to the generality of the powers conferred by sub-section (1)....,” more so sub-section (2) (f) (a) of Section 3 empowers the Central Government to require any person “to sell the whole or a specified part of the quantity...”. It is true that by notification dated 1.3.2002 10% quantity has been specified, which is required to be given by the petitioners as levy sugar but the power to require any person to sell, the whole or specified part of the quantity does not exhaust by issuance of the notification dated 1.3.2002. The power to require levy of sugar can be exercised by the Central Government up to the entire quantity. The point can be illustrated by taking a hypothetical case. For example, a situation has arisen that unless the entire stock of the sugar produced is not requisitioned by the Central Government, it is not possible to distribute the sugar in fair price shops run in the State. Can the Central Government not direct for sugar factories to sell the entire sugar to the State answer obviously shall be ‘Yes’. The Section itself empowers the Central Government to require the whole or specified part of the quantity. Thus, mere fact that notification has been issued referring to Section 3(2)(f) of the Essential Commodities Act, 1955 requiring only 10% of the sugar produce, there is no fetter on the power of the Central Government to require any further sugar as a levy sugar. Thus, mere fact that notification has been issued referring to Section 3(2)(f) of the Essential Commodities Act, 1955 requiring only 10% of the sugar produce, there is no fetter on the power of the Central Government to require any further sugar as a levy sugar. Clause 2 of the Levy Sugar Supply (Control) Order, 1979 empowers the Central Government to issue direction to any producer or importer or recognised dealer to supply levy sugar of such type or grade, in such quantities and from such place of manufacture or storage as may be specified in the order. Explanation (2) (1) explains the “Levy sugar” as sugar requisitioned by the Central Government under clause (f) of sub-section (2) of Section 3 of the Essential Commodities Act, 1955. Sub-section (5) of Section 3 is relevant in this context which is quoted herein below : “(5) An order made under this Section shall,— (a) In the case of an order of a general nature or affecting a class of persons, be notified in the Official Gazette; and (b) In the case of an order directed to a specified individual be served on such individual,— (i) By delivering or tendering it to that individual; or (ii) If it cannot be so delivered or tendered, by affixing it the outer door or some other conspicuous part of the premises in which that individual lives, and a written report thereof shall be prepared and witnessed by two persons living in the neighborhood.” 22. Sub-section (5) contemplates two categories of the order. One category of Order is of general nature or affecting a class of persons, the same is required to be notified in the official gazette and an an order directed to a specified individual can be served on such individual by delivering or tendering it to that individual. All the orders which are passed under Section 3 are not required to be published in the gazette. The notification dated 1.3.2002 was an order of general nature affecting a class of persons hence, the same was notified. The notification dated 1.3.2002 was with regard to compulsory levy against every producers. All the orders which are passed under Section 3 are not required to be published in the gazette. The notification dated 1.3.2002 was an order of general nature affecting a class of persons hence, the same was notified. The notification dated 1.3.2002 was with regard to compulsory levy against every producers. The order impugned which are orders directed against a specified individual can very well be said as order issued by the Central Government in exercise of power under Section 3 even if the quantity of levy sugar exceed to 10% of the levy sugar as required by notification dated 1.3.2002. The orders cannot be said to violate any provision of Section 3. 10% of the sugar produce is compulsory levy which is imposed on every producer but the levy sugar which has been converted by the impugned order can be read to be addition to the compulsory levy which has been already directed vide notification dated 1.3.2002. Thus, the submission of the petitioner that the impugned order violates Section 3, has no substance. The orders impugned are order passed by the Central Government in furtherance of the object of the Act. The order can be read as restraining the respondents from selling the sugar as free sale sugar and is fully covered by four corners of the Act. 23. There is one more reason to uphold the power of the Central Government to issue the impugned order converting the free sale sugar in the levy sugar which flows from sub-section (3-E) and sub-section (3-D) of Section 3 added by Act No. 37 of 2003. Section (3-D) gives power to the Central Government to direct a producer to dispose of or delivery any kind of sugar or remove any kind of sugar from the godowns in accordance with the direction issued by the Government. Section (3-D) thus clothe the Central Government with the power to direct a producer not to dispose of the free sale sugar and to dispose it as a levy sugar. Section (3-E) is to the same effect. Thus, the Central Government has power to regulate the sale of the sugar by exercising its power under Section (3-D) and (3-E) restraining the sale of specified quantity of free sale sugar and directing sale into levy sugar when the petitioner failed to sell according to the monthly release quota. 24. Section (3-E) is to the same effect. Thus, the Central Government has power to regulate the sale of the sugar by exercising its power under Section (3-D) and (3-E) restraining the sale of specified quantity of free sale sugar and directing sale into levy sugar when the petitioner failed to sell according to the monthly release quota. 24. It is useful to refer the judgment in the case of K. Ramanathan v. State of Tamil Nadu and another, AIR 1985 SC 660 . In the said case challenged was made to clause 3 (1-A) of the Tamil Nadu Paddy (Restriction on Movement) Order, 1982 issued by the State Government under Section 3 of the Essential Commodities Act, 1955 Restriction was imposed by the said order. Inspite of their being 50% levy, the State Government issued a monopoly procurement scheme of paddy. Prohibition was also imposed on transportation outside the places notified under clause 3 of Tamal Nadu Paddy & Rice (Restriction of Rates) Order, 1974. Further amendment was made in sub-clause (1-A)of clause 3 prohibiting movement outside the specified districts. The orders were challenged by means of the writ petition in the Madras High Court. One of the contentions was that word ‘regulation’ cannot be read as prohibition and the clause 3(1-A) puts a complete prohibition which was not permissible. It was further contended that although Section 3(1) of the Essential Commodities Act, 1955 contains both the words ‘regulating or prohibiting’ but Section 3(2) (d) only contains the word ‘regulating’ and the relevant order issued by the State Government was in exercise of power under Section 3(2)(d) hence prohibition could not have been imposed. Repelling the submissions following was laid down in paragraph 11 of the judgment : “Learned counsel for the appellant however strenuously con tends that the delegation of powers by the Central Government under Section 5 of the Act must necessarily be in relation to ‘such matters’ and subject to ‘such conditions’ as may be specified in the notification. The whole attempt on the part of the learned counsel is to confine the scope and ambit of the impugned order to cl. (d) of sub-section (.) of g. 3 of the Act which uses the word ‘regulating’ and take it out of the purview of sub-section (1) of Section 3 which uses the words ‘regulating or prohibiting’. The whole attempt on the part of the learned counsel is to confine the scope and ambit of the impugned order to cl. (d) of sub-section (.) of g. 3 of the Act which uses the word ‘regulating’ and take it out of the purview of sub-section (1) of Section 3 which uses the words ‘regulating or prohibiting’. That is not a proper way of construction of sub-sections (l) and (2) of Section 3 of the Act in their normal setting. The restricted construction of Section 3 contended for by learned counsel for the appellant would render the scheme of the Act wholly unworkable. As already indicated, the source of power to make an order of this description is sub-section (l) of Section 3 of the Act and sub-section (2) merely provides illustration for the general powers conferred by sub-section (l). Sub-section (2) of Section 3 of the Act commences with the words Without prejudice to the generality of the powers conferred by sub-section (1)’. It is manifest that sub-section (2) of Section 3 of the Act confers no fresh powers but is merely illustrative of the general powers conferred by sub-section (1) of Section 3 without exhausting the subjects in relation to which such powers can be exercised.” 25. The Apex Court also noticed the predominant object of the Act and it was held that Essential Commodities Act, 1955 was a piece of socio-economic legislation enacted in the national interest to secure control over the production, supply and distribution of essential commodities. Following was laid down in paragraph 22 of the judgment : “The predominant object of the Act, as reflected in the preamble is to provide, in the interests of the general public, for the control of the production, supply and distribution of, and trade and commerce in, certain essential commodities. It is a piece of socioeconomic legislation enacted in the national interest to secure control over the production, supply and distribution of, and trade and commerce in, essential commodities. The various Control Orders issued by the Central Government under sub-section (1) of Section 3 of the Act or by the State Government under Section 3 read with Section 5 have introduced a system of checks and balances to achieve the object of the legislation i.e. to ensure equitable distribution and availability of essential commodities at fair prices. The various Control Orders issued by the Central Government under sub-section (1) of Section 3 of the Act or by the State Government under Section 3 read with Section 5 have introduced a system of checks and balances to achieve the object of the legislation i.e. to ensure equitable distribution and availability of essential commodities at fair prices. Special public interest in an industry e.g. that it is engaged in the production of a commodity, vitally essential to the community, may justify the regulation of its production, supply and distribution and its trade and commerce, provided such regulation is not arbitrary and has a rational nexus with the object sought to be achieved." 26. The monthly purchase of paddy by the Government apart from compulsory levy was also held to be within the power of the Government for distribution. Following was laid down in paragraph 26 : “Surely when a part of the country is verging on conditions of acute shortage or even famine, it is expected of the government to procure foodstuffs from surplus areas and transport the same for distribution in deficit areas. In the State of Tamil Nadu like some other States, the two things most essential for the sustenance of human life are rice and paddy. It is amply borne out from the material on record that due to the failure of the southwest and north-east monsoons in successive years, and the consequent poor rainfall, there was a steep fall in production of paddy. In the circumstances, the State Government had no other alternative not only to reimpose compulsory levy on the producers of paddy to the extent of 50%, but also to introduce a scheme for a monopoly purchase of paddy by the Government with a view to build up its buffer stock for distribution through the public distribution system throughout the State. If one part of the State is faced with a famine or even acute shortage of foodstuffs, it is not unreasonable for the Government to acquire foodstuffs from the surplus areas and distribute the same in areas where they are most needed. The source of power to issue an order under cl. If one part of the State is faced with a famine or even acute shortage of foodstuffs, it is not unreasonable for the Government to acquire foodstuffs from the surplus areas and distribute the same in areas where they are most needed. The source of power to issue an order under cl. (d) of sub-section (2) of Section 3 of the Act being relatable to the general powers of the Central Government under sub-section (1) of Section 3, there is no reason for us to give a restricted meaning to the word ‘regulating’ in cl. (d) of sub-section (2) of Sections 3 of the Act so as not to take in ‘prohibiting’." 27. From the above discussion, it is clear that by virtue of Section 3 (3-D) and (3-E) , the Central Government is fully empowered to direct the mode and manner for sale of sugar including free sale sugar. In the facts of the present case, when the petitioners failed to dispose of monthly quota of free sale sugar as was released by the Central Government, the conversion of the quota which could not be disposed of as a levy sugar is fully justified. It is also relevant to note that in the order by which monthly quota was released, there was specific condition that quota which remained unsold undisposed of after expiry of the validity period shall stand converted into levy sugar. It is relevant to quote the condition No. 3 of the release order dated 29.1.2009, copy of which has been filed as Annexure-2 to the writ petition No. 28612 of 2009 : “The delivery/despatch of the aforesaid quantity of sugar shall commence with effect from 1.2.2009 and the delivery/despatch of the entire quantity shall be completed by 28.2.2009. Further the sugar factory shall sell and dispatch entire quantity released to them for the month of Feb. 09, within the prescribed validity period of the order i.e. upto 28.2.2009 and any qty, which remain unsold/undispatched after the expire of the validity period of the order shall stand converted into levy sugar stocks” 28. Further the sugar factory shall sell and dispatch entire quantity released to them for the month of Feb. 09, within the prescribed validity period of the order i.e. upto 28.2.2009 and any qty, which remain unsold/undispatched after the expire of the validity period of the order shall stand converted into levy sugar stocks” 28. As noted above sub-section (3-E) of Section 3 of the Essential Commodities Act, 1955 fully empowers the Central Government to issue a general or special order directing any producer or importer or exporter to take action regarding production, maintenance of stocks, storage, sale, grading, packing, making, weighment, disposal, delivery and distribution of any kind of sugar in the manner specified in the direction. The release of the monthly quota providing for specified quantity of sugar is fully covered by the powers of the Central Government under sub-section (3-E) of Section 3 of the Essential Commodities Act, 1955. In writ petition No. 44371 of 2009, copy of the order dated 29.9.2009 has been filed as Annexure-10 to the writ petition by which the validity period of September, 2008 non levy sugar (free sale sugar) was extended up to 15.10.2008 which was earlier fixed as 1.9.2008 to 30.9.2008. There is specific reference of sub-section (3-E) of Section 3 while issuing the said order. The relevant extract of the order dated 29.9.2008 is as follows : “In exercise of the powers conferred by sub-section (3E) of Section 3 of the Essential Commodities Act, 1955 read with the provisions of the Sugar (Control) Order, 1966 and the Notification of the Govt. of India in the erstwhile Ministry of Agriculture and Irrigation (Deptt. Of Food) No. GSR 462(E)/Ess. Comm./Sugar dated the 30th July, 1979, I V.K. Agggarwal, Director (Cost), Directorate of Sugar, Department of Food and Public Distribution hereby extend the validity period of September, 2008 Non-Levy (Free Sale) quota released vide Release Order Nos. Sc-2/2007-08 /FS/O/September,2008/N, SC-2/2007-08/FS/O September, 2008/G, and SC2/2007-08/FS/O September 2008 A/1 each dated 1st September, 2008 upto 15th October, 2008." 29. Apart from the power given in paragraphs 4 and 5 of the Sugar (Control) Order, 1966 power under sub-section (3-E) can very well be exercised for issuing direction fixing monthly quota of non levy sugar. The direction can also contain a condition that failure to dispose of any part of the quota shall result in conversion of non levy as levy sugar. The direction can also contain a condition that failure to dispose of any part of the quota shall result in conversion of non levy as levy sugar. As noticed above, monthly quota contains such condition as has been quoted from the order dated 29.9.2009 (extracted above). The statement of objects and reasons of Act No. 37 of 2003 by which Section (3-E) was added in the Act is relevant, which is quoted as below : “Prefatory Note-Statement of objects and Reasons.—The Essential Commodities Act, 1955, inter alia, provides that, for maintaining or increasing supplies of essential commodities or for securing their equitable distribution and availability at fair prices, the Central Government may issue orders regulating or prohibiting the production, supply and distribution of such essential commodities and trade and commerce therein so as to achieve the objectives of the Act.” 30. While interpreting the provisions of Section 3, the power given to Central Government has to be liberally construed as has been laid down by the Apex Court in the case of P.P. Enterprises etc., etc. v. Union of India and others, AIR 1982 SC 1016 . The provisions of Section 3(1) and Section 3(2) (d) of Essential Commodities Act, 1955 came up for consideration before the Apex Court. Clause (d) of Section (2) uses the word “storage and distribution”. By an order dated 14.7.1980 in exercise of power under clause 5 of the Sugar (Control) Order, 1966 Central Government issued direction putting restrictions on keeping stock in Calcutta and extended area. The challenge was led to the order contending that the order is not covered by Section 3 of the Essential Commodities Act, 1955. Repelling the submission following was laid down in paragraph 6 : “The language of Section 3 (1) coupled with clause (d) of sub-section (2) of Section 3 is wide enough to cover the impugned order. Section 3 (1) authorises the Central Government to pass an order for regulating or prohibiting the production, supply and distribution of an essential commodity and trade and commerce therein if it is of opinion that it is necessary or expedient to do so for securing the equitable distribution and availability. at a fair price of the essential commodity. The same power has been made more specific by clause (d) of sub-section (2) of Section 3, which provides for regulating by licences. at a fair price of the essential commodity. The same power has been made more specific by clause (d) of sub-section (2) of Section 3, which provides for regulating by licences. permits or otherwise, the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity. Sugar, which term includes khandsari, is an essential commodity and over the years it has become a scarce commodity. In the public interest it became essential to pass the impugned order to secure its equitable distribution and availability at fair prices. To that end it became necessary to prevent hoarding and black-marketing. The expression “to secure their equitable distribution and availability at fair prices” is wide enough to cover the impugned order. Likewise, the expression “storage and distribution” used in clause (d) of sub-section (2) of Section 3 should be given a liberal construction to give effect to the legislative intent of public welfare. So construed, the impugned order is fully protected and is not ultra vires Section 3 of the Essential Commodities Act, 1955.” 31. Another judgment of the Apex Court which is relevant to be noted is in the case of M/s Laxmi Khandsari etc. etc. v. State of U.P. and others, AIR 1981 SC 873 . In the said case, the State of U.P. exercising power under clause (8) of the Sugar Cane (Control) Order 1966 issued direction that no owner of power crusher (other than those vertical power crushers which manufacture their own fields) or a Khandsari unit or any agent of such owner shall in any reserved area, of any Sugar Mill work the Power Crusher, or the Khandsari Unit prior to December 1, 1980. The said order was challenged on the ground that it completely prohibits running of the Khandsari Unit, which is not in accord with Section 3 of the Essential Commodities Act, 1955 or with the Control Order. The Apex Court in paragraph 17 held that the restrictions may be partial, complete, permanent or temporary. Following was laid down in paragraphs 17 and 18. “17. Further, restrictions may by partial, complete, permanent or temporary but they must bear a close nexus with the object in the interest of which they are imposed. The Apex Court in paragraph 17 held that the restrictions may be partial, complete, permanent or temporary. Following was laid down in paragraphs 17 and 18. “17. Further, restrictions may by partial, complete, permanent or temporary but they must bear a close nexus with the object in the interest of which they are imposed. Sometimes even a complete prohibition of the fundamental right to trade may be upheld if the commodity in which the trade is carried on is essential to the life of the community and the said restriction has been imposed for a limited period in order to achieve the desired goal. 18. Another important consideration is that the restrictions must be in public interest and are imposed by striking a just balance between the deprivation of right and the danger or evil sought to be avoided. Thus freezing of stocks of food-grains in order to secure equitable distribution and availability on fair prices have been held to be a reasonable restriction in the cases of Narendra Kumar v. The Union of India, (1960) 2 SCR 375 : ( AIR 1960 SC 430 ); Diwan Sugar and General Mills (P) Ltd. v. The Union of India, (1959) 2 SUPP SCR 123 : AIR 1959 SC 626 and State of Rajasthan v. Nath Mal, 1954 SCR 982 : AIR 1954 SC 307 .” 32. The challenge to the impugned notification was also repelled by holding following in paragraphs 81 and 82: “81. The impugned notification having been passed under Section 3 of the Act, it fulfils all the conditions contained therein, viz., it is expedient for maintaining or increasing the supply of an essential commodity namely, sugar, which is included in clause (e) of Section 2 of the Act of 1955 and it regulates the supply and distribution of that essential commodity and the trade and commerce therein. 82. Having regard, therefore, to the facts and circumstances proved in this case, it cannot be said that either the Control Order or the impugned notification is against the tenor and spirit of Section 3. On the other hand, it is manifestly clear from the circumstances disclosed above that it is in pursuance of the aim and object for which Section 3 was enshrined in the Act of 1955 that the Control Order and the notification were promulgated. On the other hand, it is manifestly clear from the circumstances disclosed above that it is in pursuance of the aim and object for which Section 3 was enshrined in the Act of 1955 that the Control Order and the notification were promulgated. The contention of the learned counsel for the petitioners on this score is accordingly overruled.” 33. Sub-section (3-E) of Section 3 contemplates issuance of direction by a general or special order to take action regarding production, maintenance of stocks, storage, sale, grading, packing, marking, weighment, disposal, delivery and distribution of any kind of sugar in the manner specified in the direction. When an order fixing quota for monthly release has been passed in exercise of power under sub-section (3-E) of Section 3 of the Act, the same can very well contain direction that in the event any quantity is left out from being disposed of the monthly quota, the same shall be converted as levy sugar. The petitioners were bound by such directions and they cannot be heard in saying that the said part of the direction by which it was provided that undisposed of quota shall be converted into levy sugar is without jurisdiction or without authority. The authority is clearly under sub-section (3-E) of Section 3 of the Act itself. In view of the foregoing discussion, the contention of the petitioner that Central Government had no authority to convert the free sale sugar into levy sugar by the impugned order, cannot be accepted. 34. The petitioners have relied on two interim orders passed by the Lucknow Bench of this Court in support of their submission by which interim orders as an interim measure, it was directed that free sale sugar shall not be converted into levy sugar. The said orders are only interim orders and do not contain any ratio which can be followed in this case. These writ petitions being finally decided, the said order does not help the petitioner in any manner. 35. The said orders are only interim orders and do not contain any ratio which can be followed in this case. These writ petitions being finally decided, the said order does not help the petitioner in any manner. 35. Another judgment of the Bombay High Court relied by the petitioners is the judgment dated 10.11.1981 in the case of Shri Jagdamba Sahakari Sakhar Karkhana Ltd. v. State of Maharashtra and others (Criminal Application No. 1472 of 1980) , copy of which has been filed as Annexure 23 to the writ petition No. 44371 of 2009, was a judgment in a case where in an order was passed by the Central Government on 4.6.1979 directing that no producers of sugar shall sell or otherwise dispose of or deliver sugar or remove the same from the bonded godown of the factory except under and in accordance with the directions issued by the Central Government in that behalf. Another order dated 4.6.1979 was issued by the Deputy Director permitting the petitioner to sell 897.5 tonnes of sugar in open market. There was further condition that such sugar be sold by 30.6.1979. Application for extension of period was made but the application was rejected. A first information report was lodged for an offence committed under Section 7 of the Essential Commodities Act, 1955 read with Clause 5 of the Sugar (Control) Order, 1966. The order for process was issued by the Magistrate which was challenged in criminal Misc. Application. The writ petition was allowed and process issued against the petitioner was set aside. The order under challenge in the Criminal Misc. Application was issue of process. The learned Judges took the view that the order directing for selling the quantity before 30.6.1979 was an arbitrary order and there was no capacity in the Officer to issue any such order. From the said judgment, it is not clear as to whether there was any condition to sell the sugar by particular date fixed by the Central Government rather the judgment indicates that said condition was incorporated by the Deputy Director. The said judgment is dated 10.11.1981 much before the amendment of the Essential Commodities Act, 1955 by Act No. 37 of 2003 and in view of the above, the said judgment is clearly distinguishable. 36. The said judgment is dated 10.11.1981 much before the amendment of the Essential Commodities Act, 1955 by Act No. 37 of 2003 and in view of the above, the said judgment is clearly distinguishable. 36. Two further orders dated 27.7.2009 and 4.8.2009 of the Bombay High Court in the case of Shri Siddheshwar Sahakari Sakhar Karkhana Ltd. v. Chief Director (Sugar) Govt. of India and another (writ petition No. 5120 of 2009) have been relied by learned Counsel for the petitioners, copy of which has been filed as Annexure-24 to the writ petition No. 44371 of 2009). The said orders were also only interim orders. A perusal of paragraph 3 of the order dated 4.8.2009 indicates that inspite of opportunity given to the counsel for the respondents to get instructions from the Chief Director of Sugar, no instructions could have been received so as to oppose the interim application. The Division Bench held that prima facie no such power was found with the Chief Director to convert the free sale sugar into levy sugar. The Division Bench in the Bombay High Court has not adjudicated the issue and as noticed above, instructions from the Government were also not received when the order was passed. The observations made by the Division Bench were based only on prima facie satisfaction and no concluded opinion has been expressed which can be said to be a precedent. 37. Thus on the above reasoning the Central Government cannot be said to lack any jurisdiction or power to convert the free sale sugar, which remain undisposed of unsold as a levy sugar. 38. In writ petition No. 28230 of 2009 orders dated 7.3.2006, 9.3.2006 and 5.3.2009 have been challenged. By order dated 9.3.2006 lapsed quantity of free sale sugar for the month of February, 2006 was converted into levy sugar. The petitioner filed a writ petition challenging the said order in this Court being writ petition No. 672006 of 2006 which was disposed by the Division Bench of this Court by order dated 11.12.2006 requesting the Chief Director Government of India to consider the grievance of the petitioner. Division Bench however, clarified that no opinion was expressed on mereits of the case. In pursuance of the order of this Court, the grievance of the petitioner was considered and by order dated 5.3.2009, the representation of the petitioner has been rejected. Division Bench however, clarified that no opinion was expressed on mereits of the case. In pursuance of the order of this Court, the grievance of the petitioner was considered and by order dated 5.3.2009, the representation of the petitioner has been rejected. The order dated 5.3.2009 considered the grounds raised by the petitioner in the representation. The said order was passed after giving personal hearing also to the representative of the petitioner. We are satisfied that no error has been committed by the Chief Director Sugar in rejecting the representation of the petitioner. There is no infirmity in the order dated 5.3.2009, which may warrant any interference by this Court in writ jurisdiction. 39. Now the submissions raised in writ petitions of group ‘B’ are to be considered. In the writ petitions included in group ‘B’ challenge is to the order of the Central Government by which free sale sugar has been converted into levy sugar due to failure of the petitioners to dispose of the monthly buffer stock which was earlier directed to be maintained under the orders of the Central Government. The Sugar Development Fund Act, 1982 has been enacted to provide for the financing of activities for development of sugar industry and for matters connected therewith or incidental thereto. Rules have been framed under the said Act namely; Sugar Development Fund Rules, 1983. Under Chapter VIII of the Rules, Rule 19 provides for buffer stock. Rule 19 (1) provides that the Central Government may having regard to the stock of sugar held with the sugar undertakings, the prospects of sugar productions, the requirement of sugar for consumption within the country and exports and such other relevant factors as may be considered necessary, decide from time to time, the quantity of sugar to be maintained as buffer stock. Rule 19(1) (2) (3) (4) which are relevant are quoted herein below : 19. (1) The Central Government, may, having regard to the stock of sugar held with the sugar undertakings, the prospects of sugar productions, the requirement of sugar for consumption within the country and exports and such other relevant factors as may be considered necessary, decide from time to time, the quantity of sugar to be maintained as buffer stock. (1) The Central Government, may, having regard to the stock of sugar held with the sugar undertakings, the prospects of sugar productions, the requirement of sugar for consumption within the country and exports and such other relevant factors as may be considered necessary, decide from time to time, the quantity of sugar to be maintained as buffer stock. (2) The sugar maintained in the buffer stock shall conform to the grade laid down from time to time by the Indian Standards Institution referred to in clause (e) of Section 2 of the Indian Standards Institution (Certification Marks) Act 1952 (36 of 1952) and shall be of such grade as may be decided by the Central Government. (3) The Central Government or the Chief Director may, from time to time, require an occupier of the sugar factory to set apart such quantity and grade of sugar, pertaining to such sugar year or years, as may be necessary for the purpose of buffer stock : Provided that the share of each occupier shall be on the basis of the production of the sugar undertaking in a particular sugar year. (4) Every occupier of a sugar factory shall set apart sugar so required, and shall store it in separate and distinctly identifiable stocks and lots and separate godowns within the premises of the sugar undertaking : Provided that the Central Government may, in exceptional cases and for reasons to be recorded in writing, grant exemption to an occupier of a sugar factory from the operation of this rule.” 40. The Central Government by an order dated 1.8.2007 created a buffer stock of 30 lacs tonnes for period 2.8.2007 to 31.7.2008. By subsequent order dated 10.8.2007 factorywise allocation of buffer stock of 30 lacs tonnes was made. Vide gazette notification dated 20.4.2007 buffer stock of 20 lacs tonnes for the period of one year from 1.5.2007 to 30.4.2008 was created. By order dated 20.8.2007, the finalisation of allocation factorywise was completed of the buffer stock. By an order dated 16.4.2008 the Central Government directed for dismantling of the buffer stock of 20 lacs tonnes w.e.f. 1.5.2008 with permission to sale without release order during period 2007-08 from 1.5.2008 onwards till 30.9.2008. Another order dated 14/11th July, 2008 was issued dismantling 30 lacs tonnes of buffer stock w.e.f. 1.8.2008. By an order dated 16.4.2008 the Central Government directed for dismantling of the buffer stock of 20 lacs tonnes w.e.f. 1.5.2008 with permission to sale without release order during period 2007-08 from 1.5.2008 onwards till 30.9.2008. Another order dated 14/11th July, 2008 was issued dismantling 30 lacs tonnes of buffer stock w.e.f. 1.8.2008. It is relevant to quote the order dated 14/11th July, 2008, which is to the following effect : “To Chief Executives of all sugar mills Subject : Dismantling of buffer stock of 30 lac tonnes with effect from 1.8.2008 permission to sell it without release order reg. Sir, I am directed to inform you that the Central Government has decided to dismantle the buffer stock of 30 lac tonnes, which was created for a period of one year i.e. 01.08.2007 to 31.7.2008 vide order dated 1st August, 2007 on its due date i.e. 1.08.2008. The Central Government has further decided to allow sugar factories to sell 25% of the stock kept as buffer out of 30 lac tonnes in the domestic market in two months of its dismantling i.e. from 1st August 2008 to 30th September, 2008 and the remaining 75% at any point of time during 2008-09 sugar season commencing from 1st October, 2008 without the requirement of release orders from the Directorate of sugar for either quantity in the domestic market. You are requested to convey the above decision of the Central Government to all sugar factories of your State/UT. Yours faithfully, Sd/- illegible R.P. Bhagira) Chief Director (Sugar)” 41. The Central Government thereafter issued an order dated 13.10.2008 fixing a time schedule for sale of 75% of the 2nd buffer stock during the period 2008-09. The order dated 13.10.2008 is relevant which is quoted as below : “ORDER 1. Whereas, the Central Government vide Press Releases dated 16th April, 2008, 1st July, 2008 and Orders dated 15th July, 2008 and 8th September, 2008 had directed the producers of sugar to sell the total dismantled buffer stock of 20 lac tonnes and 25% of dismantled buffer stock of 30 lac tonnes by 30.09.08 and the remaining 75% of dismantled buffer stock of 30 lac tonnes by 30.09.09 in the domestic market and any quantity which remains unsold/un-dispatched after the due dates shall stand automatically converted to levy sugar. 2. 2. Whereas, the Central Government vide its Press Release dated 2nd October, 2008, has communicated that the Central Government has reviewed its earlier decision and has decided that the producers of sugar shall sell the remaining 75% of the 2nd buffer stock during 2008-09 sugar season in the domestic market without requirement of release orders from the Directorate of Sugar as per the quarter-wise schedule given below : Quarter Percentage First quarter (Oct-Dec) 30% of 75% Second quarter (Jan-Mar) 20% of 75% Third quarter (Apr-Jun) 30% of 75% Fourth quarter (Jul-Sep) 20% of 75% 3. Now, therefore, I, R.P. Bhagria, Chief Director (Sugar), Directorate of Sugar, Department of Food and Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution, New Delhi, in exercise of powers conferred by Section 3(3E) of the Essential Commodities Act, 1955 read with clause 5 and 10 of the Sugar (Control) Order, 1966, hereby direct the producers of sugar to sell the 75% of the dismantled second buffer stock as indicated in para 2 above and any quantity which remains unsold/undespatched at the end of the quarter shall stand converted to levy sugar and further direct the producers of sugar to submit returns on monthly basis indicating sugar sold out of the dismantled second buffer stock by 10th day of the following month for the period from October, 2008 to September, 2009 in the following format: Monthly report on sale of sugar out of dismantled of buffer stock Name of sugar factory : Short name and Code No: Buffer stock created (in tonnes): Out of 30 lac tonnes......................... 75% of 30 lac tonnes......................... (Qty. in M.Ts) Sl.No. 20%/30% of 75% Month Qty. sold Qty. of second buffer despatched 1. 2. 3 Total Authorized signatory of the sugar factory Place : Name : Date : Designation: (with seal) 4. This order is issued without prejudice to the right of the Government to take action against the defaulting producers of sugar under the penal provisions of the Essential Commodities Act, 1955. (R.P. Bhagria) Chief Director (Sugar) Tele: 011 -2338 3760" 42. A perusal of the order dated 13.10.2008 indicates that the Central Government has exercised its power under Section 3(3-E) of Essential Commodities Act, 1955 for issuing direction for sale/disposal of 75% of the 2nd buffer stock by fixing a time schedule. (R.P. Bhagria) Chief Director (Sugar) Tele: 011 -2338 3760" 42. A perusal of the order dated 13.10.2008 indicates that the Central Government has exercised its power under Section 3(3-E) of Essential Commodities Act, 1955 for issuing direction for sale/disposal of 75% of the 2nd buffer stock by fixing a time schedule. The order further contemplates that the quantity which remaines unsold/undispatched at the end of the quarter shall stand converted to levy sugar. Thus, the direction to sell the sugar in different quarters and further direction that undisposed quantity shall be converted into levy sugar are fully in consonance with the power in the Central Government under Section 3(3-E) of the Essential Commodities Act, 1955 as noted above. Thus, the consequence of undisposed buffer stock for the period as prescribed by the Central Government exercising its power under Section 3 (3-E) are the same as that of undisposed monthly quota fixed by the Central Government in exercise of the powers under Section 3 of the Essential Commodities Act, 1955. 43. Now taking writ petition No. 38034 of 2009, in which writ petition, the order dated 20.4.2009 converting the undisposed of buffer stock of 1804 MT has been challenged. Before the order dated 20.4.2009, a show cause notice was issued to the petitioners dated 5.3.2009 which has been filed as Annexure-2 to the writ petition. The show cause notice clearly contemplates that the quantity to be sold/disposed of from January, 2009 to March, 2009 was 1804 MT whereas quantity sold during the said period was nil. The petitioners claims to have submitted a reply on 14.3.2009 in which it has been mentioned that buffer stock allotted for 1st quarterly has been sold as per schedule. From the letters of the petitioner dated 17.7.2009, 16.6.2009 and 1.7.2009 annexed along with the writ petition from pages 32 to 36 of, it appears that no quantity has been sold from January 2009 to March, 2009. Hence, the order dated 20.4.2009 converting the undisposed quantity of 1804 MT was fully in consonance with the requirement to sell the buffer stock of 30 lacs tones created by letter dated 11/14th July, 2008. Reference to the letter dated 13.10.2008 has also been mentioned in paragraph 6 of the show cause notice. Subsequent order dated 9.7.2009 is an order for lifting the levy sugar which was only a consequential action. Reference to the letter dated 13.10.2008 has also been mentioned in paragraph 6 of the show cause notice. Subsequent order dated 9.7.2009 is an order for lifting the levy sugar which was only a consequential action. No infirmity is found in the order dated 20.4.2009, which may justify any interference by this Court in writ jurisdiction. 44. Coming to writ petition No. 28523 of 2009 by which writ petition, the order dated 17.4.2009 and consequential order dated 1.5.2009 have been challenged. The order dated 17.4.2009 was preceded by a show cause notice dated 6.2.2009. Notice was replied by which the grounds of heavy rain and storms obstructing the roads were taken. Reference of an application for extension of time has also been made in the reply. The Central Government vide its order dated 17.4.2009 has referred to the show cause notice as well as to the reply submitted the petitioner. The Central Government took the view that although there being violation of the orders of the Central Government issued under Sugar (Control) Order 1966 penal consequence under Section 7 has arisen but taking a lenient view the undisposed stock of buffer was converted into levy sugar. 45. A detailed counter affidavit has been filed by Sumant Kumar Srivastava on behalf of the respondents replying to the contents of the writ petition. It has been stated in the counter affidavit that Central Government has been regulating and controlling production, supply and distribution and price of sugar with a view to ensure : “(i) that the consumer gets adequate sugar throughout the year at a fair price; (ii) that the crores of cane growers who provide sugarcance, which is the basic raw material for the sugar industry, received a fair price; (iii) that the sugar producer gets a reasonably fair return from the sale of sugar.” 46. With regard to buffer stock, it has been stated that under the buffer stock subsidy scheme, the sugar factory are reimbursed the interest, insurance and storage cost for the quantity taken on buffer which is to be used for cane price payment as a first charge. It has been stated that the petitioner did not sell and dispatch the entire released quantity in anticipation of higher price of sugar in domestic market in future months. 47. It has been stated that the petitioner did not sell and dispatch the entire released quantity in anticipation of higher price of sugar in domestic market in future months. 47. For the reasons indicated above, we see no lack of jurisdiction in the Central Government in passing the impugned orders converting the undisposed of non levy sugar as levy sugar on account of failure of the petitioner to dispose of the free sale sugar within the time allowed by the Central Government vide its order issued from time to time. 48. In view of the aforesaid, writ petitions which are included in group ‘B’ challenging the order converting the non levy sugar into levy sugar due to their failure to dispose of the specified quantity of sugar within the time allowed by the Central Government, also deserves to be dismissed. 49. Learned counsel for the petitioner have also relied on an order dated 13.6.2008 passed by the Government of India by which order, the representation of the petitioner in writ petition No. 23029 of 2007, Kisan Cooperative Sugar Factory Ltd. Sarsawa v. Union of India and others which was directed to be decided by the Division Bench of this Court vide its order dated 15.5.2009, has been allowed. The Central Government having power to convert non levy sugar into levy sugar on failure of the petitioner to dispose of the sugar within the specified period, does not lack jurisdiction or power to accept the request of any sugar factory/industry either to extend the period for sale or to permit conversion of levy sugar into non levy sugar as has been done in the case of Kisan Cooperative Sugar Factory Ltd. Sarsawa. The orders passed in the case of Sarsawa Sugar Factory was on its own facts. It was noticed in the order that there was communal disturbance and the District Magistrate had requested for extension of period. The Central Government does not lack jurisdiction to consider any representation received from any sugar factory or industry protesting against any order converting non levy sugar as levy sugar. In the result all the writ petitions are dismissed. No order as to costs. ————