SIEL LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THE CHALLENGE TO THE RIGHT OF THE FOOD CORPORATION OF INDIA TO ADJUST THE AMOUNTS ON ACCOUNT OF WET AND SHORT SUPPLY OF LEVY SUGAR IN THE PAST FROM THE AMOUNT TO BE PAID AT THE CURRENT PERIOD OF TIME HAS GIVEN RISE TO THESE PETITIONS FILED BY THREE DIFFERENT SUGAR MILLS.

(2.) THE CONTOURS OF THE CONTROVERSY REVOLVE AROUND LEVY SUGAR. SUGAR IS AN ESSENTIAL COMMODITY UNDER THE ESSENTIAL COMMODITIES ACT, 1955 AND UNDER SECTION 3(2)(F) OF THE SAID ACT, THE CENTRAL GOVERNMENT HAS THE POWER TO REQUIRE ANY MANUFACTURER OF SUGAR TO SELL SUGAR PRODUCED BY IT TO THE CENTRAL GOVERNMENT, OR THE STATE GOVERNMENT OR TO A CORPORATION OWNED OR CONTROLLED BY SUCH GOVERNMENT FOR PURPOSES OF MAKING AVAILABLE SUGAR AT FAIR PRICE. THIS IS KNOWN AS THE LEVY SUGAR. THE PRICE PAYABLE FOR SUCH LEVY SUGAR IS FIXED BY THE CENTRAL GOVERNMENT BY AN ORDER MADE UNDER SECTION 3(3C) OF THE SAID ACT. SUCH LEVY SUGAR PRICE IS FIXED FROM YEAR TO YEAR.

(3.) IT IS STATED IN THE PETITION THAT THOUGH THE SUGAR YEAR COMMENCES FROM OCTOBER AND THE LEVY SUGAR PRICE OUGHT TO BE NOTIFIED IN OCTOBER, THE SAME WAS NOT BEING DONE AND FOR 1993-94, THE OLD PRICE OF 1992-93 WAS TEMPORARILY NOTIFIED AS THE PRICE AND THE FINAL PRICE WAS NOTIFIED IN JANUARY, 1994. THUS, ON 18. 3. 1994, THE CENTRAL GOVERNMENT INFORMED THE SUGAR FACTORIES THAT THE DIFFERENTIAL BETWEEN THE TWO NOTIFIED PRICES WOULD BE REIMBURSED AND THE SUGAR MILLS WERE ADVISED TO SUBMIT THEIR CLAIMS FOR REIMBURSEMENT. THIS DECISION WAS COMMUNICATED TO THE FOOD CORPORATION OF INDIA VIDE, TETTER DATED 3.5.1994 ASKING IT TO MAKE PAYMENT FOR REIMBURSEMENT OF THE DIFFERENTIAL SUGAR PRICE. IN PURSUANCE TO THESE, THE SUGAR MILLS LODGED THEIR CLAIMS. HOWEVER, THE FULL AMOUNT WAS NOT REIMBURSED WHICH HAS GIVEN RISE TO THE DISPUTE BETWEEN THE PARTIES. IT IS NOT NECESSARY TO GO INTO THE DETAILS OF THE AMOUNTS BECAUSE THAT IS AN ISSUE NOT TO BE REALLY DECIDED AND IT IS ONLY THE PRINCIPLE WHICH WILL HAVE TO BE SETTLED.