M.K. ABDUL RAHEEM Vs. STATE OF KERALA

JUDGEMENT

(1.) This is a Public Interest Litigation filed by two civil contractors undertaking government works seeking a writ of mandamus directing the first respondent to declare 'cement' as an essential article by a notified order and further by a notified order to control the price at which the cement may be bought and sold and also for a direction to the first respondent to reduce the price of cement of the 6th respondent i.e., M/s. Malabar Cements Limited, a company owned by the State Government, to the rate that was prevalent during June, 2014, evident from Ext.P1.

(2.) The material contentions advanced by the petitioners are that the market price of ingredients for manufacturing the cement, like limestone, clay, industrial by-products, such as slag, fly ash etc. have come down drastically. So also, yet another component which may have an effect on the price of cement is cost of transportation and the same has also come down due to the fall in the price of petroleum products. In spite of this, the manufacturing companies i.e., respondents 2 to 9 are periodically increasing the price of cement without any reason. It is further submitted that in 2014, the price of the cement per bag for a 50 kg. bag was Rs.248/- evident from Ext.P1. However, by the second week of February, 2015, it was increased to Rs.362/- evident from Ext.P2 and the petitioners apprehend that all the manufacturing companies have decided to increase the price from March, 2015, and it seems it was declared that the price of cement per bag would be Rs.450/-. That apart, it is submitted that the main source of employment in Kerala is the construction activities and due to the escalation of cement price, the construction activities had to be slowed down and consequential employment in the unorganised sector have also come down considerably. Other legal contentions are also raised by the petitioners to canvas the proposition that the State Government is duty bound to declare the 'cement' as an essential article as per the powers conferred under the Kerala Essential Articles Control Act, 1986 ('the Act, 1986' for brevity)

(3.) It is the specific case of the petitioners that Section 3 of the Act, 1986 confers power to the State Government to control production, supply, distribution etc. of essential articles and Section 3(2)(b) gives specific power for controlling the price at which essential articles may be brought or sold. With the above background, the grounds raised by the petitioners are that the price of cement is being increased by the manufacturing companies jointly forming themselves into a cartel by which the competition in the market is avoided which has no correlation to the cost of production or other incidental charges, including transportation charges. Therefore, the Manufacturing Companies are getting unjust enrichment at the cost of the public, hampering industrial growth. It is also pointed out that the Act was enacted by the State Legislature on realising the requirement for control, of the production and supply, including the market price of commodities, which are not within the purview of the Essential Commodities Act , and by amendment of Essential Commodities Act , 2006, cement and such other articles were removed from the definition of Essential Commodities Act . Therefore, it is the prerogative of the State Government to intervene in the market and control the price of the cement.