UNION OF INDIA Vs. P MARUTHAI PILLAI

JUDGEMENT

(1.) These are two appeals directed against the order of Ramaprasada Rao, J. (as he then was) in WPs. 800 and 1099 of 1971, allowing the same on 12-10-1973. For the purpose of understanding the controversy that arises in the writ appeals, it is necessary to refer to certain facts. Sugar industry is a seasonal industry and almost the entire sugar is produced within a period of five to six months between December and April or May. To ensure equitable distribution of available supplies throughout the year, the sale of sugar by factories is regulated by monthly release in exercise of the powers conferred by Cl. 4 of the Sugar Control Order, 166, made under S. 3 of the Essential Commodities Act, 1955 (Central Act 10 of 1955) (hereinafter referred to as the Act). The policy of the Government with reference to the regulation to be imposed on the sale, distribution and price of the sugar differ from time to time depending upon the total acreage under sugarcane cultivation and the yield of sugarcane as well as quantity of sugar manufactured by the manufacturers. On the last occasion when control on the price and distribution of sugar was imposed was in April 1963, and this was on account of the fall in production of sugar and there was shortage in supply and it was with a view to ensure equitable distribution of available supply of sugar at fair price, and that control continued up to 22-111967. In August, 1967, the Government reviewed its policy with regard to sugar. At that time according to the All India Final Estimate for sugarcane for 1966-67, the extent of the area under sugarcane in 1965-66 which was 68.69 lakh acres came down and as a result of the fall in area, the production was less and there was also a diversion of sugarcane for making ghur and khandsari. The production of sugar declined from 35.1 lakhs tonnes in 1965-66 to 21.5 lakhs tonnes in 1966-67. Taking into account the changed circumstances, the Government of India decided upon a policy of partial decontrol under which some quantity of sugar would be available to the domestic consumer at a controlled price leaving the other portion of the production for sale by the factories in the open market. In view of this changed policy, the Government formulated a particular scheme. One of the aspects of this scheme was to earmark a particular percentage of sugar manufactured by the factories for procurement by the Government itself for distribution among the public at a controlled price leaving the balance to the producers to sell the same in the open market. The percentage of sugar to be procured and the sugar to be sold in the open market by the factories varied, and as far as the years 1968-69 and 1969-70 were concerned, the percentage fixed for procurement was 70 while the other 30 percent was available for free market sale. The Government of India announced the policy for the year 1969-70 and the same was contained in a Press Note which was to the following effect:

(2.) Thus it will be seen that the 70 per cent sugar to be procured by the Government was popularly referred to as levy sugar and the 30 per cent of the sugar was referred to as free market sugar. The Government implemented these policies from time to time through the statutory instruments of the Essential Commodities Act, 1955 and the Orders made by the Government thereunder and the directions issued by the Government with reference to the said Orders as well as independently. The power of procurement referred to in the policy was exercised by means of issuing a direction under Sec. 3(2)(f) of the Act for time to time. Section 3(1) of the Act stated:

(3.) There is no dispute that sugar is one of the essential commodities to which the Act applies. In addition, there is also as we pointed out already the Sugar (Control) Order, 1966, which replaced the Sugar (Control) Order, 1955. It is the power that is contained in the provisions of S. 3(2)(f) of the Act, that was resorted to for the purpose of giving directions to the manufacturers of sugar requiring them to sell a particular quantity of sugar to the Central Government or the State Government, etc., as referred to in that clause.