AGARWAL INDUSTRIES Vs. STATE OF U P

JUDGEMENT

(1.) Messers Agarwal Industries, the petitioner, is a firm registered with the Registrar of Firms and Societies. U. P., Lucknow. The Firm has filed the instant two petitions. In the earlier petition the firm alone is the petitioner while m the latter along with the Firm its partners have also been impleaded as petitioners 2 to 7. In both the petitions the petitioner is aggrieved by the provision relating to the assumed percentage of recovery of rice from paddy contained in the U. P. Rice & Paddy (Levy) and Regulation of Trade) Order, 1981, for short Levy Order, issued under the provisions of the Essential Commodities Act, 1955 The petitioner's case is that the percentage has been fixed arbitrarily without taking relevant factors into account. It is the further case of the petitioner that since the percentage of rice recovery has been wrongly fixed, the statutory price of levy rice is also not sustainable. In consequence the petitioner has prayed in the earlier writ petition for the quashing of the relevant sub-clause of Clause 8 of the Levy Order through which the percentage of assumed recovery has been fixed as 68%, and of the notification dated 16-11-1981 through which the price of levy rice has been fixed as; 182.80 per quintal for the season 1981-82. Certain ancillary reliefs have also been claimed. In the latter writ petition the former prayer remains the same but the latter prayer has been substituted with the prayer for quashing of the notification dated 30-11-1982. Annexure no. 4. through which statutory price of levy rice for the season 1982-83 has been fixed as Rs. 193.20 per quintal. Both the petitions have arisen in the circumstances hereinafter indicated.

(2.) The petitioner firm holds a licence under the Rice Milling Industry Regulation Act No. XXI of 1958. It has a milling unit at Hardoi. The petitioner purchases paddy and converts the same into rice. Paddy as well as rice have been notified as Essential Commodities under the Essential Commodities Act, 1955, for short Act. In exercise of the power conferred under Section 3 read with Section 5 of the Act, the State Government issued the Levy Order mentioned above. Sub-clause (d) of Clause 2 of this Order defines the 'Lincensed Miller' as the owner or other person incharge of a rice mill holding licence under the Rice Milling Industry (Regulation) Act, 1958, Sub-clause (1) of Clause 3 requires every licensed miller to sell to the State Government at the notified price the quantity of rice prescribed in this sub-clause. The quantity prescribed is 40% of every variety rice, except scented variety, produced or manufactured in his mill every day. in the case of the districts of Bahraich, Gonda. Pratapgarh, Faizabad Sultanpur and Allahabad, and in the divisions of Gorakhpur and Varanasi. for the rest of the State the percentage is 60%. This 40% and 60% has to be calculated on the basis that the recovery of rice from paddy has been as prescribed in Sub-clause (8). This sub-clause prescribes different percentage for different varieties of rice, Under the 3rd proviso to this sub-clause it is competent for the Controller to accept reduced percentage of levy. But this he cannot do arbitrarily. There are two conditions to be fulfilled. The first is that he must be satisfied that the percentage of recovery was less than the prescribed percentage and the second is that he must pass a reasoned order while accepting the reduced percentage of levy.

(3.) Then come the provisions regarding the price which a miller is entitled to receive for the rice which he has so sold to the State Government. Under Sub-clause (1) of Clause 3 the price is to be notified by the State Government. Clause 7 says that for the rice delivered as levy, payment shall be made at the notified price in accordance with the specifications to be notified by the State Government from time to time. Clause 8 deals with adjustment in notified price and settlement of quality disputes. According to Sub-clause (1) the notified price would be for the fair average quality and it shall be subject to the deductions specified in the notifications. Sub-clauses (2) and (3) deal with the determination of the quality of rice, settlement of disputes relating to quality and adjustment of price.