CHAKARPUR SUGAR WORKS Vs. UNION OFINDIA

JUDGEMENT

(1.) THESE six connected writ petitions have been filed to challenge a notification issued by the State Government under R. 114 of the Defence of India Rules, 1971, directing the Khandsari units to sell to the State Government at the price specified in the order one third of the Khandsari Sugar manufactured by the Khandsari units in the first process. The price specified is Rs. 200.00 per quintal to be delivered under the conditions prescribed in the order at the purchasing centres. The petitioners have licenses for working Khandsari units and are manufacturers of Khandsari sugar. They have challenged the order of the State Government under Rule 114 of the Defence of India Rules on various grounds. As all the petitions raise similar questions of facts and law, they are heard together and are being decided by a common judgment.

(2.) LEARNED counsel for the petitioners clarified in the very beginning that what actually affects them is the fixation of levy price at a figure below the cost price. The contention that the levy price is below the cost price has not been challenged by the respondents. On the other hand, in the counter-affidavit it has been stated that the cost price is Rs. 245.00 per quintal while the levy price is Rs. 200.00. The contention of the respondents is that the State Government has power to make a levy at a figure below the cost price provided the total money to be received by the Khandsari industry from the sale of total produce brings to the producers a fair return. According to the State Government the levy price has been fixed in such a manner that the petitioners will on the whole make a profit in the industry and will suffer no loss.

(3.) THE basic question, therefore, that arises in the case is whether Rule 114 permits the State Government to make a levy by paying an amount below the cost price. Rule 114 (2) provides :