BARWANI SUGAR Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition under Article 226 of the Constitution of India has been filed by the petitioner Company which is running a sugar factory seeking following relief:

(2.) The case of the petitioner is that the Central Government in exercise of the powers conferred under Section 3 of the Essential Commodities Act, 1955 (for short "the Act") issued the Sugar (Control) order, 1966 (for short "control order"). By invoking powers under clause 4 and 5 of the Control Order the Central Government imposed restriction for the sale or disposal of sugar which is presently to the extent of 20%. The said 20% sugar is termed as levy sugar and the remaining 80% of the sugar is regarded in common parlance as free sale sugar. In the circumstances according to the petitioner it can sell the said 80% free sale sugar to anybody at any time at any price and no restriction on it can be put by the respondents. The grievance of the petitioner is that second respondent Directorate of Sugar has put reasonable restriction on sale of the said 80% of the sugar which is free sale sugar by issuing directions limiting release of monthly quota thereby putting a rider about sale of the said 80% free sale sugar. It is the case of the petitioner that by such restrictions which have been put by the respondents the petitioner has to suffer irreparable loss as the farmers could not be paid cane price in time. Moreover the petitioner is also required to face paucity of funds to meet its minimum liabilities which is likely to lead for final closure of the unit. In support of the contention that no restrictions can be put by the Central Government for sale of free sale quota the petitioner has placed reliance on the order dated 9.1.2003 passed by a learned Single Judge of this (sic) Writ Petition No. 1808/02 Jawaharlal Nehru Sahakari Agricultural Produce Processing Society Limited, Khargone vs. The Union of India and others as also the final order dated 13.7.2004 passed in the said writ petition.

(3.) The respondents No. 1 and 2 have filed reply in the form of counter affidavit and have stated that the petitioner has misconstrued the non levy sugar to be a sugar of free sale. It is stated that sugar is an essential commodity under the Act. Section 3 of the Act confers powers on the Government to control, production, supply, distribution, etc., of essential commodities. Section 3(1) provides that if the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, [or for securing any essential commodity for the defence of India or the efficient conduct of military operations] it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and commerce therein. In exercise of these powers conferred by Section 3 of the Act the Central Government had issued the Sugar Control Order, 1966. Clause 4 of the Control Order confers powers on the Central Government to restrict sale etc. of sugar by producers or importers. Clause 5 empowers the Central Government to issue directions to the producers or importers and dealers of sugar. It has been stated by the respondents that the Central Government in exercise of its powers under Section 3 (1) and (2) (f) of the Act vide notification dated 7.10.2009 (Annexure R-1) in supersession of the earlier order of the Government of India in the Ministry of Consumer Affairs directed that every domestic producer of sugar shall sell 20% of sugar produced in 2009-2010 Sugar Season (October-September) w.e.f. the 1st day of October, 2009 to the Central Government or as directed by the Central Government under the Levy Sugar Supply (Control) Order 1979. The respondents have also stated that the Central Government in exercise of the powers conferred under Clause 4 of the Control Order had issued an order dated 4.6.1979 (Annexure R-1A) by which it has been directed that no producer of Sugar by vaccum pan process shall sell or agree to sell or otherwise dispose of or deliver or agree to deliver sugar or remove sugar from the bonded godowns of the factory in which it is produced, except under and in accordance with a direction issued in writing by the Central Government.