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Oudh Sugar Mills Ltd. v/s Union of India & Another


Company & Directors' Information:- THE OUDH SUGAR MILLS LIMITED [Amalgamated] CIN = L15432UP1932PLC025186

Company & Directors' Information:- J H V SUGAR LIMITED [Active] CIN = U15421WB1997PLC085863

Company & Directors' Information:- K M SUGAR MILLS LIMITED [Active] CIN = L15421UP1971PLC003492

Company & Directors' Information:- OUDH SUGAR MILLS LIMITED [Active] CIN = U99999MH1932PLC001865

Company & Directors' Information:- J P P MILLS PRIVATE LIMITED [Active] CIN = U17111TZ2003PTC010491

Company & Directors' Information:- V M D MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1994PTC004822

Company & Directors' Information:- A R C MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1994PTC004845

Company & Directors' Information:- S AND Y MILLS LIMITED [Not available for efiling] CIN = U17111TZ1994PLC005460

Company & Directors' Information:- D C MILLS PRIVATE LIMITED [Active] CIN = U25199KL1996PTC009988

Company & Directors' Information:- S M SUGAR PRIVATE LIMITED [Active] CIN = U51299DL1999PTC098109

Company & Directors' Information:- R A MILLS PRIVATE LIMITED [Active] CIN = U17111TZ2006PTC013248

Company & Directors' Information:- S K G SUGAR LIMITED [Not available for efiling] CIN = U15421BR1971PLC000906

Company & Directors' Information:- J P SUGAR MILLS PRIVATE LIMITED [Active] CIN = U15122DL2014PTC272584

Company & Directors' Information:- J M MILLS PRIVATE LIMITED [Active] CIN = U17111TZ2006PTC013113

Company & Directors' Information:- M T A MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1989PTC003048

Company & Directors' Information:- P A MILLS INDIA LTD. [Not available for efiling] CIN = U17111TN1990PLC019762

Company & Directors' Information:- K N M MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1990PTC002702

Company & Directors' Information:- V M MILLS PRIVATE LIMITED [Active] CIN = U17111TZ2005PTC011763

Company & Directors' Information:- S. B. SUGAR LIMITED [Active] CIN = U45201WB1995PLC072017

Company & Directors' Information:- S. S. MILLS PRIVATE LIMITED [Active] CIN = U24231GJ1988PTC010885

Company & Directors' Information:- G M MILLS PRIVATE LIMITED [Active] CIN = U51900MH1999PTC122189

Company & Directors' Information:- R B MILLS PVT LTD [Active] CIN = U15141AS1949PTC001939

Company & Directors' Information:- S S SUGAR INDIA PRIVATE LIMITED [Active] CIN = U74900PN2012PTC142939

Company & Directors' Information:- B T MILLS PRIVATE LIMITED [Active] CIN = U18101MH1997PTC109479

Company & Directors' Information:- T R MILLS PRIVATE LIMITED [Active] CIN = U17111KA1954PTC000799

Company & Directors' Information:- J K MILLS LTD [Strike Off] CIN = U17200WB1946PLC013603

Company & Directors' Information:- R H S SUGAR MILLS PRIVATE LIMITED [Active] CIN = U15421RJ2012PTC040509

Company & Directors' Information:- G M MILLS PRIVATE LIMITED [Amalgamated] CIN = U18101MH2003PTC138487

Company & Directors' Information:- SUGAR CORPORATION PVT LTD [Strike Off] CIN = U15424WB1954PTC000884

Company & Directors' Information:- B S I SUGAR LIMITED [Strike Off] CIN = U01511MP1996PLC011170

Company & Directors' Information:- SUGAR CORPORATION OF INDIA LIMITED [Dissolved] CIN = U99999MH1920PTC000754

Company & Directors' Information:- UNION MILLS LIMITED [Dissolved] CIN = U99999MH1988PTC000078

    Civil Appeal Nos. 3890 & 3891 of 2010

    Decided On, 07 February 2020

    At, Supreme Court of India

    By, THE HONOURABLE MR. JUSTICE MOHAN M. SHANTANAGOUDAR & THE HONOURABLE MR. JUSTICE R. SUBHASH REDDY

    For the Appellant: Praveen Kumar, Advocate. For the Respondents: Binu Tamta, D.L. Chidananda, Hemant Arya, Chakitan V.S. Papta, R.B., Yadav, Mukesh Kumar Maroria, Advocates.



Judgment Text


R. Subhash Reddy, J.

These Civil Appeals are filed by the petitioner in Writ Petition No.6732 of 1986 filed before the High Court of Judicature at Allahabad, Lucknow Bench, Lucknow, aggrieved by the judgment and order dated 18.07.2006 and further order dated 11.09.2007 passed in Review Petition No.253 of 2006. By the aforesaid orders, the High Court has dismissed the Writ Petition and Review Petition respectively filed by the appellant herein.

2. The appellant is a public limited company namely Oudh Sugar Mills Ltd., situated at Hargaon, District Sitapur in the State of Uttar Pradesh. The appellant company invoked the jurisdiction of the High Court under Article 226 of the Constitution of India by seeking the following reliefs:

"(i) Issue a writ, order or direction in the nature of mandamus directing the opposite parties to place the petitioners sugar factory in East U.P. Zone for the purposes of the Sugar (Price Determination for 1984- 85 production) Order, 1984 and Sugar (Price Determination for 1985-86 Production) Order, 1985;

(ii) Issue a writ, order or direction in the nature of mandamus directing the opposite parties to permit the petitioner company to realise the price of their levy sugar as admissible to the sugar factories in the East U.P. Zone under the Sugar (Price Determination for 1984-85 Production) Order, 1984 and Sugar Price Determination for 1985- 86 Production) Order, 1985 and direct the opposite parties to further continue to place the petitioners sugar factory along with the other sugar factories of district Sitapur in the Uttar Pradesh east zone and may further direct the opposite parties to pay the petitioners the price of levy sugar as per the price applicable for sugar factories in the Uttar Pradesh east zone;

(iii) Declare Section 3(2)(f) and Section 3(3c) of the Essential Commodities Act, 1955 as ultra vires of Article 14 and 19(1)(g) of the Constitution of India;

(iv) Issue any other writ order or direction as the nature of case may warrant;

(v) Issue an ad interim order in favor of the petitioners;

(vi) Award the cost of the case to the petitioners."

3. As the appellant did not press for relief on the declaration sought on the validity of Section 3(2)(f) and 3(3c) of the Essential Commodities Act, 1955, the High Court did not go into the same as such.

4. For the crushing years 1984-85 and 1985-86 the appellant sugar mill was placed in central zone for the purpose of fixation of price for the levy sugar. Mainly, it was the case of the appellant that the geographical and climatic conditions of the sugar mills in the District of Sitapur, stand on the same footing as that of other similarly placed sugar factories namely Seksaria Biswan Sugar Factory Ltd. Biswan, District Sitapur and Kisan Sahkari Chini Mills Ltd. Mahmoodabad (Awadh), District Sitapur. Inspite of the same, these two factories were included in the eastern zone, while the appellant factory was discriminated against and kept in the central zone for the purpose of fixation of levy sugar price for the crushing years 1984-85 and 1985-86.

5. Considering the submissions made on behalf of both the sides and other material placed on record, the High Court, by recording a finding that the said decision was a policy decision which permitted the Central Government to make a reasonable classification and in absence of any case made out either of arbitrariness or hostile discrimination, dismissed the writ petition filed by the appellant.

6. We have heard Sri V. Shekhar, learned senior counsel appearing on behalf for the appellant and Ms. Binu Tamta, learned counsel appearing for the respondents and have perused the impugned orders and other material placed on record.

7. The price of levy sugar is fixed for a zone with an intention to ensure to the manufacturers of the sugar in the zone a reasonable return on their overall production and investment, provided that the units are running economically and efficiently. Sugar was a controlled commodity during the relevant time, covered by the provisions of the Essential Commodities Act, 1955. Certain quantity of sugar called levy sugar, was to be supplied to the Government at a price fixed by the Government and rest of the same was levy free sugar, which could be sold in open market. The price of levy sugar was fixed based on the Control Order framed under the Essential Commodities Act. The price of levy sugar was fixed by the Central Government, having regard to various factors, including the basis of basiccost schedules drawn and recommended by the expert body. As is evident from the stand of the respondents it appears that the survey report of Bureau of Industrial Cost & Prices (BICP) regarding the zonal pattern was not found feasible by the Government of India and the same was not implemented. The appellant has claimed parity with sugar factories at Biswan and Mahmoodabad, but such units were transferred to eastern zone on merits adjudged by the State Government and BICP and levy prices are fixed for zones and not for each factory. Zones were also not as per the revenue districts. Merely because there is difference in price in central zone and eastern zone, the appellant cannot claim, as a matter of right, its unit was to be placed in eastern zone instead of central zone during the relevant years. The impugned Orders questioned in the writ petition were based on exhaustive study by experts. The conclusions reached by the Central Government in exercise of statutory power cannot be said to be either discriminatory or unreasonable. So far as sugar units at Biswan and Mahmoodabad are concerned, they were transferred to eastern zone on the basis of merits adjudged by the State. When the revenue districts are not the limits for zonal division, the appellant cannot claim parity with other units only on the ground that all the units are situated in Sitapur district. Even with regard to appellant unit, after a lapse of time it was considered feasible to place it in eastern zone and we are informed that the same was placed in eastern zone. As the appellant has failed to demonstrate any invidious discrimination and statutory violation, merely on the ground that other units in Sitapur district were transferred to eastern zone and that the representation of the appellant was not acceded to for the relevant crushing years, is no ground for interference. We are not persuaded to accept the plea that the appellant was discriminated against by placing the appellant unit in central zone and other units in Sitapur district in the eastern zone of Uttar Pradesh. The action of the Central Government in placing the factory of the appellant at two different times in two different zones also does not constitute any discrimination. The policy decision was taken from time to time subject to satisfaction of the Government by taking into account expert reports. It is also the case of the respondents that the factory at Mahmoodabad was established at a very higher free sale sugar over the normal quota as per incentive scheme of Government announced in November, 1980. Several relevant factors were considered by the State Government before announcing policy and for fixation of zones, during the crushing years of 1984-85 and 1985-86. For the above said reasons, we do not find any illegality in the im

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pugned order dated 18.07.2006 dismissing the Writ Petition and further order dated 11.09.2007 dismissing the Review Petition No.253 of 2006, by the High Court. The High Court has considered the material in detail and by recording correct findings rejected the plea of the appellant. In view of such findings recorded and other reasons referred above, we do not find any merit in these appeals so as to interfere with the same. These appeals are, accordingly, dismissed with no order as to costs. 8. Pursuant to interim orders passed by this Court, 50% of the amount demanded is deposited by the appellant in the Registry and for the remaining 50% bank guarantees are furnished. We allow the respondent-Government for withdrawal of such amount covered by deposit as well as bank guarantees and accrued interest thereon.
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