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Judgment
Petitioners, an Association of Grain Merchants and Traders, Krishi Upaj Mandi, Samiti, Banapura district Hohangabad and a trader, take exception to the notification dated 15.2.2011 No. F5-1/2011/29-1 issued by the Government of Madhya Pradesh, Department of Food, Civil Supplies and Consumer Protection whereby the Minimum Support Prices of the Wheat for agricultural year 2011-12 has been fixed by the State Government at Rs.1220 per quintal. As apparent from the notification (Annexure P/1) that the same is in furtherance to the Memo No. 4 (4)/2010-PY.I dated 18.11.2010 issued by the Central Government fixing the M.S.P of wheat for the agricultural year 2011-12 at Rs.1120 per quintal to which the State Government has added Rs.100/- as bonus.
Grievance raised on behalf of the petitioner is that the Central Government having fixed the M.S.P it is beyond the jurisdiction of the State Government to add Rs.100/- by way of bonus to the M.S.P fixed by the Central Government and increase the M.S.P for procuring wheat. It is urged that with the addition of Rs.100/- to the MSP fixed by the Central Government, the Traders who are the member of the petitioner association are being burdened with the higher M.S.P as a result whereof they loose their competitive participation in purchase/procuring wheat from the Krishi Upaj Mandi in comparison to the societies who are given the incentives by the Government. Reference is made to clause 25 of the impugned notification which states: "VERNACULAR MATTER OMITTED"
The procuring agencies are enlisted as Appendix "v" with the impugned notification (the petitioners, have, however, chosen not to enclose the said appendix which could have assisted to Court to know whether the petitioner Association or its individual members have enlisted as procuring agency as to give them the cause of action to question the MSP and challenge to it on the ground that they are discriminated with the Societies and other procuring agencies.
Be that as it may the question is as to whether it is within the competence of the State to have added
Rs.100/- as bonus per quintal to the MSP fixed by the Central Government.
At the outset it needs to be stated that as none of the parties adverted to the mechanism of fixation of minimum support price recourse was taken to the official web-site of Government of India, viz, National Portal of India: india.gov.in to ascertain the mechanism as to how the M.S.P is determined.
Minimum support price as the expression suggests is to incentivize the cultivators not only to adopt modern technology to raise production but is an assurance of the remuneration and stable price environment for agricultural produce as the market place tends to be inherently unstable.
At the Central it is the Commission For Agricultural Costs and Prices, attached with the Ministry of Agriculture and Farmers Welfare, Govt. of India which submits its recommendations to the Government in the form of Price Policy Reports every year separately for five groups of commodities, viz., Kharif Crops, Rabi Crops, Sugarcane, Raw Jute and Copra. The M.S.P for these five groups of commodities/products are fixed by the Government each year on the basis of recommendation of the Commission.
The portal further reflects the mechanism adopted for arriving at the Minimum Support Price. It states that CACP submits its recommendations to the government in the form of Price Policy Reports every year, separately for five groups of commodities namely Kharif crops, Rabi crops, Sugarcane, Raw Jute and Copra. Before preparing aforesaid five pricing policy reports, the Commission draws a comprehensive questionnaire, and sends it to all the state governments and concerned National organizations and Ministries to seek their views. Subsequently, separate meetings are also held with farmers from different states, state governments, National organizations like FCI, NAFED, Cotton Corporation of India (CCI), Jute Corporation of India (JCI), trader''s organizations, processing organizations, and key central Ministries. The Commission also makes visits to states for on-the-spot assessment of the various constraints that farmers face in marketing their produce, or even raising the productivity levels of their crops. Based on all these inputs, the Commission then finalizes its recommendations/ reports, which are then submitted to the government. The government, in turn, circulates the CACP reports to state governments and concerned central Ministries for their comments. After receiving the feed-back from them, the Cabinet Committee on Economic Affairs (CCEA) of the Union government takes a final decision on the level of MSPs and other recommendations made by CACP. Once this decision is taken, CACP puts all its reports on the web site for various stakeholders to see the rationale behind CACP''s price and non-price recommendations.
The portal also contains the chart reflecting Minimum Support Price recommended and fixed for for Rabi Crop for the year 2007-08 to 2016-17. The chart reflecting Minimum Support Price recommended and fixed for for Rabi Crop for the year 2011-12 is reproduced for ready reference.
Commodity Reco. Fixed
Wheat 1285 1285
Thus, the fixation of MSP is basically the policy matter.
In Prag Ice & Oil Mills and anothr v. Union of India [ (AIR 1978 SC 1296) at page 1313] it is held that "In the ultimate analysis, the mechanics of price fixation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class of operators, the processual basis of price fixation has to be accepted in the generality of cases as valid".
In Sai Bhaskar Iron Limited v A.P. Electricity Regulatory Commission and others [(2016) 9 SCC 134] it is held:
The scope of interference in judicial review in such matters reserved for expert bodies is limited. The court cannot substitute its opinion. It has been laid down by this Court that price fixation is not the function of the court. This Court in Bihar SEB v Pulak Enterprises (2009) 5 SCC 641 has discussed the scope of interference in such a matter thus : "29. The significance of the question as to whether fixing the rate of fuel surcharge is a legislative function or a non-legislative function
is that if the function is held to be legislative, in the absence of any provision in that regard the principles of natural justice would not be applicable and the scope of judicial review would also be limited to plea of discrimination i.e. violation of Article 14 of the Constitution of India. As a general proposition, the law on the point is settled.
In Prag Ice and Oil Mills v. Union of India (1978) 3 SCC 459 a seven-Judge Bench of this Court by majority observed: (SCC p. 490, para 52)
"52. ... In the ultimate analysis, the mechanics of price fixation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class of [persons], the processual basis of price fixation has to be accepted in the generality of cases as valid."
The legal position was reiterated in Rohtas Industries Ltd. v. Bihar SEB (1984) Supp. SCC 161 and Kerala SEB v. S.N. Govinda Prabhu & Bros. (1986) 4 SCC 198 wherein it was observed, " ''price fixation'' is neither the forte nor the function of the court" (Kerala SEB case, SCC p. 214, para 10).
As regards the nature of the function, in Saraswati Industrial Syndicate Ltd. v. Union of India (1974) 2 SCC 630 the Court had observed (at SCC p. 636, para 13) that "price fixation is more in the nature of a legislative measure even though it may be based upon objective criteria found in a report or other material".
It should not, therefore, give rise to a complaint that rule of natural justice has not been followed in fixing the price. In Prag Ice and Oil Mills v. Union of India (1978) 3 SCC 459 the Court observed: (SCC p. 482, para 37) "37. We think that unless, by the terms of a particular statute, or order, price fixation is made a quasi-judicial function for specified purposes or cases, it is really legislative in character.... A legislative measure does not concern itself to the facts of an individual case. It is meant to lay down a general rule applicable to all persons or objects or transactions of a particular kind or class."
In Union of India v. Cynamide India Ltd . (1987) 2 SCC 720 this Court held that except in cases where it becomes necessary to fix the price separately in relation to individuals, price fixation is generally a legislative act, the performance of which does not require giving opportunity of hearing. Following passage from the judgment may usefully be noticed: (SCC pp. 734-35, para 5)
"5. ... legislative action, plenary or subordinate, is not subject to rules of natural justice. In the case of parliamentary legislation, the proposition is self-evident. In the case of subordinate legislation, it may happen that Parliament may itself provide for a notice and for a hearing -- there are several instances of the legislature requiring the subordinate legislating authority to give public notice and a public hearing before say, for example, levying a municipal rate -- in which case the substantial non-observance of the statutorily prescribed mode of observing natural justice may have the effect of invalidating the subordinate legislation. ... But, where the legislature has not chosen to provide for any notice or hearing, no one can insist upon it and it will not be permissible to read natural justice into such legislative activity."
Reference may also be made to a Constitution Bench decision in Shri Sitaram Sugar Co. Ltd. v. Union of India (1990) 3 SCC 223.
In a sense, fixing rate of fuel surcharge under Clause 16.10 of the tariff notification is different from fixing the tariff under Section 49 of the Act. Fuel surcharge is undoubtedly a part of tariff. But fixing rates of consumption charges or the guaranteed charges or the fixed charges or the delayed payment surcharge, etc. and fixing rates of fuel surcharge do not stand on a par. Though rates of consumption charges, etc. are based on objective materials, there is enough scope for flexibility in fixing the rates. It also involves policy to fix different rates for different categories of consumers. Such is not the position with the fuel surcharge.
Clause 16.10.1 specifies the categories coming in the net of the levy and Clause 16.10.3 provides the formula. In simple words, the formula envisages addition of units generated or purchased and increased average cost of fuel and average unit rate of purchase rates and division of the total by the quotient is the average fuel surcharge per unit (expressed in terms of paise) described by denominator S1 in the formula. The whole exercise, it would appear, involves arithmetical accounting. There is no scope for exercise of any discretion or flexibility. This distinction, however, does not help the petitioners. It rather goes against them because if fixing rate of fuel surcharge is just an arithmetical exercise, giving opportunity of hearing would hardly serve any useful purpose."
When the challenge put-forth by the petitioner as to fixation of minimum support price of the procurement of wheat for the crop year 2011-12 in the State of Madhya Pradesh is tested on the basis of above analysis, this Court does not find any merit in the challenge as would warrant any interference.
Consequently, petition fails and is dismissed. However, no costs.