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Judgment
H.L. Gokhale, C.J.
Heard Sri S.M. K. Chaudhary in support of this petition. Sri K.D. Nag appears for the Respondents.
The first petitioner, herein, is a Public Limited Company registered under the companies Act and it operates a Sugar Factory known as Tulsipur Sugar Company Limited in the District of Gonda. The petition has been filed to challenge the price of the levy sugar for the year 198283 fixed by the respondents. The price was fixed by an order issued on 27th January, 1983 at Rs.305.98 per quintal. The petitioners challenged that order dated 27th January, 1983 by seeking a declaration that this Sugar (Price Determination for 198283 Production) Order, 1983 is void and without any effect. The pettion reached for admission before a Division Bench on 29th April, 1983, when the Division Bench passed the following order:
�Notice has been accepted by Sri Randhava on behalf of opposite parties No.1 and 2 and Sri K.S. Bajpai on behalf of opposite party No.3.
Issue notice to opposite party No.4.
Learned counsel for the petitioners has produced before us a certified copy of the stay order passed in similar writ petitions filed at Allahabad.
Till further orders, we direct Food Corporation of India or other nominees etc. to pay a sum of Rs.34124 per quintal of sugar for category D30 with usual price differentials with regard to other grades with effect from today. The petitioners shall furnish Bank Guarantee in advance in respect of the difference of the price as fixed vide order dated 27.1.1983, i.e. Rs. 30598 and the price fixed by this Court as above. In addition an advance Bank guarantee be also given by the petitioners in respect of interest at the rate of 121/2% per annum. In case the petitioner fails the respondents shall be entitled to encash the Bank guarantee. The Guarantee may be furnished to the satisfaction of the Dy. Director, Government of India, Ministry of Agriculture, Department of Food, Directorate of Sugar Krishi Bhawan, New Delhi. The Bank Guarantee will be kept alive during the pendency of the writ petition and for six months thereafter.�
The result of this order was that as against the price of Rs.30598 per quintal, the RespondentFood Corporation of India was required to pay the price of Rs.34124 per quintal to the petitioners which comes to approximately Rs.35 extra per quintal. The Division Bench, however, protected the interest of the Respondents by asking the petitioner to give two Bank Guarantees, first Bank Guarantee for this difference of price and the second Bank Guarantee was in respect of the interest at the rate of 121/2%. The Court also added that in case the petition fails, the Respondents shall be entitled to encash the Bank Guarantees. The Bank Guarantees were to be furnished to the satisfaction of the Dy. Director, Government of India, Ministry of Agriculture, Department of Food, Directorate of Sugar Krishi Bhawan, New Delhi and were to be kept alive during the pendency of the writ petition. Mr. Chaudhary, learned counsel for the petitioners, informed that both the Bank Guarantees have been kept alive all throughout.
It has so transpired that a similar question with respect to the price fixation in the State of Karnataka came up before the Apex Court in Sri Malaprabha Cooperative Sugar Factory Limited v. Union of India, reported in (1994) 1 SCC 648 wherein certain guidelines were laid down by the Apex Court and the price fixation done in that matter was interfered. As far as the price fixation for the year 198283 in the State of U.P. is concerned, the matter was carried to the Apex Court in the Modi Industries Limited v. Union of India, reported in (1999) 9 SCC 545, wherein in view of the affidavit filed by the Deputy Secretary on behalf of Union of India, the Apex Court distinguished the facts concerning the price fixation under the 198283 Order with respect to the levy sugar in U.P. from the matter decided earlier in Malaprabha''s case (supra). The Apex Court referred to the order passed in Malaprabha''s case and clearly stated that the matter was not covered by the decision in Malaprabha''s case. It is a short order and we quote it. The order reads as follows:
�1. In compliance with out order dated 30.1.1996, an additional affidavit on behalf of the Union of India has been filed by Shri Deepak Khandekar, Deputy Secretary to the Government of India. In the additional affidavit, it has been expressly stated that while deterimining the minimum cane price of levy sugar regard has been had only to the minimum cane price as spoken to in Section 3(3C) (a) of the Essential Commodities Act, 1955 and the additional cane price payable under clause 5A of the Sugar (Control) Order, 1966, has not been taken into account, and that also there has been no mopping up of excess realization on levyfree sale sugar while fixing the price of levy sugar for the season 198283.
In view of the above further statement made in the additional affidavit filed on behalf of the Union of India, we are satisfied that this matter is not covered by the decision of this Court in Shri Malaprabha Coop. Sugar Factory Ltd. v. Union of India. Accordingly, the transferred case is dismissed. No Cost.�
Mr. Chaudhary, learned counsel for the petitioners, very fairly states that in view of this development as far as difference of price of about Rs.35 per quintal is concerned, the petitioners cannot challenge the matter any further. He, therefore, has no grievance to the encashment of the Bank guarantee in respect thereof. As far as the interest amount is concerned, however, he has drawn our attention firstly to an order passed by the Apex Court in the Case of Godawari Sugar Mills v. Union of India, Civil Appeal No.1186 of 1992, decided 24th July, 2000. In that matter, the Apex Court has referred to the judgment in Malaprabha''s case (supra) wherein it has been held that while fixing price of sugar cane under Section 3(3C) of the Essential Commodities Act, the Central Government is also required to take into consideration the additional price paid by the Sugar Manufacturer to the Sugar Cane Growers'' Societies. The Court went into all those aspects, but did not entertain the Appeal filed by the Appellant. At the end of the judgment, the Court has observed as follows:
�In view of the above we do not find any infirmity in the judgment under appeal which may call for our interference. However, in view of special facts and circumstances of the case we must also take into consideration the interest of the appellant. The Central Government has already paid a sum of Rs.17 lacs towards the excess price to the appellant in pursuance of order of the High Court. We, therefore, direct that the appellant shall refund the said amount within six months from today to the Central Government, but without any interest.�
Mr. Chaudhary, learned counsel for the petitioners, submits that on similar lines, the petitioners should not be asked to pay 121/2% interest. It is not possible for us to accept this submission. The order passed by the Apex Court in terms states that it is so passed in special facts and circumstances of the case and under Article 142 of the Constitution of India, the Apex Court can pass appropriate orders to do complete justice in a given case. This is how this order will have to be read. The Court was not called upon nor has it discussed the legal position with respect to the interest part in the order which was passed in Godavari''s case.
The alternative submission of Mr. Chaudhary is that the petitioners may not be required to pay this interest amount until the date on which the judgment in Modi''s case (supra) was pronounced. For that purpose, he submits that the order in Modi Industries case was passed in view of the affidavit filed by the Union of India which was considered by the Apex Court while passing that order. That is obviously so. The Respondents cannot suffer because they defended their case ably. This argument is being recorded only since it has been canvassed and it is rejected.
Mr. Chaudhary then referred to two orders of Single Judges of Delhi High Court. The First order was passed in Civil Writ Petition No.5274 of 2000, Sir Shaadi Lal Enterprices Limited and others v. Union of India and others, decided on 4th December, 2000. We have gone through the entire order. Except for the last paragraph of the order, there is no discussion on the legal position. The legal position, in this behalf is not canvassed nor has the learned Judge accepted any such contrary submission. It is only in the last paragraph in which he has observed that since the fixation of price for the year 198283 has not attained conclusivily until the decision in the Modi Industries case (supra), the interest would be payable with effect from the date of the decision in that matter. This decision is followed by another singled Judge of Delhi High Court in Govind Sugar Mills Limited v. Union of India, Civil Writ No.4238 of 2002, decided on 24th April, 2003. This order has also been passed to award interest from the date of decision in Modi''s case (supra) essentially to remain in conformity with the judgment rendered in Shadilal''s case (supra).
We are not in agreement with the view taken by two learned Signle Judges of Delhi High Court. It is not possible for us to say that the law was not clear until the decision in Modi Industries case (supra). The price was already fixed and it was known to the parties concerned. Merely because the petitions were filed and the matters were carried to the Apex Court, a litigant cannot take advantage of the pendency of the litigation. It is for this reason only that an interim order was passed by the Division Bench, which heard the matter at the admission stage, which required the petitioners to give a Bank Guarantee of additional 121/2%. It is also necessary to note that this requirement to give Bank Guarantee of 121/2% is fully in conformity with the provision of Section 3(5) of Levy Sugar Price Equalisation Act, 1976. Section 3(5) reads as follows:
�3. Levy Sugar Price Equalization Fund There shall be established a Fund to be called the Levy Sugar Price Equalisation Fund
(5) Where, in pursuance of an (interim order made by any Court, whether before or after the commencement of this Act any amount representing the difference between the controlled price and the interim price allowed by the Court is
(a) held by any producer either with himself or with any other person or with any Court, Government, bank or other authority, or
(b) collected and kept by the producer under the cover of any guarantee, or
such producer shall on the final disposal of the proceedings of the Court aforesaid, (credit to the fund, within sixty days from the date of such final disposal, such amount, to the extent it represents any excess realization together with interest due thereon at the rate of twelve and a half per cent per annum from the date on which such amount was realized by him;
(i) the interest due on so much of such amount as was realized before the date of commencement of the Levy Sugar Price Equalisation Fund (Amendment) Act, 1984 and is not credited to the fund together with interest at the aforesaid rate of twelve and a half per cent per annum before the expiry of sixty days from the date of such commencement, and
(ii) the interest due on so much of such amount as is realized after such commencement and non credited to the Fund together with interest at the aforesaid rate of twelve and a half per cent per annum within sixty days from the date on which such amount was realized, shall be at the rate of fifteen per cent per annum from the date on which such amount was realized by the producer;�
The object in making this provision is very clear as the Section itself provides that where in pursuance of an interim order made by the Court whether before or after the commencement of this provision which was added by Act No.54 of 1984, any amount representing the difference between the controlled price and the interim price allowed by the Court is held by the producer, such producer on the final disposal of the proceedings has to credit such amount to the extent it represents any such excess amount together with interest thereon at the rate of 121/2% per annum. The object of the Legislation is very clear. As seen in the facts of the present case because of the interim order passed by a Division Bench, the Respondents were required to pay Rs.35 per quintal extra to the petitioners, which they would not have otherwise paid. In the circumstances, it will not suffice that only this excess amount should be made available to the Respondents. The amount of interest which they would be loosing on this amount should also be made available to them. Now, the Statute has not left this aspect undecided. A clear provision has been made that in such an eventuality, an interest at the rate of 121/2% per annum is payable. The Division Bench has also passed an interim order to the same effect asking the petitioners to give the Bank Guarantee accordingly. In the circumstances, the request of Mr. Chaudhary that the second Bank Guarantee should not be encashed cannot be accepted.
In the circumstances, the petition is dismissed. The Respondents will be at liberty to encash the Bank Guarantees given by the petitioners.
Mr. Chaudhary, learned counsel for the petitioners, applies for stay of the part of the order, which permits encashment of the Bank Guarantee concerning the interest of 121/2%. The Respondents will not encash the second Bank Guarantee concerning the interest for a period of six weeks.
(Petition dismissed)