MATHEW - (1.) THIS is an appeal, by certificate, against the judgment and decree of the High Court of Jammu and Kashmir whereby a Division Bench of the High Court allowed an appeal filed by the State of Jammu and Kashmir from a decree for recovery of money in favour of the plaintiff - appellant. The appellant submitted a tender for supply of milk to the S. M. H. S. Hospital, Srinagar, in pursuance to a tender notice issued by the Superintendent of the Hospital at the rate of Rs. 15.90 per maund. THIS tender was accepted and a regular agreement was drawn up between the parties on 17/05/1961. One of the conditions in the agreement was that if milk became a controlled article during the period of the agreement, the contractor shall be paid at the controlled rate for the supply of the articles made by him. THIS is practically the same as paragraph 12 of the Tender Notice. In pursuance to the agreement, the appellant supplied milk to the hospital during the period of the agreement. The price of milk was controlled by virtue of a notification issued on 3/05/1961 and this control remained in force till the end of the contract period namely, 31/03/1962. The case of the appellant was that althought he agreed to supply milk at the rate of Rs. 15.90 per maund as the controlled price was Rs. 25.00 per maund he was entitled to be paid at this rate after the date of the notification controlling the price. He, therefore, claimed price of milk at the rate of Rs. 25.00per maund from 2/05/1961, to the end of March, 1962, and filed the suit.
(2.) THE defendants contended that there was no control by Government of the price of milk in the strict sense of the term and the appellant, having agreed to supply milk at the rate of Rs. 15.90 per maund, could not take advantage of the control of the price of milk, and therefore, he was not entitled to be paid at the rate of Rs. 25.00- per maund for the period in question. A learned single Judge of the High Court, who tried the case, came to the conclusion that the appellant was entitled to the price mentioned in the notification and decreed the suit on that basis. The State filed an appeal against the decree before the Division Bench. The Division Bench reversed the dcecision and dismissed the suit. The only question for consideration is whether the appellant was entitled to get Rs. 25.00 per maund as the price for the milk supplied by him from the date of the notification.
(3.) THE Division Bench was of the view that the notification did not control the price of milk but only fixed the maximum price at which milk could be bought and sold in the market and that did not deter any person from selling milk at a price lower than that fixed by the notification and so, the appellant could have purchased milk in the market at a lower price and supplied it to the Hospital in accordance with the terms of the agreement, namely, at Rs. 15.90 per maund. The notification in question runs as follows: "In exercise of the powers vested in me under Section 3 of Hoarding and Profiteering Prevention Ordinance 2000, as amended to date, I., S. A. S. Qaidri, Director, Food and Supplies, Kashmir Province, designated Controller General under Section 2 (c) of the said Act vide notification dated 3-7-59 issued under Home Secretariat No. S. 7 I-S/59 dated 8-7-1959 hereby fix maximum price of sale for the following essential commodities in the following localities as shown against each:- xxxx MilkRs.-/10/- per seer" There can be no doubt that when a Government regulates the price of a commodity, it begets a tendency in the market to raise the price of the commodity at least to the level of the price fixed by the Government. No person would normally agree, after the notification, to sell or supply milk at a price lower than the one fixed by the Government even though there is no bar to his selling the same at a lower price. ;