BEG - (1.) THE appellants are manufacturers of sugar, who have come before us after certification of their cases as fit for appeal to this Court under Article 133 (1) (c) of the Constitution. THEy challenged the notification dated 28-6-1967 issued by the Central Government under Clause 7 of the Sugar (Control) Order, 1966, fixing ex-factory prices for sugar factories specified in the notification. It appears that, in the Writ Petitions filed in the High Court for quashing the impugned notification and appropriate orders in the nature of Mandamus, the validity of Section 3 of the Essential Supplies Act 10 of 1955, as well as of the Sugar (Control) Order, 1966, issued under it were questioned. But, before us, the appellants have confined their arguments to contentions based on the correctness of the method adopted in fixing prices of sugar manufactured in various States, and the alleged failure of the Central Government to take into account the fact that there was an Initial fixation of prices of sugar by a notification dated 1-2-1967 followed by a final fixation on 28-6-1967. According to the appellants, appropriate adjustments or allowances should have been made in the final fixation by a notification of 28-6-1967. We are therefore, not concerned now with any question relating to the validity of clause 7 of the Sugar (Control) Order under which the notifications were issued.
(2.) THE relevant clause 7 reads as follows: " 7. Power to fix sugar prices:- (1) THE Central Government may from time to time by notification in the official Gazette, fix the price or the maximum price at which any sugar may be sold or delivered and different prices may be fixed for different areas or different factories or different types or grades of sugar. (2) Such price or maximum price shall be fixed having regard to the estimated cost of production of sugar determined on the basis of the relevant schedule of cost given in the Report of the Sugar Enquiry Commission (October 1965), subject to the adjustment of such rise in cost subsequent to the Report aforesaid as, in the opinion of the Central Government, cannot be absorbed by the provision for contingencies in the relevant schedule to that Report. (3) Where the price or the maximum price has been so fixed, no person shall sell or purchase or agree to sell or purchase any sugar at a price in excess of that fixed under sub-clause (1); Provided that the price at which sugar may be sold for delivery otherwise than ex-factory shall not exceed the price or the maximum price, as the case may be, fixed under sub-clause (1) for sale ex-factory plus such charges in respect of transport to any town or any specified area and other incidental charges as may be fixed by the concerned State Government or by any officer authorised in this behalf by the Central Government or that State Government in accordance with the instructions issued by the Central Government in this behalf from time to time". Clause 7 (2), set out above, requires the Government to fix the price "having regard to the estimated cost of production of sugar on the basis of the relevant schedule". "The expression ''have regard to" only obliges the Government to consider as relevant data material to which it must have regard. The appellants concede that this is the effect of language of clause 7 (2). It is evident that the price fixed is an estimated maximum price chargeable because the manufacturer cannot charge more. Furthermore, it should be noted that the only "adjustment" provided for is before a fixation of the estimated price "having regard" to the basis provided by the relevant schedule, but there is no obligation whatsoever cast upon the Government to make any "adjustment" to compensate for losses due to any previous erroneous fixations. Indeed, such attempted adjustments may seem to be unfair to subsequent consumers who ought not, it could be argued, be made to pay for past benefits possibly enjoyed by others. The Sugar Commission had recommended that the country should be divided into five zones for the purpose of fixation of price of sugar in each zone. Its opinion was, that dividing the country into a large number of zones would make the price fixation of sugar degenerate" into "cost-plus basis". The reason given by the Commission against division of the country into larger number of zones was that this would encourage inefficient factories to remain inefficient instead of inducting them to effect economies by rationalisation and modernisation so as to become efficient.
(3.) THE grievance of the appellant Saraswati Industrial Syndicate was that the Government had really divided the country into 22 zones and that it had, while doing so, taken into consideration the conversion charges on the basis of five zones putting Haryana in the same zone as Madhya Pradesh. It claimed that its efficiency as a manufacturer using modern methods was greater than that of factories in Madhya Pradesh although the wages it had to pay were higher than those paid by the Madhya Pradesh manufacturers. It was difficult for tile High Court, as it is for us, to determine these questions of fact on the meagre material or bare assertions, not subjected to cross-examination, which are available in writ proceedings decided primarily on affidavits. Nevertheless, assuming that these assertions rest on a factually correct basis, we think that a modern manufacturer of sugar, with more efficient methods of production, would gain by a fixation of price which was profitable even for less efficient manufacturers. Even if we assume that the wages of labourers were somewhat higher in Haryana than those in Madhya Pradesh, without sufficient material to be able to arrive at a definite conclusion on this matter, we think that the disadvantage to the Syndicate would be off-set by the advantage it enjoys as a producer with a more modern and efficient manufacturing technique. It is a well known fact that rationalisation of industry, by the use of modern methods, reduces the amount of labour needed in more mechanised modes of manufacture. THErefore, we do not think that these assertions could prove any inequitable treatment meted out to the Haryana manufacturers of sugar. In any case, no breach of a mandatory duty, which could justify the issue of a writ of Mandamus, was established. We have also examined the grievance of the appellants that the price of sugar for the Season 1966-67 was not determined in accordance with the relevant data. As already indicated above, the cost schedules given by the Commission were only guide-lines to indicate the relevant data in fixing the price. They were not like clear mandatory statutory provisions which could be enforced without much difficulty.;