- (1.) Parliament of India enacted Essential Commodities Act, 1955 (The Act). In terms of Section 3(2)(f) thereof, the Central Government is empowered to direct any manufacturer of sugar to sell the said commodity to the Central Government or a State Government or to a body owned or controlled by them for the purpose of making it available to the public at a fair price. It is commonly known as 'levy sugar'. Price of such levy sugar is fixed by the Central Government in exercise of its power under Section 3(3C) of the Act on yearly basis. 'Sugar year' commences from the month October of the year. Price of levy sugar although is required to be notified at that time, admittedly, there exists a practice to notify the previous year's price as a levy sugar on an adhoc basis price in October and final price therefor is notified later on.
(2.) Pursuant to or in furtherance of a notification issued by the Central Government under the Act and the directions issued by the competent authority from time to time, levy sugar was supplied by the respondents to the agencies of Central Government as also the appellant.
(3.) Respondents herein received allotment letters for supply of sugar both to FCI as also UPPCF. Claims were lodged for the price of levy sugar both with the FCI as also the Directorate of Sugar, Ministry of Food. The Central Government sanctioned the claim of the respondent in respect of the sugar supplied to UPPCF. It made similar claim in respect of the sugar supplied to the appellant. Appellant, however, demanded for a no dues certificate. It raised other objections including weight and quality of the sugar in relation to the supplies made to the Central Government. Respondents contended that no complaint having been made by the Central Government in this connection, the action of the appellant was totally unjustified. We may, however, notice that withholding of payment was, inter alia, made by the appellant for the alleged shortages in supply of sugar during the period 1983 to 1995.;