ASHOK BHUSHAN,J. - (1.) ALL these writ petitions have been filed by different sugar mills challenging the orders passed by the Government of India, Ministry of Consumer Affairs Food and Public Distribution Department (Chief Director Sugar). The issues raised in the writ petitions being common and somewhat related to each other, all the writ petitions have been heard together and are being disposed of by this common judgment. The writ petitions can be broadly classified in two groups. The writ petitions in group 'A' are the writ petitions by sugar mills challenging the orders passed by the union of India converting the undelivered/undispatched quantity of non levy sugar as levy sugar with regard to factory-wise monthly quota for different months from September, 2008 to April, 2009.
(2.) THE writ petitions included in group B challenge the order of the Government of India converting the undelivered/undispatched buffer stock which was directed to be disposed of into levy sugar as well as the order of Government of India under Levy Sugar Supply (Control) Order 1979 specifying the quantity of levy sugar out of the production for the year 2008-09 for different sugar mills. For deciding the writ petitions included in group 'A', it is sufficient to refer the facts in details with regard to two writ petitions i.e. writ petition No. 28612 of 2009, Rudra Vilas Kisan Sahkari Chini Mills Ltd. Vs. Union of India and others and writ petition No. 44371 of 2009 Dwarikesh Sugar Industries Ltd. Vs. Union of India and others. Counter affidavit and rejoinder affidavit have been filed in the aforesaid writ petitions. Brief facts of writ petition No. 28612 of 2009 are; that the petitioner Rudra Vilas Kisan Sahkari Chini Mills Ltd. is a registered cooperative society under the U.P. Cooperative Societies Act, 1965, which is running a sugar mill at Bilaspur district Rampur. The subject matter of the writ petition is conversion of release order issued for free sales sugar quota into levy sugar quota for the month of February, 2009. By an order dated 29.1.2009, issued by the Government of India in exercise of the powers conferred under sub section (3E) of Section 3 of Essential Commodities Act, 1955 along with provision of Sugar (Control) Order, 1966, Chief Director, Directorate Ministry of Consumer Affairs, Food and Public Distribution permitted the producers/owners of the sugar factories to sell out of production of the year 2008-09 as February, 2009 quota. For the petitioner i.e. Rudra Vilas Kisan Sahkari Chini Mills Bilaspur free sale allocation of February quota was 19237 M.T. The order contemplated that delivery/dispatch of the sugar shall commence from 1.2.2009 and shall be completed by 28.2.2009. The order further contemplated that entire quantity released for the month of February shall be sold within the prescribed validity period and any quantity which remain unsold/undispatched after expiry of the validity period of the order shall stand converted into levy sugar stock. Further violation of condition no. 3 shall be punishable under section 7 of the Essential Commodities Act, 1955. The petitioner claims to have received the order on 5.2.2009 and lifted only 11220 M.T and 8017 Mt sugar could not be lifted. The petitioners claimed to have sent a representation dated 4.3.2009 praying for extension of time for lifting the quota. An order dated 13.4.2009 was issued to the effect that the petitioner being unable to deliver/dispatch the full quantity of non levy sugar as allocated vide the release order dated 29.8.2009, the unreleased/undelivered quantity of sugar 8017 M.T. has been converted as levy sugar. A show cause notice dated 13.4.2009 is said to be issued with regard to monthly release quota from September, October, November, December, 2008 and January and February, 2009 asking to show cause as to why the undelivered/undispatched quota be not converted into levy sugar. The petitioner claims to have received the show cause notice on 28.4.2009, whereas the order converting February, 2009 quota as levy sugar was received on 17.4.2009. The petitioner has referred to an order passed by this Court in writ petition No. 23029 of 2007 Kisan Cooperative Sugar Factory Ltd. Sarsawa Vs. Union of India and others dated 15.5.2009, passed by the Division Bench of this Court directing the Chief Director to consider the grievances of the petitioner in pursuance of which order on 13.6.2008, an order was passed by which the Director accepting the claim of the petitioners of that case converted the levy sugar into non levy sugar . The Petitioner's case in the writ petition is that due to Kanwariya's Mela and further a news item published on 24.2.2009 that stock limits be soon issued, the entire released quantity could not be sold on. In the counter affidavit filed on behalf of Union of India, it has been stated that under the policy of the Union of India, 10% of the sugar production is requisitioned from the producers as levy sugar and remaining 90% of the sugar is allowed to be sold as free sale sugar through the system of regulated release mechanism policy of the Government. The power under Sub-section (3E) of Section 3 of Essential Commodities Act, 1955 read with Sugar (Control) Order, 1966 are exercised not only to make sugar available in reasonable quantity through out the year but also to moderate the sugar prices within a reasonable band. It is stated that in the absence of any sugar distribution mechanism, there is likelihood of a glut in availability of sugar in the market in certain months of the year and shortage in other months resulting in crash of the prices to the detriment of the sugar mills. When prices rise, the Central Government uses the release mechanism to vary the quantity in the market in order to maintain reasonable prices. The regulated release mechanism protects not only the consumer by ensuring the reasonable supply through out the year but also the sugar mills by way of maintaining prices at a steady level. In the monthly relase order, it was clearly contemplated that the entire quota released for the month be delivered disposed of within the validity period and if any quota remained undisposed of the same shall be converted as levy sugar. The writ petition has been filed praying for quashing the order dated 13.4.2009 by which undelivered quota of February, 2009 has been converted as levy sugar.
(3.) THE facts of writ petition No. 44371 of 2009 Dwarikesh Sugar Industries Ltd. are ; the Dwarikesh Sugar Industries Ltd. is a company defined under the Companies Act, 1956 which is running different units. Two orders dated 28.7.2009 issued by the Government of India in exercise of power under Essential Commodities Act,1955 read with Sugar (Control)Order, 1966 directing for conversion of undelivered/undispatched quantity of non-levy sugar into levy sugar for the month of September to December, 2008 and January and February, 2009. By another order of 28.7.2009, conversion into levy sugar has been directed for undisposed of undelivered quantity for the month of March, 2009. The petitioner's case in the writ petition is that during the relevant period, the respondents themselves had commanded to sell buffer stock created at a point of time and also to sell certain quantities of free sale sugar in accordance with the monthly release order issued from time to time. It is submitted that the petitioner could not sell the entire monthly released free sale sugar due to reasons beyond the control of the petitioner. The petitioner's case is that the total allocation of buffer stock for the crushing season 2006-07 was 188.40 M.T. The Central Government thereafter vide order dated 16.4.2008 decided to dismantle buffer stock of 20 lacs tones and further permitted the sugar factories to sell the said quantity of buffer stock in the domestic market from 1st May 2008 onwards till 30th September, 2008 without requirement of release order. Despite adverse conditions, the petitioners were able to sell the buffer stock. The petitioner was also to ensure regular release of free sale/non levy sugar although there was less demand due to heavy rain fall. Further orders were received from the Central Government for dismantling the buffer stock. The petitioner's case is that according to notification dated 1.3.2002 the proportion of levy sugar was fixed as 10% of the total sugar produce and 90% was free sale sugar. The petitioner's case is that there being already a glut in the market due to lifting of huge buffer stock, the entire monthly release quota from September to March, 2009 could not be sold. There was heavy rain during the aforesaid period causing difficulties regarding transportation. Several bridges and roads were damaged. The petitioner also claims to have submitted representation dated 30.9.2008 bringing into knowledge of the respondents the critical situation faced by the petitioner and prayed for extension of time for disposing the quota. Reference to seizure of 64800 bags of sugar by the Commercial Tax Department of the State on alleged non payment of entry tax has also been made in paragraph 36 of the writ petition. It is stated that the said sugar could be released only in April, 2009 due to which same could not be lifted within the time prescribed. Representations submitted by the U.P. Sugar Mills dated 21.4.2009 and 29.4.2009 have also been referred to. The petitioner has also referred to and relied on interim order dated 18.3.2009, passed in writ petition No. 2239 (MB) of 2009 Kisan Sahkari Chini Mills Ltd. Vs. Union of India and others, the order dated 10.11.1981 passed by the Bombay High Court in Criminal Misc. Application No. No. 1472 of 1980 Sri Jagdamba Sahakari Sakhar Karkhana Ltd. Vs. State of Maharashtra, an order of the Bombay High Court dated 27.7.2009, passed in writ petition No. 5120 of 2009 Siddheshwar Sahkari Sakhar Karkhana Ltd. Vs. Chief Director (Sugar) and Anr. and further order dated 4.8.2009 in the same writ petition disposing of interim application. Counter affidavit has been filed by the Union of India justifying the orders, converting free sale sugar into levy sugar. Powers of the Central Government under the Essential Commodities Act, 1955 read with power under Sugar Control Order 1966 has been relied in passing the order.;