ISHWARI KHETAN SUGAR MILLS PRIVATE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners in this case. The Ishwari Khetan Sugar Mills Privale Limited, carry on the business of Manufacture and sale of sugar. They have applied under Article 226 of the Constitution for a writ oi order for quashing the directions issued by the Directorate of Sugar. Ministry of Pood, Government of India, requiring them to deliver their stocks of reprocessed sugar in the year 1967-68 at the rates fixed by lhe Central, Government for delivery of sugar produced in the reason 1966-67 and for prohibiting the respondents from compelling them. to reprocess the 3,000 bags of damages sugar lying with them and to permit the same being sold in free market. The petitioner was admitted to be hear by a Division Bench but in view of the important questions involved, it was referred toa Full Bench for decision and that is how the case is now before us.

(2.) The occasion for filing this petition arose because of an accidental fire that took place on May 30, 1967, during the sugar seasons of the year 1966-67 in the petitioner's codown No. 3 involving 14,659 bags of manufacture sugar, out of which 1.114 bags were completely lost and the remaining 13.515 were damaged either by fire or fire-fighting .operations. As sugar at that time was a controlled commodity and could not be sold without permit, the petitioners approached the appropriate authorites in the Sugar Directorate with a request to issue perinils to release the damage stocks for sale in the market. This request was however, refused by the Directorate because the damages sugar did not conform to the prescribed Indian Sugar Standard (ISS) of D-29 Grade of Sugar, which alone could be released or human consumption they advised the petitioners to reprocess and to intimate the quantity of white sugar obtained after reprocessing duty certified by Central Excise Inspector of their factory, to enable the Directorate of consider its release. The petitioners, in consequence, started reprocessing but by the end of 1966-67 seasons out of the damaged 13,515 bags, they could with difficulty and after incurring heavy costs reprocess 10.515 bags only, 3,000 bags stil remained with them. in the unprocessed form.

(3.) In Januuary, 1968, the Government by letter No. 4-2(13) 66-SCII January 20, 1968 (Annexure B) informed the petitioners that the reprocessed sugar would be treated as levy sugar' and reiterated that it was not possible to release the damaged sugar for sale in free market. The words 'Levy sugar represented the GO per cent of total production of sugar of the year 1967-68, which, under a revised policy for this season, the Government had decided to take over to be released under permits issued by them at controlled prices. By another letter dated January 30, 1968 (Annexure C) the petitioners were further informed that the reprocessed sugar had to be delivered by them at rates applicable for deliveries of sugar produced in 1966-67, as fixed by the Central Government by order dated November l6, 1967, issued by them in exercise of powers conferred by sub-section (3c) of section 3 of the Essential Commodities Act. 1955. This order fixed, the ex-factory price of sugar at Rs. 139.07 p. per quintal for the Sugar produced in 1966-67.