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PETITIONER: BILESHWAR KHAN UDYOG KHEDUT SHAHAKARI

       Vs.

RESPONDENT: V.Union of India and another

DATE OF JUDGMENT:       10/02/1999

BENCH: V.N. Khare, R.P. Sethi.

JUDGMENT:

V.N.Khare, J.

       The appellants in  these  appeals  are  Co-operative Sugar  Factories  engaged  in the business of manufacture of sugar in the State of Gujarat.    On  15th  June,  1972  the respondent   issued   an   order   known   as   Sugar  Price Determination Order and on the same day.   The  Levy  (Sugar Control)  Order,  1972  was  issued  under  which  the sugar manufacturers were required  to  sell  sugar  to  the  Union Government,  State  Government  or  their  nominees  at  the controlled price of Rs.   124.59  per  quintal  for  D-Grade sugar.   The appellants challenged the aforesaid Sugar Price Determination Order and  Levy  Control  Order  by  means  of separate petitions  before  the  Gujarat High Court.  In the writ petition there was a prayer for  interim  relief  also. Interim  prayer  as  contained in the writ petition reads as follows :

       "That pending the hearing of the  petition         your Lordships will be pleased to issue an         interim    injunction    restraining   the         respondents their servants and agents  and         or  their  successors  in  office  as  the         impugned orders requiring  the  petitioner         to supply sugar to the State Government or         Union Government or to their nominees at a         price of Rs.  150/- per quintal."

       The High Court by an order  dated  31.7.72  admitted the writ petition and granted interim order as prayed for in the writ  petition.  Subsequently on 29.8.72, the stay order was made absolute.   Some  time  in  March,  1973  the  writ petition came up for hearing and on that day the counsel for the  appellant stated before the Court that by inpse of time the writ petition was rendered  infructuous.    Consequently the writ petition the Parliament passed an Act known as Levy Sugar Price   Equalisation   Fund  Act.    197  (hereinafter referred to as the "Act").  One of the objects  of  the  act was to make provisions for refund of excess realisation made by the sugar factories on the basis of interim orders issued by the  courts.    After  the  Act came into force, Union of India filed separate applications for issuing  direction  by the  High Court to the writ petitioners whose writ petitions were dismissed by the High Court to pay  the  difference  of

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price between Rs.    124.59  and  Rs.    150/-  per  quintal released by them on account of interim order granted by  the High Court  along  with  interest.    The  High  Court after hearing the matter directed the appellants to credit to levy sugar price equalisation fund  the  difference  between  the control price  of Rs.  124.59 and the price released by them in respect of levy sugar sold by  them  between  31.7.72  to 12.3.73.    The   High   Court  further  directed  that  the appellants shall credit to the fund interest at the rate  of 12-1/2%  per  annum  on the excess realisation made by them. It is against this order the appellants came to  this  Court by means of special leave petitions.

       This  Court granted special leave in all the appeals limited to the question as  regards  the  liability  of  the appellants  to  pay  interest on the amounts which they were called upon to refund the excess relisation meaning  thereby that  leave  was  refused  to the extent the appellants were required to refund the  excess  realisation  made  by  them. Thus  the only question which is before us is, as to whether the appellants are liable to pay interest  at  the  rate  of 12-1/2% per annum on all the excess realisation made by them on the basis of interim orders obtained by them.

       Learned  counsel appearing for the appellants raised two arguments.  The first argument is that the amount  which the  appellants  were  required  to refund was not an excess realisation within the meaning  of  the  expression  "excess realisation"  as  contained  in Section 2(b)(ii) of the Act. The second argument is that their cases are not governed  by sub-section  (3) of Section 3 of the Act but are governed by Section 3(4) and (5) of the Act.

       Coming  to the first argument, the contention of the appellants counsel is that since the interim order passed by the High Court on the basis of  which  the  appellants  made excess  realisation having not set aside by the appellate or higher court, the realisation made by the  appellants  would not  fall  within  the ambit os Section 2(b)(ii) of the Act. The  contention  is  that  interim  order  passed  in   writ petitions although automatically lapsed on dismissal of writ the  petitions,  but  were not set aside by the appellate or higher court.  This contention is wholly untenable.   It  is not disputed that on the dismissal of the writ petitions the interim  orders  passed  therein  were  automatically  stood discharged.  The ordinary meaning of the word ’set aside’ is to revoke or quash, the effect  of  which  is  to  make  the interim order  inoperative  or non-existent.  In the present case when High Court dismissed the writ petition the interim order passed therein became non-existent  and  in-operative. The  effect of setting aside an order or automatic discharge consequent upon the dismissal of writ petition is the  same. In  fact the expression ’set aside’ used in Section 2(b)(ii) means the interim order has come to an end  and  has  become inoperative.   We,  therefore,  reject the first argument of learned counsel for the appellant.

       So far as the second argument is concerned, we  have held hereinbefore that the interim orders passed in the writ petitions  came  to an end on dismissal of the writ petition before the Act came into force, and under such circumstances Section  3(4)  and  (5)  can  have  no  application  in  the appellants’ case.    The  Supreme  Court  in  The  Ankepalle Co-operative Agricultural & Industrial  Society  Ltd.    and another etc.  vs.   Union of India and others etc.  1977 (4)

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S.C.C.  2041 has  held  that  sub-section  (4)  and  (5)  of Section 3 do not apply to a case in which interim order made by  a  Court  has  already  come  to  an  end as a result of termination of final proceedings before the commencement  of the Act.    Moreover,  the  special  leave against the order passed by the High Court directing the appellants to  refund the excess realisation made by them was refused.  Thus it is not  open  to  the  appellants to raise this argument again. Since in the present case sub-section (3) of  Section  3  of the  Act  which provides for grant of interest on the excess realisation  made  by  the  appellant  is   applicable   the appellants are  liable  to  pay  interest.    We, therefore, reject the second contention of the counsel.

       For all the reasons stated above, we do not find any merit  in  the  appeals.  The  appeals are dismissed with no order as to costs.