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CASE NO.: Appeal (civil)  1073 of 2006

PETITIONER: Duncan Industries Ltd. and Anr

RESPONDENT: Union of India

DATE OF JUDGMENT: 10/02/2006

BENCH: H. K. Sema & B.N. Srikrishna

JUDGMENT: J U D G M E N T (arising out of SLP (C) No. 6297/2004) With Civil Appeal No.1074/2006 @ SLP (C) No. /2006  @CC No.  12164/2004

SRIKRISHNA, J.

       Delay condoned in the Special Leave Petition arising out of CC No.  12164 of 2004. Leave granted in both the Special Leave Petitions.

       The question to be answered in this case is: whether the scheme of  subsidies (known as the "Retention Price Scheme") granted by the  Respondent-Union of India (hereinafter "the Government") to fertilizer  manufacturers, could be retrospectively modified to the detriment of these  manufacturers. In our view, this question needs to be answered in the  affirmative.           The Retention Price Scheme         M/s Duncan Industries Ltd. (hereinafter "the First Appellant") is  engaged in the business of manufacturing and selling urea (a fertilizer). In  1993, the First Appellant acquired the urea plant of M/s Indian Explosives  Ltd. (a unit of ICI India Ltd.). The Second Appellant is a shareholder in the  First Appellant-Company (hereinafter, collectively "the appellants").  

       In 1957, the Government notified fertilizers (including urea) as an  "essential commodity", under the Essential Commodities Act, 1955  (hereinafter "the EC Act"). The Fertilizer (Control) Order, 1957 (hereinafter  "the Fertilizer (Control) Order") was made in exercise of the powers  conferred by Section 3 of the EC Act. The Fertilizer (Control) Order has  been revised from time to time. Through the Fertilizer (Control) Order, the  Government was able to fix the maximum retail price of fertilizers, which  was to be complied with by dealers, manufacturers etc. However, since this  controlled-price mechanism resulted in losses for manufacturers, it was  suggested that the Government provide subsidies to make good the losses.  Accordingly, the Government constituted a Committee under the  Chairmanship of Mr. S.S. Marathe (hereinafter "the Marathe Committee") to  introduce a rational system for the pricing of fertilizers in the country. The  Marathe Committee was to suggest a mechanism that would ensure a  reasonable return on investment to manufacturers of fertilizer, facilitate the  healthy development and growth of the fertiliser industry, and also ensure  that the prices of fertilizer were kept within reasonable limits. To this effect,  the Marathe Committee made a detailed report suggesting an intricate  system of fertilizer subsidies known as the "Retention Price Scheme"  (hereinafter also mentioned as "the Scheme"). This report was considered in  detail by the Government, which decided to introduce the Retention Price  Scheme for units in the nitrogenous fertilizer industry (with effect from  1.11.1977).

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A brief outline of the Retention Price Scheme is necessary. The  Retention Price Scheme was devised with a view to determine the  appropriate subsidy for fertilizer manufacturers. The subsidy is calculated as  the difference between the "Retention Price" and the maximum retail price  fixed for fertilizers (under the Fertilizer (Control) Order). A detailed formula  prescribed under the Scheme determines the Retention Price for fertilizers.   The Retention Price was to be worked out by calculating the cost of  manufacture of urea per ton. The cost of manufacturing urea comprises three  types of costs: (i) Capital-related costs (ii) Conversion costs (or Fixed costs)  and (iii) Variable costs (or Input costs). Capital-related costs incurred by a  manufacturer were the total amount of capital invested, including loan and  equity. Conversion costs included salaries, overheads, chemicals and  consumables, repair and selling expenses, catalysts etc. Variable costs  included the costs of the feedstock (the feedstock may vary from unit to  unit), utilities costs, packaging etc. Also, this formula of Retention Price  provided a post-tax return of 12% on the net worth. The working of the  Scheme provided for a fair ex-factory Retention Price per ton of urea based  upon a capacity utilization of 80% to arrive at the Variable Cost. In this  manner, the Marathe Committee had worked out the Retention Price for  each of the twenty-one urea-manufacturing units. In summary, the  combination of Conversion costs, Variable costs and Capital-related charges  (including the 12% post-tax return) was styled as the Retention Price.

The Retention Price Scheme envisaged a Fertilizer Price Fund  Account for the payment of subsidies. In respect of those units where the  Retention Prices were lower than the maximum retail price, the units were  required to credit the difference to the Fertilizer Price Fund Account.  Conversely, units whose Retention Prices were higher than the maximum  retail price would receive the difference from the Fertilizer Price Fund  Account, as a subsidy.

       The Scheme was to be administered by an inter-ministerial committee,  which also had representatives of the fertilizer industry. This committee was  called the Fertilizer Inter-Coordination Committee (hereinafter "the FIC  Committee"). The FIC Committee was to have an Executive Director and  adequate staff to maintain accounts, make and recover payments, undertake  costing, and collect and analyze production data, cost and other inputs, in  order to work out the Retention Price periodically and make appropriate  adjustments.  

The Operation of the Retention Price Scheme The Government’s decision to introduce the Retention Price Scheme  was formally notified on 1.11.1977 in the Official Gazette. However, even  prior thereto, a letter (dated 24.10.1977) was written by the Government to  the Managing Director of M/s Indian Explosives Ltd. (later acquired by the  First Appellant), wherein the details of the Retention Price Scheme were  indicated. It was pointed out in this letter that:  "\005It is the intention of the Government to bring the scheme of  retention prices in respect of nitrogenous fertiliser into effect  from 1.11.1977 on the basis of voluntary agreements on the part  of individual units to participate in the scheme\005"                                                 (emphasis supplied)

Accordingly, the Government asked for an undertaking to be signed  by a competent authority on behalf of each of the manufacturers and  enclosed a draft of the undertaking to be signed. Finally, the letter stated: "\005your (M/s Indian Explosives Ltd.) willingness to participate  in the retention price scheme communicated, and undertaking  the enclosed form duly executed by a competent authority on  behalf of your company set so as to reach this Ministry before  29th October, 1977."  

Ms/ Indian Explosives Ltd. gave such an undertaking on 10.12.1977,

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which was incidentally after the specified deadline. The undertaking,  addressed to the President of India, was in the following terms:  "Whereas the Government of India (hereinafter called the  "Government") have introduced and are operating, a scheme of  plant-wise retention price in respect of Nitrogenous and  Phsophetic (sic) fertilisers, with a view to ensuring that there is  a sustained and healthy development of the feertiliser (sic)  industry in view, particularly, of the statutory prices control  exercise (sic) by the Government over the selling prices of  fertilisers.

2.      And whereas the retention price scheme envisages  determination of fair retention prices for each product  manufactured by each fertiliser unit taking into account the cost  of production based on norms, return on net-worth, etc. and that  the introduction of this Scheme has been rendered possible by a  contribution from the Government of India by way of removal  of excise duty/FPEC, payment of subsidy and/or otherwise;

3.      And whereas the Government are also being (sic) freight  subsidy in respect of the Nitrogenous and Phsophetic (sic)  fertilisers with a view to covering the cost of transport of  fertilisers, as part of the retention price scheme;

4.      And whereas the retention price scheme also provides for  periodical revisions in the retention prices so as to reflect the  changes in the cost of raw materials/ inputs, cost of  transportation of raw materials/ inputs, etc.;

5.      And whereas Government have been fixing from time to  time a specified amount for tonne (hereinafter referred to as net  realisation) in respect of each product of each manufacturer  based on the prevailing statutory maximum retail selling price,  the rate of distribution margin, etc.;

6.      And whereas it is a feature of the scheme that units  whose retention price as fixed under the scheme is lower than  the net realization, shall pay the difference to the Fertiliser  Industry Coordination Committee (hereinafter referred to as the  "Committee"), which has been set up by the Government to  administer the retention price scheme, and that units whose  retention price as fixed under the scheme is higher than the net  realisation, will receive the difference as subsidy from the said  Committee;  

7.      We, IEL Ltd., do hereby undertake that, in the event of  the retention price fixed for our unit(s)/product(s) being lower  than the net realisatin (sic), we shall credit every month to the  Committee in accordance with such instructions and procedures  as the Government/Committee may prescribe from time to time,  an amount calculated at a rate per tonne of the concerned  nitrogenous/phosphetic fertiiser (sic), equivalent to the  difference between the net realisation and the retention price  fixed for our unit/product on the quantity of the  nitrogenous/phosphetic fertiliser moved out of the factory every  month, within a period of 45 days from the last day of the  month to which the credit relates.

8.      We further undertake that if the aforesaid amount is not  credited by us in the time limit specified above, we shall pay  interest @ 2.5% above the ruling bank rate for working capital  loans as now prescribed, or at such rate as may be prescribed  from time to time, by the Government (Ministry of Chemicals  and Fertilisers).

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9.      We also undertake and promise to abide by the decision  of the Committee, which is final and binding on all matters  relating to the determination of retention price, net realisation,  equated freight, etc.

10.     We also agree to make available to the Government, or  any person nominated for the purpose of inspection, all our  books of accounts and other records connected thereto. We also  agree to follow the procedure for submission of bills/ recoveries  in respect of Nitrogenous and Phsophetic (sic) fertilisers under  the retention price scheme as prescribed by the Government of  India, Ministry of Chemicals and Fertilisers from time to time."                                                       (emphasis added)

       Accordingly, the Retention Price Scheme was brought into operation.  The Retention Price fixed initially, was to be operative for the period  1.11.1977 to 31.3.1979. Thereafter, it was fixed for a period of three years  from 1.4.1979 to 31.3.1982. From time to time, the Retention Prices for five  pricing periods up to 31.3.1991 were notified. Since the calculation of the  Retention Prices and its approval by the Government involved  administrative delays, the approval of the policy and the computation of the  Retention Prices, though made subsequently, were made effective from the  beginning of the pricing period. The Sixth pricing period was to commence  from 1.4.1991 and remain in force up to 31.3.1994. However, the Retention  Price for this price period was actually approved in the Sixty-sixth meeting  of the FIC Committee on 16.12.1994, but made operative from 1.4.1991. It  is important to note that until the Retention Price fixed for this pricing period  was brought into force, the Retention Price that was fixed for the previous  year continued to operate. However, once the Retention Price for the Sixth  pricing period was notified, it was brought into effect from 1.4.1991.  

The Retention Price fixed, which was to be operative only up to  31.3.1994, was actually continued beyond that date. It was initially extended  up to 31.3.1997, and finally to 30.6.1997 (hereinafter "the Six-A pricing  period"). The details of the policy parameters relating to the Sixth pricing  period (1.4.1991 to 31.3.1994) and the Six-A pricing period (1.4.1994 to  30.6.1997) were notified on 24.7.1997/ 5.8.1997. During the extended  period of the Sixth pricing period that is from 1.4.1994 to 30.6.1997 (i.e. the  Six-A period), the Retention Price and the subsidy amount were worked out  on the basis of the Sixth pricing period and payments made and recoveries  effected. All of these transactions were consistent with a continuing practice,  namely, that the Retention Price would be approved after the expiry of the  pricing period, but recoveries and payments would be done, and accounts  settled from the commencement of the pricing period.

       During the continuance of the Seventh (1.7.1997 to 31.3.2000) and the  Eighth (1.4.2000 to 31.3.2003) pricing periods, the Retention Price for each  of the manufacturers was revised on account of changes, as well as,  variations in the different cost factors, the base year being the last year of the  previous pricing period.  

       In 2000-2001, complaints were voiced that fertilizer manufacturers  were misusing the Retention Price Scheme. For instance, it was alleged that  fertilizer manufacturers were actually consuming much lower quantities of  naphtha/furnace oil but were actually being compensated for higher  consumption, resulting in undue gains for them. The Government constituted  a committee chaired by Dr. Y.K. Alagh (hereinafter "the Alagh Committee")  for the purpose of reassessing the production capacity of such fertilizer units.  The Retention Prices were also reduced with effect from 1.4.2000, on an  interim basis. When the final statement of accounts of payments/ recoveries  arising from the implementation of the Seventh and Eighth pricing policies  were drawn, it was seen that an amount of Rs. 2303 crores had to be paid  while recoveries to the tune of Rs. 923 crores could be made.  

In the process of finalizing the Seventh and Eighth pricing period,

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there were detailed discussions held in a meeting between the Government’s  officials and authorized representatives of the fertilizer manufacturing units.  As far as the First Appellant was concerned, one such meeting was held on  7.8.2002 at 2:30 PM, which was attended by the Managing Director and  General Manager (Finance) of the First Appellant-Company. The Minutes of  this meeting show that the Executive Director of the FIC Committee broadly  explained the aspects on which the Retention Price had been worked out for  the Seventh and Eighth pricing periods to the representatives of the First  Appellant-Company. It was also pointed out in the meeting that Retention  Price fixation was subject to the reports of the committees that had been  constituted to examine certain pending issues. It was further pointed out that  the Retention Prices determined for the Seventh and Eighth pricing periods  were subject to further scrutiny of the repairs and maintenance charges and  capital additions allowed in the Retention Price. Thereafter, the  representatives of the First Appellant-Company were informed that based  upon information received by the FIC Committee, certain items of  expenditure were disallowed while finalizing the Retention Price for the  Seventh and Eighth pricing periods, as these were not related to urea  activity.    

       On 8.8.2002, the First Appellant addressed a letter to the FIC  Committee, giving particulars as to the repairs and maintenance charges  incurred for the years 1997-98 to 2000-01. It also raised the issue with  regard to disallowance of the bank charges for Base Years 1997-98 and  1999-2000. Apart from this, no other issue was raised in the said letter.

The Litigation         A Civil Miscellaneous Writ Petition No. 43934/2001 was moved by  the appellants in the High Court of Judicature at Allahabad to challenge the  interim revision of Retention Price made on 5.11.2001 and the consequent  demand raised upon the First Appellant on 13.11.2001 for recovery of         Rs.184.01 crores under the Scheme. Although, the appellants had filed the  Writ Petition sometime in 2001, it was actually moved in 2002, by which  time the Government had recovered Rs. 127.21 crores by way of  adjustments, leaving a balance of Rs. 56.80 crores.  

       A Civil Miscellaneous Application No. 40383/2002 was taken out by  the appellants for interim relief, which was disposed of by an agreed order.  A perusal of the agreed order made on 3.4.2002 does not indicate that there  was any challenge to the manner of computation of the Retention Price, but  only suggested that the recovery of the balance amount of Rs. 56.80 crores  be made in 10 monthly instalments, subject to disposal of a representation  made by the appellants. On the question of payment of subsidy for the  month of January 2002, it was stated in the order itself that it would be  subject to the Government’s power of revision, review and recovery of  excess payment, if exercised, in the future.

       The appellants challenged the working of the Retention Price Scheme  by Civil Miscellaneous Writ Petition No. 43042/2002. This Writ Petition  was dismissed by the High Court through the impugned judgment dated  7.11.2003. By another order dated 7.11.2003, following the impugned  judgment, the High Court also dismissed Civil Miscellaneous Writ Petition  No. 43934/2001.

The Contentions         The appellants impugn the judgment of the High Court under appeal,  on the following grounds:

       Firstly, Dr. Rajeev Dhavan, learned Senior Counsel for the appellants,  contends that the Retention Price Scheme was a statutory scheme made  under the provisions of the EC Act read with the Fertiliser (Control) Order.  Dr. Dhavan contends that this being a delegated legislation could not have  been given retrospective effect to the detriment of the appellants.  

       Next, Dr. Dhavan contended that the High Court had misunderstood

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the operation of the Retention Price Scheme as being entirely ad hoc.  According to him, what was ad hoc was the periodic revision of the  subsidies payable or receivable on account of input particulars, but the  pricing policy determined for the pricing periods would remain constant. Dr.  Dhavan has thus, sought to differentiate the process for determining the  policy norms from the actual process of computing the Retention Price.  

       Third, learned counsel contends that there was a promise made out to  the manufacturers that there would be assured post-tax returns of 12%,  which has allegedly not been fulfilled as a result of the revision of the  pricing norms. Hence, according to Dr. Dhavan, the Government was  estopped from implementing any revision of the Retention Price Scheme,  which would take away the "vested right" of 12% post-tax returns.  

       Finally, Dr. Dhavan argued that the retrospective and adverse revision  of the pricing norms by the Government is "arbitrary", "unreasonable" and  violative of Article 14 of the Constitution, especially since the Government  fixes the maximum retail price of fertilizer.  

       The learned Additional Solicitor General, by reference to the  voluminous record, contended that the High Court was fully justified in its  conclusion, and that there was no substance in the Writ Petition.

The Nature of the Retention Price Scheme         The first contention of Dr. Dhavan is that the Retention Price Scheme  is a statutory scheme, and he accordingly contends that a delegated  legislation could not be retrospectively validated. This argument needs  consideration only if the Retention Price Scheme can be said to have  statutory flavour.  

       In our view, the High Court’s finding that the Retention Price Scheme  is nothing but an administrative order, is correct. Evidently, there is nothing  in the EC Act that deals with Retention Prices. Indeed, Clause 3 of the  Fertiliser (Control) Order merely provides that it is open to the Government  to fix the maximum retail price of fertilizers. Therefore, fertilizer  manufacturers cannot sell fertilizer at a price exceeding the maximum price  fixed under the said clause.  

       On the other hand, there is no provision that deals with the grant of  subsidies for producing fertilizers. We repeatedly asked Dr. Dhavan as to  under which law the Government was obliged to make available subsidies to  fertilizer manufacturers. He fairly admitted that there was no such obligation  on the Government, and stated that if the Government decided to withdraw  the Scheme, it would only have to comply with the requirements of Article  14. Indeed, it must be remembered that the Retention Price Scheme is a  result of the Report of the Marathe Committee. It was intended to serve as a  measure of alleviation to fertilizer manufacturers, so that they were not hit  by the rising prices of inputs, especially since the retail price of the fertilizer  was itself controlled. Thus, it is evident that the Retention Price Scheme is  not linked to any statute in any manner whatsoever, but is a mere  administrative order.  

       Our conclusions are fortified by a judgment of this Court in Neyveli  Lignite Corporation Ltd. v. Commercial Tax Officer  where the nature of  this very Scheme came to be considered, albeit in the context of a sales tax  case. This Court held that the Retention Price Scheme is:  "\005clearly an administrative decision of the Government of  India. It has been issued pursuant to the Ministry’s resolution  and it enables a factory (sic)\005to receive subsidy from the  Government in case the retention price is more than the price  fixed under clause 3 of the Fertiliser (Control) Order."   

       The first contention of Dr. Dhavan must, therefore, fail since the  Retention Price Scheme is a mere administrative scheme without any  statutory flavour.

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Retrospectivity in the Scheme         At the outset, we must note that the Retention Price Scheme, both  conceptually and in its actual operation, has always had an element of  retrospectivity built-in. Indeed, the correspondence between the parties  indicates that the Retention Price was always fixed and made applicable ex  post facto from the beginning of the pricing period with adjustments to be  made towards payments and recoveries. However, Dr. Dhavan seeks to  differentiate the process for determining the policy norms from the actual  process of computing the Retention Price. According to learned counsel,  what was ad hoc and could be retrospectively changed were the subsidies  payable or recoverable in line with actuals. On the other hand, according to  him, the pricing norms (the formula for calculating Retention Prices) could  not be retrospectively changed. We cannot, however, accept this distinction.                    At the outset, the First Appellant had voluntarily entered into the  undertaking dated 10.12.1977, where it promised inter alia: "\005to abide by the decision of the Committee, which is final  and binding on all matters relating to the determination of  retention price, net realization, equated freight, etc."                                                                 (emphasis supplied)         Firstly, neither the above-mentioned undertaking, nor the evidence on  record, appears to indicate that there exists any distinction on the lines  suggested by Dr. Dhavan. Secondly, in our view, "\005all matters relating to  the determination of retention price\005" unambiguously includes the power to  determine the norms and policy that would be used for computing the  Retention Price. Also, as we have already mentioned, from its inception, the  Retention Price Scheme has always had an element of retrospectivity built- in. Therefore, the undertaking entered into by the manufacturers clearly  allows the Government to retrospectively revise the pricing norms/policy for  the Retention Price Scheme. Further, as we shall see, the First Appellant was  at all stages fully aware of and party to the deliberations that went into  determining the norms for calculating the Retention Prices. Hence, in our  view, the distinction sought to be made between the norms for determining  Retention Price and the actual computation of the Retention Price is not  tenable.  

Assured Returns         It is next contended by Dr. Dhavan that the Government is estopped  from formulating a scheme under which the Retention Price fixed would  deny the First Appellant the assured 12% post-tax returns. We do not agree.

       At the outset, we notice that the Scheme was not the result of any  unilateral action on the part of the Government. Although the result of an  administrative decision, it was grounded in an agreement reached between  the Government and certain fertilizer manufacturers. Indeed, it was open to  the manufacturers to decline to enter into such arrangement. This is evident  from the letter of the Government dated 24.10.1977, which put forward the  Scheme. As discussed earlier, this letter requested M/s Indian Explosives  Ltd. (later acquired by the First Appellant) to enter into the Scheme as  suggested, so that it may get the subsidy. The subsidies were, of course,  subject to the provisions of the Retention Price Scheme, and subject to the  undertaking to be given. In response to the letter of 24.10.1977, M/s Indian  Explosives Ltd. gave a categorical undertaking dated 10.12.1977 in the  terms that we have already extracted. It is of significance that M/s Indian  Explosives Ltd., undertook and promised inter alia:  "\005to abide by the decision of the Committee, which is final  and binding on all matters relating to the determination of  retention price, net realization, equated freight, etc."                                                                  (emphasis supplied).          In the face of this undertaking, we are unable to accept the contention  of Dr. Dhavan that the Retention Price Scheme was something that was  compulsorily imposed on fertilizer manufacturers. Indeed, it is not as if the  manufacturers are challenging the maximum retail price fixed under the  Fertiliser (Control) Order. They are merely challenging the manner in which

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the Retention Price, which determines the subsidy payable under an agreed  arrangement, is determined. In fact, when we read the undertaking which  was extracted above, it appears to us that the manufacturers had agreed to  abide by the decision of the FIC Committee, on all matters relating to  determination of the Retention Price as being "final and binding" upon them.  In the light of this, the argument of estoppel is actually the boot on the other  foot.  

       Moreover, even if we were to assume for a moment that certain  returns have been assured, and that this assurance is binding on the  Government, we are not satisfied that this assurance has actually been  breached. We agree with the High Court that there are too many  imponderables and too many disputed questions of fact for an effective  decision in a writ proceeding on this issue. In our view, therefore, this  contention of the learned counsel for the appellants must also fail.

Reasonableness and Legitimate Expectation         Dr. Dhavan next contended that the retrospective application of the  new policy parameters by the FIC Committee is ’arbitrary’, ’unreasonable’  and against the Doctrine of Legitimate Expectation. Learned counsel  contends that since the Government controls the retail price of fertilizer, it  would be ’unfair’, ’unreasonable’ and violative of Article 14 for them to  revise the scheme of subsidies, so that there would be losses caused to  fertilizer manufacturers. In our view, this contention has no merit for both  the facts and the applicable legal principles indicate that there is nothing  arbitrary or unreasonable in what the FIC Committee has done.  

       At the outset, the material placed on record clearly demonstrates that  the representatives of the First Appellant were party to the deliberations  before the FIC Committee, who explained the material particulars regarding  the manner of working out the Retention Price for the Seventh and Eighth  pricing periods. The minutes of the said discussions, read with the  correspondence between the parties pertaining to the Retention Price fixation  for the Seventh and Eighth pricing periods, leave no doubt that the First  Appellant was party to what was being done. Further, at no point, during the  discussions or in the subsequent correspondence, did the First Appellant  question the validity or correctness of the manner of fixation of the  Retention Price (except on some minor issue like bank interest charges).

       Dr. Dhavan cited a number of authorities to support his argument.  However, these cases pertain to situations where tax exemptions, which  were already granted and pursuant to which transactions had been held, were  retrospectively withdrawn. Other authorities also pertained to setting up of  industries in backward areas on promises of rebate/ concessions. In our  view, none of these authorities is of any assistance for resolving the issue  before us, which is purely a consensual working arrangement between the  Government and fertilizer manufacturers. The argument of ’legitimate  expectation’, in our view, cannot have application to the present case. As we  have said, the Scheme was a voluntary one, and having agreed to abide by  the decision of the Government, there is no question of the appellant’s  ’legitimate expectations’ being belied.

       Turning to the Article 14 argument, we emphatically reiterate the  now-accepted position that Article 14 does not require this Court to examine  the intricacies of an economic scheme or pricing policy for its merits or its  correctness, for that is in the domain of the executive or the legislative  branches of the Government.  Indeed, even if the Scheme, as revised, is  "unwise" or even "unjust", there is no recourse before us for, as Justice  Holmes elegantly put it:  "We fully understand\005the very powerful argument that can be  made against the wisdom of the legislation, but on that point we  have nothing to say, as it is not our concern."  

       We are broadly in concurrence with the reasoning of the High Court  that in matters of administrative discretion it is not open to the courts to

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interfere in minute details, except on grounds of mala fides or extreme  arbitrariness. Interference should be only within very narrow limits, such as,  where there is a clear violation of a statute or a constitutional provision, or  extreme arbitrariness in the Wednesbury  sense. Neither the High Court nor  we have found any of these vitiating factors in the administration of the  Retention Price Scheme and the consequent payments/ recoveries of the  subsidy amounts. Thus, in our view, the action of the FIC Committee to  adversely modify the subsidies framework, cannot be questioned on its  merits.

The Case of M/s Nagarjuna Fertilizers

       The learned Additional Solicitor General brought to our notice that,  out of all the concerned fertilizer manufacturing units, only two units have  challenged the Retention Price Scheme for the relevant periods. One of these  is the First Appellant and the other was M/s Nagarjuna Fertilisers and  Chemicals Ltd. (hereinafter "Nagarjuna Fertilizers"). Nagarjuna Fertilizers  had filed SLP (Civil) No. 20721/2003 against the judgment of the High  Court of Andhra Pradesh dismissing its Writ Petition No. 18242/2002 (dated  25.7.2003). This SLP was, however, summarily dismissed by this Court  through order dated 17.11.2003. Although, we have carefully applied our  mind to the case of the First Appellant, independent of the outcome in the  case of Nagarjuna Fertilizers, we find that the two cases are actually  indistinguishable on facts and the present case should have also been  similarly dismissed. In any event, after a detailed examination, we have  arrived at the same result.   

The Final Findings         Despite the bulky material and lengthy arguments presented to us, we  find that this is a case full of sound and fury, signifying nothing. Indeed, we  have found against the appellants on every point that they have chosen to  impugn the judgment of the High Court. In the result, these appeals must fail  and are hereby dismissed with no order as to costs.