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PETITIONER: NEW INDIA SUGAR WORKS ETC. ETC.

       Vs.

RESPONDENT: STATE OF UTTAR PRADESH AND ORS.

DATE OF JUDGMENT27/02/1981

BENCH: FAZALALI, SYED MURTAZA BENCH: FAZALALI, SYED MURTAZA REDDY, O. CHINNAPPA (J)

CITATION:  1981 AIR  998            1981 SCR  (3)  29  1981 SCC  (2) 293        1981 SCALE  (1)422  CITATOR INFO :  R          1987 SC1802  (10)  F          1987 SC2351  (5,9,12)

ACT:      Retrospective operation  of law-Order  levying duty  on Khandsari issued-Order,  whether applies  to existing stocks or only to future stocks-Price fixed less than manufacturing cost-Order, if liable to be quashed.

HEADNOTE:      On the  questions (1)  whether an order imposing a levy on Khandsari  could have  retrospective operation  so as  to apply to  sugar manufactured  prior to the date of the order and (2)  whether in  fixing the  price  of  levy  sugar  the Government should  consider that  the price  fixed should be sufficient to cover the manufacturing cost. ^      HELD: 1. It is not the question of retrospectivity of a statute but  its actual  working that  is  relevant.  It  is settled law  that where  a statute  operates  in  future  it cannot be said to be retrospective merely because within the sweep of  its operation  all existing  rights are  included. Once the notification for imposing the levy was made it will naturally apply to the existing stocks of khandsari with the petitioners irrespective  of  whether  it  was  manufactured before or after the order. [31B; 30G]      2. The  policy of  price control  has for  its dominant object  equitable   distribution  and  availability  of  the commodity at fair price to benefit the consumers. Individual interest,  however   precious,  must  yield  to  the  larger interest of  the community namely the consumers. Even if the petitioners have  to  bear  some  loss  there  could  be  no question  of   the  restrictions   imposed  on   them  being unreasonable. [32 B]      The fixation  of price  would be  in  the  interest  of consumers rather  than that of the producers. Moreover since the petitioners were allowed to sell freely at any rate they liked, the  remaining 50%  of sugar  after excluding the 50% which they  had to  give to levey as also the produce by the second and  third processes, the loss, if any, caused to the petitioners, would be minimal. [32 G]

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JUDGMENT:      ORIGINAL JURISDICTION:  Writ Petition Nos. 896/81, 865- 890, 577-591,  592-606, 607-621,  622-628, 629-633,  634-37, 964-88, 544,  545-575, 766-774,  775-776,  902-63,  897-901, 535-37, 532-34, 529-531, 639 and 540-43/81.            (Under Article 32 of the Constitution)      H.K. Puri for the Petitioners in WP 896/81.      Vimal Dave for the Petitioners in WP 865-890/81.      A.K.  Sen,   R.M.  Dube   and  Sarva   Mitter  for  the Petitioners in WPs 540-43/81. 30      Soli J.  Sorabjee, S.S. Ray, A.K. Sen and R.K. Jain for the Petitioners in WPs 529-37, 544-575, 577-538, 766-776 and 897-988/81.      S.S. Ray,  Soli J.  Sorabjeee and  R.K.  Jain  for  the Petitioners in WPs 634-37/81.      Lal Narain Sinha, Attorney General, O.P. Rana, and Mrs. S. Dikshit for the Respondent (State of U.P.) in WPs 540-43, 529-37, 540-43, 544-77 and 577-638/81.      M K. Banerjee Addl. Sol. Genl. and S.K. Gambhir for the State of Madhya Pradesh.      Miss A. Subhashini for Union of India.      The Order of the Court was delivered by      FAZAL ALI,  J. Having  heard counsel for the parties at great length  we are satisfied that there is no violation of the fundamental  right of  the petitioners enshrined in Art. 19(1)(g) of  the  Constitution  of  India  nor  is  Art.  14 attracted to  the facts  of  the  present  case.  There  is, therefore, no  good ground  to entertain  the petitions.  We would, however,  like to  add that  on the  materials placed before us  the Government  may consider  the desirability of adopting such  measures as  may soften  the rigours  of  the impugned orders  which, though not arbitrary or excessive so as to  violate Art. 14 or 19, do merit some consideration by the Government in order to effectuate the policy under which the impugned notification was made.      There are, however, two arguments urged before us which need special  mention. In  the first  place it was submitted that in the U.P. cases the order impugned imposing a levy on the khandsari  produced by  the petitioners  cannot have any retrospective operation so as to apply to the stock of sugar manufactured prior  to the date of the order and would apply only to  the sugar  produced after  the coming into force of the impugned  notification.  So  far  as  this  argument  is concerned we find no substance in the same because it is not a question  of retrospectivity of the statute but its actual working. Once the notification imposing the levy was made it will obviously  apply to  stock of khandsari produced by the petitioners either before or after the order. This principle has been clearly laid down by the Constitution Bench of this Court in  the case  of Trimbak  Damodar Raipurkar v. Assaram Hiraman Patil  and Ors.(1) where Gajendragadkar, J. speaking for the Court regarding the 31 scope of  a Rent  Act and  Amendment in Rent Act observed as follows:           "In this  connection it is relevant to distinguish      between an  existing right  and a vested right. Where a      statute operates  in future  it cannot  be said  to  be      retrospective merely  because within  the sweep  of its      operation all existing rights are included.      This Court  followed the dictum of Buckley, L.J. in the case of  West v.  Gwynne.(1) In  the aforesaid case Buckley,

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L.J. while  construing an  amendment in the Act by which the contract was governed observed as follows:-           "The Act  of 1881  thus expressed that in the case      of leases  made either before or after the commencement      of the  Act a  covenant not  to assign  without licence      should be  enforceable just  as before.....This section      is to  be read  as if  it were  contained in the Act of      1881, and is dealing with a subject-matter mentioned in      the Act of 1881, and as to which there is in that Act a      provision that the enactment shall apply to leases made      either before or after commencement of the Act." Hardy, M.R. in a concurring judgment while construing second amendment in  section 14 of the Conveyancing Act pointed out thus:-           "In the  First place,  the language of the section      is perfectly  general, "in  all leases,"  and there  is      nothing in  the section  itself to confine it to leases      subsequent to the Act.           Almost every  statute affects  rights which  would      have been in existence but for the statute." In these circumstances, therefore, once the notification for imposing the  levy was  made it  will naturally apply to the stock of  sugar which  was with the petitioners irrespective of the  fact that  it was  manufactured before  or after the Order.      It was  next strongly contended that in fixation of the price of  levy sugar  the  Government  has  not  taken  into consideration the  fact that the petitioners would undergo a serious loss  because the price would not be sufficient even to cover their manufacturing cost. We 32 are, however, unable to agree with this argument. The policy of price  control has  for  its  dominant  object  equitable distribution and availability of the commodity at fair price so  as  to  benefit  the  consumers.  It  is  manifest  that individual interests,  however, precious  they may  be  must yield to the larger interest of the community namely, in the instant case,  the large  body of the consumers of sugar. In fact, even  if the  petitioners have to bear some loss there can be  no question  of  the  restrictions  imposed  on  the petitioners being  unreasonable. In  Shree  Meenakshi  Mills Ltd. v. U.O.I.(1) this Court observed as follows:           "If fair price is to be fixed leaving a reasonable      margin of  profit,  there  is  never  any  question  of      infringement of  fundamental right to carry on business      by imposing reasonable restrictions.           In determining the reasonableness of a restriction      imposed by  law in  the field  of  industry,  trade  or      commerce, it  has to  be remembered  that the mere fact      that some  of  those  who  are  engaged  in  these  are      alleging loss  after the  imposition of  law  will  not      render the law unreasonable."   (Emphasis Supplied) Similar view was taken by this Court in the case of Prag Ice and Oil  Mills and  Anr. etc. v. Union of India(2) where the Court speaking through Beg, C.J., observed as follows:           "It has  also to  be remembered that the object is      to secure  equitable distribution  and availability  at      fair prices  so that it is the interest of the consumer      and not of the producer which is the determining factor      in applying  any  objective  tests  at  any  particular      time."      In this view of the matter the primary consideration in the fixation of price would be the interest of the consumers rather than  that of  the producers. Moreover, we think that since the petitioners are allowed to sell freely at any rate

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they like  the remaining  fifty per  cent  of  sugar  (after excluding the  fifty per  cent which  they have  to give for levy) as also the produce by the second and third processes, the loss if any caused to the petitioners would be minimal.      Lastly, it  was urged that Sub-Clause (5)-which is Sub- Clause (3)  in the notification issued by the Madhya Pradesh Government- 33 in the  impugned notification  issued by the U.P. Government is  extremely   arbitrary  inasmuch   as  by   insisting  on certificates it deprived the petitioners of the free sale of sugar of  the remaining amount of fifty per cent as also the Khandsari produced  by second  and third  processes. We  see some force in this argument but the Attorney General frankly conceded that  he will  see that  no inconvenience  on  this score is  caused to  the petitioners. He gave an undertaking to the  Court that  he will get the respective Sub-Clauses 5 and 3  of the impugned orders of the U.P. and Madhya Pradesh Governments  deleted   or  withdrawn  so  as  to  allow  the petitioners to  sell the  remaining amount  of sugar as also the stock produced by the second and third processes without any hitch  or hindrance.  This will,  however, be subject to routine and  quick inspection.  In view of this undertaking, therefore we  feel that a substantial part of the grievances of the petitioners would be removed. To be on the safe side, however we  allow the  stay granted  in all the petitions to continue until  the provisions  of respective  Sub-Clauses 3 and  5   passed  by  the  State  Governments  concerned  are withdrawn.      We may also emphasise the fact that the amount of sugar taken by  the Government  through levy  should  be  properly stored  and   duly  protected  from  rain  and  rot  and  be despatched to  the various  control depots  expeditiously in order to  ensure a  quick and  equitable distribution of the commodity amongst the people at moderate rates.      The Government  may also  consider the  desirability of giving a  bare minimum  hearing to the representative of the owners of the cane crushers in future before fixing the rate at which the levy is taken from the owners so as to see that the owners  of the  crushers are  not put to such great loss that they are completely wiped out from business.      With these observations the petitions are dismissed. N.K.A.                                  Petitions dismissed. 34