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PETITIONER: NEWABGANJ SUGAR MILLS CO. LTD. & ANR.

       Vs.

RESPONDENT: UNION OF INDIA AND ETC.

DATE OF JUDGMENT16/09/1975

BENCH: KRISHNAIYER, V.R. BENCH: KRISHNAIYER, V.R. FAZALALI, SYED MURTAZA

CITATION:  1976 AIR 1152            1976 SCR  (1) 803  1976 SCC  (1) 120  CITATOR INFO :  R          1980 SC1037  (4,6)  R          1985 SC 901  (11)

ACT:      Exercise amounting  recovered  by  sugar  manufacturers under rule in Court’s stay order subsequently declared to be illegally recovered-Refund  to the  consumers  expeditiously and inexpensively

HEADNOTE:      The appellants  challenged the  validity of fixation of price of  levy the  high Court.  During the  pendency of the petitions, the  appellants a  stay order from the High Court for charging  the price  in eyes price fixed by the State on furnishing Bank  guarantees for the excess price Ultimately, the High  Court upheld  the control  of price  and  directed appellants to  restore the  excess money  recovered from the consumer to the through the State Government. The appellants filed the  present  Special Leave  against the said order of the High  Court and  contended that since the Sugar Industry had lean  year, the  excess  amount  should  be  allowed  to retained by  the appellant  or that the excess amount should be to  be utilised  for stabilising  the sugarcane  growers’ economic position alternative, it was prayed that the excess amount could  remain with  the appellant  unite  a  suitable scheme for the return of the excess amount to the was made.      Dismissing the appeals, ^      HELD :      1. The  appellants had  doubt  business  use  of  these crores of  rupees for  nearly a  year even  after  the  High Court’s final judgment. The money of the many little men got by the  few millers by selling an essential commodity to the community at  what is  frankly black  market price under the umbrella of  court order  of stay  shall  get  back  to  the scattered  crowd   of  small   consumers  as  early  and  as inexpensively as  possible. A  public injury  perpetrated by calling in  aid court process must waken judicial conscience to improvise  an ad  hoc procedure  to restore  through  the court’s authority  what has  been nibbled  from the numerous buyers. The  handling of  small claims  is probably  a  must deplorable features  of the  administration of civil justice

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and yet  small claims are in many respect more signification than large  ones, involving  large numbers  and inter  class disputes. If  the confidence of the community in the justice system especially  consumer protection.  is to  be  created, radical reform of the processual law is needed now and here. The inherent  power of  the  court  has  its  roots  in  the necessity  and   its  breadth   is  co-extensive   with  the necessity. The  Court  directed  that  the  Bank  guarantees furnished by  the  appellants  should  be  encashed  by  the Registrar and  kept in short-term deposit. That he claims of the consumers should be settled by the Registrar of the High Court under  the order of the High Court through an easy and cheap machinery.  That wide  publicity should be given about the method  of returning  and that  small  claims  might  be accepted by  cost and money also returned by post. [804 C-E. 806 A. D 807 BD]

JUDGMENT:      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1186 to 201 of 1975.      Appeals by  Special Leave  from the Judgment and orders dated the  11th November,  1974, 6th December, 1974 and 27th November, 1974  of the  Allahabad High  Court in Civil Misc. Writ Nos.  4139, 5354,  5352-5353,  5355-5357,  4065,  4912, 4326,  4212,  4218,  4545,  4328,  4543  and  4769  of  1972 respectively. 804      G. S. Pathak (In CA 1186/75), S. Swarup Shri Narain for the  appellants  (In  CAs.  Nos.1186,  1194-1195  and  1196- 1197/75).      5. V.  Gupte, R. N. Bhalgotra and S.S. Khanduja for the appellants (In CA No. 1187/75).      S. S.  Khanduja for  the appellants (In CAs. Nos. 1188- 1192 of 1975) .      V.  J.   Francis  of  M/s  Ramamurthy  &  Co.  for  the appellants (In CA No. 1193/75).      Yogeshwar Prasad and Miss Rani Arora for the appellants (In CA No. 1198/75) and (1199/75).      N. N.  Goswamy and Arvind Minocha for the appellant (In CA No. 1201/75).      The Judgment of the Court was delivered by      KRISHNA IYER,  J. We  should have  made short  shift of this batch of appeals on the brief but fatal ground that the appellants-all  sugar   millers  who  had  over-priced  this essential  consumer   article  and  had    failed  in  their challenge of  the controlled  price had  no moral  nor legal claim to  keep the  huge sums which the High Court had right to directed them to disgorge. When the price of ’levy sugar’ was pegged down by the State, these factory owners rushed to the Court impeaching the validity of the control and secured a stay of operation of the order. Under cover of the Court’s stay order  which was  granted, on  bank guarantee  for  the excess price  being furnished  to the  court, the appellants sold sugar at free market rates, a euphemism for blackmarket racket-unfortunately,  with  judicial  sanction.  Crores  of rupees were  admittedly funnelled  into the  millers’ tills. But, eventually,  the High Court upheld the control of price and the  unhappy obligation to restore the unjust enrichment arose. The  High Court, whose process kept the control price in cold  storage, had  to do  justice by  the  community  of consumers who  were the unwitting victims of this judicially declared holiday  from control  which was  quickly converted into a  fleece-as-you-please seller  situation. And  so  the

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Court made the following direction:           "We, therefore,  direct that  the  Registrar  will      take immediate steps to encash the security and recover      the amount  so over-charged  by the petitioners and pay      the same  to the State Government which will keep it in      a separate account. The petitioners will furnish to the      State Government,  within a period of six weeks of this      order, a list of all such persons to whom they sold the      levy sugar  of  1971-72  season,  together  with  their      addresses, quantity  of such  sugar  sold  to  and  the      amount of  excess price  charged from each of them. The      State  Government  will  then  refund  to  the  persons      concerned the excess amount realised from each of them,      if necessary,  after verifying  the claim for refund of      such amount made by such persons." 805      The reluctant  millers have  sought and  got  leave  to appeal against  this just  direction and  in the  course  of arguments have  made some  suggestions about the disposal of the moneys.  The inarticulate  assumption  was,  presumably, that crores  of  rupees  could  remain  with  them  until  a suitable schemes for percolation of the excess prices to the ultimate small  buyer could  be fashioned.  Indeed, at  some stage, a  hesitant proposal  was made  that since  the sugar industry has  allegedly had  lean years,  these considerable sums ’picked’  from the  pockets of a considerable number of consumers had  better be  allowed  to  be  retained  by  the millers. Another  diffident hint was made that these several crores of  rupees be  used for  stablising  the  sugar  cane growers’ economic  position. The  easy-to-see-through design behind these  ’developmental’ ideas  was to have use of this large windfall till some distant project was evolved.      Indubitably,  the   appellants   are   in   unrighteous enjoyment of  colossal sums which belong to small consumers. Not amount  more can  the millers  keep what  the Court  has ordered the  Registrar to  collect  by  enforcing  the  bank guarantees. Indeed,  they have  had dubious  business use of these vast  sums for  a few  years-nearly a year, soon after the High  Court’s final judgment. Once we disenchanted them, as arguments  proceeded, that  the conscience  of the  Court would unconditionally  compel the  money  to  be  called  in forthwith,  their   interest  in  making  fertile  pro  bono public.co  suggestions  as  to  how  best  to  organise  the disbursement of  the small sums to the actual buyers flagged and, later  in the  day, Shri Dadachanji, Advocate-on-record in these  cases, even  moved that  if  leave  had  not  been formally granted,  the special leave petitions be allowed to be withdrawn  and if  leave had been already granted, Court- fee exemption  for these  many appeals may be directed. This shows up  the public  concern of  these sugar manufacturers. Anyway, the Registrar of the High Court shall take immediate steps to  encash the  security furnished  by the appellants. The money  of the  many little men gotten by the few millers by selling  an essential  commodity to the community at what is frankly  black-market price  under the  umbrella of Court order of  stay shall  get back  to the  scattered crowd of a small consumers as early and as inexpensively as possible. A public injury  perpetrated by  calling in  aid Court process must quicken  judicial conscience  to improvise  an  ad  hoc procedure to  restore through the Court’s authority what has been nibbled from the numerous buyers. Innovative realism is obligated on  the Court  on the  broad  basis  actus  curiae neminem gravabit.  Why did  the buyers pay higher prices for levy sugar ? Because, they respected the High Court’s order.      In this  justice situation  conventional procedures  of

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each small  claimant being  left to  litigate for his little sum from the miller or wholesaler is to write off the remedy and allow  the ill-gotten wealth to be in the coffers of the wrong-doer (who got the charter to charge high, from a Court order). Nor  is  the  seemingly  sweet  suggestion,  that  a representative  action  under  order  1.  r.  8  C.P.C.,  be instituted on  be half  of the class of consumers, feasible. Who is  to start?  Against whom ? How is he to meet the huge litigative costs  and how long (O, Lord, how long!) is he to wait with  long-drawn-out trial  procedures  appeal,  second appeal, special  appeal" and  Supreme Court appeal ? For, on the other side is the miller with the millions to be coughed up 806      The handling  of small  claims  is  probably  the  most deplorable feature  of the  administration of  civil justice and yet  small claims  are in many respects more significant than large  ones, involving  large numbers  and  inter-class disputes. If  the confidence of the community in the justice system, especially  consumer protection,  is to  be created, radical reform of the processual law is needed now and here.      Rejecting, therefore,  the recommendations for solution of the  problem arising  here. as put forward by counsel for the appellants,  we have  to devise  other measures.  We are aware of our limitations .           "The judge"  even when  he is  free, is  still not      wholly free.  He is  not to innovate at pleasure. He is      not a  knight-errant roaming  at will in pursuit of his      own ideal  of beauty  or of goodness. He is to draw his      inspiration from  consecrated principles.  He is not to      yield to  spasmodic santiment, to value and unregulated      benevolence. He is to exercise a discretion informed by      tradition,  methodized   by  analogy,   disciplined  by      system, and  subordinated to  ’the primordial necessity      of order in social life.’ Wide enough in all conscience      is the field of discretion that remains." (1)      The difficulty  we face here cannot force us to abandon the inherent  powers of the Court to do. "The inherent power has its  roots in  necessity and its breadth is co-extensive with the  necessity".(2) Certainly, we cannot go against any statutory prescription.  Had India had a developed system of class actions  or  popular  organisation  taking  up  public interest  litigation,   we  could   have  hoped  for  relief otherwise than by this Court’s order. We lag in this regard" although  people   are  poor  and  claims  are  individually trivial. Legal aid lo the poor has a processual dimension As things stand,  if each victim were remitted to an individual suit the  remedy could  be illusory, for the individual loss may be  too small,  a suit too prohibitive in time and money and the  wrong would  go without  redress. If there is to be relief,  we   must  construct   it  here   by  simple  legal engineering.      The Solicitor  General appearing  for the State of U.P. and the  Union of  India, informed  us that  legislation was about to  be enacted to take care of these situations. If it did come,  it were  welcome. After all, the Legislature must show better  legal concern for the small marl, as this class of consumers who are wronged or deceived are on the increase      In the  present  case,  we  think  that  the  following complex of directions will pragmatically meet the needs both of the  appellants and  the range of buyers from whom higher prices were charged :           A. The security by way of bank guarantee furnished      by every  appellant will  be encashed by the Registrar.      Of the High Court and kept in short-term deposit in the

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    State Bank of India r (1) Benjamin  Cardozo’s ’The Nature of the Judicial Process’      Yale university Press (1921) (2) Theoretical Basis Inherent Powers Doctrine Text material      prepared by  Jim R.  Carrigan-Publication  of  National      College of The state Judiciary,  U.S.A. 807           B. The  appellants will be given complete immunity      from liability to any sugar buyer, wholesaler or other"      to whom sugar has been sold by the appellants at higher      prices during  the period  covered by  the High Court’s      stay order. If any exceptional case of claim were to be      made by  any buyer,  it .....  should be done by motion      before the  High Court  which will I be justly disposed      of.           C. The  Registrar, under orders of the High Court,      will  directly   or  by   making  over   to  the  State      Government, receive  and dispose  of  claims  from  the      ultimate consumer  for  excess  price  paid  on  proper      proof. If  the State  Government is  to undertake  this      task,  a   proper,  easy   and  cheap   machinery   for      distribution to  the real, last buyers will be produced      before the  High Court and orders obtained. The process      should not be too expensive or too formalised.           D. Wide  publicity will be given about the project      and method of returning small claims and the money sent      by post or otherwise. The claims also would be received      by post or otherwise and verified without delay.           E. The  interest accruing  from the  bank deposits      will be  used for  the  incidentals  to  work  out  the      distribution.           F. It  will be  open to the wholesaler to prove by      vouchers the retailers and the latter in turn may prove      who the  ultimate ,  buyers are.  The  High  Court  may      devise modifications of this scheme or direct the State      Government to  act on  any scheme subject to the moneys      reaching the real small buyers from the retailers.           G. If  any further  directions in the mechanics of      the scheme  are felt  necessary, the  High  Court  will      report to this court.           H. If,  within one  year from  today, any  amounts      remain unclaimed  they will  go into a separate deposit      in the  High Court to be operated on application by any      claimant.           I. If  any legislation  dealing with  this subject      were to  be made  before the amounts are disbursed, the      legislative scheme  will pro  tanto  prevail  over  the      directions given above.           J. The  court-fee on  these civil  appeals will be      exempted in the special circumstances of the case.           K. Parties  will bear  their  own  costs  in  this      Court.      May  be  the  procedure  we  have  suggested  above  is      somewhat unconventional  but where  public interest  is      involved.      "Courts of  equity may,  and  frequently  do,  go  much      further both to give and withhold relief in furtherance      of the  public interest  than they are accustomed to go      where only 808      private  interests   are  involved.   Accordingly,  the      granting or   withholding  of relief  may  properly  be      dependent upon  considerations as of public interest ..      "(1)      We hope  the vigilant  legislature will activise itself

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on behalf  of the  little men  and the  law and  make quick- moving,  easily   accessible  and   free  of-cost   consumer protection measures. Slogans are not law and the rule of law in a  welfare oriented constitutional order demands ’poverty law none  too soon;  with emphasis  on the delivery of legal services with  distances shortened and road hazards removed. It is not for the Court to spell out more, but it is for the State to  awaken to  a overlooked, but not infrequent, legal phenomenon. P.H.P.                                    Appeals dismissed.      (1) 27 Am. Jur.2d, Equity,p.626 809