vil Appeal Nos
2 19293 of 1972
From the Judgment and Decree dated 2341971 of the Madras High Court in Writ Appeal Nos 155 and 157 of 1970
GL Sanghi K Parasaran section Krishnamurthy Iyer KK Venugopal DN Mishra and Ms Lira Goswami for the Appel lants
VC Mahajan Gobind Das NL Kakar CV Subba Rao BR Aggarwala TC Sharma Mrs Sushma Suri and Ms Sushma Manchanda for the Respondents
The Judgment of the Court was delivered by VERMA J
Both these appeals are against the common judgment of the Madras High Court hereinafter referred to as the High Court  by a certificate under Article 1331 of the Constitution prior to its amendment
The appellants  writ petitions were dismissed by a common judgment dated 18121969 by a learned Single Judge of the High Court and thereafter the writ appeals were dismissed by a Division Bench of the High Court on 2341971
The grievance of the appellants before us is as it was in the High Court against the fixation of a uniform retention price in 1969 to be paid to all producers for the cement produced by them and acquired by the State Trading Corporation
In short the appellants  grievance is that the fixation of a uniform retention price for all producers in 1969 instead of three different retention prices for different categories of producers as was done earlier amounted to discrimination contravening Article 14 of the Constitution
The background in which the argument of discrimination has to be tested may now be stated
Cement has been a con trolled com 853 modity for a long time and its production distribution and price were regulated by Cement Control Orders issued by the Central Government from time to time in exercise of the powers conferred under the Industries Development  Regula tion Act 1951
The arrangement made in 1856 was that the entire quantity of cement produced by all producers was acquired by the State Trading Corporation which distributed it throughout the country at a uniform price on for
basis
The price payable by the State Trading Corporation to the producer was however the retention price  or ex works  or ex factory price  fixed by the Government
In accordance with the recommendations of the First Tariff Commission in 1958 the Central Government fixed for
and ex factory prices for a period of three years from July 1958 under the Cement Control Order 1958
Even though the consumer price was one uniform for
destination price there were different retention prices for cement relating to the producers
In case of a new unit commencing production the Government fixed suitable retention price for it on the basis of cost of production
Pursuant to representation by the cement industry for revision in the prices the Second Tariff Commission was set up by the Government to examine the question
The Tariff Commission after a comprehensive study submitted its report on 2681961
In the report it was noticed that fixation of ex works price for individual cement producers had brought stagnation in the cement industry due to lack of competition and incentive amongst producers to reduce the cost of production improve the operational efficiency and increase the output
It was observed that instead of reward ing efficiency it had promoted a tendency to inflate costs which facilitated increase in the margin of profit to the producer
The Tariff Commission ultimately grouped the various units under three broad categories on the basis of return on the capital employed
These were the lowest cost group the high cost group and those whose cost of produc tion was in between the other two groups
Accordingly the Tariff Commission recommended different retention prices for the manufacturers of cement
The Government generally ac cepted the recommendations and passed the Cement Control Order 1961 fixing three different retention prices for three different groups of manufacturers
The Central Govern ment from time to time permitted increase in the retention prices so fixed
The Central Government decided on discontrol of cement wef
111966 but the cement industry imposed a system of self regulation and set up an unofficial body known as Cement Allocation and 854 Coordinating Organisation
The cement was to be distributed to consumers at uniform for
destination price all over India
This price included a freight component
A cement regulation account was also established to which a manufac turer would either contribute or draw from depending on the actual freight incurred
This system was not found workable and the Central Government decided to re impose control
The Cement Control Order 1967 was passed under Section 18G and Section 25 of the Industries Development  Regulation Act 1951 to be effective from 111968
Under this Order the threetier retention price system was continued and the retention prices fixed for the three groups were specified in the Schedule as Rs9050 Rs9350 and Rs96
Both the appellants fell under the category for which the retention price specified in the Schedule was Rs96
Under this Cement Control Order the system of uniform consumer price was preserved and freight equalisation was maintained by requir ing the manufacturer to either contribute or draw from the cement regulation account set up under clause 9 of the Order
The Cement Controller replaced the Cement Allocation and Co ordinating Organisation
Pursuant to the representation made by various manufac turers the Central Government enquired into the increase in the cost of production since 111966
In consultation with the concerned authorities it was estimated that the weight ed average increase in the cost of production since 111966 was Rs7 per tonne
The Central Government then issued the Cement Control Amendment Order 1969 on 1441969 effec tive from 1641969 by which the Cement Control Order 1967 was amended and in respect of all cement manufacturers except Ms Travancore Cement Limited Kottayam a uniform retention price of Rs 100 per tonne was fixed
The appellants filed writ petitions in the Madras High Court challenging the fixation of a uniform retention price of Rs 100 per tonne in this manner on the ground that it violated Articles 14 and 191g of the Constitution
As earlier stated the challenge was rejected by a Single Judge and thereafter a Division Bench of the High Court Hence these appeals by a certificate granted by the High Court under the unamended Article 1331 of the Constitution of India The challenge before us in these appeals is based only on Article 14 of the Constitution
Shri K Parasaran learned counsel for the appellant in the Civil Appeal No 2193 of 1972 Chettinad Cement 855 Corporation Ltd vs Union of India contended that the impugned Order made in 1969 fixing a uniform retention price for all three categories of cement producers treats unequals as equals
He argued that the fixation of three different retention prices earlier was based on the Tariff Commis sion s Report on the postulate that different producers were differently situated with different cost of production and therefore the fixation of different retention prices for them was reasonable
He next contended that increase in the cost of production being the real cause for re fixation of a higher price the exercise purports to be under Clause 12 of the Cement Control Order 1967 which does not permit fixation of the same price for all producers in spite of the difference in their cost of production particularly when the Schedule to the order initially specified different prices for them
He also contended that on the finding of the High Court that the Chettinad Cement Corporation Ltd appellant in Civil Appeal No 2193 of 1972 a newly born unit in infancy has suffered by this common treatment because there are several features which distinguish the Chettinad Cement Corporation Ltd from the other units fixation of the same price for this appellant is discrimina tory particularly when a distinction was made in the case of Ms Travancore Cement Ltd Kottayam for which a higher retention price was fixed
Shri Parasaran therefore con tended that atleast in the case of this appellant discrimi nation is proved on the basis of the High Court s finding of fact and a direction for re fixation of a reasonable price for this appellant would be justified
Shri GL Sanghi learned counsel for the appellant in Civil Appeal No 2192 of 1972 advanced a slightly modified argument
He too referred to Clause 12 of the Cement Control Order 1967 to contend that fixation of one uniform retention price for all producers is not permissible thereunder
He argued that the increase of Rs7 per tonne was to be made to the existing three tier retention prices but an irrational basis was adopted in fixing the uniform price of Rs 100 per tonne which results in an unequal increase to the three different retention prices then existing
Both the learned counsel contended that the result therefore is that whereas pro ducers for whom the retention price fixed earlier was Rs9050 per tonne have got an increase of more than Rs7 the producers for whom the retention price was fixed at Rs96 per tonne have been given an increase of less than Rs7
It was therefore contended that fixation of the uniform retention price of Rs 100 per tonne in case of all cement producers except Ms Travancore Cement Ltd Kotta yam is discriminatory resulting in contravention of Article 14 of the Constitution
To recapitulate the arrangement in vogue from 1956 was that 856 the cement produced by all the producers was acquired by the State Trading Corporation which distributed the commodity throughout the country at a uniform price on for destina tion basis
The price payable by the STC to the producers was known as the retention price  or ex works  or ex factory price  at a uniform rate
On a representation by the industry for revision of prices the Government appointed the Second Tariff Commission to go into the question
The Tariff Commission after a comprehensive review submitted its report on 2681961 and recommended the fixation of different retention prices for different groups of cement producers
The Government generally accepted the recommenda tions of the Tariff Commission and fixed three different retention prices which remained in vogue till fixation of a uniform retention price by the impugned Order in 1969
It may be mentioned that the fixation of three different prices instead of one uniform retention price in the inter vening period was challenged before the Rajasthan High Court on the ground that it was discriminatory but that challenge was rejected in Jaipur Udyog Ltd vs Union of India AIR 1
Thereafter the cement industry sought a further revi sion of the prices and the industry accepted in principle that there should be one uniform retention price or ex factory price in place of the three tier system though the claim of the industry was that the uniform price be fixed at Rs96 instead of Rs93
The real controversy therefore between the cement industry and the Central Government was whether the addition of Rs7 per tonne for fixation of a uniform retention price should be made to the sum of Rs96 or to Rs93
In other words if the uniform retention price were fixed at Rs 104 per tonne instead of Rs 100 per tonne there was no grievance to anyone in the cement indus try against fixation of the uniform retention price
Even at the hearing before us in reply to this specific query by us learned counsel for the appellants did not dispute that no grievance would survive to the appellants if the uniform retention price was fixed at Rs 104 per tonne instead of Rs 100 per tonne
In substance the grievance of both the appellants therefore is only to this extent and the argu ment of discrimination has been advanced for this purpose
In the counter affidavit filed on behalf of the Central Government the manner in which the uniform retention price for the industry was fixed at Rs 100 per tonne has been elaborately explained
A portion of the counter affidavit relied on by the High Court also is as under 857 The question of introduction of a uniform price for the entire industry had been under consideration from time to time since 1961
The opportunity of the request of the industry for an upward revision of their retention price due to increase in cost of production as a result of Governmen tal actions since 111966 was availed of to consider whether it was not opportune to introduce finally a uniform price for the entire industry as a Whole
In view of the observations of the Tariff Commission in 1961 that econo mies were possible with better management control and that the industry should make every effort to reduce its cost of production in future and the time elapsed since 196 1 it was felt that the additional price granted to the industry in 196 1 need not any longer be continued
The weighted aver age increase in the cost of production as a result of Gov ernmental actions since 111966 was determined in consul tation with the Chief Cost Accounts Officer as Rs7 per tonne
The uniform price thus works out to Rs9050 per tome ie Rs6950 per tonne prescribed in 1961 together with subsequent increases amounting in all to Rs21
The weighted average retention price on the basis of three different retention prices amounted to Rs93 per tonne
The uniform price for the industry was thus fixed at Rs 100 ie Rs93 per tonne the weighted average of the three retention prices on the basis of actual production plus Rs7 per tonne as a result of the increase in the cost of pro duction due to Governmental actions since 111966
The fixation of a uniform retention price does not therefore involve any inequality or arbitrariness
It is denied that the Cement Control Amendment Order 1969 has introduced any unfair and arbitrary inequality among the various pro ducers and would cause considerable loss to the petitioner or would amount to an unjust and arbitrary discrimination violative of Article 14 or 191g of the Constitution of India
 The assertion in the counter affidavit of the Government is that the industry was itself in favour of a single uni form retention price which was taken into account by the Government in fixing the uniform price
This was not rebut ted by the appellants
The High Court has rightly relied on this fact
It is therefore clear that the fixation of Rs 100 per tonne as the uniform retention price for the entire industry with the solitary exception of Ms Travancore Cement Ltd Kotta 858 yam for which justification has been shown was on a ra tional basis taking into account all relevant data and factors including the cement industry s acceptance of the principle of a uniform retention price for the entire indus try the only difference being in the price actually fixed at Rs 100 per tonne instead of Rs 104 per tonne claimed by the cement industry
It is obvious that the fixation at Rs 100 per tonne being shows to be made on a principle which has not been faulted the actual fixation at Rs 100 instead of Rs 104 to be received by the industry is not within the domain of permissible judicial review if the principle of a uniform retention price for the entire industry cannot be faulted The principles of price fixation permitting the fixation of a uniform price for the entire industry are no longer debatable after the recent decision of a Constitution Bench in Ms Shri Sitaram Sugar Company Limited  Anr
vs Union of India  Ors
 and UP Stale Sugar Corporation Ltd  Anr
vs Union of India  Ors
 JT even if the same were debatable when the controversy arose in the present case
In this decision the Constitution Bench while affirming the earlier decisions of this Court in Anakapalle Co operative Agricultural  Industrial Society Ltd etc
vs Union of India  Ors
  and The Panipat Cooperative Sugar Mills vs Union of India 1973 2 SCR 860 reiterated the settled principles
It was pointed out that what is best for the industry and in what manner the policy should be formulated and implemented bearing in mind the object of supply and equitable distribution of the commodity at a fair price in the best interest of the gener al public is a matter for decision exclusively within the province of the Central Government and such matters do not ordinarily attract the power of judicial review
It was also held that even if some persons are at a disadvantage and have suffered losses on account of the formulation and implementation of the Government policy that is not by itself sufficient ground for interference with the Govern mental action
Rejection of the principle of fixation of price unitwise on actual cost basis of each unit was reiter ated and it was pointed out that such a policy promotes efficiency and provides an incentive to cut down the cost introducing an element of healthy competition among the units
Similarly the criticism against the principle of weighted average adopted in fixation of price was rejected as baseless
It is obvious that even if there be no price control the uneconomic units would be at a great disadvan tage and therefore the position should not be different for the purpose of price fixation
The cost plus price fixation perpetuates inefficiency in the industry and is against the long term interest of the country
It was held that 859 price    is to be arrived at by a process of cost ing with reference to a reasonably efficient and economic representative cross section of manufacturing units
 It is therefore clear that the principle of fixation of a uniform price for the industry is an accepted principle and this has to be done by fixing a uniform price on the basis of the cost of a reasonably efficient and economic representative cross section of manufacturing units and not with reference to the cost in relation to each unit
Obviously such a practice is in larger public interest and also promotes efficiency in the industry providing an incentive to the uneconomic units to achieve efficiency and to reduce their cost
In the same decision the permitted scope of judicial review was summarised as under The true position therefore is that any act of the repos itory of power whether legislative or administrative or quasi judicial is open to challenge if it is in conflict with the Constitution or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it
 In the present case we find that the fixation of the uniform retention price at Rs 100 per tonne is based on the weighted average increase of Rs7 in the cost of production and the weighted average retention price on the basis of three different retention prices determined at Rs93 per tonne on the basis of expert opinion
Fixation of a uniform retention price being clearly permissible and the same having been determined at Rs 100 per tonne on the basis of expert opinion rounded on relevant factors there is no scope for interference within the limits of permissible judicial review in the present case
A brief reference to Clause 12 of the Cement Control Order 1967 may also be made
Clause 12 reads as under 12
POWER TO VARY THE PRICES AND TO ALTER THE SCHEDULE 
The Central Government may having regard to any change in any of the factors relevant for the price of cement such as an increase or decrease in the cost of production or distribution by notification in the Official Gazette vary the price fixed in this Order or alter the Schedule to this Order as appear to it to be necessary
 860 We are unable to appreciate how Clause 12 in any manner restricts the Central Government s power to fix a uniform retention price for all the units specified in the Schedule to the Order even though different prices were specified in the Schedule as initially enacted
The Central Government s power to refix the price can be exercised having regard to any change in any of the factors relevant for determination of price of cement 
The meaning of the expression having regard to  is wellsettled
It indicates that in exercising the power regard must be had also to the factors enumerated together with all factors relevant for exercise of that power
Once such factor specified in Clause 12 is such as an increase or decrease in the cost of production or distri bution
Admittedly the fixation of the uniform retention price at Rs I00 per tonne was made on the industry s demand for revision of the price as a result of increase in the cost of production the only dispute between the industry and the Central Government being with regard to the extent of increase and not to the effect of increase or the mode of increase by fixation of a uniform price
It is therefore difficult to appreciate the support that the learned counsel for the appellants seek from Clause 12
The only surviving question for consideration is the argument in Civil Appeal No 2 193 of 1972 for a differen tial treatment to the appellant Ms Chettinad Cement Corporation Limited on the analogy of Ms Travancore Cement Limited Kottayam
In the counter affidavit of Shri G Ramanathan Under Secretary to the Government of India the reason for treating Travancore Cement Limited different ly has been clearly stated
It has been stated that it is a sub standard unit with a capacity of 50000 tonnes per annum only without any scope for expansion while the standard capacity for a unit is two lakh tonnes per annum so that this unit is not capable of expanding the capacity and it is on the whole an uneconomic unit deserving a special consid eration
No material has been produced by the appellant Ms Chettinad Cement Corporation Limited to show that it is a similar sub standard unit without any capacity for expansion so that it too must continue to be an uneconomic unit like Ms Travancore Cement Limited Kottayam deserving a similar treatment
The counter affidavit therefore shows a rational basis for classifying Ms Travancore Cement Limited Kottayam differently as a sub standard and an uneconomic unit without any scope for improvement in com parison to other units
This argument also is untenable
As a result of the aforesaid discussion we do not find merit in 861 any of the contentions advanced in support of these appeals to support the challenge on the basis of Article 14 of the Constitution to the fixation of a uniform retention price of Rs 100 per tonne in 1969 by the impugned Order or to the practice of a uniform retention price being followed upto 1979
These appeals are accordingly dismissed
In the circum stances of the case the parties shall bear their own costs
RSS Appeals dismissed


Summary:
The appellant a real estate company was engaged in the business of letting out its property on lease Besides it was also rendering various services to its tenants such as electricity and water supply washing and cleaning lift services electrical and sanitary repairs on payment basis
For rendering these services the appellant company employed a number of workmen
A dispute arose between the employees and the appellant company with regard to wages scales of pay dearness allowance and gratuity
The State Government re ferred the disputes to Industrial Tribunal for adjudication
The appellant company contested the reference before the Tribunal by raising a preliminary objection that the alleged dispute was not an industrial dispute and that the reference was barred by Section 19 of the since there was an earlier binding award based on settlement with the Union which was not terminated by either parties
934 By an order dated August 24 1968 the Tribunal overruled the preliminary objection and gave the award dated March 3 1969 enhancing the dearness allowance of the employees
The Tribunal also framed a revised gratuity scheme but did not fix any grades and pay scales of workmen for want of con vincing evidence
The appellant company filed a writ petition in the High Court challenging the Tribunal s order dated August 24 1968 as well as the Award dated March 7 1969 contending i that the Award was without jurisdiction because the appel lant company was not carrying on industry  and the alleged dispute was not an Industrial Dispute  and that the previ ous Award was not terminated and was still subsisting ii that no dispute was raised between the workmen and the appellant prior to the reference before the Tribunal and iii that the Tribunal did not consider the appellant s capacity to pay dearness allowance to the workmen
A single judge of the High Court dismissed the writ petition by rejecting all the contentions
The appellant filed an appeal against the judgment of the single judge before a Division Bench of the High Court which was also dismissed
Against the decision of the Division Bench of the High Court the appellant company filed an appeal to this Court contending i that the High Court was in error in holding that the appellant was an industry  under Section 2j of the Act ii that the Tribunal was not competent to make the Award since the earlier Award which was in the nature of a settlement under Section 2p was not terminated in accordance with section 192 by giving a formal written notice iii that there was non compliance with the provi sions of Section 197 of the Act and iv that the Indus trial Tribunal was in error in making the Award in relation to Dearness Allowance without examining the capacity to pay the additional amount and that the High Court should have remanded the matter to the Tribunal for considering this issue in the light of the documents which were submitted by the appellant before the High Court
Dismissing appeal this Court HELD 1
The activity carried on by the appellant compa ny falls within the ambit of the expression industry defined in Section 2j of the 
The Award of the Industrial Tribunal cannot there fore be assailed on the basis that the appellant is 935 not carrying on an industry  under the Act
943E Bangalore Water Supply  Swerage Board v R Rajappa and Ors   applied
Management of Safdar jung Hospital vs Kuldip Singh Sethi   State of Bombay vs Hospital Mazdoor Sabha   DN Banerjee vs PR Mukherjee  and Corporation of the City of Nagpur vs Its employees   referred to 2
It is not the requirement of Section 192 of the that there should be a formal notice terminating a settlement and notice can be inferred from the correspondence between the parties
944B Indian Link Chain Manufacturers Ltd vs Their Workmen 1972 I SCR 790 applied
21 In view of the finding of the Division bench that the letter of employees Union dated November 24 1966 was a notice under section 196 as well as section 192 of the and that the said letter contained a clear intimation of the intention of the employ ees to terminate the Award the High Court was justified in holding that the earlier award had been validly terminated before the passing of the order of reference
943H 944A B  3
The High Court was right in taking the view that while exercising its jurisdiction under Article 226 of the Constitution the High Court should generally consider the materials which were made available to the Tribunal and fresh or further materials which were not before the Tribu nal should not normally be allowed to be placed before the Court
944F G 31 In the instant case the appellant has not been able to show why the documents relied on by it were not produced before the Tribunal
Therefore there is no justification for accepting the plea of the appellant for reconsideration of the Award of the Tribunal in the light of the documents submitted by the appellant during the pendency of the appeal before High Court
944G H 4
A question raised for the first time in the Supreme Court involving an inquiry into questions of fact cannot be allowed to be agitated
944E 936