Letters Patent Appeal No.457 OF 1999 (Against the order dated 12.4.1999 passed by a learned Single Judge of this Court in C.W.J.C.No.3088 of 1999) -------- 1. NEW SWADESHI SUGAR MILLS (PROP. THE OUDH SUGAR MILLS LTD., A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT INDUSTRY HOUSE, 159, CHURCH GATE RECLAMATION, MUMBAI- 400020), AT, P.O. AND P.S. NARKATIAGANJ, DISTRICT WEST CHAMPARAN, THROUGH SRI BANWARI LAL HIMMATSINGHKA, VICE PRESIDENT (FINANCE) 2. M.S. SHARMA, SON OF LATE L.L. SHARMA, RESIDENT OF AT & P.O. NARKATIAGANJ (NEW SWADESHI SUGAR MILLS), DISTRICT WEST CHAMPARAN -------------------Appellants Versus 1. THE UNION OF INDIA, THROUGH ITS SECRETARY, MINISTRY OF FOOD & CONSUMER AFFAIRS, DEPARTMENT OF SUGAR & EDIBLE OILS, DRISHI BHAWAN, NEW DELHI 2. UNDER SECRETARY TO GOVERNMENT OF INDIA, MINISTRY OF FODD & CONSUMER AFFAIRS, DEPARTMENT OF SUGAR AND EDIBLE OILS, DRISHI BHAWAN, NEW DELHI 3. FOOD CORPORATION OF INDIA, THROUGH ITS MANAGER (SUGAR), 16-20, BARAKHAMBA LANE, NEW DELHI- 1100001 4. REGIONAL MANAGER, FOOD CORPORATION OF INDIA, BIHAR, PATNA ---------------------Respondents WITH CWJC No.4141 oF 1999 1. VISHNU SUGAR MILLS LIMITED, A COMPANY WITHIN THE MEANING OF THE COMPANIES ACT, 1956 AND HAVING ITS REGISTERED OFFICE AT NO.C-3/3, GILLANDER HOUSE, NO.8, NETAJI SUBHASH ROAD, CALCUTTA- 700001 AND HAVING ITS SUGAR FACTORY AT HARAKHUA, P.O., P.S. & DISTRICT- GOPALGANJ, THROUGH ITS FINANCE MANAGER SAJJAN KUMAR DALMIA. 2. HEMANT KUMAR BAJORIA, CARRYING ON BUSINESS AND/OR WORKING FOR GAIN AT NO.C-3/3, GILLANDER HOUSE, 8 NETAJI SUBHAS ROAD, CALCUTTA- 700001 -----------------------Petitioners Versus 1. THE UNION OF INDIA, THROUGH ITS SECRETARY, MINISTRY OF FOOD & CONSUMER AFFAIRS, DEPARTMENT OF SUGAR & EDIBLE OILS, KRISHI BHAWAN, NEW DELHI 2. JOINT SECRETARY TO GOVERNMENT OF INDIA, MINISTRY OF FOOD & CONSUMER AFFAIRS, DEPARTMENT OF SUGAR & EDIBLE OILS, KRISHI BHAWAN, NEW DELHI 3. THE CHIEF DIRECTOR, DIRECTORATE OF SUGAR AND CONSUMER AFFAIRS, KRISHI BHAWAN, NEW DELHI 2 4. UNDER SECRETARY TO GOVERNMENT OF INDIA, MINISTRY OF FOOD & CONSUMER AFFAIRS, DEPARTMENT OF SUGAR & EDIBLE OILS, KRISHI BHAWAN, NEW DELHI -------------------------------Respondents WITH CWJC No.4452 oF 1999 1. M/S BHARAT SUGAR MILLS, SIDHWALIA (PROPRIETOR UPPER GANGES SUGAR & INDUSTRIES LIMITED), AT & P.O. SIDHWALIA, DISTRICT GOPALGANJ, THROUGH ITS OCCUPIER, GHANSHYAM DHURKA 2. C.B. PATODIA, SON OF LATE SHYAM SUNDAR PATODIA, CARRYING ON BUSINESS AND/OR WORKING FOR GAIN AT 508, SURYA KIRAN BUILDING, 19, KASTURVA GANDHI MARG, NEW DELHI- 110001. ---------------------Petitioners Versus 1. THE UNION OF INDIA, THROUGH ITS SECRETARY, MINISTRY OF FOOD & CONSUMER AFFAIRS, DEPARTMENT OF SUGAR & EDIBLE OILS, KRISHI BHAWAN, NEW DELHI 2. JOINT SECRETARY TO GOVERNMENT OF INDIA, MINISTRY OF FOOD & CONSUMER AFFAIRS, DEPARTMENT OF SUGAR & EDIBLE OILS, KRISHI BHAWAN, NEW DELHI 3. THE CHIEF DIRECTOR, DIRECTORATE OF SUGAR AND CONSUMER AFFAIRS, KRISHI BHAWAN, NEW DELHI 4. UNDER SECRETARY TO GOVERNMENT OF INDIA, MINISTRY OF FOOD & CONSUMER AFFAIRS, DEPARTMENT OF SUGAR & EDIBLE OILS, KRISHI BHAWAN, NEW DELHI ----------------------------Respondents WITH CWJC No.4464 oF 1999 1. M/S GOVIND SUGAR MILLS LIMITED, MOTIHARI UNIT, AT & P.O. MOTIHARI, DISTRICT EAST CHAMPARAN, THROUGH SHRI MADHUSUDAN SHARMA, EXECUTIVE PRESIDENT 2. C.B.PATODIA, SON OF LATE SHYAM SUNDAR PATODIA, CARRYING ON BUSINESS AND/OR WORKING FOR GAIN AT 508, SURYA KIRAN BUILDING, 19, KASTURVA GANDHI MARG, NEW DELHI- 110001 ------------------------Petitioners Versus 1. THE UNION OF INDIA, THROUGH ITS SECRETARY, MINISTRY OF FOOD & CONSUMER AFFAIRS, DEPARTMENT OF SUGAR & EDIBLE OILS, KRISHI BHAWAN, NEW DELHI 2. JOINT SECRETARY TO GOVERNMENT OF INDIA, MINISTRY OF FOOD & CONSUMER AFFAIRS, DEPARTMENT OF SUGAR & EDIBLE OILS, KRISHI BHAWAN, NEW DELHI 3. THE CHIEF DIRECTOR, DIRECTORATE OF SUGAR AND CONSUMER AFFAIRS, KRISHI BHAWAN, NEW DELHI 4. UNDER SECRETARY TO GOVERNMENT OF INDIA, MINISTRY OF FOOD & CONSUMER AFFAIRS, DEPARTMENT OF SUGAR & EDIBLE OILS, KRISHI BHAWAN, NEW DELHI ------------------------------Respondents 3 For The appellants : Mr.Y.V.Giri, Senior Advocate Mr.Jyoti Saran, Advocate Mr.Ashish Giri, Advocate. For The Union of India : Mr.Sanjay Kumar, Central Government Advocate Mr.Sanjay Kumar Pandey, Advocate. P R E S E N T THE HON'BLE MR. JUSTICE CHANDRAMAULI KR. PRASAD THE HON'BLE DR. JUSTICE RAVI RANJAN ------ Prasad, J : In all these writ applications, prayer of the petitioners is to declare Section 3(5) of the Levy Sugar Price Equalisation Fund Act, 1976 ultra vires Article 14 and 19(1)(g) of the Constitution of India. Further prayer made by the petitioners is to quash the demand notice, charging interest in the light of the aforesaid provision. L.P.A.No.457 of 1999 arises out of an order dated 14.12.1999 passed by the learned Single Judge in C.W.J.C.No.3088 of 1999, whereby the challenge made to the notice of demand had failed and the writ petition dismissed. Shorn of unnecessary details, facts giving rise to these applications are that petitioner no.1 is a limited company within the meaning of the Indian Companies Act, 1956 having its sugar factory situated in one or other districts in the State of Bihar and they carry on the business of manufacture and sale of sugar. Its share holders have also joined as petitioners in the writ applications. For the purpose of disposal of these writ applications and Letters Patent Appeal reference has been made, basically to the pleading in C.W.J.C.No.4452 of 1999 (Bharat Sugar Mills and another versus Union of India and others). 4 The Central Government in exercise of the powers conferred by Section 3 (3C) of the Essential Commodities Act made the Sugar (Price Determination for 1982-83 production) Order 1983 and fixed the price of levy sugar for the year 1982-83. Aggrieved by the fixation of levy sugar price, petitioners filed writ applications before the Delhi High Court. A Division Bench of the Delhi High Court by an interim order dated August 8, 1983 passed in C.W.P.No.1390 of 1983 permitted the petitioners to realize sale price of sugar at a higher rate. Relevant portion of the interim order reads as follows: “2. Learned counsel for the petitioner stated that any additional price received by the petitioner would be paid either to the “Sugar Cane Growers” or used for clearing the dues of the petitioner of Financial Institutions and for payment of the taxes due to the State Government. The additional price so received will not be utilized for any other purpose whatsoever. We think that the offer is quite fair. We accept it. The price accordingly will be refixed in accordance with the calculations to be made as per the order passed today. The petitioners will be bound by the undertaking not to utilize the additional price received by virtue of our present order for any other purpose than the purposes which have been stated in the Court today. In case ultimately, the rule is discharged the petitioner will make good the additional price received by them by future allocation of free sale sugar. The petitioners will also give a Bank guarantee for the difference in price to be worked out as per our order of today. The bank guarantee may be given each month for the release and additional price recoverably whether recovered or not for the previous month. The Bank guarantee will be given month by month not later than 10th of each succeeding month. The bank 5 guarantee will be given to the satisfaction of the authority issuing release order from time to time.” Petitioners fulfilled the conditions laid in the interim order and enjoyed the fruits thereof. Ultimately several writ applications including the writ petitions filed by the petitioners were transferred to the Supreme Court which upheld the fixation of minimum price for levy sugar for the year 1982-83. Relevant portion of the judgment of the Supreme Court, in the case of Bharat Sugar Mills Ltd. & anr. etc. Versus Union of India & ors. [T.C.(Civil) Nos.15-17 of 1993], reads as follows : “The very same determination of minimum price of levy sugar for the year 1982-83 was under challenge in Transferred Case (Civil) No.9 of 1990 M/s Modi Industries Ltd, Vs. Union of India. A Bench of three Judges of this Court by their order dated 20th of February, 1998 after noting that the minimum cane price had been fixed for the year 1982-83 under Section 3(3C)(a) of the Essential Commodities Act has also noticed that the additional cane price payable under Clause 5A of the Sugar (Control) Order, 1966 had not been taken into account nor was there any mopping up of excess realization on free sale sugar while fixing the price of levy sugar for the year 1982-83. This Court has held that the matter was not covered by the decision of this Court in Shri Malprabha Coop. Sugar Factory Ltd. Vs. Union of India [(1994)1 SCC 848] and had dismissed the Transferred case. Our attention has been drawn to Shri Malprabha Coop. Sugar Factory Ltd. Vs. Union of India [(1997(10) SCC 216]. In paragraph 13 of that decision this Court has expressly noted the decision in Transferred Case No.9 of 1990 (Supra) and has held that the first Shri Malprabha case did not affect the Transferred Case (Civil) No.9 of 1990 is directly applicable to the present set of Transferred cases which 6 also deal with the same price fixed for the season 1982-83. In view thereof, these Transferred cases are also dismissed.” After disposal of the case by the Supreme Court, the Union Government in the Ministry of Food and Consumer Affairs wrote to the petitioners for encashment of the bank guarantee which was resisted by the petitioners, inter alia, contending for refixation of the levy sugar price for the period 1982-83 taking into account “unit cost of production i.e. L factor” as approved by the Supreme Court in the case of Shri Malaprabha Coop. Sugar Factory Ltd. Versus Union of India and and another (1994) 1 Supreme Court Cases 648. Despite resistance the bank guarantee was encashed in favour of the Government of India. As stated earlier, in view of the interim order of the Delhi High Court petitioners realized higher amount of price for the levy sugar. As the petitioners had made excess realization in terms of the definition under Section 2(b) of the Levy Sugar Price Equalisation Fund Act, 1976 (hereinafter referred to as the „Act‟), the petitioners were asked to pay the interest thereon in terms of Section 3(5) thereof. In these writ applications, the petitioners have challenged the vires of Section 3(5) of the Act as also the demand notices made in the light thereof. It is relevant here to state that the Levy Sugar Price Equalisation Fund Act, 1976 finds incorporated at Serial No.131 of Schedule IX of the Constitution of India. Before I advert to the submissions advanced on 7 behalf of the petitioners, I deem it expedient to trace the legislative history. The act was introduced for creation of a levy sugar price equalization fund in which the excess realization made by the Producers of sugar was to be deposited so as to ensure that the price of levy sugar through out India is uniform. Section 3(5) of the Act before its amendment by the Levy Sugar Price Equalisation Fund (Amendment) Act, 1984, inter alia, provided that any amount representing the difference between the control price and the interim price allowed by the Court and realised by the producer, on the final disposal of the proceeding of the Court, it shall credit such amount to the extent it represents any excess realization to Levy Sugar Price Equalization Fund. Section 3 of the Levy Sugar Price Equalisation Fund (Amendment) Act, 1984 made various amendments in Section 3 of the principal Act and in sub-section 5 of Section 3 thereof made the following amendment. Section 3(d) of the Levy Sugar Price Equalisation Fund (Amendment) Act, 1984 reads as follows: “3. Amendment of Section 3.- In Section 3 of the principal Act, - xx xx xx (d) in sub-section (5), - (i)in the opening portion, for the words, brackets and figure “interim order referred to in sub-section (4)”, the words “interim order made by any court, whether before or after the commencement of this Act” shall be substituted; (ii) in the concluding portion, for the words 8 “or in any court of appeal or revision, credit such amount, to the extent it represents any excess realization to the Fund”, the following shall be substituted, namely :- “credit to the Fund, within sixty days from the date of such final disposal, such amount, to the extent it represents any excess realization together with interest due thereon at the rate of twelve and a half per cent per annum from the date on which such amount was realized by him : Provided that – (i)the interest due on so much of such amount as was realized before the date of commencement of the Levy Sugar Price Equalisation Fund (Amendment) Act, 1984 and is not credited to the Fund together with interest at the aforesaid rate of twelve and a half per cent per annum before the expiry7 of sixty days from the date of such commencement, and (ii)the interest due on so much of such amount as is realized after such commencement and not credited to the Fund together with interest at the aforesaid rate of twelve and a half per cent per annum within sixty days from the date on which such amount was realized, shall be at the rate of fifteen per cent per annum from the date on which such amount was realized by the producer.” Section 3(5) of the Act after amendment reads as follows : “3.Levy Sugar Price Equalisation Fund.- xx xx xx (5)Where, in pursuance of an interim order made by any Court, whether before or after the commencement of this Act any amount representing the difference between the controlled price and the interim price allowed by the court is,- 9 (a)held by any producer either with himself or with any other person or with any court, Government, bank or other aurhority, or (b)collected and kept by the producer under the cover of any guarantee, such producer shall on the final disposal of the proceedings of the court aforesaid, credit to the fund, within sixty days from the date of such final disposal, such amount, to the extent it represents any excess realization together with interest due thereon at the rate of twelve and a half per cent per annum from the date on which such amount was realized by him : Provided that – (i)the interest due on so much of such amount as was realized before the date of commencement of the Levy Sugar Price Equalisation Fund (Amendment) Act, 1984 and is not credited to the fund together with interest at the aforesaid rate of twelve and a half per cent per annum before the expiry of sixty days from the date of such commencement, and (ii)the interest due on so much of such amount as is realized after such commencement and not credited to the Fund together with interest at the aforesaid date of twelve and a half per cent per annum within sixty days from the date on which such amount was realized. shall be at the rate of fifteen per cent per annum from the date on which such amount was realized by the producer.” From a plain reading of the aforesaid provision, it is evident that any amount representing the difference between the controlled price and the interim price allowed by the court, whether before or after the commencement of the Act shall be deposited in the fund together with interest at the rate of twelve and half per cent per annum before the expiry of sixty days from 10 the date of commencement of Levy Sugar Price Equalisation Fund (Amendment) Act, 1984. In case of failure of deposit of the amount within sixty days, the interest due on such amount shall be chargeable at the rate of fifteen per cent per annum. It is relevant here to state that the Levy Sugar Price Equalisation Fund (Amendment) Act, 1984 received the assent of the President on August 23, 1984 and published in the Gazette dated 23rd of August, 1984. It is further relevant here to state that excess realization together with interest thereon at specified rate is required to be deposited only after the final disposal of the proceeding of the Court. We have heard Mr.Y.V.Giri, Senior Advocate as also Mr.Jyoti Saran, Advocate for the petitioners. They contend that the proceeding initiated by the petitioners by filing the writ applications had not been finally disposed of and in view of clear language of Section 3(5) of the Act, interest chargeable therein is not fit to be realized. In this connection our attention has been drawn to an unreported decision of the Supreme Court dated 31.3.2008 in Appeal (Civil) No.2258 of 2008 [Mahalakshmi Sugar Mills Co. Ltd. & anr. Versus Union of India & ors.] and our attention has been drawn to paragraph 58 of the judgment which reads as follows : “Modi, Bharat Mills and Triveni dealt with sugar year 1982-83. It proceeded on the basis that in that year, the mopping up having not been done and levy in terms of Clause 5A had not been applied, the factors laid down under Section 3 (3C) stood complied with. It is for the aforementioned 11 limited extent, Malaprabha-I was distinguished. No reason has been assigned in support of its decision. Rival contentions had not been noticed. The effect of payment of additional price as also SAP effect in determining the price did not fall for consideration therein. Godavari (supra), as noticed hereinbefore, was decided on the same line, particularly, having regard to the fact that the prayers made by the appellant therein are sought to be amended which was not allowed.” Mr.Sanjay Kumar, Central Government Counsel representing the Union of India, however, contends that the very assumption of the petitioners that proceeding initiated by the petitioners before the Delhi High Court has not been finally disposed of is absolutely erroneous. Having appreciated the rival submission, I do not have the slightest hesitation in rejecting the submission of the petitioners. True it is that provision of Section 3(5) of the Act shall come into picture only after final disposal of the proceeding but in the facts of the present case can it be said that proceeding has not been finally disposed off? Petitioners resorted to remedy of writ before the Delhi High Court and obtained interim order. Later on the writ petitions were transferred to the Supreme Court. The Supreme Court considered the transfer cases along with other cases and in the case of Bharat Sugar Mills Ltd. & another etc. Vs. Union of India & others (Supra) held that the fixation of minimum price for levy sugar for the year 1982-83 was correctly done. The Supreme Court while upholding the fixation of minimum price for levy sugar for the year 1982-83 in the aforesaid case had 12 relied on its earlier decision in the case of Modi Industries Limited and another versus Union of India and others (Transferred Case (Civil) No.9 of 1990). While referring to the order of the Supreme Court in the case of Bharat Sugar Mills Ltd. (supra) and other cases relied on by the petitioners, the Supreme Court in the aforesaid case observed that in those cases the Court proceeded on the basis that in sugar year 1982-83 “the mopping up having not been done and levy in terms of Clause 5A had not been applied, the factors laid down under Section 3(3C) of the Essential Commodities Act stood complied with.” The Supreme Court went on to say that no reason has been assigned in support of its decision. This observation in my opinion may be relevant for deciding the ratio of the case, but from that it cannot be inferred that the proceeding has not been finally disposed off. The Supreme Court in the transfer cases has observed as follows : “In view thereof, these Transferred Cases are also dismissed.” From the observation aforesaid, there is no escape from the conclusion that proceeding has finally been disposed off. Had the proceeding not disposed off, then natural corollary thereof is that it should have been pending before one or the other Court. Counsel for the petitioners has not been able to demonstrate as to where these proceedings are pending. Therefore, the submission of the petitioners that the interest chargeable in terms of Section 3(5) of the Act is not leviable as the proceeding has not been disposed of is absolutely unsustainable. 13 It has next been contended on behalf of the petitioners that Section 3(5) of the Act shall not cover cases in which the interim order has been passed before coming into force the Levy Sugar Price Equalisation Fund (Amendment) Act, 1984. It has been pointed out that the Delhi High Court passed the interim order on 8th of August, 1983, whereas the Levy Sugar Price Equalisation Fund (Amendment) Act, 1984 received the assent of the President on August 23, 1984 and published in the Gazette of the same day. It is submitted that the amendment has to be held to be prospective in nature and once it is held so, the interim order having been passed prior to that, Section 3(5) of the Act as amended shall not hold the field. In support of the submission, reliance has been placed on a decision of the Supreme court in the case of Sangam Spinners versus Regional Provident Fund Commissioner I (2008)1 Supreme Court Cases 391) and our attention has been drawn to the following passage from paragraph 18 of the judgment, which reads as follows : “It is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have retrospective operation. (See Keshavan Madhava Menon v. State of Bombay.) But the rule in general is applicable where the object of the statute is to affect vested rights or to impose new burdens or to impair existing obligations. Unless there are words in the statute sufficient to show the intention of the legislature to affect existing rights, it is deemed to be prospective only nova constitution futuris formam imponere debet, non praeteritis.” The argument advanced does not commend me. It is well 14 settled that retrospective operation of the statute is not taken to be intended unless that intention is manifested by specific words or by necessary implication. Every statute is prima facie prospective unless it is expressly or by necessary implication made to have retrospective operation. It is well settled that Union Parliament has plenary power of legislation within the fields assigned to it and subject to certain constitutional and judicial recognized restrictions can legislate prospectively as well as retrospectively. This is well settled rule of interpretation hallowed by time and sanctified by judicial precedents. In the case in hand, by virtue of the Section 3(d) by the Levy Sugar Price Equalisation Fund (Amendment) Act, 1984, the interim order made by any court whether before or after the commencement of the Act has come within the ambit of Section 3(5) of the Act. As observed earlier, Union Parliament has plenary power to make law and, therefore, it possesses the power to make law retrospectively and by making law it had covered such orders made before or after the commencement of the Act. In the face of the clear language of Section 3(5) of the Act, there is no escape from the conclusion that it covers interim order made by any court whether before or after the commencement of the Act. This submission thus has no force and rejected accordingly. Now referring to the decision of the Supreme Court in the case of Sangam Spinners versus Regional Provident Fund Commissioner I (2008)1 SCC 391, same instead of supporting the case of the petitioners goes against them. In the said case, it has 15 been held that prima facie every statute is prospective unless it is made to have retrospective operation expressly or by necessary implication. Here in the present case, the legislature has used the expression “whether before or after