Case: Central Dairy Farm Vs. Glindia Ltd.

dated 14.10.1988 in Writ Petition No. 16526 of 1988, the order of the Additional Milk Commissioner as licensing authority was quashed but the statutory power of the state Government to fix price of milk and milk products by notification under Section 15 of the Milk Act was recognised and no fetters were placed on the exercise of such powers by the State. The Second ground urged is that the price fixation by the State in accordance with Section 15 of the Milk Act is a power with which the Court should not interfere because it is essentially within the domain of executive authorities and requires consideration of several relevant factors pertaining to the maintenance of supply of milk. It is submitted that the Government in its counter-affidavit in the High Court has explained in detail the justification for fixing, by notification, the price of cream and panneer.17. We have heard learned counsel appearing for the contesting respondent M/s. Glindia Ltd. We have also perused the relevant part of the judgment of the High Court under appeal and looked into the relevant provisions of the Milk Act. In the present case as the prices of cream and paneer to be supplied by respondent Glindia to the appellant Dairy Farm were fixed under terms mutually settled through negotiations between the parties, the power of price fixation under Section 15 of the Act could not have been invoked by the State Government to nullify the terms and conditions of the agreement on fixation of price reached between the two companies (the appellant and respondent No.1) Section 15 of the Milk act reads as under: "15. Prohibition or regulation of sale and transport and export of milk and milk products.- The State Government may, in the public interest and subject to the provisions of this Act and the rules made thereunder, by notification regulate or fix prices in respect of -(a) the sale or supply of milk, or the manufacture, sale or supply of any milk product in a particular area; and(b) the transport of milk or any milk product from one area in the State to another area in the State or its export to any place outside the state". 18. As the Statement of Objects and Reasons of the Act indicate the legislation was found necessary to develop milk industry in a systematic and organised manner in view of the limited yield of milk in the State. It was found necessary in public interest to regulate and control production, supply and distribution of milk and milk products. To fulfill the objects of the Act the State Government has been empowered under Section 15 of the Act to regulate and fix by notification prices for selling and supply of milk and milk products. The power of State Government to fix prices of milk and milk products by issuance of notification under Sec. 15 of the Milk Act is merely an enabling one and it is not obligatory for State Government in all circumstances to fix the prices. In the instant case, the prices of cream and paneer were fixed through mutual negotiations between authorised representatives of the two companies and with the assistance of the authorities of the state. Such binding terms of agreement reached between the two companies could not be frustrated by statutory intervention of the State by issuance of notification for fixation of prices under Section 15 of the Act. As has been pointed out by the State the notification was intended to apply only to respondent Glindia Ltd. as the supplies of cream and paneer were being made to the appellant Central Fairy Farm by the Glindia Ltd. alone. 19. In the earlier judgment of the High Court (W.P. 14526/1988 decided on 14.10.1988), the power of the State Government to fix prices of milk and milk products under Section 15 of the Act was recognised and it was held that the Additional Milk Commissioner as the licensing authority had no power to interfere in the matter of fixation of price of milk and milk products. The operative part of the judgment in the earlier writ petition however settled the controversy between the parties that the prices of supplies by the respondent company were to be regulated by the directions made by the High Court in the said writ petition. The earlier judgment in the writ petition between the same parties (supra) has attained finality. The written directions issued in the earlier judgment (supra) have been quoted by us above. Those binding directions of the Court could not have been nullified by invoking power of the State of issuing price fixation notification under Section 15 of the Milk Act. The issuance of the impugned notification has rightly been held by the High Court to be an attempt to nullify the directions made by the High Court in its earlier judgment. Direction No.2 in the operative part required determination of price of cream/paneer by agreement and in the absence of any agreement on the basis of price payable by cooperative societies to purchasers with overhead charges. The dispute about over payment was directed to be resolved by committee to be appointed by the two companies comprising officers of two organisations and the high officials designated under the Milk Act. The statutory power under Section 15 of the Milk Act of issuing notification for price fixation could not have been invoked by the State to by pass or commit beach of the directions made by the High Court in the earlier writ petition. The High Court was fully justified in coming to the conclusion that the issuance of notification under Section 15 of the Act was an exercise done for oblique purpose and to somehow get over the judgment of the High Court in the earlier writ petition. The notification was ineffectual to frustrate the agreements and settlements reached on price fixation through mutual negotiations between the authorised representatives of the two companies and the authorised officers of the State.20. Consequently, we

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]Those binding directions of the Court could not have been nullified by invoking power of the State of issuing price fixation notification under Section 15 of the Milk Act. The issuance of the impugned notification has rightly been held by the High Court to be an attempt to nullify the directions made by the High Court in its earlier judgment. Direction No.2 in the operative part required determination of price of cream/paneer by agreement and in the absence of any agreement on the basis of price payable by cooperative societies to purchasers with overhead charges. The dispute about over payment was directed to be resolved by committee to be appointed by the two companies comprising officers of two organisations and the high officials designated under the Milk Act. The statutory power under Section 15 of the Milk Act of issuing notification for price fixation could not have been invoked by the State to by pass or commit beach of the directions made by the High Court in the earlier writ petition. The High Court was fully justified in coming to the conclusion that the issuance of notification under Section 15 of the Act was an exercise done for oblique purpose and to somehow get over the judgment of the High Court in the earlier writ petition. The notification was ineffectual to frustrate the agreements and settlements reached on price fixation through mutual negotiations between the authorised representatives of the two companies and the authorised officers of the State.