Case: Duncan Industries Ltd.  Vs. Union Of India

the manufacturers had agreed to abide by the decision of the FIC Committee, on all matters relating to determination of the Retention Price as being "final and binding" upon them. In the light of this, the argument of estoppel is actually the boot on the other foot. 38. Moreover, even if we were to assume for a moment that certain returns have been assured, and that this assurance is binding on the Government, we are not satisfied that the assurance has actually been breached. We agree with the High Court that there are too many imponderables and too many disputed questions of fact for an effective decision in a writ proceeding on this issue. In our view, therefore, this contention of the learned counsel for the appellants must also fail. Reasonableness and Legitimate Expectation 39. Dr. Dhavan next contended that the retrospective application of the new policy parameters by the FIC Committee is `arbitrary, `unreasonable and against the Doctrine of Legitimate Expectation. Learned counsel contends that since the Government controls the retail price of fertilizer, it would be `unfair, `unreasonable and violative of Article 14 for them to revise the scheme of subsidies, so that there would be losses caused to fertilizer manufacturers. In our view, this contention has no merit for both the facts and the applicable legal principles indicate that there is nothing arbitrary or unreasonable in what the FIC Committee has done. 40. At the outset, the material placed on record clearly demonstrates that the representatives of the First Appellant were party to the deliberations before the FIC Committee, who explained the material particulars regarding the manner of working out the Retention Price for the Seventh and Eighth pricing periods. The minutes of the said discussions, read with the correspondence between the parties pertaining to the Retention Price fixation for the Seventh and Eighth pricing periods, leave no doubt that the First Appellant was party to what was being done. Further, at no point, during the discussions or in the subsequent correspondence, did the First Appellant question the validity or correctness of the manner of fixation of the Retention Price (except on some minor issue like bank interest charges). 41. Dr. Dhavan cited a number of authorities to support his argument. However, these cases pertain to situations where tax exemptions, which were already granted and pursuant to which transactions had been held, were retrospectively withdrawn. Other authorities also pertained to setting up of industries in backward areas on promises of rebate/concessions. In our view, none of these authorities is of any assistance for resolving the issue before us, which is purely a consensual working arrangement between the Government and fertilizer manufacturers. The argument of `legitimate expectation, in our view, cannot have application to the present case. As we have said, the Scheme was a voluntary one, and having agreed to abide by the decision of the Government, there is no question of the appellants `legitimate expectations being belied. 42. Turning to the Article 14 argument, we emphatically reiterate the now-accepted position that Article 14 does not require this Court to examine the intricacies of an economic scheme or pricing policy for its merits or its correctness, for that is in the domain of the executive or the legislative branches of the Government. [See, e.g. BALCO Employees Union (Regd.) vs. Union of India, (2002) 2 SCC 333 at pp. 362-363 (paragraphs 46, 47), 381-382 (paragraphs 92, 93); Bhavesh D. Parish vs. Union of India, (2000) 5 SCC 471 at pp. 484-485 paragraph 23); Peerless General Finance and Investment Co. Ltd. vs. Reserve Bank of India, (1992) 2 SCC 343 at p. 397 (paragraphs 69 and 70); State of M.P. vs. Nandlal Jaiswal, (1986) 4 SCC 566 at pp.605-606 (paragraph 34); Premji Bhai Parmar vs. Delhi Development Authority, (1980) 2 SCC 129 at pp. 137-139 (paragraph 9)]. Indeed, even if the Scheme, as revised, is "unwise" or even "unjust", there is no recourse before us for, as Justice Homles elegantly put it: "We fully understand... the very powerful argument that can be made against the wisdom of the legislation, but on that point we have nothing to say, as it is not our concern." Noble State Bank vs. IIaskell, 219 US 575 at p. 580 (1910). We are broadly in concurrence with the reasoning of the High Court that in matters of administrative discretion it is not open to the courts to interfere in minute details except on grounds of mala fides or extreme arbitrariness. Interference should be only within very narrow limits, such as, where there is a clear violation of a statute or a constitutional provision, or extreme arbitrariness in the Wednesbury Associated Provincial Picture Houses Ltd. vs. Wednesbury Corporation, [1948] 1 KB 223. sense. Neither the High Court nor we have found any of these vitiating factors in the administration of the Retention Price Scheme and the consequent payments/recoveries of the subsidy amounts. Thus, in our view, the action of the FIC Committee to adversely modify the subsidies framework, cannot be questioned on its merits. The case of M/s Nagarjuna Fertilizers 43. The learned Additional Solicitor General brought to our notice that, out of all the concerned fertilizer manufacturing units, only two units have challenged the Retention Price Scheme for the relevant periods. One of the these is the First Appellant and the other was M/s Nagarjuna Fertilisers and Chemicals Ltd. (hereinafter "Nagarjuna Fertilizers"). Nagarjuna Fertilizers had filed SLP (Civil) No. 20721/2003 against the judgment of the High Court of Andhra Pradesh dismissing its Writ Petition No. 18242/2002 (dated 25.7.2003). This SLP was, however, summarily dismissed by this Court through order dated 17.11.2003. Although, we have carefully applied our mind to the case of the First Appellant, independent of the outcome in the case of Nagarjuna Fertilizers, we find that the two cases are actually indistinguishable on facts and the present case should have also been similarly dismissed. In any event, after a detailed examination, we have arrived at the same result. The Final Findings 44.

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

Explanation:
0[ds]Dr. Dhavan next contended that the retrospective application of the new policy parameters by the FIC Committee is `arbitrary, `unreasonable and against the Doctrine of Legitimate Expectation. Learned counsel contends that since the Government controls the retail price of fertilizer, it would be `unfair, `unreasonable and violative of Article 14 for them to revise the scheme of subsidies, so that there would be losses caused to fertilizer manufacturers. In our view, this contention has no merit for both the facts and the applicable legal principles indicate that there is nothing arbitrary or unreasonable in what the FIC Committee has doneAt the outset, the material placed on record clearly demonstrates that the representatives of the First Appellant were party to the deliberations before the FIC Committee, who explained the material particulars regarding the manner of working out the Retention Price for the Seventh and Eighth pricing periods. The minutes of the said discussions, read with the correspondence between the parties pertaining to the Retention Price fixation for the Seventh and Eighth pricing periods, leave no doubt that the First Appellant was party to what was being done. Further, at no point, during the discussions or in the subsequent correspondence, did the First Appellant question the validity or correctness of the manner of fixation of the Retention Price (except on some minor issue like bank interest charges). Dr. Dhavan cited a number of authorities to support his argument. However, these cases pertain to situations where tax exemptions, which were already granted and pursuant to which transactions had been held, were retrospectively withdrawn. Other authorities also pertained to setting up of industries in backward areas on promises of rebate/concessions. In our view, none of these authorities is of any assistance for resolving the issue before us, which is purely a consensual working arrangement between the Government and fertilizer manufacturers. The argument of `legitimate expectation, in our view, cannot have application to the present case. As we have said, the Scheme was a voluntary one, and having agreed to abide by the decision of the Government, there is no question of the appellants `legitimate expectations being belied. Turning to the Article 14 argument, we emphatically reiterate the now-accepted position that Article 14 does not require this Court to examine the intricacies of an economic scheme or pricing policy for its merits or its correctness, for that is in the domain of the executive or the legislative branches of the Government. [See, e.g. BALCO Employees Union (Regd.) vs. Union of India, (2002) 2 SCC 333  at pp. 362-363 (paragraphs 46, 47), 381-382 (paragraphs 92, 93); Bhavesh D. Parish vs. Union of India, (2000) 5 SCC 471  at pp. 484-485 paragraph 23); Peerless General Finance and Investment Co. Ltd. vs. Reserve Bank of India, (1992) 2 SCC 343  at p. 397 (paragraphs 69 and 70); State of M.P. vs. Nandlal Jaiswal, (1986) 4 SCC 566  at pp.605-606 (paragraph 34); Premji Bhai Parmar vs. Delhi Development Authority, (1980) 2 SCC 129  at pp. 137-139 (paragraph 9)]. Indeed, even if the Scheme, as revised, is "unwise" or even "unjust", there is no recourse before us for, as Justice Homles elegantly put it:"We fully understand... the very powerful argument that can be made against the wisdom of the legislation, but on that point we have nothing to say, as it is not our concern."Noble State Bank vs. IIaskell, 219 US 575 at p. 580 (1910)We are broadly in concurrence with the reasoning of the High Court that in matters of administrative discretion it is not open to the courts to interfere in minute details except on grounds of mala fides or extreme arbitrariness. Interference should be only within very narrow limits, such as, where there is a clear violation of a statute or a constitutional provision, or extreme arbitrariness in the Wednesbury Associated Provincial Picture Houses Ltd. vs. Wednesbury Corporation, [1948] 1 KB 223. sense. Neither the High Court nor we have found any of these vitiating factors in the administration of the Retention Price Scheme and the consequent payments/recoveries of the subsidy amounts. Thus, in our view, the action of the FIC Committee to adversely modify the subsidies framework, cannot be questioned on its merits