Case: GODAVARI SUGAR MILLS LTD Vs. UNION OF INDIA

1. The appellant herein is a company incorporated under the Indian Companies Act and has a sugar factory in the District of Bijapur in the State of Karnataka, where the appellant is carrying on business of manufacture of sugar. For the crushing year 1985-86, the appellant herein was required under the statutory order to sell 55% of levy sugar and rest 45% was meant for free sale. Under Sections 3, (3C) of the Essential Commodities Act (hereinafter referred to as the Act), the Central Government is empowered to fix the price of levy sugar keeping in regard to the minimum price, if any, fixed for sugarcane by the Central Government; the manufacturing cost of sugar; the duty or tax, if any, paid or payable thereon; and the securing of a reasonable return on the capital employed in the business of manufacturing sugar. It is alleged that the Central Government, for the crushing year 1985- 86, fixed the price of levy sugar at Rs. 362.76, which was subsequently increased to Rs. 365.42. The appellant was not satisfied with the fixation of the levy price and, therefore, challenged the said fixation of price by the Central Government by means of a petition under Article 226 of the Constitution before the Karnataka High Court. It was prayed therein, that the levy price was required to be refixed. A Single Judge of the High Court of Karnataka while entertaining the appellants petition, passed an order directing the Central Government to lift the levy sugar by paying a price of Rs. 375.77 per quintal of S-29 Grade with corresponding differentials for the other grades of sugar, subject to the petitioners furnishing bank guarantee to cover the difference. Ultimately, the said writ petition came up for hearing, but was dismissed by the High Court. 2. The appellant thereafter preferred a writ appeal before the Division Bench of the High Court, but the same was also dismissed. It is against the said judgment of the High Court, the appellant is before us. 3. While this matter was pending in this Court, a bench of three Judges in the case of Shri Malaprabha Coop. Sugar Factory Ltd. v. Union of India and Anr. - 1994 (1) SCC 648 held that while fixing the price for levy sugar under Sections 3 (3C) of the Act, the Central Government is also required to take into consideration the additional price paid by the sugar manufacturer to the sugarcane grower/society. On the strength of the said decision, learned counsel sought to amend the pleadings and urged that since in the present case also the Central Government has not taken into consideration the additional price paid by the appellant to the sugarcane grower, the price fixed for levy sugar by the Central Government has to be set aside and the Central Government be directed to refix the price of the levy sugar after taking into relevant conditions. It may be noticed that there was no pleading to this effect in the writ petition filed before the High Court and this question was also not raised before the high Court. It was only after this Court in Shri Malaprabha Coop. Sugar Factory Ltd. (supra) held that the additional price paid by the sugar factory has also to be taken into consideration while fixing the levy sugar price, the appellant has tried to amend the pleadings. Learned counsel, appearing for the Union of India, urged that for the crushing season in the year 1982-82, in the case of Modi Industries Ltd. & Anr. v. Union of India & Ors. - 1999 (9) SCC 245, an affidavit was filed on behalf of Union of India wherein it was stated that while determining the minimum cane price of levy sugar regard has been had only to the minimum cane price as spoken to in Section 3 (3-C) (a) of the Essential Commodities Act, 1955 and the additional cane price payable under clause 5-A of the Sugar (Control) Order, 1966, has not been taken into account, and that also there has been no mopping up of excess realisation on levy-free sale sugar while fixing the price of levy sugar for the season 1982-83. In view of the said affidavit, a Bench of three Judges in the said case held that the decision is not covered by Shri Malaprabha Coop. Sugar Factory Ltd. (supra). At present, we are not inclined to go into the question as we are of the view that at this belated stage, we should not permit the appellant to amend his pleadings and raise additional points. Moreover, in Shri Malaprabha Coop. Sugar Facotry Ltd. (supra), this Court referred to a passage from Judicial remedies in Public Law by Clive Lewis, which runs as under: The courts now recognise that the impact on the administration is relevant in the exercise of their remedial jurisdiction. Quashing decisions may impose heavy administrative burdens on the administration, divert resources towards reopening decision, and lead to increased and unbudgeted expenditure. Earlier cases took the robust line that the law had to be observed, and the decision invalidated whatever the administrative inconvenience caused. The courts nowadays recognise that such an approach is not always appropriate and may not be in the wider public interest. The effect on the administrative process is relevant to the courts remedial discretion and may prove decisive.

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

Explanation:
1[ds]3. While this matter was pending in this Court, a bench of three Judges in the case of Shri Malaprabha Coop. Sugar Factory Ltd. v. Union of India and Anr. - 1994 (1) SCC 648  held that while fixing the price for levy sugar under Sections 3 (3C) of the Act, the Central Government is also required to take into consideration the additional price paid by the sugar manufacturer to the sugarcane grower/society. On the strength of the said decision, learned counsel sought to amend the pleadings and urged that since in the present case also the Central Government has not taken into consideration the additional price paid by the appellant to the sugarcane grower, the price fixed for levy sugar by the Central Government has to be set aside and the Central Government be directed to refix the price of the levy sugar after taking into relevant conditions. It may be noticed that there was no pleading to this effect in the writ petition filed before the High Court and this question was also not raised before the high Court. It was only after this Court in Shri Malaprabha Coop. Sugar Factory Ltd. (supra) held that the additional price paid by the sugar factory has also to be taken into consideration while fixing the levy sugar price, the appellant has tried to amend the pleadings. Learned counsel, appearing for the Union of India, urged that for the crushing season in the year 1982-82, in the case of Modi Industries Ltd. & Anr. v. Union of India & Ors. - 1999 (9) SCC 245, an affidavit was filed on behalf of Union of India wherein it was stated that while determining the minimum cane price of levy sugar regard has been had only to the minimum cane price as spoken to in Section 3 (3-C) (a) of the Essential Commodities Act, 1955 and the additional cane price payable under clause 5-A of the Sugar (Control) Order, 1966, has not been taken into account, and that also there has been no mopping up of excess realisation on levy-free sale sugar while fixing the price of levy sugar for the season 1982-83. In view of the said affidavit, a Bench of three Judges in the said case held that the decision is not covered by Shri Malaprabha Coop. Sugar Factory Ltd. (supra). At present, we are not inclined to go into the question as we are of the view that at this belated stage, we should not permit the appellant to amend his pleadings and raise additional points. Moreover, in Shri Malaprabha Coop. Sugar Facotry Ltd. (supra), this Court referred to a passage from Judicial remedies in Public Law by Clive Lewis, which runs as under:The courts now recognise that the impact on the administration is relevant in the exercise of their remedial jurisdiction. Quashing decisions may impose heavy administrative burdens on the administration, divert resources towards reopening decision, and lead to increased and unbudgeted expenditure. Earlier cases took the robust line that the law had to be observed, and the decision invalidated whatever the administrative inconvenience caused. The courts nowadays recognise that such an approach is not always appropriate and may not be in the wider public interest. The effect on the administrative process is relevant to the courts remedial discretion and may prove decisive.