Case: Food Corporation of India &amp; Another Vs. M/s. SEIL Ltd. &amp; Others

1. Parliament of India enacted Essential Commodities Act, 1955 (The Act). In terms of Section 3(2)(f) thereof, the Central Government is empowered to direct any manufacturer of sugar to sell the said commodity to the Central Government or a State Government or to a body owned or controlled by them for the purpose of making it available to the public at a fair price. It is commonly known as levy sugar. Price of such levy sugar is fixed by the Central Government in exercise of its power under Section 3(3C) of the Act on yearly basis. Sugar year commences from the month October of the year. Price of levy sugar although is required to be notified at that time, admittedly, there exists a practice to notify the previous years price as a levy sugar on an adhoc basis price in October and final price therefor is notified later on2. Pursuant to or in furtherance of a notification issued by the Central Government under the Act and the directions issued by the competent authority from time to time, levy sugar was supplied by the respondents to the agencies of Central Government as also the appellant3. Respondents herein received allotment letters for supply of sugar both to FCI as also UPPCF. Claims were lodged for the price of levy sugar both with the FCI as also the Directorate of Sugar, Ministry of Food. The Central Government sanctioned the claim of the respondent in respect of the sugar supplied to UPPCF. It made similar claim in respect of the sugar supplied to the appellant. Appellant, however, demanded for a no dues certificate. It raised other objections including weight and quality of the sugar in relation to the supplies made to the Central Government. Respondents contended that no complaint having been made by the Central Government in this connection, the action of the appellant was totally unjustified. We may, however, notice that withholding of payment was, inter alia, made by the appellant for the alleged shortages in supply of sugar during the period 1983 to 19954. Respondents filed writ applications before the High Court of Delhi. A learned Single Judge of the said Court classified the cases into two categories; (1) supplies made to the State Government, the Central Government; and their other agencies in respect whereof the appellant only had the authority to make payment, and (2) supplies made to the appellant5. So far as the supplies made to the Central Government and other agencies are concerned, it was held that a direction for making the payment should be made but in respect of the supplies made to the appellant; any resolution setting the controversy was held to be impermissible in a writ proceeding therefor and the respondents were relegated to the remedy of a civil suit for recovery of respect of the amount claimed by them6. A review petition was filed by the respondents pointing out that no direction has been made in regard to payment of interest and by a judgment and order dated 29th April, 2005 interest was directed to be paid7. Appeals preferred there against by the appellant herein have been dismissed by a Division Bench of the High Court by reason of the impugned judgment.

Court's reasoning:
18. Article 14 of the Constitution of India has received a liberal interpretation over the years. Its scope has also been expanded by creative interpretation of the court. The law has developed in this field to a great extent. In this case, no disputed question of fact is involved. The High Court, in an appropriate case, may grant such relief to which the writ petitioner would be entitled to in law as well as in equity. We do not, thus, find any substance in the contention of Mr. Sharan that while exercising its review jurisdiction, no interest on the principal sum could have been directed to be granted by the High Court. A writ court exercises its power of Review under Article 226 of the Constitution of India itself. While exercising the said jurisdiction, it not only acts as a court of law but also as a court of equity. A clear error or omission on the part of the court to consider a justifiable claim on its part would be subject to review; amongst others on the principle of actus curiae neminem gravabit (An act of the courts shall prejudice none). We appreciate the manner in which the learned Judge accepted his mistake and granted relief to the respondents19. We, however, although agree with the opinion of the Division Bench of the High Court on the legal principle in regard to payment of interest, as has been enunciated by it, having regard to the fact that the respondents did not prefer any appeal, are of the opinion that increase in the rate of interest, as has been directed by the Division Bench, cannot be upheld.