BILESHWAR KHAN UDYOG KHEDUT SHAHAKARI MANDALI LTD. ETC. versus UNION OF INDIA AND ANOTHER

Citation: [1999] 1 S.C.R. 569 · Decided: 10-02-1999 · Supreme Court of India · Bench: V.N. KHARE · Disposal: Dismissed

Judgment (excerpt)

... 
BILESHW AR KHAN UDYOG KHEDUT SHAHAKARI 
MANDALI LTD. ETC. 
v. 
UNION OF INDIA AND ANOTHER 
FEBRUARY 10, 1999 
[V.N. KHARE AND R.P. SETHI, JJ.] 
Levy Sugar Price Equalisation Fund Act, 1976 : Section 2(b )(ii) and 
Section 3(3), (4) & (5)-Excess realisation-Two orders requiring appellants 
to sell sugar at controlled price issued--Challenged before the High Court in 
writ petition-Implementation of the said orders restrained by interim or-
ders---<:onsequently, sugar sold at more than the controlled price-Writ peti-
tion dismisse~Interim orders lapsed on dismissal-The Act came into force 
subsequently-Substituted the orders requiring to sell sugar at controlled 
price--Provision for refund of excess realisation on setting aside of interim 
orders of the Court-Application for refund of excess realisation allowed by 
Court-Appealed against-Hel~Effect of setting aside an order or automatic 
discharge consequent upon dismissal of writ petition is the same-Appellants 
liable to refund excess realisation alongwith interest. 
Words & Phrases : 
'Set aside' meaning of in the context of Section 2(b )(ii) Levy Sugar 
Price Equalisation Fund Ac~ 1976. 
0 
In June, 1972 th<! respondent issued Sugar Price Determination 
Order and the Levy (Sugar Control) Order requiring the sugar man:Jfac-
turers to sell sugar to the Union Government, State Government or their 
nominees at the controlled price of Rs. 124.59 per quintal. The appellant 
co-operative sugar factories challenged the abovesaid two orders before 
A 
B 
c 
D 
E 
F 
the Gujarat High Court, by way of writ petitions. The High Court admitted G 
the writ petition and issued an injunction order restraining the respon-
dents, their servants etc. from requiring the appellant to sell sugar at the 
controlled price. Subsequently, the said order was made absolute. When 
the writ petition came up for hearing, the High Court, on the statement of 
the counsel for the appellant that by the lapse of time the writ petition had H 
569 
570 
SUPREME COURT REPORTS 
[1999) 1 S.C.R. 
A become infructuous dismissed the writ petition.' 
After the dismissal of the writ petition, Parliament passed Levy 
Sugar Price Equalisation Fund Act, 1976 with the object of making 
provisions for the refund of excess realisation made by the sugar factories 
on the basis of interim orders obtained from the Courts. Subsequently, the 
B respondent Union of India filed applications praying for directions to the 
said petitioners, to pay the price difference realised by them on account of 
interim order granted by the High Court, alongwith interest. The High 
Court allowed the said applications directing the appellants to pay the 
c 
D 
difference amount alongwith interest at the rate of 12 1/2% per annum. 
In appeal, before this Cou~ the issue involved was regarding the 
liability of the appellants to pay interest on the amount called upon to pay 
as excess realisation. Leave as to the appellants' liability to refund be 
excess realisation was refused. 
The appellants contended that as their cases were governed by 
Section 3(4) and (5) of the Act, they were not liable to pay interest on the 
.amount to be refunded as excess realisation. It was also contended that as 
the interim order passed by the High Court on the basis of which the 
appellants made excess realisation, although automatically lapsed, had not 
E been set aside by the appellate or the higher court; thus the realisation 
was riot within the ambit of Section 2(b) (ii) of the Act. 
F 
Dismissing the appeals, this Court 
• 
HELD : 1.1. Ordinary meaning of the word 'set aside' is to revoke or , 
quash, the effect of which is to make the interim order inoperative or 
non-existent. The expression 'set aside' used in Section 2(b)(ii)(i) of the of 
Levy Sugar Price Equalisation Fund Act, 1976 means an interim order has 
come to an end and has become inoperative. [573-D-E] 
G 
1.2. The effect of setting aside an order or automatic discharge 
consequent upon the dismissal is the same. When the High Court dis-
missed the writ petition, the interim order passed therein became non-ex-
istent and inoperative and stood automatically discharged. Interim orders 
passed in the writ petition came to an end on dismissal of the writ petition 
H before the Equalisation Fund Act came into force and under such cir-
BILESHWAR KHAN UDYOG KHEDUTSHAHAKARI MANDALI LID. v. u.o.I. [V.N.KHARE,J.] 
571 
"' 
cumstances Section 3(4) and (5) of .the Act have no application to the

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