LexDUNCAN INDUSTRIES LTD. AND ANR versus UNION OF INDIA
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- ~ ..... DUNCAN INDUSTRIES LTD. AND ANR. A v. UNION OF INDIA FEBRUARY 10, 2006 [H.K. SEMA AND B.N. SRIKRISHNA, JJ.] B ---\ Essential Commodities Act, 1995: Section 3. .. Retention Price Scheme-Granted to fertilizer manufacturers- Retrospective modification of-To the detriment of manufacturers- c Permissibility-Government fixed the maximum retail price of fertilizers, which was to be complied with by dealers, manufacturers act.-This controlled-price mechanism resulted in losses for the manufacturer-Retention Price scheme was devised with a view to determining the appropriate subsidy for fertilizer manufacturers and was brought into operation-Retention Prices for five D pricing periods up to 31.3.1991 were notified-Since the calculation of the )( Retention prices and its approval by the Government involved administrative ·~ delays, the approval of the policy and the computation of the Retention Prices, though made subsequently, were made effective from the beginning of the pricing period-Until the Retention Price fixed pricing period was brought into force, the Retention Price that was fixed for the previous year continued E to operate-This pricing period which was to be operative only up to 31.3.1994 was actually continued up to 30. 6. 1997-During the continuance of the Seventh (1.7.1997 to 31.3.2000) and the Eighth-(1.4.2000 to 31.3.2003) pricing periods, the retention Price for each of the manufacturers was revised-Thereafter, the representatives of the Fertilizer company were informed that based upon F information received by the Fertilizer-coordination Committee (FlC), certain items of expenditure were disallowed while finalizing the Retention price for the Seventh and Eighth pricing periods-Fertilizer company challenged the consequent demand raised/or the recovery of a certain sum under the Scheme- High Court dismissed the writ petition-Held: Retention Price Scheme is nothing but an administrative order and is not linked to any statute in any G manner whatsoever-Retention Price Scheme, both conceptually and in its actual operation, has always had an element of retrospectivity built-in- / ~ Although the result of an administrative decision, the Retention Price Scheme ' was grounded in an agreement reached between the Government and certain 149 H , 150 SUPREME COURT REPORTS [20061 2 S.C.R. A fertilizer manufacturers·-Therefore, the Retention Price Scheme was not .... , . something that was compulsorily imposed un fertilizer manufacturers--As the Scheme was a voluntary one, and the fertilizer company having agreed to abide by the decision of the Governments, there is no question of its 'legitimate expectations' being belied-In the matters of administrative discretion it is nut B open lo courts to interfere in minute details--The action of the F!C Com mi/lee lo adversely modifj; the subsidies framework cannot be questioned on its merits-Hence, Retention Price Scheme could be retrospectively modified to the detriment of the manufacturers-Fertilizer (Control) Order, 1957- , Conslilulion of India, 1950, Art. 14-Administralive Law. The appellant was engaged in business of manufacturing and selling C urea (a fertilizer). Through the Fertilizer (Control) Order, 1957 made under Section 3 of the Essential Commodities act, 1955, the Government fixed the maximum retail price of fertilizers, which was to be complied with by dealers, manufacturers etc. This controlled-price mechanism resulted in losses for the manufacturers. D A Retention Price Scheme was devised with a view to determining the appropriate subsidy for fertilizer manufacturers and was brought into operation. The Retention Price fixed initially was to be operative for the period 1.11.1977 to 31.3.1979. From time to time, the Retention Prices for five pricing periods up to 31.3.1991 were notified. Since the calculation of E the Retention Price and its approval by the Government involved administrative delays, the approval of the policy and the computation of the Retention Prices, though made subsequently, were made effective from the beginning of the pricing period. The sixth pricing period was to commence from 1.4.1991 and remain in force up to 31.3.1994. However, the Retention Price for this period was actually approved and made F operative from 1.4.1991. Until the Retention Price fixed for this pricing period was brought into force, the Retention Price that was fixed for the previous y
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