FOOD CORPORATION OF INDIA versus V.K. SUKUMARAN ETC. ETC.

Citation: [1995] SUPP. 5 S.C.R. 631 · Decided: 23-11-1995 · Supreme Court of India · Bench: K. RAMASWAMY, B.L. HANSARIA · Disposal: Dismissed

Judgment (excerpt)

-
FOOD CORPORATION OF INDIA 
A 
v. 
V.K. SUKUMARAN ETC. ETC. 
NOVEMBER 23, 1995 
B 
[K. RAMASWAMY AND B.L. HANSARIA, JJ.] 
Essential Commodities Act, 1955-Sections 3(1) & (2)-Kerala Ration-
ing Order, 1966-Sub-clause (BA) of Clause 45-Interpfetation of-Rationed 
articles-Revision of prices including distribution Cost-Intimation of revised C 
rates necessary to retail dealers-Retailers to account for differential price of 
the stock on hand on previous closing day. 
The respondent, an authorised retail dealer at Emakulam Distt. 
purchased from the appellant's godown rice on 10.10.1985 and 11.10.1985 
at the pre-revised rates for public distribution to the cardholders. On D 
11.10.1985, the Civil Supplies Officials issued instructions to the respon-
dent and other retail dealers revising the price of the rice w.e.f. 12.10.1985 
and stating that the closing stock on 12.10.1985, should be ascertained and 
the difference of the price was to be deposited in the Treasury and Challan 
was to be submitted within two days thereafter and in the case of non-com-
E 
pliance, action would be taken against the defaulter. Writ petitions filed 
against the orders were allowed while holding that the respondent was not 
liable to refund the difference of the price for the stock on hand on closing 
day of 9.10.1986 and supplied on October 10 and October 11, 1985; that 
the liability would arise only from the date when intimation of the revised 
rate thereof was given by the Civil Supply Officer and since the intimation 
was given on 13.10.1985, for the stock on hand as on 12.10.1985 difference 
would be liable to be refunded at the revised rates from that date. Writ 
F 
appeal filed challenging the order was dismissed by the Division Bench, 
upholding the order of the Single Judge. Hence these appeals by special 
leave. The question raised for consideration was whether the retailers were G 
liable to refund the difference of the price for the opening stock held by 
the retailer on 10.10.1985 and purchased on October 10 and 11, 1985 as 
intimated. 
Dismissing the appeal, this Court 
631 
H 
A 
B 
632 
SUPREME COURT REPORTS [1995) SUPP. 5 S.C.R. 
HELD : 1.1. The respondent was bound by the Kerala Rationing 
Order, 1966 issued under sub-section (1) and (2) of S3 of the Essential 
Commodities Act, 1955. Sub-clause (SA) of Clause 45 of the order enjoins 
that whenever the existing issue price of rationed articles, i.e., the price at 
which the stock has to be released from the Food Corporation of India or 
Central Storage Depot, is revised by the Government of India or State 
Government either upward or downward, the stock of rationed articles 
with the authorised retail distributor as on the beginning of the day from 
which day the revised issue price will come into force, should be a~sessed 
by the authorised retailed distributor and intimated to the Taluk Supply 
Officer/City Rationing Officer or any officer authorised by the State 
C Government for the purpose. [636-D-F] 
1.2. The authorised distributor, either whole-seller or retailer, is 
enjoined to make good the difference of the price of stock on hand as on 
the previous closing day, in these cases as on October 9, 1985, consequent 
D to the revision of the issue price by the Central Government with effect 
from October 10, 1985. Para 2 of the Government Circular No. 176, 
Ministry of Food and Civil Supplies issued on 11.10.1985, authorised the 
State Government/Union Territory to revise the rates of issue price conse-
quent upon the revision of the price including the distribution cost with 
E effect from October 10, 1985. In terms thereof, on revision of retail price 
by the State/Union Territory government and on issue of instruction from 
the State Government, the Taluk officials as stated earlier, had intimated 
to the retail dealers that the revised prices would come into effect from 
October 13, 1985 and they were directed to pay the difference on the stock 
F 
on hand on 12.10.1985. It would be desirable to avoid loss to public 
exchequer and unintended windfall to whole-sale or retail dealers that 
before enforcing the revised rates of rice, an infrastructure in built, 
revision by State Government or Union Territory Authorities is made and 
intimation thereof and the date of its becoming effective is made public 
through media, i.e. Radio., T.V. or press so that the revised rates would 
G come into effect from that date and the stock held at the close of the 
previous date

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