H.S.S.K. NIYAMI AND ORS. versus UNION OF INDIA AND ANR.

Citation: [1990] 3 S.C.R. 862 · Decided: 21-08-1990 · Supreme Court of India · Bench: N.M. KASLIWAL · Disposal: Dismissed
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Judgment (excerpt)

A 
H.S.S.K. NIYAMJ AND ORS. 
v. 
UNION OF INDIA AND ANR. 
-\ 
AUGUST 21, 1990 
B 
[N.M. KASLIWAL AND K. RAMASWAMY, JJ.) 
Essential Commodities Act, 1955/Sugar (Control) Order, 1963: 
Section 3(3C)/Clause 6 and Notification No. CSR No. 463 dated 
24.3.1966-Constitutional validity of Section 3(3C)-Price fixation-
_ '6, 
Zoning-Whether legislative po/icy-Whether individual notice of rep-
resentation/hearing necessary before placing a party in a particular 
C zone-Absence of such opportunity-Whether violative of principles of 
D 
natural justice. 
-
Constitution of India, 1950: Article 31C-Validity of Section 
3(3C) of Essential Commodities Act, 1950. 
·-<. 
The Sugar Inquiry Committee appointed by the Government of 
India recommended five zones for the fixation of ex-factory prices of 
sugar, including Zone No. 1 consisting of factories in Maharashtra, 
North Mysore etc. Accepting the recommendation, the Government of 
India issued notification in GSR No. 463 dated March 24, 1966 and the 
E 
factories were specified in Schedules 2 & 3 annexed thereto. The appel-
lants' factories located in North Mysore, were included in Zone No. I. 
~ 
The appellants filed writ petitions in the High Court assailing the 
constitutional validity of Section 3(3C) of the Essential Commodities 
Act, 1955 and the Notification dated March 24, 1966, and praying for a 
F 
direction to the respondents to include the appellants' factories in Zone 
No. 2 consisting of South Mysore, South Andhra Pradesh and Orissa 
and to fix the price at Rs.161 per quintal for the sugar manufactured by 
the appellants' factories. The writ petitions were dismissed by the High 
--f. 
Court. 
G 
In the appeals before this Court, on behalf of the appellants it was 
contended that the appellants' factories were part of the entire State as 
was notified preceding the notification, that factors like price of 
sugarcane, taxes, duties, sugar recovery percentage, labour charges, 
cost of production or fair return to the produce were same or similar in 
the entire State but due to the notification, which included the appel-
). 
H !ants in Zone No. 1, they were put to huge losses, and that the appel-
862 
-
NIYAMI v. U.0.1. 
863 
lants were entitled to a notice and hearing before placing them in Zone 
}·No. 1 and clubbing with other factories in the State of Maharashtra, 
etc. was uneconomical and kept the appellants under loss and therefore, 
it was violative of principles of natural justice. 
Dismissing the appeals, this Court, 
HELD: 1. The Essential Commodities Act, 1955 having received 
the protective umbrella of Article 31C oftbe Constitution, read with 9th 
·Schedule, Item No. 126, Section 3(3C) of the Act cannot be held to be 
ultra vires of the fundamental rights enshrined under Article 19(l)(g) 
and right to property under Article 19(1)(1) as was available in the year 
1968. MoreovPr, it is covered by a recent decision of this Court in M/s. 
Shri Sitaram Sugar Company v. Union of India & Ors., [1990] 3 SCC 
223. Therefore, the point is no longer res integra. Section 3(3C) is 
constitutionally valid and unassailable. [865G-H; 866A] 
A 
B 
c 
2.1 The fixation of the price and zoning are integral scheme of the 
notification; without placing the factories in the appropriate zone based o 
on agro-climatic and other economic considerations the proper price 
fixation cannot be made. So, both the factors are part of the policy 
decision by the government in exercise of the statutory powers. This 
decision is based on the recommendation made by the Sugar Commis-
~ sion consisting of experts in the field of agro-economics who after 
exhaustive study and consideration of the relevant material placed 
E 
before it made the recommendation. Thereby it assumes the character 
of legislative policy. It does not concern itself with an individual case. 
Once it is concluded that the zoning system is an integral part of the 
~ price fixation of the sugar produced by the factories in a particular 
zone, it is legislative in character and no individual sugar factory is 
entitled to a notice and hearing before placing the particular. factory or 
F 
,.._ factories in a particular zone. Moreover, the Sugar Commission beard 
the persons desired to be beard and considered the representation and 
·material produced. At the stage of notification, the question of further 
representation or hearing does not arise nor a feasible exercise. It is for 
the Government to accept or reject or modify the
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