INDIA CEMENT LTD. ETC. versus UNION OF INDIA AND OTHERS

Citation: [1990] 3 S.C.R. 850 · Decided: 21-08-1990 · Supreme Court of India · Bench: J.S. VERMA · Disposal: Dismissed

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Judgment (excerpt)

A 
B ' 
c 
. . . . ' . . ' , 
·''·· 
INDIA CEMENT LTD. ETC. 
v, 
UNION OF INDIA AND OTIIERS 
AUGUST 21, 1990 
[J.S. VERMA,. M.M. PUNCHHI AND K. JAYACHANDRA 
, ,, 
REDDY, JJ.] 
, 
Cement Control Order 1967 Clause 12-Flxation of uniform 
r,etfntion pric~Legality oj: 
The appellants tiled writ petitions in the Madras High Conrt chal-
lenging the fixation in 1969 of a uniform retention price of Rs.100 per 
tonne of cement instead of the existing three different retention prices 
for different categories of prodncers fixed earlier on the basis of the 
recommendations made by the Second Tariff Commission in 1961. The 
grievance of the appellants was that the f1Xalion of a uniform retention 
D price to be paid to all producers for the cement produced by them and 
acquired by the State Trading Corporation amounted to discrimination 
contravening Article 14 of the Constitution. The challenge was rejected 
by a Single Judge and, thereafter, a Division Bench of the High Court. 
Cement bas been a controlled commodity for a long time and its 
E 
production, distribution and price were regulated by Cement Control 
Orders issued by the Central Government from time to time in exercise 
of the powers conferred under sections 18G and 25 of the Industrial 
(Development & Regulation) Act, 1951. 
On behalf of the appellants it was contended that the impngned 
F 
Order made in 1969 fixing a nniform retention price for all three 
categories of cement producers treated unequals as equals; that the 
increase of Rs. 7 per tonne was to be made to the existing three-tier 
retention prices, but an irrational basis was adopted in f1Xlng the 
uniform price of Rs.100 per tonne which resulted in an unequal 
increase to the three different retention prices then existing; that clause 
G 
12 of the Cement Control Order, 1967 did not permit one uniform 
retention price; and that atleast in the case of Chettinad Cement Corpo-
ration Ltd. discrimination was proved on the basis of the distinction 
made by the High Court in the case of M/s Travancore Cement Ltd. The 
appellants however did not dispute before this court that no grievance 
would survive if the uniform retention price was fixed at Rs.104 per 
H tonne Instead ofRs.100. 
850 
-\ 
-· 
INDIA CEMENT v. U.0.1. 
851 
On behalf of the respondents i! was asserted that the industry 
Itself bad sought a revision of the prices and had accepted in principle 
) · that there should be one uniform retention price. 
Disml&l!ing the appeals, this Court, 
HELD: (1) The fixation of Rs.If)() per to!!De as the unlf()rm reten· 
tion price for the entire industry with the solitary exception of M Js 
Travancore Cement Ltd. for which justification bad been shown, was on 
·.a·:: . ii rational basis taking into account all relevant data and factors includ-
ing the ~ement i!Idµstry'~ acceptance of the principle of a uniform 
retenti1111 Dfice f!!r tbe ~ptire !P~l!lltcy', lh~ gnly difference being in the 
price aetually ri-.i:a !It ff.s, f!!!l !J'f tl!!!ll~ i'!~~~. of ~; 1~1 Pllr ~~~~ 
claimed by the cement industry. It is obvious, therefore, that the priiici· 
pie of a uniform retention price for the e11tlre industry had l!Ot been 
faulted. [857H; 858A·!ll 
· 
(2) The principle of fixation of a uniform price for the industry 
A 
B 
c 
was an accepted principle and this had to be done by fixing the uniform 
D 
price on the basis of the cost of a reasonably efficient and economic 
representative cross.s~ioµ of IDanllfa!'Hlring !mits and not with refe. 
rence to the cost in relation to each unit, [859A·B] 
M/s. Shri Sitaram SugaF Company Limited & Anr. v. Unim1 gf 
.,,. India & Ors, and U.P. State Sugar Corporation Ltd. & Anr. v. Union 
E 
of India & Ors., J.T. 1990 (I) SC 462, referred to. 
(3) Fixation of a uniform retention price being clearly permissible 
and the same having been determined at Rs.100 per tonne on the basis 
of expert opinion, founded on relevant factors, there was no scope for 
interference within the limits of permissible judicial review in the pre· 
sent case. [859E] 
Anakapal/e Co-operative Agricultural & Industrial Society Ltd. v. 
Uriiori of India, [1973] 2 SCR 982 and The Panipat Cooperative Sugar 
Miiis "· Uriion of India, [1973] 2 SCR 8(!0, referred to. 
( 4) The Central Government's wwer under Clause 12 of the 
Cement Control Order, 1967 to reflx the price can be exercised 'having 
regard to any change in any of the factors relevant for determination of 
.\. price of cement'. The meaning of the 

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