M/S. OUDH SUGAR MILLS LTD. versus UNION OF INDIA & ANR.

Citation: [2020] 2 S.C.R. 619 · Decided: 07-02-2020 · Supreme Court of India · Bench: MOHAN M. SHANTANAGOUDAR · Disposal: Dismissed

Judgment (excerpt)

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619
M/S. OUDH SUGAR MILLS LTD.
v.
UNION OF INDIA & ANR.
(Civil Appeal No. 3890 of  2010)
FEBRUARY 07, 2020
[MOHAN M. SHANTANAGOUDAR AND
R. SUBHASH REDDY, JJ.]
Sugar:
Sugar Company – Placed in central zone of State of Uttar
Pradesh for the purpose of fixation of price for the levy sugar –
For two crushing years – Company filed writ petition before High
Court seeking direction to be placed in the eastern zone, seeking
parity with other two units which were placed in eastern zone –
Single Judge dismissed the petition – Review petition against the
same, was also dismissed – Appeal to Supreme Court – Held: the
company was placed in the central zone for the relevant years, after
exhaustive study by the experts – Conclusions reached by the Central
Government in exercise of statutory power cannot be said to be
either discriminatory or unreasonable – The company cannot claim
parity with other units in the district, when the revenue districts are
not the limits for zonal division.
Dismissing the appeals, the Court
HELD: 1.1 The price of levy sugar is fixed for a zone with
an intention to ensure to the manufacturers of the sugar in the
zone, a reasonable return on their overall production and
investment, provided that the units are running economically and
efficiently. Sugar was a controlled commodity during the relevant
time, covered by the provisions of the Essential Commodities
Act, 1955. Certain quantity of sugar called levy sugar, was to be
supplied to the Government at a price fixed by the Government
and rest of the same was levy free sugar, which could be sold in
 [2020] 2 S.C.R. 619
619
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620
SUPREME COURT REPORTS
[2020] 2 S.C.R.
open market. The price of levy sugar was fixed based on the
Control Order framed under the Essential Commodities Act. The
price of levy sugar was fixed by the Central Government, having
regard to various factors, including the basis of basic–cost
schedules drawn and recommended by the expert body. [Para
7][623-A-D]
1.2 The impugned Orders questioned in the writ petition
were based on exhaustive study by experts. The conclusions
reached by the Central Government in exercise of statutory power
cannot be said to be either discriminatory or unreasonable. So
far as sugar units, with which the appellant had claimed parity,
are concerned, they were transferred to eastern zone on the basis
of merits adjudged by the State. When the revenue districts are
not the limits for zonal division, the appellant cannot claim parity
with other units only on the ground that all the units are situated
in Sitapur district. Even with regard to appellant unit, after a lapse
of time, it was considered feasible to place it in eastern zone.
[Para 7][623-E-H]
1.3 Merely because there is difference in price in central
zone and eastern zone, the appellant cannot claim, as a matter of
right, its unit was to be placed in eastern zone instead of central
zone during the relevant years. [Para7][623-E-F]
1.4 As the appellant has failed to demonstrate any invidious
discrimination and statutory violation, merely on the ground that
other units in Sitapur district were transferred to eastern zone
and that the representation of the appellant was not acceded to
for the relevant crushing years, is no ground for interference.
[Para 7][623-H; 624-A]
1.5 The action of the Central Government in placing the
factory of the appellant at two different times in two different zones
also does not constitute any discrimination. The policy decision
was taken from time to time subject to satisfaction of the
Government  by taking into account expert reports. [Para 7][624-
B-C]
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621
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3890
of 2010.
From the Judgment and Order dated 18.07.2006 of the High Court
of Judicature at Allahabad, Lucknow Bench, Lucknow in Writ Petition
No. 6732 (M/B) of 1986.
 With
Civil Appeal No. 3891 of 2010.
V. Shekhar, Sr. Adv., Praveen Kumar, Ms. Sheetal Rajput, Advs.
for the Appellant.
Ms. Binu Tamta, R.R. Rajesh, D.L. Chidananada, Raj Bahadur,
Mukesh Kumar Maroria, Tanmaya Agarwal, Wrick Chatterjee, Ms. Smriti
Dua, Advs. for the Respondents.
The Judgment of the Court was delivered by
R. SUBHASH REDDY, J.
1. These Civil Appeals are filed by the petitioner in Writ Petition
No.6732 of 1986 filed before the High Court of Judicature at Allahabad,
Lucknow Bench, Lucknow, aggrieved by the judgment and order dated
18.07.2006 and further order dated 11.09.2007 passed in Review Petition
No.253

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