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Haryana Roller Flour Mills Pvt. Ltd. Vs. Union of India and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Writ Petn. No. 3406 of 1982
Judge
Reported inAIR1986P& H182
ActsConstitution of India - Article 19(1); Essential Commodities Act. 1955 - Sections 3
AppellantHaryana Roller Flour Mills Pvt. Ltd.
RespondentUnion of India and ors.
Cases ReferredSheo Rice Mills v. Union of India
Excerpt:
.....227 of the constitution. - --10. powers of licensing authority and specified authority to issue directions to licensees--(1) the licensing authority or as the case may be, the specified authority, may issue directions to licensees in regard to--(a) the source from which and the manner in which wheat shall, be obtained for the purpose of manufacture of wheat products ;(b) the production or manufacture of different kinds of wheat products and also the size of the packing, the method of packing and the like ;(c) the disposal of wheat products. clause 10(1)(b) has no relevancy at all as it only mentions that the directions could be issued for the production or manufacture of different kinds of wheat products and also the size of the packing, the method of packing and the like......features of this petition may be noticed:--the petitioners-company is a licensed mill under the wheat roller flour mills (licensing and control) order, 1957 (hereinafter referred to as the 'control order') and manufactures wheat products, i.e. maida, suji, atta and bran, etc. it is averred in the petition that under clause 10(1)(a), control order, respondent 1 had been issuing orders time and again restraining the petitioners to purchase wheat from the open market and instead has ordered that the mills would purchase wheat from the central pool at the issue price fixed by respondent 1 from time to time and the products manufactured by the mills are also to be said at the price fixed by respondent 1 and 2. in the year 1981-82 the issue price of wheat was fixed by respondent 1 at the.....
Judgment:

Prem Chand Jain, C.J.

1. This judgment of ours would dispose of this and the connected writ petitioners (i.e. C. W. P. Nos. 2311 of 1981 and 2204, 2264, 2266, 2450 and 2478 of 1983) as common question of law and fact arises in all of them.

2. In order to appreciate the controversy, certain salient features of this petition may be noticed:--

The petitioners-Company is a licensed Mill under the Wheat Roller Flour Mills (Licensing and Control) Order, 1957 (hereinafter referred to as the 'Control Order') and manufactures Wheat products, i.e. maida, suji, atta and bran, etc. It is averred in the petition that under Clause 10(1)(a), Control Order, respondent 1 had been issuing orders time and again restraining the petitioners to purchase Wheat from the open market and instead has ordered that the Mills would purchase Wheat from the Central Pool at the issue price fixed by respondent 1 from time to time and the products manufactured by the Mills are also to be said at the price fixed by respondent 1 and 2. In the year 1981-82 the issue price of Wheat was fixed by respondent 1 at the rate of Rs. 155/- per quintal with effect from April 1, 1982 and the stocks were supplied to the petitioners at that price, and the wheat products were sold by the petitioners at the rate fixed by respondent 2. The said issue price was enhanced by respondent 1 from Rs. 155/- to Rs. 185/- with effect from 1-8-1982.

3. It is next averred that respondent 1 vide telegram No. 14(3)/82-DR-III, dt. July 27, 1982, addressed to the Food and Supplies Department, Haryana, Chandigarh, intimated that the revised ex-mill and retail prices of maida, suji and also the resultant atta and bran should be notified. It further states that it is also necessary to verify the stocks of Wheat and Wheat products lying with the Roller Flour Mills as on closing transaction on July 31, 1982. It also provides that as in the past, it is necessary to recover the differential cost from the Roller Flour Mills between the old prices and the revised prices in respect of the stocks of both wheat and wheat products held by them on the morning of 1-8-1982, including those in transit and necessary undertaking to the effect that they would pay the differential cost by 31-8-1982, May be obtained. A further direction was issued that the Food Corporation of India would release the August quota only on the receipt of such an undertaking through the respective State Government. Copy of the telegram is attached with the petition as Annexure P. 1.

4. It is further stated in the petition that respondent 2 issued a letter Endst. No. FG-1-82/24022, dt. July 28,1982, to respondent 3, a copy of which was also sent to the petitioners, directing respondent 3 that the stocks of the wheat and wheat products lying with the Roller Flour Mills as on the close of transaction on July 31, 1982, and stocks in transit only July 31, 1982, be physically verified; that the differential cost between the old prices and the revised prices in respect of stocks of both wheat and wheat products should be recovered from the Roller Flour Mills and that necessary undertaking that the Mills would pay differential costs by 31-8-1982, must be obtained, in duplicate, from the Mills. A copy of this letter sent to the petitioners contains a note that the August 1982 quota of wheat would be released by the Food Corporation of India only when they have either deposited the differential cost in wheat and wheat products with them on the close of transaction on July 31, 1982, or on their furnishing undertaking to the effect indicated in the telegram.

5. Through these petitioners the petitioners have challenged the action of the authorities requiring them either to deposit the differential amount between the old prices and the revised prices of stocks as held on July 31, 1982, or to give an undertaking in that respect, on the pleas that the respondent have no authority or jurisdiction under any law requiring the petitioners to deposit the differential amount due to the increase in the issue price of wheat; that the purchase of what form the Food Corporation of India by the petitioners from time to time in is the nature of contractual obligation and the terms and conditions of the supply of wheat do not provide for any such recovery on account of increase in issue price of wheat by the Government and that the action of the authorities is violative of Art. 19(1)(g) of Constitution and is also hit by the provisions of Art. 14 being arbitrary and discriminatory.

6. The petitioners came up for motion hearing on 10-8-1982, when notice of motion was issued to the respondent. In obedience to that notice, separate written statements have been filed on behalf of respondent 1 and respondent 2 and 3.

7. In the written statement filed on behalf of respondent 1, it is averred that the functions of the Flour Milling Industry are regulated and control under the Control Order and the conditions of the licence; that the Control Order has been made by the Central Government in exercise of the powers conferred by S. 3, Essential Commodities Act. 1955; that under Clause (3) of the Control Order, the milling licence is required by owners of Wheat Roller Flour Mills for the purpose of manufacturing of wheat products and that the licencee is required to abide by the directions issued by the Licensing Authority in exercise of its powers under the Control Order.

8. It is further averred that as regards supply of wheat to the Roller Flour Mills for manufacture of wheat products and their disposal, Cl 10 of the Control Order is relevant, which reads as under:--

'10. Powers of Licensing Authority and Specified Authority to Issue Directions to Licensees--

(1) The Licensing Authority or as the case may be, the specified authority, may issue directions to licensees in regard to--

(a) the source from which and the manner in which wheat shall, be obtained for the purpose of manufacture of wheat products ;

(b) the production or manufacture of different kinds of wheat products and also the size of the packing, the method of packing and the like ;

(c) the disposal of wheat products.

Provided that no direction under item (a) shall be issued by the specified authority without obtaining the prior concurrence of the Central Government.

9. On the basis of above provisions, it is averred that wheat is supplied to the Roller Flour Mills from the stocks held by the Food Corporation of India on behalf of Union of India. The wheat is supplied to the Roller Flour Mills at subsidized rates. The present issue price of wheat to Roller Flour Mills was revised from Rs. 155/- to Rs. 185/- with effect from 1-8-1982. Since wheat is supplied to Roller Flour Mills at a fixed subsidized price, the prices of wheat products are also required to be statutorily fixed after allowing milling margins to Roller Flour Mills so that the benefit of subsidy reaches the consumers. Therefore, the State Government have also been directed to statutorily fix the prices of maida and suji and also resultant atta and bran. Under Clause 10(1)(a) of the Control Order, Roller Flour Mils obtain wheat for the purpose of manufacturing wheat products, from the Food Corporation of India's depots at a fixed issue price as per the directions of the Central Government. In effect supply of wheat to Roller Flour Mills is not a sale of wheat to them under normal trade and for this plea certain reasons have been given in the written statement which, for our purpose, may not be noticed in detail in the judgment. It is further averred that the Roller Flour Mills are selling wheat products on or after 1-8-1982 at the revised prices which are obviously higher than the prices fixed on the supply of wheat to them at the rate of Rs. 155/- per quintal prior to 1-8-1982. If they are allowed to do so on the wheat products out of the stock lying prior to 1-8-1982, the Roller Flour Mills will get unintended benefit. In case the petitioners are required to pay the differential cost on the prices of wheat and wheat products, they will not suffer any loss as the recovery would be with reference to the increase in price on resultant wheat products out of stock of wheat before 1-8-1982. Thus, the Government is competent to issue directions with regard to recovery of differential cost both on account of wheat and wheat products in respect of stock lying with the Roller Flour Mills as on the morning of 1-8-1982. The owners of Roller Flour Mills are also legally bound to abide by the directions issued by the Government in this behalf. Since the finding out of details and verification of stocks will take some time, it was necessary to obtain an undertaking from the Roller Flour Mills to pay the differential cost. In case the Roller Flour Mills do not abide by the instructions of the Licensing Authority/Government, directions for stopping supply of wheat can also be validly issued in accordance with the Control Order and conditions of the licence. This is how the writ petition has been contested on behalf of respondent 1. It may, however be observed that in parawise comments the material allegations made in the petitioners have been controverted.

10. The matter was heard by the Motion Bench and was admitted to hearing by a Division Bench. That is how we are seized of the matter.

11. Mr. Bhoop Singh, learned counsel appearing for the petitioners, contended that there was no jurisdiction or authority in respondent 1 to require the petitioners to pay the differential amount; that under the Control Order a direction could be issued fixing the issue price at which the wheat could be sold but there was no power under Clause 10 of the Control Order to require the petitioners to pay the differential amount in the event of the increase of the issue price on the stocks which had already been sold to them and of which they had become the full owner. In support of his contention, the learned counsel placed reliance on the judgments of Division Bench reported as Bokaro Roller Flour Mills Pvt. Ltd. v. Union of India, AIR 1984 Pat 331, and Delhi Flour Mills Court. Ltd. v. Commr, of Food and Supplies, Delhi AIR 1985 Delhi 312. The learned counsel also brought to our notice an unreported decision of the Allahabad High Court in Sheo Rice Mills v. Union of India, Civil Misc. Writ Petn. No. 3404 of 1983, and many other connected petitions, decided on 31-1-1985.

12. On the contentions raised before us by the learned counsel for the petitioners, a short question that arises for determination is whether there is any authority or jurisdiction in respondent 1 to direct the recovery of the differential amount. On consideration of the entire matter in the light of the provisions of the Control Order, we find that the answer to the aforesaid question has to be in the negative. It may be stated at the outset that on behalf of the petitioners it was never disputed that the issue price of wheat could be fixed by respondent 1 and that the petitioners were bound to purchase wheat from the Food Corporation of India at that price. But, in the instant cases before us, the Government, after increasing the issue price, is trying to recover the differential amount between the old prices of the stocks which had already been sold on the issue price earlier fixed by the Government and the new issue price fixed after the sale of the stocks. There can be no gainsaying that after the purchase of the wheat stocks on the issue price as fixed by the Government at the time of sale, the petitioners had become its full owners. Again it is correct as there is no dispute that on the stocks lying which had been purchased on the issue price fixed earlier, the petitioners would be entitled to charge new rates on wheat products manufactured by them and in this manner, they would be getting additional benefit. But, this fact by itself will not help in determining the legality of the direction issued for the recovery of the differential amount as we will have to find out a provision which would vest the authority with power to issue such a direction and unfortunately no such provision exists. Reliance was placed on the provisions of Clause 10 of the Control Order, which have been reproduced in the earlier part of the judgment. From a bare perusal of the provisions we find ourselves unable to deduce that such a direction could be issued under that clause. Under Clause 10(1)(a), the authority may issue directions to the licensees in regard to the source from which and the manner in which wheat shall be obtained for the purpose of manufacture of wheat products. Clause 10(1)(b) has no relevancy at all as it only mentions that the directions could be issued for the production or manufacture of different kinds of wheat products and also the size of the packing, the method of packing and the like. Clause 10(1)(c) provides for the disposal of wheat products. Thus, under none of the aforesaid clauses power exists with the authority to issue any direction requiring the Roller Flour Mills to pay the differential amount. No doubt, the licencing authorities have power under Clause 10 to issue directions from time to time and the licensees are also bound to carry out the directions. But, these powers cannot be stretched to the extent of asking for extra amount. The theory of unintended benefit or unjust enrichment cannot be pressed into service, because there is neither any agreement between the parties nor any mistake on behalf of the petitioners The authorities have no jurisdiction to redetermine the price of the goods that sale of which has become complete. As earlier observed, what has to be seen, is the source of power and, in our considered opinion, neither under Clause 10 nor under any other relevant law such direction is contemplated. The view which we are taking finds full support from the judgment, to which reference has been made while noticing the contentions of the learned counsel for the petitioners, in which same direction was under challenge and has been quashed.

13. For the reasons recorded above we allow these petitions, quash the impugned orders, Annexures P. 1 and P. 2, and restrian the respondent from realizing the differential amount. However, in the Circumstances of the case, we make no order as to costs.

14. Petitions allowed.


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