Skip to content


Union of India and anr. Vs. Sahkari Khand Udyog Mandli Ltd. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtGujarat High Court
Decided On
Case NumberCivil Applns. Nos. 2312 to 2318 of 1975, in Spl. C.A. Nos. 1223, 1232, 1233, 1234, 1235, 1236 and 12
Judge
Reported inAIR1981Guj102; (1980)2GLR181
ActsCode of Civil Procedure (CPC), 1908 - Sections 141 and 151; Constitution of India - Article 226; Maintainability of (Levy Sugar Price Equalisation Fund) Act, 1976 - Sections 2, 3, 3(3), 3(4) and 3(5)
AppellantUnion of India and anr.
RespondentSahkari Khand Udyog Mandli Ltd.
Appellant Advocate S.B. Vakil, Sr. Counsel
Respondent Advocate J.M. Thakore, Adv. General and; Sudhir I. Nanavati, Adv. for;
Cases ReferredThe Newabganj Sugar Mills Co. Ltd. v. The Union of India
Excerpt:
.....of section 3 do not apply to this case is correct, we are unable to uphold the final submission made by him because this case clearly falls under sub-section (3) of section 3. 13. the last argument which has been advanced by the learned advocate gen is that the excess amounts realised by the respondents the cover of the interim order of this court are not an 'excess realisation' within the meaning of section 2 (b) (ii) which we have referred to above. 14. before we part with the case, we would like to make a brief reference to the two decisions of the supreme court. if they fail to do so, the orders made herein shall be executed as if they are decrees of the court......the force of an interim order made by this court in each of those petitions, the respondents sold levy sugar at a price higher than the controlled price and recovered from the state government, union government or their nominees more than what they were entitled to. thereafter the respondents did not proceed with the petitions but they withdrew them. the interim order made by this court, therefore, ceased to be operative in each of the petitions.3. the question which thereafter arose was this: how should the 'excess realisations' made by the respondents be dealt with? such situations arose in different parts of the country also. therefore, parliament passed the levy-sugar price equalisation fund act, 1976, under which the central government has constituted levy-sugar price equalisation.....
Judgment:

S.B. Sheth, J.

1. These Civil Applications have been filed by the Union of India and the Deputy Director, sugar and Vanaspati, Government of India, claiming from each of the respondents certain amounts wider the following circumstances.

2. Special Civil Applications Numbers 1235 of 1972, 1234 of 1972, 1236 of 1972, 1232 of 1972, 1223 of 1972, 1262 of 1972 and 1233 of 1972, were filed by the present respondents in this Court. In those Special Civil Applications, they challenged the price of sugar fixed by the Central Government at Rs.124.59 p. per quintal for the year 1972-73. They obtained an interim order in all these petitions from this Court by virtue of which the controlled price of Rupees 124.59 p. per quintal was frozen and the respondents who are sugar manufacturers were allowed to sell 'levy' sugar at Rs.150/- per quintal. Obviously, therefore, under the force of an interim order made by this Court in each of those petitions, the respondents sold levy sugar at a price higher than the controlled price and recovered from the State Government, Union Government or their nominees more than what they were entitled to. Thereafter the respondents did not proceed with the petitions but they withdrew them. The interim order made by this Court, therefore, ceased to be operative in each of the Petitions.

3. The question which thereafter arose was this: How should the 'excess realisations' made by the respondents be dealt with? Such situations arose in different parts of the country also. Therefore, Parliament passed the Levy-Sugar Price Equalisation Fund Act, 1976, under which the Central Government has constituted Levy-Sugar Price Equalisation Fund into which such 'excess realisations' are directed to be paid. On behalf of the Central Government, Mr. Vakil has stated to us that the amounts recoverable from the present respondents excluding Khedut Sahkari Khand Udyog Mandali Ltd., petitioner in Special Civil Application No.1223 of 1972, come to Rs.51,79,597/-.

4. The Order which the respondents challenged in the writ petitions was Sugar (Price Determination) Order, 1972. It was published on 15th June 1972. On that very day, the Levy (Sugar Control) Order, 1972, was published under which, as stated above, the sugar manufacturers were required to sell sugar to the Union Government, State Government or their nominees at the controlled price of Rs.124.59 p. for D-grade sugar, All those Special Civil Applications were withdrawn on 12th March, 1973.

5. Thereafter the present petitioners filed these Civil Applications an 16th September, 1975, essentially for the purpose of taking steps to undo the wrong which the respondents had done under the cover of the interim order of this Court. In other words, the present petitioners pray for directing the respondents to pay into the Levy Sugar Price Equalisation Fund the excess price recovered by them under the protective cover of the interim order of this Court.

6. Mr. Vakil who appears on behalf of the present petitioners has raised two contentions before us. His first contention is that the Court should exercise its inherent jurisdiction to deprive the respondents of the undue advantage or benefit which they took under the cover of the interim orders at this Court. The second contention which he has raised is that Levy Sugar Price Equalisation Fund Act, 1976, now requires the respondents as all other sugar manufacturers to deposit into that Fund the 'excess realisations' made by them. It is not in dispute before us that the respondents could sell sugar to Union Government, to State Government or their nominees at Rs.150/- per quintal only on account of the interim order made by this Court which had stayed the implementation of the controlled price fixed by the Central Government at Rs.124.59 p. But for the interim order of this Court, they would have been required to sell sugar to the Central Government and others at the controlled price of Rs.124.59 p. per quintal. Therefore, it was only on account of the interim order made by this Court that they realised per quintal the unauthorized excess realisation of Rs.25.41 p. Having taken benefit in the aforesaid terms of the interim orders made by this Court, they withdrew the petitions. Withdrawal of their petitions meant that they lost the cause. Every order made by a Court must ultimately abide by the final order which the Court makes in those proceedings. Since the petitions were withdrawn by the respondents, they stood dismissed. It therefore, means that the interim orders which were made therein not only came to be vacated but it also means that it the respondents had derived any monetary benefit only on account of the interim order of this Court, they must make it good to one who is entitled to claim it. Therefore, even though the Levy Sugar Price Equalisation Fund Act, 1976, holds the field, we are of the opinion that, even if that Act was not there, we would have exercised our inherent jurisdiction to undo the wrong which was done to the society by the interim order which we made and under which we stayed the implementation of the controlled price of levy sugar. Such an inherent power is indeed found in Section 151 of the Civil Procedure Code. So far as High Courts are concerned, even apart from Section 151 of the Civil Procedure Code, we have inherent jurisdiction to do all things which are necessary to be done for the purpose of administering justice and working out the rights of the parties. The argument raised by Mr. Vakil that this is a case which is eminently suitable for exercise of inherent jurisdiction of this Court is therefore very well founded.

7. The second aspect of the case which Mr. Vakil has presented to us relates to the Levy Sugar Price Equalisation Fund Act, 1976. Sec, 3 (3) of the Act provides as follows:

'Save as otherwise provided in subsection (4), every producer shall, -

(a) in the case of an excess realisation made before the commencement of this Act, within thirty days from such commencement,

(b) in the case of an excess realisation made after such commencement, within thirty days from the date on which such excess realisation was made, credit to the Fund, the amount representing such excess realisation, together with interest due thereon at the rate of twelve and a half per cent per annum, from the date on which such amount was realised by him.'

Section 3 (3) (a) casts upon the respondents a clear obligation to credit to the Fund the excess amount realised by them under the force of an interim order of the Court. 'Excess realisation' has been defined by Section 2. The definition, inter alia, reads as follows:

'excess realisation', in relation to each grade of levy sugar, -

(i) means the price realised by any producer, on the sale of levy sugar of such grade, in excess of,-

(a) the controlled price, or

(b) where any fair price has been fixed by a Court for levy sugar of such grade, such fair price, and

(ii) includes any realisation represent the difference between the controlled price and the price allowed by the Court by an interim order, if such interim order is set aside, whether by the Court which made the order or in appeal or revision.'

It is, therefore, clear that when Section 3 (3) (a) is read with Section 2 (b) (ii), the respondents are liable to deposit to the credit of the Fund all excess realisations made by them during the period during which the interim order of this Court operated. It operated between 31st July, 1972, when it was made by this Court and 12th March, 1973, when respondents withdrew their writ petitions. Both the contentions which Mr. Vakil has raised are, therefore, well founded.

8. The learned Advocate General who appears on behalf of the respondents has raised before us three contentions in reply.

9. His first contention is that such miscellaneous proceedings are not maintainable. According to him, the present petitioners either ought to have filed substantive suits to recover from the respondents excess realisations made by them under the force of the interim order of this Court or they ought to have filed substantive writ petitions. He has in that behalf invited out attention to Section 141 of the Civil Procedure Code which provides as follows:

'The procedure provided in this Code in regard to suits shall be followed, as far as it can be made applicable, in all proceedings in any Court of civil jurisdiction.

Explanation: In this section, the expression 'proceedings' includes proceedings under Order IX, but does not include any proceeding under Article 226 of the Constitution.'

Now, the Explanation to Section 141 was added in 1976. According to the learned Advocate General, since the Explanation expressly excludes petitions under Article 226 of the Constitution, it cannot be invoked for the purpose of instituting such miscellaneous proceedings to recover the excess realisations. It is no doubt true that Explanation to Section 141 was enacted for the first time in 1976 and that it was not in existence on the date when the present Civil Applications were filed. He has further argued that even when there was no Explanation to Section 141, the decisions rendered by the Supreme Court and some of the High Courts took the view that Section 141 did not apply to proceedings under Article 226 of the Constitution. We assume that the argument raised by the earned Advocate General is correct. Even then it does not come in our way. What the present petitioners require us to do is to enforce our interim orders...., made in Special Civil Applications (sic). Therefore, irrespective of whether Section 141 applies to writ petitions or not, we think that we have the inherent jurisdiction to undo the wrong done to the petitioners and to set it right. The first part of the argument raised by the learned Advocate General, therefore, fails and is rejected.

10. The second part of his argument is that after having decided the writ petitions, this Court has become functus officio and cannot make any order. In our opinion, this is a wrong way of looking at the problem. Every Court becomes functus officio after it decides a case except for the purpose of reviewing its decision where it is moved for review. To say that the Court becomes functus officio only means that the Court cannot reopen the same controversy and cannot redecide the matter. The doctrine of functus officio does not go to the extent of saying that if by virtue of an interim order a wrong has been done to a person or to the society, it cannot be undone after the dispute between the parties has ended otherwise than on merits. By pleading that the Court has become functus officio, no one can over-reach the Court. He has indeed asked us the following question:

If Section 141 is not applicable to the instant case, under what provision of law can the Court entertain this miscellaneous proceedings?

We have already stated that the power of the Court to undo a wrong resulting from an interim order does not depend upon Section 141 or Section 151 of the Civil Procedure Code. Therefore, the wrong which was done to the society by our interim order can always be undone by us in exercise of our inherent jurisdiction and when we do so, we cannot be faced with the question of having become functus officio. The first contention raised by the learned Advocate General, therefore, fails and is rejected.

11. The next argument which he has raised is that the Supreme Court in The Anakepalle Co-operative Agricultural & Industrial Society Ltd. v. Union of India, AIR 1977 SC 2041, has held that subsections (4) and (5) of Section 3 do not apply to a case in which interim order made by a Court has already come to an end as a result of the termination of the final proceedings before the commencement of the Act. Sub-section (4) of Section 3 reads as follows:

'3 (4). Where, by virtue of any interim order made by any Court, whether before or after the commencement of this Act, -

(a) amounts representing the difference between the controlled price and price allowed by any Court by an order made in this behalf, have been, or are required to be, -

(i) kept with the producer himself, or

(ii) kept deposited with, or in the custody of, any Court, or

(iii) kept deposited with, or in the custody of, any Government, bank, authority or other person; or

(b) any amount in excess of the controlled price has been collected and kept by the producer under the cover of any guarantee given in pursuance of such order, it shall not be necessary to credit such amounts to the Fund so long as the Court which passed the interim order does not so direct'.

Sub-section (5) of Section 3 reads as follows:

'3 (5). Where, in pursuance of an interim order referred to in sub-sec (4), any amount representing the difference between the controlled price and the interim price allowed by the Court is, -

(a) held by any producer either with himself or with any other person or with any Court, Government, bank or other authority, or

(b) collected and kept by the producer under the cover of any guarantee, such producer shall, on the final disposal of the proceedings of the Court aforesaid, or in any Court of appeal or revision, credit such amount, to the extent it represents any excess realisation to the Fund.'

In Anakepalle's case (supra), the Supreme Court has indeed held that sub-secs (4) and (5) of Section 3 operate in case where an interim order made by a Court is subsisting at the date of the Commencement of the Act or is subsequently made Section 3 (4) and (5) carve an exception and relieve the producer from the obligation to credit the amount of excess realisations to the Fund within the period specified and postpone this obligation to the point of time when the Court which has passed the interim order so directs or the proceedings before the Court finally come to an end, Section 3 (4) and (5) can have no application when an interim order made by a Court already came to an end, as a result of final disposal of the proceedings, before the commencement of the Act.

12. As held by the Supreme Court, sub-sections (4) and (5) id Section 3 cannot be brought into play or relied upon in these cases because they do not apply to proceedings which were taken to final conclusion before the Levy Sugar Price Equalisation Fund Act. 1976, was passed. In the instant case, while making the order which we are shortly making, we are not relying upon sub-sections (4) and (5) of Section 3. We rely upon sub-section (3) of Section 3 which requires a producer to credit to the Fund all excess realisations made by him. Therefore, though the argument advanced by the learned Advocate General that sub-sections (4) and (5) of Section 3 do not apply to this case is correct, we are unable to uphold the final submission made by him because this case clearly falls under sub-section (3) of Section 3.

13. The last argument which has been advanced by the learned Advocate Gen is that the excess amounts realised by the respondents the cover of the interim order of this Court are not an 'excess realisation' within the meaning of Section 2 (b) (ii) which we have referred to above. According to him, the interim order must have been set aside either by the Court which made it or by the appellate or revisional Court. According to him, in the instant case, the interim order was not set aside by this Court or by any one else. It merely ceased to be operative when the respondent withdrew their petitions. According to him therefore, unless the present petitioners show that the interim order was set aside by this Court or by the Supreme Court, what they realised under the force of that order cannot be said to be an excess realisation. We are not impressed by the argument raised by the learned Advocate General. An interim order can be said to have been 'set aside' when it is expressly set aside or by necessary implication when it ceases to be operative particularly in a case where the substantive petition has been withdrawn. The expression 'set aside' used in Section 2 (b) (ii) means that the interim order has come to an end or has become inoperative. Therefore, what the respondents realised under the cover of the interim order of this Court was an excess realisation, The third and the last argument raised by the learned Advocate General, therefore, fails and is rejected.

14. Before we part with the case, we would like to make a brief reference to the two decisions of the Supreme Court. The first decision is in The Newabganj Sugar Mills Co. Ltd. v. The Union of India, AIR 1976 SC 1152. A similar question arose in that case before the Levy Sugar Price Equalisation Fund Act, 976; was passed. Even under those circumstances, the Supreme Court enforced the interim order made by Allahabad High Court under the cover of which the sugar manufacturers had recovered higher price in respect of levy sugar than the controlled price. We may state that it was in pursuance of this decision of the Supreme Court that The Levy Sugar Price Equalization Fund Act. 1976, was passed by Parliament.

15. After the Act was passed, it came to be interpreted by the Supreme Court in Anakepalle's case (AIR 1977 SC 2041) (supra) in which the Supreme Court, inter alia, held that sub-ss. (4) and (5) of Section 3 of that Act are not applicable to those cases which came to a final termination before that Act came into force. We have reproduced the relevant provisions of the Act. Sub-section (3) of 3 of that Act applies to 'excess realisations' made by a sugar manufacturer before that Act came into force and prior to which the interim order ceased to be operative.

16. In this view of the matter, the petitioners are entitled to a direction from this Court requiring the respondents to credit to Levy Sugar Price Equalisation Fund the amounts in question.

17. All the petitions are, therefore, granted. Respondents are directed to credit to Levy Sugar Price Equalisation Fund the difference between the controlled price of Rs.124.59 p. and the price recovered by them in respect of levy sugar sold by them to Union Government, State Government or their nominees between 31st July, 1972 to 12th March, 1973, They shall also credit to that Fund interest at the rate of 12.5% per annum on all 'excess realisations' made by them. The interest shall run from the date or dates on which they made the excess realisation or excess realisations. The respondents shall be at liberty to credit to the Fund the aforesaid amounts within a period of three months. If they fail to do so, the orders made herein shall be executed as if they are decrees of the Court. There shall be no order as to costs of all these petition.

18. Petitions allowed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //