Skip to content


Union of India (Uoi) and ors. Vs. Orient Paper and Industries Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtKolkata High Court
Decided On
Case NumberFMA No. 662 of 1982, FMAT Nos. 1980 and 1982 of 1982
Judge
Reported in1984(18)ELT714(Cal)
ActsEssential Commodities Act, 1955 - Section 3; ;Constitution of India - Article 134A; ;Paper (Control) Order, 1979; ;Paper (Control of Production) Order, 1974; ;Paper (Regulation of Production) Order, 1978
AppellantUnion of India (Uoi) and ors.
RespondentOrient Paper and Industries Ltd. and ors.
Appellant AdvocateN.C. Chakrabarty, ; Soman Bose, ;R.N. Das, ;Amitava Dutta and ;Uma Sanyal, Advs.
Respondent AdvocateD. Pal, ;R.N. Bajoria, ;Bhaskar Gupta, ;Ajoy Dey, ;B.N. Sen, S. Pal and ;P. Bose, Advs.
Excerpt:
- .....appointed by the government of india under the paper (control) order, 1979 praying for stay of the interim orders passed by the learned judge on the respective writ applications of the respondents, orient paper and industries ltd., sirpur paper industries ltd. and andhra pradesh paper mills ltd., while issuing the rules nisi on such applications. the applications have been filed in the connected appeals preferred against the said interim order of the learned judge passed in the rules nisi.2. it appears that in the year 1974, an order, namely, paper (control of production) order, 1974 was passed by the central government in order to ensure production of minimum percentage of common writing and printing paper. the said order was, subsequently, replaced by the paper (regulation of.....
Judgment:

Murari Mohan Dutt, J.

1. These three applications have been filed by the Union of India, the Joint Secretary, Department of Industrial Development, Ministry of Industries, Government of India and the Controller appointed by the Government of India under the Paper (Control) Order, 1979 praying for stay of the interim orders passed by the learned Judge on the respective writ applications of the respondents, Orient Paper and Industries Ltd., Sirpur Paper Industries Ltd. and Andhra Pradesh Paper Mills Ltd., while issuing the Rules Nisi on such applications. The applications have been filed in the connected appeals preferred against the said interim order of the learned Judge passed in the Rules Nisi.

2. It appears that in the year 1974, an order, namely, Paper (Control of Production) Order, 1974 was passed by the Central Government in order to ensure production of minimum percentage of common writing and printing paper. The said order was, subsequently, replaced by the Paper (Regulation of Production) Order, 1978 dated March 8, 1978. In terms of both these orders, white printing paper was to be manufactured to the extent of at least 30% of the total quantity of paper manufactured by the different paper mills.

3. It appears that the Central Government also passed an order being Paper (Control) Order, 1979 Under Section 3 of Essential Commodities Act, 1955. Under the Paper (Control) Order, the retention price of white printing paper was fixed by the Central Government from time to time. On December 24, 1981, the retention price of white printing paper was fixed by the Central Government at Rs. 4,200/- per metric tonne.

4. The joint committee of the paper industries which was the representative association of the paper manufacturers (including the petitioner) voluntarily undertook to effect the supply of white printing paper and announced their intention through advertisement in the news media.

5. The above scheme was introduced for the purpose of bettering the needs of educational sector, particularly, the students community and the publishers of text books. The Central Co-ordination Committee allocates the white printing paper made available by the manufacturers to different States/Union Territories according to their needs. The State level committees set up in different States distribute white printing paper among allottees, namely, manufacturers of exercise book and publishers of text books. These products are made available to the students community throughout the country at fixed rates. It may be stated here that the retention price is fixed in regard to 30% of the total production of white printing paper and the remaining 70% of production is left free to be sold in the open market at whatever price each manufacturer can command. The objects of such free sale of 70% of the total production is to help the manufacturers to make adequate profits on overall basis. Further, the Government exempts the manufacturers from payment of usual excise duty which is about 26.5%. Instead of realisation and payment of usual excise duty of 26.5%. the manufacturers are entitled to realise and pay only 5%. excise duty in respect of 30% of the total production of white printing paper which is known as levy paper. ,

6. The respondents (writ petitioners) filed the writ petitions, inter alia, challenging the propriety of the fixation of retention price of Rs. 4,200/-with effect from December 24, 1981 in respect of white printing paper. On the respective writ petitions of the respondents, the learned Judge issued Rule Nisi and passed an interim order on each of the three writ petitions. The interim orders of learned Judge dated May 24, 1982 passed on two of the writ petitions and the other on June 14, 1932 are the same. The interim order is as follows :-

'In so far as the interim order is concerned, Dr. D. Pal, appearing for the petitioners, states on instructions that unless the petitioner is allowed to have retention price of Rs. 6,300/- as against Rs. 4,200/-which is the impugned retention price, the petitioner will have to close down its business. The petitioners are prepared to give an undertaking not to deal with or dispose of its immovable assets pending disposal of the rule. There will be an interim order of injunction in terms of prayer (f) of the petition. The petitioners would be entitled to sell their white printing paper at a price of Rs. 6,300/- per metric tonne pending disposal of the rule on the undertaking of the petitioner to court through its Advocate on record Mr. A.K. Dey not to deal with or dispose of the immovable assets except in the usual course of business pending disposal of the rule. In so far as the excise duty payable on the higher price is concerned, the petitioner is directed to furnish a bank guarantee in favour of the Collector having jurisdiction over the subject matter of the excise proceeding for the difference between the excise duty which is payable and the excise duty at the rate of 26.25%.'

Prayer (f) as mentioned in the said interim order is as follows:-

'Injunction restraining the respondents Nos. 1, 2 & 3, their servants or agents from giving any effect to and/or in taking any steps whatsoever pursuant to and/or in terms of the Paper (Control) Order, 1979 as amended'.

7. Subsequently, another interim order was passed by the learned Judge on September 21, 1982 in each case, whereby the learned Judge enhanced the retention price from Rs. 6,300/- to Rs. 6,600/- per metric tonne with effect from December 1, 1982 on the same terms and conditions as contained in the earlier interim order.

8. The appellants preferred the appeals against the earlier interim orders passed by the learned Judge on May 24, 1982. The subsequent interim orders were passed by the learned Judge during the pendency of the appeals. In view of the earlier interim orders, the writ petitioners that is, the manufacturers, have been selling white printing paper at the rate of 6,300/- with effect from the date of the earlier interim orders of the learned Judge and, after the subsequent interim orders dated September 21, 1982, at the rate of Rs. 6,600/- with effect from December 1, 1982. It may be stated that the retention price has been fixed by the Central Government under the Paper (Control) Order, 1979, as amended at Rs. 4,200/-. Further by virtue of the interim orders the writ petitioners had been realising 26.5% of the excise from their customers instead of 5%. But no payment of excise duty has been made by the writ petitioners beyond 5%.

9. In the rule Nisi issued on the writ petition of the respondent, Orient Paper and Industries Ltd., Uttar Pradesh Exercise Book . has been demanding higher of the added respondent not only for the increased retention price but also for the increased excise duty at the rate of 25.5% instead of 5% of excise duty as was being paid by them previously. It is their case that in view of the above circumstances, the added respondent cannot supply exercise books to the students community.

10. The question, therefore, is whether the learned Judge was justified in passing the impugned interim orders. It cannot be denied that the object of Section 3 of the Essential Commodities Act under which the Paper (Control) Order has been passed is supply, equitable distribution and availability of the essential commodity that is to say, white printing paper, at a fair price. Under the Paper (Control) Order, it is the Central Government which is the only authority that will fix the retention price after taking into consideration certain state, including the cost of production. At this state, it may be presumed that the Central Government has, after taking into consideration all these factors, fixed the retention price at the rate of Rs. 4,200/- per metric tonnes. As has been stated already, the retention price is revised from time to time. Indeed, it appears from the news item in the Economic Times, Calcutta dated March 25, 1983, a copy of which has been handed over to us by Dr. D. Pal, learned Advocate appearing on behalf of the respondent (writ petitioners) that the Union Government has decided to enhance the retention price of white printing paper by 1,200/- per tonne to Rs. 5,400/- per tonne with effect from April 1, 1983. It is submitted on behalf of the appellants that the Central Government cannot consider the revision of retention price in view of the interim order passed in terms of prayer (f) of the writ petitions restraining the Central Government from giving any effect to and/or taking any steps whatsoever pursuant to and/or in terms of the Paper (Control) Order, 1979. There can be no doubt that if the Central Government cannot give effect to the Paper (Control) Order or take any steps pursuant to the said order, it cannot revise the retenf on price.

11. In our opinion, even assuming that the retention price fixed by the Central Government for the period in question was not justified, still the High Court has no jurisdiction to permit the manufacturers of paper to sell white printing paper at particular price. In other words, the High Court, on our opinion, cannot fix the retention price. This court can set aside a retention price fixed by the Central Government under the Paper (Control) Order at the final hearing of the Rule Nisi and direct the Central Government to reconsider such retention price for the period in question. But what has been done by the learned Judge in the instant case is that by interim orders, the retention price fixed by the Central Government under the Paper (Control) Order has been increased. Our attention, however, has been drawn to a similar interim order passed by a judge sitting singly of the Karnataka High Court. We are, however, of the view that, in any event, the High Court has no jurisdiction to fix retention price by an interim order even for a temporary period. On this ground, therefore, the impugned interim orders are liable to be set aside.

12. There is another significant aspect of the matter relating to the jurisdiction of this court to entertain writ petition. The registered offices of all the respondents (writ petitioners) and their mills are situate in different States other than the State of West Bengal. The Paper (Control) Order, 1979 has been passed by the Central Government in New Delhi. It has not even been averred anywhere in the writ petitions that any sale of levy paper is made in the State of West Bengal. Further, there is also no averment that there is any stock of white printing paper belonging to the writ petitioners in the State of West Bengal. It is, therefore, manifestly clear that as no sale is effected by the writ petitioners in West Bengal, the question of the sales in West Bengal being affected does not arise. Prima facie, therefore, no part of the cause of action has arisen within the territorial limits in respect of which court exercises jurisdiction. The only averment that has been made in the writ petitions is that the writ petitioners have their sales offices in Calcutta and their businesses have been seriously affected regarding supply of white printing paper because the quarterly allotment letters from the Controller appointed under the Paper (Control) Order, 1979 are received in Calcutta. In our opinion, no part of the cause of action can be said to have arisen in Calcutta or any other place within West Bengal simply because the sales offices of the writ petitioners are situated in Calcutta or that the allotment letters are received by them in Calcutta. It is significant to notice that although it is claimed by the writ petitioners that their sales offices are situated in Calcutta, no claim has been made by them that any sale takes place in Calcutta or at any other places in West Bengal. Prima facie, therefore, we are satisfied that this Court has no jurisdiction to entertain the writ petitions.

13. Before we part with these cases, we may deal with one preliminary objection raised by Dr. Pal. It is contended that as the appellants did not prefer any appeal from the subsequent interim orders of the learned Judge enhancing the retention price from Rs. 6,300/- to Rs. 6,600/- per metric tonne, the present appeals are not maintainable. The subsequent interim orders have been passed by the learned Judge obviously in modification of the earlier interim orders. We do not think that on this ground the present appeals will fail. This contention is, accordingly, overruled.

14. As the disposal of these applications virtually means the disposal of the connected appeals, the appeals are treated as on day's list. The impugned interim orders of the learned Judge are set aside. The appeals are allowed. No separate order need be made on the application for stay which shall also be deemed to have been disposed of along with this order. There will be no order as to costs.

15. On behalf of the respondents (writ petitioners), a prayer has been made for certificates for appeal to the Supreme Court under Article 134A of the Constitution of India. In our opinion, as the appeals are against interim orders, the order disposing of the appeals is not a final order and, as such, no appeal lies to the Supreme Court. Even assuming that such appeals are maintainable before the Supreme Court, in our opinion, no question of law of general importance is involved in these appeals. In the circumstances, the prayer for certificates is disallowed.


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