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Issues Involved:
1. Validity of the notification dated 28-6-1967 issued by the Central Government under clause 7 of the Sugar (Control) Order, 1966. 2. Correctness of the method adopted in fixing prices of sugar. 3. Alleged failure of the Central Government to make appropriate adjustments or allowances in the final fixation of prices. 4. Division of the country into zones for price fixation. 5. Compliance with the guidelines and schedules provided by the Sugar Enquiry Commission. 6. Reasonableness and fairness of the price fixation process. 7. Legal implications of fixing prices twice within one season. 8. Validity of the writ petitions and the jurisdiction of the High Court under Article 226 of the Constitution. Detailed Analysis: 1. Validity of the Notification Dated 28-6-1967: The appellants challenged the notification issued by the Central Government fixing ex-factory prices for sugar factories. The Supreme Court noted that the appellants had confined their arguments to the correctness of the method adopted in fixing prices and the alleged failure to make appropriate adjustments. The Court emphasized that it was not concerned with the validity of clause 7 of the Sugar (Control) Order under which the notifications were issued. 2. Correctness of the Method Adopted in Fixing Prices: Clause 7(2) of the Sugar (Control) Order requires the government to fix prices "having regard to the estimated cost of production of sugar on the basis of the relevant schedule." The Court noted that the expression "having regard to" obliges the government to consider relevant data but does not mandate specific adjustments for past erroneous fixations. The Court found that the price fixed was an estimated maximum price and that there was no obligation on the government to compensate for losses due to previous erroneous fixations. 3. Alleged Failure to Make Appropriate Adjustments: The appellants argued that the government failed to make adjustments for the initial fixation of prices followed by a final fixation. The Court held that the only "adjustment" provided for was before the fixation of the estimated price and that there was no obligation to compensate for losses due to previous erroneous fixations. The Court emphasized that such adjustments could be unfair to subsequent consumers. 4. Division of the Country into Zones for Price Fixation: The Sugar Enquiry Commission recommended dividing the country into five zones for price fixation. The appellants contended that the government had divided the country into 22 zones, which was contrary to the Commission's recommendation. The Court noted that it was difficult to determine these factual questions on the meager material available in writ proceedings. The Court found that the division into zones was intended to encourage efficiency and rationalization in the industry. 5. Compliance with Guidelines and Schedules Provided by the Sugar Enquiry Commission: The Court examined the cost schedules provided by the Commission and found that they were only guidelines and not mandatory statutory provisions. The Court noted that the schedules gave considerable freedom to the government in determining the "fair price" and that the criteria were elastic enough to include or exclude certain items. The Court found that the government had not acted arbitrarily or unreasonably in fixing the prices. 6. Reasonableness and Fairness of the Price Fixation Process: The Court emphasized that price fixation is more in the nature of a legislative measure and does not require a quasi-judicial procedure. The Court held that the criterion adopted must be reasonable and that there must be a reasonable nexus between the matters taken into account and the purposes of the exercise of power. The Court found that the government had acted reasonably and in accordance with the purposes of the Essential Commodities Act. 7. Legal Implications of Fixing Prices Twice Within One Season: The appellants argued that the price fixed on 28-6-1967 should apply for the whole season and that they suffered losses due to the lower price fixed on 1-2-1967. The Court found that there was no provision in the Control Order for a provisional fixation followed by a final fixation. The Court held that the practice of fixing prices twice within a season was fair and reasonable and that there was no obligation on the government to compensate for losses due to the initial fixation. 8. Validity of the Writ Petitions and the Jurisdiction of the High Court: The Court noted that the appellants had not shown that the price fixation was ultra vires or that there was a failure to perform a mandatory duty. The Court emphasized that no writ or order in the nature of mandamus would issue when there was no failure to perform a mandatory duty. The Court held that the writ petitions were rightly rejected by the High Court and that the appeals failed on merits. Conclusion: The Supreme Court dismissed the appeals, holding that the government had acted reasonably and in accordance with the law in fixing the prices of sugar. The Court found no grounds for issuing any writ, order, or direction under Article 226 of the Constitution. The appeals were dismissed with no order as to costs.
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