1990 (8) TMI 398 - SC - Indian Laws

Summary

Issues Involved:
1. Fixation of a uniform retention price for cement producers.
2. Alleged discrimination contravening Article 14 of the Constitution.
3. Validity of the Cement Control (Amendment) Order, 1969.
4. Differential treatment of specific cement producers.

Summary:

1. Fixation of a Uniform Retention Price for Cement Producers:
The appellants challenged the fixation of a uniform retention price of Rs. 100 per tonne for all cement producers, arguing that it treated unequals as equals, violating Article 14 of the Constitution. Historically, different retention prices were fixed for different categories of producers based on the Tariff Commission's recommendations, which were accepted by the Government. The Central Government, however, decided to introduce a uniform retention price in 1969, which was contested by the appellants.

2. Alleged Discrimination Contravening Article 14 of the Constitution:
The appellants argued that the uniform retention price was discriminatory as it did not account for the different costs of production among producers. They contended that the earlier system of three different retention prices was reasonable and that the new uniform price system was arbitrary. The Court, however, found that the fixation of Rs. 100 per tonne was based on a rational basis, considering the weighted average increase in the cost of production and the industry's acceptance of a uniform price principle.

3. Validity of the Cement Control (Amendment) Order, 1969:
The appellants argued that Clause 12 of the Cement Control Order, 1967, did not permit the fixation of a uniform price for all producers. The Court held that Clause 12 allowed the Central Government to vary prices based on changes in relevant factors, including the cost of production. The fixation of the uniform retention price was found to be within the Government's power and based on expert opinion, thus not arbitrary or unreasonable.

4. Differential Treatment of Specific Cement Producers:
The appellants contended that the differential treatment of M/s. Travancore Cement Limited, which was given a higher retention price, was discriminatory. The Court found that M/s. Travancore Cement Limited was classified differently due to its status as a sub-standard and uneconomic unit without scope for expansion, justifying special consideration. The appellants failed to show that they were similarly situated to M/s. Travancore Cement Limited.

Conclusion:
The Supreme Court dismissed the appeals, holding that the fixation of a uniform retention price of Rs. 100 per tonne was based on a rational and permissible principle, and did not violate Article 14 of the Constitution. The Court also upheld the differential treatment of M/s. Travancore Cement Limited as justified. The parties were directed to bear their own costs.