TMI Blog1990 (8) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... e dismissed by the High Court and the appellants in these circumstances have approached this Court challenging the Judgment of the High Court. The material contentions raised by the appellants in the affidavit and adumbrated in the grounds of appeal in this Court are that the appellants' factories are part of the entire State of Mysore (now Karnataka) as was notified preceding the impugned notification. The factors like price of sugarcane, taxes, duties, sugar recovery percentage, labour charges, cost of production or fair return to the produce are same or similar in the entire State but due to the impugned notification by including in Zone No. 1 the appellants are put to huge losses. The country was divided into five zones. Zone No. 1 consists of all the factories in Maharashtra, Gujarat, North Mysore, North Andhra Pradesh, Zone No. 2 consists of all the factories in Orissa, rest of Andhra Pradesh, South Mysore (rest of Mysore), Madras, Pondicherry and Kerala. On account thereof the appellants are stated to be subjected to heavy losses. The details have been mentioned in the affidavit and the grounds of appeal but for the purpose of disposal of the point involved in the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edules. The Commission made indepth enquiry and in paragraph 4.3, it was stated that as against the four zones recommended by the Tariff Commission, Government has gradually increased the number to twenty-two. The Commission has stated each zone should be large enough to ensure that the principle of price fixation does not degenerate into a 'cost plus' basis as the latter discourages efficiency and perpetuates inefficiency. In paragraph 4.4, it was stated that the Sugarcane Breeding Institute, Coimbatore has divided the whole country into five regions on the basis of agro-climatic and other considerations details of which were given in Chapter IV: Region (1) consists of Gujarat, Maharashtra, North Mysore, North Andhra Pradesh and South Madhya Pradesh. In paragraph 4.6, it was stated that apart from considerations relating to agro-climatic factors and comparative economic advantage, it is worthwhile to consider the variations in duration of crushing and sugar recovery also. On this basis some revision in the zones, as suggested by the Coimbatore Institute appears to be necessary. In paragraph 4.7, it was stated that on the basis of the above considerations, the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciples of zoning. In the written submissions made by Shri Venugopal it is noted by the Bench that as was seen during the course of heating only two or three persons have come forward challenging zoning. There are 389 Sugar Factories in the country and the present intervener has 166 members. Their Associations being National Federation of Cooperative Sugar Factories Ltd. has also intervened in these petitions and have adopted the arguments of I.S.M.A. Hence almost the entire industry has supported zoning and only a handful of people who also factually are not high-cost units have opposed zoning. In Anakapalle Coop. Agrl. Industrial Society Ltd. etc, etc. v, Union of India Ors., [1973] 2 SCR 882, the facts are that the Tariff Commission recommended the entire country to be divided into 15 zones and the levy sugar price was fixed on the basis. The zoning system was attacked in that case. While repelling the contention, Grover, J. speaking for the Constitution Bench held that: It is somewhat difficult to accept the argument of those who are opposed to the zonal system that the loss alleged to have resulted to some of the sugar producers can be attributed to the prices having b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is impracticable, unworkable and would defeat the very purpose of fixing sugar price. In Shri Sitaram Sugar Company's case in paragraph 59, this Court held that it is a matter of policy and planning for the Central Government to decide whether it would be on adoption of a system of partial control, in the best economic interest of the sugar industry and the general public that sugar factories are grouped together with reference to geographical-cum-agro-economic-factors for the purpose of determining the price of levy sugar. Sufficient power has been delegated to the Central Government to formulate and implement its policy decision by means of statutory instruments and executive orders. Whether the policy should be altered to divide the sugar industry' into groups of units with similar cost characteristics with particular reference to recovery, duration, size and age of the units and capital costs per tonne of output, without regard to their location is again a matter for the Central Government to decide. What is best for the sugar industry and in what manner policy should be formulated and implemented, bearing in mind the fundamental object of the statute, namely, supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring, no one can insist upon it and it will not be permissible to read natural justice into such legislative activity. In Shri Sitaram Sugar Company's case it was reiterated that fixation of price for sugar is a legislative policy and the principles of natural justice would not apply. From this perspective of the statutory study and in the light of the law laid down by this Court, the question emerges whether the appellants are entitled to an individual notice and hearing before placing them in Zone No. 1 in the impugned notification. The fixation of the price and zoning are integral scheme of the notification, without placing the factories in the appropriate zone based on agro-climatic and other economic considerations the proper price fixation cannot be made. So both the fact or are part of the policy decision by the Government in exercise of the statutory powers. This decision is based on the recommendation made by the Sugar Commission consisting of experts in the field of agro-economics who after exhaustive study and consideration of the relevant material placed before it made the recommendation. Thereby it assumes the character of legislative policy. It does not concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raph cannot be construed to put a fetter on the power of the government to reconsider the policy due to change in circumstances of groupings of the sugar factories in a State in one zone or other region. It is apposite here to quote the rule laid in Joseph Beauharnais v. People of the State Illinois, 96 L.Ed. 919 at 930, applicable to the facts of the present case, thus: This being so, it would be out of bounds for the judiciary to deny the legislature a choice of policy, provided it is not unrelated to the problem and not forbidden by some explicit limitation on the State's power. That the legislative remedy might not in practice mitigate the evil, or might itself raise new problems, would only manifest once more the paradox of reform. It is the price to be paid for the trial-and-error inherent in legislative efforts to deal with obstinate social issues. Moreover the Sugar Commission heard the persons desired to be heard and considered the representation and material produced. At the stage of notification the question of further representation or hearing does not arise not a feasible exercise. It is for the government whether to accept or reject or modify the recomme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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