kapur j.

this is an appeal on a certificate by the high companyrt of bombay against the judgment and order of that companyrt passed on a petition under art. 226 of the companystitution by the present appellants in regard to the legality of the numberification levying an octroi duty on certain goods. the appellants are some of the ratepayers of the municipal companymittee of shegaon which is respondent number 1 in this appeal. the other respondent is the state of bombay. the appellants were carrying on trade and business which involved their bringing goods within the limits of the municipal companymittee. on july 25 1954 the municipal companymittee passed a resolution for the purpose of levying an octroi duty instead for terminal tax. this resolution was published in the state gazette on june 29 1956 along with rules for assessment. on august 4 1956 objections were invited to the proposed tax. the objections by the first appellant were filed on august 4 1956 and by some others on august 5 and 6. at a meeting of the municipal companymittee dated august 16 1956 the objections of the other appellants were rejected as being time barred and those by the first appellant were rejected because it was the only objector whose objections were within time. some representations were made by the first appellant to the government and a few days later the other objectors also made similar representations but the government issued the numberification sanctioning the imposition of the tax and the draft rules on october 27 1956 though the gazette numberifications were published on two separate dates i.e. october 30 and october 31 1956. the appellants then filed a petition under art. 226 in the high companyrt of bombay at nagpur challenging the legality of the imposition of the tax. two main grounds were urged  1  that the numberification was ultra vires because s. 67 of the c.p. berar municipalities act 1922  act ii of 1922  hereinafter termed the act had number been companyplied with and  2  that the rate of tax in regard to certain articles was unauthorised in that it was more than the maximum which companyld be levied under the law. the high companyrt rejected the first ground but accepted the second objection and gave relief accordingly. appellants number. 2 to 6 have number taken steps for the prosecution of the appeal and the appeal in so far as it relates to them is dismissed for number-prosecution. the appellant number 1 before us has challenged the vires of the imposition on two grounds  1  that all the steps necessary for the imposition of the octroi duty had number been taken and therefore s. 67 had number been companyplied with and  2  that as a matter of fact there was numbernumberification imposing an octroi duty. for the purpose of the decision of these objections it is necessary to refer to the scheme of the act chapter ix of which relates to the imposition assessment and companylection of taxes. section 66 enumerates the taxes which may be imposed and s. 67 prescribes the procedure for imposing taxes. section 67 reads as under -

section 67 1  a companymittee may at a special meeting pass a resolution to propose the imposition of any tax under section 66.

when such a resolution has been passed the companymittee shall publish in accordance with rules made under this act a numberice defining the class of persons or description of property proposed to be taxed the amount or rate of the tax to be imposed and the system of assessment to be adopted. any inhabitant of the municipality objecting to the proposed tax may within thirty days from the publication of the numberice submit his objection in writing to the companymittee. the companymittee shall take the proposal and all objections received thereto into companysideration at a special meeting and may modify the proposals so as number to affect their substance and may then forward them to the provincial government along with all objections received its decisions thereon and its reasons therefor. if the companymittee decided to modify the proposals so as to affect their substance it shall publish them again in the manner prescribed in sub-section  2 . the provincial government on receiving such proposals may sanction or refuse to sanction the same or sanction them subject to such modifications as it may think fit or return them to the companymittee for further companysideration

 6

if any proposals for taxation have been sanctioned under sub-section  5  the provincial government may by numberification direct the imposition of the tax as sanctioned from such date as may be specified in such numberification and thereupon the tax shall companye into effect as from the date so specified. a numberification of the imposition of a tax under this section shall be companyclusive evidence that the tax has been imposed in accordance with the provision of this act. the objection to the vires of the numberification in regard to procedure is that the objections raised by appellant number 1 though within time were number companysidered on their merits and were rejected merely on the ground that there was only one objector and as this was one of the essential steps for the validity of the imposition it companyld number be said that s. 67 had been companyplied with and the imposition was therefore invalid. the high companyrt rejected this plea because of s. 67 8  although it found that number-consideration of the objections was an error in procedure. the language of sub-s.  8  lends support to this view. it provides that the issuance of the numberification imposing a tax shall be companyclusive evidence that the tax had been imposed in accordance with the provisions of the act. but it was argued that as a matter of fact there was numbernumberification imposing the tax and therefore the question of companyclusive evidence does number arise. this in our opinion is number established. as stated above there were two numberifications issued by the government both of october 27 1956. one was published in the gazette on october 30 1956 and the other on the following day. the first numberification was as follows -

number 4963-5869-m-xiii. - in exercise of the powers companyferred by sections 71 76 and 85 of the central provinces and berar municipalities act 1922  ii of 1922  the state government are pleased to sanction the following draft rules for assessment companylection and refund of the octroi tax within the limits of the shegaon municipality in the buldana district. the rules shall companye into force from the date of their publication in the madhya pradesh gazette extraordinary. and the second numberification stated -

number 4962-5869-m-xiii. - in exercise of the powers companyferred by sub-section  2  of section 67 of the central provinces and berar municipalities act 1922  ii of 1922  the state government are pleased to companyfirm the following draft rules for the imposition of the octroi tax within the limits of the shegaon municipal companymittee in the buldana district under clause  c  of sub-s.  1  of section 66 of the said act on animals and goods brought for sale expenditure or use in supersession of the rules of terminal tax sanctioned under numberification number 37-16-b-vii dated the 15th february 1921.

the rules shall companye into force from the date of their publication in the madhya pradesh gazette extraordinary. the first numberification purports to be in exercise of the powers under s. 71 which relates to rules for assessment and for preventing evasion of assessment of taxes s. 76 which provides for companylection of taxes and s. 85 which relates to refunds. that numberification therefore lays down the various rules and other matters necessary for the companylection of taxes. the second numberification on the face of it is under sub-s.  2  of s. 67. it appears to us that this is a mistake and should have been under sub-s.  7  of s. 67. by this numberification the state government companyfirmed the draft rules for the imposition of the octroi duty which in the companytext must mean imposition of the tax because the very first rule states -
rule 1 octroi shall ordinarily be levied on companymodities included in the following classes and specified in the schedule hereto annexed and at the rates therein entered.


civil appellate jurisdiction civil appeals number. 1102-1104
of 1963.
appeals from the judgments and decrees dated numberember 27
1959 of the punjab high companyrt  circuit bench  at delhi in
civil regular first appeals number. 69-d 71-d and 85-d of
1963.
bishan narain sardar bahadur and arun b. saharya for the
appellant  in all the appeals . d. bali and din dayal sharma for the respondents  in c.
as. number. 1102 and 1103 of 1963 . g. ratnaparkhi for respondent  in c.a. number 1104 of
1963 . the judgment of the companyrt was delivered by
ramaswami j. these appeals arise out of 3 suits for damages
filed by the heirs of three persons namely shri ram
parkash shrimati panni devi and sant gopi chand who died as
a result of the companylapse of the clock tower situated
opposite the town hall in the main bazar of chandi chowk
delhi belonging to the appellant-corporation formerly the
municipal companymittee of delhi. suit number 5 52 of 1952 was filed by the heirs of shri ram
parkash suit number 930 of 1951 was filed by the heirs of smt. panni devi and suit number 20 of 1952 was filed by kuldip raj
whose father gopi chand was killed by the fall of the clock
tower. all the suits were tried by the companyrt of subordinate
judge 1st class delhi who disposed of all the suits by a
common judgment dated july 9 1953. the subordinate judge
granted a decree for a sum of rs. 25000 to shrimati
subhagwanti and other heirs of ram parkash in suit number 552
of 1952 a sum of rs. 15000 to the heirs of shrimati panni
devi in suit number 930 of 1951 and a sum of rs. 20000 to
kuldip raj in suit number 20 of 1952. it was held by the trial
court that it was the duty of the municipal companymittee to
take proper care of buildings so that they should number prove
a source of danger to persons using the highway as a matter
of right. the trial companyrt rejected the plea of the
municipal companymittee that in the case of latent defects it
could number be held liable and the municipal companymittee as the
owner of the buildings abutting on the highway was liable
in negligence if it did number take proper care to maintain the
buildings in a safe companydition. it was submitted against
the municipal companymittee before the trial companyrt that apart
from superficial examination of the clock tower from time to
time by the municipal engineer numberexamination was ever made
with a view to seeing if there were any latent defects
making it unsafe. aggrieved by the decree of the trial
court the municipal companymittee filed appeals in the high
court in all the three suits. on numberember 27 1959 the high
court disposed of all the appeals by a companymon judgment. the
decree for rs. 25000 in suit number 552 of 1952 was
maintained the amount of rs. 15000 awarded in suit number 930
of 1951 in favour of munshi lal and others was reduced to
rs. 7200 and the amount of rs. 20000 awarded in suit number
20 of 1952 was reduced to rs. 9000. the high companyrt held
that the principle of res ipsa loquitur applied to the case. the high companyrt companysidered that it was the duty of the
municipal companymittee to carry out periodical examination for
the purpose of determining whether deterioration had taken
place in the structure and whether any precaution was
necessary to strengthen the building. the high companyrt mainly
relied on the evidence of shri b. s. puri retired chief
engineer p.w.d. government of india who was invited by the
municipal companymittee to inspect the clock tower after its
collapse and who was produced by them as their witness. the
facts disclosed in his statement and that of mr.
chakravarty the municipal engineer were that the building
was 80 years old and the life of the structure of the top
storey having regard to the type of mortar used companyld be
only 40 to 45 years and the middle storey companyld be saved for
anumberher 10 years. the high companyrt also took into
consideration the statement of mr. puri to the effect that
the companylapse of the clock tower was due to thrust of the
arches on the top portion. mr. puri was of the opinion that
if an expert had examined this building specifically for the
purpose he might have found out that it was likely to fall. the witness further disclosed that when he inspected the
building after the companylapse and took the mortar in his hands
he found that it had deteriorated to such an extent that it
was reduced to powder without any cementing properties. these appeals are brought by the municipal companyporation of
delhi against the decree of the high companyrt dated numberember
27 1959 in first appeals number 69-d of 1953 number 71-d of 1953
and number 85-d of 1953.
the main question presented for determination in these
appeals is whether the appellant was negligent in looking
after and maintaining the clock tower and was liable to pay
damages for the death of the persons resulting from its
fall. it was companytended in the first place by mr. bishen
narain on behalf of the appellant that the high companyrt was
wrong in applying the doctrine of res ipsa loquitur to this
case. it was argued that the fall of the clock tower was
due to an inevitable accident which companyld number have been
prevented
by the exercise of reasonable care or caution. it was also
submitted that there was numberhing in the appearance of the
clock tower which should have put the appellant on numberice
with regard to the probability of danger. we are unable to
accept the argument of the appellant as companyrect. it is true
that the numbermal rule is that it is for the plaintiff to
prove negligence and number for the defendant to disprove it. but there is an exception to this rule which applies where
the circumstances surrounding the thing which causes the
damage are at the material time exclusively under the
control or management of the defendant or his servant and
the happening is such as does number occur in the ordinary
course of things without negligence on the defendants part. the principle has been clearly stated in halsburys laws of
england 2nd edn. vol. 23 at p. 671 as follows
an exception to the general rule that the burden of proof
of the alleged negligence is in the first instance on the
plaintiff occurs wherever the facts already established are
such that the proper and natural inference immediately
arising from them is that the injury companyplained of was
caused by the defendantsnegligence or where the event
charged as negligence tells its own story of negligence on
the part of the defendant the story so told being clear and
unambiguous. to these cases the maxim res ipsa loquitur
applies. where the doctrine applies a presumption of fault
is raised against the defendant which if he is to succeed
in his defence must be overcome by companytrary evidence the
burden on the defendant being to show how the act companyplained
of companyld reasonably happen without negligence on his part. in our opinion the doctrine of res ipsa loquitur applies in
the circumstances of the present case. it has been found
that the clock tower was exclusively under the ownership and
control of the appellant or its servants. it has also been
found by the high companyrt that the clock tower was 80 years
old and the numbermal life of the structure of the top storey
of the building having regard to the kind of mortar used
could be only 40 or 45 years. there is also evidence of the
chief engineer that the companylapse was due to thrust of the
arches on the top portion and the mortar was deteriorated to
such an extent that it was reduced to powder without any
cementing properties. it is also number the case of the
appellant that there was any earthquake or storm or any
other natural event which was unforeseen and which companyld
have been the cause of the fall of the clock tower. in
these circumstances the mere fact that there was fall of
the clock tower tells its own story in raising an inference
of negligence so as to establish a prima facie case against
the appellant. we shall proceed to companysider the main question involved in
this case namely whether the appellant as owner of the
clock tower abutting on the highway is bound to maintain it
in proper state of repairs so as number to cause any injury to
any member of the public using the highway and whether the
appellant is liable whether the defect is patent or latent. on behalf of the appellant mr. bishen narain put forward
the argument that there were numbersuperficial signs on the
structure which might have given a warning to the appellant
that the clock tower was likely to fall. it is companytended
that since the defects which led to the companylapse of the
clock tower were latent the appellant companyld number be held
guilty of negligence. it is admitted in this case that
the clock tower was built about 80 years ago and the
evidence of the chief engineer is that the safe time-limit
of existence of the building which companylapsed was 40 or 45
years. in view of the fact that the building had passed its
numbermal age at which the mortar companyld be expected to
deteriorate it was the duty of the appellant to carry out
careful and periodical inspection for the purpose of
determining whether in fact deterioration had taken placed
whether any precautions were necessary to strengthen the
building. the finding of the high companyrt is that there is no
evidence worth the name to show that any such inspections
were carried out on behalf of the appellantand in fact if
any inspections were carried out they were of casual and
perfunctory nature. the legal position is that there is a
special obligation on the owner of adjoing premises for the
safety of the structures which he keeps besides the highway. if these structures fall into disrepair so as to be of
potential danger to the passers-by or to be a nuisance the
owner is liable to anyone using the highway who is injured
by reason of the disrepair. in such a case it is numberdefence
for the owner to prove that he neither knew number ought to
have knumbern of the danger. in other words the owner is
legally responsible irrespective of whether the damage is
caused by a patent or a latent defect. in wringe v. companyen
 1  the plaintiff was the owner of a lock-up shop in proctor
place sheffield and the defendant companyen was the owner of
the adjoining house. the defendant had let his premises to
a tenant who had occupied them for about two years. it
appears that the gable end of the defendants house
collapsed owing to a storm and fell through the roof of the
plaintiffs shop. there was evidence that the wall at the
gable end of the defendants house had owing to want of
repair become a nuisance i.e. a danger to passers by and
adjoining owners. it was held by the companyrt of appeals that
the defendant was liable for negligence and that if owing to
want of repairs premises on a highway become dangerous and
therefore a nuisance and a passer-by or an adjoining owner
suffers damage by the companylapse the occupier or the owner if
he has undertaken the duty of repair is answerable
 1  1940 1 k.b. 229.
llsup. cl/66--10
whether he knew or ought to have knumbern of the danger or number. at page 233 of the report atkinson j. states
by companymon law it is an indictable offence for an occupier
of premises on a highway to permit them to get into a
dangerous companydition owing to number-repair. it was number and is
number necessary in an indictment to aver knumberledge or means of
knumberledge see reg. v. watson  1703  2 ld. raym. 856. in
reg. v. bradford navigation company  1865  6 b. s. 631 651
lord blackburn  then blackburn j.  laid it down as a general
principle of law that persons who manage their property so
as to be a public nuisance are indictable. in attorney-
general v. tod heatley  1897  1 ch. 560 it was clearly
laid down that there is an absolute duty to prevent premises
becoming a nuisance. if i were sued for a nuisance said
lindley l. j. in rapier v. london tramways company  1893  2 ch. 588 599 and the nuisance is proved it is numberdefence on
my part to say and to prove that i have taken all reasonable
care to prevent it. the ratio of this decision was applied by the companyrt of
appeals a subsequent case in mint v. good  1  and also in
walsh v. holst and company limited and ors.  2  in our opinion the
same principle is applicable in indian law. applying the
principle to the present case it is manifest that the
appellant is guilty of negligence because of the potential
danger of the clock tower maintained by it having number been
subjected to a careful and systematic inspection which it
was the duty of the appellant to carry out. the last question is regarding the quantum of damages which
requires separate companysideration in each case. section i of the fatal accidents act 1855  act xiii of
1855  reads
whenever the death of a person shall be caused by wrongful
act neglect or default and the act neglect or default is
such as would  if death had number ensued  have entitled the
party injured to maintain an action and recover damages in
respect thereof the party who would have been liable if
death had number ensued shall be liable to an action or suit
for damages numberwithstanding the death of the person
injured and although the death shall have been caused under
such circumstances as amount in law to felony or other
crime. every such action or suit shall be for the benefit of the
wife husband parent and child if any of the person whose
death shall have been so caused and shall be brought by and
in the name of the executor administrator or representative
of the person deceased and in every such action the companyrt
 1   19511 1 k.b. 517.  2  1958 1 w.l.r. 800
may give such damages as it may think proportioned to the
loss resulting from such death to the parties respectively
for whom and for whose benefit such action shall be brought
and the amount so recovered after deducting all companyts and
expenses including the companyts. number recovered from the
defendant shall be divided amongst the before mentioned
parties or any of them in such shares as the companyrt by its
judgment or decree shall direct. this section is in substance a reproduction of the english
fatal accidents acts 9 and 10 vict. ch. 93 knumbern as the
lord campbells acts. the scope of the companyresponding
provisions of the english fatal accidents acts has been
discussed by the house of lords in davies v. powell duffryn
associated companylieries limited  1  at page 617 of the report
lord wright has stated the legal position as follows
it is a hard matter of pounds shillings and pence subject
to the element of reasonable future probabilities. the
starting point is the amount of wages which the deceased was
earning the ascertainment of which to some extent may
depend upon the regularity of his employment. then there is
an estimate of how much was required or expended for his own
personal and living expenses. the balance will give a datum
or basic figure which will generally be turned into a lump
sum by taking a certain number of years purchase. that
sum however has to be taxed down by having due regard to
uncertainties for instance that the widow might have again
married and thus ceased to be dependent and other like
matters of speculation and doubt. the same principle has been reiterated by viscount simon in
nance v. british companyumbia electric railway companypany limited  2
in the present case of subhagwanti etc. there is evidence
that ram parkash deceased was 30 years old at the time of
the accident his widow subhagwanti being aged about 28 and
his son 14 and daughters 12 and 2 years old. the evidence
adduced regarding the income of ram parkash and the amount
of loss caused to his widow and children was number
satisfactory but the high companyrt companysidered that the widow
and children must have been receiving at least a monthly sum
of rs. 150 for their subsistence and for the education of
the children from the deceased ram parkash. the income was
capitalised for a period of 15 years and the amount of rs. 27000 which was arrived at was more than what the trial
court had awarded. the high companyrt accordingly saw numberreason
for reducing the amount of damages awarded by the trial
court. in the case of tek chand and his four children the
high companyrt has estimated that the pecuni-
 1  1942 a.c. 601.  2  1951 a.c. 601.
ary loss caused by the death of his wife should be taken to
be rs. 40 p.m. and if a period of 15 years is taken for the
purpose of calculating the total sum the amount will companye
to rs. 7200. lastly in the case of kuldip raj the high
court has calculated the pecuniary loss at the rate of rs.


civil appellate jursidiction civil appeal number. 154
155 of 1974.
from the judgment and order dated 19.4.1973 of the
mysore high companyrt in w.p. number. 356 and 1215 of 1968.

s. javeli and b.r. agarwala for the appellants. s. hegde anand haksar and mrs. sushma suri for the
respondents. the judgment of the companyrt was delivered by

ramaswamy j. these two appeals on certificate under
article 136 of the companystitution are by two sugar factories
situated in numberthern part of mysore number karnataka state. the
appellants filed writ petitions under article 226 of the
constitution in the high companyrt of mysore at bangalore as-
sailing the companystitutional validity of section 3 3c  of the
essential companymodities act 1955  in short the act  and the
numberification dated march 24 1966. it was prayed inter alia
that a writ or order in the nature of mandamus be issued
directing the respondents to include the petitioners facto-
ry in zone number 2 and to fix the price at rs.161 per quintal
for the sugar manufactured by the petitioners factory. the writ petitions were dismissed by the high companyrt and
the appellants in these circumstances have approached this
court challenging the judgment of the high companyrt. the mate-
rial companytentions raised by the appellants in the affidavit
and adumbrated in the grounds of appeal in this companyrt are
that the appellants factories are part of the entire state
of mysore  number karnataka  as was numberified preceding the
impugned numberification. 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 numberifi-
cation by including in zone number 1 the appellants are put to
huge losses. the companyntry was divided into five zones. zone number 1
consists of all the factories in maharashtra gujarat numberth
mysore numberth andhra pradesh zone number 2 companysists 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 appeals it is number necessary to adum-
brate all the material particulars in that regard. the
contention that section 3 3c  of the act is ultra vires of
their fundamental rights enshrined under article 19 1  g
and right to property under article 19 1  f  as was avail-
able in the year 1968  but since deleted under companystitution
44th amendment act  is numberlonger available. the act received
the protective umbrella of article 31c of the companystitution
read with 9th schedule as it has been included therein as
item number 126. it is thereby immuned from attack on that
score. moreover it is companyered by a recent companystitution bench
judgment of this companyrt in m s. shri sitaram sugar
company v. union of india ors. 1990 3 scc 223 1990
1 scale 475. therefore the point is numberlonger res integra. section 3 3c  is companystitutionally valid and unassailable. the next companytention raised in the high companyrt as well as
reiterated before us is that the appellants are entitled to
a numberice and hearing before placing them in zone number 1.
clubbing with other factories in the state of maharashtra
etc. is uneconumberical and kept the appellants under companystant
loss. therefore it is violative of the principles of natu-
ral justice. to appreciate the companytention it is necessary to
look into the numberification issued. the government of india
in exercise of the power under section 3 of the companymission
of inquiry act 1952 appointed sugar inquiry companymission by
numberification number s.o. 2670 dated august 3 1964 which company-
sists of dr. s.r. sen the advisor and addl. secretary to
government of india planning companymission as chairman and
four other econumberic experts as members of the companymission to
inquire into  a  the determination of the prices and the
system of distribution of sugar and  b  the policy regarding
licensing of new sugar factories or the expansion of exist-
ing sugar factories. they made a detailed inquiry after
examining the persons companynected with industries including
many an owner of the sugar factories or representatives of
the associations of the sugar factories and companyperative
sugar factories associations etc. in paragraph 4 they
discussed the proliferation of zones as against the four
zones recommended by the previous tariff companymission. the
representatives of the state government and the sugar indus-
try submitted their detailed memoranda on the various prob-
lems including zoning and companyt schedules. the companymission
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 companymission has stated each zone should be
large enumbergh to ensure that the principle of price fixation
does number degenerate into a companyt plus basis as the latter
discourages efficiency and perpetuates inefficiency. in
paragraph 4.4 it was stated that the sugarcane breeding
institute companymbatore has divided the whole companyntry into
five regions on the basis of agro-climatic and other companysid-
erations details of which were given in chapter iv region
 1  companysists of gujarat maharashtra numberth mysore numberth
andhra pradesh and south madhya pradesh. in paragraph 4.6
it was stated that apart from companysiderations relating to
agro-climatic factors and companyparative econumberic advantage it
is worthwhile to companysider the variations in duration of
crushing and sugar recovery also. on this basis some revi-
sion in the zones as suggested by the companymbatore institute
appears to be necessary. in paragraph 4.7 it was stated that on the basis of
the above companysiderations the companymission recommended five
zones for the purpose of fixation of ex-factory price of
sugar. zone number 1 as stated earlier which is relevant for
the purpose of these appeals companysists of factories in maha-
rashtra numberth mysore etc. accepting the recommendation the
government of india in exercise of the powers companyferred upon
them by sub-rule  2  of rule 125 of the defence of india
rules 1962 and clause 6 of the sugar  companytrol  order 1963
issued under section 3 3c  of the act and in supersession of
the numberification of the government of india numberification
number gsr 1145 dated august 6 1965 issued the impugned numberi-
fication in gsr number 463 dated march 24 1966 and the facto-
ries were specified in schedules 2 3 annexed. the numberifi-
cation has been issued and was published in the gazette of
india for the purpose of fixing prices in companyumn 2 of sched-
ule i annexed hereto as the maximum ex-factory price. thus
that the appellants factories came to be included in zone
number 1 as recommended by the expert econumberic companymission
appointed by the government of india. the numberification as
stated earlier is a statutory numberification issued in exer-
cise of the powers referred to herein before. the question therefore is whether the appellants are
entitled to individual numberices of representation and hearing
before placing them in zone number 1 and fixation of the
prices. as regards right to hearing for fixation of the
prices is companycerned as stated earlier it is companycluded in. m s. shri sitaram sugar companypanys case. as regards the
zoning of the factories is companycerned it is also based on the
reports submitted by the companymissions companysisting of the
econumberic experts and the sugarcane breeding institute
coimbatore that too after companysidering the representations
made by the state governments and also the sugar industry. in paragraph 4 of m s. sitaram sugar companypanys case our
learned brother thommen j. speaking for the companyrt has numbered
that mr shanti bhushan learned companynsel appearing on behalf
of some of the sugar factories companyceded that the zoning is
valid but assailed price fixation companytending that as a
result of the zoning the companyt structure was arbitrary and
the classification offends article 14. that was resisted by
shri k.k. venugopal learned companynsel appearing for indian
sugar mills association and also companynsel for companyperative
sugar factories and they supported the principles of zoning. in the written submissions made by shri venugopal it is
numbered by the bench that as was seen during the companyrse of
heating only two or three persons have companye forward chal-
lenging zoning. there are 389 sugar factories in the companyntry
and the present intervener has 166 members. their associa-
tions being national federation of companyperative sugar facto-
ries limited
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 number high-cost units have opposed zoning. in anakapalle companyp. agrl. industrial society limited etc
etc. v union of india ors. 1973 2 scr 882 the facts
are that the tariff companymission recommended the entire companyn-
try 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 companytention grover j. speaking
for the companystitution 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 at-
tributed to the prices having been fixed zone-wise. for
instance in the punjab zone the crushing capacity of all
the factories is practically the same i.e. 1000 tons per
day. the prices which were fixed by the government were on
the basis of 67 days duration with a recovery of 8.75. in
the case of malwa sugar mills the actual duration was 95
days the recovery being 8.78. ordinarily and in the numbermal
course profits should have been made by the said unit and it
should number have incurred losses. the reasons for incurring
losses can be many including mismanagement lack of effi-
ciency and following a wrong investment policy which have
numberhing to do with the zonal system. and again at page 894 it is laid thus
the extreme position taken up on behalf of some of the
petitioners that the prices should have been fixed unit-wise
and on the basis of actual companyts incurred by each unit companyld
hardly be tenable. apart from the impracticability of fixing
the prices for each unit in the whole companyntry the entire
object and purpose of companytrolling prices would be defeated
by the adoption of such a system. it must be remembered that
during the earlier period of price companytrol the price was
fixed on an all india basis. that still is the objective and
if such an objective can be achieved it cannumber be doubted
that it will be highly companyducive to proper benefit being
concerned on the companysumers. according to the companymission the
objective to be achieved should be to have only two
regions in the while companyntry namely sub-tropical and
tropical. number a single expert body appointed by the govern-
ment of india from time to time companyntenanced the suggestion
that price companytrol should be unit-wise. it appears that even
before the tariff companymission such a point of view was under-
standably number pressed on behalf of the sugar industry. the
low companyt units demanded the formation of the larger zones. the high companyt units asked for the formation of smaller
zones. numbermaterial has been placed before us to show that
there was any serious demand for prices being fixed unit-
wise
it was further held that even in the arguments it was
almost companymon ground with the exception of one or two dis-
sentient voices that zoning is unavoidable in our companyntry in
the matter of fixing of the price of sugar. thus this companyrt
rejected that zoning is to be done on unit-wise and that
fixation of the price for each unit in the whole companyntry is
impracticable unworkable and would defeat the very purpose
of fixing sugar price. in shri sitaram sugar companypanys case in paragraph 59
this companyrt 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 companytrol in the best econumber-
ic interest of the sugar industry and the general public
that sugar factories are grouped together with reference to
geographical-cum-agro-econumberic-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 instru-
ments and executive orders. whether the policy should be
altered to divide the sugar industry into groups of units
with similar companyt 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 and equi-
table distribution of essential companymodities at fair prices
in the best interest of the general public is a matter for
decision exclusively within the province of the central
government. such matters do number ordinarily attract the power
of judicial review. in paragraph 61 it was further stated that the division of
industry
on zonal basis for the purpose of price determination has
been accepted without question by almost all the producers
with the exception of a few like the petitioners. the indi-
vidual disadvantage for the loss this supply on account of
present zoning system by its very nature is incapable of
determination by judicial review. in saraswati industrial syndicate limited etc. v. union of
india 1975 1 scr 956 this companyrt held that price fixation
is more in the nature of a legislative measure even though
it may be based upon objective criteria found in a report or
other material. it companyld number therefore give rise to a
complaint that rules of natural justice have number been fol-
lowed in fixing the price. in prag ice oil mills anr. etc. v. union of india 1978 3 scr 293 chandrachud j.  as he then was  speaking for the companyrt held that price
fixation is really legislative in character in the type of
control order before the companyrt and it satisfies the test of
legislation and legislative measure does number companycern itself
with the facts of an individual case. it is meant to lay
down a general rule applicable to all persons or objects or
transactions of a particular kind or class.  emphasis supplied
in laxmi khandsari etc. etc. v. state of u.p. ors. 1981 3 scr 92. the facts are that in exercise of power
under clause 8 of sugarcane  companytrol  order 1966 a numberifi-
cation was issued prohibiting crushing during particulars
hours of the day. it was companytended to be violative of the
principles of natural justice. it was held that it is legis-
lative in character and the rules of natural justice would
stand companypletely excluded and numberquestion of hearing arises. in union of india anr. v. cynamide india limited anr. 1987 2 scc 720 at 734 735 chinnappa reddy j. speaking
for the companyrt held that legislative action plenary or
subordinate is number subject to rules of natural justice. in
the case of parliamentary legislation the proposition is
self evident. in the case of subordinate legislation it
itself provide for a numberice and for a hearing numberone can
insist upon it and it will number be permissible to read natu-
ral justice into such legislative activity. in shri sitaram
sugar companypanys case it was reiterated that fixation of
price for sugar is a legislative policy and the principles
of natural justice would number apply. from this perspective of the statutory study and in the
light of the law laid down by this companyrt the question
emerges whether the appellants are entitled to an individual
numberice and hearing before placing them in zone number 1 in the
impugned numberification. the fixation of
the price and zoning are integral scheme of the numberifica-
tion without placing the factories in the appropriate zone
based on agro-climatic and other econumberic companysiderations the
proper price fixation cannumber be made. so both the fact or
are part of the policy decision by the government in exer-
cise of the statutory powers. this decision is based on the
recommendation made by the sugar companymission companysisting of
experts in the field of agro-econumberics who after exhaustive
study and companysideration of the relevant material placed
before it made the recommendation. thereby it assumes the
character of legislative policy. it does number companycern itself
with an individual case. once it is companycluded that the
zoning system being an integral part of the price fixation
of the sugar produced by the factories in a particular zone
it is legislative in character and numberindividual sugar
factory is entitled to a numberice and hearing before placing
the particular factory or factories in a particular zone. it
was open to place its view like others before the companymis-
sion. it is undoubted that in the subsequent years when the
writ petition was filed in the high companyrt on behalf of the
government a companycession was made that the appellants would
be reimbursed of the losses they incurred but that is no
precedent for deciding that the appellants should be placed
in a particular zone or that they should be heard before
placing them in zone number 1. it is true as companytended by shri
aggarwal that in paragraph 52 and 53 in shri sitaram sugar
companys case this companyrt held that any act of the reposi-
tory of power whether legislative or administrative or
quasi-judicial is open to challenge if it is in companyflict
with the companystitution or the governing act or the general
principles of law of the land or it is arbitrary or unrea-
sonable that numberfair minded authority companyld ever had made
it. even then this companyrt has pointed out that the impugned
orders are undoubtedly based on an exhaustive study by
experts and that the impugned orders though open to criti-
cism would number be subject to judicial review. it is also
true that in anakapalle companyp. agrl. and industrial societys
case this companyrt has pointed out that all the factories in a
state would be placed in one zone and placing them in dif-
ferent regions would be uneconumberical. in shri sitaram sugar
companys case the companystitution bench also held that the
above decision requires numberreconsideration. but the observa-
tions therein have been made based upon the recommendation
made by the tariff companymission and accepted by the government
to keep each state in a particular zone but when the subse-
quent sugar companymission went into the question since by then
there is appreciable increase of large number of sugar
factories in several regions though number on the statewise
basis in a particular zone. as stated earlier the recommen-
dations are based on indepth study. the numberification as such
was number questioned in the writ petition. therefore the
observation of this
court in that paragraph cannumber be companystrued to put a fetter
on the power of the government to reconsider the policy due
to change in circumstances of groupings of the sugar facto-
ries 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 illinumbers 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
number unrelated to the problem and number forbidden by some
explicit limitation on the states power. that the legisla-
tive remedy might number 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 companymission heard the persons desired to
be heard and companysidered the representation and material
produced. at the stage of numberification the question of
further representation or hearing does number arise number a
feasible exercise. it is for the government whether to
accept or reject or modify the recommendation made by the
commission. we accordingly hold that zoning is a legisla-
tive act and policy. we have numberhesitation to companyclude that
the companytention of the appellants that they are entitled to
individual representation and numberice and heating before
placing them in zone number 1 is devoid of force and is reject-
ed. it is also equally true that the government did number file
any companynter affidavit even till date refuting the allega-
tions made in the grounds of appeal regarding the alleged
costs structure and the companysequential loss that the appel-
lants are being put to. but in view of the finding that it
is a legislative policy but number an executive action we
cannumber draw an adverse inference against the state for number
denying those allegations and to companyclude that the appel-
lants factories are to be placed in a particular zone. in
other words this companyrt cannumber interfere with the legislative
policy of zoning particular factories in a particular re-
gion namely in zone number 1 of the appellants factories by
merely the state having omitted to file the companynter affida-
vit refuting the allegations of the alleged loss. in an
individual case of administrative action if numbercounter
affidavit has been filed an adverse inference may be drawn
and relief may be moulded as per given situation. likely
that some loss may be caused to individual factory but as
pointed out by this companyrt in anakapalle companyp. agrl. and
industrial societys case that the price fixation cannumber be
made unit-wise and it is number practic-
able to make unit as a base t6 fix the price or to place in
a particular zone.