Khan Udyog Khedut Shahakari Vs. Union of India & ANR  INSC 24 (10
R.P. Sethi. V.N.Khare, J.
appellants in these appeals are Co-operative Sugar Factories engaged in the
business of manufacture of sugar in the State of Gujarat. On 15th
June, 1972 the
respondent issued an order known as Sugar Price Determination Order and on the
same day. The Levy (Sugar Control) Order, 1972 was issued under which the sugar
manufacturers were required to sell sugar to the Union Government, State
Government or their nominees at the controlled price of Rs. 124.59 per quintal
for D-Grade sugar. The appellants challenged the aforesaid Sugar Price
Determination Order and Levy Control Order by means of separate petitions
before the Gujarat High Court. In the writ petition there was a prayer for
interim relief also.
prayer as contained in the writ petition reads as follows :
pending the hearing of the petition your Lordships will be pleased to issue an
interim injunction restraining the respondents their servants and agents and or
their successors in office as the impugned orders requiring the petitioner to
supply sugar to the State Government or Union Government or to their nominees
at a price of Rs. 150/- per quintal." The High Court by an order dated
31.7.72 admitted the writ petition and granted interim order as prayed for in
the writ petition. Subsequently on 29.8.72, the stay order was made absolute.
Some time in March, 1973 the writ petition came up for hearing and on that day
the counsel for the appellant stated before the Court that by inpse of time the
writ petition was rendered infructuous. Consequently the writ petition the
Parliament passed an Act known as Levy Sugar Price Equalisation Fund Act. 197
(hereinafter referred to as the "Act"). One of the objects of the act
was to make provisions for refund of excess realisation made by the sugar
factories on the basis of interim orders issued by the courts. After the Act
came into force, Union of India filed separate applications for issuing
direction by the High Court to the writ petitioners whose writ petitions were
dismissed by the High Court to pay the difference of price between Rs. 124.59
and Rs. 150/- per quintal released by them on account of interim order granted
by the High Court along with interest. The High Court after hearing the matter
directed the appellants to credit to levy sugar price equalisation fund the
difference between the control price of Rs. 124.59 and the price released by
them in respect of levy sugar sold by them between 31.7.72 to 12.3.73. The High
Court further directed that the appellants shall credit to the fund interest at
the rate of 12-1/2% per annum on the excess realisation made by them.
against this order the appellants came to this Court by means of special leave
Court granted special leave in all the appeals limited to the question as
regards the liability of the appellants to pay interest on the amounts which
they were called upon to refund the excess relisation meaning thereby that
leave was refused to the extent the appellants were required to refund the
excess realisation made by them.
the only question which is before us is, as to whether the appellants are
liable to pay interest at the rate of 12-1/2% per annum on all the excess realisation
made by them on the basis of interim orders obtained by them.
counsel appearing for the appellants raised two arguments. The first argument
is that the amount which the appellants were required to refund was not an
excess realisation within the meaning of the expression "excess realisation"
as contained in Section 2(b)(ii) of the Act.
second argument is that their cases are not governed by sub-section (3) of
Section 3 of the Act but are governed by Section 3(4) and (5) of the Act.
to the first argument, the contention of the appellants counsel is that since
the interim order passed by the High Court on the basis of which the appellants
made excess realisation having not set aside by the appellate or higher court,
the realisation made by the appellants would not fall within the ambit os
Section 2(b)(ii) of the Act.
contention is that interim order passed in writ petitions although
automatically lapsed on dismissal of writ the petitions, but were not set aside
by the appellate or higher court. This contention is wholly untenable. It is
not disputed that on the dismissal of the writ petitions the interim orders
passed therein were automatically stood discharged. The ordinary meaning of the
word 'set aside' is to revoke or quash, the effect of which is to make the
interim order inoperative or non-existent. In the present case when High Court
dismissed the writ petition the interim order passed therein became
non-existent and in-operative.
effect of setting aside an order or automatic discharge consequent upon the
dismissal of writ petition is the same.
fact the expression 'set aside' used in Section 2(b)(ii) means the interim
order has come to an end and has become inoperative. We, therefore, reject the
first argument of learned counsel for the appellant.
as the second argument is concerned, we have held hereinbefore that the interim
orders passed in the writ petitions came to an end on dismissal of the writ
petition before the Act came into force, and under such circumstances Section
3(4) and (5) can have no application in the appellants' case. The Supreme Court
in The Ankepalle Co-operative Agricultural & Industrial Society Ltd. and
another etc. vs. Union of India and others etc. 1977 (4) S.C.C. 2041 has held
that sub-section (4) and (5) of Section 3 do not apply to a case in which
interim order made by a Court has already come to an end as a result of
termination of final proceedings before the commencement of the Act. Moreover,
the special leave against the order passed by the High Court directing the
appellants to refund the excess realisation made by them was refused. Thus it
is not open to the appellants to raise this argument again.
in the present case sub-section (3) of Section 3 of the Act which provides for
grant of interest on the excess realisation made by the appellant is applicable
the appellants are liable to pay interest. We, therefore, reject the second
contention of the counsel.
all the reasons stated above, we do not find any merit in the appeals. The
appeals are dismissed with no order as to costs.