Ram Ganga Fertilizers Ltd. Etc. vs Union Of India And Ors.
1993 Latest Caselaw 437 Del

JUDGMENT

D.K. Jain, J.

(1) The four petitioners, manufacturers of Single Super Phosphate (for short SSP), a low nutrient phosphatic fertilizer, seek awrit of mandamus to the respondents, directing them to: (a) notify the ex-factory price of Ssp for them for the quarters succeeding the quarter September 1991 and December, 1991, (b) pay the correct subsidy payable to them for the quarters of September 1991 onwards (beyond the ceiling rate) on the basis of the ex-factory price to be notified, (c) pay to petitioners no. I and 3 the subsidy payable to them for the Ssp supplied for the period I August 1992 to 24 August 1992and(d) pay to them interest at the market rate for the delay in payment of subsidy from the time the correct subsidy ought to have been paid till the time it is actually paid.

(2) PETITIONERS' case is that prior to 1982,SSP was under informal price control, which was made effective from 16 March 1976, a flat subsidy of Rs.200.00 per tonne was granted by the Government of India while the consumer price for individual unit was fixed by the Fertilizers Association of India in accordance with the formula agreed to with the Government of India after deducting the said subsidy. However, different retail prices were fixed for different manufacturers. The result was that there was no uniformity in the price of SSP. On the recommendation of the working group on review of subsidy, on 23 May 1982, the Government of India replaced the scheme of flat subsidy at the above rate by a scheme of a differential level of subsidy on the basis of the ex-factory price to be worked out separately for each manufacturing unit. The ex-factory price was to be worked out by Fertilizer Industry Co-ordination Committee (for short FICC)separtelyfor each manufacturing unit. For this purpose, all the manufacturing units were to furnish details to Ficc on prescribed proformae. This method of payment of subsidy continued till November, 1991 when the Government of India decided to fix a ceiling on subsidy payable to the manufacturers of SSP. Accordingly, the Government, vide order dated 01 November 1991 intimated the Ficc the two ceiling rates fixed by it for the period from 25 July, 1991 to 13 August 1991 and from 14 August 1991 onwards. The ceiling rates for the said periods were, however, revised by another order dated 9 June 1992. Both these orders were successfully challenged by the petitioners in Ram Ganga Fertilizer & others Vs. Union of India & others, 1993 ( 1 ) Delhi Lawyer 202. The said orders were quashed by this court holding that no ceiling could be fixed for those manufacturing units which were established before the issue of the said two orders. It was held that subsidy to the petitioners was to be paid in accordance with the Scheme formulated and enforced w.e.f. 23 May 1992 i.e. price to be worked out by FICC.

(3) The grievance of the petitioners in the present writ petition qua relief (b) and (c) is that though for the quarters succeeding September 1991 and December 1991 they have been paid at the ceiling rate, they are entitled to payment at the differential rates in accordance with the Scheme of 1982 and since nothing has been paid for the period 01 August 1992to24August 1992, they are entitled to be paid full subsidy. They allege that the respondents are illegally withholding the money due to them. They further state that the Government of India has failed to notify the ex-factory price for the quarters after September 1991 or December .as the case may be, immediately after having received the relevant cost data from the petitioners, which it was obliged to do at least within 45 days of the furnishing of the said data. The petitioners, therefore, claim interest at the market rate for the delay in payment of the subsidy.

(4) In the counter-affidavit filed, the respondents deny their liability for the reliefs claimed. It is stated that for receiving the amount of subsidy payable to the petitioners under the Scheme, they have to furnish an undertaking, which was not furnished and as such payments for the period from 01 August 1992 to 24 August 1992 could not be released. The reply is however, silent on the question as to why the payment was being restricted to the ceiling limit after it had been struck down by this Court. It is stated that the petitioners had also represented to Ficc that despite the fact that the ceiling had been struck down by this Court, they were prepared to accept part payment of the subsidy without prejudice to their legal rights to get full payment.

(5) I have heard learned counsel for the parties. At the outset ShriShanti Bhushan, learned counsel for the petitioners, has stated that during the pendency of the writ petition the ex-factory prices of the Ssp for all the aforesaid quarters regarding reliefs (b)and(c) have been notified and subsidy has also been paid to the petitioners for the said period at the ceiling rates and, therefore, he would restrict his prayer in the writ petition to the extent of payment for the aforesaid period beyond the ceiling limit and interest for the delay in the payment of the subsidy. Thus, the points surviving for determination are; (i) whether the petitioners are entitled to the payment of subsidy on the basis of Scheme formulated on 23 May 1982 and (ii) whether the respondents are liable to pay interest to the petitioners on account of delay in payment of subsidy.

(6) It is common ground that subsidy for the periods referred to for the purpose of reliefs (b)and(c) i.e. for the period from 16 August 1991 to 24 August 1992 has already been paid at the ceiling rates and the petitioners' claim to be paid beyond the ceiling rates, lam of the view that there was no justification on the part of the petitioners to withhold the subsidy over and above the ceiling limit after the pronouncement of the judgment by this court. I feel that there is no reason as to why the petitioners should not be paid the full amount of subsidy on the basis of the ex-factory price worked out by Ficc, which has since been notified. I would, therefore, direct the respondents to pay to the petitioners the balance amount of subsidy for the period from 16August 1991 to 24 August 1992 which, as per the statement filed by ShriS.K.Mahajan, learned counsel for the respondents, is still due to the petitioners, within four weeks from today, failing which the petitioners will be entitled to interest @ 20.75 per cent per annum which, I am told, is the current rate of-bank interest on the working capital, from I I November 1992 (the date of decision of this court in Cwp No. 73/1992 (supra)strikingdowntheceiling) till the date of actual payment. As during the course of arguments, learned counsel for the respondents feebly mentioned that the respondents have preferred a Special Leave Petition against the judgment of this court and the same is pending, to safeguard the interest of the respondents, I would direct that the balance amount of subsidy will be released to the petitioners only on their furnishing an undertaking to this Court in the form of an affidavit to the effect that in case the aforesaid judgment of this court is set aside by the Supreme Court, they will refund the excess amount of subsidy received by them within one month of the pronouncement of the judgment by the Supreme Court, failing which they will also be liable to pay to the respondents interest @ 20.75 per cent per annum from the date of payment to them by the respondents to the actual date of refund by them.

(7) The other question which remains to be considered is as to whether the petitioners are entitled to interest for delay in the issuance of notification of ex-factory prices.

(8) Shri S.K.Mahajan, learned counsel for the respondents, attributes the delay in fixation of ex-factory prices to the petitioners and urges that the respondents are not liable to pay interest. He submits that there was delay on the part of the petitioners in furnishing of the requisite cost data in the prescribed performae. Since this fact was seriously contested by learned counsel for the petitioners, I asked Shri S.K. Mahajan to furnish complete details about the receipt of cost data by the respondents to ascertain if there was any deficiency on the part of the petitioners in furnishing the cost data and if so, was the same communicated to the petitioners and when.

(9) The details, so furnished, in the form of a chart do indicate that in some cases there has been delay by the respondents in processing of cost data furnished and in the issue of notification. The liability to pay interest on this account is further denied on the plea that there is no such stipulation in the entire scheme for payment of subsidy.

(10) My attention was drawn by learned counsel for the petitioners to the stipulations in the Scheme to the effect that if the petitioners failed to credit to the account of Ficc the excess amount of the subsidy received -within a particular period they were made liable to pay interest to the respondents @ 2.5 per cent over and above the bank's rate of interest for the working capital. Learned counsel, therefore, submitted that on the same parity of reasoning the respondents should also pay interest to the petitioners when there is inordinate delay on their part to pay the subsidy. In my view, though on a parity of reasoning and analogy, absence of such a stipulation in favor of the petitioners at first sight may seem to be odd and incongratuous but the fact remains that whereas a specific stipulation for payment of interest by the petitioners to the respondents exists in the scheme, it has been avoided in favor of the petitioners. Therefore, in the absence of such a stipulation, for payment of interest by the respondents, there have to be compelling reasons, for which facts of each case have to be seen.

(11) The prime question, therefore, is whether on the facts of the present case, could it be said that the respondents have deliberately delayed the notification of the ex-factory prices to deprive the petitioners from their lawful dues. The statement filed by Shri Mahajan, referred to hereinabove, indicates that the petitioners have been paid the provisional amount of subsidy on the maximum ceiling rate i.e. Rs. 1,326.00 per metric tone, which shows that ex-factory prices had not been taken into consideration by respondents when the provisional payments were made. It is not the petitioner's case that they have been paid subsidy on the last notified ex-factory prices which were less than the ceiling rate. I feel that even if, the ex-factory prices had been worked out and notified expeditiously, no payment of subsidy on the basis of the price, so determined, could be made to the petitioners till the ceiling imposed had been struck down by this court on 11 November 1992. In this view of the matter, I am of the opinion that the petitioners are not entitled to any interest on account of delay in the issue of notification for ex-factory prices.

(12) The result is that the writ petition is partly allowed. There will be no order as to