JUDGMENT
M. Katju and Rakesh Tiwari, JJ.
1. Learned standing counsel may file counter-affidavit within three weeks, List thereafter.
2. The petitioner has a sugar factory at Saharanpur.
The petitioner has challenged the restrictions on free sale sugar. In our prima facie opinion, these restrictions are arbitrary and violative of Articles 14 and 19(1)(g) of the Constitution. In this connection, we may explain the general scheme regarding sale of sugar. The sugar produced by sugar factories is generally divided into two categories-levy sugar and free sale sugar. The levy sugar has to be compulsorily sold by the manufacturer to the Government or to the nominee of the Government at the price fixed by the Government. Such sugar is then distributed to the poor people of the country through the public distribution system (Fair Price Shops etc.). The idea is that the poor people could get sugar at a cheap price. However, this often entails a loss to the manufacturer because the levy sugar is sold to the Government (or its nominee) at the price fixed by the Government, which is sometimes lower than the cost price and hence, the remaining sugar is permitted to be sold freely in the market so as to make good the loss entailed by sale of the levy sugar. It must be understood that businessmen operate for profit and not for charity. Hence, they are entitled to earn a reasonable amount of profit and cannot be compelled to operate at a loss.
3. So far as the free sale sugar is concerned, it can be sold to anybody at any price at any time, otherwise, it would not be free sale sugar. We are prima facie of the opinion that any restrictions imposed on the free sale sugar are prima Jade arbitrary and illegal and violative of Articles 14 and 19(1)(g) of the Constitution.
4. It has been alleged in paragraphs 20 and 40 to 44 of the
writ petition that the Central Government is not permitting release of free sale sugar for sale in the market beyond a certain amount. We are prima facie of the opinion that this restriction is wholly arbitrary and Illegal and violative of Article 19(1)(g) of the Constitution. In our opinion, no limitation can be placed by the authorities on the quantum of free sale sugar which the petitioner wishes to sell in the open market. If such a limitation is placed, it will militate against the very concept of free sale sugar. We are informed that at present 85% of the sugar manufactured in sugar factories is regarded as free sale sugar, and 15% as levy sugar. Hence, restrictions can only be placed on the 15% levy sugar, but not on the free sale sugar.
5. Of course, the authorities can verify whether the sugar sought to be sold is only free sale sugar and not the entire sugar (which includes the 15% levy sugar too). For this purpose, the petitioner should inform the District Magistrate details about the sale of free sale sugar, i.e., the quantum sold, to whom it is sold, at what price, etc. but beyond that, no restrictions can be placed on sale of free sale sugar, and clauses 4 and 5 of the Sugar Control Order, 1966, have to be construed accordingly.
6. It may be mentioned that even the State Government recommended the prayer of the petitioner for permitting sale of free sale sugar (vide Annexure-7), but surprisingly, the Central Government did nothing. The petitioner has stated that it has to pay cane growers’ dues, factory expenses, etc. which it cannot do without selling the free sale sugar.
7. We therefore, direct that the petitioner can sell the free sale sugar in any quantity to any one at any price, but shall give the intimation to the District Magistrate about it as stated above.
8. This order will be subject to further orders of this Court.