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The Essential Commodities Act, 1955
Article 14 in The Constitution Of India 1949
The Companies Act, 1956
Hari Bansh Lal vs Sahodar Prasad Mahto & Ors on 30 August, 2010

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Patna High Court - Orders
M/S Vishnu Sugar Mills Limited vs The Union Of India & Ors on 12 January, 2012
                IN THE HIGH COURT OF JUDICATURE AT PATNA

                                             CWJC No.13466 of 2011

                M/S Vishnu Sugar Mills Limited P.O.- Harakhua, P.S.- Vishnu Sugar Mills,
                District- Gopalganj, through its General Manager, Shri P.R.S. Panicker, son of
                Late Raghav Panicker.
                                                                                  ......Petitioner.
                                                      Versus
                1. The Union of India through the Secretary, Ministry Of Consumer Affairs
                     And Public Distribution (Department of Food and Public Distribution),
                     Government of India, Krishi Bhawan, New Delhi-110001.
                2. The Joint Secretary (Sugar), Ministry of Consumer Affairs and Public
                     Distribution (Department of Food and Public Distribution), Government of
                     India, Krishi Bhawan, New Delhi - 110 001.
                3. The Chief Director (Sugar) Government of India, Ministry of Consumer
                     Affairs, Food and Public Distribution (Department of Food and Public
                     Distribution), Directorate of Sugar, Krishi Bhawan, New Delhi - 110 001.
                4. The Dy. Director (Sugar Control), Govt. of India, Ministry of Consumer
                     Affairs, Food and Public Distribution, Directorate of Sugar, Krishi Bhawan,
                     New Delhi - 110 001.
                5. The State of Bihar through the Secretary, Department of Food Supply, and
                     Commerce, Government of Bihar, Patna.
                                                                               ......Respondents.
                                                     -----------

                For the petitioner               : Mr. Y.V. Giri, Senior Advocate with
                                                   Mr. Ashish Giri, Advocate.

                For respondents-Union of India: Mr.Raghib Ashan, Senior Advocate with
                                                Mrs. Kalpana, C.G.C.

                For the respondent-State        : Dr. Chandra Shekhar Azad, Advocate.
                                                  A.C. to G.A.-9.
                                                     -----------

                                                  PRESENT

                                     HON'BLE MR. JUSTICE S. N. HUSSAIN

                                                    ORDER

6/ 12.01.2012 Petitioner is a company incorporated under the Indian Companies Act, 1956 having its registered office at Kolkatta and having its sugar factory at Gopalganj manufacturing and supplying sugar at wholesale.

2. The petitioner has filed this writ petition for the following reliefs:- -2-

i) To issue an appropriate writ/order/direction in the nature of certiorari for quashing the decision/order dated 30.11.2010 (Annexure-8) issued by respondent no.3 the Chief Director (Sugar), Government of India, Ministry of Consumer Affairs, Food and Public Distribution (Department of Food and Public Distribution), Directorate of Sugar, Krishi Bhawan, New Delhi- 110 001 whereby and whereunder the carry forward levy liability of the sugar mills including the petitioner, which was earlier governed by order dated 18.6.2002 (Annexure-3) has been revised and thus the petitioner of carry forward levy obligation has been fixed to maximum two sugar seasons subsequent to the sugar season to which the levy obligation pertains.

ii) To issue an appropriate writ/order/direction declaring the impugned decision/order dated 30.11.2010 (Annexure-8) as ultra vires Article 14 and 19(1) (g) of the Constitution of India.

iii) To issue an appropriate writ/order/direction declaring the impugned decision/order dated 30.11.2010 (Annexure-8) violative of judgment passed by this Hon'ble Court reported in 2008(4) PLJR-181 (M/s Vishnu Sugar Mills Ltd. Vs. Union of India & Ors) Annexure-4) which has further been upheld by the Division Bench of this Hon'ble Court vide order dated 20.07.2009 (Annexure-6) passed in LPA No.438/2009 (Union of India & Ors. Vs. M/s Vishnu Sugar Mills Ltd.) by which the carry forward levy obligation has already been fixed up to 1st of November of every sugar season beyond which no levy liability can be carry forward and the liability is to start afresh, also declaring the impugned decision/order violative of judgment dated 05.11.2009 (Annexure-

7) passed in CWJC No.18498/2008 (M/s Vishnu Sugar Mills Ltd. vs. Union of India & Ors) which has further relied and clarified the judgment reported in 2008(4) PLJR 181.

iv) To issue an appropriate writ/order/direction in the nature of mandamus permitting the petitioner to sell 696.1 tone (6961 quintals) of levy sugar out of the production season 2009-10 as free sugar in open market as the respondent authorities have failed to get the same lifted before 1st of November,2010 which is the cut off date as held by this Hon'ble Court reported in 2008 (4) 181 (Annexure-4) beyond which no levy sugar liability of the petitioner sugar mill can be carry forward.

v) To any other relief or reliefs for which the petitioner is entitled for.

3. Learned counsel for the petitioner claimed that as per Levy Sugar Supply (Control) Order, 1979, the Central Government was empowered to issue directions to any producer or recognized dealer to supply levy sugar of such type or grade and in such quantities and from such place of manufacture or storage as required by the State Government and may be specified in the Order at -3- a price determined under the provision of Essential Commodities Act, 1955. In accordance with the aforesaid provision, the percentage of levy sugar and free sugar was being fixed by the Govt. of India from 1985-86 to 2009-10 and since 2001-02, the percentage was fixed as 10% levy sugar and 90% free sale. Subsequently the Department of Food and Public Distribution (Directorate of Sugar), Govt. of India found that the Governments and the Corporations were not lifting allotted sugar from the factories which resulted in huge accumulation of sugar with the sugar factories affecting their financial position also and hence it issued a circular to all the factories dated 18.06.2002( Annexure-3) allowing Sugar Mills to sell equivalent quantity of unlifted levy sugar after lapse of three months from the date of allotment, in the open market, but levy obligation of the concerned Sugar Mills was to remain unchanged, meaning thereby that it will shift to the next year in addition to next year's levy sugar.

4. Learned counsel for the petitioner also relied upon a decision of a Bench of this Court dated 02.09.2008 (Annexure-4) passed in CWJC No.9555 of 2007 (M/s Vishnu Sugar Mills Limited Vs. The Union of India & Ors) in which it was held that the carry forward rule, which was earlier held to be valid, cannot now hold good and, accordingly the carry forward liabilities would totally lapse extinguishing the liability but before this can be effective, the Central Government is given three months' time to liquidate the accumulated carry forward liabilities beyond which the same would not continue and with the next sugar production year commencing from 1 st November, 2008, there would not be any carry forward of past liability and the levy liability would start with a clean slate. The said order was also affirmed by a Division Bench of this Court vide order dated 20.07.2009 (Annexure-6) passed in L.P.A.No.429 of 2009 and LPA No.438 of 2009. The same view was also followed by a bench of this Court vide order dated 05.11.2009 (Annexure-7) passed in CWJC No.18498 of 2008. This matter also travelled upto the Supreme Court vide Petition for Special Leave to -4- Appeal (Civil) CC 3253 of 2010 which was disposed of as having become infructuous vide order dated 13.04.2011 (Annexure-9).

5. A chart with comparative statement of production of sugar in India, levy entitlement and release and lifting of levy sugar by the government during the years 2005-06, 2006-07 and 2007-08 has been annexed by the petitioner as Annexure-11 to the this writ petition which showed that the Governments and Corporations were lifting less than 5% of the levy sugar as per the quota fixed. Learned counsel for the petitioner also argued that without considering the aforesaid position of law and the situations with respect to lifting of levy sugar the Department of Food and Public Distribution, Directorate of Sugar, Govt. of India issued letter dated 30.11.2010 (Annexure-8) to all the sugar mills holding that the decision of the Central Government dated 18.06.2002 did not provide any time for carrying forward the levy obligation in respect of sugar converted from levy sugar to non-levy sugar and hence the Central Government had reviewed its earlier decision and has decided that the sugar mills will be allowed to sell equivalent quantity of their un-lifted levy sugar, which remains un- lifted after lapse of three months from the date of allotment, in the open market, but levy obligation of the concerned sugar mill will remain unchanged. However, it was directed that the period of carry forward of levy obligation would be maximum two sugar seasons subsequent to the sugar season to which the levy obligation pertains and where the levy sugar obligation of a sugar mill is carried forward to future sugar seasons, the sugar mill shall be entitled only to the levy price of the sugar season to which the levy obligation pertained.

6. Learned counsel for the petitioner claimed that due to the aforesaid impugned order, the petitioner has been suffering as levy sugar for the year 2009-10 still remained unlifted despite judicial pronouncement, whereafter season 2010-11 arrived, but major portion of levy sugar was not being lifted and thereafter now next season of 2011-12 has also started from October, 2011. He -5- further argued that if the un-lifted levy sugar for a season is sold by the petitioner and after two years the quota of levy sugar for the earlier seasons is allowed to be lifted by the Government, the producer will be put to huge loss as they will have to provide the sugars to the Government at the rate which was applicable to the levy sugar two years earlier. Hence, he submitted that the impugned order of the authority is not only violative of the specific directions of this Court, but they are also arbitrary and perverse meant to cause huge loss to the mills.

7. On the other hand, learned counsel for the respondents submitted that the impugned decision of the Government is an economic policy decision, which cannot be interfered by the courts of law. In this connection, he relied upon three decisions of the Apex Court in case of Balco Employees' Union (Regd). Vs. Union of India & Ors. Reported in (2002) 2 SCC 333; in case of OJAS Industries (P) Ltd. Vs. Oudh Sugar Mills Ltd. & Ors. reported in 2007(4) SCC 723; and in case of Bajaj Hindustan Limited Vs. Sir Shadi Lal Enterprises Ltd. & Anr, reported in (2011) 1 SCC 640.

8. Learned counsel for the respondents stated that the present policy of the Government had been affirmed by the Supreme Court vide order dated 13.04.2011 passed in Petition for Special Leave to Appeal (Civil) CC No. 3253 of 2010. Learned counsel for the respondents claimed that the aforesaid policy of the Government is not unreasonable as no ultimate loss is going to accrue to the petitioner as levy sugar is not to be kept year after year, rather the mills can sell the un-lifted levy sugar in open market, but in subsequent years, if demand is made by the Governments, the mill will have to provide equivalent quantity of levy sugar. He further averred that considering the decisions of the Courts of law, the Government has amended its policy vide the impugned circular with respect to the carry forward of levy obligation by sugar mills for all the sugar industries as a whole and not for the petitioner's sugar mill alone. -6-

9. Learned counsel for the respondents argued that availability of levy sugar varied from sugar season (October to September) to sugar season as during sugar seasons of high production, the availability of sugar production is high and demand for levy sugar is less during which the State Government and its agency do not come forward to lift the levy sugar, but during sugar season of low production, the demand of levy sugar increases and the Sugar Mills become reluctant to deliver levy sugar required by the Government and its agency which creates difficulties for the Government to make requisite quantities available to poor families and the Public Distribution System in the country is affected adversely. Hence, learned counsel for the respondents also argued that the present policy of the Government is legal, valid and proper and there is no occasion for any interference in it.

10. Considering the arguments of learned counsel for the parties and the materials on record, it is quite apparent that the ratio of levy sugar and free sale sugar for each year has been fixed by the Government at 10% and 90% respectively which is not disputed by the petitioner. This ratio can be changed and the quota of levy sugar can be raised by the government if required in any subsequent year. The only issue in dispute in this case is the carry forward rule promulgated by the Government by the impugned order providing carry forward of the levy quota to the subsequent two sugar seasons at the rate which was provided for the sugar season to which the levy obligation belonged. Hence, out of the aforesaid issue two questions arise for consideration in this case, namely (i) whether the carry forward rule provided in the impugned order is legal and justified and (ii) whether the Government/Corporation will be justified to lift levy sugar not at the rate of that sugar season, but at the rate of the previous sugar season to which the levy obligation belonged.

11. The comparative statement of production of sugar in India, levy entitlement and release & lifting of levy sugar by the -7- government/corporation during the years 2005-06, 2006-07 and 2007-08 has been produced by the petitioner as Annexure-11 to the writ petition which has not been disputed as its source is Cooperative Sugar Journal Vol.40, April, 2009 No.8 (Page nos.85-86), a monthly publication by National Federation of Cooperative Sugar Factory Limited, New Delhi. It clearly showed that although levy entitlement for the year 2005-06 at the rate of 10% was 19.27 lac tonnes, but the Government/Corporation lifted only 8.01 lac tonnes; similarly, levy entitlement for the year 2006-07 at the rate of 10% was 28.36 lac tonnes, but the Government/Corporation lifted only 9.73 lac tonnes; whereas levy entitlement for the year 2007-08 at the rate of 10% was 26.36 lac tonnes, but the Government/Corporation lifted only 9.2 lac tonnes. In the said circumstances, it is quite apparent that there has not been major deviation either in the production of the sugar or the demand of sugar or in the lifting of levy sugar for all those years and the Government/Corporation has been able to lift even less than 5% of their levy sugar entitlement. This falsifies the plea of the respondents that some years the demand for levy sugar is high and some year it is quite low which created difficulties for the Government to make requisite quantities of sugar available to poor families and public distribution system in the country is affected adversely. Hence, the basis of the order, as pleaded by the respondents, has been shown to be absolutely frivolous and misconceived.

12. Clause 2 of the Levy Sugar Supply (Control) Order, 1979 provided that Central Government may, from time to time, by order issue directions to any producer or recognized dealer to supply levy sugar of such type or grade, in such quantities and from such place of manufacture or storage to such persons or organizations or to such Governments, as may be specified in the order and at a price not exceeding the price determined under Section 3-C of the Essential Commodities Act, 1955. Section 3 of the Essential Commodities Act, 1955 describes powers of the Central Government to control production, supply, -8- distribution etc. of essential commodities. Levy sugar means sugar requisitioned by the Central Government under Section 3 of the aforesaid Act especially sub- section (2)(f) thereof. Section 3-C of the said Act describes powers of the Central Government to determine the minimum price of sugarcane, manufacturing cost of sugar, duty or tax and securing of reasonable return on the capital employed in the manufacturing of sugar and for that different prices may be determined from time to time for different areas or for different factories and for different kinds of sugar.

13. In terms of the aforesaid provisions of law, the Department of Food & Public Distribution (Directorate of Sugar), Government of India took a policy decision and issued letter dated 28.10.2010 (Annexure-14) directing the mills to provide the specified quantity of levy sugar out of the production of the year 2009-10 (October, 2009 to September, 2010) to the Government or any person or organization duly authorized by the officers of the Government referred to as the 'Consignee' subject to the conditions detailed therein. On the other hand, the impugned order dated 30.11.2010 (Annexure-8) issued by the Directorate of Sugar, Government of India is not a policy decision, rather it is merely a revised guidelines directing that the carry forward of the levy obligation would be of maximum two sugar seasons subsequent to the sugar seasons to which the levy obligation pertained with certain other conditions. This has been admitted by the respondents in paragraph 28 of their counter affidavit. There is no pleading at all in the entire counter affidavit of the respondents that the impugned order is a statutory direction.

14. Learned counsel for the respondents has relied upon a decision of a Bench of this Court dated 04.09.2006 passed in CWJC No.6964 of 2006 with respect to reasonableness of carry forward rule regarding levy sugar. The said decision had been subsequently considered by a Bench of this Court in CWJC No.9555 of 2007 and CWJC No.9892 of 2007 (M/s Vishnu Sugar Mills -9- Ltd. and M/s Riga Sugar Company Ltd. Vs. The Union of India) vide order dated 02.09.2008 reported in 2008 (4) PLJR 181 in which it had been held that carry forward rule is reasonable if it is carried forward for a reasonably short period. If it is pointed out that this carry forward rule is being extended for unreasonable long period, then the question may arise as to its reasonableness or otherwise. It was further held that carry forward rule which was earlier held to be valid, cannot now hold good and, accordingly, the carry forward liabilities would totally lapse extinguishing the liability but before this can be effective, the Central Government is given three months' time to liquidate the accumulated carry forward liabilities beyond which the same would not continue and with the next sugar production year commencing from 1 st November, 2008, there would not be a carry forward of past year's liability and the levy liability of the new year would start with a clean slate.

15. The aforesaid order of a Single Judge of this Court was challenged by Union of India vide LPA No.429 of 2009 and LPA No.430 of 2009 and both were considered by a Division Bench of this Court which did not find any good reason to interfere with the order and both the letters patent appeals were dismissed vide order dated 20.07.2009 (Annexure-6). Against the aforesaid decision of the Division Bench, the Union of India filed Petition for Special Leave to Appeal (Civil) CC 3253/2010, but after issuance of the impugned notification dated 30.11.2010, nothing survived in the said petition which stood disposed of vide order dated 13.04.2011 as having been rendered infructuous.

16. Thus, it is quite clear that the Hon'ble Apex Court vide its aforesaid order dated 13.04.2011 did not uphold the notification dated 30.11.2010, rather it rejected the claim of the Union of India on the basis of their own circular and hence the petitioner never lost his right to challenge the said notification dated 30.11.2010 which is impugned in the instant writ petition. Furthermore, the Apex Court also did not indicate or observe that the said

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notification would render the decisions of this court ineffective. The aforesaid facts and the decisions of the courts of law also indicate that the decision of this Court dated 02.09.2008 in CWJC No.9555 of 2007 and CWJC No.9892 of 2007 (M/s Vishnu Sugar Mills Limited and M/s Riga Sugar Company Limited Vs. The Union of India & Ors.) reported in 2008(4) PLJR 181 was not set aside and the findings therein were never reversed.

17. From the counter affidavit filed by the respondents in the instant case it is quite apparent that it is exactly the same pleadings which the respondents had raised in the above mentioned writ petitions bearing CWJC No.9555 of 2007 and CWJC No.9892 of 2007 and all the said objections had been laid to rest by a bench of this Court in the aforesaid decision, the relevant portions of which are noted hereinbelow.

6. ................. A sugar year is the period beginning from 01st November and ending on 31 st October, the next year. The effect is that for a production year, 10% of the total production has to be kept apart by the sugar mill for being sold to the Government or its agency at the prices notified. The price fixation has been subject matter of challenge many a times and has been upheld by Courts on the ground that it is only a part of the stocks that are acquired as levy sugar and the losses, if any, can be made up by selling the balance free stocks in open market. It was also held that the prices have been fixed keeping in view a reasonable return to the sugar mills. Levy sugar, which is so acquired by the Central Government, is allotted to various State Governments on monthly basis in order to meet their liability under the Public Distribution System and for distributing sugar to people below the poverty line. It is monthly allotment because in the Public Distribution Network, levy sugar is sold on monthly basis and is for monthly consumption. It is not that if for two months for any reason sugar is not supplied to the card holders then in the third month either they are supplied three times the monthly quota or their requirement accumulates and shoots up to three times the monthly quota. Sugar is a foodstuff for daily consumption. Daily consumption does not accumulate.

10. These facts would show that at the end of the sugar year 2006-2007 as against the total levy liability of 17,888.30 Metric Tonnes of sugar the total lifting was 11,168.00 Metric Tonnes. Thus, the unlifted levy sugar which carried forward from the year 2003-2004 was 6,720.30 Metric Tonnes. Figures would show that for the years 2003-2004 and 2004-2005, no levy sugar was lifted at all. The carry over of this 6,720.30 Metric

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Tonnes of sugar liability is much more than liabilities in the previous year and, therefore, in a subsequent year, the liability would be more than twice the year's 10% of the production. Effectively, if the entire liability was required to be discharged, the petitioner would be required to deliver over 20% of its production of ensuing year as levy liability as against statutory liability of only 10%. What petitioners question that when State is unable to utilize even half of that amount in a year how does it propose to utilize twice the amount and what is the purpose of keeping the liability levy under the carry forward rule for such long periods. There is no answer from the respondents.

12. Under the Sugar (Control) Order 1966 and orders issued thereunder, a sugar mill is not free to stock its production of free sale sugar at will. It is obliged to make weekly/monthly dispatches as sale of quantities fixed by Central Government, the failure to abide by with attracts stiff penalties and prosecutions. It will, thus, be seen that all the free sale sugar of a year is sold immediately. Now if the levy liability is not lifted then even this stock is sold but liability continues. Thus, in the year, if the sugar mills are required to deliver past levy liability as well as current levy liability, all at once, they will have in sufficient stocks to meet the same, thus, exposing them to penalties and prosecutions and that too for no fault of their's rather for fault of State. This position cannot be but termed as unfair, arbitrary and unreasonable within the meaning of Article 14 of the Constitution of India.

13. This Court, in the earlier proceedings, had held the carry forward rule valid provided carry forward was not beyond reasonable time but seeing the manner in which the liabilities are being carried forward and added to the next year liability and allowed to increase year after year, in my view, now renders the provision arbitrary and unreasonable. This is carrying forward the liability beyond reasonable limit. It must end and Government must ensure that the year's consumption requirement are set realistically and levy procurement adjusted accordingly. This balance has to be maintained notwithstanding unlike tax liability or unfilled up vacancies in service, this cannot accumulate as it is based on daily consumption which does not accumulate. If a person does not get sugar for any reason for two months, it is not that in the third month, he will consume three times the quantity. The distribution under Public Distribution System does not get increased in subsequent periods. His requirement each month he fulfills by purchase elsewhere. Thus, this carry forward rule, which was earlier held to be valid, cannot now hold good and, accordingly, the carry forward liabilities would totally lapse extinguishing the liability but before this can be effective, the Central Government is given three months' time to liquidate the accumulated carry forward liabilities beyond which the same would not continue and with the next sugar production year commencing from 01 st November 2008, there would not be a carry forward of past liability and the levy liability would start with a clean slate.

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18. Apart from the aforesaid decision, there is a circular of the Central Government dated 17.01.2005 (Annexure-21), paragraph 4 of which provides that if free sugar is not sold within the time prescribed then it becomes levy sugar. In the light of aforesaid circular the impugned notification that if levy sugar is not lifted within time it will remain levy sugar for two years more appears to be absolutely unjust and unreasonable.

19. It is also apparent from the facts and circumstances of the case that the allotment of levy sugar is on monthly basis because in the public distribution network the levy sugar is sold on monthly basis and is for monthly consumption. Hence, earlier when two months accumulated levy sugar was directed by the authorities to be released by the petitioner, the matter was challenged in CWJC no.6964 of 2006 and it was dismissed vide order dated 04.09.2006 as it was only for two months, but the Court in its aforesaid order struck a note of caution by observing that carry forward rule is reasonable if it is carried forward for a reasonable short period, but if it is sought to be extended for unreasonable long period, then the question of unreasonableness would arise.

20. When the matter was again considered by a Bench of this Court in CWJC No.9555 of 2007 and CWJC No.9892 of 2007 a Bench of this Court passed its order dated 02.09.2008 giving three months time to the Government to liquidate the accumulated carry forward liability beyond which the same would not continue and with the next sugar production year there would not be a carry forward of past liability and levy liability would start with a clean slate. This order has been affirmed by the appellate court as mentioned above.

21. Now by the impugned notification, the authority has sought to enhance the carry forward rule with respect to levy sugar from two or three months to two years which, in the light of both the decisions as mentioned above, is clearly unreasonable and against the specific decisions of the courts of law which makes it a nullity. It is quite apparent that the circumstances have not

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changed during all those times since the earlier orders passed by this Court, but the respondents are changing their stance from two months to three months and now to two years which cannot be legally allowed in the facts and circumstances of this case. Reference in this regard may be made to a decision of the Apex Court in case of Hari Bansh Lal vs. Sahodar Prasad Mahto and others, reported in (2010) 9 SCC 655.

22. The respondents-authorities cannot be allowed to use their executive fiat to take away any vested right of a citizen. One of the important elements of the rule of law is legal certainty and Article 14 of the Constitution applies to Government policies and if the policy and the Act of the Government and its authorities, even in contractual matters, fail to satisfy the test of reasonableness, then such a decision, circular or notification would be unconstitutional and the principle of judicial review cannot be denied against such government policy or decision as judicial review is intended to prevent arbitrariness and unreasonableness in the larger public interest. Reference in this regard may be made to a decision of the Supreme Court in case of Reliance Energy Ltd. and another vs. Maharashtra State Road Development Corporation Ltd. & Ors. reported in (2009) 8 SCC 1.

23. In addition to the aforesaid facts and circumstances, the impugned notification reveals that it has been issued in ignorance of the orders of the High court which have been mentioned above. Thus such orders or notifications passed or issued in ignorance of earlier decisions of the Courts and the findings given therein would be a nullity and a Court of law is bound to decide the same. Reference in this regard may be made to a decision of the Apex Court in case of Shankar Cooperative Housing Society Limited Vs. M. Prabhakar and others reported in (2011) 5 SCC 607.

24. The decisions of the Supreme Court relied upon by learned counsel for the respondents in this regard in case of Balco Employees' Union

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(Supra); Ojas Industries Pvt. Ltd. (Supra); and Bajaj Hindustan Limited (supra) are in respect of a different context not applicable to the facts of this case, specially in view of the two case laws of the Apex Court mentioned in the previous paragraphs.

25. In the said circumstances, the impugned notification/order dated 30.11.2010 (Annexure-8) issued by the Chief Director (Sugar), Ministry of Consumer Affairs, Food and Public Distribution, Directorate of Sugar, Govt. of India, New Delhi (respondent no.3) and its consequential orders are hereby quashed with a direction to the Governments or its authorized Corporations to liquidate the accumulated monthly carry forward liabilities within three months beyond which the same would not continue and with the next sugar production year commencing from October each year there would not be any carry forward of past liability and the levy liability would start with clean slate every year.

26. With the aforesaid direction/observation, this writ petition is allowed.

( S. N. Hussain, J.) Sunil/ AFR