M.M. Dutt, J.

1. In this appeal, the appellants, namely, the Union of India, the Joint Secretary to the Government of India, Ministry of Steel, Mines and Coal (Department of Mines) and the Controller of Aluminium have challenged the propriety of the judgment of a learned Judge of this Court whereby the learned Judge made absolute the Rule Nisi issued on the application of Hindustan Aluminium Corporation Limited, hereinafter referred to as HINDALCO, and one of its share-holders, under Article 226 of the Constitution. In the writ application, the respondent HINDALCO challenged the propriety and legality of five orders of the Central Government, all dated Oct. 4. 1979 under the Aluminium Control Order, 1970 passed under Section 3 ef the Essential Commodities Act, 1955. The legality and constitutional validity of the provisions of Clauses 4A and 4B of the Aluminium Control Order were also challenged in the writ application.

2. At all material times HINDALCO carried and still carries on the business of producing and/or manufacturing aluminium. It owns and operates an aluminium plant at Renukoot, in the district of Mirzapur, within the State of Uttar Pradesh. It produces and/or manufactures the following: (a) aluminium and alloy ingots, billets and wire bars, (b) aluminium wire rods known as 'properzi' rods, (c) aluminium rolled products in various shapes, (d) aluminium extrusions in various shapes and types of sections.

3. Besides HINDALCO, there arethree other companies which produceand/or manufacture aluminium and itsproducts. These companies are BharatAluminium Company Limited, which isa Central Government company theMadras Aluminium Company Ltd., andIndian Aluminium Company Ltd., hereinafter referred to as BALCO, MALCOand INDALCO respectively.

4. The production of aluminium in India is of vital importance and it is essential for the growth, development and maintenance of the economy. The Central Government by virtue of its power under Clause (xi) of Section 2 of the Essential Commodities Act, 1955 declared aluminium to be an essential commodity by a notification dated June 29, 1957.

5. The demand for aluminium has been rising because of massive investment in generation, transmission and distribution of electricity, particularly in rural electrification programme. The demand for commercial grade aluminium has also been rising principally on account of compelling need for saving energy, aluminium being a very light metal with high heat conductivity. The production of aluminium in the country, however, has not been able to keep pace with the increase in demand although the present installed capacity is adequate to meet the current demand. The shortfall in production is due to inadequate availability of power to aluminium smelters. In the circumstances, the Central Government has been compelled to arrange import of aluminium since Sept 1977. Imports are now being made through the Minerals & Metals Trading Corporation (hereinafter called MMTC).

6. In order to combat inflation in the price of aluminium the Central Government by a notification dated May 20, 1970, issued under Section 3 of the Essential Commodities Act passed the Aluminium Control Order, 1970 (hereinafter referred to as the Control Order) for the availability of aluminium and its products at fair prices and for regulating production, supply and distribution thereof. The Control Order was amended from time to time.

7. The consumption of power for production of one metric tonne of aluminium varies in different smelters of country under optimum conditions. One paise variation in the power tariff rate leads to a variation of about, Rs. 170/-per tonne (according to HINDALCO Rs. l80/- per tonne) in the cost of production of aluminium. Different State Electricity Boards charge different power tariff rates to the smelters catered to by them. The cost of production of aluminium per metric tonne, therefore, varies widely in different smelters.

8. In view of the rise in the cost of production, particularly the differenttariff rates, the cost of production of the four producers namely, HINDALCO, BALCO, MALCO and INDALCO was different The cost of production of BALCO and MALCO was much higher than that, of HINDALCO and INDALCO.

9. The Control Order as amended up to March 20, 1979 provides fixation of retention price and sale price of aluminium ingots produced by the said four producers. The retention price is fixed having regard to the estimated cost of production. The retention price is to he retained by the producer concerned, As the cost of production of HINDALCO and INDALCO were lower than that of BALCO and MALCO, the retention prices of HINDALCO and INDALCO were lower than the sale price, whereas the retention prices of BALCO and MALCO were higher than the sale price. If BALCO and MALCO were to sell aluminium, they would undoubtedly suffer loss and their industries will go on perpetually at a loss. In order to obviate this difficulty, the Control Order provides a method for fixation of the sale price. If the retention price of any producer is lower than the sale price, he has to pay the difference between the sale price and retention price to the Aluminium Regulation Account maintained by the Controller of Aluminium as provided in the Control Order. On the other hand, if thr., retention price of any producer is higher than the sale price, he would be paid the corresponding difference from the Aluminium Regulation Account. Under this method, the sale price is obtained by dividing the weighted average of the retention prices of aluminium by the total production of aluminium by the four producers. The mechanism of sale price as illustrated by the appellants in para 4.3 of their supplementary affidavit-in-opposition filed in the trial court is as follows:

CompanyEstimated production

(tonnes)Retention price

(Rs.)Amount due (Rs.) (2) x (3)

1234

A201803,200B251503,750C102502,500D15

2203,300

70

12,750

Weighted average ofretention price -- Rs. 12,750/70= Rs. 182.1 or pay. Rs. 182.

The sale price is fixed at Rs. 182. Therefore,

Awill pay in the account for every tonneSold Rs. (182-160)=Rs. 22Bwill pay in account in every tonneSold Rs. (182-150)=Rs. 32Cwill draw from the account for every tonneSold Rs. (250-182)=Rs. 68Dwill draw from the account for every tonneSold Rs. (220-182)=Rs. 38.

10. On Oct. 4, 1979, the Central Government passed five orders as contained in the respective notification. By the said orders, the Central Government fixed the sale price and retention prices of indigenous aluminium sold as ingots, billets, wire bars and wire rods under Clause 4 (1) and the first proviso to Clause 4A of the Control Order, the retention prices of indigenous aluminium ingots under Clause 4A of the Control Order, the sale and retention prices of unwrought indigenous aluminium products by an aluminium producer and transferred by him to his auxiliary plant for further processing under the third proviso to Clause 4 (1) and Clause 4A of the Control Order and the sale price of imported aluminium under Clause 4 (2) of the Control Order.

11. On Oct. 5, 1979, the Central Government issued a Press Note. It has been, inter alia, stated in the Press Note that recently there has been an increase in the power tariff of some of the smelters, resulting in corresponding increase in the cost of production, and that considering all aspects of the matter, it has been decided by the Government to revise the price of indigenously produced metal to reflect the increase in the cost of production due to the revision in the rate of power tariff. Further, if, has been stated that the Government has also decided to pool the price of the domestic metal with the price of imported metal and to fix a uniform price. The prices of aluminium of different specifications inclusive of excise duty have also been stated in the said Press Note. It has also been stated that the imported aluminium will also be sold at the prices fixed in the Press Note.

12. By the impugned orders, the retention prices of HINDALCO havebeen increased by Rs. 655/- per tonne. It is complained by HINDALCO that the said amount of Rs. 655/- per tonne is wholly inadequate having regard to the enormous increase in the cost of production that had taken place since October 1978. If is alleged that in making the impugned orders, the appellants have completely ignored the cost of production of aluminium, and that the said amount of Rs. 655/- does not even cover the increase in the cost of electrical power that has taken place since the prices of aluminium were last fixed in Oct. 1975. If has also been complained by HINDALCO that even the entire increase in the cost of power consumed by HINDALCO has not been taken into consideration by the Government in fixing the retention prices. Renusagar Power Co. Ltd. (hereinafter referred to as Renusagar) is the wholly owned subsidiary of HINDALCO. Renusagar owns and operates a coal-fired thermal power plant which generates approximately 135 MW of power. The whole of the said power generated by Renusagar (excluding the power consumed by the auxiliary plant of Renusagar) is supplied to HINDALCO for the manufacture of aluminium. It is alleged that as a result of the increase in the prices of coal by the notification daled July 16, 1979, the cost of generation of power of Renusagar has increased by about 2.25 paise per unit. Consequently the cost of production of aluminium by HINDALCO has also increased. It is alleged that in fixing the retention prices, the Government had not taken into consideration and included in the retention prices, the cost which HINDALCO has to bear on account of generation of power by Renusagar which is fully consumed by HINDALCO in the production and manufacture of aluminium.

13. On Jan. 15, 1970, the Central Government set up a body known as the Bureau of Industrial Costs and Prices (hereinafter referred to as BICP) for the purpose of giving advice to the Central Government on industrial costs and prices. In September, 1977, the BICP and the Additional Secretary fo the Government of India, Ministry of Steel, Mines and Coal (Department of Mines) recommended that since the last fixation of prices in October 1978, the increase in the cost of production of aluminium was more than Rs. 900/- per tonne onaccount of increase in the cost of raw materials other than power, and that the sale prices and retention prices of aluminium should be increased accordingly. The BICP and the said Additional Secretary also recommended further increase in the selling and retention prices of aluminium on, account of power. It is complained by HINDALCO that in spite of the aforesaid recommendations by the BICP and the said Additional Secretary the Central Government; in making the impugned orders, has arbitrarily and without any basis whatsoever completely ignored the increase in the cost of raw materials other than power which are important items in the cost of production of aluminium.

14. It is alleged that the sale and retention prices of HINDALCO fixed by the impugned orders do not cover even direct costs incurred for the manufacture of aluminium by HINDALCO. HINDALCO is now suffering a cash loss of approximately Rs. 1315/- per tonne of aluminium manufactured and sold by HINDALCO apart from the loss caused by the non-recovery of overhead, depreciation and return and the like. On a total production and sale of 110 tonnes of aluminium per day HINDALCO is now suffering a cash loss of approximately Rs. 1.45 lakhs per tonne. The said loss is wholly beyond the capacity of HINDALCO to bear.

15. It is thus apparent that HINDALCO feels aggrieved by the fixation of the retention prices of aluminium. According to HINDALCO, in fixing the retention prices of aluminium, the Central Government has not taken into account the increase in the cost of production since the fixation of retention prices in Oct. 1978. It has not also taken into consideration the increase in the cost of power which is supplied to it by Renusagar, a subsidiary of HINDALCO.

16. On Oct. 5, 1979, that is, on the day following, the impugned orders were passed, HINDALCO preferred an appeal against the impugned orders to the Central Government under Clause 11 of the Control Order. During the pendency of the said appeal, on Oct. 24, 1979, HINDALCO filed a writ petition before a learned single Judge of this Court whereupon the Rule Nisi out of which this appeal arises was issued.

17. At the hearing of the Rule Nisi, it was contended inter alia on behalf of HINDALCO as follows: (1) Clauses 4A and 4B of the Control Order were ultra vires Section 3 of the Essential Commodities Act. (2) The sale and renten-tion prices of aluminium were not fixed in accordance with Clauses 4 and 4A of the Control Order and. as such, the impugned orders were illegal and should be quashed. (3) Increases in the cost of production not having been taken into account in fixing the retention prices for HINDALCO the impugned orders were illegal and liable to be set aside. (4) The amount of money being the difference between the sale price and retention price which HINDALCO was required to pay to the Aluminium Regulation Account was tantamount to imposition of tax without any legislative sanction therefor and not authorised by Section 3 of the Essential Commodities Act. Accordingly, such imposition of tax was void and HINDALCO could not be asked to pay the differences between the sale price and retention price to the Aluminium Regulation Account. (5) The impugned orders were void under Article 14 of the Constitution inasmuch as HINDALCO was discriminated vis-a-vis BALCO without any reasonable justification therefor. (6) In fixing the sale and retention prices of aluminium by the impugned orders, the Central Government violated the rules Of natural justice in not giving HINDALCO a proper and reasonable Opportunity of being heard and, as such, the impugned orders were void.

18. On the other hand, the appellants and the MMTC sought to refute the above contentions of HINDALCO. The Central Government took preliminary objections as to the maintainability of the writ petition by HINDALCO, such objections were supported by MMTC. It was contended on behalf of the Central Government that this Court had no jurisdiction to entertain a writ petition inasmuch as no part of the cause of action arose within the territorial limits of this Court over which it exercises jurisdiction. Further, HINDALCO having availed itself of an alternative remedy by preferring an appeal to the Central Government under Clause 11 of the Control Order, the writ petition was not maintainable.

19. The learned Judge, after considering the facts and circumstances ofthe case and the submissions made on behalf of the parties, overruled the said preliminary objections raised on behalf of the Central Government and supported by MMTC. It was held by the learned Judge that a part of the cause of action had arisen within the jurisdiction of this Court and, as such, this Court had jurisdiction to entertain and dispose of the writ petition. So far as the objection to the maintainability of the writ petition on the ground of an alternative remedy is concerned, it was observed by the learned Judge that although Clause 11 of the Control Order provided for an appeal, no rules or procedure had been laid down for hearing or disposal of such appeals and no particular Tribunal or Authority had been expressly empowered to hear such appeals. During the pendency of the proceeding, the Government had nominated two officers to hear the appeal which seemed to the learned Judge to be an ad hoc arrangement. Further, HINDALCO had challenged the vires of Clauses 4A and 4B of the Control Order, and the same could not be decided by the appellate authority. In that view of the matter, the learned Judge held that, the alternative remedy was not a bar to the maintainability of the writ petition.

20. As regards the contention of HINDALCO, the learned Judge overruled all of them except one which will be stated presently. The learned Judge came to the finding that since 1978 there had been a steady increase in the prices of raw materials required for the production of aluminium, and that in fixing the prices under the impugned orders, the Government had taken into account only the rise in the rate of electricity charges and nothing more. It was observed by the learned Judge that by fixing the retention price below the cost of production, a producer might be compelled to sell its products at a loss till such price was re-fixed. As, according to the learned Judge, the Central Government had not. taken into consideration the increases in the costs of production, it acted illegally in violation of the provisions of Clauses 4 and 4A of the Control Order. Upon the said fiindings, the learned Judge allowed the writ application in part directing the Central Government. to re-consider the retention and sale prices fixed in respect of the products of 'HINDALCO, in the light of the observation made byhim in his judgment, and that till the same was done, the learned Judge directed the appellants not to give effect to the prices of aluminium fixed by the Central Government by the impugned orders.

21. Being aggrieved by the said judgment of the learned Judge, the present appeal has been filed by the Union of India and others. HINDALCO has also filed a cross-objection to the findings of the learned Judge overruling its other contentions as indicated above.

22. At the very outset, Mr. Noni Coomer Chakraborti, learned Counsel appearing on behalf of the appellants has urged the said two preliminary objections to the maintainability of the writ petition filed by HINDALCO. The first objection relates to. the jurisdiction of this Court to entertain and hear the writ petition and the second one to the bar of the writ petition on the ground of the alternative remedy of an appeal as provided for in Clause 11 of the Control Order. So far as the first, objection is concerned, it has been submitted by the learned Counsel that the impugned orders were all passed by the Central Government in New Delhi. The aluminium plant of HINDALCO is situate at Renukut, in the District of Mirzapur, within the State of Uttar Pradesh, outside the jurisdiction of this Court. It is, accordingly, submitted that no part of cause of action arose within the jurisdiction of this Court and, as such, this Court had no jurisdiction to entertain the writ petition.

23. On the other hand, it is contended by Mr. Sidhartha Shankar Ray, learned Counsel appearing on behalf of HINDALCO that although its factory is situate at Renukoot, the impugned orders have adversely affected the business carried on by HINDALCO in Calcutta within the jurisdiction of this Court. It is pointed out by him that HINDALCO has its principal office wherefrom it carries on its business at Birla Building in Calcutta, Substantial quantity of goods manufactured by HINDALCO are sold in West Bengal and in particular at Calcutta and the said sales are dealt with, inter alia, by the said office of HINDALCO at Calcutta. HINDALCO holds large stocks of aluminium manufactured by it in or around Calcutta through different Consigning Agents. The sub-stantial amount of sale proceeds out of which HINDALCO is compelled to pay into the Aluminium Regulation Account by virtue of the impugned orders was received in Calcutta. It is submitted thai in view of the impugned orders, HINDALCO has been suffering lass in Calcutta also. Accordingly, it is submitted that as the impugned orders have affected the business of HINDALCO in Calcutta, a part of the cause of action arose in Calcutta and this Court had jurisdiction to entertain the writ petition.

24. Under Article 226(2) of the Constitution, the High Court may exercise its power conferred by Clause (1) of Article 226 to issue, directions, orders or writs if the cause of action, wholly or in part, arises within the territory over which it exercises jurisdiction. It is now well settled that 'cause of action' means every fact which the plaintiff should prove, if traversed, in order to succeed in the suit. HINDALCO has come with a case that in view of the impugned orders, it. has been suffering loss in its business in the sale of aluminium and its products produced and manufactured by it in Calcutta where its principal office is situate. If there had been no allegation of incurring of any loss as a result of the impugned orders, we are afraid, there would not have given rise to any cause of action either wholly or in part, in Calcutta. Normally no person institutes any suit or proceeding unless his right is jeopardized or prejudiced in consequence of any action of a private individual or of the Government. In the writ petition, there has been a categorical averment of the suffering of loss by HINDALCO by the sale of aluminium and aluminium products in Calcutta. We are now not concerned with the truth or otherwise of the allegation as the question of jurisdiction is to be determined on the basis of the allegations made in the writ petition. If there was no such allegation of any loss suffered by HINDALCO in Calcutta, the High Court would not, entertain the writ petition, however, illegal the impugned orders may be. A writ petition is not entertained unless the petitioner comes with a case that he has been prejudiced by any action of the Government or a statutory body or authority. So, in our opinion, the writ petition, prima facie, discloses that apart of cause-of-action arose in Calcutta within the jurisdiction of this Court.

25. Mr. Chakrataorti has, however, placed much reliance upon a decision of a learned single Judge of this Court (Sisir Kumar Mukherjea J.) in Darshanlal Anand Prakash v. Collector of Customs & Central Excise, Shillong, 1974 Cal LJ 27. In that case, the petitioners challenged the notifications under item 3 (1) of the First Schedule to the Central Excises and Salt Act. 1944. By the said notifications, the Central Government classified the tea gardens into five zones for the purpose of levying excise duty at varying rates on tea produced at the gardens according to the zones to which they belonged. The challenge of the petitioners, therefore, related to the levy of duties of excise on the manufacture and production of tea. The, manufacture and production of tea by the petitioners took place in the State of Assam. The levy and collection of duties of excise also took place in the State of Assam. It was, however, contended on behalf of the petitioners that by reason of the said levy the financial position of the petitioners was adversely affected and such adverse effect was felt by them in Calcutta. The question was whether a part of the cause--of-action had arisen in Calcutta. In support of the contention that a part of the cause-of-action arose in Calcutta, it was contended on behalf of the petitioners that as they had to deposit money in the Reserve Bank of India at its Calcutta office for the payment of excise duty, it should be held that a part of the cause-of-action had arisen in Calcutta and, accordingly, this Court had jurisdiction to entertain the writ petition. It was held that such deposit was not payment of excise duty so long as it was not appropriated by the Collector of Customs and such appropriation took place at Assam by the Collector of Customs by debiting the current account maintained by the assessee in Assam. Accordingly, the said contention of the petitioners was not accepted by the learned Judge. The learned Judge also overruled the contention of the petitioners that the effect of the impugned notifications was felt by the petitioners in their places of business including Calcutta. There was, however, no averment and also no finding in that case that the petitioner had suffered loss in their business in Calcuttaas a result of the impugned notifications. In our opinion, it has been rightly observed by the learned Judge that the effect felt at a place of business of the petitioners by reason of imposition of duty levied on the petitioners' tea, is far too remote and incidental to constitute a part of the cause-of-action, Further, there is a clear distinction between the effect being felt at a place of business and suffering of loss in the business by reason of an impugned order of the Government. We do not, therefore, think that Darshanlal's case is of any help to the appellants. Nor do we think that the decision of the Supreme Court in the Advocate-General, State of Bihar v. Madhya Pradesh Khair Industries, : 1980CriLJ684 supports the contention of the appellants inasmuch as the facts of that case are completely different from those of the instant case before us. In the circumstances, we agree with the learned trial Judge that a part of the cause-of-action arose in Calcutta and this Court had jurisdiction to entertain the writ petition.

26. Now we come to the next preliminary objection to the maintainability of the writ petition. It is contended that as HINDALCO has availed itself of a remedy by way of an appeal under Clause 11 of the Control Order, the writ petition was not maintainable, Clause 11 provides that any producer, manufacturer or dealer or importing agent or any other person aggrieved by any order or direction issued under this order, may, within 30 days from the date of receipt of the copy of such order or direction, prefer an appeal to the Central Government and thereupon the Central Government may confirm, reverse or modify such order or direction. In this connection, it may be noticed that the appeal was filed by HINDALCO on Oct. 3, 1979 that is to say, on the next day of the passing of the impugned orders, all dated October 4, 1979. On Oct. 24, 1979, the Rule Nisi out of which this appeal arises was issued and an ad interim order was made by the learned Judge. On November 29, 1979, that is to say, during the pendency of the Rule Nisi, the Central Government constituted a bench consisting of two Joint Secretariesfor hearing the appeal preferred by HINDALCO under Clause 11 of the Control Order.

27. It is now well settled that where there is an adequate and efficacious alternative remedy, the High Court will not normally entertain a writ petition. This principle of law has come into existence by virtue of judicial decisions imposing self restriction on the exercise of power under Article 226 of the Constitution where there is an adequate and efficacious alternative remedy. The question of an alternative remedy being a bar is, however, a question of discretion and not of jurisdiction. Clause 11 of the Control Order provides for an alternative remedy by way of an appeal. The appeal has to be preferred to the Central Government and it is the Central Government that will dispose of the appeal. The impugned orders have all been passed by the Central Government and, although Clause 11 provides an appeal to the Central Government in our opinion, it serves no purpose. The authority which has passed an order cannot constitute itself the appellate authority against such an order. If there had been a provision for review, it would be understandable, but it is not comprehensible how an appeal would lie to the Central Government when the Central Government itself has passed the imupgned orders. In the circumstances, we do not think that the provision for appeal under Clause 11 of the Control Order is an alternative remedy to HINDALCO. The two Joint Secretaries who have been appointed by the Central Government to hear the appeal of HINDALCO are subordinate officers of the Central Government and, we are afraid, such officers would not be able to call in question the impugned orders of the Central Government. In any event, there will always be an apprehension in the mind of the appellant that no justice will be done to it in the appeal. It is true that HINDALCO has preferred an appeal before the writ petition was filed in this Court, but so far as this Court is concerned, before refusing to entertain the writ petition, it should be satisfied that the remedy which has been resorted to by HINDALCO is an alternative remedy in the true sense of the term and the relief which is sought for under Article 226 of the Constitution may be available to it in the appeal. But, as has been stated already, no appeal can lie to the Central Government against the impugned orders passed by the Central Government, the provision of Clause 11 of the Control Order does not afford an alternative remedy to HINDALCO. Moreover, in the writ petition, HINDALCO has challenged the validity of Clauses 4A and 4B of the Control Order. The appellate authority under Clause 11 will not be entitled to decide the question whether Clauses 4A and 4B are ultra vires Section 3 of the Essential Commodities Act or not. For all this, we hold that the writ petition is quite maintainable and the provision under Clause 11 is not an alternative remedy and is, therefore, no bar to the maintainability of the writ petition.

28. Before we consider the contentions of the parties On the merits Of the case ,we may discuss a few other relevant facts. The Control Order or the price control applies only to 50% of the total production by each producer in the form of electrical grade metal. The price-controlled metal was required to he delivered by the producers to the State Electricity Boards, Government Department or to any other person as directed by the Central Government. This metal is known as 'levy aluminium'. The remaining metal, that is, commercial grade was left free from price control and the producers were expected to realise the cost elements of financing charges, depreciation and profits by the sale thereof. The dual pricing policy resulted a sharp increase in the price of non-levy aluminium affecting particularly, the weaker sections of the community who are large number of users of aluminium utensils. In view of this and other considerations, the Government decided to abolish the dual pricing system for aluminium and in its place introduced a uniform price for primary metal, that is, electrical conductor grade and commercial grade ingots and wire rods, wire bars/billets made from electrical conductor grade metal. The revised prices, on a uniform basis, were introduced on Oct. 18, 1978: The retention price fixed for each aluminium producer under this policy covered the full cost of production. By virtue of the notification No. S. O. 357 (E) dated July 15, 1975 read with the notification being S. O. 600 (E) dated Oct. 16, 1975. the Government would be entitled to direct each producer to supply aluminium to the extent of 50% of his monthly production in the form of aluminium ingets, wirebars or billets or wire rods to such of the consumers as may be specified by the Controller or such other officer authorised by the Central Government in this behalf, at such price as may be fixed by the Central Government, from time to time, under the Control Order. It is now necessary to refer to Clauses 3, 4, 4A and Sub-clauses (1) to (4) of Clause 4B of the Control Order, which are as follows:

'3. Control of sale price.-- (1) No producer or manufacturer or dealer or any other person shall sell or agree to sell or otherwise dispose of indigenous aluminium at a sale price exceeding the sale price to be fixed in pursuance of Clause 4.

Explanation: For the purposes of order, any transfer of unwrought indigenous aluminium produced by a producer to his auxiliary plant for further processing and sale as indigenous aluminium of different specifications shall be deemed to be a sale and accordingly the sale price shall be fixed in pursuance of Clause 4 in respect of such quantity of unwrought indigenous aluminium so transferred;

(2) No importing agent or dealer shall sell or agree to sell or otherwise dispose of imported aluminium at a price exceeding the sale price of imported alminium fixed under Clause 4.

4. Fixation of sale price:

(1) The Central Government or theController may, having regard to theestimated cost of production or manufacture of indigenous aluminium, fixfrom time to time, by notification in theOfficial Gazette, the sale price of indigenous aluminium and different saleprices may be fixed in respect of indigenous aluminium of different sizes orspecifications or in respect of indigenousaluminium produced or manufacturedin different areas or different factoriesin India;

Provided that, where the Central Government may require any producer to supply, under Clause 4C indigenous aluminium of such specifications and in such quantities to such persons specified in that Clause, the Central Government or the Controller may, if it is considered necessary so to do, fix in respect of such indigenous aluminium, separate sale prices:

Provided further that only one price shall be fixed for indigenous aluminiumof the same specifications, whether produced in different areas or in different factories in India;

Provided also that the Government may, by order, fix the sale price of un-wrought indigenous aluminium produced by a producer and transferred by him to his auxiliary plant for further processing and sale as indigenous aluminium of different specifications.

(2) The Central Government or the Controller may, having regard to the price of imported aluminium, the estimated cost of a production of indigenous aluminium, and the provisions of Clause 4-B fix from time to time, by notification in the Official Gazette, the sale price of imported aluminium. and different sale prices of imported aluminium may be fixed, in respect of different sizes or specifications of imported aluminium.

4A. Fixation of retention price of indigenous aluminium :

The Central Government may, having regard to all relevant factors, including the estimated cost of production of indigenous aluminium produced by a producer, by order, fix from time to time, the retention price in respect of indigenous aluminium produced and sold by such producer and different retention prices may be fixed in respect of indigenous aluminium of different specifications produced by such producer. Such retention prices may also be fixed per tonne of unwrought indigenous aluminium produced and transferred by a producer to his auxiliary plant for further processing and sale as indigenous aluminium of different specifications:

Provided that, where the Central Government may require any producer to supply, under Clause 4C, indigenous aluminium of such specifications and in such quantities to such persons specified in that Clause, the Central Government or Controller may, if it is considered necessary so to do, fix in respect of such indigenous aluminium separate retention price.

Provided further that only one retention price shall be fixed for indigenous aluminium of the same specification, for each producer, whether such indigenous aluminium is produced in different areas or in different factories in India.

4B. Fair pricing of Aluminium:

(1) With a view to securing the avail-ability of aluminium to the consumersat a fair price, the Central Government may, from time to time, pool:--

(a) the retention prices of indigenous aluminium; or

(b) the weighted average of retention prices, with respect to the price of imported aluminium;

(2) An account, to be called the Aluminium Regulation Account, shall be maintained by the Controller or by such authority or person as may be specified by the Central Government in this behalf;

(3) Where the retention price fixed under Clause 4A in respect of indigenous aluminium ingot or of any other specification produced by any producer is lower than the sale price in respect of indigenous aluminium ingot or of such specification fixed under Clause 4, such producer shall, as soon as may be, after each sale, and in any case not later than such period as may be specified by the Controller in this behalf, pay into the Aluminium Regulation Account, an amount equivalent to the difference between the retention price and sale price in respect of each tonne of indigenous aluminium sold by him. Provided that where the retention price of unwrought indigenous aluminium 'produced and transferred by a producer to his auxiliary plant for further processing and sale as indigenous aluminium of different specifications is lower than : the sale price, such producer shall, as soon as may be, after each sale and in any case not later than such period as may be specified by the Controller in this behalf, pay into the Aluminium Regulation Account an amount equivalent to the product of the difference between the sale price and the retention price in respect of each tonne of unwrought indigenous aluminium and the number of tonnes of indigenous aluminium, sold by such producer and for which no sale price has been fixed.

(4) Where the retention price fixed under Clause 4A, in respect of indigenous aluminium ingot or of any other specification produced by any producer is higher than the sale price in respect of indigenous aluminium ingot or of such specification, fixed under Clause 4, such producer shall be paid from the money standing to the credit of the Aluminium Regulation Account, an amount equivalent to the difference between the retention price and sale price in respect ofeach tonne of indigenous aluminium sold by him.

Provided that where the retention prie of unwrought indigenous aluminium produced and transferred by a producer to his auxiliary plant for further processing and sale as indigenous aluminium of different specifications, is higher than the sale price, such producer shall be paid from the money standing to the credit of Aluminium Regulation Account, an amount equivalent to the product of the difference between the retention price and sale price in respect of each tonne of unwrought indigenous aluminium and the number of tonnes of indigenous aluminium sold by such producer and for which no sale price has been fixed.'

29. The Control Order has been passed under Section 3 of the Essential Commodities Act. The dominant object of Section 3 of the Act is maintenance of or increase in supplies of any essential commodity or for securing their equitable distribution and availability at fair prices. In order to fulfil that object, Section 3 authorises the Central Government to pass orders which may provide for regulating or prohibiting the production, supply and distribution of an essential commodity and trade and commerce therein. Clause (c) of Sub-section (2) of Section 3 of the Act lays down that such an order may provide for controlling the price at. which any essential commodity may be bought or sold. Clause (f) of Sub-section (2) also provides for requiring any person holding in stock, or engaged in the production, or in the business of buying or selling of any essential commodity to sell the whole or a specified part of the quantity held in stock or produced or received by him, or in the case of any such commodity which is likely to be produced or received by him, to sell the whole or a specified part of such commodity when produced or received by him to the Central Government or a State Government, or to an officer or agent of such Government, or to a Corporation owned or controlled by such Government or to such person or class of persons and in such circumstances as may be specified in the order.

30. The grievance of HINDALCO is that the retention prices for aluminium have not been fixed in accordance with the Clause 4A of the Control Order. its case is that although Clause 4Aprovides for the fixation of the retention price of indigenous aluminium having regard to all relevant factors, including the estimated cost of production of indigenous aluminium, the Government has not at all taken into consideration the increase in the prices of essential commodities, such as steel, paper, cement, coal and petroleum products which the Government was bound to take into account, The Government has not also taken into consideration the increase in the power tariff rate fully and it has also altogether ignored the cost of power supply to HTNDALCO by Renusagar, a 100% subsidiary of HINDALCO. It has been urged by Mr. Ray, learned Counsel for HINDALCO that in view of the expression 'having regard' to Clause 4A, the Government should not only take into consideration the estimated cost off production but also ensure the cost of production in the retention price that may be fixed by the Government. It is submitted that far from reflecting the increases in the prices of inputs required for production and manufacture of aluminium, the Government has not at all taken into consideration such increase in the fixation of retention prices. Before considering whether the Government is bound to reflect in the retention price of indigenous aluminium the estimated cost of production or the increase in the prices of various items of inputs, we may first of all consider whether the Government has taken into consideration such increases in the cost of production.

31. It appears that during the year 1978 till October, 1978, there was little or no increase in the purchase cost of main raw materials and inputs required for the production of aluminium. The Central Government had taken into account the prices of inputs on May 1, 1978 and the power tariff rate as revised subsequently in July 1978, and prices fixed in October 1978 reflected the entire cost of production. In para. 22 (i) of the affidavit in opposition of the appellants affirmed by one Hirak Ghosh, the Deputy Secretary to the Government of India, Ministry of Steel, Mines and Coal (Department of Mines) and Controller of Aluminium, it has been categorically averred that before issuing the impugned notifications the Government examined the increase in the cost of production of HINDALCO and also of otheraluminium producers, and that the respective retention prices of the producers, namely, HINDALCO, INDALCO, BALCO and MALCO reflected the increase in the power rates only. A supplementary affidavit-in-opposition affirmed by the said Hirak Ghosh was filed by the appellants with the leave of the learned trial Judge. In para. 11 of the supplementary affidavit-in-opposition, it has also been categorically staled, inter alia, that the Government increased the price of aluminium taking note of the increase in the cost of production due to the increase in the prices of certain essential commodities such as steel, paper, cement, power, coal and petroleum products. Such increase in the prices of each essential commodity was considered by the Government on its own merits.

32. According to HINDALCO, the Government has not even taken into consideration such increases in the costs of production, but that has been denied by the appellants and, as noticed above, it is the positive case of the appellants that such increases have been taken into consideration before fixing the retention prices of indigenous aluminium, Our attention has been drawn by Mr. Ray to the fact that para. 11 of the supplementary affidavit-in-opposition has not been properly affirmed. The said paragraph has been affirmed as true to the information of the deponent without disclosing from which source he derived such information. It must be said that para 11 has not been properly affirmed, but even if we leave out of consideration para 11, the other averments in the affidavit-in-opposition pointed out above show that, the Government has taken into consideration the increase in the cost of production.

33. The learned Counsel for HINDALCO submits that the appellants have not denied the averment in para 46 (e) of the writ petition. In that para, if, has been stated, inter alia, that the Central Government did not have regard to or proper regard to the estimated cost of production and other material factors so far as HINDALCO was concerned, Para 46 (e) has been dealt with by the appellants in para 34 (ii) of the affidavit-in-opposition in which it has been submitted inter alia that in the light of the provision of Section 3 of the Essential Commodities Act, the cost of pro-duction itself is of no relevance. It istrue that in Clause (ii) of Para 34, there has been no denial of the averments made in para 46 (e) of the petition. Para 34, however, starts with the following: 'That the contentions made by the petitioners in para 46 of the petition are not admitted. I say that proper submissions will be made thereon, on behalf of the respondent at the time of hearing.' The learned Additional Soliciter General has placed reliance upon the starting words of para 34 and submits that the allegations made in paragraph 46 including para 46 (e) of the petition have not been admitted which means a denial of the same. Much submissions have been made on the scope and extent of the word 'not admitted'. There can be no doubt that a fact stated to be not admitted is a denial of that fact. It would have been better for the appellants to specifically deny the allegations made in para 46 (e) of the petition. We do not, however, think that the absence of any specific denial is fatal to the appellants, for in considering whether an allegation, has been denied or not, the Court should not be too technical in the matter. Where, as in the instant case, allegations contained in the particular paragraph have not been specifically denied, before coming to any finding that such, allegations have been admitted by non-traverse, it will be the duty of the Court to take into consideration other averments in the affidavit and then to decide whether the allegations have been denied or not. Assertion of a fact which is contrary to another fact, is a denial of that another fact, even though the same is not specifically denied. In the instant case, HINDALCO has repeated the allegations that there has been no consideration of the increase in the cost of production by the Central Government. On the other hand, in the affidavit-in-opposition the appellants have in many places specifically averred that there has been such consideration by the Central Government. So, in our opinion, even though para 46 (e) of the petition has not been specifically denied by the appellants, it is difficult to uphold the contentions of HINDALCO that the appellants have, by non-traverse of that paragraph, admitted non-consideration by the Central Government of the increase in the cost of production. There is no reason why we should not believe the ease of the ap-pellants as pleaded in their affidavit-in-opposition that the Government had taken into consideration the increase in the cost of production. Accordingly, we do not accept the contention of HINDALCO that the Government, had not considered at all the increases in the cost of production.

34. The next question that requires consideration is whether in view of the expression 'having regard to' the Government was under a duty to ensure the producers of aluminium including HINDALCO the cost of production including increases in such cost in the retention prices. In this connection, we may refer to a decision of the Privy Council in Ishak v. Thowfeek, (1968) 1 WLR 1718, where Lord Pearson observed as follows:

'The requirement; that the Board shall 'have regard' to certain matters tends in itself to show that the Board's duty in respect of these matters is limited to having regard to them. They must take them into account and consider them and give due weight to them, but they have an ultimate discretion and are not bound to select a person or persons whom they consider unsuitable.'

The above observation of Lord Pearson which has been relied on by Mr. Ray does not support his contention that in view of the expression 'having regard to' in Clause 4A of the Control Order, the Government is enjoined to ensure or reflect in the retention price the increases in the cost of production. A Statutory requirement to 'have regard' to any existing terms or circumstances does not necessarily mean a duty to comply with them (Stroude' Judicial Dictionary Fourth Edn, Vol. 2, Page 1214). That statements has been made with reference to the decision of the Privy Council in Ishak v. Thowfeek (supra). Thus by the said observation of Lord Pearson it has not been laid down that the expression 'have regard to' means a duty. The expression, in our opinion, means that all relevant factors should be taken into account and tonsidered before the Government fixes the retention price. In Ryots of Gara-bandha v. Zamindar of Parlakimedi, AIR 1943 PC 164, the Privy Council observed that the expression 'have regard to' only obliged the Government to consider all relevant materials to which it must have regard. The SupremeCourt had occasion to consider the expression 'having regard to' in Saraswati Industrial Syndicate Ltd. v. Union of India : [1975]1SCR956 . Under Clause 7 (2) of the Sugar Control Order passed under Section 3 of the Essential Commodities Act, the Government is required to fix the price 'having regard to the estimated cost of production of sugar on the basis of the relevant schedule'. In interpreting the term 'having regard to' Beg J. (as he then was) relied on the interpretation given to the expression by the Privy Council in Ryots of Garabandhe v. Zamindar of Parlakimedy. The appellants before the Supreme Court also conceded that what the Privy Council had said was the effect of the language of Clause 7 (2) of the Sugar Control Order. We are unable to accept the contention of the learned Counsel for HINDALCO that the interpolation given to the term 'having regard to' by the Supreme Court was on the basis of the concession made by the appellants. Had it been so, the Supreme Court would not have referred to the said observation of the Privy Council. In our opinion, the Supreme Court accepted the interpretation given by the Privy Council which was also conceded to by the appellants. The importance of the decision of the Supreme Court in Saraswati's case is that the Supreme Court had to interpret the similar expression, namely, 'having regard to the estimated cost of production, occurring in Clause 7 (2) of the Sugar Control Order as in Clause 4A of the Control Order with which we are concerned, both the orders having been passed under Section 3 of the Essential Commodities Act.

35. In the later decision of the Supreme Court in State of Karnataka v. Ranganatha Reddy, : [1978]1SCR641 the Supreme Court considered the contents and purports of the expressions 'having regard to' and 'shall have regard to' and. after referring to some English decisions and the decision in Saraswati's case (supra), took the same view as expressed by Beg J. in Saraswati's case (supra). The expression 'having regard to' as interpreted by the Privy Council and the. Supreme Court does not support the contention of HINDALCO that such expression enjoins the Government to ensure or reflect the estimated cost of production in the retention, price, Whatit enjoins is, therefore, that the Government shall have regard to all the relevant factors relating to the cost of production of indigenous aluminium. There can be no doubt that consideration does not mean to give a cursory glance by the Government on the relevant materials, but it requires giving due weight to such materials. Thereafter, it would be the concern of the Government whether it would include all factors in the cost of production in the retention price or not and, in this respect, the decision of the Government would be final and conclusive unless it demonstrably leads to manifest injustice and hardship.

In an earlier decision in Union of India v. Kamalabai, : [1968]1SCR463 relied upon by Mr. Ray for HINDALCO. the Supreme Court had to consider the scope and extent of Section 8(1)(e) of the Requisitioning and Acquisition of Immovable Property Act, 1952. Clause (e) relates to the making of an award by the Arbitrator determining the amount of compensation payable for the requisitioning or the acquisition of any property. It provides inter alia that in making an award, the Arbitrator shall have regard to the circumstances of each case and the provisions of Sub-sections (2) and (3) so far as they are applicable. Sub-sections (2) and (3) enjoin what the amount of compensation payable for the requisitioning or the acquisition of any property shall consist of. It has been observed by G. K. Mitter J. who delivered the judgment of the Supreme Court that the expression 'have regard to'' in Sub-clause (e) of Sub-section (1) of Section 8 does not, give the Arbitrator any freedom of considering the two modes laid down in Sub-section (3) and accepting the one which he thinks fair. It is clear that the expression 'having regard to' has been interpreted by the Supreme Court as above in the context of Section 8(1)(e) and subsections (2) and (3) thereof. After the acquisition of any property, the Government is to pay compensation to the owner of the property, such compensation should be the just equivalent of the market price. Indeed, Sub-section (3) of Section 8 which has been couched in a mandatory language provides as to what should be the amount of compensation payable for acquisition of anyproperty. In that context, it has been held by the Supreme Court that the expression 'having regard to' in Clause (e) of Section 8(1) does not confer on the Arbitrator any discretion not to include in the amount of compensation, any of the amounts as mentioned in Cls. (a) and (b) of Sub-section (3). If the Arbitrator had such a discretion, in that case, the compensation that would be awarded might not be the just equivalent of the market price. In the circumstances, we do not think that the said interpretation of the term 'having regard to' as made by the Supreme Court in Kamala-bai's case (supra) in the context of the facts of that case will have any application to the instant case.

36. In this connection, we shall consider a few other decisions of the Supreme Court which have been relied onby the learned Counsel for HINDALCO.In Panipat Co-Operative Sugar Millsv. Union of India, : [1973]2SCR860 andin Anakapalle Co-Op. Agrl. & Industrial Society Ltd. v. Union of India, : [1973]2SCR882 , the Supreme Courthad to consider Section 3(3C) of theEssential Commodities Act. Section 3(3C) reads as follows:

'3 (3C). Where any producer is required by an order made with reference to Clause (f) of Sub-section (2) to sell any kind of sugar (whether to the Central Government or a State Government or to an officer or agent of such Government or to any other person or class of persons) and either no notification in respect of such sugar has been issued under Sub-section (3-A) or any such notification, having been issued, has ceased to remain in force by efflux of time, then, notwithstanding anything contained in Sub-section (3), there shall be paid to that producer an amount therefor which shall be calculated with reference to such price of sugar as the Central Government may, by order, determine, having regard to-

(a) the minimum price, if any, fixed for sugarcane by the Central Government wider this section;

(b) the manufacturing cost of sugar;

(c) the duty or tax, if any, paid or payable thereon; and

(d) the securing of a reasonable return on the capital employed in the business of manufacturing sugar, and different price may be determined, from time to time, for different areas,or for different factorie or for different kinds of sugar.

Explanation.-- For the purpose of this sub-section, 'producer' means a person carrying on the business of manufacturing sugar.'

In these two decisions, the Supreme Court has not interpreted or considered the expression 'having regard to' occurring in Section 3(3C) of the Essential Commodities Act, but held that the fair price has to fee determined in respect of the entire products ensuring to the industry a reasonable return on the capital employed in the business of manufacturing sugar. One of the factors to which the Government shall have regard to in determining the price of sugar is the securing of a reasonable return on the capital employed in the business of manufacturing sugar. It is contended by Mr. Ray that in holding that the fair price has to be determined in respect of the entire production ensuring to the in industry a reasonable return on the capital employed in the business of manufacturing sugar, the Supreme Court had in its mind the expression 'having regard to' in Section 3(3C) and the scope and extent thereof. In support of the said contention, much reliance has been placed by Mr. Ray on a later decision of the Supreme Court in Prag Ice & Oil Mills v. Union of India, AIR 1979 SC 1296. That was a case on the Mustard Oil (Price Contral) Order, 1977 issued under Section 3 of the Essential Commodities Act. In that case, one of the contentions of petitioners was that fixation of a price without en-suring a reasonable return to the pro-ducers or dealers was unconstitutional In support of that contention, the decision of the Supreme Court in Panipat's case (supra) and in Anakapalle's case (supra) were relied upon. In repelling the said contention, the Supreme Court observed as follows (at p. 1316). 'Counsel for the petitioners relied upon the decisions in Panipat Co-Ope-rative Sugar Mills v. Union of India, : [1973]2SCR860 send Anakapalle Cooperative Agricultural and Industrial Society Ltd. v. Union, of India, : [1973]2SCR882 in support of their contest-tion that a fixation, of a price without ensuring a reasonable return to the pro-ducers or dealers is unconstitutional. The infirmity of this argument, as pointed out in Meenakshee Mills v. Union ofIndia AIR 1974 SC 366is that these two decisions turn on the language of Section 3(3C) of the Essential Commodities Act under which it is statutorily obligatory to ensure to the industry a reasonable return on the capital employed in the business of manufacturing sugar. These decisoins can, therefore, have no application to cases of price fixation under Section 3(1) read with Section 3(2)(c) of the Act Cases falling under Sub-sections (3-A), (3B) and (3C) of Section 3 of that Act belong to a different category altogether.'

37. Relying upon the said observation of the Supreme Court it has been strenuously urged by Mr. Ray that in view of the expression 'having regard to' in Section 3(3C) of the Essential Commodities Act, the Supreme Court was of the view that it was statutorily obligatory to ensure to the industry a reasonable return on the capital employed in the business of manufacturing sugar. The same expression being in Clauae 4A of the Control Order, Mr. Ray submits, it should be held that it is statutorily oblgatory on the part of the Central Government to ensure to the aluminium industry the estimated cost of pvoduction or the increases in the cost of production in the retention price of indigenous aluminium. Counsel submits that in Prag Ice & Oil Mills' case, the Supreme Court has, in effect construed the expression 'having regard to' as denoting an obligation on the part of the Government.

38. Attractive though the contention is, we regret, we are unable to accept the same. It will be incorrect to say that in Prag Ice & Oil Mills' case (AIR 1976 SC 1296), the Supereme Court considered or interpreted the expression 'having regard to' accurring in. Sec. 3(3C) of the Essential Commodities Act. It is true that in Panipat's case and in Ankapalle's case : [1973]2SCR882 , it has been observed that Section 3(3C) ensures a reasonablev return to the pre-ducers or manufacturers of sugar on the capital employed by them but such ob-servation has been, made not on the interpretation of the term 'having regazd to', but for some other reasons which will be stated presently.

39. In Panipal's case (AIR 1973 SC 507) the Supreme COURT has noticed that Sub-section (8C) of Section 3 of the Essential Commodities Act was incorporated into the Act b an amendmentthereof, Further, the Tariff Commission in 1956 and the Sugar Enquiry Commission in 1965 had worked out the zonal cost schedules on the basis of averaged recovery and duration, the minimum and not the actual price of cane, the averaged conversion costs and recommended a reasonable return on the capital employed by the industry in the business of manufacturing sugar. Thisexperience was before the legislature at the time when Sub-section (3C) was inserted in the Act. The legislature therefore, incorporated the same formula in the new sub-section as the basis for working out the price. The purpose behind enacting the new sub-section was three-fold, namely, to provide an incentive, to increase production of sugar, encourage expansion of the industry to devise a means toy which the cane producer could get a share in the profitsof the industry through prices for his cane higher than the minimum price fixed and secure to the consumer distribution of at least a reasonable quantity of sugar at a fair price. It has been observed by the Supreme Court that there can beno doubt that these were the objectives for which the sub-section was passed. It is thus apparent that in the background of the facts stated above, the Supreme Court in the cases of Panipat and Anakapaile held that, a reasonable return should be ensured to the sugar industry on the capital employed. Further, in that background, Sub-section (3C) was interpreted by the Supreme Court as making it obligatory for the Government to secure a reasonable return on the capital employed in fixing the price of sugar and that has also been noticed fey the Supreme Court in its later decision in Prag Ice & Oil Mills' case. We are, therefore, unable to accept the contention of the learned Counsel for HINDALCO that in view of the said observation of the Supreme Court in Prag Ice & Oil Mill's case it should be held that under Clause 4A of the Control Order, it is statutorily obligatory for the Government to ensure or reflect in the retention price, the estimated cost of production or the increases in the prices of inputs.

40. It is said on behalf of HINDALCO that, if the Government is not bound to include in the retention price all the increases in the cost of production, reasonable return on the capital employed apart, the producer will sufferloss, it is urged that the Government not having reflected in the retention price the increases in the prices of various inputs of production for which the Government is responsible and thewhole of increase in the power tariff rate, HINDALCO has suffered loss since the revision of retention and sale prices m terms of the impugned orders. Indeed. from the balance sheet of HINDALCO for the year 1980 an endeavour has been made before us by the learned Counsel for HINDALCO to show that in that year HINDALCO has suffered a loss of about Rs. 21 lakhs in regard to production of aluminium. The appellants and MMTC, however, do not admit that HINDALCO has suffered any loss whatsoever; on the contrary, it is their case that HINDALCO has made a profit of 1,98,47,197/- after deducting fromits income a sum of RS. 14,30,44,230/-which has been set apart as the amount payable to the Aluminium Regulation Account. It is, however submitted on behalf of HINDALCO that in calculat-its income from production of aluminium, its income from sources other than from aluminium amounting to Rupees 1,40,23,342/- should be excluded and upon such exclusion, the balance sheet shows that HINDALCO has suffer-ed a loss of Rs. 20,76,145/-. Much submissions have been made on behalf of the parties as to whether HINDALCO has suffered a loss or has gained a profit or not The question of profit or loss was not raised before the learned trial Judge, the balance sheet was not produced and no affidavit in support of the respective cases of the parties relating to profits and loss of HINDALCO was filed. At this stage, we do not propose to embark on the question whether HINDALCO has suffered a loss or has gained a profit from its aluminium business in 1980. We shall, however proceed on the assumption that HINDALCO has suffered a less of Rupees 20,00,000/- and odd in 1980 as a result of the implementation of the impugned orders or the revision of the retention and sale prices of aluminium.

41. A question will naturally arise whether the Government will be justified in fixing the retention price of aluminium in such a way as would entail a loss to the industry. Mr. Ray has placed reliance upon the observation of Ray C. J. in Meenakshee Mill's case : [1974]2SCR398 (supra) on CottenTextile (Control) Order; 1948 that the fair price must be fair not only from the point of view of the consumer but also from the point of view of the producer, and that any restriction in excess of what would be necessary in the interest of general public or to remedy the evil. has to be very carefully considered so that the producer does not perish and the consumer is not crippled, At the same time, it has also been ob-served that the aspect of ensuring availability of the essential commodities to the consumer equitably and at fair price is the most important consideration. The dominant object, of Section 3 of the Essential Commodities Act as stated already, is maintenance and increase in supplies, equitably distribution and availability at fair price of the essential commodity and, with that object in view the Government has to takemeasures for regulating the production or manufacture of any essential commodity and for controlling the price at which such commodity may be bought or sold. These mesures are taken obviously in the interest of the consumers which is of paramount consideration. The interest of producer or manufacturers of an essential commodity is no doubt a factor to be taken into consideration, but surely it is of much lesser importance and must yield to the interest of the general public who are the consumers. This does not mean that the Government will not look to the interest of the industry, and it is theduty of the Government to strike a balance between the need or the demand for the essential commodity concerned and the interest of the industry. but in no case the interest of the industry should be given preference and predominant consideration surrendering public benefit. If in serving the interest of the public the industry has to suffer a loss for a temporary period, such loss cannot, be considered a relevant factor in setting at naught the governmental action in faxing the price of an essential commodity. Care should also be taken by the Government to see that the loss is not a perpetual one or a huge loss which may result in the closure of the industry but because the industry has suffered a loss for the time being that will be no ground for setting aside the governmental policy relating to the fixation of the_price of an essentialcommodity. The Price Control Order is to achieve the objectives of Section 3 of the Essential Commodities Act, namely, for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices. The Court will consider whether such objectives have been achieved by the Price Control Order, and it will be an irrelevant factor that in achieving the same some loss has been or may be caused to a particular industry. The view that we have taken finds support from the decision of the Supreme Court in Prag Ice & Oil Mill's case : 1978CriLJ1281a (supra) where special emphasis has been laid on the said objectives. We do not think that the observation of the Supreme Court in Prag Ice & Oil Mill's case to the effect that the producer will in certain circumstances have to bear a loss has been made in the context, of abnormal situations, as contended by the learned Counsel for HINDALCO. It may be that there was some abnormal situation in the sense that there was illegal hoarding of mustard oil and an artificial rise in the price thereof. But whatever may be the situation, it is clear from that decision that the paramount consideration and dominant, object of Section 3 is the interest of the consumers and not of the industry.

42. In Laxmi Khandsari v. State of U. P., : [1981]3SCR92 the Supreme Court has reiterated the observation made in its earlier decision in Prag Ice & Oil Mill's case relating to the objects sought to be achieved by Section 3 of the Essential Commodities Act and its view that there is no obligation to fix the price in such a way as to ensure reasonable profits to the producer or manufacturer. The question has been answered by the Supreme Court positively in New India Sugar Works v. State of U. P., : [1981]3SCR29 That case was on the validity of the notification imposing levy on sugar. In that context Fazal Ali J. after reviewing the decisions on the point observed as follows (Para 4) :

'It was next strenuously contended that in fixation of the price of levy sugar the Government has not taken into consideration the fact that the petitioners would undergo a serious loss because the price would not be sufficient even to cover their manufacturing cost. We are, however, unable to agreewith this argument. The policy of price control has for its dominant object equitable distribution and availability of the commodity at fair price so as to benefit the consumers. It is manifest that individual interests, however, precious, they may be must yield to the larger interest of the community namely, in the instance case, the large body of the consumers of sugar. In fact, even if the petitioners have to bear some loss there can be no question of the restrictions imposed on the petitioners being unreasonable.'

43. In view of the above decisions of the Supreme Court and particularly the decision in the case of New India Sugar Works, no challenge can be made to the impugned orders of the Government passed under the Control Order on the ground that HINDALCO has suffered loss.

44. We have so far proceeded on the assumption that HINDALCO has suffered a loss, for, as alleged by it, the retention price does not reflect all the increases in the prices of various inputs of production. We would however, like to state some significant facts. On Sept. 28, 1979 under a covering letter, HINDALCO submitted to the Controller of Aluminium a statement, showing the increase in the cost of production due to increase in the costs of raw materials, power and stores (Annexure IV to the affidavit-in-opposition). Rs. 3,275/- was shown to be the total increase on controlled items on account of raw materials, power, stores and sundries for each tonne of aluminium ingot. An additional increase in the cost of uncontrolled fabricated items was claimed in the, statement to be Rs. 400/- per tonne of such items. In the said letter it was stated that by way of an interim measure, HINDALCO increased the price of uncontrolled metal by Rs. 2,200/- per tonne pending revision of prices of aluminium by the Government, It was alleged that even after the increase in the price, the uncontrolled fabricated items still fall short of Rs. l,475/- per tonne, and the controlled items by Rupees 3,225/- per tonne as compared to the actual increase in the. cost of production, causing continued heavy losses. It was alleged, in para. 41 of the writ, petition that even after the sale and retention prices were fixed by the impugned orders, on a total productionand sale of 110 tonnes of aluminium metal per day, HINDALCO was suffering a cash loss of approximately Rs. 1.45 lakhs per day.

45. It was, however, pointed out by the appellants in para. 23 of their affidavit-in-opposition that since HINDALCO produced 25,000 tonnes of uncontrolled semi-fabricated items per annum the additional receipts on account of average increase in prices by Rs. 2,200/- per tonne would amount to Rs. 1.5 lakhs per day. Further, it was pointed out that HINDALCO again raised the prices of semi-fabricated items taking into account the increase in the prices by the impugned orders dated October 4, 1979. These increases, if, was averred, more than compensated HINDALCO of its alleged loss of 1.45 lakhs per day on account of the retention prices of the controlled items. It was alleged that HINDALCO's intention was to reap a double benefit by moving this Court praying for increase in the retention prices. In para. 18 of the affidavit-in-reply, HINDALCO admitted that after the revision of the sale and retention prices by the impugned orders it increased the prices of uncontrolled semi-fabricated items by Rs. 1,170/- -per tonne over and above the increase of Rs. 2,200/- per tonne effected immediately before the impugned orders were passed. Thus, after the passing of the impugned orders, the total increase that was made by HINDALCO in the prices of uncontrolled semi-fabricated items of aluminium was Rs. 3,370/- per tonne, that is to say above the total increase in the costs of the inputs of the controlled metal. The significant fact to be noticed is that while the appellants in para. 23 of their affidavit-in-opposition averred that in view of the increase by HINDALCO of the prices of uncontrolled semi-fabricated items by Rs. 2,200/-per tonne, HINDALCO got an additional receipt of Rs. 1.5 lakhs per day, the alleged loss being Rs. 1.45 lakhs per day was not denied in para. 18 of the affidavit-in-reply, although it wag alleged that losses suffered by it on controlled items had not been compensated at all. It was also not disclosed by HINDALCO in para. 23, what the daily additional receipt was consequent on the increase in the prices of uncontrolled items by Rs. 2,200/- per tonne, Moreover, it has been noticed already that HINDALCO further, increased theprices of uncontrolled items by Rupees 1,170/- per tonne over and above Rs. 2,200/-. If after the increase by Rs. 2,200/- there was an additional receipt of Rs. 1.5 lakhs per day, the additional increase would surely amount to much more than Rs. 1.5 lakhs per day. Thus it is difficult to accept the case of HINDALCO that it was suffering a cash loss of Rs. 1.45 lakhs per day.

46. While we are on Clauses 4A and 4B of the Control Order, We may consider the case of HINDALCO that the said clauses are ultra vires Section 3 of the Essential Commodities Act which is one of the grounds in the cross-objection. It is argued on behalf of HINDALCO that Clauses 4A and 4B impose a tax on the producers and/or manufacturers of aluminium without there being any specific provision in that regard in Section 3 of the Essential Commodities Ad. The contention made on behalf of HINDALCO is that as it has to pay the difference between the sale price and retention price in the Aluminium Regulation Account as provided in Clause 4B, such payment is tantamount, to an imposition of tax without any legislative sanction. The above contentions were also made before the learned Judge, but the learned Judge overruled the same.

47. Latham C. J. of the High Court of Australia has, in Mathews v. Chicory Marketing Boards 60 CLR 263 defined 'tax' as follows:

'A tax is a compulsory exaction of money by public authority for public purposes enforceable by law and is not payment for services rendered'. It has been observed by B. K, Mukherjea J. (as he then was) in the decision of the Supreme Court in Commr., Hindu Religious Endowments, Madras v. Lakshmindra Tirtha Swamiar, : [1954]1SCR1005 that the definition as given by the learned Chief Justice of the High Court of Australia brings out the essential characterstics of a tax as distinguished from other forms of imposition. Keeping that definition in view, We shall proceed to consider whether Clauses 4A and 4B of the Control Order seek to impose any tax on the producer or manufacturer of aluminium.

48. In support of his contention that the payment in the Aluminium Regulation Account is indirectly an imposition of tax, Mr. Ray has placed much reliance on a decision of the Privy Council in Lower Main Land Dairy Products Sales Adjustment Committee v. Crystal Diary, Limited, 1933 A. C. 168. What happened in that case was that because it was more profitable to dairy farmers in British Columbia to sell their milk in a fluid form than to sell products manufactured from it, there was congestion in the fluid milk market, caused by a shortage of demand. As a remedy, the Provincial Legislature passed the Daily Products Sales Adjustment Act, 1929 authorising the appointment of an adjustment. Committee. The Committee fixed monthly the standard prices for fluid milk and manufactured products. The farmers had to submit returns to the Committee as to the quantity of milk sold by them, and a farmer selling fluid milk had to pay to the Committee a levy assessed according to the quantity he sold. The total of these levies which together made up the difference in value of the milk disposed of in the two forms, was to be apportioned by the Committee among the farmers who had sold milk products. The expenses of the Committee were to be met by a further levy on the farmers. Both the levies were recoverable as debts, Lord Thankerton who delivered the iudgment of the Board observed as follows:

'The main issue of this appeal is whether the adjustment levies are taxes.....In the opinion of their Lordships, the adjustment levies are taxes. They are compulsorily imposed by a statutory committee..... They are enforceable bylaw. Compulsion is an essential feature of taxation. The Committee is a public authority, and the imposition of these levies is for a public purpose. The fact that moneys so recovered or distributed as bonus among the traders in the manufactured products market, does not affect the taxing character of the levies made.'

The statement of law and the essential characteristics of 'tax' as contained in the said observation of Lord Thankerton has been approved by the Supreme Court in the case of Venkata Subbarao v State of Andhra Pradesh : [1965]2SCR577 .

49. Relying upon the said decision of the Privy Council, 1933 A. C. 168, it is urged by the learned Counsel of HINDALCO that it should be held that Clauses 4A and 4B of the ControlOrder impose a tax on the producers and manufacturers of aluminium by directing payment in the Aluminium Regulation Account the difference between the sale price and the retention price. In our opinion the facts of the said Privy Council case are different from those in the instant case. In the Privy Council case, the adjustment levies were assessed according to the quantity of milk sold by a farmer. Each farmer had to pay the adjustment levies out of the sale proceeds of milk. The money that was levied from each farmer was his money. It was compulsorily imposed and was enforceable by law. So there can be no doubt that there was compulsory exaction of money by a public authority for public purposes enforceable by law and was not payment for any services rendered. Thus the adjustment levies squarely came within the definition of 'tax' as given by Chief Justice Latham in Matthews v. Chicory Marketing Board (supra). In the instant case, mbney that is required to be paid by HINDALCO into the Aluminium Regulation Account, that is to say, the difference between the sale price and the retention price of aluminium, does not belong to HINDALCO. In order that a particular imposition can be characterised as tax, it must be proved that the amount that has to be paid belongs to the person from whom if is recovered. It is only the person entitled to a sum of money compulsorily recovered from him by any statutory authority can assail such recovery or imposition as 'tax' if it be without any legislative sanction. But a person who is merely the holder of the money for the time being but not entitled to the same cannot, in our opinion, assail the recovery of the same as tax, even if such recovery is without any legislative sanction, for, in such a case, there would be no element of exaction which is a sine qua non to the imposition being a tax. For these reasons, the earlier Privy Council case in the City of Halifox v. Nova Scotia Car Works Limited, 1914 AC 992 : (AIR 1914 PC 227 (2)) and the decision in Attorney-General v. Wills United Dairies Ltd., (1922) 127 LT 822 which have been relied on by Mr. Ray do not apply to the facts of the instant case.

50. It is not the case of the appellate that Section 3 of the Essential Commodities Act authorises the imposition of any Tax, for, according to them, Clauses 4A and 4B of the Control Order do not seek to impose any tax on the aluminium producers or manufacturers. Section 3 does not at all contemplate an imposition of tax. It is no doubt true that without any express and specific authority of a statutory provision a tax cannot be imposed on any person. But as we have held that there is no exaction of money from HINDALCO or from any other producers or manufacturers of aluminium, the question of imposition of tax does not at all arise.

51. Realising the difficulty Mr. Ray has for the first time advanced an argument that the whole of the sale price including the retention price belongs to the producer concerned, namely, HINDALCO. In elaboration of this contention, the learned Counsel submits that Section 3 of the Essential Commodities Act contemplates the fixation of one price, that is, the sale price which the seller is legally entitled, without any statutory interference to retain the entirety of the same received by him from the consumer. It is contended that 'retention price' as provided in the Control Order is a complete misnomer and is not envisaged by Section 3 of the Act, In a transaction of sale and purchase between the buyer and seller, the only factor that affects the transaction is the sale price and not the retention price. So it is submitted that the whole of the sale price belongs to the producer which is also borne out by the fact that it is the producer who is alone entitled to sue a customer for the realisation of unpaid sale price. Thus, Counsel for HINDALCO submits, to ask the producer to part with a portion of the sale price by payment of the same in the Aluminium Regulation Account is exaction of money and, as such. imposition of tax in the true sense of the term. It is urged that Clauses 4A and 4B of the Control Order providing for payment in the Aluminium Regulation Account the difference between the sale price and the retention price are ultra vires Section 3 of the Act inasmuch as Section 3 does not postulate fixation of retention price for payment of 3 portion of the sale price in the Aluminium Regulation Account.

52. The above contentions, in our opinion are fallacious. The objectives under Section 3 of the Essential Commodities Act Cinder which the Control Order has been passed are maintenance or increase in supplies or equitable distribution and availability at fair prices of any essential commodity. To achieve these objectives, Section 3 authorises the Central Government to pass orders regulating or prohibiting the production, supply and distribution of any essential commodity and trade and commerce therein. What Section 3 aims at is that the essential commodity should, be made available to the consumers at a fair price. Fixation, of fair price only will not necessarily render the essential commodity available to the consumers, In order to make the essential commodity available to the consumers at a fair price, not only the fair price has to be fixed but, if there is no adequate simply of the essential commodity, supply thereof has to be increased.

53. The Government has fixed the sale price of indigenous aluminium which is considered to be fair and within the pecuniary limits of the consumers. The cost of production of HIN-DALCO is lower than the sale price but it is higher so far as BALCO and MALCO are concerned. If BALCO and MALCO have to sell aluminium at the sale price without any subsidy, they will have to close their business, for they cannot be compelled to produce and sell aluminium at a perpetual loss, Closure of their business would seriously, affect, the supply and availability of aluminium. If the supply of Aluminium is such that it cannot meet the demand, mere fixation of the sale price would serve no purpose of the consumers and, consequently, the objectives under Section 3 of the Act cannot be achieved. In order to obviate this difficulty the concept of retention price normally reflecting the cost of production has been introduced. As the retention price fixed for HINDALCO is lower than the sale price, it has to pay to the Aluminium Regulation Account the sum which is the difference between the sale price and the retention price. Such sum will be paid to BALCO and MALCO as subsidy making up the losses that might be suffered by them or, in other words, making up the difference between their respective retention prices and the sale price. Thus, it appears that the steps taken by the Government by the fixation of a retention price for each producer and the saleprice and the provision for payment to the Aluminium Regulation Account were necessary in the interests of the consumers so as to maintain supply of aluminium consistent with the demand therefor and to make it available to the consumers at a fair price.

54. It is not correct to say that Section 3 of the Act contemplates fixation of one price, that is, the sale price and no other price. In Diwan Sugar Mills v. Union of India, : AIR1959SC626 it has been observed by the Supreme Court that it is perfectly legitimate for the Government, keeping in mind the object of availability at fair price, to fix different prices at different stages but only the price at one of the stages depending upon the Government's estimate of the situation, would serve the object of the Act. In the instant case, the Government, has fixed one sale price at which the essential ccommodity namely, aluminium will be sold to the consumers. It is true that the Government has also fixed for each producer a retention. price which a producer will be entitled to get out of the sale price. Fixation of retention prices is necessary for the purpose of fulfilling the object of availability of aluminium at a fair price. We are un-able to accept the contention or the. learned Counsel for HINDALCO that, Government has no power to fix retention prices. Such power can be found, in Section 3 itself and that is the regulatory power of the Government. It is obvious -that the power to regulate has been conferred on the Government in order to achieve the objects of Section 3. It has been already discussed that if retention prices are not fixed and no payment is required to be made to the Aluminium Regulation Account, there would be no supply commensurate with the demand and, consequently, non-availability of the commodity at a fair price. Thus it was incumbent upon the Government to fix the retention prices for different producers and provide for payment to the Aluminium Regulation Account. The expression 'regulation' in Section 3 of the Act should be given a liberal interpretation (See P. P. Enterprises v. Union of India : [1982]3SCR510 ). Thus unless it is manifestly unjust, any action by the Government in exercise of its regulatory power in the matter of availability of any essential commodity at afair price will be perfectly legal and justified. For all this we hold that the provisions for fixation of retention prices and for payment in the Aluminium Regulation Account are quite legal and valid.

55. There is no substance in the contention of HINDALCO that it is entitled to the whole of the sale price.No such claim was ever made by. it before, for it could not be made. Theclaim has been made for the first timebefore us with a view to characterisingthe payment in the Aluminium Regulation Account as exaction of moneyamounting to imposition of tax. It hasbeen found already that such payment is not tax, for HINDALCO is notentitled to the whole of the sale price.It is only entitled to the retention priceas fixed by the Government, which isless than the sale price. It may be thatfor the time being a producer whoseretention price is less than the saleprice holds the whole of the sale priceand, in case of non-payment of thesale price by a consumer, the producerwill be entitled to institute a legal action for the realisation of the samebut that is no consideration justifying aclaim by the producer to the whole ofthe sale price. The sum of money inexcess of the sale price is held by theproducer concerned to the credit of theAluminium Regulation Account so longas it is noi deposited in that Account.The view which we have taken, that themoney that is required to be paid byHINDALCO to the Aluminium Regulation Account does not belong to it, noris it by way of imposition of tax,finds support from the decision of theDelhi High Court in B D. Aggarwala v.Union of India, ILR (1974) 2 Delhi 520.(The above contentions made on behalfof HINDALCO are, accordingly, overfilled.

56. At this stage we shall refer to a contention of the learned Additional Solicitor-General that unless any money realised by the Government goes to the Consolidated Fund, it cannot be regarded as tax. It is submitted that as the amounts deposited in the Aluminium Regulation Account do not go to the Consolidated Fund but are, distributed among certain producers of aluminium, such amounts' cannot be on account of any tax imposed by the Government. In support of, the contention, the learned Additional Solicitor-General has placedreliance upon the provision of Article 266 of the Constitution and a few decisions of the Supreme Court, namely, Hingir-Rampur Coal Company v State of Orissa, : [1961]2SCR537 ; Govt. of Madras v. Zenith Lamps & Etectricals Ltd. : [1973]2SCR973 ; State of Rajasthan v. Sajjan Lal, : [1974]2SCR741 and Southern Pharmaceuticals & Chemicals v. State of Kerala : [1982]1SCR519 . In view of our finding that the money which HINDALCO is required to pay in the Aluminium. Regulation Account does not belong to it and, consequently, there being no exaction ofsuch money, it is not tax, it is hardly necessary for us to consider the contention that as the money does not go to the Consolidated Fund it does not partake of the character of tax.

57. The third proviso of Clause 4 (1), Clause 4A, the first proviso to Clause 4B (3) and the proviso to Clause 4B (4) of the Control Order provide for the fixation of sale and retention prices with regard to the unwrought aluminium transferred by a producer from one place to another, namely, to his auxi-liary plant and payment of the differ-ence between these prices either in or out of the Aluminium Regulation Account. It appears that the Control Order has made a distinction between a producer and a manufacturer. A producer is one who produces aluminium from bauxite or alumina. A manufacturer is one who manufactures aluminium, that is to say aluminium of different specifications. The manufacturers of al-minium purchase aluminium ingots from the producers for the purpose of manufacture of different aluminium goods. These purchases are to be made at the sale price fixed by the Government under the Control Order. HINDALCO is both a producer and a manufacturer of aluminium. It has auxiliary plants for processing un-wrought indigenous aluminium into aluminium of different specifications, such as sheets, circles, sections etc. Under the third proviso of Clause 4 (1) of the Control Order, the Government has been authorised to fix the sale price and under Clause 4A the retention prices per tonne of unwrought indigenous aluminium produced and transferred by a producer to his auxiliary plant for fur-ther precessing arid sale as indigenous aluminium of different specifications such transfer being deemed to be a saleunder the Explanation to Clause 3 (1) of the Control Order. So sale and retention prices have been fixed by the Government in respect of unwrought aluminium which is transferred by HINDALCO to its auxiliary plants for further processing into aluminium of different specifications mentioned above. The contention that has been put forward on behalf of HINDALCO is that as no sale actually takes place, the Government has no authority to treat the transfer of unwrought indigenous aluminium to the auxiliary plants as sale and fix the sale and retention prices. Further it is submitted that in the case of deemed sale, the provision for payment of the difference between the sale price and the retention price into the Aluminium Regulation Account is exaction of money in the true sense of the term and such payment should be construed as imposition of tax. It is submitted that Section 3 of the Essential Commodities Act does not empower the Government to treat the transfer of unwrought aluminium by a producer to his auxiliary plants as sale when actually no sale takes place and to fix the sale and retention prices for the purpose of payment in the Aluminium Regulation Account. Accordingly, it is contended that the said provisions of the Control Order are null and void.

58. Two questions arise for our consideration. First, whether, when unwrought aluminium is transferred by a producer to his auxiliary plant for further processing into aluminium of different specifications, such transfer can be deemed to be a sale. Second, whether the payment of the difference between the sale price and the retention price can be regarded as imposition of tax.

59. When a producer is also a manufacturer, he will not have to purchase unwrought aluminium for the purpose of manufacturing aluminium goods, but a manufacturer who is not a producer of aluminium has to purchase unwrought aluminium from a producer at a sale price fixed by the Government under the Control Order. The cost of production of aluminium goods by such a manufacturer will be much higher than that of a manufacturer who is a producer. Naturally, the producer who is also a manufacturer will be in a position to sell aluminium goods to the consu-mers at a much lesser price than a manufacturer who is not a producer. So the manufacture and sale of aluminium goods would be the monopoly of a manufacturer who is also a producer. The businesses of other manufacturers will have to be closed down, for it would be impossible for them to compete with a producer who is also a manufacturer. Consequently, there will be a great set back in the aluminium industry and the object of Section 3 of the Essential Commodities Act, namely for maintaining or increasing supplies of aluminium or for securing its equitable distribution and availability at, fair price, would be frustrated. The provisions of the impugned clauses of the Control Order are obviously to equalise the cost of unwrought aluminium of the producers of aluminium with that of other manufacturers of aluminium. It is true that prima facie there is no element of sale when unwrought aluminium is transferred by a producer to his auxiliary plants for the purpose of manufacturing aluminium of different specifications. But in order to obviate the inequality in the cost of unwrought aluminium, a producer who is also a manufacturer has been treated as two different entities, namely (1) as a producer and (2) as a manufacturer. As a manufacturer, he has been placed in the same position as other manufacturers, so that one producer is not treated differently from another and one manufacturer is not treated differently from another manufacturer. In case no provision had been made for fixation of sale and retention prices of unwrought aluminium transferred to his auxiliary plant by a producer, the whole of the Control Order would have been ineffective and, in any case, would have resulted in discriminatory treatments between a producer who is also a manufacturer and a manufacturer who is not a producer. A producer and a manufacturer of aluminium are two distinct and separate categories of persons and each category is entitled to be treated alike.

60. The question however, is whether the Government has power to treat or deem such transfer to be a sale. It has been already discussed if the transfer had not been treated as a sale, the Control Order would have been unworkable and, moreover, it would be violative of Article 14 of the Constitution so far as manufacturers of aluminium goods are concerned. Section 3 of the Act does not provide for any such 'deemed sale' as contended on behalf of HINDALCO, but for the purpose of achieving the objects underlying Section 3, the Government has been conferred with the power of regulating or prohibiting the production supply and distribution of any essential commodity and trade and commerce therein. Further, under Clause (f) of Sub-section (2) of Section 3 of the Act Government may direct any producer to sell the whole of a specified part of the quantity of any essential commodity held in stock or produced or received by a producer to it or to its officer or agent or to a Corporation owned by it or to a person or class of persons. In view of Clause (f), it would have been quite legal for the Government to direct the producers of aluminium to sell the entire quantity of unwrought aluminium to the Government, and that if any producer would like to manufacture aluminium goods, he would have to re-purchase unwrought aluminium from the Government at a price which may be the difference between the sale price and the retention price. By deeming a transfer of unwrought aluminium to the auxiliary plam of a producer to be a sale the Government has, in our opinion, proceeded in the light of the provision of Clause (f) of Sub-section (2) of Section 3 of the Act, though not strictly in accordance with the terms thereof. If any such order in terms of Clause (f) had been passed by the Government strictly in accordance with the terms of Clause (f) it would have been, to some extent, inconvenient for the producers as that would have delayed production of aluminium goods on account of compliance with the formalities of sale and re-purchase of unwrought aluminium. By deeming a transfer to be a sale, the Government appears to have acted for the benefit and convenience of the producers who are also manufacturers of aluminium goods. We do not think that any objection can be taken on the ground that the Government has no power to deem a transfer to be a sale. It may be that Clause 3 of the Control Order under which a transfer of unwrought aluminium to the auxiliary plants of a producer shall be deemed to be a sale is not strictly in accordance with the provision of Clause (f) of Sub-section (2) of Section 3. But in considering the propriety and validity of such a provision, the Court will look to the substance of the provision and the object which it. seeks to achieve rather than to its form. So we do not think that any illegality has been committed by the Government in fixing the sale and retention prices of unwrought aluminium after it is transferred by a producer to his auxiliary plants for manufacture of aluminium of different specifications, and the payment of the difference between the sale price and the retention price in the Aluminium Regulation Account, deeming such transfer to be a sale. There is therefore, no substance in the contention made on behalf of HINDALCO that the Government has no authority to deem the transfer of aluminium to be a sale as there is no element of the contract of sale and purchase.

61. The answer to the second question will not detain us long. As soon as it is found that the provision of the Control Order providing for the fixation of sale and retention prices of aluminium ingots transferred by a producer to his auxiliary plants is legal and valid, the payment that a producer has to make in the Aluminium Regulation Account cannot be regarded as tax. For the same reasons as given earlier, in this case also, there will be no question of exaction of money. The contentions of HINDALCO are, accordingly overruled.

62. The next contention of HIN-DALCO is that the fixation of sale and retention prices of wire rods called 'properzi rods' is null and void because (i) it is in violation of Section 3(3) of the Essential Commodities Act and consequently, the first proviso to Clause 4 (1), and Clauses 4A and 4B of the Control Order; (ii) if, is not in accordance with Clause 4A of the Control Order, for the fixation of conversion cost of properzi rods has been made on the basis of weighted average of the cost of conversion of all the four primary aluminium producers; and (iii) it is contrary to Clause 4A of the Control Order, for properzi rods are not produced but they are manufactured.

63. Contentions (i) and (iii) have, however been not pressed by Mr. Ray, learned Counsel for HINDALCO. He has, however, strenuously urged the second contention. Clauses 4A of the Control Order provides as follows:

'The Central Government may, having regard to all relevant factors, including the estimated cost of production of indigenous aluminium produced by a producer, by order, fix from time to time the retention price in respect of indigenous aluminium produced and sold by such producer and different retention prices may be fixed in respect of indigenous aluminium of different, specifications produced by such producer. Such retention prices may also be fixed per tonne of unwrought indigenous aluminium produced and transferred by a producer to his auxiliary plant for further processing and sale as indigenous aluminium of different specifications.

64. It is contended that under Clause 4A, separate retention prices have to be fixed for each producer in respect of goods manufactured by him from unwrought aluminium. The properzi rods are manufactured by HINDALCO and also by the other three producers. It is complained by HINDALCO that in fixing its retention prices in respect of properzi rods, the cost of conversion of unwrought aluminium into properzi rods has been taken by the Government uniformly for all the four producers fixing the same at the sum of Rs. 335/- per tonne on the basis of weighted average of the cost of conversion of all the producers. Such fixation of conversion cost, Counsel for HINDALCO submits, is in violation of Clause 4A of the Control Order under which the conversion cost has to be fixed separately in respect of each producer. It is the case of HINDALCO that its actual cost of conversion is Rs. 530/- per metric tonne which should have been taken into consideration in fixing the retention price and that, accordingly, it has suffered loss for the fixation of Rs. 335/- as the conversion cost on an illegal basis. It has however, been pointed out by the learned Additional Solicitor-General that the basis of fixation of conversion cost has not been challenged in the writ petition. Such challenge has been made in the affidavit-in-reply. It is submitted on behalf, of HINDALCO, that as it was not aware of the basis of fixation of conversion cost, it could not take the point in the writ petition, but after it was disclosed in the affidavit-in-op-position of the Government, the point has been taken assailing the adoption of the basis of weighted average for the determination of the conversion cost.

65. It appears that separate retentionprices have been fixed for each producer as required by Section 4A of theControl Order. In fixing the retentionprice, the conversion cost was determined on the basis of weighted averageof such cost of all the producers. Itfurther appears that in 1978 the conversion cost that was also fixed on thebasis of weighted average was Rs. 335/-per tonne. The said amount has also beentaken to be the conversion cost for theperiod in question. It is difficult to accept that HINDALCO was not awareof the basis of determination of the conversion cost. There can be no doubtthat the conversion cost should havebeen determined separately for eachproducer, but merely because it has beendone on the basis of weighted average,it cannot, be struck down unless it hasresulted in loss to HINDALCO. If isonly alleged by HINDALCO that itsactual cost of conversion :is Rs. 530/-per tonne, but it has not disclosed howmuch loss it has suffered on account offixation of conversion cost of Rs. 335/-per tonne. It is not in dispute that thelicensed capacity of HINDALCO for. properzi rods has been increased from12,000 tonnes to 22,000 tonnes. There issome controversy as to whether the increase of the licensed capacity is legalor not. There is some substance in thecontention of the learned AdditionalSolicitor-General that if HINDALCO hadbeen suffering a loss on account of theconversion cost having been fixed atRs. 335/- per tonne, it would not haveincreased its licensed capacity nor wouldit have manufactured properzi rods tothe extent of 25,000 tonnes. As HINDALCO has not disclosed how much lossit has suffered on account of low fixation of conversion cost, as alleged by it,it is difficult to hold that HINDALCOhas suffered loss. This, in our opinion,cannot be a ground for directing theCentral Government to re-consider thefixation of retention price of properzirods.

66. It is not in dispute that the in-crease in the retention price for unwrought aluminium of HINDALCO by Rs. 655/- per tonne is on account of the increase in the electric power rates. It has been already stated that the sources of electric power of HINDALCO areU.P. State Electricity Board and Renu-sagar which is a subsidiary of HIN-DALCO. The case of HINDALCO is thatthe cost of Henusagar power was totally ignored by the Government, and that in dealing with the cost of U. P. State Electricity Board supply, the Government had acted arbitrarily and subjected HINDALCO to hostile discrimination. HINDALCO claims that there has been an increase in the cost of power to the extent of Rs. 1,104,45, that is, at the rate of 5.97 paise per unit. On the other hand, the Government has claimed that full increase in the cost of power has been reflected in the said sum of Rupees 665/- in the retention price.

67. In the statement of calculations which has been annexed to the writ petition [(Annexure 5 (4)] HINDALCO claims that there has been an increase of 5.97 paise per unit. In support of bis contention that the increase in the power rales of both the U. P. State Electricity Board and Renusagar have been reflected in the said sum of Rupees 655/- per tonne of aluminium, the learned Additional Solicitor-General submits that as according to the Government one paise increase in the cost of power resulted in an increase of Rupees 170/- per tonne of unwrought aluminium the increase of the retention price by Rs. 655/- granted by the Government represented an increase at the rate of about 3.85 paise per unit of power over and above the previous rates allowed by the Government. In the annual report of the Board of Directors of HINDALCO, if, is stated, inter alia, that one paise increase in the rate of power per unit would result in an increase of Rs. 180/- in the cost of unwrought aluminium per tonne, although in the writ petition it has been claimed to be Rs. 200/-. It is submitted by the learned Additional Solicitor-General that even on the basis of Rs. 180/-, the increase in the cost of power as represented by the said sum of Rs. 655/-would be at the rate of 3.64 paise per unit which is slightly less. The learned Additional Solicitor-General has however, refuted the contention of HINDALCO that there has been an increase at the rate of 5.97 paise per unit of power.

68. It is apparent from the Press Note dated October 5 1979 that the Government decided to reflect the entire increase in the costs of power. It is, however, difficult to come to any finding whether, the Government has, as amatter of fact, included in the retention price of unwrought aluminium of HINDALCO, the whole of the increase in the cost of power of both the sources. There can be no doubt that in view of the said decision of the Government, it should include in the retention price the entire increase in the power rates.

69. We may however, proceed on theassumption that the increase in the power rate of Renusagar has not been included in the retention price fixed for HINDALCO. In other words, the said sum of Rs. 655/- does not reflect the full cost of power. The question, however, is whether on this ground we shall be justified in directing reconsideration by the Government of the fixation of retention price as has been directed by the learned Judge. We have earlier repelled the contention of HINDALCO that on account of low fixation of the retention prices it had been suffering ]oss of Rs. 1.45 lakhs every day. Again, we may assume that HINDALCO had suffered loss as the entire increase in the power rates has not been reflected in the retention price. Alleging that it had been suffering loss HINDALCO withheld payment in the Aluminium Regulation Account. It appears from the balance sheet for the year 1979 that a sum of Rs. 6,06.65,8.71/- has been set apart for the Aluminium Regulation Account. The balance sheet for the year 1980 reveals that a sum of Rs. 14,30,44,230/- has been kept back for the Aluminium Regulation Account. The total amount which has been withheld by HINDALCO is Rs. 20,37,10,101/- which, it may be presumed, has been invested by HIN-DALCO. The minimum interest which HINDALCO can reasonably be presumed to have earned, by such investment is 10% which would mean on amount of interest of Rs. 2,03,07,000/- every year. For the last four years, the said sum stands withheld and the total amount of interest, which HINDALCO has earned must be, in the minimum, more than Rupees 8.00,00,000/-. Even assuming that HINDALCO had suffered loss, by withholding the said amount for payment inthe Aluminium Regulation Account it has earned more than Rs. 8,00,00,000/-and as such, today the question of suffering of any loss by HINDALCOfor the period in question, that is, for seventeen months does not arise. So even if the retention price has not included the whole of the increase in thecost of power from the above twosources, we do not think that the retention and sale prices fixed by the Government should be set aside and the Government should be asked to reconsider the same as has been done by the learned Judge. In the circumstances, we do not find any merit in the contention of HINDALCO that as the full increase in the cost of power has not been included in the retention prices, the Government should be directed not to insist on the payment in the Aluminium Regulation Account till the retention price is re-fixed by the Government for the period in question after due consideration of the increase in the cost of of production including the increase to the cost of power.

70. Before we part with this appeal, we may dispose of some other contentions of HINDALCO. It is contended that Clauses 4A and 4B of the Control Order are ultra vires Articles 14, 19(1)(g), 265 and 300A of the Constitution. It is also urged that the impugned orders are discriminatory inasmuch as while the Government has allowed to other producers the entire increase in the cost of power rates, it has only allowed to HINDALCO 40% of such increase. The validity of the impugned orders have, accordingly, been challenged as violative of Article 14 of the Constitution. Further, it is contended that as HINDALCO has not been given an opportunity of being heard, before the impugned orders were passed they are violative of the rules of natural justice and are void.

71. We do not think that there is any substance in the above contentions. We have failed to appreciate how the impugned clauses of the Control Order are violative of Articles 14, 19(1)(g), 265 and 300A of the Constitution. The Control Order has been passed under Section 3 of the Essential Commodities Act. In our opinion, as the impugned provisions of the Control Order are quite consistent, with the provision of Section 33 of the Act, there is no question of their teeing violative of any of the provision of the Constitution, regard being had to the fact that the Constitutional validity of Section 3 has not been challenged by HINDALCO. It is said that HINDALCO has been discriminated against at least in respect of the increase in the cost of power. Whether the retention price fixed for HINBALCO reflects the whole of the increase in the cost of power supplied to it by the U. P. State Electricity Board and Renusagar is a disputed question of fact which cannot be gone into in a proceeding under Article 226 of the Constitution. It has been already pointed out by us that even if the entire increase in the cost of power was net included in the retention price that has not prejudiced HINDALCO, for it has earned a considerable amount of interest on the amount payable by it to the Aluminium Regulation Account. AS regards the contention that HINDALCO should have been given an opportunity of being heard before the impugned orders were passed, we do not think that there is any merit in the contention. HINDALCO itself made representation to the BICP which considered such representations. The recommendations of BICP were placed before the Government, and it can be reasonably presumed that the Government, after considering such representations and the recommendations of the BICP, passed the impugned orders. Therefore, it cannot be said that HINDALCO was not heard. We are unable to accept the contention that HINDALCO should have been given a personal hearing. HINDALCO never asked for a personal hearing, nor do we think that any such hearing was necessary. As the Government had considered the written representations of HINDALCO which contained in details its grievances, there was no violation of the rules of natural justice.

72. For the reasons aforesaid, we set aside the judgment of the learned Judge, dismiss the writ petition and discharge the Rule Nisi. The appeal is, accordingly, allowed and the cross-objection is dismissed. HINDALCO is granted six weeks' time from date to pay to the Aluminium Regulation Account all amounts payable by it to the said Account for the period in question. There will be no order as to costs.

73. A prayer has been made on behalf of HINDALCO for a certificate for appeal to the Supreme Court under Article 134A of the Constitution. In this connection it may be said that all the questions of law have been decided by us wife reference to the decisions of the Supreme Court as also of the decisions of the other High Courts and the Privy Council.

74. In the circumstances, we do not think that it is a fit case for the grant of a certificate for appeal to the Supreme Court. The prayer for a certificate is, accordingly, disallowed.

Monoj Kumar Mukherjee, J.

I agree.