1982 (12) TMI 223 - SC - Indian Laws

Court Upholds Jurisdiction in Calcutta Appeal Case; Orders Retention Price Fixation

Union Of India (Uoi) And Ors. Versus Hindustan Aluminium Corporation.

The Court upheld its jurisdiction based on the cause of action arising in Calcutta. It deemed the appeal process inadequate due to the Central Government ... - Issues Involved:1. Jurisdiction of the Court2. Alternative remedy and maintainability of the writ petition3. Fixation of retention and sale prices4. Alleged imposition of tax without legislative sanction5. Discrimination and violation of Article 146. Violation of natural justiceIssue-wise Detailed Analysis:1. Jurisdiction of the Court:The appellants argued that the Court had no jurisdiction as the impugned orders were passed in New Delhi and the aluminium plant of HINDALCO was situated in Uttar Pradesh. However, the Court ruled that a part of the cause of action arose in Calcutta as HINDALCO's principal office and substantial business operations were located there, thereby conferring jurisdiction on the Court.2. Alternative Remedy and Maintainability of the Writ Petition:The appellants contended that the writ petition was not maintainable due to the availability of an alternative remedy by way of an appeal under Clause 11 of the Control Order. The Court held that the provision for appeal to the Central Government was not an adequate alternative remedy as the Central Government itself had passed the impugned orders. Additionally, the appellate authority could not decide on the vires of Clauses 4A and 4B of the Control Order.3. Fixation of Retention and Sale Prices:HINDALCO argued that the retention prices were not fixed in accordance with Clause 4A of the Control Order, as the cost of production and increases in the cost of inputs were not fully considered. The Court found that the Government had taken into account the increase in the cost of production, including power rates, and that the retention prices reflected these increases. The Court also held that the Government was not obliged to ensure the cost of production in the retention price but only to consider it.4. Alleged Imposition of Tax Without Legislative Sanction:HINDALCO contended that the payment to the Aluminium Regulation Account was tantamount to an imposition of tax without legislative sanction. The Court ruled that the payment was not a tax as it did not constitute a compulsory exaction of money for public purposes. The money paid into the Aluminium Regulation Account did not belong to HINDALCO but was part of a regulatory mechanism to ensure equitable distribution and availability of aluminium at fair prices.5. Discrimination and Violation of Article 14:HINDALCO argued that it was discriminated against as the Government did not fully consider the increase in the cost of power supplied by Renusagar. The Court found that the Government had considered the increase in power costs and that HINDALCO had not suffered any loss as it had withheld payments to the Aluminium Regulation Account and earned interest on the withheld amount.6. Violation of Natural Justice:HINDALCO claimed that it was not given an opportunity to be heard before the impugned orders were passed. The Court held that HINDALCO had made representations to the Bureau of Industrial Costs and Prices (BICP), which were considered by the Government. Therefore, there was no violation of the rules of natural justice as HINDALCO's grievances were considered through written representations.Conclusion:The Court dismissed the writ petition and upheld the validity of the impugned orders. The cross-objection filed by HINDALCO was also dismissed. The Court granted HINDALCO six weeks to pay the amounts due to the Aluminium Regulation Account. The prayer for a certificate for appeal to the Supreme Court was disallowed.