1. The appellant, State of Gujarat, challenges the judgment of the High Court of Gujarat dated 2-8-1979, rendered in Special Civil Application No. 150 of 1975 wherein it was held that the Gujarat Paddy (Procurement) Order, 1974, (hereinafter referred to as "the Levy Order") is not in conformity with the provisions of Section 3(3) and Section 3(3-B) of the Essential Commodities Act, 1955 and so, ultra vires. It is common ground that if the price paid or offered to be paid is fixed having regard to the factors specified in the amended Sub-section (3-B), it would be valid. The question is: has it been so fixed in Schedule II to the impugned Levy Order?
2. The State Government was required to take into account three factors, namely, (i) the general crop prospects, (ii) the need for making available at reasonable prices to the consumers, particularly the vulnerable sections of the consumers, such grades or varieties of paddy which were specified in the impugned Levy Order, and (iii) the recommendations, if any, of the Agricultural Prices Commission with regard to the price of the grade or variety concerned of paddy. After referring to the materials placed before the High Court, it opined that no averments or materials were available to show what factors were taken into account while considering "the general crop prospects" in respect of paddy, in fixing the purchase price of different varieties of paddy during the Kharif season of 1974. The High Court, however, noticed that the varieties of paddy shown in various serial nos. were of different quality and the State Government had fixed the price of paddy from Rs 62 to Rs 110 per quintal based on the "Report of the Commission". It was found that the Commission did not have any data from the State of Gujarat in respect of the paddy crop during the Kharif season 1974-75 and whatever data the Commission had, was rather stale and did not reflect the current economic factors prevalent in the State of Gujarat. The Commission had fixed the price of paddy in Gujarat based on statistical data collected from the State of Andhra Pradesh, State of Orissa and other States. It is because of these factors, the High Court held that the State Government did not take into account "the general crop prospects" in respect of paddy during 1974 Kharif season, but took into account irrelevant and inapplicable recommendations made by the Commission so far as the State of Gujarat is concerned. The State Government was under an obligation to take into account only relevant factors, but it took into account irrelevant factors for consideration. On these premises, the High Court concluded that there is no material to establish any link between the price structure shown in Schedule II to the impugned Levy Order and the statutory requirements specified in the amended Sub-section (3-B) of Section 3 of the Essential Commodities Act. So, it was held that the State Government failed to demonstrate that the prices of different varieties of paddy were fixed in the impugned Levy Order on a proper consideration of relevant statutory requirements and so Schedule II to the Levy Order is liable to be struck down as ultra vires Section 3(3-B), (as amended) of the Essential Commodities Act.
3. We see no error in the aforesaid reasoning and conclusion of the High Court. Since the State Government had not taken into account relevant and material factors in fixing the price as enjoined on them by the Act, it was bound to pay to the respondents the value for the paddy as computed in terms of Clause (c) of Sub-section (3) of Section 3. The High Court was justified in holding so. We see no reason to interfere. The appeal is dismissed. No costs. Now that the appeal of the State has been dismissed, the appellants shall pay the amount due to the respondents within three months from today.