Black Marketers Taking Advantage Of Differences Between State And Centre: Calcutta HC Directs Jute Commissioner To Review Rate Of Raw Jute To Curb Price Hike

The Calcutta High Court on Wednesday has directed the Jute Commissioner to review and re-fix the rate of raw jute if the notified rate cannot be adhered to.

Justice Amrita Sinha observed, 

"The Jute Commissioner is directed to take positive steps and adopt stringent measures to implement the notified rate, but despite all efforts, if it appears that the notified rate cannot be adhered to, then the Jute Commissioner shall review and re-fix the rate taking into consideration the relevant factors as mentioned in the Control Order, 2016."

The Court further ordered the Jute Commissioner to collect first-hand information with regards to the rate at which jute is available to the mill owners and thereafter notify the rate after taking into consideration the freight, transportation, handling and storage charges. 

"The rate should not be fixed upon extraneous consideration and the same must be reviewed at frequent intervals considering the ground realities. The Jute Commissioner should realise that the rate fixed should not be meant only for the purpose of publishing it in the official gazette but for the purpose of practical implementation of the same. Regular raids, search and seizure should be conducted to prevent illegal hoarding or any nefarious activity sending out false signals of scarcity. Stern action should be taken against any /all persons found indulging in any illegal activity and acting with vested interest leading to the rise in the price of raw jute", the Court directed further. 

The direction was issued while adjudicating upon a plea moved by the Indian Jute Mills Association demanding a review of the Jute Commissioner's notification on September 30, 2021, in which the price of raw jute was capped at Rs 6,500 per quintal.

The petitioners had alleged that the price that has been fixed by the Jute Commissioner is not the reasonable price at which raw jute of the above variety is available in the market. It was further contended that raw jute is available in the market at a price higher than that has been fixed by the Jute Commissioner.

The Court was further apprised that as a desperate attempt to procure raw jute, the mills intentionally keep increasing the prices to lure hesitant and helpless suppliers pushing the overall market prices upwards sending a false sense of scarcity. It was further submitted that as many of the mills cannot purchase the raw jute at higher rates they are forced to close down leaving thousands of workers jobless. Though the mill owners receive prompt payment from the Government on account of the jute bags sold to them, they more often than not, delay in making payment to the raw jute suppliers, it was stated further. 

Pursuant to a perusal of the rival submissions, the Court expressed displeasure at the failure of the concerned counsels to provide an amicable solution to the precarious condition of the jute industry and accordingly remarked, 

"The counsels of all the parties were given enough opportunities to suggest an amicable solution to the stalemate condition which the jute industry is facing, but for reasons best known to the parties, none came up with any solution which could show any light to enlighten the lives of lakhs of persons associated directly or indirectly with this industry."

The Court further noted that the Jute Commissioner is under a statutory obligation to fix the price of raw jute after taking into account the relevant considerations and to adopt all necessary methods to implement the said price, otherwise the price fixed by the Jute Commissioner will lose its relevance and the purchasers will be left at the mercy of the traders who are openly selling the product at rates higher than the notified rate.

Emphasising on the need to enquire as to why the prices of raw jute have risen exponentially, the Court remarked, 

"In such a situation, the most pertinent question is - what is the reason for such hike in price of raw jute despite bumper growth? When there is abundant supply, the price ought to have come down. The fact that the price is spiralling upward instead of coming down, implies that something is going wrong somewhere. There must be some loop holes which are required to be plugged. But who will bell the cat, is possibly the next relevant question."

Justice Sinha further opined that raising the notified rate possibly is not the solution to the problem and that a check and balance is to be maintained. It was further held that with a rise in the notified rate, the government will be liable to reimburse the mill owners the higher rate, which in turn will put a pressure on the exchequer and most likely, the higher rate will not reach the hands of the poor cultivators and will fizzle out in the middle rung.

Opining that the hoarders and black marketers are taking advantage of the differences between the officials of the State government and the central government, the Court remarked further, 

"It has been alleged that the officials of the State are not extending the necessary help and cooperation to the officers of the Central Government. Taking advantage of the difference between the State and the Central, the hoarders and black marketers are taking active role in selling raw jute at an exorbitant rate."

Underscoring further the need to adopt a holistic approach in order to revive the industry, the Court opined, 

"All the parties who are a part of the jute industry need to adopt a holistic approach and devise means not only to save but to revive the industry which is the pride of our country, especially Bengal. Reviving the industry will undoubtedly be a herculean task and joint effort of all stake holders is extremely important. Statute demands that the Jute Commissioner leads from the front. All the other organs of the Government need to extend their wholehearted cooperation to the Jute Commissioner if action is required to be taken against any person or agency who indulges in any activity leading to the rise in the notified rate."

It was further held that the Jute Commissioner should invoke power bestowed by law for taking steps in the best interest of the industry and should not falter to take strict action against any person or agency who may try to meddle with the statutory authority in performing their duties. 

The Court however did not permit the Jute Balers' Association to publish a further quotation after noting that the Jute Commissioner is the competent authority to fix the price as it was opined that it would create more confusion and would not provide a solution to the problem. 

Case Title: Indian Jute Mills Association and Anr v. Union of India and Ors

Case Citation: 2022 LiveLaw (Cal) 166 

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