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Business News/ Politics / Policy/  Delhi high court reserves order on Fertiliser Association of India plea
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Delhi high court reserves order on Fertiliser Association of India plea

Fertilizer body had appealed against judgment upholding govt's decision to fix MRP of phosphatic and potassic fertilizers

The government had decided that the prices of fertilizers ought to be reduced to reasonable levels. Photo: Pradeep gaur/MintPremium
The government had decided that the prices of fertilizers ought to be reduced to reasonable levels. Photo: Pradeep gaur/Mint

New Delhi: The Delhi high court (HC) on Monday reserved its order on an appeal by the Fertiliser Association of India (FAI), an industry lobby group, against a 6 January judgment of a single judge of the high court upholding the government’s decision to fix the maximum retail price (MRP) of phosphatic and potassic (P&K) fertilizers.

The government had also required fertilizer manufacturers and importers to submit certified cost data along with their subsidy claims, which would be restricted if their MRP was found to be unreasonable for 2013-14.

FAI has challenged the retrospective application of one of these notifications, which was issued on 26 June 2013, but made effective from 1 April of that year.

A bench of chief justice G. Rohini and Rajiv Sahai Endlaw questioned whether the fertilizer companies had any right to claim subsidy from the government and what was so unreasonable about the government giving subsidy only if the MRP set by the companies for their products was reasonable.

Lawyer Sandeep Sethi, appearing for FAI, argued that the government’s decision meant that even fertilizers that were already in the market would have to be sold at a price less than the MRP.

FAI had challenged the notifications as being unreasonable, arbitrary and inherently in conflict with the rationale of the Nutrient Based Subsidy Scheme, 2010 as it allowed the government to indirectly control and regulate the MRP of P&K fertilizers, which they were allowed to do as per the scheme.

While challenging the retrospective application of these notifications, FAI had contended that this resulted in the fertilizer manufacturers/importers ceasing to have any control over the price of fertilizers and had been disabled from recovering any adverse fluctuations in their costs.

The government argued that it issued the notifications in “public interest" because it had found that the price of fertilizers had not fallen despite a fall in the international prices to ensure that subsidy is available only to manufacturers and importers who sold the fertilizers at reasonable prices and did not indulge in profiteering.

The government, with the recommendation of an inter-ministerial committee and approval of cabinet committee on economic affairs, had decided that the prices of the fertilizers ought to be reduced to reasonable levels to maintain the balance between the MRPs and subsidy rates and to ensure that the benefit of the reduction in the international prices were passed through to the farmers.

Justice Vibhu Bakhru had found no infirmity in the government’s circulars and rejected FAI’s contentions, prompting this appeal.

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Published: 24 Feb 2015, 12:01 AM IST
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