HC asks govt to 'carefully consider' demand for price control on rubber

The Delhi High Court has asked the commerce ministry and the Rubber Board to “consider carefully” the demand of user-industry associations to bring down the price of natural rubber (NR).

The HC said this while disposing three petitions filed by the Indian Cycle & Rickshaw Tyre Manufacturers Association, the Automotive Tyre Manufacturers Association and the All India Rubber Industries Association. These user associations had urged the HC to ask the government to regulate NR prices through steps such as removal of duties, fixing a price band and banning futures trade in the commodity.

“Preferably, the representations of each petitioner shall be given a hearing and thereafter a detailed order passed on those representations, giving the reasons for the decision. It is only then that a court which is asked to judicially review such decision can possibly know what factors weighed with the government in arriving at its decision,” states the HC order.

“In undertaking an exercise of price fixation, it is essential for the government to undertake a wide-ranging consultation with all the persons likely to be affected by such decision, whether they are rubber growers or rubber industries. The court can enquire whether such procedure has been adopted. Prima facie, it appears not to have been undertaken in the present case,” it went on.

The judges also asked the ministry’s secretary to set up a panel of experts from the Rubber Board on the subject.

According to the petitioners, the price of rubber in the domestic market was around Rs 170 a kg, whereas the reasonable level was Rs 80 a kg. Under Section 13 of the Rubber Act, 1947, the government was bound to fix a price band, they said.

The petition said frequent representations to the Union government for reducing the Customs duty on natural rubber from 20 per cent to 7.5 per cent, in consonance with the inverted duty structure policy announced in the Foreign Trade Policy, were either not considered or not satisfactorily dealt with.