Jute Commissioner Can't Rewrite Policy; Ignoring CCEA-Approved Pricing Formula Violates Article 14: Calcutta HC

The Calcutta High Court has held that the Jute Commissioner cannot rewrite economic policy and that any departure from a pricing formula approved by the Cabinet Committee on Economic Affairs (CCEA) is arbitrary, illegal, and violative of Article 14 of the Constitution.

Quashing the impugned price fixation, the Court directed authorities to determine and notify the prices of jute bags for October and November 2025 in accordance with the formula communicated by the Ministry of Textiles on October 17, 2025.

It also ordered payment of the differential amount due to jute mills, with 9% annual interest in case of delay.

Justice Smita Das De observed that once the CCEA had approved the pricing methodology and the Ministry had communicated it for implementation, the Jute Commissioner's role was limited to carrying out that policy.

“The Jute Commissioner is not at liberty to rewrite economic policy. Once the CCEA has pronounced upon the matter and the Ministry of Textile has communicated the policy for implementation, the role of the Jute Commissioner is confined to faithful execution.The constitutional scheme, administrative law and the doctrine of legitimate expectation converge on a singular conclusion, the formula dated October 17, 2025 is binding and the failure to implement it is arbitrary, illegal and violative of Article 14 of the Constitution of India. ” the court ruled.

The dispute arose after no separate price notifications were issued for October and November 2025. Instead, the September 15, 2025 rate of Rs 7,458.81 per 100 bags continued to be applied through Production Control and Supply Orders even as raw jute prices changed.

The Indian Jute Mills Association challenged this decision. It argued that the government-approved pricing mechanism required jute bag prices to be determined through a formula linked to a three-month moving average of raw jute prices. According to the association, the approved methodology was not followed for the two months in question.

The Union government and the Jute Commissioner defended the decision. They argued that fixation of jute bag prices involved economic policy, technical considerations, and administrative discretion. The respondents maintained that retaining the September rate was necessary because hoarding had contributed to an artificial rise in raw jute prices. Removing the cap, they claimed, could have sharply increased procurement costs and burdened the public exchequer.

They also argued that the Ministry's communication was merely a policy guideline and did not eliminate the statutory discretion vested in the Jute Commissioner under the Jute and Jute Textiles Control Order, 2016.

The Court was not persuaded.

It held that an authority that adopts a specific pricing methodology cannot subsequently abandon it and impose an alternative regime on an ad hoc basis. Any departure from a prescribed formula without proper justification would be vulnerable to judicial review under Article 14, the Court said.

Addressing the maintainability of the petition, the Court found that the absence of price notifications had created a regulatory vacuum. Jute mills supplying government agencies could not independently determine prices, creating uncertainty in procurement and potentially affecting statutory supply obligations.

“This Writ Petition is maintainable. The jurisdiction of the Hon'ble Court under Article 226 is rightly invoked to compel the Jute Commissioner to act in accordance with law,” the Court observed.

The judgment also relied on the doctrine of legitimate expectation. The Court noted that jute mills plan procurement of raw jute, production schedules and financial commitments on the basis of the pricing mechanism approved by the government. They were therefore entitled to expect that the notified formula would be applied consistently.

Holding that the Commissioner could not substitute the approved methodology with a pricing mechanism of his own choosing, the Court said any such attempt would be ultra vires and unsustainable.

The Court accordingly directed the authorities to recalculate and notify the prices for October and November 2025 under the approved formula and pay the resulting differential amounts due to jute mills.