Specialised silica products outside small-scale reservation; rival not entitled to wider inspection of application files

A technical evaluation under the Industries (Development and Regulation) Act found that specialised grades of silica proposed for manufacture were distinct from reserved precipitated silica for the Small Scale Sector because they required spray-drying, higher capital investment, and different end uses. On that basis, the products were treated as outside the small-scale reservation, so the objection to approval of the industrial licence and foreign collaboration failed. The document also states that a trade rival is not ordinarily entitled to inspect another applicant's papers, departmental notings, or related files beyond the committee minutes, unless special circumstances justify wider disclosure; the request for further inspection was therefore refused.

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Issues: (i) Whether the specialised grades of silica proposed to be manufactured by the third respondent were covered by the reservation of precipitated silica for the Small Scale Sector and whether approval for the industrial licence and foreign collaboration could be restrained; (ii) Whether the petitioners were entitled to inspection of the other application papers, departmental notings and related files beyond the minutes of the Technical Evaluation Committee.

Issue (i): Whether the specialised grades of silica proposed to be manufactured by the third respondent were covered by the reservation of precipitated silica for the Small Scale Sector and whether approval for the industrial licence and foreign collaboration could be restrained.

Analysis: The reservation under Section 29B(2A) of the Industries (Development and Regulation) Act, 1951 applied to precipitated silica for the Small Scale Sector, but the proposed products were found, on technical and commercial evaluation, to be specialised grades requiring spray-drying, heavy capital investment, and different end uses. The Technical Evaluation Committee concluded that these products were not practically manufacturable within the small-scale capital limit and were to be treated as a separate category with import-substitution value.

Conclusion: The specialised grades were not treated as reserved precipitated silica, and the challenge to the grant of approval failed.

Issue (ii): Whether the petitioners were entitled to inspection of the other application papers, departmental notings and related files beyond the minutes of the Technical Evaluation Committee.

Analysis: The Court found that the relevant material had already been examined and that, as a matter of principle, a trade rival was not entitled to routine inspection of another party's application files and internal departmental notes absent special circumstances. Copies of the relevant committee minutes were sufficient.

Conclusion: Further inspection was refused.

Final Conclusion: The challenge to the governmental approval was rejected, and the ancillary request for wider inspection of departmental records was also declined.

Ratio Decidendi: Where a product, though technically falling within a broad generic description, is shown on the basis of expert evaluation to constitute a distinct specialised grade requiring substantially different technology, investment and market use, it may be treated as outside the small-scale reservation for the generic product; routine inspection of a rival's application files is not warranted without special cause.

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