TaxTMI 
TaxTMI 
2010 (11) TMI 859
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.... granted to the respondent number 5 to 6 for purchasing and/or acquiring land for the purposed of establishing new sugar industries without licence. 6. It is submitted by learned counsel for the appellant that the effect of the impugned judgment and order quashing of the Notification dated 11.9.1998 and the Press Note dated 31.8.1998 is that the sugar industry in India has virtually been thrown back into the era of `License Raj', nullifying the efforts of the Government of India to open up the economy to prospective investors. Also, all the sugar industries established throughout India after 11.9.1998 (as per the available data they are 100 in number) have become illegal. Industrial development, particularly in the sugar producing States, may well come to a grinding halt. An investment of about Rs.4000 crores in the sugar industry in U.P. alone has been jeopardized. The petitioner herein alone has invested about Rs.600 crores in the sugar industry in the State of U.P. after the said Notification and Press note were issued. Further, the petitioner has committed an investment of an amount of Rs.700 crores in the sugar industry in U.P. It is submitted that lacs of farmers throughou....
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....ch constitutes roughly 42% of the total sugarcane production in the country. However, despite adequate availability of sugarcane area, U.P. still lags behind Maharashtra in the production of sugar. Even though the demand of sugar in the country has increased manifold but the sugar industry in U.P. has remained stagnant over a long period of time due to various reasons including sickness of uneconomic and unviable units mainly in the Government and the cooperative sector. Due to low sugarcane crushing capacity, the farmers were forced to sell their cane to less remunerative uses. The petitioner's sugar projects have brought a new hope to the farmers at large. 9. Sugar, is item number 25 of the first Schedule of the Industries (Development and Regulation) Act, 1951. Hence, no one could set up a sugar industry without a licence as per Section 11 of the Act. 10. The Industries (Development and Regulation) Act was passed in 1951. The statements of objects and reasons of the Act states as follows : "The object of this Bill is to provide the Central Government with the means of implementing their industrial policy which....
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....ould be set up without a licence from the Central Government. 16. Since independence the situation has totally changed in India. Now India has a heavy industrial base and also has several sugar mills. Hence the earlier regulatory laws relating to the sugar industry, including the requirement of a licence, have evidently served their purpose and are no longer required and may in fact be obstructing the growth of industry in our country now. Hence the policy of liberalization began in the early 1990s and it appears that it was in pursuance of the liberalization policy that the impugned Press Note and Notification were issued. 17. A perusal of the background in which de-licensing of sugar industry was done shows that it was a well considered step which was done having regard to the stage of development of the industry. This background is: a) On 24th July 1991, the Government of India announced its liberalized "Industrial Policy 1991". b) On 25th July, 1991, the first notification i.e. Notification No. 477(E) came to be issued by virtue of which 20 out of the Scheduled industries were taken out of the purview of Section 10, 11, 11A & 13 of the Act. The structure of this not....
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....f commercial production against the LOI issued by them. It is, however, open to entrepreneurs to file an initial IEM (in lieu of the LOI/Industrial Licence held by them) if they so desire, whenever any variation from the conditions and parameters stipulated in the LOI/Industrial Licence is contemplated." "NOTIFICATION (266) Ministry of Industry (Department of Industrial Policy and Promotion) Notification No.S.O.808(E) dated September 11, 1998 published in the Gazette of India, Extra, Part II, Section 3 (ii) dated 14th September, 1998 p.2, no.599 (F.No.10(13)/96 I.P.). In exercise of the powers conferred by sub-section (1) as Section 29-B of the Industries (Development and Regulations) Act, 1951 (65 of 1951), the Central Government hereby makes the following further amendment in the notification of the Government of India in the Ministry of Industry (Department of Industrial Development Number S.O.477(E) dated the 25th July, 1991, namely :- In Schedule II to the said notification, item 4, relating to Sugar and the entries thereunder shall be omitted." 19. Section 29B(1) of the Act states : "29-B. Power to....
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.... the Government of India in sugar industry. This Court after analyzing the provisions of the Press Notes in respect of prescribing minimum distance between two sugar mills, and the new Sugarcane Control Order, 2006 held that the defect pointed out by the Delhi High Court in paragraph 63 of its judgment has been removed by the Government of India by bringing in the amendment in 2006. This Court held that this amendment is clarificatory in nature and retrospective in operation and shall apply to all cases pending in various courts. 21. In view of the judgment of this Court in Ojas Industries (supra) upholding the validity of the Press Note prescribing distance norms and subsequent amendments in 2006 in Sugarcane Control Order 1966 and making it retrospective, the issues involved in the present case have been substantially decided. The challenge of the writ petitioner in the High Court was based on the setting up of a sugar mill in its vicinity (though beyond 15 kms away) because of the policy of de-licensing prescribed under Notification dated 11.09.98 issued in exercise of powers under Section 29(B) (1) of the IDR Act, 1951. This Court has upheld the distance norms i.e. a minimum....
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....ous and, not being informed by any reason whatsoever, can be clearly held to be arbitrary and founded on mere ipse dixit of the executive functionaries thereby offending Article 14 of the Constitution or such policy offends other constitutional provisions or comes into conflict with any statutory provision, the Court cannot and should not outstep its limit and tinker with the policy decision of the executive function of the State. This Court, in no uncertain terms, has sounded a note of caution by indicating that policy decision is in the domain of the executive authority of the State and the Court should not embark on the unchartered ocean of public policy and should not question the efficacy or otherwise of such policy so long the same does not offend any provision of the statute or the Constitution of India. The supremacy of each of the three organs of the State i.e. legislature, executive and judiciary in their respective fields of operation needs to be emphasized. The power of judicial review of the executive and legislative action must be kept within the bounds of constitutional scheme so that there may not be any occasion to entertain misgivings about the role of the judicia....
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....tion 2 of the Section 29B also confers upon the Central Government an express power of cancellation of such exemption. In our opinion sufficient guidelines have been provided by the legislature for the Government in this connection. The power conferred under Section 29B is in our opinion not tainted by the vice of excessive delegation because the essential legislative policy is specified in the preamble to the IDR Act and is writ large throughout the provisions of the Act. The grounds on which exemption from licensing can be granted - one of them being the stage of development of the industry - are also specified in Section 29B. The legislative policy having been clearly stated, in our opinion there is no excessive delegation. See in this connection P.J. Irani vs. State of Madras (1962) 2 SCR 169at pages 179-180, Sitaram Bishambar Dayal vs. State of U.P. (1972) 4 SCC 485 (vide para 5 and 7), Mahe Beach Trading Co. and Ors. vs. Union Territory of Pondicherry and Ors. (1996) 3 SCC 741 (vide para 13), State of Tamil Nadu vs. K. Sabhanayagam (1998) 1 SCC 318 (vide para 14, 19, 20 and 21), Consumer Action Group vs. State of Tamil Nadu (2000) 7 SCC 425 (vide para 5-18, 41 reviews case la....
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....the sugar industry. The notification under Section 29B was sufficient for this purpose. 33. In the impugned judgment the High Court has observed : "Licensing is a part of regulation of the scheduled industry. Therefore licensing policy of the Government cannot be said not to be in the public interest. De- licensing policy largely affects the interest of the people. Somebody may say for socialism or somebody may say for globalization, but the thought of majority people has to be reflected in the House by the majority vote. Then and then alone the policy can be accepted as a law by its amendment. Therefore, without ascertaining the pros and cons on that line mere issuance of notification by the pen of the executive is an action without jurisdiction and as such illegal." 34. With respect we cannot agree with this observation. There is nothing in the 1951 Act which required a notification under Section 29B(1) to be approved by Parliament. Also, whether it is in the public interest to issue such a notification is ordinarily for the Government to decide, and the Court should exercise judicial restraint in this connection. Whether there should be licensing of an industry or not is f....
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....p; "To stay experimentation in things social and economic is a grave responsibility. Denial of the right to experiment may be fraught with serious consequences to the Nation." (See also `The Legacy of Holmes and Brandeis' by Samuel Konefsky). 39. In the Constitution bench decision of the Supreme Court in Shri Sitaram Sugar Co. Ltd. vs. Union of India AIR 1990 SC 1277 it was observed : "What is best for the sugar industry and in what manner the policy should be formulated and implemented, bearing in mind the fundamental object of the statute viz. supply and equitable distribution of essential commodity at fair prices in the best interest of the general public is a matter for decision exclusively within the province of the Central Government. Such matters do not ordinarily attract the power of judicial review." 40. It was held in the above decision as well as in India Cement Ltd. vs. Union of India AIR 1991 SC 724 that even if some persons are at a disadvantage and suffered losses on account of formulation and implementation of the Government policy that is not by itself sufficient ground for interference by the Court. ....
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....y was necessary in the public interest it would be entitled to revise the policy and lay down a new policy. 45. In Prag Ice & Oil Mills vs. Union of India AIR 1978 SC 1296 the Supreme Court observed : "We do not think that it is the function of the Court to sit in judgment over such matters of economic policy as must necessarily be left to the government of the day to decide. Many of them are matters of prediction of ultimate results on which even experts can seriously err and doubtlessly differ. Courts can certainly not be expected to decide them without even the aid of experts." 46. In Shri Sitaram Sugar Co. Ltd. vs. Union of India (1990) 3 SCC 223 the Supreme Court observed : "Judicial review is not concerned with matters of economic policy. The Court does not substitute its judgment for that of the legislature or its agents as to matters within the province of either. The Court does not supplant the view of experts by its own views." It must be remembered that certain matters are by their nature such as best be left to experts in the ....