TMI Blog2010 (11) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... T 1. As prayed by learned counsel Mr. Parijat Sinha this petition is dismissed as withdrawn. Civil Appeal No.5856 of 2005 2. These petitions have been filed against the judgment and order dated 1.2.2006 in Civil Misc. Writ Petition No.31199 of 2005 of the High Court of Judicature at Allahabad 3. By that decision the High Court has quashed the Press Note Number 12 dated 31.8.1998 and Notification SO 808(E) dated 11.9.1998, issued by the Central Government, by which the Sugar Industry was de-licensed under Section 29B of the Industries (Development and Regulation) Act, 1951 (hereinafter referred to as the Act'.) 4. As a consequence, the High Court has debarred the respondent number 6 from establishing a sugar industry without obtaining a licence under Section 11 of the Act. 5. The High Court has also cancelled the permission, if any, 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06. The petitioner has already spent about Rs.600 crores on the purchase of land, plant and machinery and other miscellaneous expenditure. Further, the construction of buildings of the other three sugar factories and integrated distillery for production of Ethanol etc. is in full swing on which a further sum of Rs.700 crores is committed to be invested for which the petitioner had also made GDR issue of US$ 110 million and committed in the international market. It is submitted that all the projects of the petitioner would be affected by the impugned judgment. 8. It is submitted that in the State of U.P., the sugar industry is one of the most important industries, with sugarcane being the chief cash crop. Thousands of people have been provided employment in this industry alone. Nearly half of India's sugarcane area is situated in U.P. alone, which 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n produce our own sugar. These businessmen told the British Government that they were willing to set up such industries provided they were assured of regular supply of sugarcane. It may be mentioned that sugarcane is the main raw material for manufacture of sugar. If an adequate supply of sugarcane was not available to the sugar mills the mills would have to close down entailing heavy losses to the proprietors. The Government accepted this request and framed laws for ensuring a regular supply of sugarcane to any sugar mill established in India and made various regulations for the sugar industry. 15. The 1951 Act placed the sugar industry in the First Schedule to the Act, which meant that no sugar industry could 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcane (Control) Order, 1966. 2. The entrepreneurs who wish to avail themselves of the de-licensing of sugar industry would be required to file an Industrial Entrepreneurs Memoranda (IEM) with the Secretariat of Industrial Assistance in the Ministry of Industry as laid down for all de-licensing Industries in terms of the Press Note dated 2nd August, 1991, as amended from time to time. 3. Entrepreneurs who have been issued letter(s) of intent (LOI) for manufacture of sugar need not file an initial IEM. In such cases, the LOI holder shall only file part B of the LOI at the time of commencement of 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advance and opening of LOC with suppliers, commencement certificate of civil work and construction of building, sanction of requisite term loans from the banks or financial institutions and any other steps prescribed by the Central Government in this regard. (iii) This Court by its judgment dated 02.04.07 in Ojas Industries P. Ltd. vs. Oudh Sugar Mills Ltd Ors (2007) 4 SCC 723 considered the Press Note dated 31.08.98, the amendment of Sugarcane Control Order, 2006 and the liberalization policy of 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 amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve and legislative authorities as the case may be. 25. In paragraph 42 of the aforesaid decision this Court quoted from its earlier decision in M.P. Oil Extraction vs. State of M.P. 1997(7) SCC 592 as follows : .........The executive authority of the State must be held to be within its competence to frame a policy for the administration of the State. Unless the policy framed is absolutely capricious 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the stage of development of any schedule industry if the Central Government is of the opinion that there should be an exemption from some or all of the provisions of the Act, it can issue an appropriate notification for this purpose. Sub- section 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 Territo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utive. We do not agree. It is well settled that the executive power of Union of India is co-extensive with the legislative power vide Article 73(1) of the Constitution. Hence in our opinion it was not necessary to amend the Act to de-license 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... process of trial and error and Courts must not interfere with necessary experiments. In the same decision Justice Brandeis also observed : 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 implementat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... country. When the Government is satisfied that change in the policy 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 field. This Court does not have the technical an ..... 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