RENUKA SUGARS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) All these Writ Petitions are listed before this Bench by a Special Order of the Hon'ble Chief Justice for decision. The subject matter of all these petitions is identical though one of the writ petition is by way of public interest litigation. Therefore, they are taken up for consideration together and disposed of by this common order.

(2.) The Petitioners in W.P. No. 66920/2010 herein are the member shareholders of the Doodhganga Krishna Sahakari Sakkare Karkhane Niyamit, Chikkodi. It is a Cooperative sugar factory registered under the Karnataka Cooperative Societies Act. 1959. It was established to cater to the needs of the sugarcane farmers In and around Chikkodi, Raibagh and Athani Taluk in Belgaum District. Later it was converted into a Multi-State Co-operative Society under the Karnataka Multi State Co-operative Societies Act, 2002, by extending its area of operation to more than one State (Karnataka & Maharastra) Earlier, they were having crushing capacity of 2500 TCD with 13 MW Co-generation Power Plant and 40 KL Distillery. The crushing capacity of Co-generation power production was also increased to 23 MW. Thus, they have established an integrated, unique cooperative sugar factory with the total investment of more than Rs. 300 Crores. On 31-8-1998 the Government has completely de-licenced the sugar industry with effect from 14-9-1998 wherein the concept of filing of IEM with the Secretariat of Industrial Assistance in Ministry of Industry, Government of India has been introduced. Prior to the issuance of Press Note No. 12 dated 14-9-1998 the minimum radial distance between two sugar factories for the first time was fixed at 30 Kilometers during the Sixth Five Year Plan vide Press Note No. 7/1984. This was increased to 40 Kilometers during the Seventh Five Year Plan vide Press Note No. 1 (1989 series) dated 2-1-1987. The distance was reduced to 25 Kilometers on fulfillment of certain conditions vide Press Note No. 12/1989 dated 19-5-1989. Again vide Press Note No. 16/1991 dated 8-11-1991 the distance between proposed and existing sugar factories was down to 25 kilometers with the stipulation of reduction to 15 Kilometers in special cases where the cane availability is justified. This was further reduced to 15 Kilometers by Press Note No. 1/1997 dated 10-1-1997. The Central Government in exercise of powers conferred on it by Section 3 of Essential Commodities Act, 1965, and by virtue of an amendment dated 10-11-2006 inserted Clause 6A. 6B, 6C. 6D, and 6E in the Sugarcane (Control) Order 1966 by virtue of which it had imposed clear restriction on setting up of two sugar factories within the radius of 15 Kilometers and thus there is clear prohibition of setting up of a sugar factory within the radius of 15 Kilometers from an existing sugar factory.

(3.) Respondent No. 7 namely M/s. Shivshakathi Sugars Limited., is trying to set up a sugar factory within 15 Kilometers radius from the existing Doodhganga Krishna Sahakar Sakkate Karkhane Niyamit, Chikkodi, a existing sugar factory. The 7th Respondent filed an IEM for setting up of a sugar factory in Village Saundatti Raibag Taluka, Belgaum District, on 8-6-2006. Respondent No. 7 cannot set up or barred from setting up of sugar factory within the 15 Kilometers radius from the existing Doodhganga Krishna Sahakar Sakkare Karkhane Sugar factory. The proposed site of Respondent No. 7 at Saundatti Village is situated within 15 kilometers radius of the Petitioners' factory. They have produced a map issued by the Department of Public Works, Ports & Inland Water Transports, Government of Karnataka to substantiate the same. The 7th Respondent by furnishing false details appears to have obtained distance certificate. Respondent No. 7 had already failed to take any of the effective steps for the commencement of the commercial production till this date. Therefore, the time limit prescribed under the provisions of the Sugarcane (Control) Order for taking steps has lapsed resulting in de-recognition of IEM filed by Respondent No. 7. Respondent No. 2 has already issued a show cause notice to Respondent No. 7 on 2th April, 2010 and sought an explanation for cancelling and derecognizing the IEM of Respondent No. 7. The second Respondent ought to have re-recognized the IEM filed by Respondent No. 7 and forfeited the performance guarantee furnished by Respondent No. 7 and ought to have declared that the IEM of Respondent No. 7 as lapsed. The Petitioners being aggrieved by the failure of Respondent No. 2 in de-recognizing the IEM filed by Respondent No. 7 are constrained to approach this Court by way of writ petition. Therefore, they sought for declaration that the IEM filed by Respondent No. 7 dated 8-6-2006 is null and void and the same has been lapsed and de-recognized in law and for a direction directing Respondents 1 to 6 not to allow Respondent No. 7 from setting up of a sugar factory within 15 Kilometers radius from the Petitioners' factory.