DEVINDER SINGH Vs. UNION OF INDIA

JUDGEMENT

(1.) These two Writ Petitions raise common questions inasmuch as in both these petitions there is challenge to grant of Letter of Intent dated 31 March, 1994 issued by the Central Government in the Ministry of Industry in favour of the respondent Vipin Goel for him to establish a sugar unit of the capacity of 2500 TCD (Tonnes cane crush per day) at Chandak in District Bijnor, U.P. Both the petitioners, however, claim their individual right to the Letter of Intent issued to them, and seek a mandamus for that purpose. '

(2.) Under the Industries (Development and Regulation) Act, 1951 (for short 'the 1. D. Act') sugar falls under the first schedule and is, thus, a scheduled industry under clause (i) of Section 3 of the Act. Under Clause (d), industrial undertaking means an undertaking pertaining to a scheduled industry carried on in one or more factories by any person or authority including the Government. Under Section II of theA^t, a licence is required for establishment of a new industrial undertaking which licence is to be granted by the Central Government in the Ministry of Industry. Section 14 prescribes the procedure for grant of licence or permission and it says before granting any licence or permission under Section 11 the Central Government may require such officer or authority, as it may appoint for the purpose, to make a full and complete investigation in respect of applications received in this behalf and to report to it the result of, such investigation, and in making any such investigation the officer or authority shall follow such procedure as may be prescribed. A licence may contain such conditions including, in particular, conditions as to the location of the undertaking and the minimum standards in respect of size to be provided therein as the Central Government 708 may deem fit to impose in accordance with the Rules, if any, made under Section 30. The Registration and Licensing of Industrial Undertakings Rules, 1952, (for short 'the I.D. Rules') have been framed. These Rules provide as to how the application for licence for establishment of a new industrial undertaking is to be made and how that application is to be processed. We may reproduce the extracts from the relevant rules:- 7. Application for licence.-(1) Application for a licence of permission for the establishment of a new industrial undertaking or any substantial expan- sion of for the production or manufacture of any new article in an industrial undertaking shall be made before taking any of the following steps: (a) raising from the public any part of the capital required for the under- taking or expansion or the production or manufacture of the new article; (b) commencing the construction of any part of the factory building for the undertaking or expansion or the production or manufacture of the new article; (e) placing order for any part of the plant and machinery required for the undertaking or expansion of the production or manufacture of the new article; (I-A) An application for a licence or permission for changing the location of the whole or any part of an industrial undertaking which has been registered or in respect of which a licence or permission has been issued shall be made before taking any of the following steps: (a) the acquisition of land or the construction of premises for the purpose of housing the industrial undertaking at the proposed new site; (b) the dismantling of any part of the plant and machinery at the existing site. (3) Each application shall be accompanied by a crossed demand draft for Rs. 2,500 drawn on the State Bank of India, Nirman Bhawan, New Delhi, in favour of the pay and Accounts Officer, Ministry of Industry (Department of Industrial Development), Government of India, New . Delhi. 8. Acknowledgement of application.- On receipt of the application, the receiving officer shall note thereon the date of its receipt, and shall send to the applicant an acknowledgement staling the date of receipt. 10. Application to be referred to Committee. (1) The Ministry of Industrial Development shall refer the application to a Committee appointed under Sub-rule (2); Provided that where an application relates to the extension of the period of validity of an industrial licence or to the issue of a carry-on-business licence or to diversification within the existing licensed capacity inrespect of such scheduled industries as may, from time to time, be decided by the Central Government, having regard to the maximum of production, better utilization of existing plant and machinery and other factors, the Ministries 709 concerned may dispose of such application without reference to the Committee. (2) The Ministry of Industrial Development may, by Notification in the Official Gazette, appoint one or more Committees, consisting of such number or members as it may think fit to represent- (a) The Ministries of the Central Government dealing with- (i) the industries specified in the First Schedule to the Act; (ii) Finance; (iii) Company Affairs; and (iv) Science and Technology; and (b) the Planning Commission. (3) A Committee appointed under Sub-rule (2) may co-opt one or more representatives of other Ministries of the Central Government or of any State Government concerned, wherever it is necessary. 11. Submission of report by the Committee-(1) After Such investigations as may be necessary the Committee to which an applicatiion has been referred under Rule 10 shall submit a report to the Ministry of Industrial Development. 12. Contents of the report.- In making the report under Rule 11, the Committee shall have regard to the approved plans, if any, of the Central Government for the development of the scheduled industry concerned and, where no such plans exist, to the existing capacity of the scheduled industry, the demand and supply position, availability of raw materials and plant and machinery. The report should, among other matters, contain recommendations regarding capital and its structure, suitability of the location proposed from the point of view of the approved plans for the industry, capacity of the plant to be installed, availability of rail-transport capacity, availability of technical and other skilled personnel required, and collaboration, if any, with foreign manufacturers. 14. invitation of applications- (1 ) The Ministry of Industrial Development or the authority appointed by it in this behalf may, where it considers necessary, invite, by means of a notice published in the Gazette of India, applications for the grant of licences for the establishment of new industrial undertakings in any scheduled industry. (2) An application received under Sub-rule (1) shall be dealt with in the manner laid down in Rules 10 to 13. 15. Grant of licence orpermission.-(1) The Ministry of Industrial Development shall consider the report submitted to it under Rule 11, and where it decides that a licence or permission, as the case may be, should be granted it shall inform the applicant accordingly, not later than three months from the date of receipt of the application, or the date on which additional information under Rule 9 is furnished, whichever is later. 710 (2) Where the Ministry of Industrial Development considers that certain conditions shall be attached to the licence or permission, or that the licence or permission should be refused, it shall not later than three months from the date of receipt of the application or the date on which additional information under Rule 9 is furnished, whichever is later, give an opportuntiy to the applicant to state his case, before reaching a decision. (3) Where a licence or permission has been refused the applicant shall be informed of the reasons for such refusal. (4) Licences or permissions shall be in Form F appended to these rules." Under the Govemmentoflndia(Allocationof Business) Rules, 1961,framed by the President of India under Clause (3) of Article 79 of the Constitution for the allocation of business, one of the subjects which falls to be dealt by the Ministry of Food is sugar industry and is indicated as under:- "6. Industries, the control of which by the Union is declared by Parliament by law to be expedient in public interest, as far as these relate to: (a) ......; (b) Sugar Industry (including development of Gur and Khandsari); and (e) ....." Then the following subjects are shown under the Ministry of Industry:- "1. Industrial Policy 1. .... 2. Administration of the Industries (Development and Regulation) Act, 1951 (65 of 1951). xx xx xx III. Industries and Industrial and Technical Development.

(3.) Planning development and control of and assistance to, all industries other than those dealt with by any other Department, but including industries relating to bread, oilseeds meals (edible), breakfast foods, biscuits, confectionery (including Cocoa Processing and Chocolate making), malt extract, protein isolate, high protein food,weaning food and extruded food products (including other ready-to-eat foods)." ' Under Rule 14 of the I.D. Rules, the Ministry of Industry did not invite any applications by means of public notice in the Gazette of India for the grant of licence for establishment of the new sugar industry. However, by means of Press Notes (1990 and 1991 Series) certain guidelines were issued by the Central Government for licensing of new and expansion of existing sugar factories. Press Note (1991 Series) was issued in supersession of the Press Note (1990 Series) as certain revised guidelines were formulated. We may reproduce certain extracts from these guidelines from the Press Note (1991 Series) dated 8 November, 1991 for the sugar year 1991-92 and the Eighth Five Years Plan (1992-93 to 1996-97):- . "A". 711 (1) ....... (2) Licences for new sugar factories will be issued subject to the condition that the distance between the proposed new sugar factory and an existing/already licensed sugar factory should be 25 kilometres. This distance criterion of 25 kms. could, however, be relaxed to 15 kms. xx xx xx (5) Other things being equal, preference in licensing will be given to proposals from the Co-operative Sector and the Public Sector, in that order, as compared to the Private Sector. In case more than one application is received from any zone of operation, priority will be given to the application received earlier. However, in such cases, also, preference will be given to the Co-operative Sector, followed by the Public Sector and the Private Sector, in that order, even though the applications of the first two sectors may be of a later date. xx xx xx B. Applications for licences will initially screened by the Screening Committee of the Ministry of Food. While considering such applications, the comments of the State Governments/Union Territory Administration concerned would also be obtained. The State Government/Union Territory Administration would be required to furnish their comments within 3 months of the receipt of communication from the Ministry of Food. C. Applications for grant of industrial i licences for the establishment of new sugar factories as well as expansion of existing units should be submitted directly to the Secretariat for Industrial Approvals in the Department of Industrial Development in Form IL alongwith the prescribed fee of Rs. 2500.00 . A copy of the application may also be sent to Ministry of Food. D. The procedure and guidelines, as given above, are brought to the notice of the entrepreneurs for their information and guidance." . We may also note that the stand of the Central Government has been that the submission of application for grant of licence for setting up new sugar factory is an on going continuous process and application submitted at any time can be taken into consideration by the Ministry of Industry and the Screening Committee of the Ministry of Food to which application is referred.