SIEL LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners have challenged the rejection of their application for grant of an industrial licence for a sugar factory in district Muzaffarnagar in the State of U.P. The petitioners also challenge the grant of Letter of Intent (hereinafter referred as the LOI) to respondent No. 1 for the same district in preference to the petitioners. The action of the Government respondent No. 1 has been challenged mainly on the following grounds.

(2.) Briefly the facts which are necessary to appreciate the controversy in this writ petition are that sugar falls under the Ist Schedule to the Industries Development and Regulation Act and being a scheduled industry a licence is required under Section 11 of the Act for establishment of a new industrial undertaking. The licence is to be granted by the Ministry of Industry, Government of India. The petitioners as also respondents 3 and 4 besides some other parties had applied for industrial licence for setting up of a sugar factory in district Muzaffarnagar, Uttar Pradesh. The application of respondent No. 3 was made on or about 22nd October, 1993 while the petitioners' application is dated 13th March, 1995. The petitioners claim that they are already running two most efficient sugar factories in the State of Uttar Pradesh and thus have the necessary expertise and experience and capability of setting up of a new sugar factory. It is also claimed that the petitioner No. 1 is a large and a well-known widely held public limited company with acess to huge funds. It enjoys excellent relationship with the cane growers of the State of U.P. and has done tremendous work for their development and upliftment. On the other hand it is stated that respondent No. 3 has no experience of running a sugar factory.

(3.) On 21st January, 1997 the Licencing Committee of the Ministry of Industry in its meeting decided to grant the LOI to respondent No. 3 purely on the basis that its application was earlier in point of time. In the same meeting the Licencing Committee noted that Smt.Shobhna Bhartia was the earliest applicant and she had been granted an LOI in the year 1994 but she had failed to implement the same and, therefore, in spite of the fact that she was the earliest applicant, her application was rejected. On 6th February, 1997 the LOI was issued in favour of respondent No. 3. Vide letter dated 23rd February, 1997 the respondent No. 1 informed the petitioner that the LOI was being granted to an older applicant for the selected location. It is further stated in the said letter that the Government of India did not find themselves in a position to consider the request of the petitioners for a licence. However in case the petitioners wished to contest the ground of rejection they may send their representation to the Directorate of Sugar, Krishi Bhawan, New Delhi within a period of three weeks from the date of issue of the said letter. The petitioners made a representation to the Government in this behalf on 17th March, 1997 but the same remained pending. The present writ petition was filed in this Court on 14th May, 1997 challenging the action of respondent No. 1.