2017 Supreme(SC) 467

SUPREME COURT OF INDIA
A.K. SIKRI, ABHAY MANOHAR SAPRE, JJ.
SHIVASHAKTI SUGARS LIMITED – APPELLANT(S)
VERSUS
SHREE RENUKA SUGAR LIMITED & ORS. – RESPONDENT(S)
CIVIL APPEAL NO. 5040 OF 2014 W I T H CIVIL APPEAL NO. 5041 OF 2014 CIVIL APPEAL NO. 5042 OF 2014 A N D CIVIL APPEAL NO. 5043 OF 2014
Decided On : 09-05-2017

IMPORTANT POINTS
Order/Pres note under Sugarcane (Control) Order is only an administrative guidelines, not having statutory character.
Requirement of Clauses 6A, Explanation 1 of Sugarcane (Control) Order, 1966 cannot be interpreted to mean crushing for any of the one season out of five.
Law is an interdisciplinary subject where interface between law and other sciences come into play. Impact of other disciplines on law is to be necessarily kept in mind while taking a decision. Interface between law and economics is much more relevant in today’s time.

Headnote:(a) Essential Commodities Act – Section 29(b) – Sugarcane Control Order, 1966 – Putting condition of minimum distance of 15 km between two sugar manufacturing units – No such provision in the Act – Said order/Pres note only an administrative guidelines, not having statutory character. (Para 3)

       (b) Sugarcane (Control) Order, 1966 – Clauses 6A, Explanation 1 – Existing sugar mill – Needs to crush for five consecutive years – High Court wrongly interpreting it as crushing for any of the one season out of five – M/s. Raibagh Sahakari, held, was not an existing sugar factory. (Para 28)

       (c) Sugarcane (Control) Order, 1966 – Clause 6A – M/s. Raibagh Sahakari giving no objection cvertificate to appellant way back in 1995 – Appellant’s application was processed on the basis that M/s. Raibagh Sahakari was not in operation – State Government ordering liquidation of M/s. Raibagh Sahakari – Its revival initiated only in 2008, after acknowledgement of IEM of appellant in 2006 – Held, requirement of distance as prescribed in Clause 6A would be inapplicable. (Para 29)

       (d) Sugarcane (Control) Order, 1966 – Clause 6A – Existing sugar mill giving no objection certificate – Existing mill waving the requirement of distance – Distance between it and appellant 15 km at relevant time – Bona fide of appellant cannot be doubted – a

       (1996) 5 SCC 460 – Relied upon

       (2007) 4 SCC 723 – Referred

       (e) Jurisprudence – Law and other subjects – Law is an inter disciplinary subject where interface between law and other sciences come into play – Impact of other disciplines on law is to be necessarily kept in mind while taking a decision – Interface between law and economics is much more relevant in today’s time – Even if there be some technical violation, appellant’s factory is required to be run in larger economic interest of public – Court exercising power under Article 142, Constitution of India. (Para 37, 40)

       (1999) 1 SCC 492 – Relied upon

       Facts of the case:

       The appellant herein had made an application for permission to establish a new sugar factory. One, M/s. Raibagh Sahakari, which was in the same vicinity where the appellant was seeking to establish its factory, gave a ‘no objection’ certificate to the appellant for establishing a sugar factory in the year 1995. The application of the appellant was processed and the Government of India issued a Letter of Intent (LOI) to the appellant on July 03, 1996 permitting it to establish a sugar factory at Village Saundatti, Tehsil Raibagh, District Belgaum. This was done before the new policy was announced vide Press Note-12 dated August 31, 1998.

       After the aforesaid Press Note, there was paradigm shift in the approach as no licence was now required and instead requirement was to file an Industrial Entrepreneurs Memoranda (IEM) only. On June 05, 2006, the Commissioner of Cane Development/Director of Sugar issued a certificate to this effect certifying that there was no such sugar factory within the radius of 15 km from the appellant’s site. After the issuance of this certificate, the appellant filed its IEM which was duly acknowledged by the Ministry of Commerce and Industries.

       On January 24, 2004, the Government of Karnataka had passed an order of liquidation of Raibagh Sahakari.

       The appellant filed its IEM on August 08, 2006, supported by the certificate issued by the Cane Development Commissioner that there was no existing sugar factory within the radius of 15 km. On October 20, 2006, the Government of Karnataka granted permission to the appellant for purchase of agricultural lands for industrial purposes in Raibagh Taluk in village Yadrav. Similar permission was granted under Section 109(1) of the Karnataka Land Reforms Act, 1961. Similar permission under Section 109(1) on November 20, 2006 for land admeasuring a total of 38 acres and 11 guntas for setting up a sugar factory in village Yadrav and Saundutti was also granted by the Deputy Commissioner, Belgaum.

       While the IEM of the appellant was being processed, the Sugarcane (Control) Amendment Order, 2006 was brought into force on November 10, 2006. Clauses 6A to 6E were inserted. By Clause 6A, a minimum distance requirement of 15 kms was brought into force. This requirement, which was hitherto administrative in nature, has, become a statutory requirement. However, only Clauses 6B(1) to 6D were made applicable by virtue of Clause 6E to industries whose IEM stood acknowledged till this date.

       The Government of India granted the second extension of time to the appellant till June 07, 2011. Factory was duly set up and production started before June 07, 2011. The appellant has also been given the environmental clearance. Government of India even granted licence dated March 24, 2011 for crushing for the season 2010-2011.

       On July 19, 2007 the Government notified tenders for giving Raibagh Sahakari factory by way of lease. This Notification inviting tender was challenged by certain persons in the form of writ petition filed in the High Court. The High Court dismissed the writ petition, thereby upholding the action of the Government to invite tenders.

       Ultimately tender of Respondent No. 1, i.e., Shree Renuka Sugar Limited was accepted and lease deed dated October 16, 2008 was executed in favour of Respondent – 1 thereby allowing it to restart the said factory. Even this grant of lease was challenged in a bunch of writ petitions which were dismissed by the High Court on February 10, 2010. In this order as well, the High Court again noticed that since the factory had been lying closed since 2001-2002, it needed a restart which was in public interest. In this manner, it is Respondent no. 1 which is now running Raibagh Sahakari factory and has now taken a position that since Raibagh Sahakari is within the radius of 15 kms from the place where appellant had set up its factory, as per the provisions of clause 6A of Sugarcane (Control) Amendment Order, 2006, no permission could have been given to the appellant to start its factory.

       Between June, 2010 and November, 2010, four writ petitions, in quick succession, came to be filed against the appellant for stalling its project, at the stages when substantial work had been accomplished by the appellant for setting up of the factory.

       The High Court has held that the distance between the factory of the appellant and Raibagh Sahakari is less than 15 kms and, therefore, the setting up of the factory is in violation of clause 6A of the Sugarcane (Control) Amendment Order, 2006. As a consequence, the IEM of the appellant is held to be derecognized. The High Court has also held that extensions dated August 18, 2010 and December 01, 2010 were without jurisdiction as “effective steps” in terms of Sugarcane Control Amendment Order were not taken and, therefore, no extension could be given.

       the necessity of distance requirement between M/s. Raibagh Sahakari factory and the appellant’s factory as contained in Clause 6A was not attracted.

       Finding of the Court:

       Appellant’s factory is required to run in larger economic interest of the public.

       Result: Appeal allowed.