The grant of licences for new sugar units is based on the potential availability of raw material and not the existing availability.

T. N. C. RANGARAJAN, J.

( 1 ) THIS writ appeal arises from the order of N. Y. Hanumanthappa J. , dismissing the writ petition at the admission stage. The writ petition challenged grant of letter of intent to Vasavi Jute Mills Private Limited (herein after referred to as vasavi , even though it has since been renamed as Varalaxmi Sugars Limited) for setting up a sugar factory, on the grounds that the petitioner Coastal Papers Limited (hereinafter referred to as coastal ) which had already been given a letter of intent to set up a sugar factory, would be adversely affected. The learned Judge was of the view that the matter was one of the economic policy, there were no mala fides in the grant of letter of intent to Vasavi and no grievance that can be adquately redressed and consequently, there was no requirement of giving notice to the petitioner before grant of letter of intent to Vasavi with the result that the petitioner, as a rival trader, had no right or locus standi to maintain the writ petition.

( 2 ) THE learned counsel for the writ petitioner took us through a mass of documents to urge that certain norms relating to the provisions of adequate raw material to the proposed unit had not been followed and the letter of intent had been given to Vasavi in contravention of the regular procedure. He also pointed out that if the letter of intent already given to the petitioner was to be meaningful, then the Government had a duty to protect the supply of the raw material to the extent required for the optimum functioning of the unit and when that was not possible, the Government had no jurisdiction to issue another licence to any other person and such an issue of licence violated also the policy guidelines. He further argued that the grant of the licence to Vasavi in disregard of the policy and procedure affected the viability of the petitioner s unit and, consequently, the petitioner had a right to be heard and the locus standi to question the grant of licence to Vasavi. The learned counsel thus submitted that the impugned order granting the letter of intent, should be quashed.

( 3 ) THE learned counsel for Vasavi submitted that the impugned order was well within the revised policy which was aimed at developing the potential of sugar-cane and it was for the petitioner to achieve that potential within the area allotted to him and could not object to the different area being allotted to Vasavi. The learned counsel also submitted that there was no violation of any norms and since the area of operation was quite different from that of Coastal, there was no locus standi for Coastal to maintain the writ petition. It was also pointed out that the extent of allocation of raw material depended upon the order of the Cane Commissioner under the andhra Pradesh Sugarcane (Regulation and Supply and Purchase) Act, in respect of which alternative remedies were available and, therefore, the writ petition was not maintainable.

( 4 ) THE learned Standing Counsel for the Central Government submitted that the grant of licences particularly in the liberalised atmosphere was a matter of policy and when no violation of the policy guidelines had been established, the petitioner had no locus standi to question the grant of licence to another person outside his area even if there was any procedural irregularities. The learned Standing Counsel submitted further that the grant of licence to Vasavi was in accordance with the policy guidelines and the procedure laid down for the issue of licences, and it was not required to be interfered with.

( 5 ) SUGAR Industry is governed by the Industries (Development and regulation) Act, and licences are to be given by the Government of India. Guidelines are issued by the Government for the grant of such licences from time to time. The raw material viz. ,the sugar cane required for the sugar factories is regulated by the Andhra Pradesh Sugarcane (Regulation of supply and Purchase) Act, 1961. Under that Act, there is a

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