1994 Supreme(AP) 618

Andhra Pradesh High Court
Judges : N.Y.HANUMANTHAPPA
Coastal Papers Limited, rep.by its Managing Director, Mr.C.V.Rao, Rajahmundry - Appellant
Versus
Government of India, rep.by Secretary, Department of Industrial Development, Ministry of Industry, New Delhi - Respondent
Decided On : 12-28-94

Headnote:

INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951 - SECTIONS 11, 12, 14 - ANDHRA PRADESH SUGAR CANE (REGULATION OF SUPPLY AND PURCHASE) ACT, 1961 - REGISTRATION AND LICENSING OF UNDERTAKINGS RULES, 1952 - SUGAR CANE CONTROL ORDER, 1966 - WRIT PETITION - MAINTAINABILITY - TERRITORIAL JURISDICTION - LOCUS STANDI - LACHES - REVIEW PETITION - SCOPE OF JUDICIAL REVIEW - POLICY MATTERS - MALA FIDES - BIAS - ARBITRARINESS - DISCRIMINATION - PROMISSORY ESTOPPEL - LEGITIMATE EXPECTATION - ZONAL ALLOTMENT - WRIT PETITION DISMISSED.

Fact of the Case:

Petitioner, one of the rival traders, challenged the Letter of Intent (LOI) issued to the 8th respondent for installing a Sugar Unit at Veeraghattam in Srikakulam District of Andhra Pradesh, and requested the authorities not to allot any zone or area of operation of cane development potential to the 8th respondent in Srikakulam District and to cancel any allotment of zone of operation, if already made to him.

Finding of the Court:

The Court held that the writ petition was maintainable, the petitioner had locus standi, and the delay in filing the writ petition was not fatal. The Court further held that the grant of LOI to the 8th respondent was not in violation of any of the provisions of the Acts, Rules, or guidelines and was not arbitrary or discriminatory. The Court also held that there was no mala fides or bias on the part of the authorities in granting the LOI to the 8th respondent. The Court further held that the doctrine of promissory estoppel and legitimate expectation did not apply to the present case. The Court also held that the zonal allotment was not arbitrary or discriminatory.

Issues: 1. Whether the Writ Petition is maintainable in view of not availing of alternative remedy? 2. Is it open for a rival trader to contend that his fundamental right guaranteed under Art. 19 (l) (g) of Constitution of India is infringed by virtue of granting a similar licence to a competitor? 3. Before granting LOI to 8th respondent, whether the first respondent was expected to hear the petitioner? 4. To what extent Courts can interfere in the policy matters laid down, by Governments to prevent monopoly and how? And whether the State or authorities are not empowered to impose restrictions? 5. While granting LOI to 8th respondent, whether authorities committed any mala fides or acted in bias? 6. While granting LOI to 8th respondent, whether the authorities violated any of the provisions of Acts, Rules or Guidelines and discriminated against the petitioner and in favour of 8th respondent? 7. Was there any promise on the part of the respondents/state that no licence or LOI be given to others except the petitioner to start a sugar unit in Srikakulam district to attract the principle of promissory estoppel?

Ratio Decidendi: 1. A writ petition is maintainable even if an alternative remedy is available, if it is shown that the order in question is contrary to law or a statute and has resulted in depriving a person's fundamental right or against principles of natural justice. 2. A rival trader cannot challenge the permit or licence issued to a competitor in the field. There is no vested right of monopoly in the business of starting of Sugar units. Unhealthy competition and tendency towards monopoly and corruption deserve to be discouraged. 3. There is no obligation on the authorities to hear a rival trader before granting LOI to another person. 4. Courts can interfere in policy matters of the government only if it is shown that the policy is mala fide or arbitrary. 5. Mala fides or bias on the part of the authorities in granting LOI to a person must be established by placing convincing material. 6. Granting of LOI to a person is not in violation of any of the provisions of the Acts, Rules, or guidelines and is not arbitrary or discriminatory, if it is granted after satisfying with the existence of need, relevant requirements and considerations. 7. The doctrine of promissory estoppel and legitimate expectation do not apply to a case where a person seeks to challenge the grant of LOI to another person on the ground that the authorities had promised him that no LOI would be given to anyone else.

Final Decision: The writ petition was dismissed.