Point of Law: An amendment having retrospective operation which has effect of taking away a benefit already available under existing rule should be held as arbitrary, discriminatory and violative of rights guaranteed under Articles 14, 16 and 19 of Constitution of India.

JUDGMENT :

R.DEVDAS, J.

This is an intra court appeal filed at the hands of the writ petitioners being aggrieved of the impugned order passed by the learned Single Judge in W.P. No. 102856/2022. The writ petitioners had approached the learned Single Judge seeking to quash the impugned order dated 25.07.2022 passed by the 4th respondent-Commissioner for Cane Development and Director of Sugar, Government of Karnataka.

2. Brief facts of the case are that appellant No.1 M/s Askins Biofuels Private Limited was granted Industrial Entrepreneur Memorandum (for short ‘IEM’) on 05.12.2019 to establish a standalone distillery, to manufacture ethanol. The Government of India, through the Ministry of Consumer Affairs, Food & Public Distribution, had issued a notification dated 08.03.2019 extending financial assistance to molasses based standalone distilleries. The Scheme for extending financial assistance to molasses based standalone distilleries was proposed by the Central Government with an intention to enhance and augment ethanol production capacity. Only molasses based standalone distilleries were eligible to file application under the Scheme. Provision was made in the said notification calling upon eligible applicants to set up new distilleries, including expansion of the capacity of the existing molasses based standalone distilleries. Accordingly, appellant No.1 filed an application seeking permission and grant of IEM for establishment of a standalone distillery, at the location 106/2, Harugeri Road, Alagawadi, Raibag, Belagavi District. It is the contention of the appellants that after establishment of the distillery in the said location, appellant No.1 started procuring molasses from appellant No.2, which is a factory licenced to produce jaggery. However, subsequently another notification dated 14.01.2021 was issued by the Ministry modifying the Scheme for enhancement of ethanol distillation capacity or to set up distilleries for production of first generation ethanol from feed stocks, such as, cereals (rice, wheat, barlie, corn and sorghum), sugarcane, sugar beet, etc. Provision was made to convert existing molasses based distilleries (whether attached to sugar mills or standalone distilleries) to dual feed and also to convert grain based distilleries to dual feed. Following the said notification permitting standalone distilleries to produce ethanol from dual feeds, including sugarcane, appellant No.1 started procuring sugarcane juice from appellant No.2 for production of ethanol.

3. Respondent No.5-M/s Alagawadi Bireshwar Sugars which was holding IEM in the same area, also called reserved area, was aggrieved of the establishment of standalone distillery within the reserved area and procurement of sugarcane juice by appellant No.1 from appellant No.2. Respondent No.5 filed W.P. No. 100915/2022 seeking a writ of mandamus to the respondent authorities to immediately stop appellant No.1 from establishing the factory, to prevent the appellants herein from dealing with sugarcane/sugarcane juice procured from the reserved area and to stop production. It was also contended that the appellants herein, put together, were a sugar factory and they violated the provisions contained in the Sugarcane Control Order. However, by order dated 15.03.2022, the said writ petition was disposed off directing the concerned authorities to consider various representations and complaints given by respondent No.5 herein and to pass orders in accordance with law. Since opportunity was required to be given to the appellants herein to raise objections and have their say in the matter, the appellants herein gave written representations/objections before the Cane Commissioner. The Cane Commissioner passed an order dated 30.04.2022 holding that appellant No.1 herein is not eligible to utilize sugarcane juice/syrup for production of ethanol. It was held that appellant No.1 can only produce ethanol extracted from molasses. Being aggrieved, the appellants herein filed W.