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High Court Of Delhi
DEVINDER SINGH - Appellant
Versus
UNION OF INDIA - Respondent
Civil Writ 1930 of 1994
Decided On : 01/03/1995
INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951 - SECTIONS 11, 14, 15 - RULES 7, 8, 10, 11, 12, 14, 15 - SUGAR INDUSTRY - GRANT OF LETTER OF INTENT - PROCEDURE - RECOMMENDATIONS OF SCREENING COMMITTEE, LICENSING COMMITTEE AND ADMINISTRATIVE MINISTRY - RELEVANCE - CONSIDERATIONS - JUDICIAL REVIEW.
Fact of the Case:
Two writ petitions challenging the grant of Letter of Intent (LOI) dated 31 March, 1994 issued by the Central Government in the Ministry of Industry in favor of respondent Vipin Goel for him to establish a sugar unit of the capacity of 2500 TCD (Tonnes cane crush per day) at Chandak in District Bijnor, U.P. Petitioners claimed their individual right to the LOI issued to them and sought a mandamus for that purpose.
Finding of the Court:
1. The Central Government in the Ministry of Industry completely ignored the recommendations of the Screening Committee as well as the Licensing Committee. 2. The Screening Committee in the Administrative Ministry, i.e., the Ministry of Food, is not an ordinary committee whose recommendations can be brushed aside without valid reasons. 3. The Central Government in the Ministry of Industry itself in its letters addressed to the Pasupati and Devinder Singh informed them that they could not be granted Letter of Intent and also informed them that Government would give them an opportunity to state their case again before reaching a final decision, and that for that purpose they were told that they should send their representations to the Directorate of Sugar which is under the Ministry of Food. 4. Recommendations of the Licensing Committee, which is a statutory body, have also been given a complete go by. 5. The only consideration that prevailed with the Central Government in the Ministry of Industry was that Vipin Goel was the older applicant though it had taken different stands while writing letters to Pasupati and Devinder Singh declining their requests for grant of Letter of Intent. 6. Priority in making an application could not be the only consideration, or even of much relevance, unless all other factors, which are necessary for the establishment of sugar factory as per the law, are the same among various aspirants. 7. The recommendations of the State Government do not appear to be in the mind of the Central Government when it passed orders recommending the case of Vipin Goel for grant of Letter of Intent when recommendations of the Screening Committee, the Administrative Ministry (Ministry of Food) and the Licensing Committee had been brushed aside without even a wink. 8. There has been clear breach of Rule 15 of the I.D. Rules. 9. The impugned decision is in violation of the guidelines and the statutory rules on the subject. 10. Grant of hearing to the petitioners would have certainly not served any purpose as decision had already been taken to grant the Letter of Intent to Vipin Goel.
Issues: 1. Whether the Central Government in the Ministry of Industry could completely ignore the recommendations of the Screening Committee as well as the Licensing Committee? 2. Whether the Screening Committee in the Administrative Ministry, i.e., the Ministry of Food, is an ordinary committee whose recommendations can be brushed aside without valid reasons? 3. Whether the Central Government in the Ministry of Industry itself in its letters addressed to the Pasupati and Devinder Singh informed them that they could not be granted Letter of Intent and also informed them that Government would give them an opportunity to state their case again before reaching a final decision, and that for that purpose they were told that they should send their representations to the Directorate of Sugar which is under the Ministry of Food? 4. Whether Recommendations of the Licensing Committee, which is a statutory body, have also been given a complete go by? 5. Whether the only consideration that prevailed with the Central Government in the Ministry of Industry was that Vipin Goel was the older applicant though it had taken different stands while writing letters to Pasupati and Devinder Singh declining their requests for grant of Letter of Intent? 6. Whether priority in making an application could be the only consideration, or even of much relevance, unless all other factors, which are necessary for the establishment of sugar factory as per the law, are the same among various aspirants? 7. Whether the recommendations of the State Government do not appear to be in the mind of the Central Government when it passed orders recommending the case of Vipin Goel for grant of Letter of Intent when recommendations of the Screening Committee, the Administrative Ministry (Ministry of Food) and the Licensing Committee had been brushed aside without even a wink? 8. Whether there has been clear breach of Rule 15 of the I.D. Rules? 9. Whether the impugned decision is in violation of the guidelines and the statutory rules on the subject? 10. Whether Grant of hearing to the petitioners would have certainly not served any purpose as decision had already been taken to grant the Letter of Intent to Vipin Goel?
Ratio Decidendi: 1. The Central Government in the Ministry of Industry cannot completely ignore the recommendations of the Screening Committee as well as the Licensing Committee. 2. The Screening Committee in the Administrative Ministry, i.e., the Ministry of Food, is not an ordinary committee whose recommendations can be brushed aside without valid reasons. 3. The Central Government in the Ministry of Industry itself in its letters addressed to the Pasupati and Devinder Singh informed them that they could not be granted Letter of Intent and also informed them that Government would give them an opportunity to state their case again before reaching a final decision, and that for that purpose they were told that they should send their representations to the Directorate of Sugar which is under the Ministry of Food. 4. Recommendations of the Licensing Committee, which is a statutory body, cannot be given a complete go by. 5. The only consideration that prevailed with the Central Government in the Ministry of Industry was that Vipin Goel was the older applicant though it had taken different stands while writing letters to Pasupati and Devinder Singh declining their requests for grant of Letter of Intent. 6. Priority in making an application could not be the only consideration, or even of much relevance, unless all other factors, which are necessary for the establishment of sugar factory as per the law, are the same among various aspirants. 7. The recommendations of the State Government do not appear to be in the mind of the Central Government when it passed orders recommending the case of Vipin Goel for grant of Letter of Intent when recommendations of the Screening Committee, the Administrative Ministry (Ministry of Food) and the Licensing Committee had been brushed aside without even a wink. 8. There has been clear breach of Rule 15 of the I.D. Rules. 9. The impugned decision is in violation of the guidelines and the statutory rules on the subject. 10. Grant of hearing to the petitioners would have certainly not served any purpose as decision had already been taken to grant the Letter of Intent to Vipin Goel.
Final Decision: 1. Petitions allowed. 2. Writ of certiorari issued quashing the order granting the impugned Letter of Intent to Vipin Goel, respondent, for him to establish a sugar factory at Chandak in District Bijnor. 3. Direction issued to respondents 1 to 3 to consider the matter afresh in accordance with law. 4. Petitioners entitled to costs Counsel fee Rs. 5,000.00 in each Writ Petition. 5. Rule made absolute.
( 1 ) THESE two Writ Petitions raise common questions inasmuch as in both these petitions there is challenge to grant of Letter of Intent dated 31 March, 1994 issued by the Central Government in the Ministry of Industry in favour of the respondent Vipin Goel for him to establish a sugar unit of the capacity of 2500 TCD (Tonnes cane crush per day) at Chandak in District Bijnor, U. P. Both the petitioners, however, claim their individual right to the Letter of Intent issued to them, and seek a mandamus for that purpose.
( 2 ) UNDER the Industries (Development and Regulation) Act, 1951 (for short the 1. D. Act ) sugar falls under the first schedule and is, thus, a scheduled industry under clause (i) of Section 3 of the Act. Under Clause (d), industrial undertaking means an undertaking pertaining to a scheduled industry carried on in one or more factories by any person or authority including the Government. Under Section II of thea^t, a licence is required for establishment of a new industrial undertaking which licence is to be granted by the Central Government in the Ministry of Industry. Section 14 prescribes the procedure for grant of licence or permission and it says before granting any licence or permission under Section 11 the Central Government may require such officer or authority, as it may appoint for the purpose, to make a full and complete investigation in respect of applications received in this behalf and to report to it the result of, such investigation, and in making any such investigation the officer or authority shall follow such procedure as may be prescribed. A licence may contain such conditions including, in particular, conditions as to the location of the undertaking and the minimum standards in respect of size to be provided therein as the Central Government 708 may deem fit to impose in accordance with the Rules, if any, made under Section 30. The Registration and Licensing of Industrial Undertakings Rules, 1952, (for short the I. D. Rules ) have been framed. These Rules provide as to how the application for licence for establishment of a new industrial undertaking is to be made and how that application is to be processed. We may reproduce the extracts from the relevant rules:- 7. Application for licence.- (1) Application for a licence of permission for the establishment of a new industrial undertaking or any substantial expan- sion of for the production or manufacture of any new article in an industrial undertaking shall be made before taking any of the following steps: (a) raising from the public any part of the capital required for the under- taking or expansion or the production or manufacture of the new article; (b) commencing the construction of any part of the factory building for the undertaking or expansion or the production or manufacture of the new article; (e) placing order for any part of the plant and machinery required for the undertaking or expansion of the production or manufacture of the new article; (I-A) An application for a licence or permission for changing the location of the whole or any part of an industrial undertaking which has been registered or in respect of which a licence or permission has been issued shall be made before taking any of the following steps: (a) the acquisition of land or the construction of premises for the purpose of housing the industrial undertaking at the proposed new site; (b) the dismantling of any part of the plant and machinery at the existing site. (3) Each application shall be accompanied by a crossed demand draft for Rs. 2,500 drawn on the State Bank of India, Nirman Bhawan, New Delhi, in favour of the pay and Accounts Officer, Ministry of Industry (Department of Industrial Development), Government of India, New. Delhi. 8. Acknowledgement of application.- On receipt of the application, the receiving officer shall note thereon the date of its receipt, and shall send to the applicant an acknowledgement staling the date of receipt. 10. Ap
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