The Kaithal Cooperative Sugar Mills Limited vs Union of India (UOI) and Others

S.P. Kurdukar C.J. and V.K. Bali, J.—Heard counsel for the parties and perused the returns filed on behalf of the respondents.

This writ petition under Article 226 of the Constitution of India is filed by the petitioner the Kaithal Co-operative Sugar Mills Limited, challenging the grant of the letter of intent dated December 7, 1993, Annexure P-5, to the third respondent ISGEC Covema Plastics Limited. The petitioner is the existing cooperative sugar mills at Kaithal. The third respondent made an application requesting for the grant of the letter of intent to start sugar mills at village Kamoda near Pipli in District Kurukshetra. Kaithal and Kurukshetra are adjoining districts. The screening committee, in its meeting held on June 22, 1993, Annexure P4/A, recommended for rejection of the application of the third respondent mainly on the ground of distance criteria. The screening committee, however, opined as under:

"KURUKSHETRA:

Although there was surplus cane available in this district and there were 5 proposals - 4 from the private sector and one from the cooperative sector, from this district, Secretary, Cooperatives, Haryana, was of the view that the availability of cane would not be sufficient to sustain a new sugar factory......."

The third respondent vide their application dated August 3, 1990, approached the Ministry of Industry requesting to grant licence for sugar mills to them around Pipli. They, however, vide their letter dated September 13, 1990, specified the exact site for the proposed sugar mills at village Kamoda near Pipli. It appears that the Minister for Food recommended the proposal and forwarded the proposal to the Ministry of Industry favouring grant of licence. The said Ministry after considering the pros and cons of the claim of the third respondent and also after taking into account the request made by the third respondent to change the location of the factory, granted the letter of intent, Annexure P-5. It is this letter of intent, which is the subject-matter of challenge in this writ petition.

Mr. Aggarwal, the senior counsel appearing in support of this petition, firstly urged that u/s 11A of the Industries (Development and Regulations) Act, 1951, (hereinafter called the Act), and the rules framed thereunder, the recommendations made by the screening committee are required to be accepted since it was a statutory committee constituted under the Act. He further urged that the screening committee after considering the cane availability and the cane potential in the said area decided not to recommend the application of the third respondent for starting the sugar mills. The licensing committee in the Ministry of Industry, the counsel urged, has totally ignored the report of the screening committee and has arbitrarily granted the letter of intent.

After going through the material placed before us and after hearing the counsel for the parties, we are of the opinion that the licensing committee has taken into account all the relevant factors while granting letter of intent to the third respondent. Even the report of the screening committee indicates that there is enough sugarcane and the statistics on the record indicate that there would be surplus sugarcane available for the sugar mills of the third respondent. In this view of the matter, we are of the opinion that the decision taken by the licensing committee cannot be said to be illegal and at any rate there is no error apparent on the face of the record.

Mr. Aggarwal then urged that the licensing committee did not apply its mind to the various factors which were reflected in the report of the screening committee and in particular distance criteria. Since the proposed sugar mills is situated within the periphery of 32 kilometers, but beyond 25 kilometers, according to Mr. Aggarwal, the grant of letter of intent, would violate the guidelines framed under the Act.

Mr. Sarin, the learned counsel for the third respondent, raised a preliminary objection to the maintainability of the writ petition at the instance of the petitioner. Since we applied our mind to the merits of the case, it is unnecessary to go into the preliminary objection raised by Mr. Sarin.

As observed earlier, the proposed sugar mills would be beyond 25 kilometers and we have no manner of doubt that as and when the assigned area for each of the sugar mills will be determined, the authorities will take into account how best the assigned area should be worked out. In our opinion, there is no case to interfere with the grant of letter of intent to the third respondent. The writ petition is without any substance and the same stands summarily rejected.