Bombay High Court
Loknete Marutrao Ghule Patil ... vs The Union Of India And Others on 23 July, 2021
Bench: S.V. Gangapurwala, Shrikant Dattatray Kulkarni
(1) wp-13836-2017 & ors.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
WRIT PETITION NO.13836 OF 2017
1. Eknath S/o Bhanusas Barge
Age : 56 years, Occu: Agril,
R/o Gopalpur (Khamgaon), Post: Shirasgaon
Tq. Newasa, Dist. Ahmednagar
2. Dilip S/o Shamrao Kundhare,
Age: 40 years, Occu: Agril,
R/o. Warkhed, Tq. Newasa,
Dist. Ahmednagar
3. Vijay S/o Mannu Parsaiya,
Age : 35 years, Occu: Agril,
R/o. Ramdoh, Tq. Newasa,
Dist. Ahmednagar. ..Petitioners
Versus
1. The Union of India
Through its Ministry of Commerce
and Industry,
Secretariate for Industrial Assistance,
Public Relation & Complaints Section,
New Delhi.
2. The Chief Director (Sugar),
Government of India,
Ministry of Consumer Affairs,
Department of Food and Public Distribution
Directorate of Sugar, Krushi Bhavan,
New Delhi.
3. The State of Maharashtra
Through its Principal Secretary,
Co-operation, Marketing and Textile,
Department, Mantralaya, Mumbai-32.
4. The Commissioner of Sugar,
Maharashtra State,
Sakhar Sankul, Shivaji Nagar,
Pune-5.
5. The Survey of India,
Office of Director,
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Maharashtra and Goa,
Geo-spatial Data Center,
Phule Nagar, Alandi Road,
Pune.
6. Swami Samarth Sugars and Agro
Industries Ltd. Warkhed (Ramdoh)
Tq. Newasa, Dist. Ahemadnagar,
Correspondence Office:
35, Bhiwada Best Staff Quarters,
Jerbai Wadia Road, Bhoiwada,
Parel, Mumbai-400012.
Through its Director,
Vinay S/O. Vijay Shivtare,
Age: 37 years, Occu: Business,
R/o Purandareshwar, 4373,
Sopan Nagar Road, Saswad,
Tq. Purandar, District : Pune-412301.
..Respondents
Mr. R. N. Dhorde Senior Advocate Petitioners.
Mr. A. G. Talhar A.S.G. for the Respondent Nos.1, 2
and 5.
Mr. K. N. Lokhande, A.G.P. for Respondent Nos.3 and
4.
Mr. A. Y. Sakhre, Senior Advocate i/by Mr. A. V.
Hon, Advocate for Respondent No.6.
WITH
CIVIL APPLICATION NO.2704 OF 2018
IN
WRIT PETITION NO.13836 OF 2017
Vishwanath Eknath Shinde & Anr.. ..Applicants
Versus
The Union of India and Ors. ..Respondents
Mr. Ajinkya P. Deshmukh, Advocate for Applicants.
Mr. A. G. Talhar A.S.G. for the Respondent Nos.1, 2
and 5.
Mr. K. N. Lokhande, A.G.P. for Respondent Nos.3 and
4.
Mr. A. Y. Sakhre, Senior Advocate i/by Mr. A. V.
Hon, Advocate for Respondent No.6.
Mr. R. N. Dhorde, Senior Advocate for Respondent
Nos.7 and 8.
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AND
WRIT PETITION NO.2405 OF 2018
WITH
CIVIL APPLICATION NO.3484 OF 2021
AND
CIVIL APPLICATION NO.8046 OF 2020
IN
WRIT PETITION NO.2405 OF 2018
Dnyaneshwar Sahakari Sakhar
Karkhana Ltd., Dnyaneshwar Nagar,
Post Bhende, Tq. Newas, Dist. Ahmednagar.
Throught its Authorised Officer,
Sunil S/o Laxman Shinde
Age-37 years Occ.: Service as Legal Officer
R/o, Dnyaneshwar Nagar, Post Bhende, Tq. Newasa
Dist. Ahmednagar .. Petitioner
Versus
1. The Union of India
Through its Ministry of Commerce
and Industry,
Secretariate for Industrial Assistance,
Public Relation & Complaints Section,
New Delhi.
2. The Chief Director (Sugar),
Government of India,
Ministry of Consumer Affairs,
Department of Food and Public Distribution
Directorate of Sugar, Krushi Bhavan,
New Delhi.
3. The State of Maharashtra
Through its Principal Secretary,
Co-operation, Marketing and Textile,
Department, Mantralaya, Mumbai-32.
4. The Commissioner of Sugar,
Maharashtra State,
Sakhar Sankul, Shivaji Nagar,
Pune-5.
5. The Survey of India,
Office of Director,
Maharashtra and Goa,
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Geo-spatial Data Center,
Phule Nagar, Alandi Road,
Pune.
6. Swami Samarth Sugars and Agro
Industries Ltd. Warkhed (Ramdoh)
Tq. Newasa, Dist. Ahemadnagar,
Correspondence Office:
35, Bhiwada Best Staff Quarters,
Jerbai Wadia Road, Bhoiwada,
Parel, Mumbai-400012.
Through its Director,
Vinay S/O. Vijay Shivtare,
Age: 37 years, Occu: Business,
R/o Purandareshwar, 4373,
Sopan Nagar Road, Saswad,
Tq. Purandar, District : Pune-412301.
..Respondents
Mr. R. N. Dhorde Senior Advocate i/b Mr. P. S.
Dighe, Advocate for the Petitioner.
Mr. A. G. Talhar A.S.G. for the Respondent Nos.1, 2
and 5.
Mr. K. N. Lokhande, A.G.P. for Respondent Nos.3 and
4.
Mr. A. Y. Sakhre, Senior Advocate i/by Mr. A. V.
Hon, Advocate for Respondent No.6.
AND
WRIT PETITION NO. 6754 OF 2020
Loknete Marutrao Ghule Patil
Dnyaneshwar Sahakari Sakhar
Karkhana Ltd., Dnyaneshwar Nagar,
Post Bhende, Tq. Newas, Dist. Ahmednagar.
Throught its Authorised Officer,
Sunil S/o Laxman Shinde
Age-39 years Occ.: Service as Legal Officer
R/o, Dnyaneshwar Nagar, Post Bhende, Tq. Newasa
Dist. Ahmednagar .. Petitioner
Versus
1. The Union of India
Through its Ministry of Commerce
and Industry,
Secretariate for Industrial Assistance,
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Public Relation & Complaints Section,
New Delhi.
2. The research Officer,
Department for Promotion of Industry
and Internal Trade (SIA) (IEM Section)
Udyog Bhava, New Delhi- 110 011.
3. The Chief Director (Sugar),
Government of India,
Ministry of Consumer Affairs,
Department of Food and Public Distribution
Directorate of Sugar, Krushi Bhavan,
New Delhi.
4. The State of Maharashtra
Through its Principal Secretary,
Co-operation, Marketing and Textile,
Department, Mantralaya, Mumbai-32.
5. The Commissioner of Sugar,
Maharashtra State,
Sakhar Sankul, Shivaji Nagar,
Pune-5.
6. The Survey of India,
Office of Director,
Maharashtra and Goa,
Geo-spatial Data Center,
Phule Nagar, Alandi Road,
Pune.
7. Swami Samarth Sugars and Agro
Industries Ltd. Warkhed (Ramdoh)
Tq. Newasa, Dist. Ahemadnagar,
Correspondence Office:
35, Bhiwada Best Staff Quarters,
Jerbai Wadia Road, Bhoiwada,
Parel, Mumbai-400012.
Through its Director,
Vinay S/O. Vijay Shivtare,
Age: 37 years, Occu: Business,
R/o Purandareshwar, 4373,
Sopan Nagar Road, Saswad,
Tq. Purandar, District : Pune-412301.
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8. Vinay S/O. Vijay Shivtare,
Age: 37 years, Occu: Business,
R/o Purandareshwar, 4373,
Sopan Nagar Road, Saswad,
Tq. Purandar, District : Pune-412301.
9. The Secretary,
Ministry of Consumer Affairs,
Department of Food and Public Distribution,
Krishi Bhavan, New Delhi-110 001
..Respondents
Mr. R. N. Dhorde Senior Advocate i/b Mr. P. S.
Dighe, Advocate for the Petitioner.
Mr. A. G. Talhar A.S.G. for the Respondent Nos.1,
3, 6 and 9.
Mr. K. N. Lokhande, A.G.P. for Respondent Nos.4 and
5.
Mr. A. Y. Sakhre, Senior Advocate i/by Mr. A. V.
Hon, Advocate for Respondent No.7.
CORAM : S. V. GANGAPURWALA AND
SHRIKANT D. KULKARNI, JJ.
JUDGMENT RESERVED ON : 23.04.2021
JUDGMENT PRONOUNCED ON : 23.07.2021.
JUDGMENT (Per: S. V. Gangapurwala) :
1. Rule. Rule made returnable forthwith.
With the consent of the parties matter is taken up
for final hearing at the admission stage.
2. These writ petitions are based on similar
set of facts and law, ergo, to avoid rigmarole are
decided by common judgment.
3. Writ Petition No.2405/2018 and Writ
Petition No.6754/2020 are filed by existing sugar
factory. Writ Petition No.13836/2017 is filed by
the members of the existing sugar factory.
(7) wp-13836-2017 & ors.
4. In Writ Petition No.13836/2017, the
petitioner seeks declaration that the IEM dated
08.09.2010 issued in favour of new sugar factory is
de-recognized/cancelled in view of provisions of
Clause 6-C of Sugarcane (Control) Order, 1966 (for
short 'Order, 1966'). It seeks declaration that
action on the part of respondent no.6 in changing
the location of new sugar factory is illegal and
arbitrary. Further prayer is made seeking
declaration against the authorities to cancel or
de-recognize the IEM in favour of new sugar
factory.
5. In Writ Petition No.2405/2018 declaration
is sought that IEM dated 08.09.2010 issued in
favour of new sugar factory is
de-recognized/cancelled in view of provision of
Clause 6-C of Order, 1966. The said petitioner
also seeks direction against the authorities from
granting permission to new sugar factory within
aerial distance of 25 kms from existing sugar
factory in view of Notification dated 03.12.2011 of
the State Government issued pursuant to the power
vested in it as per Proviso to Clause 6-A of the
Order, 1966. It also assails the action of new
sugar factory in changing the location from the one
mentioned in the IEM dated 08.09.2010. In Civil
Application No.8046/2020 the petitioner assailed
the order dated 14.11.2018, 15.11.2018, 12.04.2019,
09.05.2019 and 17.10.2019 granting yearly
extensions to IEM dated 08.09.2010 till 07.09.2020.
By filing Civil Application No.3484/2021 in Writ
(8) wp-13836-2017 & ors.
Petition No.2405/2018 the petitioner assailed the
extensions granted to IEM dated 08.09.2010 from
08.09.2020 to 07.09.2021.
6. The petitioner in Writ Petition
No.6754/2020 assails the order dated 14/08/2020 and
30/09/2020 of the authority amending the IEM dated
08/09/2010 and changing the location of the new
sugar factory.
7. The petitioner is an existing registered
Co-operative Sugar Factory since the year 1973.
8. The respondent-Swami Samarth Sugars and
Agro Industries Ltd. (hereinafter referred to as
'new sugar factory') filed an application for
getting the Aerial Distance Certificate for
establishing new sugar factory at site Gat No.48
and 40 at village Warkhed, Tq. Newasa. The Aerial
Distance Certificate was issued to the new sugar
factory after measuring the distance of the
proposed site in Gat No.48 at village Warkhed. On
or about 08.09.2010, the Central Government
(Industries Department) issued I.E.M. in favour of
respondent-new sugar factory mentioning the
location is village Warkhed (Ramdoh), Tq. Newasa,
Dist. Ahmednagar. On or about 16.06.2014 new sugar
factory made an application to the Chief Director
(Sugar), New Delhi for granting extension to the
I.E.M. and for change of location. The extension
of I.E.M. was granted to the new sugar factory
under letters dated 14.11.2018 from 2015-2016,
(9) wp-13836-2017 & ors.
15.11.2018 from 2016-2017, 12.04.2019 from 2017-
2018, 09.05.2019 from 2018-2019 and lastly the same
is granted up to 07.09.2021. The petitioners are
basically contended that, in view of Clause 6-C of
the Order, 1966, the I.E.M. stands de-recognized,
as no effective steps are taken within the period
stipulated and no commercial production has
commenced as yet. The change of location is not
permissible. The change of location is sought in
the year 2014. As per Notification dated
03.12.2011, the minimum aerial distance of new
sugar factory from the existing sugar factory shall
be 25 kms. The aerial distance in this case of the
new sugar factory from its changed location is less
than 16 kms. The extensions granted are illegal.
9. We have heard Mr. Dhorde, learned Senior
Advocate for petitioner, learned A.S.G. for Union
of India and its Authorities, Mr. Sakhre and Mr.
Hon, learned Senior Advocates for new sugar factory
and learned A.G.P.
10. The following chronology of events seem to
be a matter of record:
Sr. Date Particulars
No.
1 2008 new sugar factory desirous of
setting up sugar factory
approached Survey of India for
aerial distance certificate qua
property at Warkhed, Tal. Newasa.
2 9/5/2008 Objection by Petitioner for grant
of aerial distance certificate to
new sugar factory sugar factory.
(10) wp-13836-2017 & ors.
3 12/03/2010 Aerial Distance Certificate
granted by Survey of India in
favour of new sugar factory for
Warkhed, Tal. Newasa, Distance.
Ahmednagar.
4 29/03/2010 Application by new sugar factory
to Commissioner of sugar,
Maharashtra to issue distance
certificate in accordance with
certificate issued by Survey of
India.
5 17/08/2010 Aerial Distance Certificate issued
by Commissioner, Sugar Maharashtra
to Chief Director (Sugar), Govt.
of India for new sugar factory.
6 08/09/2010 IEM filed by new sugar factory -
for new sugar factory acknowledged
- Performance Bank Guarantee of 1
Crore was submitted in accordance
with Sugarcane Control Order.
7 23/09/2010 Writ Petition 9341 of 2010 was
filed before this Court
challenging IEM issued to new
sugar factory on ground that 6-A
was not complied with & breach of
environmental laws.
8 17/03/2011 PIL No.23 of 2011 was filed
challenging the IEM of new sugar
factory.
9 27/01/2014 Order of this Court in WP 9341 of
2010 suggesting all environmental
laws would have to be complied
with.
Issue of aerial distance
certificate of 15 km decided.
10 16/06/2014 Application by new sugar factory
to Chief Director (Sugar), Union
of India for extension of IEM and
change of location.
11 July 2014 Chief Director, Sugar, Govt. of
India to Commissioner, Sugar,
Maharashtra - Distance certificate
(11) wp-13836-2017 & ors.
that was issued does not mention
Survey number - therefore, issue
fresh certificate.
12 16/10/2014 Commissioner, Sugar, Maharashtra
to Survey of India - Letter of
Govt. of India regarding survey
no. in distance certificate
forwarded for necessary action.
13 17/12/2014 Government of India notice to new
sugar factory - for personal
hearing with all documents.
14 31/3/2015 Reply of new sugar factory to
Chief Director, Sugar, Govt. of
India - from 2010 to 2014 pendency
of litigation and Irrigation NOC -
fresh land will have to be
identified and all permissions
will be taken.
Request made not to de-recognize
IEM, grant extension of the IEM as
well as permission for change of
location.
15 04/08/2015 Application by new sugar factory
to Chief Director, Sugar, Govt. of
India - - extension sought for
further four years - Performance
Bank Guarantee of 1 Crore
extended.
16 10/09/2015 Chief Director, sugar, Govt. of
India to new sugar factory -
submit proposal for extension of
time through the State Government.
17 11/09/2015 Government of India to
Commissioner, Sugar, Maharashtra
to give its recommendations on
request for extension.
18 14/09/2015 Application by new sugar factory
to Chief Director, Sugar, Govt. of
India - request for grant of
extension of IEM and permission
for change of location.
(12) wp-13836-2017 & ors.
19 15/09/2015 Letter by Government of India to
Commissioner, Sugar, Maharashtra
seeking views / recommendations on
request for change of location by
new sugar factory.
20 21/09/2015 Application by new sugar factory
to Commissioner, Sugar,
Maharashtra in furtherance of
Govt. of India letter dated
15.09.2015 - pendency of
litigation - IEM acknowledged for
factory with Aerial Distance
Certificate of 15 kms -
performance guarantee of 1 Crore
extended to keep IEM alive
required to issue letter to Survey
of India for Malewadi Dhumala,
Tal. Newasa.
21 17/10/2015 Commissioner, Sugar, Maharashtra
to Survey of India carry out
measurement of aerial distance qua
proposed location at Malewadi,
Tal. Newasa.
22 17/10/2015 Commissioner, Sugar, Maharashtra
to Regional Director - states that
Central Govt. is competent
authority to take decision
regarding de-recognition of IEM -
In view of letter of Central Govt.
report sought on effective steps
taken by new sugar factory.
23 17/12/2015 Report of Regional Director to
Commissioner, Sugar, Maharashtra -
no effective steps taken by new
sugar factory.
24 18/01/2016 Commissioner, Sugar, Maharashtra
to Govt. of India - no effective
steps taken - therefore, extension
cannot be recommended.
25 2016-2017 Land at Malewadi, Dhumala, Tal.
Newasa were acquired by new sugar
factory in furtherance of proposal
(13) wp-13836-2017 & ors.
for amendment in IEM qua location.
26 27/11/2017 Commissioner, Sugar, Maharashtra
to Survey of India - aerial
distance qua Malewadi Dhumala (in
continuation of letter dated
17.10.2015.
27 27/11/2017 Writ Petition No.13836 of 2017
filed against new sugar factory.
28 16/12/2017 Letter by new sugar factory to
Survey of India for distance
certificate qua Malewadi-Dhumala,
Tal. Newasa.
29 01/01/2018 Distance Certificate issued by
Survey of India in pursuance of
application for amendment of IEM -
addressed to Commissioner, Sugar
(Maharashtra) - more than 15 km.
30 02/01/2018 Letter of Commissioner, Sugar
(Maharashtra) - ON EXTENSION OF
IEM - stated that in view of
intervening litigation that has
spanned from 2010-2014 and 2016-
2017 as well as subsequent
petition filed in 2017 - no
objection for granting extension
of IEM
ON CHANGE OF LOCATION - Survey of
India has measured aerial distance
for proposed location sought to be
amended - copy of the said
certificate forwarded to Chief
Director, Sugar for appropriate
action.
31 26/02/2018 1st W.P. i.e. Writ Petition No.2405
Khandoba of 2018 filed against new sugar
Prasanna factory.
Sakhar
Karkhana
Ltd. Vs.
Union of
India &
Ors.
32 27/03/2018 Order of this Court - statement of
(14) wp-13836-2017 & ors.
Govt. of India recorded - decision
on extension of IEM pending -
construction at risk of new sugar
factory.
33 02/05/2018 Order of this Court - decision on
extension not yet taken - new
sugar factory if it carries out
construction shall be at its risk.
It shall not create equity.
34 14/11/2018 Extension was granted in favour of
to of the Petitioner up to 07/09/2019
09/05/2019 14.11.2018 - Extension from 2015-
15.11.2018 - Extension from 2016-
12.04.2019 - Extension from 2017-
09.05.2019 - Extension from 2018-
35 25/06/2019 Letter of Government of India,
Department for Promotion of
Industry and Internal Trade
("DPII") to Department of Food and
Public Distribution - sought
comments regarding amendment in
IEM.
36 26/08/2019 Letter of Government of India,
Department of Food and Public
Distribution - NOC for amendment
communicated to DPII.
37 17/10/2019 Order passed granting extension of
IEM up to 07.09.2020 Bank
Guarantee of 50 lakhs given by new
sugar factory.
38 28/07/2020 Letter of Secretary, Food and
Public Distribution Department,
Government of India to Secretary,
DPII - application for amendment -
change is minor and in same Taluka
- therefore, necessary action may
be taken.
39 14/08/2020 Acknowledgment for amendment in
IEM - location updated to
(15) wp-13836-2017 & ors.
Malewadi-Dhumala.
40 16/09/2020 Office memorandum of GOI, Food and
Public Distribution Department -
NOC for change in office address
of new sugar factory (Application
was made by new sugar factory for
change in office address on or
about 24/05/2020)
41 30/09/2020 Acknowledgment for amendment in
IEM change in office address.
42 01/10/2020 The 2nd W.P. was filed - amended
subsequently - challenge to
letters dated 14/08/2020 and
30/09/2020.
43 18/02/2021 Order passed granting extension up
to 07.09.2021.
11. The case of the petitioner rests on the
premise that after issuance of IEM, effective steps
are not taken within a period of two years, nor
production commenced within four years. The IEM
stands de-recognized by operation of Clause 6-C of
the Order, 1966. The change of location is not
permissible under the Order, 1966 and at the time
of request of change in location, the Sugarcane
Control Order was already amended and aerial
distance between existing sugar factory and new
sugar factory ought to be 25 kms. In the present
case, from the changed location the distance of new
sugar factory of the respondent is within 25 KM of
the petitioner's sugar factory.
12. Mr. Dhorde, the learned senior advocate
for the petitioner in his usual lucid manner
submits that, the IEM is acknowledged on
08.09.2010. As per Order, 1966 and more
(16) wp-13836-2017 & ors.
particularly Clause 6-A, the aerial distance to be
maintained as on the date the IEM was issued
between new sugar factory and existing sugar
factory was 15 KM. Admittedly from 08.09.2010 for
a period of two years no effective steps were taken
by the respondent/new sugar factory, nor within a
period of four years the commercial production had
commenced. As per Clause 6-C of the Order 1966,
the IEM stood de-recognized. The subsequent
amendment extending the period for effective steps
and commercial production would not apply. The IEM
stood lapsed before the amendment in the year 2016
extending the period for effective steps and/or
commercial production. The land was also not
purchased by the respondent/new sugar factory at
the location shown in the IEM. For the first time
on or about 16.06.2014, an application was made by
the respondent for extension of IEM and change of
location. The change of location is also not
permissible as there was no provision under Order
1966. According to the learned senior advocate,
the application given for extension of IEM on
16.06.2014 was not granted and for the first time
on or about 14.11.2018 extension was granted upto
07.09.2016 and subsequent extensions are granted
after the said date. The same are illegal. It is
further submitted that, even the Commissioner of
Sugar under his communication dated 17.10.2015
raised an objection for change of location and
represented to the Survey of India that the
distance between the new sugar factory and existing
(17) wp-13836-2017 & ors.
sugar factory is less than 25 KM and same is not in
tune with the 2011 notification requiring distance
of 25 KM to be maintained between the new sugar
factory and existing sugar factory.
13. It is further submitted that, reliance of
the respondent on the press note issued in the year
1997 and 1998 would be of no relevance. Those
press notes were before the Statute was introduced.
In the year 2006 provisions were incorporated in
the Order, 1966 governing the IEM. As the Statute
does not provide for change of location, the press
note not in confirmity with the statute would not
apply. At any rate till 08.09.2015 no steps were
taken by the respondent sugar factory in view of
the report of the Commissioner of Sugar. The
report of the Commissioner of Sugar indicates that
IEM is obtained fraudulently indicating some land
which is not purchased in the name of the sugar
factory. The learned senior advocate further
contends that, the litigation was pending since
2010 between the parties. No stay was operating at
any point of time. Pendency of litigation would
not be sufficient for extension of period.
Amendments of the year 2016 and 2018 are not made
retrospectively applicable and hence back dated
extensions granted are totally illegal.
14. Per contra Mr. Sakhare, the learned senior
advocate for the respondent/ new sugar factory
laculently would submit that, the amendments to the
Order, 1966 are clarificatory and procedural in
(18) wp-13836-2017 & ors.
nature and hence would operate retrospectively.
To buttress his submissions, the learned senior
Advocate places reliance on the judgments of the
Apex Court in the cases of Nani Gopal Mitra vs. The
State of Bihar reported in AIR 1970 SC 1636, Sudhir
G. Angur and Ors. vs. M. Sanjeev and Ors. reported
in (2006) 1 SCC 141, State of Bihar and Ors. vs.
Ramesh Prasad Verma (Dead) thr. L.Rs. Reported in
(2017) 5 SCC 665 and M/s Ojas Industries (P) Ltd
Vs. M/s Oudh Sugar Mills Ltd. and others reported
in (2007) 4 SCC 723.
15. The extensions granted are valid. There
cannot be automatic de-recognization of the IEM.
The IEM dated 08.09.2010 was alive. The
application for extension of IEM was filed prior to
expiry of four years. No order of de-recognition
was passed. The bank guarantee was never
forfeited. Clause 6-D of the Order, 1966
contemplates personal hearing. As such, no
question of automatic de-recognition. Reliance is
placed in a case of Lokshakti Group matters in Writ
Petition No. 135 of 2013. The application for
extension of IEM was pending since 16.06.2014. The
decision was taken by the authority after
clarificatory amendment in the year 2018 and
extension orders were passed. In view of Press
Note III validity would be considered from the date
of final order in Court proceedings or date of
decision by the Government authorities. The Court
proceedings went on from the year 2010 to 2014 and
then from the year 2017 till this date. The
(19) wp-13836-2017 & ors.
decision of extension was taken in the year 2018
and decision on application for amendment i. e.
change of location is taken in the year 2020.
Therefore, IEM could not be said to be de-
recognized and more particularly when litigation
between the parties was pending and also
applications to the Government for extension of IEM
were pending and under consideration. The
performance guarantee of One crore was extended
from time to time. The orders granting extension
are not challenged.
16. It is further submitted by Mr. Sakhare,
the learned senior Advocate that change in location
is necessitated due to environmental laws and also
the irrigation NOC was refused. The change in
location is within the same taluka and same group
gram pachayat. The amendment to IEM qua location
is permissible as per Press Note III read with
Press Note No. IV with Press Note of the year 1998.
The amendment in IEM does not amount to fresh
IEM. Reliance is placed by the learned Senior
Advocate on the judgment of this Court in a case of
Khandoba Prasanna Sakhar Karkhana Ltd. Vs. Union of
India & Ors. reported in 2011 (5) Bom.C.R. 104. In
the said case also it is held that, change in
location was permissible and the amendment to the
IEM qua location would be retrospective viz from
the date of IEM. The IEM is dated 08.09.2010, as
such criteria of 25 KM distance is not applicable.
The respondent No. 7 is not a new sugar factory,
but will have to be considered as existing sugar
(20) wp-13836-2017 & ors.
factory because all steps were taken. Substantial
investment has been made. Expenses of about Rs.
34.23 crores were incurred. The funds to the tune
of Rs. 75 crores were mobilized and the civil work
of the factory to the extent of 85% is complete.
The order is placed for plant and machinery against
the bank guarantee of Rs. 15 crores and letter of
credit of Rs. 05 crores.
17. We have considered the submissions
canvassed by learned counsel for the parties.
18. The matter would revolve around
interpretation of Clause 6-C of the Order, 1966.
19. Undisputedly the petitioner is an existing
sugar factory. It is functioning since the year
1973. From the material on record, it is manifest
that, the IEM of respondent/new sugar factory is
acknowledged on 08.09.2010 after obtaining aerial
distance certificate. The acknowledgment of IEM
is as per Clause 6-B of the Order, 1966. Clause 6-
C of the Order, 1966 mandates the time within which
the new sugar factory shall take effective steps
and start commercial production. The stipulated
time for taking effective steps shall be two years
and commercial production shall commence within
four years with effect from the date of filing the
Industrial Entrepreneur Memorandum with the Central
Government.
20. Clause 6-C of the Order, 1966 provides for
further consequences upon failure to take effective
steps within two years and commencement of
(21) wp-13836-2017 & ors.
commercial production within four years. The
consequences contemplated under Clause 6-C of the
Order, 1966 are de-recognition of the IEM and
forfeiture of the performance guarantee. Proviso
to Clause 6-C of the Order, 1966 gives discretion
to the Chief Director (Sugar) to grant extension of
one year not exceeding six months at a time for
implementing the Industrial Entrepreneur Memorandum
and commencement of commercial production thereof.
Clause 6-D of the Order, 1966 clarifies
that, the performance guarantee furnished for its
implementation shall be forfeited after giving the
concerned person a reasonable opportunity of being
heard.
21. Under Explanation 4 to Clause 6-A of the
Order, 1966, the "effective steps" are clarified
and explained. Effective steps as detailed under
Explanation 4 of Clause 6-A of the Order, 1966
reads as under :
Explanation 4. - The effective steps
shall mean the following steps taken by the
concerned person to implement the
Industrial Entrepreneur Memorandum for
setting up of sugar factory :
(a) purchase of required land in the
name of the factory;
(b) placement of firm order for
purchase of plant and machinery for the
factory and payment of requisite advance or
opening of irrevocable letter of credit
with suppliers;
(C) commencement of civil work and
construction of building for the factory;
(22) wp-13836-2017 & ors.
(d) sanction of requisite term loans
from banks or financial instructions;
(e) any other steps prescribed by the
Central Government, in this regard through
a notification.
22. The purpose for providing the minimum
distance is the necessity and viability of a new
sugar factory near the existing sugar factory. The
quantity of sugarcane produce may change or that
the viability will have to be considered depending
upon the existing scenario, so time limit is also
prescribed. In 2011 the State Legislature amended
the Order, 1966 providing minimum aerial distance
between new sugar factory and existing sugar
factory as 25 kms, probably because as cluster of
sugar factories near each other would not be viable
proposition and may affect the survival of existing
sugar factory. So today if a new sugar factory is
allowed to be established on the terms of IEM of
2010 within the aerial distance of 15/16 kms that
would render existing sugar factory unviable and
both sugar factories may not be in a position to
survive. The public money borrowed from the bank
would not be repaid causing erosion of public
funds. If fresh IEM is sought in 2011 i.e. after
amendment, the minimum aerial distance required
from existing sugar factory is 25 kms.
23. Admittedly, within a period of two years
from the acknowledgment of IEM the respondent/new
sugar factory had not taken effective steps. For
four years the new sugar factory had not purchased
(23) wp-13836-2017 & ors.
the land in the name of factory and nor placed
confirmed orders for purchase of plant and
machinery, nor the civil work had commenced. None
of the steps as contemplated under Explanation 4 of
Clause 6-A of the Order, 1966 were under taken by
the respondent/sugar factory within four years.
Even within five years of IEM, no effective steps
were undertaken for purchase of land, muchless
start of commercial production. For the first
time, change of location was sought by the
respondent on 16.06.2014 and the land at the place
of changed location was purchased on or about the
year 2017.
24. The amendment to Clause 6-C of the Order,
1966 viz extending the maximum time limit to
implement Industrial Entrepreneur Memorandum is
dated 24th August, 2016. The question would be
whether the amendment dated 24th August, 2016 in
the Order, 1966 would apply to the IEM of the
respondent issued on 08.09.2010. Admittedly up to
24th August, 2016, the respondent existing sugar
factory had not purchased the land, nor any
construction of civil work had commenced, nor it
appears that, confirmed order for purchase of plant
and machinery was placed. The civil work and the
construction of building of the factory had also
not commenced. The respondents are harping on the
fact that, the amendment to the Order, 1966 is
retrospective. The retrospective operation of the
amendment would mean that if IEM is in existence,
the amendment would apply, but if the IEM stood
(24) wp-13836-2017 & ors.
de-recognized before amendment of 24th August,
2016, the amended provisions would not apply to a
de-recognized IEM.
25. Clause 6-C of the Order, 1966 is self
explanatory. If effective steps are not taken
within two years and commercial production does not
commence within four years from the date of filing
of IEM, the IEM stands de-recognized. Clause 6-D
would not apply so far as de-recognition of IEM is
concerned. Clause 6-D only provides that the
forfeiture of performance guarantee would be after
giving reasonable opportunity of being heard.
Clause 6-D does not speak about the de-recognition
of IEM after opportunity of hearing to the person.
Even invoking proviso to Clause 6-C, wherein
discretionary powers are given to the Chief
Director (Sugar) to grant extension of one year not
exceeding six months at a time is held in favour of
the respondent/new sugar factory, still the IEM
would stand de-recognized on 08/09/2015 and does
not survive as on the date of amendment dated 24 th
August, 2016 whereby the period for taking
effective steps and commencing commercial
production was extended. The four years as
contemplated for commercial production would lapse
on 08/09/2014 and maximum one year extension as per
the proviso to Clause 6-C would also lapse on
08.09.2015. The amendment extending the time limit
for taking effective steps and commencing
commercial production is for the first time
(25) wp-13836-2017 & ors.
introduced on 24th August, 2016.
26. The language of Clause 6-C does not admit
of any ambiguity. Upon failure to take effective
steps within two years and commence commercial
production within four years, the IEM stands de-
recognized. Clause 6-C as it stood prior to
amendment dated 24.08.2016 gave power to the Chief
Director (Sugar), Department of Food and Public
Distribution, Ministry of Consumer Affairs to
extend IEM upto maximum of one year on
recommendation of the concerned State Government.
We do not find the recommendations of the State
Government on record. If Commissioner of Sugar,
Maharashtra is accepted to represent State
Government for recommendation within the meaning of
proviso to Clause 6-C of Order, 1966, then under
letter dated 18.01.2016, the Commissioner of Sugar,
Maharashtra State refused recommendation for
extension of IEM and affirmed that respondent New
Sugar Factory has not taken effective steps. In
the present case no such discretion was exercised
and even assuming benefit of extension for one year
is granted to respondent sugar factory that lapsed
on 08/09/2015. The Authority did not possess
jurisdiction to grant extension beyond one year.
The provisions as stood before amendment of
24.08.2016 did not provide for extension beyond one
year. None of the authorities nor even the Central
Government had the authority to grant extension of
IEM beyond one year. Once the IEM is not operative
and in existence, the amendment on 24/08/2016 even
(26) wp-13836-2017 & ors.
if held to be retrospective would not enure to the
benefit of respondent-new sugar factory. On
24.08.2016, the IEM was a dead letter. No rights
would flow from such an IEM inter alia attract
amended provision.
27. Clause 6-C providing de-recognition of IEM
upon failure to comply the conditions referred to
therein is self operative. The consequence of de-
recognition of IEM upon failure to take effective
steps and commence commercial production within the
time stipulated therein is provided in Clause 6-C.
When consequence of de-recognition of IEM upon
failure to take effective steps and commence
commercial production is provided by the Rules,
there can be no manner of doubt that the statutory
requirement must be interpreted as imperative and
mandatory.
28. Once the IEM stands de-recognized by
operation of statute and/or Rules question of
applicability of amendment would not arise. One
cannot infuse a life in a dead person. The IEM
stood de-recognized axiomatically upon failure to
take effective steps and commence commercial
production as per Clause 6-C of the Order, 1966.
No separate procedure is prescribed for de-
recognition. Reliance on upon failure to take
effective steps and commence commercial production
6-D of the Order, 1966 of personal hearing to be
given before de-recognition by the respondent appears
to be misplaced. The same would be limited to the
(27) wp-13836-2017 & ors.
forfeiture of performance guarantee. Subsequent
extensions granted in the year 2018 would not be of
any avail. The extension granted in the year 2018
for the year 2015-2016 is also for the location
where the respondent sugar factory had not taken
effective steps. It had not even purchased the
land at the said location for which extension was
granted. On 31.03.2015 also the respondent/new
sugar factory replied to the Chief Director (Sugar)
that fresh land will have to be identified. It
appears that the respondent-new sugar factory
purchased the land at the changed location viz
Maliwadi Dhumala, Tq. Newasa in the year 2017. The
IEM was issued on 08.09.2010. The changed location
was not approved by the respondent-authority upto
the year 2020. Effective steps were not taken for
almost seven years from the date of issuance of IEM
in the year 2010. Even as per amendment dated 24 th
August, 2016 effective steps are required within
two years from the date of issuance of IEM and
commercial production ought to commence within five
years. No effective steps were taken even upto to
the year 2017.
29. In the case of M/s Ojas Industries (P) Ltd
Vs. M/s Oudh Sugar Mills Ltd. and others reported
in AIR 2007 SC 1619, the Apex Court had observed
that, the Sugarcane Control Amendment Order 2006
shall apply retrospectively. It was held to be
retrospective for those IEM which were pending. In
the present case, the amendment dated 24 th August,
(28) wp-13836-2017 & ors.
2016 extending the period for effective steps and
commercial production would apply if the IEM would
have been operative. By virtue of operation of
upon failure to take effective steps and commence
commercial production 6-C of the Order, 1966, IEM
stood de-recognized before amendment, no question
would arise of applicability of amendment to a de-
recognized IEM.
30. The reliance on the Press Notes of the
years 1997 and 1998 would not be of any avail to
the respondent. The Press Notes were issued when
the IEM, the amendment to IEM, the power to grant
extension to IEM were not regulated by Legislative
provisions. With effect from 10.11.2006, the
Sugarcane (Control) Order, 1966 is amended. By
exercising power under Section 3 of Essential
Commodities Act Clause 6-A to 6-E are introduced
governing the IEM, its acknowledgment, de-
recognition of IEM, grant of extension and the
circumstances for grant of extension. As grant of
extension of IEM is governed by Legislative
provisions, the Press Notes purportedly issued
under executive powers prior to the Legislative
provision may not hold the field and would not
apply.
31. The Writ Petition was pending from 2010 to
2014 and 2017 onwards, but at no point of time the
Court had stayed the IEM, nor had prohibited the
respondent-new sugar factory from taking effective
steps. Clause 6-C as amended on 24.08.2016 details
(29) wp-13836-2017 & ors.
the circumstances for extension. One of the
circumstance is stay by the Court. Mere pendency
of Writ Petition or Court proceeding is not a
ground for extension of IEM. The reliance on the
judgment of this Court in case of Grampanchayat
Ashti Vs. State of Maharashtra and ors. in Writ
Petition No.135/2013 and connected writ petitions
dated 16.03.2018 would not enure to the benefit of
the respondent/New Sugar Factory. In the said case
IEM was acknowledged in favour the party on
25.02.2010. The stay was granted by the Court on
09.04.2013 and was subsequently revived on
14.08.2013. Because of the order of stay the party
could not commence construction work. The new
sugar factory in the said case was prevented from
taking steps by the order of this Court, moreover
in the said case report was submitted by the
authority that construction work commenced before
stay was granted by the Court.
32. The Court observed that change of location
would relate back to the date of issuance of IEM.
In said case immediately after acknowledgment of
IEM on 25.02.2010, on 03.05.2010 intimation was
given regarding change of location. In the present
case, change of location was sought after four
years and same was acceded after ten years of the
IEM. At no material point of time the new sugar
factory was refrained from taking effective steps.
Prohibitory orders were never passed against new
sugar factory even for a day.
(30) wp-13836-2017 & ors.
33. In case of Khandoba Prasanna Sakhar
Karkhana Ltd. Vs. Union of India & Ors. (supra) it
was held that change of location is permissible. In
that case the name of village was wrongly named. In
the present case, the village mentioned in the IEM
is village Warkhed. The location is sought to be
changed to village Malewadi Dhumala village. In
case of Khandoba Prasanna Sakhar Karkhana Ltd. Vs.
Union of India & Ors. IEM was issued on 12.10.1998
and change in location was sought on 20.03.2006.
The Order, 1966 is amended on 10.11.2006
incorporating Clauses 6-A to 6-E dealing with IEM
its extension and de-recognition.
34. It appears that, extensions of IEM to
respondent-new sugar factory are granted in casual
manner. On 16.06.2014 respondent-new sugar factory
filed an application for extension of IEM and
change of location. It was apparent that, the
petitioner did not possess land at the location for
which the IEM was issued, still on 14.11.2018
extension is granted upto 07.09.2016. On 15.11.2018
extension is granted upto 07.09.2017. On 12.04.2019
extension of IEM is granted upto 07.09.2018 and on
09.05.2019 extension is granted upto 07.09.2019.
All these extensions are granted at the location
where the petitioner had not even purchased the
land, nor had taken effective steps till this day.
For the first time, amendment for change of
location is accepted by the Central Government on
(31) wp-13836-2017 & ors.
30.09.2020. For the changed location respondent-
new sugar factory did not possess IEM till
30.09.2020 i.e. for 10 years from the date of
issuance of IEM. Long rope is given to respondent-
new sugar factory. Even after 11 years of issuance
of IEM commercial production is nowhere in sight.
35. It is pertinent to observe that while
granting extension of IEM to the respondent-new
sugar factory upto 07.09.2016 under order dated
14.11.2018, the Authority has relied upon Clause 6-
C of the Sugarcane (Control) (Amendment) Order
dated 12.10.2018. While granting extension upto
07.09.2016 in paragraph 5 of the Order dated
14.11.2018 reference is made to the letters dated
04.01.2018 and 06.11.2018 issued by new sugar
factory that the new sugar factory could not
undertake effective steps due to the involvement of
the Court cases, severe drought condition and
reluctance of bank/financial institutions to
finance the project. This shows that upto
06.11.2018 effective steps were not undertaken nor
construction at the site had begun and while
granting extension upto 07.09.2016 reliance is
placed on the letters of the new sugar factory
dated 04.01.2018 and 06.11.2018. In fact, if the
extension is granted upto 07.09.2016, the facts and
circumstances as on the date that is upto
07.09.2016 only ought to be considered. Similar
and for the same reasons the extension is granted
upto 07.09.2017 under order dated 15.11.2018. Same
letters are relied. In fact the orders of granting
(32) wp-13836-2017 & ors.
extension dated 14.11.2018, 15.11.2018 and
12.04.2019 ad-verbatim appear to be same. This
would demonstrate that the extensions are granted
without application of mind by the Authorities.
36. The respondent-new sugar factory is making
capital of the investments made by it. This Court
under order dated 27.03.2018 had observed that if
the further construction is made, same would be at
the risk of the respondent and subject to the
decision in the petition. It is also worthwhile to
note that under letter dated 04.01.2018 and
06.11.2018 the new sugar factory intimated that it
could not undertake effective steps due to
involvement of the Court cases, drought condition
and reluctance of bank/financial institutions to
finance the project. This would demonstrate that
even upto November-2018, the respondent has not
undertaken any construction work at the site. It
is no gain saying on the part of the new sugar
factory that, now it has invested in the
construction activity. The same cannot be a ground
to ignore the extensions granted in violation to
the provisions of the Rules and Statute.
37. The learned Senior Advocate for the
respondent/new sugar factory challenged the locus
standi of the petitioner to file the writ petition
and assail the I.E.M. issued in favour of the new
sugar factory. According to the learned Senior
Advocate, the petitioners are rivals in business
and cannot maintain the writ petition. The learned
(33) wp-13836-2017 & ors.
Senior Advocate relied on the judgment of the Apex
Court in the case of Jashbhai Motibhai Desaid Vs.
roshan Kumar, Haji Bashir Ahmed and Others reported
in (1970) 1 SCC 671, the judgment of the Bombay
High Court in the case of Manju Ramesh Jaiswal Vs.
State of Maharashtra and Ors. in Writ Petition (L)
No.2331 of 2019 and on the judgment in the case of
Khandoba Prasanna Sakhar Karkhana Ltd. Vs. Union of
India & Ors. reported in (2011) 5 Bombay C R 104
and contends that factory beyond 15 kms would not
have locus to challenge on the ground that there
would be unhealthy competition or supply of the
sugarcane would be adversely affected. The learned
Senior Advocate for the petitioner submits that the
reliance on the judgment of the Apex Court in a
case of Nagar Rice and Flour Mills and others Vs.
N. Teekappa Gowda and Bros. and Others reported in
1970 (1) SCC 575 would not be applicable in the
said case. There was no statutory provision for
keeping the minimum distance. In the present case,
in view of the amendment in the year 2011 to the
Order, 1966 minimum distance of 25 kms has to be
maintained and the existing sugar factory of the
petitioner is within the statutory distance of 25
kms from the new sugar factory. The learned Senior
Advocate for the petitioner submits that, if the
license is granted in violation of statutory
provision, then the petitioner has locus. The
reliance is placed by the learned Senior Advocate
on the judgment in the case of Sai Chaltitra Vs.
Commissioner, Meerut Mandal and Ors reported in
(34) wp-13836-2017 & ors.
2005(5) All M.R. (SC) 632. Admittedly the distance
between the existing sugar factory of the
petitioner and the respondent-new factory is less
than 25 kms.
38. The new sugar factory was issued with the
I.E.M. in the year 2010. At the relevant time
minimum distance to be maintained was 15 kms. The
distance between the existing sugar factory and the
new sugar factory is more than 15 kms.
Subsequently, the new sugar factory sought change
of location in the year 2014. At the time, the
change of location was sought, the minimum distance
to be maintained as per the Order, 1966 between
existing sugar factory and new sugar factory was
mandatorily more than 25 kms. The distance between
the petitioner's existing sugar factory and
respondent-new sugar factory is less than 25 kms.
The IEM stands de-recognized axiomatically upon not
taking effective steps within stipulated period.
The new sugar factory failed to take effective
steps within stipulated period. The members of the
sugar factory are the agriculturist of that region.
To protect the interest of farmers, the Order, 1966
is amended in 2006 introducing Clause 6-A to 6-E.
The stakeholders in the Sugar Factory are the
agriculturists/sugarcane growers. The viability of
sugar factory is paramount to the interest of
agriculturists. It is with said view the Clauses
of Order, 1966 provides for time frame to take
effective steps, commence commercial production,
(35) wp-13836-2017 & ors.
maintain minimum aerial distance between existing
sugar factory and new sugar factory. If the
effective steps are not taken for a long time, then
new sugar factory cannot claim right to get
extension in perpetuity. The question raised by
the petitioner is regarding the violation of the
Statutory provisions. In view of the judgment of
the Apex Court in the case of Sai Chaltitra Vs.
Commissioner, Meerut Mandal and Ors (supra) the
petitioner would possess the locus standi to
maintain the present writ petition.
39. Considering all the facts cumulatively,
the irresistible conclusion can be drawn that
unnecessary indulgence is demonstrated by the
authorities in favour of new sugar factory.
40. In view of the foregoing discussions, we
hold that the IEM dated 08.09.2010 issued in favour
of respondent-new sugar factory viz. Swami Samarth
Sugars and Agro Industries Ltd. stands de-
recognized and is inoperative. The extensions
granted from time to time are also set aside. No
right subsists in favour of the new sugar factory
pursuant to the IEM dated 08.09.2010. The
respondent-Swami Samarth Sugars and Agro Industries
Ltd. is refrained from carrying out its work and
all further activities pursuant to the IEM dated
08.09.2010.
41. Rule made absolute in above term. No
costs.
(36) wp-13836-2017 & ors.
42. In view of disposal of writ petitions,
civil applications stand disposed of.
(SHRIKANT D. KULKARNI) (S. V. GANGAPURWALA)
JUDGE JUDGE
43. At this stage, the learned counsel for the
new sugar factory seeks stay of the operation of
the present judgment and order for a period of four
(04) weeks from today.
44. The learned counsel for the petitioner
opposes the request and submits that this Court
under order dated 27.03.2018 had observed that, if
the further construction is made, the same shall be
at the risk of the respondents and subject to the
decision in the petition.
45. Considering the request made by the
respondents, the operation of the present judgment
is stayed for the period of four (04) weeks from
today.
46. Needless to state, further activity would
not create equity in favour of the respondents.
After lapse of four (04) weeks, the present order
granting stay to the operation of the judgment
shall axiomatically stand vacated.
(SHRIKANT D. KULKARNI) (S. V. GANGAPURWALA)
JUDGE JUDGE
Devendra/July-2021
