Karnataka High Court
Shri Basava Textiles Pvt Ltd vs The Secretary To The Government on 6 April, 2023
Bench: R.Devdas, Rajesh Rai K
1
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 6TH DAY OF APRIL, 2023
PRESENT
THE HON'BLE MR JUSTICE R.DEVDAS
AND
THE HON'BLE MR JUSTICE RAJESH RAI K
W.A. NO. 100555/2022 C/W W.A. NO. 100557/2022,
W.A. NO. 100558/2022 AND W.A. NO. 100022/2023 (GM-RES)
IN W.A. NO. 100555/2022
SHRI BASAVA TEXTILES PVT. LTD.
P.O. BOX NO. 12, BELAGAVI ROAD,
BAILHONGAL, DIST. BELAGAVI-591 102
REPRESENTED BY ITS CHAIRMAN AND
MANAGING DIRECTOR SHRI. VIJAY METGUD.
- APPELLANT
(BY SRI UDAYA HOLLA, SENIOR COUNSEL FOR
SRI SHREEVATSA HEGDE, ADVOCATE)
AND:
1. THE SECRETARY TO THE GOVERNEMENT,
COMMERCE AND INDUSTRIES DEPARTMENT
(MSME AND MINES) AND THE COMPETENT
AUTHORITY UNDER PARA 6 B OF THE SUGARCANE
(CONTROL) ORDER 1966, 135, 1ST FLOOR,
VIKASASOUDHA, BENGALURU-560 001.
2. THE CHIEF DIRECTOR SUGAR,
DIRECTORATE OF SUGAR AND
VEGITABLE OILS, DEPARTMENT OF
FOOD AND PUBLIC DISTRIBUTION,
MINISTRY OF CONSUMER AFFAIRS,
FOOD AND PUBLIC DISTRIBUTION,
GOVERNMENT OF INDIA, ROOM NO 582,
KRISHI BHAVAN, NEW DELHI - 110 001.
3. THE COMMISSIONER FOR CANE DEVELOPMENT
AND DIRECTOR OF SUGAR, GOVERNMENT OF KARNATAKA,
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W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
HOUSING BOARD BUILDING, CBAB COMPLEX,
F BLOCK, V-TH FLOOR, CAUVERY BHAVAN,
K.G.ROAD, BENGALURU - 560 008.
4. THE DEPUTY COMMISSIONER,
BELAGAVI.
5. M/S. HARSHA SUGARS LIMITED,
UNIT-2, SOGALA VILLAGE, SAUDATTI TAL,
BELAGAVI (A COMPANY REGISTERED
UNDER COMPANIES ACT, 2013)
HAVING ITS REGISTERED OFICE AT
PLOT NO. 10, P & T COLONY,
II STAGE, BESIDE HANUMAN TEMPLE,
HANUMAN NAGAR, BELAGAVI - 590 019
REPRESENTED BY ITS MANAGING DIRECTOR
SHRI. CHANNARAJ S/O BASAVARAJ HATTIHOLI.
- RESPONDENTS
(BY SMT. VIDYAVATHI M. KOTTURSHETTAR,
ADDITIONAL ADVOCATE GENERAL AND
SRI V.S. KALASURMATH, HCGP FOR R1, R3 & R4,
SRI M.B. KANAVI,
CENTRAL GOVERNMENT STANDING COUNSEL FOR R2,
SRI PRASHANT F. GOUDAR, ADVOCATE FOR R5)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT 1961 PRAYING TO SET-ASIDE THE
COMMON ORDER DATED 16.12.2022 PASSED BY THE HON'BLE LEARNED
SINGLE JUDGE IN WRIT PETITION NO. 102172/2022, AND ETC.,
IN W.A. NO. 100557/2022
BETWEEN:
SHRI BASAVA TEXTILES PVT. LTD.,
P.O.BOX NO.12, BELAGAVI ROAD,
BAILHONGAL, DIST. BELAGAVI-591 102
REPRESENTED BY ITS CHAIRMAN AND
MANAGING DIRECTOR
SHRI. VIJAY METGUD
- APPELLANT
(BY SRI UDAYA HOLLA, SENIOR COUNSEL FOR
SRI SHREEVATSA HEGDE, ADVOCATE)
AND:
3
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
1. THE CHIEF DIRECTOR (SUGAR),
MINISTERY OF CONSUMER AFFAIRS,
DEPARTMENT OF FOOD AND PUBLIC
DISTRIBUTION, DIRECTORATE OF SUGAR,
KRISHI BHAVAN, NEW DELHI - 110 001.
2. M/S. HARSHA SUGARS LIMITED
PLOT NO. 10, P & T COLONY,
II STAGE, BESIDE HANUMAN TEMPLE,
HANUMAN NAGAR, BELAGAVI - 590 019
REPRESENTED BY ITS
MANAGING DIRECTOR SHRI. CHANNARAJ,
S/O BASAVARAJ HATTIHOLI.
- RESPONDENTS
(BY SRI M.B. KANAVI,
CENTRAL GOVERNMENT STANDING COUNSEL FOR R1,
SRI PRASHANT F. GOUDAR, ADVOCATE FOR R2)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF KARNATAKA
HIGH COURT ACT 1961, PRAYING TO SET-ASIDE THE ORDER DATED
16.12.2022 PASSED BY THE LEARNED SINGLE JUDGE IN WRIT PETITION
NO. 102119/2022 & ETC.,
IN WA NO.100558/2022
BETWEEN:
M/S. INAMDAR SUGARS,
NO. 69, 2ND FLOOR, SAPTHAGIRI APARTMENT,
6TH CROSS, MALLESHWARAM,
BENGALURU - 560 001
REPRESENTED BY ITS DIRECTOR
MR. VIKRAM D. INAMDAR
- APPELLANT
(BY SRI GURUDAS KANNUR, SENIOR COUNSEL
FOR SRI SHREEVATSA HEGDE, ADVOCATE)
AND:
1. M/S. HARSHA SUGARS LIMITED,
PLOT NO. 10, P & T COLONY,
II STAGE, BESIDE HANUMAN TEMPLE,
HANUMAN NAGAR, BELAGAVI - 590 019
REPRESENTED BY ITS MANAGING DIRECTOR
SHRI. CHANNARAJ S/O BASAVRAJ HATTIHOLI.
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W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
2. THE CHIEF DIRECTOR (SUGAR),
MINISTRY OF CONSUMER AFFAIRS,
DEPARTMENT OF FOOD & PUBLIC DISTRIBUTION,
DIRECTORATE OF SUGAR, KRISHI BHAVAN,
DELHI - 110011.
3. THE COMMISSIONER FOR CANE DEVELOPMENT
AND DIRECTOR OF SUGAR,
GOVERNMENT OF KARNATAKA,
HOUSING BOARD BUILDING,
CBAB COMPLEX, F BLOCK, V-TH FLOOR,
CAUVERY BHAVAN, K.G.ROAD,
BENGALURU - 560 008.
4. THE STATE OF KARNATAKA
REPRESENTED BY THE PRINCIPAL SECRETARY,
DEPARTMENT OF COMMERCE AND INDUSTRIES
(MSME & MINES), NO.135, 1ST FLOOR,
VIKASASOUDHA, BENGALURU - 560001.
- RESPONDETS
(BY SRI GANGADHAR S. HOSAKERI AND
SRI GOUTAM BHARADWAJ, ADVOCATE FOR R1,
SRI M.V. KANAVI,
CENTRAL GOVERNMENT STANDING COUNSEL FOR R2,
SMT. VIDYAVATHI M. KOTTURSHETTAR,
ADDITIONAL ADVOCATE GENERAL AND
SRI V.S. KALASURMATH, HCGP FOR R3 AND R4)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF KARNATAKA
HIGH COURT ACT 1961 PRAYING TO, SET-ASIDE THE ORDER DATED
16.12.2022 PASSED BY THE LEARNED SINGLE JUDGE IN WRIT PETITION
NO. 102585/2022 & ETC.,
IN W.A. NO. 100022/2023
BETWEEN:
SHRI. BASAVA TEXTILES PVT. LTD.,
P.O. BOX NO. 12, BELAGAVI ROAD, 40 YEARS,
BAILHONGAL, DIST. BELAGAVI-591 102,
REPRESENTED BY ITS CHAIRMAN AND
MANAGING DIRECTOR SHRI. VIJAY METGUD.
- APPELLANT
(BY SRI UDAYA HOLLA, SENIOR COUNSEL FOR
SRI SHREEVATSA HEGDE, ADVOCATE)
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W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
AND:
1. THE SECRETARY TO THE GOVERNMENT,
COMMERCE AN INDUSTRIES DEPARTMENT,
(MSME AND MINES) & COMPETENT AUTHORITY
UNDER PARA 6B OF THE SUGARCANE CONTROL
ORDER, 1966, 135, 1ST FLOOR, VIKASASOUDHA,
BENGALURU-560 001.
2. THE CHIEF DIRECTOR (SUGAR),
DIRECTOR OF SUGAR AND VEGITABLE OILS,
MINISTRY OF CONSUMER AFFAIRS
DEPARTMENT OF FOOD & PUBLIC
DISTRIBUTION, DIRECTORATE OF SUGAR,
KRISHI BHAVAN, NEW DELHI-110 001.
3. THE COMMISSIONER FOR CANE DEVLOPMENT AND
DIRECTOR OF SUGAR, GOVERNMENT OF KARNATAKA,
HOUSING BOARD BUILDING , CBAB COMPLES,
F BLOCK,V-TH FLOOR, CAUVERY BHAVAN,
K.G. ROAD, BENGALURU-560 008.
4. THE EPUTY COMMISSIONER,
BELAGAVI-590 001.
5. M/S. HARSHA SUGARS LIMITIED,
REG. UNDER COMPANIES ACT 2013
HAVING REG. OFFICE, PLOT NO. 10, P & T COLONY,
II STAGE, BESIDE HANUMAN TEMPLE,
HANUMAN NAGAR, BELAGAVI-590 019.
REPRESENTED BY ITS MANAGING DIRECTOR
SHRI. CHANNARAJ S/O BASAVARAJ HATTIHOLI.
-RESPONDENTS
(BY SMT. VIDYAVATHI M. KOTTURSHETTAR,
ADDITIONAL ADVOCATE GENERAL AND
SRI V.S. KALASURMATH, HCGP FOR R1, R3 & R4,
SRI M.B. KANAVI,
CENTRAL GOVERNMENT STANDING COUNSEL FOR R2,
SRI PRASHANT F. GOUDAR, ADVOCATE FOR R5)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF KARNATAKA
HIGH COURT ACT 1961 PRAYING TO, SET-ASIDE THE COMMON ORDER
16.12.2022 PASSED BY THE LEARNED SINGLE JUDGE IN WRIT PETITION
NO. 102314/2022& ETC.,
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W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
THESE WRIT APPEALS HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 13.03.2023, COMING ON FOR 'PRONOUNCEMENT OF
JUDGMENT' THIS DAY, R.DEVDAS J., DELIVERED THE FOLLOWING
JUDGMENT.
JUDGMENT
These intra court appeals arise out of orders passed by the
learned Single Judge in W.P. Nos. 102172/2022, 102314/2022,
102613/2022, 102624/2022 and 102966/2022 and two other writ
petitions, namely, WP No. 102585/2022 and WP no. 102119/2022,
all dated 16.12.2022. The grievance of the parties are all directed
and arise out of claim for Industrial Entrepreneurship Memorandum
(IEM) for establishment of new sugar unit at Hirekoppa village of
Saundatti Taluk, Belagavi District.
2. A narration of brief facts would be necessary to understand
the background of the case. The Government of Karnataka had
issued a notification on 11.09.2007 setting out the procedure for
establishment of new sugar factories in the State of Karnataka.
Applications were required to be submitted for grant of IEM, for
establishment of new sugar factory in the specified area or village in
terms of clause 2(7) of the said notification. However, in terms of
clause 2(8), if more than one application is received, the specified
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
authority for recommending for grant of IEM to the Central
Government was the Secretary, Department of Industries &
Commerce, who was to take necessary approval from the concerned
Minister. It is not disputed that in respect of Hirekoppa village,
Saundatti Taluk, IEM was issued in favour of M/s Inamdar Sugars
Ltd. and performance bank guarantee was furnished by Inamdar
Sugars on 01.11.2010. However, for various reasons, Inamdar
Sugars was not able to comply with the requirements fully within the
stipulated time, as was required under the notification. On
11.01.2019 the Chief Director (Sugars), Ministry of Consumer
Affairs, Food & Public Distribution, New Delhi, passed an order de-
recognizing the IEM of Inamdar Sugars and further passed orders
confiscating the bank guarantee dated 25.11.2010 in a sum of Rs. 1
crore which was furnished by Inamdar Sugars. M/s Inamdar Sugars
filed W.P. No. 104180/2019, 104575-576/2019 challenging the order
of de-recognition dated 11.01.2019 and sought for repayment of the
bank guarantee. The learned Single Judge, while noticing the
amendment dated 24.08.2016 brought to the Sugarcane (Control)
Order, 1966, held that the competent authority has not taken into
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
consideration the amended provisions before de-recognizing the
IEM and consequently quashed the order dated 11.01.2019 and
directed the concerned authority to reconsider the representation
dated 27.10.2017 in the light of the amendment dated 24.08.2016 to
the Sugarcane (Control) Order, 1966 and directed the concerned
authority to pass orders within three months from the date of receipt
of a copy of the order.
3. Although the said writ petitions in 104180/2019 & connected
matters were disposed of on 10.02.2020, and no orders were
passed by the competent authority, Inamdar Sugars gave three
representations on 28.02.2022, 15.03.2022 and 23.03.2022 seeking
extension of the IEM in terms of the amended provisions of the
Sugarcane (Control) Order. When there was no positive reaction
from the competent authority, Inamdar Sugars filed W.P. No.
101700/2022 seeking a writ of mandamus directing the concerned
authorities to consider the request made for extension of IEM and to
pass necessary orders. The learned Single Judge passed an order
dated 22.04.2022 directing the authorities to consider the
representations given by Inamdar Sugars and to pass necessary
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
orders within a period of four weeks from the date of receipt of a
copy of the order. It was also directed that the consideration of the
representations shall be strictly in accordance with law and any
orders passed by this Court on earlier occasions.
4. In the meanwhile, on 19.01.2022, M/s Basava Textiles Ltd.,
submitted an application to the Commissioner for Cane
Development and Director of Sugar seeking grant of IEM in respect
of Marakumbi village, Saundatti Taluk. On the very next day, i.e.,
20.01.2022, M/s Harsha Sugars Ltd., also filed similar application
seeking IEM in respect of Sogala village, Saundatti Taluk. On
24.01.2022, the Cane Commissioner wrote to the Deputy
Commissioner, Belagavi stating that M/s Harsha Sugars had
submitted an application for setting up a new sugar factory at Sogala
village and had sought for Distance Certificate which is required to
be obtained at the hands of the Survey Department of India and
therefore requested the Deputy Commissioner to furnish Pillar
Construction Report indicating the Pillar location and survey number
duly authenticated by the Taluka Tahasildar, Assistant Executive
Engineer, PWD, and The Deputy Commissioner. It was also
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
requested that the sketch and report indicating the pillar location,
etc. and topo-sheet mentioning the survey points should be clearly
indicated. However, on 28.01.2022, the Cane Commissioner once
again wrote to the Deputy Commissioner, Belagavi stating that M/s
Basava Textiles had filed an application seeking IEM for
establishment of a new sugar factory at Marakumbi village,
Saundatti Taluk and accordingly sought for similar information, as
was done in the case of Harsha Sugars.
5. In the meanwhile, since directions were issued by the learned
Single Judges in favour of Inamdar Sugars, while directing the
concerned authority to reconsider the representations given by
Inamdar Sugars for extension of IEM in terms of the amended
provisions of the Sugarcane (Control) Order, the Chief Director
(Sugar), New Delhi passed an order on 08.07.2022 stating that the
Company was advised in a communication dated 20.06.2022 that if
they wish to keep the IEM alive, they were required to submit fresh
bank guarantees and accordingly Inamdar Sugars had furnished a
fresh bank guarantee and in that view of the matter the request
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
made by Inamdar Sugars was acceded to and the validity of the IEM
was extended.
6. In the meanwhile, the application filed by Harsha Sugars was
also processed and an acknowledgement was issued for grant of
IEM on 31.03.2022. Harsha Sugars therefore wrote a letter to the
Chief Director of Sugars, Government of India, enclosing
Performance Bank Guarantee of Rs. 1 crore. Again requisitions
were made on 19.05.2022 and 01.06.2022 to accept the
Performance Bank Guarantee and to pass necessary orders
permitting establishment of a new sugar factory. However, when
Harsha Sugars got to know that the Chief Director (Sugar), New
Delhi had passed an order on 08.07.2022 extending the validity of
the IEM in favour of Inamdar Sugars, Harsha Sugars filed W.P. No.
102585/2022 seeking to quash the order dated 08.07.2022.
7. M/s Basava Textiles also filed two writ petitions in W.P. No.
102172/2022 and W.P. No. 102314/2022 contending that since the
Secretary to Government, Commerce & Industries Department,
Bengaluru was appointed and notified as the Specified Authority to
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
issue Distance Certificate and make recommendation for grant of
IEM by notification dated 22.03.2022, the Distance Certificate issued
by the Cane Commissioner, Karnataka in favour of Harsha Sugars
should not be accepted. Several other writ petitions were also filed
with similar prayers and the learned Single Judge has passed orders
in that regard on 16.12.2022 in W.P. No. 102172/2022 & connected
matters declaring that since the notification was gazetted on
15.07.2022, the Secretary to Government would be the Specified
Authority only from 15.07.2022 and consequently, the Distance
Certificate issued by the Cane Commissioner prior to 15.07.2022
was upheld. M/s Basava Textiles has filed W.A. No. 100555/2022
challenging the said order passed in W.P. No. 102172/2022.
8. Harsha Sugars had also filed W.P. No. 102119/2022 seeking
directions to the Chief Director (Sugar), New Delhi to consider its
representations and pass orders accepting the Performance Bank
Guarantee, issue IEM and permit the petitioner to establish new
Sugar Factory. The learned Single Judge allowed the writ petition
and directed the authority to consider the representations and permit
the petitioner therein to implement the IEM. Basava Textiles has
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
filed W.A. No. 100557/2022 calling in question the order passed by
the learned Single Judge in W.P. No. 102119/2022.
9. During the course of the hearing this Court made it clear that if
the Writ Appeal filed at the hands of Inamdar Sugars is allowed,
upholding the order passed by the Chief Director (Sugar), New Delhi
on 08.07.2022, extending the validity of the IEM in favour of Inamdar
Sugars, then the claim made by Harsha Sugars and Basava Textiles
for grant of IEM would automatically fail in view of the express
provisions contained in Clause-6A of the Sugarcane Control Order
prohibiting establishment of a second sugar factory within the
reserved area. Therefore, the case of Inamdar Sugars which was
decided by the learned Single Judge in W.P. No. 102585/2022 was
taken up for consideration.
10. Learned Senior Counsel Sri Gurudas S. Kannur appeared on
behalf of Inamdar Sugars and submitted that admittedly Inamdar
Sugars was granted IEM and its Performance Bank Guarantee was
accepted on 01.11.2010. On 11.01.2019, the Chief Director
(Sugars), New Delhi had passed an order de-recognizing of IEM of
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
Inamdar Sugars and further passed orders confiscating the Bank
Guarantee. Inamdar Sugars had filed W.P. No. 104180/2019 and
W.P. No. 104575-576/2019 challenging the order of de-recognition
dated 11.01.2019 and sought for repayment of the Bank Guarantee.
By order dated 10.02.2020, the learned Single Judge had quashed
the order dated 11.01.2019 while directing the respondent
authorities to reconsider the representation dated 27.10.2017 given
by Inamdar Sugars, in the light of the amendment dated 24.08.2016
to the Sugarcane Control Order and further a direction was issued to
pass orders within three months from the date of receipt of a copy of
the order. Learned Senior Counsel would therefore submit that
when the order of de-recognition was set aside on 10.02.2020,
Inamdar Sugars continued to hold the IEM. Therefore, it was
impermissible for any other entity to seek IEM to establish a new
sugar factory within or overlapping the reserved area. Learned
Senior Counsel would therefore submit that even if Basava Textiles
and Harsha Sugars submitted applications for IEM on 19.01.2022
and 20.01.2022 respectively, the Cane Commissioner was duty
bound to bring to the notice of the Deputy Commissioner the existing
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
IEM and reserved area of Inamdar Sugars. Learned Senior Counsel
would submit that in view of the specific bar contained in Clause 6A
of the Sugarcane Control Order, the competent authority and
specified authority should have rejected the application of Basava
Textiles and Harsha Sugars, while noticing that the proposal given
by the two entities would overlap the reserved area of Inamdar
Sugars.
11. Learned Senior Counsel would also submit that in the matter
of reconsideration of the extension of the validity of IEM at the hands
of the Chief Director (Sugars), as was directed by the learned Single
Judge in W.P. No. 104180/2019 dated 10.02.2020, Harsha Sugars
has no locus standi to raise any objection. The matter is purely
between the Government of India and Inamdar Sugars. It is
submitted that the learned Single Judge erred in entertaining the
Writ Petition filed at the hands of Harsha Sugars in the matter of
extension of the validity of IEM granted in favour of Inamdar Sugars.
12. Per contra, learned counsel for Harsha Sugars submits that an
acknowledgement of the IEM was given by the competent authority
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
on 31.03.2022. It is only thereafter that the impugned order dated
08.07.2022 was passed by the Chief Director (Sugar), New Delhi,
extending the validity of the IEM in favour of Inamdar Sugars,
without noticing the fact that an acknowledgement of IEM was
already given by the competent authority on 31.03.2022 and
thereafter Performance Bank Guarantee of Rs. 1 crore was also
furnished by Harsha Sugars. In that view of the matter, it is
submitted that it cannot be contended that Harsha Sugars has no
locus standi to question the subsequent order dated 08.07.2022
passed in favour of Inamdar Sugars. Learned counsel submits that
the learned Single Judge has taken pains to consider various
amendments of Clause 6C of the Sugarcane Control Order and
considered the decisions cited by the learned Senior Counsel
appearing for Inamdar Sugars, including Ojas Industries (P) Ltd.,
Vs. Oudh Sugar Mills Ltd. & Others, (2007) 4 SCC 723. The
learned Single Judge has clearly held that the decision in Ojas case
has no application to a case of this kind in which the IEM had stood
de-recognized.
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
13. Having heard the learned Senior Counsel Sri Gurudas S.
Kannur for Inamdar Sugars and learned counsel Sri Gautam S.
Bharadwaj and Prashat F. Goudar for Harsha Sugars, this Court is
of the considered opinion that Harsha Sugars has no locus standi to
raise objections in the matter of extension of the validity of the IEM in
favour of Inamdar Sugars. We have to notice that Inamdar Sugars
filed W.P. No. 104180/2019 and W.P. Nos.104575-576/2019
challenging the order of de-recognition dated 11.01.2019 and sought
for repayment of the Bank Guarantee. No doubt, till then Inamdar
Sugars had made it clear in some of its communications that it was
not interested in completing the establishment of the sugar factory
and it therefore sought return of the Bank Guarantee. However,
during the course of the proceedings in W.P. No. 104180/2019 and
W.P. Nos.104575-576/2019, Inamdar Sugars pressed into service
the amendments brought to Clause 6C of the Sugarcane Control
Order and made a submission before the learned Single Judge that
its financial position has improved and therefore it may be permitted
to proceed with the completion of the establishment of sugar factory
having regard to the extension of time permitted in view of the
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
amendments to Clause 6C. Accepting the submission of Inamdar
Sugars, the learned Single Judge had set aside the order of de-
recognition dated 11.01.2019, by order dated 10.02.2020 and
directed the Chief Director (Sugars) to reconsider the request made
by Inamdar Sugars.
14. It is noticeable that subsequent to the order dated 10.02.2020
passed by the learned Single Judge quashing the order of de-
recognition and directing the authority to reconsider the
representations given by Inamdar Sugars, Inamdar Sugars gave
representations dated 28.02.2022, 15.03.2022 and 23.03.2022
seeking extension of the validity of IEM. When the same did not
evoke any response from the authority, Inamdar Sugars filed W.P.
No. 101700/2022 seeking a direction to the authority to consider the
representations for extension of the validity of IEM. A specific
direction was given by the learned Single Judge on 22.04.2022
directing the competent authority to consider the three
representations for extension of the validity of IEM. A personal
hearing was given to Inamdar Sugars on 16.06.2022 and an
advisory was given in writing by the competent authority on
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
20.06.2022 that if the Company wishes to keep the IEM alive, it is
required to submit a fresh Bank Guarantee in terms of the extension
provided as per various amendments of Clause 6C, totally
amounting to Rs.3 crores. Accordingly, a fresh Bank Guarantee, as
directed was furnished by Inamdar Sugars on or before 20.06.2022.
In consideration of all the above, the Director (Sugar & V.O.) passed
the impugned order dated 08.07.2022 extending the validity of the
IEM in favour of Inamdar Sugars.
15. It is noticeable that the order of de-recognition dated
11.01.2019 was set aside by order dated 10.02.2020. This would
imply that the IEM granted in favour of Inamdar Sugars continued to
be in currency. Even if it is admitted that Inamdar Sugars was only
seeking refund of the Bank Guarantee in its earlier representations,
nevertheless commencing from 28.02.2022, Inamdar Sugars gave
three representations seeking extension of the validity of IEM.
Therefore, even before an acknowledgement was given to Harsha
Sugars on 31.03.2022 regarding its application seeking IEM,
Inamdar Sugars had given its representations for extension of the
validity of IEM. Inamdar Sugars is entitled in law to seek extension
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
of the validity of IEM. On the other hand, when the IEM of Inamdar
Sugars was in currency, no application for grant of a fresh IEM in the
reserved area could have been entertained by the respondent-
authorities. The competent authority also erred in not noticing the
reserved area of Inamdar Sugars while issuing the Distance
Certificate in favour of Harsha Sugars. We are not really concerned
with the competence of the Cane Commissioner in issuing the
Distance Certificate, in the present case.
16. For the same reason, having noticed the chronology of events,
this Court is also of the considered opinion that in the matter of
extension of the validity of the IEM of Inamdar Sugars, no other
entity can have any say or locus standi. The right of seeking
extension of the validity of IEM cannot be denied to Inamdar Sugars
and such a claim is a matter between Inamdar Sugars and the
competent authority only.
17. This Court has also been appraised of the fact that after grant
of IEM in favour of Inamdar Sugars, during the quarter ending
31.12.2013, it had purchased around 30.10 acres of land and had
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
taken further steps to procure the remaining extent of the land in the
name of the factory for establishment of the sugar factory. In a
communication dated 14.11.2018 made by the Cane Commissioner
to the Chief Director (Sugar), New Delhi, it is stated that the Inamdar
Sugars had approached various financial institutions seeking
financial assistance to set up the sugar factory. A certificate of the
Chartered Accountants of the Inamdar Sugars has been furnished to
show that it has made a total investment of more than Rs.30 crores
towards the establishment of sugar factory. The Chief Director
(Sugar), New Delhi has rightly considered all these aspects and
extended the validity of the IEM in favour of Inamdar Sugars.
18. In the light of the above, this Court is of the considered opinion
that the impugned order dated 08.07.2022 before the learned Single
Judge could not have been set aside at the behest of Harsha Sugars
which has no locus standi in the matter. We also declare that
applications seeking IEM in the reserved area or overlaping the area
of Inamdar Sugars could not have been entertained by the
respondent authorities contrary to the provisions of the Sugarcane
Control Order.
W.A. No. 100555/2022 c/w
W.A. No. 100557/2022,
W.A. No. 100558/2022 &
W.A. No. 100022/2023
19. Consequently, we proceed to allow W.A. No. 100558/2022
filed by M/s Inamdar Sugars and set aside the impugned order dated
16.12.2022 in W.P. No. 102585/2022.
W.A. No. 100555/2022, W.A. No. 100557/2022 and W.A. No.
100022/2023 stand dismissed only on the ground that they could not
have sought IEM in the reserved area or overlaping the area of
Inamdar Sugars. For the same reason, we make it clear that the
Performance Bank Guarantee tendered by M/s Harsha Sugars shall
not be accepted by the respondent-authorities.
Ordered accordingly.
In view of disposal of the appeals on merit, pending IAs, if any,
also stand dismissed.
SD
JUDGE
SD
JUDGE
BVV
List No.: 1 Sl No.: 1 to 1.3
