AMTTAVALALA. J. - (1.) Writ petitioner filed this peittion basically challenging a press note dated 31st August, 1998 and the notification being numbered SO 808 (E) dated 11th September, 1998, which are as follows: PRESS NOTE "Subject : De-licensing of Sugar Industry. The Government has further viewed the list of industries under compulsory licensing, and has decided to delete sugar industry from the list of industries requiring compulsory licensing under provisions of the Industries (Development and Regulation) Act, 1951. However, in order to avoid unhealthy competition among sugar factories to procure sugarcane, a minimum of 15 KM would continue to be observed between an existing sugar mill and a new mill by exercise of power under Sugarcane (Control) Order, 1966. 2. The entrepreneurs who wish to avail themselves of the de-licensing of sugar industry would be required to file an Industrial Entrepreneurs Memoranda (IEM) with the Secretariat of Industrial Assistance in the Ministry of Industry as laid down for all de-licensing industries in terms of the Press Note dated 2nd August, 1991, as amended from time to time. 3. Entrepreneurs who have been issued Letter(s) of Intent (LOI) for manufacture of sugar need not file an initial IEM. In such cases'! the LOI Holder shall only file part B of the LOI at the1 time of commencement of commercial production against the LOI issued by them. It is, however, open to entrepreneurs to file an initial IEM (in lieu of the LOI/Industrial Licence held by them) if they so desire, whenever any variation from the conditions and parameters stipulated in the LOI/Industrial Licence is contemplated." NOTIFICATION "(266) Ministry of Industry (Department of Industrial Policy and Promotion) Notification No. S. O. 808(E), dated September 11, 1998 published in the Gazette of India, Extra, Part II, Section 3(ii) dated 14th September 1998, p. 2, No. 599 (F. No. 10(13)/ 96.I.P.). In exercise of the powers conferred by sub-section (1) of Section 29-B of the Industries (Development and Regulation) Act, 1951 (65 of 1951), the Central Government hereby makes the following further amendment in the notification of the Government of India in the Ministry of Industry (Department of Industrial Development Number S.O. 477 (E), dated the 25th July, 1991, namely :- In Schedule II to the said notification, item 4, relating to the Sugar and the entries thereunder shall be omitted."
(2.) According to Mr. S. P. Gupta, learned Senior Counsel appearing for the petitioner, de-licensing of the sugar industry by the Union of India respondent No. 1 herein, without amending the Industries Development and Regulation Act (hereinafter called 'the said Act') is wrongful. This is an executive attempt to deregulate the sugar industry by invoking power of exemption under the said Act without parliamentary sanction. It is contrary to Industrial Policy and has far reaching effect on the State Legislation specially with special reference to the State of Uttar Pradesh. Section 29-B of the said Act gives power to the Government to make certain specific exemption which cannot be generalised. By such device the Government has usurped the power of specified in ustry. Section 29-B of the said Act gives power only in respect of the development of the scheduled industry. That does not necessarily mean that the Government should loose the control upon the industry. Development of the industry is to be made by the Central Government in consultation of the concerned State. Both the Central and the State Governments had communicated several other regulations and framed Rules etc. to regulate the supply and to ensure equitable distribution of sugar and related raw material such as sugarcane. The procurement of sugarcane, the sale and price of sugar, the price of the end products of the factory, including molasses, the export etc. of sugar are all controlled by several Acts in all States with specific reference to the State of Uttar Pradesh. Even if the control through licensing under the IDR Act has sought to be eliminated, the control of the several areas of sugar production, procurement of raw-material, sale of the waste products as also the marketing through exports and within the country continue to be regulated through the several Central and State Acts. A list of such Acts is quoted hereunder :- "a. The U. P. Sugarcane (Regulation of Supply & Purchase) Act, 1953 (Act No. 24 of 1953) was an Act to regulate supply and purchase of sugarcane for use in sugar factory. b. The Sugar Control Order, 1966 deals with supply and equitable distribution of sugar. Prices of levy sugar are determined by Central Government for Public Distribution System. c. The U. P. Sugarcane Purchase Tax Act, 1961 relates to the tax on the purchase of sugar by factories and sugar manufacturing units. d. The Sugar Cess Act, 1982 of Government of India providing imposition of tax on sugar for the development of sugar industry and for matters connected therewith. e. Even the end product of the sugarcane is controlled under the U. P. Sheera Niyantran Adhiniyam, 1962 which is an Act providing in public for the control and storage, gradation and price of molasses produced by sugar factories in Uttar Pradesh regulation of supply and distribution thereof. f. There is an Act in the State of Uttar Pradesh for providing the welfare of the labour employed in the sugar industry and for their development of including housing maintenance and dispensary service in sugar factories etc., namely, the U. P. Sugar and Power Alcohol Industries Labour Welfare and Development Fund Act, 1950. g. The export of sugar has been controlled by the Central Government. h. The Essential Commodities Act, 1955 controls the production, supply and distribution of sugar as an essential commodity."
(3.) Therefore, delicensing policy of sugar industry is arbitrary and does not stand informed by any rationale. While carving liberty to be referred through the various policy notifications issued by the Central Government from time to time, the said guidelines ensured consultation with State Government about setting up new unit. The earlier notification dated 25th July, 1991 was completely changed by the 1998 amendment by de-licensing the sugar industry.;