Kisan Sahkari Chini Mills Ltd. vs Union of India (UOI) and Others

V.M. Sahai, J.—The short question that arises for consideration in this petition is whether a new sugar factory could be established within the radius of 15 kms. of an existing sugar factory ; whether a new sugar factory established by Respondent No. 5 is within 15 kms. radius of the existing sugar factory of the Petitioner and, if so, its effect ?

M/s. Dwarikesh Sugar Industries Ltd., Bundaki, Respondent No. 5 (in brief D.S.I.L.) intended to set up a new sugar factory and was issued I.E.M. No. 292/21A/IMO/2005 on 24.1.2005 for setting up 7500 T.C.D. plant. When Petitioner M/s. Kisan Sahkari Chini Mills Ltd. (in brief K.S.C.M.L.) came to know about the I.E.M. for establishment of a new sugar factory by D.S.I.L. within their reserved area of sugar-cane, he obtained a certificate from Survey of India on 9.3.2005 which was to the effect that the proposed site of D.S.I.L. was only at a distance of 13.5 kms. whereas, as per the Government order dated 11.9.1998, the maximum radial distance prescribed was 15 kms. The Petitioner made a representation on 14.2.2005 to the Cane Commissioner, Uttar Pradesh. D.S.I.L. also applied before Cane Commissioner, Uttaranchal seeking permission to develop the proposed cane reserved area. The Cane Commissioner informed the Secretary, Cane Development and Sugar Industries, Uttaranchal, Dehradun that establishment of the new unit would be detrimental to the interest of the Petitioner. Another representation was made by the Petitioner on 23.2.2005 before the Secretary, Sugar-cane Development and Sugar Industries, U. P., Lucknow that the new sugar unit which is sought to be established by D.S.I.L. is only about 13 kms. away from Petitioner''s sugar mill which was in violation of existing rules and memorandum of understanding which was arrived at between the State of Uttar Pradesh and State of Uttaranchal. It was also pointed out that Petitioner''s sugar mill has been established in the year 1976-77 and if the new sugar mill was established, the supply of sugar-cane to Petitioner''s mill would be seriously affected. The Petitioner also made a representation on 15.3.2005 to the Secretary, Government of India, Ministry of Commerce and Industries, New Delhi informing him that the new sugar mill could not be allowed to be established as it would affect the Petitioner badly and the establishment of new sugar mill of D.S.I.L. was contrary to the Government orders etc. as it was being established at a distance of only 13.5 kms. though the Government order provides that no sugar factory could be established within a radius of 15 kms. from an existing sugar factory.

We have heard Sri R.N. Trivedi, learned senior counsel assisted by Sri Akhilesh Kalra, advocate appearing for the Petitioner, Sri Umesh Chandra, learned senior counsel assisted by Sri Rakesh Bahadur and Sri S. N. Srivastava, learned Counsel appearing for Respondent No. 5, and learned standing counsel appearing for Respondents No. 3 and 4. Sri K. C. Sinha, has accepted notice on behalf of Respondents No. 1 and 2.

Sri R. N. Trivedi, learned Counsel for the Petitioner has vehemently urged that from various certificates issued by Survey of India and District Magistrate, it was established that D.S.I.L. has been established within 15 kms'' radius of the Petitioner''s sugar mill and that distance is 13.5 kms. which is not permissible, therefore, this Hon''ble Court may be pleased to direct the closure of the new sugar factory established by D.S.I.L. as it has been established in violation of the Government orders and guidelines issued by the Central Government. On the other hand, Sri Umesh Chandra has urged that D.S.I.L. was inaugurated on 24.12.2005 and has started production w.e.f. 30.12.2005 and since then it is developing the reserved area as per the order of the Cane Commissioner. For the last two years, the Petitioner''s sugar mill as well as sugar mill of the Respondents are functioning to their capacity and there is no shortage of sugar-cane in the area. Sugar-cane in the area is sufficient to meet the requirement of both Petitioner and Respondent No. 5. He further urged that the I.E.M. issued by the Central Government for establishment of new sugar unit has not been challenged by the Petitioner in the writ petition.

K.S.C.M.L. filed Civil Misc. Writ Petition No. 31199 of 2005 challenging the establishment of new sugar factory by D.S.I.L. within 15 kms. radius from its sugar mill. The writ petition was dismissed on 1.2.2006 and the Court declined to interfere in the matter on the ground that distance between the two sugar factories was less than 15 kms. The order of this Court was challenged by K.S.C.M.L. by means of SLP (Civil) No. 4744 of 2006, Kisan Sahkari Chini Mills Ltd. v. Union of India. Another similar matter came up for hearing before the Apex Court which was decided in Ojas Industries (P) Ltd. Vs. Oudh Sugar Mills Ltd. and Others, The SLP filed by K.S.C.M.L. was disposed of by the Apex Court on 25.7.2007 for deciding the issue involved in the writ petition by the High Court in the light of its decision in Ojas Industries case (supra).

Learned Counsel for the parties have fairly stated before us that the only question which is to be decided in this writ petition is as to whether D.S.I.L. could establish a new sugar mill within a radius of 15 kms. of the Petitioner''s sugar mill. Learned Counsel for the Petitioner has taken us to the various documents on record. The letter dated 15.2.2005 shows that if village is taken to be the central point, the distance from one village Rajpur-Pooranpur-Nahadi to Rajpur, District Udham Singh Nagar was 15.5 kms. whereas from letters dated 7.10.2005 and 10.10.2005 issued by Survey of India, Uttaranchal Geo Spatial Data Centre, Dehradun at item No. 1, the distance between D.S.I.L. and K.S.C.M.L. is shown to be 13.828 kms. Learned Counsel for the Petitioner has vehemently urged that the Government of India in its order dated 20.1.2006 has clearly mentioned that the criterion of distance of 15 kms. in terms of press note 12 of 1998 was under the consideration of the Central Government and it would not create any equity in favour of D.S.I.L. Therefore, once it is found that D.S.I.L. has been established within the radius of 15 kms. then a direction is liable to be issued for its closure. We have also gone through the decision of the Ojas Industries (supra). The Union of India, on 10.12.2006, had issued Sugar-cane (Control) (Amendment) Order, 2006 which has inserted Clauses 6A to 6E in the Sugar-cane (Control) Order, 1966. Clause 6A, in clear terms, provides that no new sugar factory shall be set up within the radius of 15 kms. of any existing sugar factory or another new sugar factory in a State or two or more States. The proviso to Clause 6A provides that the State Government with prior approval of the Central Government can enhance the minimum distance of 15 kms. fixed under Clause 6A. In paragraphs 28 to 32 of the decision the Apex Court has held that Sugar-cane (Control) (Amendment) Order, 2006 shall apply retrospectively to all cases including the case in which I.E. Ms. are pending. In paragraph 32 it was held as under:

The said 2006 Order will apply only to cases where I.E. Ms. are pending in dispute in various Courts. The said 2006 Order will also apply after our judgments to those cases which are under dispute and where milling has not commenced or permitted to commence.

From the facts and circumstances of this case, it is clear that D.S.I.L. was completed in the year 2005. It was inaugurated on 24.12.2005 and had come into production with effect from 30.12.2005. Sugar-cane area has also been reserved for D.S.I.L. It is not the case of the Petitioner that there is any shortfall in the supply of the sugar-cane to the Petitioner''s sugar mill. The production of sugar-cane in the area appears to be enough to feed both the sugar mills. We have gone through the reliefs claimed in the writ petition and we do not find that I.E.M. issued by the Government to D.S.I.L. has been challenged by the Petitioner in the writ petition.

In view of the law laid down by the Apex Court in Ojas Industries (supra), since the D.S.I.L. has commenced production on 30.12.2005 and its I.E.M. having not been challenged by K.S.C.M.L., Sugar-cane (Control) (Amendment) Order, 2006 would not apply to the case of the Petitioner. It is true that the distance between the two sugar mills has to be taken from one sugar mill to another and not from one village to another and D.S.I.L. has been established at a distance of 13.828 kms. from K.S.C.M.L. which is within a distance of 15 kms. not permissible under the Press Note 12 of 1998 and Clause 6A of 2006 Control Order, but in view of the fact that D.S.I.L. has established his factory in which huge amount has been spent and it has also started production with effect from 30.12.2005, we are not inclined to interfere in the matter. No other point was raised or argued before us.

For the aforesaid reasons, we do not find any merits in the writ petition. The writ petition fails and is accordingly dismissed.

The parties shall bear their own costs.