Delhi HC quashes plea for cancelling sugar mill permit

In a case involving the delicensing of the sugar industry, the Delhi High Court has dismissed Ojas Industries Pvt Ltd's petition seeking the cancellation of the acknowledgment of Oudh Sugar Mills Ltd's industrial entrepreneurs' memorandum (IEM) for setting up of a new sugar mill in Uttar Pradesh.

It has also quashed Bajaj Hindustan Ltd's acknowledgment allowing it to set up a factory within 12.8 km from the Oudh Sugar's site.

A division bench comprising Chief Justice Markendeya Katju and Justice Madan B Lokur held that the regulation prescribing the 15 km distance between the existing sugar mill and a new sugar mill didn't operate to the prejudice of Oudh Sugar and others. "In our opinion, the regulation is a rational regulation considering the fact that sugarcane is the main raw material for a sugar mill.'

According to the court, the petitioner didn't have an existing sugar mill either on the date of Press Note (August 31, 1998) or on the date of filing IEM, so the restriction of 15 km doesn't apply.

The court said there was no ambiguity or vagueness in the Press Note, the court said the Central government was open to amend the Press Note and clarify that if an IEM was filed by a party for setting up a sugar mill, then a subsequent IEM for setting up a mill within 15 km of the first party would not be entertained.

The petitioner had sought quashing of acknowledgment of IEM issued to Oudh Sugar Mills Ltd for setting up of a new sugar undertaking at village Saidpur Khurd, Lakhimpur Kheri (Uttar Pradesh) within 7.2 km from its proposed sugar mill on the ground that it violated the Central government's guidelines.

According to counsel Dushant Dave, appearing for the petitioner, Ojas Industries had got acknowledgment of its IEM for setting up of a sugar mill at village Basaigapur, District Lakhimpur Kheri (UP) on May 5, 2004 and had also applied for NoC from the UP Pollution Control Board.

However, Oudh Sugar's counsels Shanti Bhushan along with Jayant Bhushan, had contended that once the sugar industry was de-licensed by the government notification, no one was required to take permission for license before setting up a sugar factory. The 15-km restriction contained was not enforceable in law as it was merely an executive instruction without any statutory sanction, they submitted.