Sat Pal, J.:— In this writ petition the petitioner has challenged the letter of intent granted by the Government of India to one Mr. K.K Bajoria (respondent No. 5 in the writ petition) on 7th August, 1990 for the purposes of establishing a new sugar factory at a place called Agauta, District Bulandshahr, U.P with crushing capacity of 250 Tonnes Cane Crushing Per Day (hereinafter referred to as ‘TCD’).
The facts of the case as briefly stated are that the petitioner is a company registered under the Companies Act, 1956 and is having a sugar factory at Simbhaoli, District Ghaziabad, U.P Prior to 1982 the licensed crushing capacity of the petitioner's factory was 2000 TCD. In the year 1982 this crushing capacity was raised to 2750 TCD. On 29th December, 1989 Government of India granted licence to the petitioner for expansion of its crushing capacity from 2750 TCD to 5000 TCD. It may be pointed out here that in June 1990 the petitioner had filed an application for > further expansion of its crushing capacity from 5000 TCD to 10000 TCD and this application is pending for consideration with the Government of India.
On 5th April, 1990, respondent No. 5 applied under section 11 of the Industries (Development & Regulations) Act, 1951 (hereinafter referred to as ‘the Act’) for grant of a licence for installing a sugar factory with a crushing capacity of 4500 TCD at a place called Agauta, district Bullandshar. The aforesaid application was received by the Directorate of Sugar on 10th April, 1990.
The Government of India, Ministry of Food & Civil Supplies vide its letter dated 25th April, 1990, addressed to the Government of Uttar Pradesh, sought its views and comments on the application of respondent No. 5 and asked Government of Uttar Pradesh to provide the information in the prescribbed proformas. A copy of this letter was also endorsed to respondent No. 5.
The Office of the Cane Commissioner Uttar Pradesh, Lucknow, on 14th May, 1990, on recceipt of prescribed forms from respondent No. 5, authenticated the statement of facts contained in the forms and forwarded the same to the Government of Uttar Pradesh.
On the basis of the information received from the Cane Commissioner Uttar Pradesh, Lucknow, the Joint Secretary to the Government of Uttar Pradesh, vide letter dated 31st May, 1990 forwarded the additional information containing cane availability data or potential for development of cane and other requisite informations together with the recommendations of the State Government to the Government of India, Ministry of Industry, New Delhi.
On 23rd July, 1990 the Government of India, Ministry of Industry, Department of Industrial Development issued a press note containing fresh guidelines for licensing of new and expansion of existing sugar factories and these guidelines were in supersession of earlier guidelines. The guidelines contained in the aforesaid press note are as under:—
i) New sugar factories will continue to be licensed for a minimum economic capacity of 2500 Tonnes Cane Crush per day (TCD). There would not be any maximum limit on such capacity. No relaxation of minimum economic capacity for backward areas or in the areas under-developed from the point of view of sugarcane availability will be permitted.
ii) Licences for new sugar factories will be issued subject to the condition that there is no sugar mill within a radial distance of 15 kilometers. The applicant does not have to producce any certificate/clearance regfarding cane availability or potential for development of cane.
iii) All new licences will be issued with the stipulation that cane price will be payable on the basis of scrose content of the sugarcane.
iv) Other things being equal, preference in licensing will be given to proposals from the co-operative sctor and the public sector, in that order, as compared to the private sector.
v) While granting licences for new sugar factories, industrial licences in respect of downstrom units for the use of molasses i.e industrial alcohal etc., will be given readily.
vi) Priority will be given to factories with capacity of less than 2500 TCD to expand to the aforesaaid minimum economic capacity.”
It will be seen that one of the guidelines was that licences for new sugar factories will be issued subject to the condition that there is no sugar mill within a radial distance of 15 kilometers and further the applicant will not be required to produce any certificate/clearance regarding cane availability or potential for development of cane.
As per counter affidavit filed on behalf of respondents 1 to 3, the application of respondent No. 5 for grant of licence had been put up for consideration before the licensing committee in its 20th, 32nd and 33rd meeting held on 14th May, 1990, 30th July, 1990 and 6th August, 1990 respectively. It has further been stated in this affidavit that the licensing committee in its meeting held on 6th August, 1990 duly considered the applications listed in the agenda including the application of respondent No. 5 and recommended the issue of letter of intent to the said respondent. In the said meeting the licensing committee recommended three other cases for the grant of industrial licences for sugar. It has also been stated in this affidavit that the officer who represented Ministry of Food & Civil Supplies in the licensing committee in the said meeting held on 6th August, 1990 requested for deferment of decision till the case was considered by the departmental screening commitee of the Ministry of Food & Civil Supplies but the licensing committee on the basis of the requisite information available to it did not consider it necessary to defer its decision and proceeded to dispose of the application of respondent No. 5 on merit.
Pursuant to the recommendations of the licensing committee and keeping in view the guidelines contained in the press note dated 23rd July, 1990, the Government of India, Ministry of Industry, Department of Industrial Development, vide letter dated 7th August, 1990 granted an industrial licence to respondent No. 5 for the establishment of a sugar factory at Agauta, District Bulandshahr for crushing capacity of 2500 TCD. The aforesaid letter granting industiral licence to respondent No. 5 and the guidelines issued by the Government of India in its press note dated 23rd July, 1990 have been challenged by the petitioner in this writ petitoin.
Mr. S.P Gupta, the learned counsel for the petitioner urged the following contentions for our consideration.
1) The press note dated 23rd July, 1990 issued by the Government of India, Ministry of Industry containing guidelines for licensing of new sugar factories is ultra vires of the Government of India (Allocation of Business) Rules, 1961 inasmuch as under the said Rules the Ministry of Food & Civil Supplies and not the Ministry of Industry is competent to issue such a press note and guidelines.
2) The said press note prescribing the distance rule of 15 kilometers and dispensing with the requirement of certificate and clearance regarding cane availability is illegal and void because it is contrary to the provision of Section 14 of the Act which requires compelete investigation and is further contrary to Rule 12 of the registration and licensing of industrial undertakings Rules 1952 (hereinafter referred to as ‘the Rules’) in terms of which the licensing committee should have regard to the approved plans, availability of raw materials and suitability of the location proposed from the point of view of the approved plans for the industry.
3) The said press note is illegal and void being arbitrary and violative of Artile 14 of the Constitution of India and further being violative of the Act on the ground that it is contrary to the object, purpose and scheme of Uttar Pradesh Regulations of Supply & Purchase Act, 1953 and the Sugar Control Order 1966.
4) The press note is further arbitrary, irrational and violative of Article 14 of the Constitution of India because it was issued without any material or basis, without any application of mind, without consulting the Ministry of Food & Civil Supplies (Which has been the Administrative and Expert Ministry on the subject) and was opposed to the consistent findings and recommendations of several High Power Expert Bodies set up by the Government.
5) The said press note is violative of Article 14 of the Constitution inasmuch as different sugar factories placed in different circumstances and having different requirements have fallen in the same class and subject them all to the same inadequatly low radial distance of 15 kilometer irrespective of availability of sugarcane.
6) The press note is not valid, legal and enforceable because it changes the scope of granting licence to new. sugar factories without consulting or offering an opportunity of expansion or hearing to the affected party (existing factories or even their association) particularluy those whose applictions for further expansion were already pending consideration.
7) The letter of intent dated 7th August, 1990 issued in favour of respondent No. 5 for establishing a sugar factory at Agauta is void ab inito, illegal and violative of Article 14 of the Constitution of India on the fololowing grounds:—
a) The application of respondent No. 5 for establishing a sugar factory and asking for licence filed on 5th April, 1990 should have been rejected there and then as admittedly the proposed factory of the said respondent was to situate at a distance of 23 kilometers from an existing factory and in accordance with the guidlines applicable at that time the distance from an existing factory ought to have been 40 kilometers or more.
b) The information furnished by respondent No. 5 in his supplementary information to the effect that his proposed sugar factory shall have no adverse effect on the cane supplies of any existing factories was incorrect inasmuch as the said respondent in its pleading has accepted that the cane supplies of the petitioner's shall be reduced by 2.7% by one estimate (Page 217 of the paper book) and 12% by other estimate (Page 241 of the paper book).
c) It is violative of principal of natural justice as it has been issued without show cause notice or hearing to the petitioner which is available to the petitioner from the Statutory declaration of reserved area as well as from the protected area provided by the radial distance policy.
d) It is in breach of section 14 of the Act which requires complete investigation as in the present case there was no genuine or effective consultation with the Government of Uttar Pradesh and both the petitioner (directly affected existing factory) and the Ministry of Food & Civil Suplies (the Administrative and Expert Ministry) were kept out of the investigation.
e) It is in breach of Rule 13 of the Rules which envisages a public enquiry and in the present case no enquiry was conducted by the licensing committee.
f) It is in breach of Rules 11 and 12 read with Rule 15 of the Rules inasmuch as no report as stipulated in Rule 11 was made or submitted to the Ministry of Industry.
g) It is per se arbitrary and contrary to the very object and purpose of the Act because so long as the reserved area meant for the factory of the petitioner remains intact there is a legal presumption that no sugar cane is available to any other factory from that area. But in the present case 13 purchasing centres of the reserved area of the petitioner will be affected.
h) It was mala fide in law and illegal inasmuch as application of respondent No. 5 was arbitrarily picked up from amongst 200 applications and it was not selected on the basis of any claims. It was granted mechanically without application of mind and without considering relevant factors.
i) It was arbitrary and discriminatory and against public interest as the application of the petitioner for expansion of the existing factory in the same area was pending consideration.
j) It is unfair and violative of Article 14 of the Constitution of India because the Government of India is barred by the principle of promissory estoppeel in view of the assurances given by it to the petitioner in the letter of intent for expansion of petitoiner's capacity to 5000 TCD.
k) It is contrary to the Government's own policy of giving perference to the co-operative sector applicants.
Mr. Ashok Desai, the learned counsel for respondent No. 5 raised following preliminary objections regarding maintainability of the writ petiton:—
1) That the writ petition was not maintainable in law since the petitoiner does not have any legal right to maintain a monoply or to object to grant of licence to respondent No. 5 or otherewise and does not have any locus standi.
2) That the petitioner must establish some right in his favour under the provisions of the Act itself and not in some other Statute.
3) That the Court when dealing with the matters of economic policy will be loath to interfere with the exercise of the Government's discretion in these matters.
4) That in view of the need of establishment of more sugar factories, the Court will not exercise its discretionary equitable jurisdiction in favour of the petitioner.
Before dealing with the facts of the writ petiton on merits, it will be appropriate to deal with first preliminary objection raised by Mr. Desai as to whether the petitioner has any legal right or locus standi to challenge the impugned press note dated 23rd July, 1990 and the letter of intent dated 7th August, 1990 issued in favour of respondent No. 5 for establishing a new sugar factory at Agauta. In support of this preliminary objection, Mr. Desai submitted that the licence granted to the petitioner under the Act did not contain any promise to the petitioner that no other sugar factory would be set up in the vicinity. He further submitted that the Act does not provide for any hearing to those who are not applicants. In fact under Rule 15(2) of the said Rules framed under the Act, opportunity is required to be given only to those persons who are applicants for the grant of licence. In this connection he referred to a judgment of the Supreme Court in J.M Desai v. Roshan Kumar, AIR 1956 SC 756. He placed strong reliance on para 46 of this judgment pertaining to the judicial concept called “damnum sine in-juria” namely, that the petitioner may suffer harm or loss which is not wrongful in the eyes of law because it does not result in any injury to a legal right or legally protected interest since the business competition which causes such injury is a lawful activity.
The submission made by Mr. Desai appears to have force. In the present case the impugned press note dated 23rd July, 1990 like the earlier press notes on the subject contained guidelines for licensing of new and expansion of existing sugar factories and is purely a policy matter of the Government before issuance of which no existing factory owner is entitled to any hearing. This press note will have to be read along with the provisions of the Act and Rules framed thereunder. Further the letter of intent issued in favour of respondent No. 5 does not contravene any provision of the Act or Rules framed thereunder or any guidelines mentioned in the press note. The apprehension of the petitioner that 13 of the purchasing centres of the reserved area of the petitioner shall be affected by grant of the letter of intent in favour of respondent No. 5 is also premature. The letter of intent nowhere mentions that by grant of this licence respondent no. 5 will be entitled to purchase sugarcane from those 13 purchasing centres belonging to the reserved area of the petitioner. The petitioner will, however, be entitled to hearing only before the Cane Commissioner under section 15 of the Uttar Pradesh Sugarcane (Regulation of Supply & Purchase), 1953 (hereinafter referred to as UP Act of 1953) when respondent No. 5 calims his right to purchase sugarcane from those centres. It will be relevant to point out here that the party aggrieved by the decision of the Cane Commissioner has also a right to appeal to the State Government under section 15 of the said Act. The interest of the petitioner, if at all, is of commercial nature to ensure that other persons are not granted any licence for establishment of a new sugar factory in the vicinity of the sugar mill of the petitoiner. In fact the petitioner has not been denied or deprived of a legal right.
The present case is covered on all fours by the ratio of a Supreme Court decision in The Nagar Rice & Flout Mills v. N. Teekappa Gowda & Bros., AIR 1971 SC 246 wherein it was held that rice mill owner has no locus standi to challenge under Article 226 of the Constitution of India the setting up of a new rice mill by another-even if such setting up be in contravention of section 8 (iii) (c) of the Rice Milling Industry (Regulation) Act, 1958—because no right vested in such an applicant is infringed. It may be pointed out here that the aforesaid decision has been followed recently by the Supreme Court in Mithlesh Garg v. Union of India (1992) 1 SCC 168.
For the aforesaid reasons we are of the opinion that the petitioner has no locus standi to invoke the special jurisdiction under Article 226 of the Constitution of India. Accordingly, we hold that the writ petition is liable to be dismissed on this short ground.
On the question of locus standi Mr. Gupta, learned counsel for the petitioner, however, submitted that the petitioner has locus standi to maintain this writ petitoin inasmuch as the impugned letter of intent issued in favour of respondent No. 5, will affect the right of the petitioner to purchase sugarcane from 13 purchasing centres of the ‘Reserved Area’ of the petitioner. In support of his submissions he relied on the following judgments of the Supreme Court.
i) S.P Gupta v. Union of Indias, 1981 SCC 87, ii) N. Parthasarthy v. Controller of Capital Issues, 1991 (3) SCC 153, iii) Sub Committee on Judicial Accountability v. Union of India, 1991 (4) SCC 699, iv) Bangalore Medical Trust v. B.S Mudappa JT 1991 (3) SC 172.
On examination of these cases, we find that the reliance by the petitioner on the ratio and observations of the Supreme Court in these cases is wholly misplaced. The first three cases relate to public interest litigation and have no bearing on the facts of this case. In the fourth case petitioners were the inhabitants of a locality whose park was converted into a nursing home and were thus directly affected persons. But in the present case, as stated above, the petitioner shall have the statutory right of hearing before the Cane Commissioner as and when respondent No. 5 claims his right to purchase sugarcane from purchasing centres of the reserved area of the petitioner. The apprehension of the petitioner at this stage is unjustified.
Even assuming for the sake of argument that the petitioner has locus standi to maintain this writ petition, we find, that the writ petition has to be dismissed on merits also, as we see no force in any of the contentions raised by the learned counsel for the petitoiner.
As regards contention No. 1 we see no substance in this contention. A perusal of the Government of India (Allocation of Business) Rules, 1961 shows that the relevant Ministry for the purposes of “Administration of the Industries (Development & Regulation) Act, 1951, is the Ministry of Industry. It will be relevant to point out here that all the press notes including the press note dated 23rd July, 1990 have been issued by the Ministry of Industry.
Contentions 2 to 6 raised by the learned counsel for the petitioner pertain to the press note dated 23rd July, 1990. The learned counsel for the petitioner has challenged the aforesaid press note mainly on the grounds that the distance between the existing factory and the proposed factory has been reduced to 15 kilometers and requirement of certificate and clearance regarding sugarcane availability has been dispensed with without hearing the owners of the existing factories and/or their association. Further the guidelines contained in the press note are contrary to the Sugar Control Order, 1966 and U.P Sugarcane (Regulations of Supply and Purchase) Act, 1953 (hereinafter referred to as U.P Act of 1953). The guidelines are opposed to the consistent findings and recommendations of several high power expert bodies.
Before dealing with these contentions it will be relevant to point out that the impugned press note containing the guidelines has been issued under the provisions of the Act and it has to be read along with the Act and Rules framed thereunder. In terms of the said press note only the certificate of sugarcane availability is not required to be annexed along with the application. But the requirement of certificate of sugarcane availability is not a precondition under the provisions of the Act and Rules framed thereunder. However, it cannot be said that by issue of the impugned press note, availability of raw material, plant and machinery, suitability of the location proposed from the point of view of the proposed plant for the industry have been given go by. The main change in the new policy is with regard to the reduction of distance of the proposed factory from the existing factories. But the impugned press note containing guidelines pertains to policy matters of the Government of India. These guidelines essentially lack adjudicative disposition unless they violate constutional or legal limits on power or amount to clear abuse of power. This again is the judicial recognition of the administrator's right to trial and error, as long as both trial and error are bona fide and within the limits of authority. In this connection we may refer to a passage from “The Purpose and Scope of Judicial Review” by Sir Gerard Bremnnan which was cited with approval by the Supreme Court in a recent judgment reported in (1991) 3 SCC 91.
“The courts are kept out of the lush field of administrative policy, except when policy is inconsistent with the express or implied provisions of a statute which creats the power to which the policy relates or when a decision made in purported exercise of power is such that a repository of the power, acting reasonably and in good faith, could not have made it. In the latter case, ‘something overwhelming’ must appear before the court will intervene. That is, and ought to be, a difficult onus for an applicant to discharge. The courts are not very good at formulating or evaluating policy. Sometimes when the courts have intervened on policy grounds, the court's view of the range of polcies opened under the statute or of what is unreasonably policy has not won public acceptance. On the contrary, curial views of policy have been subjected to stringent criticism. In the world of politcs, the courts opinions on policy are naturally less likely to reflect the popular view than the policies of a democratically elected government or of expert administrators…..”
In this connection, reference may be made to another judgment of the Supreme Court in Shri Sitaram Gugar Company Ltd. v. Union of India, 1990 (3) SCC 223. In this case it was held that the court does not substitute its judgment or its decision for that of the legislature or its agents as to matters within the province of either.’
In support of his aforesaid contentions 2 to 6 Mr. Gupta, the learned counsel for the petitioner has placed reliance on the following judgments 1) State of M.P v. G.S Dall & Flour Mills, AIR 1991 SC 772, 2) Life Insurance Corporation of India v. Escorts Ltd., AIR 1986 SC 1370, 3) Banglore Medical Trust v. B.S Muddabba, JT (1991) 3 SC 172, 4) Ch. Tika Ramji v. State of U.P, AIR 1956 SC 676, 5) The Purtabpar Company Ltd., v. Cane Commissioner of Bihar, AIR 1970 SC 1896, 6) (1977) ILR 1 Allahabad 663, 7) 1988 A.L.J 624, 8) Bishamber Dayal Chandra Mohan v. State of U.P, AIR 1982 SC 33, 9) AIR 1986 SC 515, 10) Utkal Contractors & Jonery P. Ltd., v. State of Orissa, AIR 1987 SC 1454, 11) P.J Irani v. State Of Madras & Another, AIR 1961 SC 1731, 12) JT (1991) 3 SC 172, 13) (1977) Laker Airways Ltd. v. Department of Trade, 2 All England Reporter 182, 14) Kumari Shrilekha Vidyarthi v. State of U.P, AIR 1991 SC 537, 15) Kunnathat Thathunni Moopil Nair v. State of Kerala, AIR 1961 SC 552, 16) AIR 1967 SC 1801 and 17) Re Liverpool Taxi Owners' Association (1972) 2 All England Reporter 589, 18) Baldev Singh v. State of H.P, AIR 1987 SC 1239 and 19) State of Haryana v. Ram Kishan, AIR 1988 SC 1301.
The first three judgments are on the proposition that the executive instructions can supplement the Statute but cannot run contrary to the statutory provisons. In the Escort's case (supra) it was held that a subordinate legislating body may make the appropriate rules and regulations to regulate the exercise of a power which the Parliament has vested in it, so as to carry out the purposes of the legislation, but it cannot divest itself of the power. There is no dispute so far as the law laid down in these judgments is concerned but the reliance of the learned counsel for the petitoiner on these judgments is misplaced. As stated above, in terms of the impugned press note the applicant was not required to produce any certificate/clearance regarding the cane availability or potential for development of cane. But the investigation by the Government under the provisions of the Act and the Rules regarding availability of raw materials etc., was not dispensed with. The press note containing guidelines has to be read along with the provisions of the Act and the Rules. In view of this the guidelines contained in the press note are not contrary to any provision of the Act or the Rules framed thereunder.
The judgments mentioned at serial No. 4 to 7 are to the effect that under section 15 of the U.P Act, 1953, the Cane Commissioner declares the reserved or assigned areas for the factories and also transfers particular area from one factory to another. Further the powers given to the Cane Commissioner have got to be exercised within the limits prescribed after consulting the factories owners and Canegrowers Co-operative Societies and any order made by the Cane Commissioner thereunder is liable to an appeal to the State Government at the instance of the party aggrieved. But the contention of the learned counsel for the petitioner that the petitoiner should have been given a hearing before the issue of the impugned press note, as their right to purchase, the sugarcane from the reserved area was likely to be affected is misconceived. As stated above, the stage of hearing will be at the time of annual allotment of sugarcane by the Cane Commissioner as and when respondent No. 5 or any other factory owner claims his right to purchase the sugarcane from any of the purchasing centres belonging to reserved area of the petitioner.
The judgments mentioned at Sr. No. 8 to 13 are to the effect that the decision of the Government ought to be in accordance with the objects of enactment and there should not be any violation of the statutory scheme. The ratio in all these judgments is not applicable to the facts of the present case and the impugned press note is not contrary to any provisions of the Act or the rules framed thereunder as explained hereinabove.
In the judgment mentioned at serial No. 14 it has been held by the Supreme Court that any action of the State ought to be reasonable and should not be arbitratory one. This judgment has been relied upon in support of the proposition that the impugned press note was issued without any material or basis and was issued without any application of mind. The ratio of this judgment is also not applicable to the facts of the present case as the guidelines contained in the impugned press note pertain to the economicpolicy of the Government and are in accordance with the provisions of the Act and the Rules framed thereunder.
The judgments at serial Nos. 15-16 have been relied upon in support of the contention that the impugned press note treats different sugar factories placed in different circumstances and having different requirements and subjects them to the same radial distance criterian for availabliity of the sugarcane. This contention is devoid of any merit inasmuch as the guidelines contained in the press note have to be read along with the provisions of the Act and the Rules and the investigation regarding availability of sugarcane under these provisions is implicit in the guidelines.
The judgment at serial No. 17 to 19 have been relied upon by the learned counsel for the petitioner in support of the contention that the existing factory owners and/or their association should have been afforded an opportunity before issue of the impugned press note. The contention is again misconceived. As explained hereinabove, the stage of affording an opportunity to the petitioner will arise as and when respondent No. 5 or any other mill owner approaches the Cane Commissioner to claim any right to purchase the sugarcane from any of the purchasing centres of the petitioner. The ratio of this judgments is, therefore, not applicable to the facts of the present case.
In contention No. 7 the learned counsel for the petitioner has challenged the letter of intent dated 7th August, 1990 issued in favour of respondent No. 5 on various grounds mentioned earlier. Since these grounds form the main contentions of the petitioner, the same are being restated briefly with our observations. The first ground is that on the date of submission of the application (i.e 5th April, 1990) by respondent No. 5 for establishing a sugar facotory at Agauta, the application was not maintainable in terms of the guidelines applicable at that time. This ground is, however, misconceived as the date of applicability of the guidelines shall be the date on which the letter of intent was granted. As stated in the counter affidavit filed on behalf of the Union of India, the application of respondent No. 5 had been put up for consideration before the licensing committee in its meeting held on 14th May, 1990, 30th July, 1990 and 6th August, 1990. From this it is clear that the application was considered, inter alia, on two dates after the issue of the new guidelines.
The next ground of attack is that respondent No. 5 had furnished false information to the effect that his proposed sugar factory shall have no adverse affect on the cane supplies of any existing factory. This contention is devoid of any merit inasmuch as even after the letter of intent was issued in favour of respondent No. 5, the latest reservation order does not show that any portion of the ‘reserved area ‘of the petitioner has been transferred in favour of respondent No. 5. It may, however, be pointed out here that in terms of section 15 of the U.P Act of 1953, the reserved area of one sugar factory can be transferred to the other by the Cane Commissioner after affording an opportunity to the factory owner whose reserved area is likely to be disturbed.
Another ground of challenge to the letter of intent is that the same has been issued in favour of respondent No. 5 without affording any opportunity to the petitioner which right is available to it from the statutory declaration of the reserved area as well as from the protected area provided by the radial distance policy. In support of this contention the learned counsel for the petitioner has placed reliance on Purtabpur case, Shanker Singh case, Simbhaoli Sugar mills case, Baldev Singh case (supra) and National Textile Workers' Union v. P.R Ramakrishnan, AIR 1983 SC 759.
The said contention of the petitioner is, however, misconceived. In terms of the provisions of the Act and the Rules framed thereunder, no opportunity is required to be afforded to those who are not applicants. Since the petitioner was not one of the applicants in establishing a sugar factory in the area in question, it was not entitled to any hearing. As stated hereinabove, the impugned letter of intent nowhere mentions that any portion of the reserved area of the petitioner has been transferred in favour of respondent No. 5, as such the petiioner is not entitled to any hearing at this stage. The petitioner will however be entitled to hearing before the Cane Commissioner under section 15 of the UP Act of 1953 as and when respondent No. 5 claims any right to purchase sugarcane from any purchasing centres belonging to the ‘reserved area’ of the petitioner. The juddments mentioned hereinabove pertain to the right of a person for hearing only when any right vested in him is affected. The ratio of these judmgnets is, therefore, not applicable to the facts of the present case.
Another ground of challenge to issue of the letter of intent is that complete investiation under section 14 of the Act and Rules 13 and 15 of the Rules framed thereunder was not made by the Government of India before issuing the said letter of intent and there was no effective consultation by the Central Government with the Government of U.P It has been alleged that the letter of intent was granted in favour of respondent No. 5 without application of mind. In supprort of this contention, the learned counsel for the petitioner placed reliance on Banglore Medical Trust case (supra), U.P State Road Transport Corp. v. Mohd Ismail, AIR 1991 SC 1099, Utkal Contractors & Joinery Pvt. Ltd (supra) and Narayana Sankaran Mooss v. State of Kerala, AIR 1974 SC 175, Union of India v. Sankal Chand Himatlal Sheth, AIR 1977 SC 2328, Padfield and others v. Minister of Agriculture, Fishries and Food and others, (1968) 1 All England Reporter 694 and Shivajirao Nilangekar Patil v. Dr. Mahesh Madhav Gosavi, AIR 1987 SC 294. We, however, find no substance in this contention as it is evident from the counter affidavit filed on behlaf of the Union of India that the Government of India sought the view and opinion of the Government of U.P on the application of respondent No. 5 vide letter dated 25th April, 1990. The Government of U.P vide letter dated 31st May, 1990, on the basis of the comments received from the Cane Commissioner of U.P, forwarded the requisite information containing cane availability data to the Government of India, Ministry of Industry, New Delhi. It has further been stated in this affidavit that the application of respondent no. 5 had been put up for consideration before the licencing committe in its meetings held on 14th May, 1990, 30th July, 1990 and 6th August, 1990 and after proper consideration, the licensing committe recommended the issue of letter of intent for establishing a sugar factory in favour of respondent No. 5 and three other applicants. Since from the aforesaiid affidavit filed on behlaf of the Union of India it is clear that necessary investigation was made and effective consultation with the Government of U.P took place, the ratio of the aforesaid judgments is not applicable to the facts of the present case.
It may be pointed out here that in terms of Rule 13 of the Rules, it is for the licencing committee to take a decision as to whether a public enquiry is necessary in respect of any application. Since in the present case the licensing committee did not think it necessary to hold a public enquiry, there is no violation of Rule 13 in the present case. Further there is no violation of Rule 15 of the Rules also inasmuch as it was on the basis of the report of the licencing committee that the letter of intent was issued in fvour of respondent No. 5.
Another ground of attack against the issue of the impugned letter of intent is that the application of respondent No. 5 was arbitrarily picked up from amongst 200 applications and it was contrary to the Government's own policy of giving preference to the cooperative sector applicants. This ground is again without any merit as nowhere it has been alleged that either the petitioner or any cooperative society was one of the applicants for establishing a sugar mill in the area in question. Similarly the allegation of the petitioner that the grant of impugned letter of intent was contrary to the Government's own policy of giving preference to expansion (particularly in view of the fact that an application of the petitioner for expansion of existing factory was pending) is without any force. As stated in the press note dated 23rd July, 1990, priority was to be given to the factories with capacity of less than 2500 TCD to expand to the aforesaid minimum economic capacity but the application of the petitioner pending for consideration is for expansion of its crushing capacity from 5000 TCD to 10,000 TCD.
It was also contended by the learned counsel for the petitioner that the letter of intent was illegal because the Government of India was barred by the principal of promissory estoppel from interfering with the cane area or cane suplies of the petitioner. In support of this contention the learned counsel for the petitioner placed reliance on Union of India v. Godfrey Philips India Ltd, AIR 1986 SC 806. This contention is again misconceived inasmuch as the petitioner has no inalienable right in the reserved area. As stated hereinabove, the reserved area was subject to transfer to another sugar factory in terms of section 15 of the UP Act of 1953. This, however, could be done after affording an opportunity to the mill owner whose reserved area was likely to be affected. The ratio of the aforesaid judgment is, therefore, not applicable to the facts of the present case.
Before we conclude we may point out that brief arguments were also addressed on behalf of two interveners, namely, Kisan Sehkari Chini Mills Ltd. and U.P State Sugar Corporation Ltd. Mr. M.C Bhandare, Sr. advocate and Miss Kitty Kumarmangalam, learned counsel for the interveners mainly relied on the submissions made on behalf of the petitioner. They, however, submitted that their right to purchase sugarcane from certain purchasing centres belonging to their respective reserved areas is going to be affected by grant of the impugned letter of intent and the said letter of intent could not be issued before affording an opportunity to the said interveners for making a representation. The contention of the learned counsel for the interveners is misconceived in view of the discussion on this point made hereinabove. These interveners, like the petitioner, will be entitled to hearing only before the Cane Commissioner under section 15 of the U.P Act of 1953 as and when respondent No. 5 claims any right to purchase sugarcane from any of the purchasing centres belonging to the interveners. The party aggrieved of the decision of the Cane Commissioner has also a right to appeal to the State Government under section 15(4) of the said Act.
In view of the above discussion we find no force in any of the contention raised by the learned counsel for the petitioner and as such we dismiss the writ petition. The parties are left to bear their own costs.