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Bhavna Agro Products and Services Private Limited (Gat No. 47) v/s The Commissioner of Sugar, State of Maharashtra & Others

    Letters Patent Appeal No. 238 of 2012 in Writ Petition No. 858 of 2012

    Decided On, 11 August 2016

    At, In the High Court of Bombay at Nagpur


    For the Appellant: Firdos Mirza, Advocate. For the Respondents: R1 & R2, S.B. Bissa, AGP, R3, R.L. Khapre, S.R. Deshpande, M.V. Samarth, Advocates.

Judgment Text

Oral Judgment: (B.P. Dharmadhikari, J.)

1. Heard Shri Firdos Mirza, Advocate for the appellant, Shri S.B. Bissa, AGP for respondent Nos. 1 & 2, Shri R.L. Khapre, Advocate for respondent No. 3, Shri S.R. Deshpande, Advocate for intervenor No. 1 and Shri M.V. Samarth, Advocate for intervenor No. 2.

2. With consent, the Letters Patent Appeal is admitted and heard finally. Appellant is a Private Limited Company, which desires to set up a Sugar Mill and for that purpose needs Aerial Distance Certificate as contemplated by Clause 6A of the Sugarcane (Control) Order, 1966 (hereinafter referred to as Sugarcane Order). The effort made by it failed as the authority has found that the Aerial Distance between two chimneys of factories was not taken into account. The chimneys of proposed Sugar Plant/ Factory of the petitioner has to be at the distance of 25 kms. from the chimney of existing sugar factory in the area.

3. This was questioned by the petitioner in Writ Petition No. 858 of 2012 and the learned Single Judge has on 30.04.2012, dismissed that petition holding that first Aerial Distance Certificate must be obtained by the petitioner and, thereafter, its contention about the factory in the vicinity not being in existence, needed to be looked into.

4. By inviting attention to Clause 6A and 6B of the Sugarcane Order, Shri Mirza, learned counsel submits that the Sugar Factory in the vicinity must not only be in existence but also operative. He submits that Sugar factory i.e. Respondent No. 2 in present LPA has seized to be in operation and is defunct since 2001 and hence, there was no question of its chimney being looked into for finding out Aerial Distance of chimney of the petitioner’s Sugar factory.

5. Shri Khapre, learned counsel points out the brief past history. He submits that the Sugar factory of Respondent No. 2 is attempted to be revived by Respondent No. 3 and the material steps have been taken in that direction. Writ Petition No. 2895 of 2010 is already filed for seeking mandamus for that purpose and it has been admitted for final hearing. Huge public land and public money is already invested in that Sugar factory and if the Sugar factory of the petitioner is allowed to come up, the plans of revival of Respondent No. 2 – Sugar factory would be frustrated. Without prejudice, he adds that Respondent No. 2 has got ancillary distillery which is functioning and as such it cannot be said that the Sugar factory of Respondent No. 2 is not operational.

6. Shri Samarth, learned counsel appearing for intervenor No. 2 – Maharashtra State Cooperative Bank Limited, submits that Maharashtra State Cooperative Bank has to recover huge public money from Respondent No. 2 – factory, if any other Sugar Factory is allowed to come up in the vicinity, the loan recovery by the Maharashtra State Cooperative Bank through auction of property of Respondent No. 2 would be defeated.

7. Shri Deshpande, learned counsel for intervenor No. 1 – Vijay @ Suresh Tulshiram Jadhav, supports the arguments of Shri Khapre and Shri Samarth, learned counsel. He submits that Sugar factory of Respondent No. 2 must be revived.

8. With the assistance of the respective counsel, we have perused Clause 6A and 6B of Sugarcane Order. Clause 6A envisages Aerial Distance Certificate for the purposes of enabling the petitioner to process its proposal for establishing a Sugar factory. The Aerial distance to be counted is from the chimney of existing Sugar factory or another new Sugar factory in the State or in two or more States. At the relevant time, bar was, to set up new Sugar factory within the radius of 15 kms. It is not in dispute that now this distance is increased to 25 kms. Explanation (1) defines 'existing sugar factory' to mean a sugar factory in operation and also includes a sugar factory that has taken all effective steps as specified in Explanation 4 to set up a Sugar factory but then it excludes a Sugar factory which has not carried out its crushing operations for last five sugar seasons. Explanation 2 defines 'new sugar factory' to mean a sugar factory which is not an existing sugar factory but has filed the Industrial Entrepreneur Memorandum as prescribed by the Department of Industrial Policy and Promotions, Ministry of Commerce and Industry in the Central Government and has submitted a performance guarantee of Rs. One crore to the Chief Director (Sugar), as stipulated therein. As per Clause 6B, before filing the Industrial Entrepreneur Memorandum with the Central Government, the concerned person has to obtain a Certificate from the Cane Commissioner or from the Director (Sugar) or Specified Authority of the concerned State Government that distance between the site where he proposes to set up sugar factory and adjacent existing sugar factories and new sugar factories is not less than the minimum distance prescribed by the Central Government or the State Government, as the case may be.

9. The scheme, therefore, shows that a person desirous of establishing a Sugar factory has to first obtain an Aerial Distance Certificate. The certificate has to be in relation to site to be chosen by him and site of existing sugar factory or the new sugar factory. It is not in dispute here that the appellant has to obtain an Aerial Distance Certificate between his site and the site of Respondent No. 2, which claims to be the existing sugar factory. Thus, we are not required to look into the definition of new sugar factory in this matter.

10. The contention of the respondents is as distillery is in operation, sugar factory must be presumed to be in operation. We have already looked into Explanation (1) which throws some light in this respect.

11. The question is, whether merely because ancillary activity of a distillery is going on, can it be said that the sugar factory is operational ? If the Sugar factory is not operational, the question of computing distance from its site to the site of the petitioner may not arise.

12. In this situation, the interpretation of scope or scheme as envisaged in Clause 6A and 6B of the Sugarcane Order, by the learned Single Judge, cannot be sustained. If there is no existing operational Sugar factory in the vicinity, the appellant may not be required to obtain such distance certificate from the plant of Respondent No. 2. If the plant of Respondent No. 2 is to be treated as an existing Sugar factory in operation, then the requirement will have to be fulfilled.

13. The first question, therefore, to be looked into is about the status of the Sugar factory of Respondent No. 2. As on today, efforts for its revival are underway and it cannot and does not make it an existing Sugar factory in operation, if it is not satisfying the mandate of Clause 6A of the above mentioned Sugarcane Order. This question has not been gone into by any of the authorities. It may also require some scrutiny by the expert in the field.

14. In this situation, this question can be more conveniently examined by Respondent No. 1. Respondent No. 1, therefore, to proce

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ed to find out whether the plant of Respondent No. 2 can be treated as an existing sugar factory in operation for the purposes of Clause 6A or Clause 6B of the Sugarcane Order. This exercise shall be completed within a period of ten weeks from today. If necessary, an opportunity of hearing shall be extended to the appellant as also to Respondent No. 2 and Respondent No. 3. 15. With these directions and keeping all rival contentions open, we partly allow the present Letters Patent Appeal and dispose it of. However, there shall be no order as to costs. 16. Needless to mention that in view of the above observations, Intervention Application (CAZ) Nos. 219 of 2013 and 228 of 2013 are allowed. Intervenors be added as intervenors in cause title after the last respondent.