JUDGMENT
A. Lakshmana Rao, Acting C.J.
1. This writ appeal arises out of the order dated 28-9-1992 allowing Writ Petition No. 10401 of 1992. The respondent herein is the writ petitioner. He established a rice-mill at Itchapuram, Srikakulam District, in the year 1964 after obtaining the requisite permit under Section 5 of the Rice Milling Industry (Regulation) Act, 1958 (for short “the Act”). He was also granted licence under Section 6 of the Act for carrying on rice-milling operations. This license was renewed from time to time till the year 1973-74. As the license was not renewed thereafter, the rice-mill became defunct from 1974-75. For the year 1975-76, the respondents sought for fresh permit under Section 5 of the Act, and fresh permit was granted by the Commissioner of Civil Supplies in his proceedings dated 28-1-1976 and he carried on milling operations thereafter till the year 1983. Again from 1-4-1983, the mill had become defunct. On 21-2-1990, the respondent again applied for a fresh permit under Section 5 of the Act for recommencing the milling operations. The Collector called for a report from the concerned Mandal Revenue Officer. The Mandal Revenue Officer submitted a report dated 17-1-1991 recommending for grant of the permit. However, the Collector disagreed with the Mandal Revenue Officer and recommended not to grant the permit as the rice-mill was situated within 5 K.Ms., from the State border. On the basis of the report submitted by the Collector, the Commissioner passed the impugned order dated 6-5-1991 rejecting the application submitted by the respondent herein for grant of permit under Section 5 of the Act.
2. Aggrieved by the impugned proceedings dated 6-5-1991, the respondent herein filed Writ Petition No. 10401 of 1992. The learned Judge rejected the contention advanced on behalf of the Commissioner of Civil Supplies that the permit could not be granted in view of the policy decision taken by the State Government not to grant permits under Section 5 of the Act for establishment of rice-mills within 5 K.Ms., from the State border, and quashed the impugned order on the ground that the application for grant of permit cannot be rejected on the basis of executive instructions. Aggrieved by that order, this appeal is filed.
3. It is submitted by the learned Government Pleader appearing for the appellants-respondents that the policy decision taken by the State Government not to grant permit for establishment of a new rice-mill or to recommence milling operations by a defunct rice-mill near the border areas, has relevance to the object and purpose of the Act as well as to the relevant control orders viz. The Andhra Pradesh Schedule Commodities Dealers (Licencing and Distribution) Order, 1982; The Andhra Pradesh Rice and Paddy (Storage Control) Order, 1981; and the Andhra Pradesh Sheller and Combined Sheller-Huller Rice Mills (Non-Trading) (Regulation of Working Hours) Order, 1973, and the said policy decision has been taken in order to prevent smuggling of rice into the border States.
4. Section 5 of the Act provides that while disposing of an application for grant of permit, due regard shall be had to (a) the number of rice mills operating in the locality; (b) the availability of paddy in the locality; and (f) such other particulars as may be prescribed. Rule 3 of the Rice Milling Industry (Regulation and Licensing) Rules, 1959 prescribe the procedure for consideration of the application for grant of the permit under Section 5 of the Act and the relevant factors that shall be taken into consideration in that regard. One of the considerations relates to the effect that the operation of the new or the defunct rice-mill may have on the local economy. The policy decision said to have been taken by the State Government that no new or defunct rice-mill shall be permitted to be established or a defunct mill be permitted to commence milling operations in any area within 5 K.Ms., from the State border, cannot be said to be an irrelevant consideration, and the said policy decision has nexus to the factors relating to local economy. Therefore, the rejection of the application on the ground that the defunct mill was situated within a distance of 5 K.Ms., from the border area, cannot be said to be either arbitrary or unreasonable. Therefore, the order passed by the learned Single Judge cannot be sustained, and it is accordingly set aside.
5. It is, however, submitted by the learned Counsel for the respondent that after the impugned order had been passed by the Commissioner of Civil Supplies, he had granted permit under Section 5 of the Act in respect of a rice mill located at Singdi village, Bhamini Mandal, Srikakulam District, which is situated within a distance of 3 K.Ms., from the border. He also stated that the Commissioner granted permit in respect of a rice-mill situated at Legagam village, Kothur Mandal, Srikakulam District, which is also situated at a distance of 3 K.Ms., from the border. It is also the case of the respondent that in respect of a rice-mill which is situated in Pathapatnam village and Mandal, Srikakulam District, which is at a distance of 4 K.Ms., from the border, permit has been granted under Section 5 of the Act after 1990. If that is true, the Commissioner of Civil Supplies shall verify the same and reconsider the application submitted by the respondent herein within three months from the date of receipt of a copy of this order and pass appropriate orders thereon. Subject to the above direction, the writ appeal is allowed. No order as to costs.