JUDGMENT
P.K. Bahri, J.
(1) In this writ petition brought under Article 226 of the Constitution of India the legality of the order dated September 9. 1986, has been challenged and the same is sought to be quashed by which the petitioner has been denied the incentive introduced by Incentive Scheme dated November 15, 1980 read with circular dated December 30, 1980.
(2) The manufacture of sugar is an industry regulated under the Industries (Development and Regulation) Act, 1951./ Section 10 of the said Act provides for registration of all such industries and Section 11(1) provides for granting license for new industries and Section 11A prohibits the manufacture by a registered and licensed undertaking of any new article. So, in this way there is a complete control over the sugar industry by the Government. Section 298 of the said Act entitles the Central Government to obviate the necessity of complying with the provisions of Sections 10, 11A and 13 the said Act.
(3) In order to see that the production of sugar is increased in the country, the Central Government have been issuing time to time certain notifications under Section 29B of the said Act and then Central Government have been issuing explanatory press notes in that connection. Such press notes were issued on May 25, 1970 and May 9, 1978. A notification was also issued on February 16, 1973 exempting the sugar industry from the operation of the provisions of Sections 10, 11, 11A and 13 of the said Act. A notification was also issued on April 25, 1978. The effect of the first notification was that sugar industry could expand its production by installing machines and plants to the tune of Rs. one crore. This limit was enhanced to Rs. three crores by the second notification. On May 9, 1978, the Central Government issued a press note elucidating the provisions of the said notification and it was clarified that in regard to undertaking which would not require any industrial license under the new policy, a simple procedure of registration with the technical authorities would be followed. The industry was required to furnish a return in the form ‘G’ appended to the Rules framed under the said Act and such a form was to be furnished every six months mentioned in the progress made in respect of the expansion of the industry.
(4) The Central Government introduced an incentive scheme dated December 6, 1975. The incentive was available to the new sugar factories and also to the factories which have introduced expansion of the industry. On November 15, 1980, the Central Government circulated a revised incentive scheme
(5) The case of the petitioner, in brief, is that on April 26, 1978 the petitioner had a licensed capacity of 1700 M.Ts. crushing of sugarcane per day capacity and in older to expand the capacity of its unit from 1700 Tcd to 3500 T.C.D. the petitioner-company in pursuance to the notification dated 26, 1978. popularly known as ‘Liberalised Licensing Policy’ asked for the requisite registration and in response to letter dated November 2, 1979, the petitioner furnished the requisite information and after some correspondence was exchanged the petitioner was granted necessary registration vide letter dated June 30, 1980. The petitioner averred that immediately after receiving this letter the petitioner proceeded to place orders for the additional machinery needed for the expansion of the industry and before the end of the year 1980 the petitioner-company had already spent Rs. 17.13 lakhs as well as incurred liability to the extent of Rs. 38.78 lakhs towards the machinery etc. for which the orders had been placed and advances made. The petitioner has alleged that the petitioner was able to complete the expansion of the factory by early February 1982. The petitioner also mentioned that before the comencement of the sugar year which commences from 1st October and ends on 30th September of the following year, the petitioner-company had sent the letter dated September 23, 1982, to the respondent furnishing the complete list of machinery installed, its cost as well as other details arid the full information required for the purpose of grant of incentive and thereafter a lot of correspondence was exchanged between the parties and ultimately vide letter dated September 9, 1986, the respondent rejected the claim of the petitioner for grant of incentive on the ground that the expansion of the factory carried out by the petitioner is not covered by, the provisions of paragraphs 3 and 4 of the circular dated December 30, 1980. Under the aforesaid paragraphs the sugar factories proposing to expand their capacities were required to” register themselves with the Directorate of Sugar and also obtain prior approval of the Directorate of Sugar for items of plant and machinery to be installed before any additions and alterations are made with regard to the proposed expansions and paragraph 4 laid down that failure to obtain prior concurrence /approval of the Directorate to the installation of proposed plant/ equipment for such expansions as also failure to register the expansion will debar such projects from the grant of incentive meant for ‘Liberalised Expansion Projects’. It is the case of the petitioner that the petitioner had already obtained the approval of the respondent with regard to the items of various machinery which were installed for expansion of the factory before coming into force of the new incentive scheme and if any prior approval was made pre-requisite condition for grant of incentive, the same should have been considered to have been met as prior approval had been obtained by the petitioner before enforcement of the new scheme of incentive. The petitioner has also in the alterative/pleaded that as the petitioner had already taken steps and incurred huge expenditure for purchase of machinery and plants for installation in the factory in pursuance to the expansion programme already approved by the respondent, the condition introduced in the new incentive scheme for seeking prior approval of such machinery and plant was not applicable to the Petitioner. Hence, the petitioner has prayed for issuance of a writ of certiorari for quashing the letter dated September 9, 1986, by which the respondents have rejected the prayer of the petitioner for grant of incentive under the aforesaid scheme and a writ of mandamus requiring the respondents to proceed to consider the quantum of incentive available to the petitioner under the said scheme and to grant the same expeditiously.
(6) Shri S.K. Chattopadhyay. Director (S.T.) Directorate of Sugar, Ministry of Food and Civil Supplies, has filed the affidavit opposing the writ petition. It has been pleaded that the request of the petitioner for grant of incentive under the scheme has been declined rightly by the respondents as the petitioner did not come within the purview of the aforesaid incentive scheme inasmuch as the petitioner had not obtained any prior approval of the Directorate of Sugar for items of plant and machinery to be installed before any additions and alterations are made with regard to the proposed’ expansions. It was also pleaded that the petitioner had not got its expansion programme registered with the Directorate of Sugar after the enforcement of the new incentive scheme. In nutshell the case of the respondents is that as the petitioner had got its expansion programme registered before the coming into force of the new incentive scheme and had also not obtained any prior approval with regard to items of plant and machinery to be installed with regard to the proposed expansion programme, as such the petitioner was not covered by the provisions of the new incentive scheme and thus not entitled to have any such incentive. I need not give the details of the incentive scheme as to what sort of incentives are available if the case of the petitioner is covered by the incentive scheme because the only question to be decided in the present matter is as to whether the petitioner is covered by the incentive scheme in question or not.
(7) Counsel for the petitioners has vehemently argued that under the new liberalised licensing scheme the Govt. had introduced various schemes so as to remove certain bottlenecks which put hurdle in the way of quick expansion of the production capacity of the existing sugar factories and also in the installation of new factories. It is known fact that the Government was keen for increase in production of sugar. The Government is also keen that some minimum quantity of sugar is available to the consumers at a reasonable price and in this way two pruned pricing policy is being followed. Certain quantity of sugar is taken per force from the factories at a fixed price which is stated to be a sometimes below even the cost price for being distributed to the consumers through fair price shops at fixed price and the sugar factories are permitted to sell the remaining quantity of sugar in the open market but there also the Government exercises control in the manner that monthly release orders regarding the quantity of sugar to be put in the market are issued to the factories so that the market price also does not go out of control. Be that as it may, the Government intended to give certain incentives to the new factories and also to the existing factories which were to undertake expansion programmes to increase the capacity to produce more sugar. It is indeed not in dispute that the petitioner had applied for expansion of his factory and had got its expansion project registered with the respondent before the enforcement of the new incentive scheme while there was incentive scheme also in force since 1975. The expansion of the factory of the petitioner was not completed during the period the previous incentive scheme introduced in 1975 was in force. It was averred in para 9 of the petition that the petitioner had placed orders for the additional machinery needed for the expansion and before the end of the year 1980 the petitioner-company had already spent Rs. 17.13. lakhs as well as incurred liability to the extent of Rs. 38.78 lakhs towards the machinery etc. for which orders had been placed and advances made. In reply affidavit it was mentioned that these facts are matter of record. There was no clear and emphatic denial of these facts. The case of the petitioner appears to be covered by the ratio laid down by Division Bench of this Court in M/s. Dhampur Sugar Mills Ltd. v. Union of India & Others, , which judgment has been approved by the Hon’ble Supreme Court, In cited case the material facts, in brief, were that M/s. Dhampur Sugar Mills Limited in order to take benefits of the liberalised licensing and incentive policy had decided upon to expand the crushing capacity of its factory. The petitioner in that case had submitted an application for seeking registration to the Directorate of Sugar on June 10, 1980. The correspondence was being exchanged but no final decision was taken for grant of registration and in the meanwhile on August 18, 1981 the respondents had taken a decision that no such registration would be granted and the factories shall have to take resort to the provisions of Sections 10 to 13 of the Act for getting the new licenses. The petitioner in that case had completed its expansion programme in February 1982 and sought incentive under the new scheme. The Government had denied the prayer of the said petitioner for grant of incentive on the ground that no registration had been granted to the factory under the new scheme and no prior approval had been obtained for installation for new machines meant for the expansion programme. The Division Bench of this Court allowed the writ with the following observations : ”The Industry was promised that the new Licensing Policy will ensure greater freedom and opportunity for enterpreneurs. The delay in granting the registration was totally unjustified and arbitrary. It was contrary to assurances made to the industry. To permit the respondents, after such an inordinate and unexplained delay, to withdraw registration on ground that the policy was rescinded would be contrary to equity and law. Another equitable aspect, namely, the investment up to Rs. 3 crores and the planning and labour that has gone in the expansion programme, cannot be ignored by the Court.”
(8) The Division Bench went on to quash the order of the Directorate of Sugar by which it had declined to give incentive. It was held that as the petitioners were entitled to registration under the said scheme of April 26,1978, they are also entitled to the incentives under the incentive scheme in as much as they had completed their expansion in February 1982. The case of the petitioner before me stands on a better footing because here the petitioner had been granted a registration under the liberalised licensing policy and the question was whether the petitioner should be entitled to have benefit of incentive under the new scheme of October 1980. The petitioner has shown that it had incurred huge expenditure in purchasing the equipment and placing order for supply of machines etc. in pursuance to the expansion project already approved. Thus, huge expenditure has been incurred prior to coming into force of the new incentive scheme and the pre-requisite condition mentioned in the new incentive scheme could not possibly be fulfillled by the petitioner inasmuch as the petitioner had already taken concrete steps for purchasing the machinery and plant and thus question of his taking prior approval for installing the said machines and plant by virtue of new incentive scheme did not arise. More over, in para 17 of the writ petition it was clearly averred that such approval has been already obtained but in counter it was pleaded that the said approval was granted not under the new incentive scheme of 1980 meaning thereby that the approval had been granted regarding the plant and machinery to be installed in respect of expansion project prior to coming into force of the new incentive scheme. I do not see how it makes any difference to the entitlement of the petitioner to get the incentive under the new scheme of 1980. There could be no occasion for the petitioner to get any prior approval for installing new machines and plant because there was no such requirement prior to the enforcement of October 1980 incentive scheme. I may a this stage reproduce the order of the Supreme Court in Civil Appeal No. 4038/85, Union of India & Another v. M/s. Dhampur Sugar Mills Ltd. : “Leave granted. We find no ground what so ever justifying interference under Article 136 of the Constitution. The facts revealed show that the respondent-company had submitted its application for registration under the liberalised scheme on 10th June 1980 complying with all the requisite formalities. But for unknown reasons, the authorities concerned did not choose to dispose of the application though it is now admitted that had the liberalised licensing policy not been rescinded on 18.8.1981 the respondent would have been entitled to registration under the Notification dated 26.4.1978. The delay in the disposal of the respondent’s application for registration was not due to default on its part. The blame to be placed entirely at the door of the authorities concerned, having failed to grant the Respondent registration before the policy was rescinded. As a consequence the respondent was also denied the benefit of the Incentive Scheme. One of the grounds now urged before us to sustain the denial of the benefit of the Scheme of Incentives is that the prior approval of the Directorate of Sugar for the items of plant and machinery to be installed was not obtained. The second Incentive Scheme came into force from 30.12.1980 and by that time the Respondent bad not only applied for registration but also placed the necessary orders for plant and machinery. The respondent could not have possibly obtained prior approval of the authorities in the situation in which it was placed. We find no merit whatever in this appeal which is accordingly dismissed with costs.”
(9) So, perusal of the above order of the Supreme Court shows that in the case of M/s. Dhampur Sugar Mills Ltd. also the new incentive scheme was made applicable even though the factory had incurred the expenditure for installation of the plant and machinery without getting any approval under the new scheme. It was held that there could be no question of any approval under the new scheme when such expenditure had been incurred prior to enforcement of the new scheme, and the said Mill was held to be entitled to the incentive under the new scheme. I do not find any difference between the facts of the present case and the facts of the case which were there before the Supreme Court.
(10) Counsel for the respondents has drawn my attention to another judgment of a Division Bench of this Court in Civil Writ No. 1584/85, Shri Madhi Vibhag Khand Udyog Sahakari Mandli Limited & Another v. Union of India & Anr., decided on September 3,1987. In the cited case, facts were different. The petitioner in that case had not incurred any expenditure in installing any plant and machinery prior to enforcement of the new incentive scheme, rather the petitioner had taken steps for getting registration of the expansion programme and also had installed machinery and plant only after the enforcement of the new incentive scheme. The Division Bench after distinguishing the case of M/s. Dhampur Sugar Mills Ltd. (supra) held that the petitioner in that case was not entitled to the incentive under the new scheme because the petitioner had incurred all expenditure on installation of plant and machinery knowing very well that under the new scheme the prior approval was a condition precedent. So, this judgment would not help the respondents in support of the impugned order.
(11) Keeping in view the facts and the circumstances and following the ratio laid down in the case of M/s. Dhampur Sugar Mills Ltd. (supra), I hold that the petitioner is entitled to succeed in this petition. I make the rule absolute and allow the writ and quash the impugned letter dated September 9, 1986 and direct the respondents to grant to the petitioner the incentive under the new incentive scheme issued on October 4,1980. The petitioner shall furnish the necessary information in consonance with the said scheme to the authorities concerned within one month and the respondents shall decide the case of the petitioner with regard to grant of incentive within three months thereafter. The respondents shall also ensure that further incentive benefit is given to the petitioner for the periods specified in the incentive scheme in accordance with the terms of the scheme. The respondents shall pay Rs. 2,000/ as costs out of which Rs. 1,000.00 shall be paid to the Indian Council of Legal Aid and Advice, Lawyers, Chamber No. 3, High Court of Delhi, New Delhi.