S. B. WAD ( 1 ) THE petitioners sugar mill was establishedin 1933. A substantial expansion of its capacity was allowed bythe Government under the Industries (Development and Regulation) Act, in 1965. The cane crushing capacity under the saidexpansion Scheme was increased from 2,000 tonnes to 2250tonnes of sugar cane per day. On 16-2-1973 the Governmentof India issued a Notification under Section 29- (B) of the saidact and inter-alia, exempted the sugar industry from. applicationof Section 10, 11,11-A and Section 13 of the Act as well asthe Rules framed under the Act. Broadly speaking, the exemption was applicable for setting up new industry and expansionof the existing industry. The exemption could be granted wherethe investment did not exceed Rs. one crore. The said newliberalised Scheme envisaged that the undertaking should merelyregister itself with the Government, without requirement of alicence and other conditions laid down by the said Sections ofthe Act. On 6/12/1975 the Directorate of Sugar andvanaspati, Ministry of Agriculture and Irrigation issued anincentive Scheme for new facrories and for expansion programmes by established undertakings. All sugar factories wereinformed of the Incentive Scheme. The object of the Schemewas as follows: IN order to achieve the targetted production envisagedin the Fifth Five Year Plan period, licences havebeen issued for the establishments of new sugarfactories and for effecting substantial expansion inthe existing sugar factories. In recent years, therehas been a steep increase in the cost of plant andmachinery required, for the sugar projects and atthis high cost the new projects were not provingeconomically viable units. The Central Financialinstitutions were. therelore. finding it difficult toadvance term-loan to the entrepreneures of newfactories as well as the sugar factories for effectingexpansion in the existing units. The establishmentof projects has thus recived a serious set back,which may delay the achievement of the targettedproduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . After examining the recommendations of the Committee in great. detail the. Government have sane -. tioned a scheme to provide incentives to the newsugar factories and expansion schemes based inpart on excise duty concession and in part on higherpercentage of levy-free sugar quota. "the Incentive Scheme was, to operate from ]:,t November,1975 to 31/10/1980. . . . . . . After examining the recommendations of the Committee in great. detail the. Government have sane -. tioned a scheme to provide incentives to the newsugar factories and expansion schemes based inpart on excise duty concession and in part on higherpercentage of levy-free sugar quota. "the Incentive Scheme was, to operate from ]:,t November,1975 to 31/10/1980. ( 2 ) IN order to take the benefits of the liberalised licensingand incentive policy of the government of india. the petitionersdecided upon further expansion of their crushing capacity. In1978, the Government of India decided to further liberalise thelicensing policy and issued a Notification to that effect on 26/04/1978. Under the new Scheme the investment limitof I crore was raised to three crores. The Notification furtherlaid down that the industrial undertaking which was exemptunder the said Notification "shall register itself with the Directorate General of Technical Development. . . . . . . and shall furnisha return in Form-G appended to the registration and licensingof Industrial Undertakings Rules, 1952 in respect the progress made by the undertaking and shall also submit productionreturns every month in such form as may be notified under theprovisions of the said Rules to the concerned authorityb mentioned above. " ( 3 ) THROUGH a press note issued along with the said Notification, the industry was further informed that on receipt of theapplication for registration, the D. G. T. D. etc. will take theapplications on record expeditiously and communicate thefacts of registration and the registered number to the party. The industry was further informed that the "industrial undertakings which have licence-application pending with Government,should review their application and any application which iscovered by the new exemption limit, may be withdrawn bywriting to the Government. " The industry was also assuredthat in the light of the above clarification, Government expected that the new licensing policy would ensure greater freedomand opportunity for entrepreneurs. Along with the liberalisationof the licensing policy, the Government continude the policy ofgiving incentives to sugar industries started in 1975. Before thefirst Scheme of incentives came to an end on 31/10/1980, a new Scheme for incentives was issued by the Government on 4/10/1980. The new Scheme was applicable,inter-alia. to all licensed expansions completed on or after 1/10/1980, The Scheme was also applicable tothe expansion projects already licensed. ( 4 ) THE petitioners submit that after the liberalised licensing scheme was announced on 26-4-1978. The new Scheme was applicable,inter-alia. to all licensed expansions completed on or after 1/10/1980, The Scheme was also applicable tothe expansion projects already licensed. ( 4 ) THE petitioners submit that after the liberalised licensing scheme was announced on 26-4-1978. the petitioners decided toraise their crushing capacity and sent their technicians and engineers to Australia to study and master the cane milling technologyused in that country. It is admitted on both sides that Australiahas developed high and efficient technology in this area. Afteracquiring the know-how. the petitioners started developingdesigns and manufacture of equipment indiganously. Thepetitioners also invited firm quotatiens and placed firm orderby investing more than Rs. 2 crores. I he limit under the newlicensing scheme was Rs. 3 crores. With this preparation thepetitioners applied for registration to Directorate of Sugar on 10/06/1980. ( 5 ) THE Directorate of Sugar called for further informationfrom the petitioners regarding the contemplated increased inthe daily cane crushing capacity, costs and specifications ofnew machineries, costs of land and building etc. and schedule of machinery of the factory. This letter was sent by the Directorate on 8/07/1980. On 3-9-1980. the Directorate askedthe petitioners about the composition of the Board of Directorsand their share-holdings. On 13-7-1980, the Govt. of Indiawrote to all sugar industries commending the Australian technology and its adoption. "the petitioners had already introducedthe said technology at great cost. On 26-10-19?,0 the Directorate of Sugar appreciated the efforts of the petitioners factory"in talcing up the fabrication of new type of equipment for thefirst time in India and trying to introduce the same for improving the technical efficiency in the sugar factories. " Then camethe new Incentive Policy of the Government on 4-10-1980. On13-12-1980, the Government informed all sugar factories thatthe Incentive Scheme of 4/10/1980 was applicable toall sugar factories proposing expansion of their capacity underthe Liberalised Licensing Policy. They were informed that theyshould register themselves with the Directorate of Sugar and"also obtain prior approval of the Directorate of Sugar for item"of plant and machinery to be installed before any additions oralterations are made with regard to the proposed expansions". They were also informed that unless these conditions were complied with they would not get the benefits of the incentives. ( 6 ) THEREAFTER, (for the first time) on 13/03/1981 thedirectorate informed the petitioners that the application of thepetitioners for registration was under consideration of thegovernment. They were also informed that unless these conditions were complied with they would not get the benefits of the incentives. ( 6 ) THEREAFTER, (for the first time) on 13/03/1981 thedirectorate informed the petitioners that the application of thepetitioners for registration was under consideration of thegovernment. The petitioners were also informed that aboutthe contents of Government s letter dated 23-10-1980. Thepetitioners again requested for registration on 20-4-1981, Thedirectorate asked the petitioners to furnish the information onthe additions made in the plan for Five Years, the copies ofinformations of the items of machineries proposed for the expansions and to satisfy the Directorate that the investment wasnot more than 3 crores. All the required informations weresupplied by the petitioners on 27/05/1981 along withrevised estimated costs, sixty-six photostat copies of quotationsand forty five copies of orders placed on the third party. Inspite of this no decision was taken. On 3-7-1981 the Directorateinformed the petitioners that the matter was under consideration of the Government. It appears that on 18/08/1981,a Notification was issued by Government of India withdrawingexemptions under Section 29-B and requiring the undertakingsto obtain licences as required by the Act. Obviously, the saidorder was to apply prospectively. On 2-9-1981 the Directorateagain informed the petitioners that its application for registration was still under consideration of the Government. Thepetitioners duly completed the expansion in Feb. 1982 and informed the Directorate accordingly. With the starting of the newcrushing season in November, 1982, the petitioners started itsregular production of the increased capacity 4,000 tonnes perday from 2-12-1982 and informed the Directorate. As theregistration application wa^ nor yet disposer of and the petitioners did not get any benefit of the Incentive Scheme, thepetitioners were required to file the present petition. ( 7 ) INITIALLY, at the time of arguments the respondents contested the petitioners claim on the ground that the petitionersbad not obtained prior permission for installation of maheineryand plant required by circular dated 30-12-80. It was alsosubmitted by the Respondents that the petitioners had net obtained the registration as required by the Liberalised Licensingpolicy of 1978. It was then Submitted that the petitioners, hadnot produced satisfactory evidence. to show that expansion waswithin the limits of three crores. They also submitted that. It was alsosubmitted by the Respondents that the petitioners had net obtained the registration as required by the Liberalised Licensingpolicy of 1978. It was then Submitted that the petitioners, hadnot produced satisfactory evidence. to show that expansion waswithin the limits of three crores. They also submitted that. thepetitioners had not supplied information in Form-G. On examining of the documents producer by the petitioners, and afterhearing the arguments it was found by the Bench that none ofthe objections raised by the respondents had any merit. Therequirement of the prior permission before machinery andplantwere put up was not mandated by the Liberalised Licensingpolicy. What was required by the said Circular was that thepetitioners should register themselves without any complianceof stringent licensing requirement under the I. D. R. Act. The petitioners had filed their application for registration on10-6-1980 and at that time such prior permission was, not required. It may be noted that when the petitioners filed theapplication, the earlier Incentive Scheme was still in operation. Indeed, one of the prayers of the petitioners is to give them thebenefit of the earlier Incentive Scheme. Moreover, the Circulardated 30-12-1980 is only in the nature of administrative instnictions. It can be made applicable only prospectively. it appearsthat. para 3 of the said Circular recognises this legal positionbefore the application was made by the petitioners they hadalready completed technical and feasibility reports, collectedquotations and were in the process of fabricating indigenoursmachinery. From the documents produced by the petitionersit was found that the petitioners had been regularly filing information in Form-G and were reporting the progress made in theexpansion programme. We also found that after the petitionersubmitted their application in June. 1980. the respondentshad on several occasions asked for information and documents. Every information called for and documents redquired furnished by the petitioners. As we found that the only requirementof the licensing Policy (and Incentive Policy) was thatthe investments should not be exceeded Rs. 3 crores and thatthis aspect was not fully gone into by the respondents, wedirected the respondents to decide this aspect of the matterafresh after giving full. opportunity to the petitioners to producethe additional documents and information, if so needed by therespondents. 3 crores and thatthis aspect was not fully gone into by the respondents, wedirected the respondents to decide this aspect of the matterafresh after giving full. opportunity to the petitioners to producethe additional documents and information, if so needed by therespondents. ( 8 ) PURSUANT to our order the Directorate of Sugar asked forfollowing information from the petitioners : (1) Certificate from the Chattered Engineer indicatingthat no other othere ,machinery has been added other thanthose which were proposed to be added for expansionfor which I he request for registration was made (2) Certificate from the Chartered Accountant verifyingthe total as well as item-wise cost of machinery addedto the existing plant and the expenditure incurredon building etc. , for the expansion implemented. (3) Crushing rate/24hrs. . opera. tion for each day of theseasons, 1981-82, 1982-83 and 1983-84. (4) Details of machinery added, if any. after the completion of expansion upto 4000 TCD. (5) Total value of the assets of the company moludingthe assets of other units covered under this Company. (6) Documentary evidence showing that installation of all the plant, and miachinery including the building etc. . were completed prior to 18/02/1982. ( 9 ) THE petitioners supplied all the information with thenecessary documenis. On September 15. 1984 the Chiefdirector (Sugar) rejcted the petitioners application on theground that the Liberalised Licensing Policy was rescinded on 18/08/1981. The Chief director also held that therewas no material to show that the petitioners had finishedform-G return and the progress report. The Chief Directer,however, held that the expansion made by the petitioners waswithin the prescribed limits, of Rs. 3 crores. ( 10 ) EVEN at the earlier stage of arguments we had found thatthere was no substance in the respondents contention that information in Form-G was not. supplied by the potitioners. It maybe noted that the Director General of Technical Developmenthad recommended the expansion Scheme of the petitioners asit was satisfied that the necessary information in Form-G andprogress report was already made by the petitioners. One such. . letter dated 20-7-1981 furnishing copy of Form-G duly filledin and the progress report addressed to Ministry of Industryand Supply is produced by the petitioners The statement ofthe Chief Director in this regard is a case of left hand not knowing what the right hand done. The other ground of rejection ofthe. petitioners application for registeration is, equally misconceived. . letter dated 20-7-1981 furnishing copy of Form-G duly filledin and the progress report addressed to Ministry of Industryand Supply is produced by the petitioners The statement ofthe Chief Director in this regard is a case of left hand not knowing what the right hand done. The other ground of rejection ofthe. petitioners application for registeration is, equally misconceived. The Liberalised Licenceing Policy and the Incentivepolicy were drawn up by the Central Government for a majornational objective of achieving targetted growth in the Fiveyear Plan. The Government as well as the industry had feltthat red-tape and cumbersome procedure of licensing were majorhurdles in rapid industrial growth/expansion. Various Technicalcommittees were constituted from time to time. Liberalisationpolicy was the result of the technical findings of such committeesand considered decisions of the Government. The 1978 Policyonly made a few additions to 1973 Policy. The main policyframework, therefore, continued. In this background the industrialist like the petitioners took up expansion programme in allgood faith. Every industry has. its gestation period. The Government should know it better sine they are themselves runningindustries in public sector. Policy is an antithesis of adhocisinpolicy is a projection in futur. It. must have relative durabilityand predictability. The potitioners had applied for registration14 months before the Scheme was rescinded. Respondents wererequiring the petitioners to furnish information and assuringthat the matter was under consideration. A month before the-recession of the policy (i. e. 5-7-1981) the respondents had toldthe petitioners that th; application was under consideration. But what is of greater interest is a fact that on 2-9-1981 whenthe Liberalised Licensing Policy was already withdrawn, therespondents were still assuring the petitioners that the application was under consideration. It is not explained either in thecounter-affidavit or at the time of arguments as to why norespondents were still assuring the petitioners that the applicaalongwith the 1978 Policy the industry was assured that thed. G. T. D. etc. will take on the record the applications for registration expeditiously. and communicate the fact. of registratonand the registration number to the parties, The industry waseven told to withdraw their pending application-, for licencesand to avail of the liberalisation Scheme. The industry waspromised that the new Licensing Policy will ensure greater freedom and opportunity for entrepreneures. The delay in granting the registration was totally unjustified and arbitrary. It wascontrary to assurances made to the industry. of registratonand the registration number to the parties, The industry waseven told to withdraw their pending application-, for licencesand to avail of the liberalisation Scheme. The industry waspromised that the new Licensing Policy will ensure greater freedom and opportunity for entrepreneures. The delay in granting the registration was totally unjustified and arbitrary. It wascontrary to assurances made to the industry. To permit therespondents, after such an inordinate and unexplained delay, towithdraw registration on the ground that the policy was rescindedwould be contrary to equity and law. Another equitable aspect. namely, the investment upto Rs. 3 crores and the planning andlabour that has gone in the expansion programme, cannot beignored by the Court. ( 11 ) FOR the reasons stated above the order of the Directorateof Sugar dated 15/09/1984 is quashed and aside Therespondents are. directed to register the petitioners immediately and give them a registration number under the Liberalisation Scheme dated 26/04/1978. As the petitioners areentitled to registration under the said Scheme, they are alsoentitled to the incentives under the Scheme. The. petitioners hadinformed the Government that they had completed their expansion in February, 1982. The documents produced by the petitionerthe information. supplied from time in Form-Gand the progress reports, support the conclusion that the expansion in fact was completed in February, 1982. Intimation to thiseffect was also sent to the Government. From the next sugarseason commencing in November. 1982 the ppetitioners startedthe production, the actual date being 2-12-1982 The petitionershave fairly conceded that they cannot get the benefits of Firstincentive Scheme because expansion was not completed before 31/10/1980. But the petitioners are certainly entitled tothe benefits of the Second Incentive Scheme issued on 4/10/1980. "the petitioners are entitled to the concession ofthe free sugar quota and relief in excise duty under the saidscheme. The petitioners had already submited the productionfigures since 1981 to the respondents. The petitioners shallfurnish additional data and particulars as required by the Incentive Policy Circular dated 4/10/1980 within a fortnightfrom today. The respondents shall pass necessary orders givingthe benefits of the Incentive Scheme dated 4/10/1980within three months thereaffer. The respondents should alsoensure that further incentive benefit is given to the petitionersbeyond the date of this judgment and within the five year periodprescribed by the said Incentive Scheme. ( 12 ) THE petition is allowed with costs, counsel s fee atrs. 2,000. 00. We. The respondents should alsoensure that further incentive benefit is given to the petitionersbeyond the date of this judgment and within the five year periodprescribed by the said Incentive Scheme. ( 12 ) THE petition is allowed with costs, counsel s fee atrs. 2,000. 00. We. however having; regard to the general policyof the State and with "special reference to Article 39 (a) of theconstitution of India feel that half of the amount of the costsshould be paid to a legal aid society We would. therefore, directthat this half amount of the costs i. e. Rs. 1,000. 00 be given forthe Indian Council of Legal Aid and Advice, "lawyers Chamberno. 3, High Court of Delhi, New Delhi. Such a course has theapproval of the Supreme Conn in "priya Wart B. K. D. Dubaldhan and others v. State of Haryana and others (1982) 11 SCC"142 and "state of Maharashtra v. GA. Patre and. others, (1982)II SCC. 447. " The rule is made absolute.