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2010 DIGILAW 816 (AP)

Ganpati Sugar Industries Limited v. Commissioner and Director of Sugar and Cane Commissioner, Hyderabad

2010-08-26

C.V.NAGARJUNA REDDY

body2010
Judgment This writ petition is filed for a Mandamus to set aside the proceedings dated 15.05.2006 and the consequential proceedings dated 12.06.2006 of respondent No.1. The petitioners were running a sugar factory in Medak District near Sangareddy. A factory zone was allotted to them by respondent No.1 for a period of five crushing seasons comprising 295 Villages in ten Mandals of Medak District and 98 Villages in four Mandals of Ranga Reddy District on 28.07.1995. Thereafter on 05.02.2000, a fresh factory zone was declared for the seasons 1999-2000 to 2003-04 by including 393 Villages. By another proceedings dated 01.10.2004, the factory zone was declared for five crushing seasons from 2004-05 onwards, comprising 470 Villages in seventeen Mandals i.e., eleven Mandals of Medak District and six Mandals of Ranga Reddy District. The petitioners obtained a fresh Industrial Entrepreneur Memorandum (IEM) on 06.06.2005. On 02.05.2006, the petitioners made an application to respondent No.1 for declaring factory zone in respect of the new unit. Respondent No.3 obtained IEM for establishing a sugar factory at Ranga Reddy District on 08.05.2006 and on the same day, it applied for allotment of factory zone. By proceedings dated 15.05.2006, respondent No.1 declared the factory zone for respondent No.3 comprising 391 Villages in thirteen Mandals of Mahaboobnagar District and 299 Villages in nine Mandals of Ranga Reddy District for five crushing seasons on temporary basis commencing from 2006-07 season. Consequently, the petitioners' application for declaration of factory zone was rejected by respondent No.1, vide his letter dated 12.06.2006. These two proceedings are assailed in the present writ petition. Separate counter-affidavits had been filed on behalf of respondent Nos.1 and 2 and respondent No.3. In the counter-affidavit filed by the Deputy Cane Commissioner, Office of respondent No.1, it is inter alia averred that petitioner No.1 has submitted the IEM for establishment of a new sugar factory with 2500 TCD at Marepally Village, Peddemul Mandal in Ranga Reddy District along with a feasibility report and request letter dated 02.05.2006 to respondent No.1 for allotment of factory zone by proposing twelve Mandals of Ranga Reddy District for the proposed new unit; that respondent No.1, vide his memo dated 09.05.2006, has directed the Assistant Cane Commissioner, Sangareddy, to submit report/remarks for the proposed new sugarcane of respondent No.3 and that a report was accordingly submitted on 15.05.2006, based on which respondent No.1 has declared the zone area, vide proceedings dated 15.05.2006. It is further averred that as only two Mandals were left unallotted after allotment of nine Mandals in Ranga Reddy District to respondent No.3, it would not be feasible to allot those remaining Mandals to the petitioners' proposed unit. It is further stated that respondent No.1 has declared the factory zone in favour of respondent No.3 for five crushing seasons on temporary basis keeping in view the interests of cane growers. The counter-affidavit relied on Section 15 of the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1961 (for short 'the Act') and has also referred to the fact that the petitioners are already having a sugar factory at Sangareddy, Medal District and respondent No.3 being a new entrepreneur and with a view to encourage the new promoter, the request of respondent No.3 was considered. The counter-affidavit has also raised objection to the maintainability of the writ petition in view of availability of alternative remedy under Section 17 of the Act. Specific reference to the contents of the counter-affidavit of respondent No.3 is not necessary, because it has virtually adopted the stand contained in the counter-affidavit filed on behalf of respondent Nos.1 and 2. The short question that arises for consideration is whether respondent No.1 has considered the rival applications submitted by the petitioners and respondent No.3 in a proper manner? The facts noted above would show that petitioner No.1 was granted IEM earlier than the grant of IEM in favour of respondent No.3. It is also not in dispute that the application of the petitioners is earlier in point of time than the application of respondent No.3. No specific criteria is discernable from the counter-affidavit filed on behalf of respondent Nos.1 and 2 in selecting the allottee of the factory zone when more than one application is pending, except the plea that respondent No.3 is a new entrepreneur and that with a view to encourage it the factory zone was declared in its favour. In my opinion, in the absence of specific guidelines or criterion prescribed by the competent authority, respondent No.1 shall adopt a reasonable approach in disposing of the applications. Admittedly, when the factory zone was declared in favour of respondent No.3, the petitioners' application was pending. In my opinion, in the absence of specific guidelines or criterion prescribed by the competent authority, respondent No.1 shall adopt a reasonable approach in disposing of the applications. Admittedly, when the factory zone was declared in favour of respondent No.3, the petitioners' application was pending. Surprisingly there is no reference to the application of the petitioners in the proceedings dated 15.05.2006 by which the application of respondent No.3 was accepted and factory zone was declared. Even if in respondent No.1's wisdom respondent No.3 was entitled to preference, it was obligatory on him to consider both the applications and assign reasons for his preferring respondent No.3 to the petitioners. Curiously, having not considered the petitioners' application at all, respondent No.1 has rejected their application almost one month after declaring factory zone in favour of respondent No.3 on the sole ground that already nine out of twelve Mandals in Ranga Reddy District were allotted to respondent No.3. By failing to consider the petitioners' application along with the application of respondent No.3 and declaring the factory zone in favour of respondent No.3 even ahead of consideration of the petitioners' application, respondent No.1 has rendered the application of the petitioners a fait accompli. In my opinion, respondent No.1 committed a serious procedural error in not considering the applications of the petitioners and respondent No.3 together when both of them have applied for the same areas for declaration as factory zone. For these reasons, the impugned orders cannot be sustained in law. As regards the objection regarding the alternative remedy, the law is well settled that the doctrine of alternative remedy is only a rule of procedure devised by the Superior Courts as a measure of self imposed restrictions. Where manifest injustice is done to a party, this Court would always entertain a writ petition ignoring the availability of alternative remedy (See Whirlpool Corporation vs. Registrar of Trade Marks 1998(8) SCC 1 and Harbans Lal Sahnia vs. Indian Oil Corporation Limited 2003(2) SCC 107 ). As the impugned action of respondent No.1 is patently arbitrary which resulted in gross injustice to the petitioners, I am not prepared to throw out the writ petition on the ground of alternative remedy. As the impugned action of respondent No.1 is patently arbitrary which resulted in gross injustice to the petitioners, I am not prepared to throw out the writ petition on the ground of alternative remedy. For the aforementioned reasons, impugned proceedings dated 15.05.2006 and 12.06.2006 are set aside and respondent No.1 is directed to consider the applications of the petitioners and respondent No.3 together and take a fresh decision, in accordance with law, after giving an opportunity of hearing to both the parties. Subject to the above directions, the Writ Petition is allowed. As a sequel to disposal of the writ petition, W.P.M.P.Nos.17993 of 2006 and 3635 of 2007 and W.V.M.P.Nos.1554 and 2332 of 2006 are disposed of infructuous.