Natural Sugar and Allied Industries Limited v. State of Maharashtra
2020-04-30
S.V.GANGAPURWALA, SHRIKANT D.KULKARNI
body2020
DigiLaw.ai
JUDGMENT : SHRIKANT D. KULKARNI, J. 1. Rule. Rule returnable forthwith. With the consent of the parties, petition is taken up for final hearing at admission stage. 2. The petitioners are challenging the Government notification dated 22.3.2018 issued by the Co-operation, Marketing and Textile Department, Government of Maharashtra, Mumbai by invoking writ jurisdiction under Article 226 of the Constitution of India. 3. The factual matrix giving rise to the instant petition is as under. 4. The petitioners are private sugar factories duly registered under the Companies Act, 1956, situated at different places in Aurangabad region. The private sugar factories are carrying out the activities of harvesting, transporting and crushing of sugarcane of agriculturists in their respective areas and making payments as per the provisions of Sugarcane (Control) Order, 1966. At the relevant point of time, there was serious drought situation prevailing in Marathwada region. The situation had become very serious, as the agriculturists who had cultivated the sugarcane with all the adversities and supplied their sugarcane to the sugar factories; however, the sugar factories on account of fall in the sugar prices could not fetch good price for its product. Resultantly, the entire sugar industry in the State was in danger and they were seriously facing problems. 5. The Union of India, Ministry of Consumer Affairs, Food and Public Distribution, by taking into consideration the grave situation and to facilitate the payment of sugarcane dues of the farmers of the season 2014-15, on 23.6.2015, had notified the scheme for extending soft loan to the sugar mills/sugar factories. The loan is to be used for payment of cane price of farmers relating to the Fair and Remunerative Price (hereinafter referred as F.R.P. for brevity) as fixed by the Central Government. Accordingly, the Union of India, Department of Consumer Affairs, Food and Public Distribution issued notification dated 23.6.2015, for extending soft loan to the sugar factories. As per the scheme of soft loan launched by the Union of India, the petitioners were supposed to take loan from the financial institutions and components of loan interest on the said amount initially for one year was to be borne by the Central Government and remaining four years it was for the State Government.
As per the scheme of soft loan launched by the Union of India, the petitioners were supposed to take loan from the financial institutions and components of loan interest on the said amount initially for one year was to be borne by the Central Government and remaining four years it was for the State Government. The State Government, in the light of said policy had taken decision dated 30.7.2015 with reference to the notification issued by the Central Government dated 23.6.2015 thereby making 14 co-operative and private sugar factories eligible/qualified for the said scheme. 6. The petitioners were eligible for the said scheme and accordingly, they had borrowed the loans from the Banks and financial institutions. The State Government had issued another notification dated 21.4.2016, for extension of soft loan scheme to 22 co-operative and private sugar factories which were not fulfilling the criteria and 6 co-operative and private sugar factories which were held ineligible for the benefit of the scheme. Thus, for remaining 28 co-operative and private sugar factories, the scheme was made applicable by extending the benefit of scheme vide notification dated 21.4.2016. 7. According to the petitioners, the State Government, in spite of its policy decision did not make payment of interest of soft loan and they had to suffer. The petitioners made representations to the Regional Joint Director of Sugar as well as other authorities regarding payment of interest on the soft loan. The Regional Joint Director of Sugar, vide communication dated 12.1.2018 addressed to the Commissioner of Sugar also pointed out that the petitioners are eligible for getting benefit of soft loan scheme and the amount of interest on the soft loan needs to be paid by the Government. 8. According to the petitioners, the State Government issued impugned notification dated 22.3.2018 whereby it restricted the policy of soft loan scheme of the Central Government only to 29 sugar factories mentioned in the notification which are co-operative sugar factories. The State Government by the said notification had excluded the private sugar factories. According to petitioners, the scheme framed by the Central Government and implemented by the State Government cannot in any way discriminate between co-operative sugar factories and private sugar factories. On the contrary, the scheme was made applicable uniformly taking into consideration the interest of the agriculturists.
The State Government by the said notification had excluded the private sugar factories. According to petitioners, the scheme framed by the Central Government and implemented by the State Government cannot in any way discriminate between co-operative sugar factories and private sugar factories. On the contrary, the scheme was made applicable uniformly taking into consideration the interest of the agriculturists. According to petitioners, the State Government by issuing notification dated 22.3.2018 has deprived the petitioners from getting benefit of the scheme. 9. According to petitioners, the notification dated 22.3.2018, issued by the State Government is arbitrary and violative of Article 14 of the Constitution of India. It has caused injustice to the petitioners since they have been deprived of getting benefits of the soft loan scheme. The petitioners are facing financial crisis because of their exclusion from the said scheme. The petitioners made various representations to the authorities including Honourable Chief Minister and Minister for Co-operation, Marketing and Textile Department and pointed out such discrimination and requested to extend the benefits of its policy to the petitioners, but no outcome. Ultimately, the petitioners constrained to knock the doors of this Court by invoking extra-ordinary writ jurisdiction. 10. Heard Shri V.D. Hon, learned Senior Counsel for the petitioners and Shri S.G. Karlekar, learned A.G.P. for respondent nos. 1 to 3 at length. 11. Perused the copy of notification dated 23.6.2015, issued by the Department of Consumer Affairs, Food and Public Distribution of Union of India, copy of notification dated 30.7.2015, issued by the State Government, copies of loan repayment certificates of the petitioners, copy of notification dated 21.4.2016, issued by the State Government, copy of Circular issued by the Commissioner of Sugar, Pune dated 29.11.2017, copy of notification dated 22.3.2018, issued by the State Government and copies of representations made by the petitioners to the authorities of the State Government. We have also perused the affidavit-in-reply filed on behalf of respondents no. 1 and 2 and copy of order passed in Civil Application No. 128 of 2009 in Public Interest Litigation No. 20 of 2006 with connected matters, passed by the Division Bench at Principal Seat dated 21.1.2010. 12.
We have also perused the affidavit-in-reply filed on behalf of respondents no. 1 and 2 and copy of order passed in Civil Application No. 128 of 2009 in Public Interest Litigation No. 20 of 2006 with connected matters, passed by the Division Bench at Principal Seat dated 21.1.2010. 12. Shri V.D. Hon, learned Senior Counsel invited our attention to the copy of notification dated 23.6.2015, issued by the Department of Consumer Affiaris, Food and Public Distribution of Union of India, copy of notification dated 30.7.2015 issued by the State Government, copy of notification, issued by the State Government dated 21.4.2016. By placing reliance on the abovesaid documents, Shri Hon, learned Senior Counsel vehemently argued that the petitioners are entitled to get benefit of soft loan scheme launched by the Government of India and implemented by the State Government vide its notifications dated 30.7.2015 and 21.4.2016. The State Government, vide its notification dated 21.4.2016 has extended the benefit to the left out cooperative sugar factories and private sugar factories in view of peculiar circumstances prevailing at the relevant point of time by keeping in mind the interest of the farmers. Shri Hon, learned Senior Counsel submitted that the State Government cannot back out from the said policy in its midst. The State Government cannot restrict the benefit of the soft loan scheme only to certain number of co-operative sugar factories. The State Government cannot make such kind of discrimination between co-operative sugar factories and private sugar factories. According to Shri Hon, the notification issued by the State Government dated 22.3.2018 restricting the benefit only to certain co-operative sugar factories without assigning any reason is arbitrary and violative of Article 14 of the Constitution of India. Therefore, Shri Hon urged to quash and set aside the notification dated 22.3.2018, issued by the State Government in Co-operation, Marketing and Textile Department, Mumbai. 13. Shri S.G. Karlekar, learned A.G.P. for the State vehemently argued that though initially soft loan scheme was made applicable to Co-operative sugar factories and private sugar factories, subsequently the Government has taken a policy decision to restrict the benefit of soft loan scheme only to certain Co-operative sugar factories. It is a policy decision taken by the State Government wherein financial implications are involved. The State Government has a right to take such kind of policy decisions by keeping in mind the interest of co-operative movement.
It is a policy decision taken by the State Government wherein financial implications are involved. The State Government has a right to take such kind of policy decisions by keeping in mind the interest of co-operative movement. Shri Karlekar submitted that in policy decision matters, the higher Courts should be slow in making judicial intervention. Shri Karlekar submitted that it is not a case covered under the term of judicial review and as such, the petition needs to be dismissed. 14. It is undisputed position that the Ministry of Consumer Affairs, Food and Public Distribution of Union of India had issued notification dated 23.6.2015 with a view to facilitate payment of sugarcane dues of the farmers for the sugar season 2014-15 by launching the scheme of soft loan to sugar mills. The purpose of making available soft loan was to make payment of cane price arrears of farmers for the sugar season 2014-15 relating to the F.R.P. of sugarcane fixed by the Central Government for that sugar season. In the said notification dated 23.6.2015, the Union of India has given Modalities and Extent of loan, Extent of Interest Subvention, Modalities of payment of interest subvention amount by Central Government. On the basis of notification issued by Central Government dated 23.6.2015, the State Government issued notification dated 30.7.2015 thereby extending benefit of soft loan scheme to the sugar factories to make payment of F.R.P. to the farmers and payment of interest on soft loan. On perusing Government notification dated 30.7.2015, issued by the Department of Co-operation, Marketing and Textile, it is noticed by us that the benefit of the said soft loan scheme was extended to the eligible 147 co-operative sugar factories and private sugar factories with certain terms and conditions enumerated in the said Government notification. By way of another notification dated 21.4.2016, Government of Maharashtra also extended the benefit to 22 cooperative sugar factories and private sugar factories as well as six cooperative and private sugar factories, which were not eligible under that scheme. 15. There is no dispute that the names of petitioners/private sugar factories were shown as eligible to get benefit of that soft loan scheme introduced by the Central Government. The center of controversy in the present petition is the Government notification dated 22.3.2018 whereby benefit of soft loan scheme was restricted only to 29 co-operative sugar factories in the State of Maharashtra.
The center of controversy in the present petition is the Government notification dated 22.3.2018 whereby benefit of soft loan scheme was restricted only to 29 co-operative sugar factories in the State of Maharashtra. The private sugar factories have been excluded from getting benefit of soft loan scheme. The question comes why such a decision has been taken by the State Government dated 22.3.2018, whereby benefit is restricted only to 29 co-operative sugar factories. 16. The co-operative movement has been widely spread in the State of Maharashtra. It has roots at every village. In State of Maharashtra, we may come across village level co-operative credit societies, farmers co-operative societies, co-operative sugar factories etc. at large scale. The State of Maharashtra is a leader in strengthening the movement of co-operation whereby farmers have been benefited in large scale. If the State Government has taken a policy decision to restrict the benefit of soft loan scheme to certain co-operative sugar factories in the State of Maharashtra by keeping in mind the co-operative movement in the State, certainly difficult to accept the argument advanced by Shri Hon, learned Senior Counsel for the petitioners that it amounts to violation of Article 14 of the Constitution of India. It cannot be overlooked that the State Government had initially extended the benefit to the sugar factories in the State of Maharashtra including co-operative and private sugar factories. Later on, that scheme was restricted to 29 co-operative sugar factories by way of economic policy decision. If the private sugar factories are left out or excluded from getting benefit of soft loan scheme, it cannot be said to be an arbitrary decision much less violative of Article 14 of the Constitution of India. The Government has a right to take policy decision, particularly wherein financial implications are involved. 17. The Government has the authority and power to frame the policies and also to change the policies. The power of Government to frame a policy to implement it and amplitude of manner in which it is to be framed and implemented is wide. The scope of judicial review in matters of policy is limited and minimal and more particularly, when the policy involves fiscal ramifications.
The power of Government to frame a policy to implement it and amplitude of manner in which it is to be framed and implemented is wide. The scope of judicial review in matters of policy is limited and minimal and more particularly, when the policy involves fiscal ramifications. In matters of economic policy, the Court does not interfere with the decision of expert body as is held by the Apex Court in the judgment in the case of Balco Employees Union vs. Union of India, (2002) 2 SCC 333 , Ekta Shakti Foundation vs. Govt. of NCT of Delhi, (2006) 10 SCC 337 , Bhavesh D. Parish vs. Union of India, (2000) 5 SCC 471 and Brij Mohan Lal vs. Union of India and Others, (2012) SCC 502. 18. As a general rule, the Courts do not interfere in the policy decisions of the Government. But, then, there are certain situations in which the courts can interfere even in the policy decisions of the Government. 19. In case of DDA vs. Joint Action Committee, Allottee of SFS Flats, (2008) 2 SCC 672 : AIR 2008 SC 1343 , the Supreme Court has held as under: “65. Broadly, a policy decision is subject to judicial review on the following grounds: (a) if it is unconstitutional. (b) if it is dehors the provisions of the Act and the regulations. (c) if the delegatee has acted beyond its power of delegation. (d) if the executive policy is contrary to the statutory or larger policy.” 20. We have no manner of doubt that the policy matters are within the domain and competence of the State Government and where any policy involves financial and economic ramifications, the Court certainly would not transgress upon the policy making power of the State. Having regard to the important and land mark decisions of the Honourable Supreme Court (supra), if the Government notification dated 22.3.2018, issued by the Department of Co-operation, Marketing and Textile is studied carefully in the background of earlier notifications dated 30.7.2015 and 21.4.2016, we are not in agreement with the submissions canvassed by Shri Hon, learned Senior Counsel for the petitioners. The State Government had initially taken the decision to extend the benefit of soft loan scheme to the sugar factories in the State including co-operative and private sugar factories by keeping in mind the interest of sugarcane farmers at large.
The State Government had initially taken the decision to extend the benefit of soft loan scheme to the sugar factories in the State including co-operative and private sugar factories by keeping in mind the interest of sugarcane farmers at large. Subsequently, the State Government has changed the policy probably because of large financial ramifications and visioning financial crisis, the State Government has restricted the benefit of soft loan scheme to 29 sugar factories by issuing notification dated 22.3.2018. It is a policy decision taken by the State Government in the premise of large financial ramification, which the State would have to suffer without change in policy, it does not amount to arbitrary act on the part of the Government much less violative of Article 14 of the Constitution of India. 21. We would not get into budgetary or financial domain of the State Government. Are we experts in such matters? There is elected Government in the State which has mandate to govern. We are not getting into the issues of financial support and adequacy of funds. 22. No case is made out by the petitioners for judicial review under Article 226 of the Constitution of India. Certainly, the petition needs to be dismissed. 23. In future, if the State Government changes its policy regarding financial aid to the private sugar factories, the petitioners may agitate the demand of extension of soft loan scheme to them. 24. Writ Petition accordingly stands dismissed. No order as to costs. Rule discharged.