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2023 DIGILAW 1297 (KAR)

M S Patil Sugers Limited v. Union of India

2023-11-09

C M JOSHI, R.DEVDAS

body2023
JUDGMENT : R.Devdas, J. The petitioner who was respondent No.6 before the learned Single Judge in a writ petition filed at the hands of the respondent No.6-herein, is seeking to assail the order of the learned Single Judge in W.P.No.201621/2023 dated 28.06.2023. 2. It is not in dispute that the appellant herein was granted IEM during the year 2010. However, by order dated 28.03.2019 the IEM was de-recognized and bank guarantee was confiscated. The appellant herein seems to have made communication/representation on 05.11.2022 seeking extension of time for implementation of the project in terms of the IEM issued in the year 2010. In the meanwhile, however the respondent No.6 herein had sought for a distance certificate and a distance certificate was issued on 10.10.2022. The Secretary to the Department of Commerce and Industries, Government of Karnataka, forwarded the distance certificate of respondent No.6 to the competent authority namely the Chief Director (Sugars) and the Secretary to the Department of Promotion of Industry, Union of India. On 15.11.2022 IEM was granted to respondent No.6. A day earlier to the issuance of the IEM in favour of respondent No.6, the appellant herein filed writ petition No.203011/2022 challenging the order dated 28.03.2019. Curiously, even before the respondent No.6 was granted IEM, it was made a party respondent to the proceedings. During the course of the writ petition, it appears that M/s. Basaveshwara Sugars & Energy Limited was issued a distance certificate on 16.08.2023. It is sought to be contended at the hands of the appellant herein that M/s. Basaveshwara Sugars & Energy Limited and the appellant are one and the same. Following the issuance of the distance certificate, M/s. Basaveshwara Sugars & Energy Limited is said to have been issued with the acknowledgement for having filed IEM and it is contended that the requisite payment of bank guarantee of Rs.1 Crore was also made on 27.09.2023. 3. In the meanwhile, the acknowledgement of IEM issued in favour of respondent No.6 was annulled by order dated 22.02.2022. Being aggrieved of the said order and having come to know that the appellant herein was issued a distance certificate, the respondent No.6 filed W.P.No.201621/2023 calling in question the order dated 22.02.2023 and seeking a declaration that the distance certificate dated 10.10.20222 issued in its favour is valid. 4. Being aggrieved of the said order and having come to know that the appellant herein was issued a distance certificate, the respondent No.6 filed W.P.No.201621/2023 calling in question the order dated 22.02.2023 and seeking a declaration that the distance certificate dated 10.10.20222 issued in its favour is valid. 4. Learned Single Judge held while rejecting the contentions of respondent No.6 that once IEM is submitted for manufacture of sugar, in terms of Clause-6B(2) of the Control Order, a performance guarantee was required to be furnished by the respondent No.6. However, the learned Single Judge also held that the order dated 22.02.2023 passed by the respondent authority annulling the Distance Certificate issued in favour of the 6th respondent was without affording an opportunity of hearing and therefore, having regard to the provisions contained in the Control order, such an order could not have been passed without issuing a show cause notice to the 6th respondent. In that view of the matter, the writ petition filed by the 6th respondent was allowed while quashing the order dated 22.02.2023 and directing the respondent authorities to issue a show cause notice to the 6th respondent within a period of 15 days from the date of receipt of the copy of the order. The 6th respondent was directed to submit a reply within 15 days from the date of receipt of the notice. The authorities were required to pass necessary orders and complete the entire process within 30 days from the date of receipt of the reply at the hands of the 6th respondent. Being aggrieved of the order passed in favour of the 6th respondent, the appellant is before this Court. 5. Learned counsel for the 6th respondent submits that under similar circumstances this Court in the case of Shri Basava Textiles Private Limited v. The Secretary to the Government and others, in Writ Appeal No.100555/2022 and connected matters, which was decided on 06.04.2023 at Dharwad Bench, has held that in the matter of consideration of objections raised at the hands of the person holding the IEM and subsequently cancelled, a third party will have no locus standi. In that view of the matter, it is submitted that when the appellant herein did not raise a challenge to the order of cancellation of the IEM which was passed on 28.03.2019, till a writ petition was filed only on 14.11.2022 and when admittedly in the name of another entity a distance certificate was sought and IEM was also sought, it shows that the appellant has given up the claim in respect of the earlier IEM issued way back in the year 2010, no fault can be found in the impugned orders passed by the learned Single Judge while directing that the respondents were required to issue a show cause notice to the 6th respondent herein before annulling the Distance Certificate. Insofar as the consideration of the matter between the 6th respondent and the respondent authorities, in terms of the decision of this Court in the case of Shri Basava Textiles Private Limited (supra), the appellant herein will have no locus sandi. The learned counsel also sought to point out that it was not the appellant herein who applied for Distance Certificate but it was M/s Basaveshwara Ethanol and Energy Limited, while the Distance Certificate was issued in favour of M/s Basaveshwara Sugar and Energy Limited. The learned counsel further submitted that unless and until the Distance Certificate issued in favour of the 6th respondent and the IEM which was annulled by the respondent authority attains finality, there was no occasion for the appellant herein to seek Distance Certificate in respect of the reserved area. 6. Having heard the learned counsels and on perusing the petition papers, we are of the considered opinion that the learned Single Judge has rightly held that in terms of the provisions contained in the Control order, before the respondent authority could pass any adverse orders affecting the rights of the 6th respondent in whose favour a Distance Certificate was issued, an opportunity of hearing was required to be given to the 6th respondent. In that view of the matter, we do not find any infirmity in the impugned order passed by the learned Single Judge. In that view of the matter, we do not find any infirmity in the impugned order passed by the learned Single Judge. On the question of the locus standi of the appellant herein in the matter of the Distance Certificate issued in favour of the 6th respondent and the subsequent orders passed by the respondent authority annulling the same, as held in the case of Shri Basava Textile Private Limited (supra), the appellant herein will have no locus standi. It is for the same reason, that we see that the learned Single Judge has directed the respondent authority to issue a show cause notice to the 6th respondent, receive a reply at the hands of the 6th respondent and thereafter consider the contentions of the 6th respondent and pass necessary orders. This Court also declared in M/s Basaveshwar Textile that applications seeking IEM in the reserved area or overlapping the area in whose favour an IEM has already been granted cannot be entertained by the respondent authority contrary to the provisions to the Sugarcane (Control) order. 7. For the reasons stated above, we are of the considered opinion that the orders passed by the learned Single Judge are well merited and requires no interference at the hands of this Court. Accordingly, the writ appeal stands dismissed.