The Hindu Business Line : HC quashing of de-licensing: 42 sugar units may be hit

"It appears now that the prevailing units would have to go through the process of regularisation since all the industrial entrepreneurs memoranda will be reversed."

New Delhi , Sept. 4

AN Allahabad High Court order quashing the 1998 de-licensing of the sugar industry by the Centre could affect at least 42 sugar mills.

Mr Justice Sanjay Misra and Mr Justice Amitava Lala, disposing of a writ petition filed by Monnet Sugar Ltd against the Centre, the Uttar Pradesh Government and others, said de-licensing could be done only by an act of Parliament and not through an executive order.

According to the two-judge Bench, no condition "is attached to the law nor any power of delegation has been given by Parliament by law to the executives to de-licence the industry".

When contacted, the Indian Sugar Mills Association (ISMA) Director-General Mr S.L. Jain said: "About 42 sugar mills have come up under the de-licensing policy of the Government across the country. Out of the entire lot, about six are in Uttar Pradesh, 16-17 in Maharashtra and the rest outside."

Though about 90 units have come up after 1998, some 58 companies had obtained licences under an earlier scheme of the Union Government and set up their units under the four-year gestation period, he added.

Asked about the fate of sugar mill units that are already functioning, an industry official said: "It appears now that the prevailing units would have to go through the process of regularisation since all the industrial entrepreneurs memoranda (IEM) will be reversed.

Those with IEMs would have to obtain licences.

After all the functioning units are operating according under a prevailing set of policy prescribed by the Government when they entered the sector."

Meanwhile, an official of a sugar company said, "One now needs to see what the Government does. After all, the respondent was the Government along with others."

Monnet Sugars had challenged the press note issued on August 3, 1998 that deleted sugar industry from the list of industries requiring compulsory licencing under the Industrial (Development and Regulation) Act, 1951.

It said the de-licensing had allowed expansion of capacity by sugar mills and it affected the availability of sugarcane for the mills despite the Centre retaining the stipulation that no new mills can come up with 15 km radius of an existing unit.

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