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Petitioner: TANDLIANWALA SUGAR MILLS LIMITED VS Respondent: NORTH-WEST FRONTIER PROVINCE JUDGMENT
Court Name: Peshawar High Court Judge(s): Muhammad Qaim Jan Khan, Tariq Pervez Title:TANDLIANWALA SUGAR MILLS LIMITED vs NORTH-WEST FRONTIER PROVINCE
JUDGMENT
Reported As: PLD 2007 Peshawar 68 Result: Order accordingly Judgment JUDGMENT TARIQ PARVEZ KHAN, C J.---This writ petition (No,1510 of 2005) and two connected Writ Petitions bearing Nos. 1710/2005 and 1449/2006, can be disposed of through this single judgment as ultimate point of law involving their decision is common and also because petitioners in Writ Petition No,1710/2005 and petitioners in Writ Petition No,1449/2006 are respondents therein. 2. Though these are three writ petitions but involving four Sugar Mills i,e,-- M/s Chashma Sugar Mills M/s Tandlianwala Sugar Mills M/s Al-Moiz Industries Ltd. M/s Dewan Sugar Mills 3. Chashma Sugar Mills was established in District D.I. Khan which went into production in the year 1990. It now wants to install an extended plant of its Mills but on different location within the District of D.I. Khan. 4. Tandlianwala Sugar Mills was established in the year 2004-2005 and was gone into production. 5. Almoiz Industries applied for establishment of Sugar mills in District D.I. Khan which was granted to it by the Provincial Government on 16-5-2005. It has purchased some 1700 acres of land has opened its letter of credit and entered into financial commitment in almost one Billion rupees, as asserted, and the establishment of the Mill is in progress. 6. Dewan Sugar Mills applied for establishment of Sugar Mills in D.I. Khan in the early days of May, 2005 which has been granted to it on 17-9-2005.
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7. These three writ petitions have been heard together because Tandlianwala Sugar Mills has raised objection to the issuance and establishment of sugar industry in favour of Almoiz Industries and has also challenged the proposed NOC that might be issued to Chashma Sugar Mills. Almoiz Industries has filed writ petition where they have challenged NOC issued to Dewan Sugar Mills on 17-9-2005 on the ground that the mills of the petitioner i,e, Almoiz Industries and the Proposed Dewan Sugar Mills would be at a distance of some 4 KM i,e, much less than 35 Kilometres which is against policy of the Provincial Government. 8. Chashma Sugar Mills has different story to tell as it has challenged the two Notifications issued by the Provincial Government one a letter, by Chief Secretary of the Province dated 9-9-2006 and the other from Director Industries dated 11-9-2006, restraining them not o carry out further work on their extended plant and to remove infrastructure already erected. It has also challenged the locus standi of Tandlianwala Sugar Mills on whose behest the Provincial Government has issued the orders of restraint. 9. Before entering into factual position, it is relevant here to state the law governing the establishment and enlargement of sugar Industry. 10. Ordinance IV of 1963 West Pakistan Industries (Control on Establishment and Enlargement) Ordinance, 1963 (hereinafter referred to as "Ordinance)" was promulgated on 26th January, 1963. The Provincial Government while exercising powers purportedly under section 3 of the Ordinance had issued two Notifications i,e, Notification bearing No,SOII(IND)10-355/Vol.IX dated 14-5-2005 (hereinafter referred to as "Notification") and Notification bearing No,SA0II(AD)4(21)/K.C./ 2005, dated 24th May, 2005 (hereinafter referred to as "Notification No,2"). Relevant portion of the "notification" is reproduced below:- ,in exercise of the powers conferred upon him under section 3 of the West Pakistan Industries (Control on Establishment and Enlargement) Ordinance, 1963, the Governor N.-W.F.P. Is pleased to order with immediate effect that a "No Objection Certificate" will be required from Government of N.-W.F.P., Industries, Commerce, Mineral Development, Labour and Technical Education Department for the establishment of new Sugar Mills within the limits of D.I. Khan District, Industries Department will issue N.O.C. In consultation with N.-W.F.P. Agriculture Department." 11. To give effect to the above Notification, the Agriculture, Live Stock and Cooperative Department of Government of N.-W.F.P. Was pleased to issue "Notification No,2" whereunder a Committee has been constituted which will suggest for issuance of N.O.C. For establishment of new sugar mills within the limits of the District. It has laid down certain criteria for the guidance of the Committee. For the sake of convenience, Notification No,2 is reproduced as under:-- No, SAOII (AD)4(21) K.C./2005. The Competent authority is pleased to constitute a Committee comprising of following experts:- 1.Director-General, Agriculture (Extention) N. W. F. P.Chairman 2.Mr. Inayatullah Khan, Chamber of Agriculture, D.I. KhanMember 3.Dr. Nasir-ud-Din, Agriculture Research Institution D.I. Khan Director/Member TERMS OF REFERENCES (1). The Committee will suggest for issuance of N.O.C. For establishment of new sugar mills within the limits of D.I. Khan District keeping in view the following criteria:- (i) to (vi) ,............................................... (vii) If a new mill justified then it must be ensured that the location of the new mill is at least 35 kilometres from the nearest sugar mill so that the existing mills capacity and its incentive for development of new and better cane varieties is not affected'. Each mill should have a clear area for availability and development of cane so that mills do not enter into undue and unproductive competition leading to cane wars, introduction of middlemen and loss of initiative by the mills to
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develop good varieties of cane. Development of good cane varieties is the primary objective so that the growers yield per acre improves and the mills sugar recovery is enhanced so that more sugar is produced from smaller areas of sugarcane thus decreasing the use of water for sugarcane. The sugar mills only spend money on development when they are reasonably sure that the cane they develop ends up in their mill and does not go to the neighbouring mill. For this it is imperative to have a distance of at least 35 kilometres between each mill." 12. It is the grievance of the petitioner M/s. Tanlianwala Sugar Mills that the Provincial Government could not have issued N.O.C. In favour of the Almoiz Industries on 16-5-2005 without awaiting the opinion of the Agriculture Department as they were never consulted. Since the case of M/s. Almoiz Industries was moved by the Chief Minister of the Province, it is argued that in the scheme of things, Chief Minister does not figure anywhere because the Ordinance only refers to the Government and the "Notification" only empowers the Government that too with the consultation of the Agriculture Department. Allegations are that N.O.C. Issued to respondent Almoiz Industries is for extraneous considerations, manifestly illegal and issued in haste. 13. Tandlianwala Sugar Mills is also dissatisfied with the Notification in favour of respondent No,5 that they without applying for N.O.C. Had not only bought land for their extension which in fact, according to the petitioner, is for the establishment of a new mills which is hardly at a distance of a 4 K.M. From the Mills of the petitioner Tandlianwala Sugar Mills. Through letters dated 16-7-2005 and 17-7-2005 the petitioner M/s. Tandlianwala Sugar Mills approached the Provincial Government i,e, respondent No,1 followed by legal nOtice i,e, 21-7-2005 pointing out manifest illegalities but no action was taken by the respondent/Government against the respondent/Mills. The petitioner sought that the N.O.C. Issued in favour of respondent No,4 Almoiz Industries dated 16-5-2005 and the proposed N.O.C. That might be issued to respondent No,5 M/s. Chashma Sugar Mills Ltd. Shall be held as arbitrary, illegal and without any legal effect. 14. Almoiz Industries, petitioner in Writ Petition No,1710/2005, has arrayed besides Government functionaries, M/s Dewan Sugar Mills as respondent No,4. Their grievance is that where Industries are established under the authority of the Provincial Government for setting up Sugar Mills but in violation of the Ordinance of 1963 and the Notification the Provincial Government cannot allow respondent No,4 M/s Dewan Sugar Mills to establish a new mills which is close to the vicinity of the mills of the petitioner Almoiz Industries. 15. The grievance of the Chashma Sugar Mills, petitioner in W.P. No,1449/2006, is similarly against the Provincial Government as well as Tandlianwala Sugar Mills/respondent No,8 and Haroon Akhtar respondent No,7, Director of the Mills. This writ petition has given sufficient and elaborate facts which are necessary to be given in this judgment as they will have bearing on the final hearing of the connected writ petitions as well. This Mills was established in 1990 in the District of D.I. Khan and according to the petitioner, the sugarcane cultivation in the said year was only 7000 acres. It is asserted that because of the introduction of the progressive farming and policies of the petitioner/Mills, the sugarcane cultivated area is now increased to 1,10,000 acres. Because of the increase in sugarcane cultivated area and efforts attributed to itself, the petitioner decided to set up extended plant of the Sugar Mills but not within the existing Sugar Mills, in village known as Ramak in the District of D.I. Khan. They asserted that they selected the site for the Factory in the month of June, 2004 and by 15-4-2005 have purchased the land required by making payments to the owners. They have called for quotations for 6000 TCD Sugar Mills from Haseeb Waqas, Brothers Engineering, Karachi and Heavy Mechanical Complex at Taxila. They have also asked for quotations for power House and Mills House Turbines for supply of 80 tons per hour steam boiler again from Heavy Mechanical Complex Taxila and for the said purchase they have already made 15% advance payment. They have also called upon quotations from 6000 to 8000 Tons Sugarcane per day sugar
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mills plant from the Heavy Mechanical Complex at Taxila and have obtained Financing consent for the project from MCB and many more steps. 16. It is argued that any restrictions imposed under the Ordinance followed by the "Notification" and "Notification No,2" are ultra vires to Article 8 of the Constitution of Islamic Republic of Pakistan, 1973 which ensures that any law inconsistent with or in derogation with Fundamental Rights would be void. It is also their case that besides illegality or otherwise of Notification, since very decisive steps as mentioned above have been taken and also huge amount has been invested before the date of Notification, the principle of locus poenitentiae has come into operation, particularly when all the official respondents remained associated at different stages with the petitioner-company during the process when they were acquiring the land and undertaking the financial liability. It was argued that having learnt about the Notification, the petitioner-Mills approached the Chief Minister of the Province apprising him of the steps taken by him and also updating the Chief Minister on the issue. The petitioner-Mills has given the detail of different investments for the proposed Mills till June, 2005, the total cost by now already paid is to the tune of some 80 million rupees. 17. The petitioner has also levelled allegation of extraneous considerations and interference by some functionaries of the Provincial Government i,e, Chief Secretary and there is also reference to some inter actions and actions between brother of respondent No,7 and the Chief Secretary. 18. It is argued that both the Notifications i,e, "Notification" and "Notification No,2" are to block the way of the petitioner in establishing its extended unit and as such the same are illegal, improper and based on mala fide and have been manoeuvred by respondent No,7 Tandlianwala Sugar Mills. In the petition and also during arguments at the bar, 'reference is made to the .Communication made to the Provincial Government vide letters dated 13-12-2005 and 5-6-2006 informing that the proposed extension of the Mills shall go into operation by 15th October, 2006. However, because of the interference allegedly made by Hamayoon Akhtar, Federal Minister for Commerce, Government of Pakistan, the respondent Tandlianwala Sugar Mills has manoeuvred to prevail upon the Chief Secretary of the Province who on 10-7-2006 addressed a letter to the Secretary Industries and Secretary Agriculture N.-W.F.P. To submit their report to the Chief Secretary in respect of extended plant of the petitioner it is argued that the Secretary Industries of the Province convened a meeting to build up working relationship between the petitioner-Mills and Tandlianwala Sugar mills in his office on 11-8-2006 where due to non-availability of Chief Executive of the petitioner-Mills, Director of the petitioner/Mills was asked to attend the meeting. That the meeting was held at the scheduled, place which was attended to by Haroon Akhtar, brother of the Federal Minister, named above, and from the petitioner's side, it was Abdul Qadar Khan Khattak, Technical Director where participants of the meeting were informed that the petitioner/Mills for its extended unit has already completed 85% of the work which statement was challenged. Therefore, decision was made that a team comprising of the functionaries of the Industries Department and Agriculture Department shall visit the site of the extended unit of the petitioner. Accordingly, Director Industries N.-W.F.P. And Director Seed Agriculture Department visited the site of the extended plant of the petitioner/Mills 'on 15th and 16th August, 2006 and they reported that some 1290 workers were engaged in civil, mechanical and electrical works and at site 75% to 80% work as completed. 19. It is asserted that that on 9-9-2006, the Chief Secretary of the Province issued direction to the Director Industries N.-W.F.P. To take measures stopping the work at the site of the extended plant, invoking jurisdiction under section 3 of the Ordinance issued by the order of the Director Industries dated 11-9-2006 whereby petitioner has been directed to stop work on the extended plant and shall remove the constructed plant. It was submitted that where on one hand, petitioner was stopped from the work which had already been completed by nearing 80% while on the other the Provincial Government has issued N.O.C. On 17-9-2006 in favour of Dewan Sugar Mills.
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20. This brings us to conclude that N.O.C. Issued in favour of Dewan Sugar Mills has been challenged by Almoiz Industries, status of Almoiz is challenged by Tandlianwala Sugar Mills and also that of Chashma Sugar Mills. Whereas Chashma Sugar Mills extension has no quarrel with issuance of N.O.Cs. Either in favour of Dewan Sugar Mills or Almoiz Industries but are much concern about stoppage of work 'and direction to them to remove the constructed plant at the extended site vide order of the Director Industries N.-W.F.P. Dated 11-9-2006. 21. We have heard the learned counsel for the petitioners in respective petitions, counsel for the private respondents and learned Advocate General representing the Provincial Government. 22. It appears to be more game of musical chair between different competitors i,e, Sugar Mills, all interested to have their Mills installed and functional in the District of Dera Ismail Khan to the exclusion of others. 23. If on one hand M/s Tandlianwala Sugar Mills want that they be allowed to hold the field and M/s Almoiz Industries should not be issued N.O.C. For installation of Sugar Mills whereas M/s Chashma Sugar Mills shall be restrained not to set up extended plant which in fact, in the view of Tandlianwala Sugar Mills, is not extension but setting up of a new industry. 24. Almoiz Industries wants that N.O.C. Issued to them is valid under the Ordinance read with "Notification" and "Notification No,2" and that respondent be restrained not to issue and if issued shall withdraw N.O.C. From Dewan Sugar Mills. 25. M/s Chashma Sugar Mills, however, does not oppose grant of N.O.C. To Dewan Sugar Mills and also to Almoiz Industries and even they have no objection against Tandlianwala Sugar Mills but it wants that official respondents having raised no objection to the activities undertaken by Chashma Sugar Mills until they completed some 80% of the work on their extended plant, but because of intervention of Tandliawnwala Sugar Mills, the official respondents have issued letters of restraint dated 9-9-2006 by the Chief Secretary of the Province and dated 11-9-2006 by the Director Industries, Government of N.-W.F.P., where they are asked not only to close their extension project but to remove the infrastructure. 26 In order of seniority of filing of petitions, we first heard learned counsel for M/s Tandlianwala Sugar Mills, whose contention is that their Mills is functional since 2004-2005 and official respondents be restrained not to issue N.O.C. To M/s Almoiz Industries for establishment of new Sugar Mills in Dera Ismail Khan and also to restrain them similarly against M/s Chashma Sugar Mills who under the garb of extension, in fact are setting up a new Mills. It is also argued by learned counsel for the petitioner that the mode and the mamier through which Almoiz Industries was granted N.O.C. Is rather unprecedented, given out in haste. 27. It is argued that Almoiz Industries filed an application for grant of N.O.C. For setting up Sugar Mills on 14-5-2005 followed by directive of the Chief Minister to the Secretary concerned on 16-5- 2005 and on the same date Director-General Agriculture asked for the comments of Secretary Agriculture, the same date letter from Agriculture Department goes to the Industries Department and yet On the same date N.O.C. Is issued to Almoiz Industries on 16-5-2005 i,e, within a span of 48 hours all formalities were completed. It is argued that where official respondents have acted in haste, this court should not shut its eyes because the speed with which N.O.C. Is issued to Almoiz Industries speaks of extraneous considerations and therefore, N.O.C. Issued to Almoiz Industries be withdrawn. 28. They have also challenged the extension of Chashma Sugar Mills by stating that even if they have completed 80% work on the site, it was without any legal cover as was required under the Ordinance and the "Notification" and "Notification No,2" and that if Chashma Sugar Mills is allowed to carry out its project which has been though stopped by the Provincial Government, it will create environmental hazards as well as would result into making hundreds of acres of land in the District water logged. The learned counsel argued that under the Ordinance, there is a procedure
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prescribed for establishment of a new sugar mills and without that being following, no new mills can be established. 29. A question has been formulated by learned counsel for the petitioner as to right of the Tandlianwala Sugar Mills to challenge issuance of N.O.C. To Almoiz Industries and a proposed N.O.C. To Chashma Sugar Mills. 30. It was argued that the locus standi of the petitioner/Mills as to its right to challenge establishment of new Mills against the provisions of the Ordinance, its right shall be construed in wider sense and not limited. It was argued that whereby acts of the respondents not only the sugar industry is going to suffer in the District but also there is every possibility of environmental hazards, Tandlianwala Sugar Mills has got the right to challenge, reliance is placed at:-- PLD 1957 Lahore 914 PLD 1963 Supreme Court 564 PLD 1969 Supreme Court 223 PLD 1971 Supreme Court 252 PLD 1960 Supreme Court 31 PLD 1981 SCMR 916 & 1917 31. It is argued that no party can dictate its terms to the Government because the base of processing of application of Almoiz Industries rather indicates that official respondents were invisibly dictated to issue the N.O.C. In 48 hours. Reliance is placed at PLD 1964 Supreme Court 829 and 2004 YLR 521. 32. It was lastly argued that superior courts in particular cannot sit as spectators nor can shut their eyes where any Government functionary acts in the manner which is against law or acts without application of law. Reliance is placed at 2005 SCMR 678 para. 18 at page 689. 33. The petitioner-Almoiz Industries have raised their annoyance against issuance of N.O.C. To Dewan Sugar Mills and the ground for challenge is that the N.O.C. Issued to Dewan Sugar Mills is against the provisions of the Ordinance, the "Notification" and "Notification No,2". It is argued that as per Notification dated 24-5-2005 there is one restriction laid down amongst others that the distance of 35 KM from the nearest sugar mills is necessary for not affecting the existing Mills and as Dewan Sugar Mills would be established within the distance of hardly 4 KM from the petitioner- Almoiz Industries, the N.O.C. To Dewan Sugar Mills be withdrawn. Counsel appearing for Chashma Sugar Mills, however, has a different story to tell i,e, his was the first Mills installed in the District in the year 1990 when total cultivated area of sugarcane was 7000 acres but because of efforts made by the petitioner Chashma Sugar Mills, the cultivated area has been increased to 1,10,000 acres; that they have invested more than 80 Million Rupees in the establishment of extension plant of its sugar mills and that as per report of the committee constituted by the Director Industries N.-W.F.P., some 75% to 80% work has already been completed. His contention is that as decisive steps were taken and had been taken by the petitioner with the knowledge and implied consent of official respondents, a right has accrued to the petitioner which cannot be withdrawn. 34. He has also challenged two letters, one issued by the Chief Secretary of the Province on 9-9- 2006 followed by letter issued by the Director Industries N.-W.F.P. Dated 11-9-2006, on the ground that they are without lawful authority and jurisdiction; that they are originated with mala fide intention and are procured by sheer abuse of authority of respondent No,7 i,e, Haroon Akhtar whose brother Mr. Hamayoon Akhtar is presently Federal Minister for Commerce and that Tandlianwala Sugar Mills of which Haroon Akhtar is Director, is using their official influence to the disadvantage of the petitioner. 35. All facts have been given in detail but this court is rather more concerned with the legal position.
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36. Ordinance IV of 1963 was promulgated as was published in the A Official Gazette on 26-1-1963 by the then Governor West Pakistan. 37. Under section 1 of the Ordinance, it was termed as West Pakistan Industries (Control on Establishment and Enlargement) Ordinance, 1963. Subsection (2) of section 1 has made it applicable to the whole of West Pakistan. Its subsection (3) is very important which reads as under:-- "This section and section 2 shall come into force at once and the remaining provisions of the Ordinance shall come into force in such areas and on such dates as the Government, may by Notification in the Official Gazette, specify." 38. Section 2. Of the Ordinance contains "Definitions". 39. Section 3 of the Ordinance provides that "no person shall establish or cause to be established industrial undertaking or enlarge or cause to be enlarged any existing industrial undertaking except with the previous permission in writing of the Government". This was the form of section 3 as originally promulgated but was subjected to amendment in ID the year 1976. 40. The amendment in section 3 of the Ordinance was made which in fact is an addition of proviso, by substituting colon at the end of section, which reads as under: "provided that the application of any person for the grant of such permission shall not be rejected- --- (a) without giving such person an opportunity of showing cause against it; or (b) Unless Government is satisfied, on the basis of information available to it and after making such inquiry as it may deem fit, that the grant of permission to such person will be prejudicial to the national interest, or injurious to the health of, or a source of nuisance for, the residents of the local area in which the industrial undertaking is proposed to be set up or, as the case may be, the industrial undertaking which is proposed to be enlarge is situated." 41. Under section 4 of the Ordinance, there is a check on unauthorized establishment or enlargement of industrial undertaking. Under section 7 of the Ordinance, there is right of Appeal and Revision by an aggrieved person. Whereas section 13 empowers then Government to make Rules for carrying into effect the provisions of the Ordinance. 42. Needles to say that in the year 1975 on 5th August, 1975 the North-West Frontier Province Adaptation of Laws Order, 1975,…
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