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SC upholds govt ban on new sugar mills

SC upholds govt ban on new sugar mills
PTI
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First Published: Wed, Apr 04 2007. 03 32 PM IST
Updated: Wed, Apr 04 2007. 03 32 PM IST
New Delhi: The Supreme Court has upheld a ban imposed by the government on setting up new sugar mill within 15 km of an existing factory if the owner was taking effective steps to operate the unit within the stipulated time period.
A bench comprising Justice Arijit Pasayat and Justice S.H. Kapadia also ruled that the ban will not be applicable on the mills which are already functioning, but will apply to those cases which are under dispute and where milling has not begun.
The apex court’s observations came in a dispute between Ojas Industries, an affiliate of Bajaj Hindustan, and K.K. Birla group firm Oudh Sugar Mills Ltd, over the central government’s Sugarcane (Control)(Amendment) Order, 2006.
The sugarcane order issued by the Centre in November last year barred setting up new mills within 15 kms of an existing factory if the owner of the existing mill was taking effective steps for its functioning after filling the Industrial Entrepreneur Memorandum to start the mill.
“We hold that the Sugarcane (Control) (Amendment) Order, 2006 imposes a bar on the subsequent IEM holders in matter of setting up of new sugar mills during the stipulated period given to the earlier IEM holders to take effective steps enumerated in Explanation 4 to Clause 6A of the Sugarcane (Control) (Amendment) Order, 2006,” the apex court said.
According to Clause 6A, effective steps would include buying land, placement of contracts for machinery, payment of advance, beginning civil work and construction of building and sanction of requisite loans from banks.
The bench also said the Control Order of 2006 does not put a ban on setting up new units, but only gives a priority in the matter of establishing new sugar mills.
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First Published: Wed, Apr 04 2007. 03 32 PM IST