Judgment:
:
1. : R IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE06H DAY OF JANUARY, 2023 BEFORE THE HON'BLE MR JUSTICE N.S.SANJAY GOWDA W.P. No.102856 of 2022 [GM-RES]. BETWEEN:
1. M/S. ASKINS BIOFUELS PRIVATE LIMITED, A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956, AND HAVING ITS REGISTERED OFFICE AT1506, GOKAK ROAD, ALAGAVADI, HARUGERI, RAIBAG TALUK, BELGAVI DISTRICT, REPRESENTED BY ITS DIRECTOR MR. ASHOK J ASKI.
2. M/S. SHRI. BHRAMANANDASAGAR JAGGERY INDUSTRIES, A PARTNERSHIP FIRM HAVING ITS OFFICE AT1506, GOKAK ROAD, ALAGAVADI, HARUGERI, RAIBAG TALUK, BELGAVI DISTRICT, REPRESENTED BY ITS PARTNER MR. MAHAVEER J ASKI. … PETITIONERS (BY SHRI ANIRUDHA R.J.
NAYAK, ADVOCATE) AND:
1. THE UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF CONSUMER AFFAIRS, FOOD & PD, DIRECTORATE OF SUGAR, KRISHI BHAVAN, NEW DELHI-110001.
2. THE SECRETARY, DEPARTMENT OF PROMOTION OF INDUSTRY :
2. : AND INTERNAL TRADE, MINISTRY OF COMMERCE & INDUSTRY, UDYOG BHAVAN, NEW DELHI-110001.
3. THE CHIEF DIRECTOR (SUGAR), MINISTRY OF CONSUMER AFFAIRS FOOD & PUBLIC DISTRIBUTION, ROOM NO.581, KRISHI BHAVAN, RP ROAD, NEW DELHI-110001.
4. THE COMMISSIONER FOR CANE DEVELOPMENT AND DIRECTOR OF SUGAR, GOVERNMENT OF KARNATAKA, HOUSING BOARD BUILDING, CBAB COMPLEX, F BLOCK, V FLOOR, CAUVERY BHAVAN, KG ROAD, BENGALURU-560008.
5. M/S. ALAGAWADI BIRESHWAR SUGARS PVT. LTD., A COMPANY REGISTERED UNDER THE COMPANIES ACT1956 (AMENDED AS PER COMPANIES ACT2013 HAVING ITS REGISTERED OFFICE AT198137, KALLESHWAR INDUSTRIES REGULATED MARKET ROAD, BAMBOO BAZAR, DAVANAGERI-577001, AND HAVING ITS PROPOSED UNIT AT SY.No.106, ALAGAWADI -591317, TQ: RAIBAG, DIST: BELAGAVI. … RESPONDENTS (BY SHRI GOUTAM S.BHARADWAJ, ADVOCATE FOR SHRI PRASHANT F.GOUDAR, ADVOCATE FOR C/R5; SHRI M.B. KANAVI, ADVOCATE FOR R1 TO R3; SRI. SHIVAPRABHU HIREMATH, AGA FOR R4) THIS WRIT PETITION IS FILED UNDER ARTICLES226& 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF CERTIORARI OR SUCH OTHER WRIT,
ORDEROR DIRECTION AS THIS HON’BLE COURT MAY DEEM FIT, QUASHING THE
ORDEROF RESPONDENT NO.4 IN NO.DSK/DEV/30/2021-22, DATED2507.2022, ENCLOSED AS ANNEXURE-Q BEARING NON SPEAKING AND CONTRARY TO THE SPECIFIC DIRECTION OF THIS HON’BLE COURTS
ORDERDATED1503.2022 IN ANNEXURE-D AS BEING ILLEGAL AND UNTENABLE IN LAW, IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. THIS WRIT PETITION, HAVING BEEN HEARD AND RESERVED FOR
ORDERS, COMING ON FOR PRONOUNCEMENT, THIS DAY, THE COURT MADE THE FOLLOWING: :
3. :
ORDER1 M/s. Askins Biofuels Private Limited, the 1st petitioner (hereinafter referred to as “Askins”) and M/s. Shri Bhramanandasagar Jaggery Industries, the 2nd petitioner (hereinafter referred to as “Bhramanandasagar”) have jointly presented this writ petition challenging the order dated 25.07.2022, passed by the Commissioner for Cane Development and Director of Sugar, the 4th respondent (hereinafter referred to as “the Cane Commissioner”).
2. By the said order, Askins has been directed to stop the construction activities immediately and has also been directed not to commence any kind of production activities for the manufacture of Ethanol using Sugarcane Juice at its present establishment.
3. The Cane Commissioner has also directed the Deputy Commissioner, Belagavi to ensure that his order is :
4. : implemented and also to prevent the undertaking of any further construction and production of Ethanol by Askins.
4. Further, a request is also made to the Member Secretary, State Level Environment Impact Assessment Authority to review the environmental clearance issued for the production of Ethanol utilizing Sugarcane Juice and Syrup.
5. A request is also made to the State Pollution Control Board to review the consent for establishment issued in favour of Askins, as it was ineligible to utilize the Sugarcane Juice or Syrup for the production of Ethanol.
6. The Cane Commissioner has also requested the Chief Director (Sugar), Ministry of Consumer Affairs, Department of Food and Public Distribution, Directorate of Sugar, Government of India to review the financial assistance approved and granted to Askins, since they were utilizing Sugarcane Juice and Syrup to produce Ethanol, which they were not entitled to do. :
5. :
7. The facts leading to the filing of this writ petition, which are not in dispute, are as follows:
8. In the year 2011, Bhramanandasagar filed W.P. No.65849/2011 challenging the acknowledgement of the Industrial Entrepreneur Memorandum (for short ‘the IEM’) of M/s. Alagawadi Bireshwar Sugars Pvt. Ltd., the fifth respondent (hereinafter referred to as “Alagawadi”).
9. By an order dated 15.12.2014, this Court held that both Bhramanandasagar and Alagawadi were entitled to file a fresh IEM.
10. On 07.07.2015, an IEM was filed by Alagawadi. The IEM of Alagawadi stated that they intended to manufacture Sugar. This IEM was filed after Alagawadi had obtained a ‘Distance Certificate’ as contemplated under Clause 6B of the Sugarcane (Control) Order, 1966. As required under Clause 6B, Alagawadi also furnished a performance guarantee of Rupees One crore on 09.07.2015 as surety for implementation :
6. : of the IEM within the time stipulated under the Sugarcane (Control) Order, 1966.
11. On 04.02.2019, Bhramanandasagar filed its IEM, which stated that they intended to manufacture rectified spirit at Alagawadi.
12. On 08.03.2019, the Ethanol Policy was notified by the Government of India.
13. On 01.11.2019, Askins was incorporated as a Company under the Indian Companies Act and within 35 days thereafter, Askins filed an IEM on 05.12.2019, which stated that they intended to manufacture Ethanol.
14. On 02.01.2020, a Memorandum of Understanding was entered into between Bhramanandasagar and Askins for the supply of Sugarcane Juice.
15. On 06.03.2020, on the request of Alagawadi for an extension of time to implement the IEM as provided under :
7. : Clause 6C of the Sugarcane (Control) Order, 1966, the time for implementing the IEM was extended from 08.07.2020 to 07.07.2021. A second extension was also granted to implement the IEM from 06.07.2021 to 07.07.2022 and a third extension was also granted for the implementation of the IEM from 08.07.2022 to 07.07.2023. Thus, the time for implementation of the IEM has been granted to Alagawadi till 07.07.2023, by which time, Alagawadi is required to take all effective steps and commence commercial production.
16. Alagawadi, noticing the activities of the petitioners, proceeded to raise objections by filing a series of representations objecting to the activities and steps being taken by Askins for commencing activities for the manufacture of Ethanol.
17. W.P. No.100915/2022 was filed before this Court seeking for a mandamus to direct the concerned respondents :
8. : to order immediate stoppage of the construction of the Ethanol Plant, which was being constructed at Alagawadi.
18. By an order dated 15.03.2022, this Court directed respondents No.3 to 7 therein to consider the representations submitted by Alagawadi and also directed that Askins and Bhramanandasagar be granted an opportunity to file objections and of being heard while the representations were to be considered. The Court directed the Cane Commissioner, the Deputy Commissioner, and the Chief Director, to decide within three weeks.
19. Pursuant to the said order, an order came to be passed by the Cane Commissioner on 30.04.2022, by which the Cane Commissioner directed Askins to stop undertaking any further construction work immediately and directed the Deputy Commissioner to take steps to prevent the undertaking of any construction work and any kind of production activity by Askins. :
9. :
20. Bhramanandasagar was also directed not to divert or sell the Sugarcane Juice to Askins and ordered that the Memorandum of Understanding that had been entered with Askins was required to be cancelled.
21. At the same time, the State Level Environment Impact Assessment Authority and Karnataka State Pollution Control Board were also requested to cancel the Environmental Clearance and Consent for establishment that had been granted to Askins.
22. Lastly, the Chief Director (Sugar), Union of India, was requested to review the financial assistance approved and granted to Askins, since Askins had obtained financial assistance by stating that it would produce Ethanol from Molasses but was utilizing Sugarcane Juice / Syrup for production of the Ethanol.
23. Askins challenged the order dated 30.04.2022 by filing W.P. No.101807/2022. This Court by order dated :
10. :
26. 05.2022 set aside the order dated 30.04.2022 and remitted the matter to the Commissioner for Cane Development and Director of Sugar, by directing the petitioners to appear before him on 06.06.2022.
24. On 23.05.2022, an order came to be passed by the Deputy Director (Cost), Ministry of Consumer Affairs, Food and Public Distribution (Department of Food and Public Distribution) Directorate of Sugar and Vegetable Oil, by which Askins was directed not to produce ethanol from sugarcane juice purchased from any jaggery/khandsari unit.
25. The said order dated 23.05.2022 was challenged by the petitioners by filing W.P.No.101968/2022. This writ petition, by an order dated 02.06.2022 disposed off the petition by directing the Commissioner for Cane Development and Director of Sugar to hear Askins and Bhramanandasagar personally on 10.06.2022 and ensure that the order in W.P. No.101915/2022 was complied with. :
11. :
26. The Cane Commissioner, pursuant to the said order, heard Askins and Bhramanandasagar and proceeded to pass the impugned order dated 25.07.2022. By the impugned order, the Cane Commissioner has reiterated the directions that he had issued earlier calling upon Askins to stop construction activities immediately and not to commence any production activities for the manufacture of Ethanol by using Sugarcane Juice.
27. As had already been ordered before, the Deputy Commissioner was once again directed to ensure that the Cane Commissioner’s direction was adhered to and the request to the State Level Environment Impact Assessment Authority and the Karnataka State Pollution Control Board to review the environmental clearance, was also reiterated.
28. As had already been ordered before, the Chief Director of the Government of India was also requested to :
12. : review the financial assistance approved and granted to Askins.
29. Shri Anirudha R.J.
Nayak, learned counsel appearing for the petitioners, contended that the impugned order directing Askins to stop all works relating to the establishment of the Ethanol Plant was wholly illegal. He contended that the petitioners had filed an IEM with the intent of producing Ethanol as per the Ethanol Blending Program Policy which had been notified by the Government and which actively encouraged the production of Ethanol using Sugarcane Juice or Syrup or molasses. He submitted that the establishment of a plant to manufacture Ethanol could not be considered a ‘Factory’ as defined under the Sugarcane (Control) Order, 1966 and could not be subjected to the restrictions imposed under Clause 6A of the Sugarcane (Control) Order. He submitted that since the Sugarcane (Control) Order could not be applied to the Ethanol :
13. : Manufacturing Plant, the entire proceedings culminating in the impugned order was one without jurisdiction.
30. He submitted that to be a ‘Factory’ as defined under the Sugarcane (Control) Order, the Factory needed to be a premises in which Sugar was manufactured by Vacuum Pan Process and at the option of the Factory, in addition, Ethanol was also to be produced either from Sugarcane Juice or molasses (including B-Heavy molasses). He submitted that the definition of ‘Factory’ contemplated that only if both sugar and ethanol are manufactured in the same premises, it could be considered as a ‘Factory’ for the purposes of the Sugarcane (Control) Order.
31. He submitted that since Askins was only intending to manufacture Ethanol and was not manufacturing Sugar and thus the provisions of the Sugarcane (Control) Order could not be applied to them. He submitted that the procurement of sugarcane Juice for the purposes of manufacturing Ethanol :
14. : would in no way bring the Ethanol Manufacturing Plant within the definition of ‘Factory’ as defined under the Sugarcane (Control) Order.
32. Learned counsel also sought to contend that as per the definition of a ‘Factory or Sugar Factory’ under the 2021 Amendment to the Sugarcane (Control) Order, it was absolutely essential that the Sugarcane was to be crushed and either the Sugar or Ethanol was required to be manufactured. He submitted that if sugarcane was not crushed and only Ethanol was manufactured by procuring sugarcane juice/ syrup or molasses or from other sources, such a plant could not be considered as a ‘Factory or Sugar Factory’. In short, he contended that the twin requirements of both i.e., the crushing of sugarcane and the manufacture of Ethanol was absolutely essential for the Ethanol Manufacturing Plant to be considered as a Factory under the Sugarcane (Control) Order. :
15. :
33. He submitted that since in the instant case, admittedly sugarcane was not being crushed in the proposed plant set up by Askins, the authorities had seriously erred in considering Askins as a ‘Factory or a Sugar Factory’ as defined under the Sugarcane (Control) Order, 1966.
34. He submitted that, the Hon’ble Apex Court in various decisions have held that the provisions of the Sugarcane (Control) Order were retrospective in nature and therefore, the definition of 2021 Amendment would also be applicable in respect of the IEM that Askins had filed in the year 2019.
35. He submitted that the impugned order fundamentally restrained the petitioners from manufacturing Ethanol despite a clear policy having been formulated by the Government of India encouraging the production of Ethanol which had been touted as a foreign exchange saver and which :
16. : would save the nation from huge import bills of petroleum products.
36. He submitted that the State Government had no jurisdiction to pass an order, which has the effect of impeding the implementation of a policy formulated by the Government of Karnataka.
37. Shri Goutam S. Bharadwaj and Shri Prashant F. Goudar, learned counsel appearing for Alagawadi, the 5th respondent, on the other hand, contended that the impugned orders were legal and were confirmed to both the letter and spirit of the law and there was, thus, absolutely no reason to disturb the same.
38. They submitted that any plant which proposed to manufacture Ethanol would automatically become a ‘factory’ within the meaning of the Sugarcane (Control) Order and as a further consequence, the restrictions imposed/contemplated under the Sugarcane (Control) Order for setting up such :
17. : plants, would be attracted forthwith. It was contended that any premises in which Ethanol was manufactured resulted in that premises becoming a ‘Factory’ under the Sugarcane (Control) Order.
39. It was stated that as per the definition of Factory, any premises which manufactured Sugar by Vacuum Pan Process or manufactured Ethanol would have to be considered a Sugar factory under the provisions of the Sugarcane (Control) Order.
40. Learned counsel contended that the 2021 Amendment clarified this position by clearly stating that the Sugar Factory would mean any premises where either Sugarcane was crushed and sugar manufactured or any premises where Ethanol was manufactured from Sugarcane Juice / Sugar / Syrup / Molasses.
41. It was stated that the definition clearly indicated that, even if only ethanol was manufactured from Sugarcane :
18. : Juice / Sugar / Syrup / Molasses, the said premises would be deemed to be a Factory or a Sugar Factory for the purposes of the Sugarcane (Control) Order.
42. Learned counsel sought to place reliance on the third explanation, which was inserted into Clause (3), which stated that the production of Ethanol directly from Sugarcane Juice / Sugar / Syrup / Molasses was permitted only in the case of a Sugar Factory.
43. It was submitted that since admittedly Ethanol was sought to be manufactured from Sugarcane Juice by Askins, the same was impermissible, as Askins was not a Sugar Factory.
44. Learned counsel submitted that both Bhramanandasagar and Askins were indigenously trying to get over the rigors of the Sugarcane (Control) Order by subterfuge as if they were two independent entities. It was contended that in the very premises in which Bhramanandasagar was :
19. : situate, Askins was trying to set up its Ethanol Manufacturing Plant and they were essentially one integrated plant, which was however sought to be bifurcated by creating an illusion of them being separate entities.
45. It was contended that admittedly the plant being set up by Alagawadi was abutting the unit of Bhramanandasagar and Askins and the restriction imposed by Clause 6A of the Sugarcane (Control) Order was sought to be flagrantly violated by a brazen attempt to create two separate plants, when in fact, they were one integrated plant. It was sought to be highlighted that the Directors of Askins were in fact Partners of Bhramanandasagar, and they were essentially part of the same management.
46. It was contended that a diabolical plan had been hatched to create a Jaggery unit and a Distillery by creating an illusion that they were two unconnected entities solely to :
20. : escape the bar which had been created under Clause 6A of the Sugarcane (Control) Order.
47. It was also argued that Askins had secured financial assistance on the ground that it was manufacturing Ethanol through molasses, when, in fact, Askins was trying to establish a plant, which manufactured Ethanol from sugarcane Juice or Syrup.
48. Learned counsel submitted that similar attempts made by other industries in constructing their Ethanol plant, as being distinct from a sugar factory, had caught the attention of the Government of India and a clarification had been issued that Distilleries including stand-alone Distilleries could produce Ethanol from sugarcane Juice / Syrup purchased from sugar mills only (i.e., which were producing sugar from Vacuum Pan Process). It was clearly stated that the Distilleries or stand-alone Distilleries would not be allowed :
21. : to procure sugarcane juice or syrup from any Khandsari Units to produce Ethanol.
49. It was stated that since there was a clarification that Distilleries proposing to produce ethanol from sugarcane, were also required to maintain a distance of 15 kilometers, the entire argument of Askins that it was outside the purview of the Sugarcane (Control) Order, cannot be accepted.
50. In the light of the arguments advanced by the respective parties, the question that would arise for consideration, is as follows:
"Whether the establishment of a factory to manufacture Ethanol using sugarcane juice, sugar or sugar syrup can be prevented by the Cane Commissioner on the premise that such an establishment is in fact a “factory or sugar factory” as defined under Clause 2(c) of the Sugarcane (Control) Order, 1966 and would thereby contravene the prohibition imposed under Clause 6A of the Sugarcane (Control) Order, 1966?." :
22. :
51. To answer this question, a brief overview of the legislative history of the Sugarcane (Control) Order is required to be stated.
52. The Sugarcane (Control) Order was notified on 16.07.1966. In the originally enacted order, ‘factory’ and ‘producer of sugar’ was defined, as follows: “2. Definition.-. In this order, unless the context otherwise requires, - XXXXX (c) ‘factory’ means any premises including the precincts thereof in any part of which sugar is manufactured by vacuum pan process.” XXXXX (i) ‘producer of sugar’ means a person carrying on the business of manufacturing sugar by vacuum pan process.
53. As could be seen from the said definition, any premises including the precincts, in which sugar was manufactured by Vacuum Pan Process was to be construed as a Factory and the person carrying on a business of :
23. : manufacturing sugar by vacuum pan process was considered as a producer of sugar.
54. This definition was prevalent from the year 1966 till it was substituted on 28.12.2007. By the 2007 Amendment, the definition of ‘factory’ and ‘producer of sugar’ was defined, as follows: “2. (c) ‘factory’ means any premises including the precincts thereof in any part of which sugar is manufactured by vacuum pan process and at its own option, ethanol either directly from sugarcane juice or from molasses including B- Heavy molasses, or both as the case may be, is manufactured. (i) ‘producer of sugar’ means a person carrying on the business of manufacturing sugar by vacuum pan process and at its own option, ethanol either directly from sugarcane juice or from molasses, including B-Heavy molasses, or both.
55. As could be seen from this definition, from 2007, if in any premises including the precincts of a Factory, if sugar was manufactured by Vacuum Pan Process and at its own option, Ethanol was also manufactured either directly from sugarcane Juice or molasses including B-Heavy Molasses or :
24. : both, it was to be considered as a Factory for the purposes of the Sugarcane (Control) Order. A plain reading of the definition basically indicates that, if sugar was manufactured and Ethanol was manufactured in the manner stated in the definition, such a premise was also to be considered as a Factory. Thus, essentially from 2007, if on any premises, sugar and ethanol were manufactured, they were considered as a Factory.
56. This amendment of the year 2007 was once again substituted in the year 2016 (w.e.f. 30th September 2016). The definition, as substituted in 2016, read as follows: “2. (c) “factory” means any premises including the precincts thereof in any part of which sugar is manufactured by vacuum pan process and at its own option, ethanol from molasses or B-Heavy molasses; (i) “producer of sugar” means a person carrying on the business of manufacturing sugar by vacuum pan process and at its own option, ethanol from molasses or B-Heavy molasses.” :
25. :
57. As could be seen from the said definitions of the year 2016, the portion relating to the manufacture of ethanol from sugarcane juice was deleted. Thus, only if ethanol was manufactured from molasses (including B-Heavy molasses), it was to be considered as a Factory. In other words, if a plant secured sugarcane juice and manufactured ethanol on and from 30th September 2016, it was not considered a Factory for the purposes of the sugarcane (Control) Order.
58. The definition of Factory was once again amended on 26.07.2018, which read as follows: “2. (c) “factory” means any premises including the precincts thereof in any part of which sugar is manufactured by vacuum pan process and at its own option, ethanol either directly from sugarcane juice or form molasses, including B- heavy molasses, or both, as the case may be, is manufactured.” (i) “producer of sugar” means a person carrying on the business of manufacturing sugar by vacuum pan process and at its own option, ethanol either directly from sugarcane juice or from molasses, including B-heavy molasses, or both.” :
26. :
59. As could be seen from the Amendment of the year 2018, once again the position as it existed before the 2016 amendment was restored, in the sense that, the manufacture of ethanol from sugarcane Juice, which had been deleted under the 2016 Amendment was again restored. Thus, once again, if in a premise, both sugarcane (from vacuum pan process) and ethanol (from sugarcane juice/molasses (including B-heavy molasses) or both) were manufactured, it was considered as a factory.
60. The definition of Factory was once again amended on 31.05.2021 and a new definition was substituted, which reads as follows: “2. (c) “factory or sugar factory” means any premises including the precincts thereof in any part of which sugarcane is crushed and either sugar is manufactured by vacuum pan process or at its own option, ethanol is manufactured from sugarcane juice or sugar or sugar syrup or molasses, including B-heavy molasses.” (i) “producer of sugar” means a person carrying on the business of manufacturing sugar by vacuum pan process or at its own option, manufacturing of ethanol from sugarcane juice or :
27. : sugar or sugar syrup or molasses, including B- heavy molasses.
61. As could be seen from the said definition, as against the earlier term of Factory, the term Factory or Sugar Factory was sought to be defined. It stated that a factory would mean a premise in which sugarcane was crushed and either sugar was manufactured by vacuum pan process or ethanol was manufactured from sugarcane juice or sugar or sugar syrup or molasses (including B-heavy morasses), it would become a Factory or Sugar Factory for the purposes of the Sugarcane (Control) Order.
62. To put things in perspective, from the year 1966 to 2007, for the purposes of the Sugarcane (Control) Order, a Factory was a premise, where sugar was manufactured by vacuum pan process. During this period, there was no concept of ethanol being manufactured in a Sugar Factory.
63. For the first time in 2007, the manufacture of ethanol, either directly from sugarcane juice or from molasses :
28. : (including B-heavy molasses) or both, in addition to sugar, in a premise amounted to that premises becoming a Factory for the purposes of the Sugarcane (Control) Order.
64. For the period 30.09.2016 to 26.07.2018, the manufacture of ethanol directly from sugarcane was deleted in the definition Clause and this resulted in making only those premises, where ethanol was manufactured from molasses becoming a Factory for the purposes of the Sugarcane (Control) Order.
65. From 26.07.2018, the earlier position of manufacturing ethanol from sugarcane juice was restored.
66. To appreciate the course of the definition of a Factory under the Sugarcane (Control) Order from 1966 to 2021, the definition of a Factory under the Sugarcane (Control) Order can be classified into three periods. :
29. :
67. For the first period between 1966 to 2000, Factory meant premises where only sugar was manufactured by vacuum pan process.
68. For the second period from 2007 to 2021, any premises, where sugar was manufactured from the vacuum pan process and also ethanol was manufactured was construed as a Factory.
69. In this period, it was the requirement that ethanol was to be manufactured from sugarcane juice or molasses or sugar or sugar syrup. However, during this period, there were minor changes made regarding the source from which ethanol could be manufactured. a. From 2007 to 2016, ethanol was to be manufactured from sugarcane juice or molasses or both, for it to be considered a Factory. :
30. : b. For the period from 2016 to 2018, ethanol was required to be manufactured only from molasses, for it be considered a Factory. c. From 2018 to 2019, ethanol was required to be manufactured from sugarcane or molasses or both, for it to be considered a Factory. d. For the period from 2019 to 2021, ethanol was required to be manufactured from sugarcane juice or sugar or sugar syrup or molasses, for it to be considered a Factory. e. Ultimately from 2021, a premise where either sugar was manufactured by vacuum pan process or ethanol was manufactured, was considered a Factory.
70. What is to be noticed is that for the period from 2007 to 2021, for a premise to be considered as a ‘factory’ for the purposes of the Sugarcane (Control) Order, the :
31. : manufacture of both sugar and ethanol was necessary. This is obviously because of the word “and” used in the definition after the sentence “in any part of which sugar is manufacturing by vacuum pan process and”.
71. However, from 2021 by the use of the expression “either sugar is manufactured or at its own option, ethanol is manufactured from sugarcane juice or sugar or sugar syrup or molasses”, any premises in which either from sugar or ethanol was manufactured, became a factory for the purposes of the Sugarcane (Control) Order.
72. To put it differently, from 2021 onwards, even if only ethanol was manufactured in a premise, it became a sugar factory and it was not necessary for sugar also to be produced for it to be considered as a sugar factory. As a necessary consequence, since the premises where only Ethanol was manufactured became a sugar factory, the :
32. : restrictions as contemplated under Clause 6A of the Sugarcane (Control) Order stood automatically attracted.
73. However, the learned counsel for the petitioners contended that in order for a premise to become a Factory or Sugar Factory from 2020, two ingredients were essential. According to him, the first ingredient was that there had to be crushing of sugarcane and the second ingredient was that there should be either the manufacture of sugar or the manufacture of ethanol. He submitted that if sugarcane was not crushed and only ethanol was manufactured from whatever source, the premises would not be a Factory or Sugar Factory as defined under the Sugarcane (Control) Order and consequently, the restrictions of Clause 6A could not be applied to a premises, where only ethanol was manufactured.
74. Learned counsel submits that it is not in dispute that the 1st petitioner was not crushing sugarcane in its plant, and it was merely proposing to manufacture ethanol and in :
33. : the light of this admitted position, it could not be construed as a Factory or Sugar factory. Learned counsel contended that the way ethanol was manufactured was of no consequence. He submitted that the petitioner was entitled to secure sugarcane juice or sugar or sugar syrup or molasses and yet be entitled to be out of the purview of the Sugarcane (Control) Order, since sugarcane was not crushed.
75. He also submitted that the source of supply for the manufacture of ethanol was also of no consequence. In short, he submitted that whenever in a premises, only ethanol was manufactured, it cannot be construed as a Factory or Sugar Factory, as defined under the Sugarcane (Control) Order. He submitted that since, Askins could not be considered as a Sugar Factory, the impugned order passed by the Cane Commissioner was one without jurisdiction.
76. The entire basis of this argument of Shri Naik hinges on the phrase ‘sugarcane is crushed and either sugar is :
34. : manufactured by vacuum pan process or at its own option ethanol is manufactured’ used in the definition of factory. according to the learned counsel, for the manufacture of either sugar or ethanol, only if sugarcane was crushed, the premises would become a factory.
77. The definition of the term “factory or sugar factory” reads as follows: “2(c) “factory or sugar factory” means any premises including the precincts thereof in any part of which sugarcane is crushed and either sugar is manufactured by vacuum pan process or at its own option, ethanol is manufactured from sugarcane juice or sugar or sugar syrup or molasses, including B-heavy molasses.
78. As could be seen from the above, the definition is in two parts.
79. The first part would apply to any premises (or its precincts) in which sugarcane is crushed and either sugar is manufactured by vacuum pan process. This is because of the use of a “comma” after the expression sugarcane is crushed and either sugar is manufactured by vacuum pan process or at its own :
35. : option “,”. The use of this comma clearly indicates that the expression relation to the manufacture of sugar comes to an end and the second part of the definition starts. Thus, the subsequent use of the expression ethanol cannot be applied to the first part of the definition.
80. The second part would thus be applicable only to a premise where ethanol is manufactured from sugarcane juice or from sugar or sugar syrup or molasses (including B-Heavy molasses).
81. However, the argument of the learned counsel seeks to extend the term artificially to “sugarcane is crushed and either sugar is manufactured by vacuum pan process or at its own option, ethanol”. The argument basically ignores the use of comma and seeks to integrate the second part of the definition relating to the manufacture of ethanol for the manufacture of sugar from sugarcane. This argument also seeks to ignore the remaining part of the definition relating to the specification of the raw materials to be used for the :
36. : manufacture of ethanol. If this contention were to be accepted, the resultant definition would render that portion of the definition which specifies the raw material specified for the manufacture of ethanol otiose. The very fact that the source for manufacture of ethanol is specified in clear and distinct terms by itself excludes the necessity of crushing sugarcane for the manufacture of ethanol. This argument of the learned counsel appearing for the petitioner, cannot, therefore, be accepted.
82. The intent of the amended definition is to ensure that premises in which only ethanol is manufactured would also have to be considered as a factory and it is for this very reason different raw materials, such as sugarcane juice or sugar or sugar syrup or molasses, from which ethanol could be manufactured was explicitly stated. It is obvious that this definition became necessary since the manufacture of ethanol was based on sugarcane juice or sugar syrup or sugar or molasses, which were essentially by-products of sugarcane :
37. : and as a consequence, the procurement of sugarcane by the existing factories would be hampered if a factory manufacturing ethanol was permitted to be established in violation of the 15 km restriction contemplated under Clause 6-A of the Sugarcane (Control) Order.
83. Thus, even if ethanol alone was to be manufactured and sugar was not manufactured, nevertheless, by a legal fiction created by the definition, such a premise would automatically become a Sugar Factory for the purposes of the Sugarcane (Control) Order.
84. It is to be noticed here that right up to 2021, the definition included the manufacture of both sugar and ethanol in a premise for it to be considered as a ‘factory’ under the Sugarcane (Control) Order. However, from 2021, the manufacture of both sugar and ethanol was not necessary and the manufacture of either sugar or ethanol was sufficient to make it a Factory under the Sugarcane (Control) Order. :
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85. It is, therefore, clear that the legislative intent to make every plant, where only ethanol was manufactured, using the sources mentioned in the definition, would also have to be construed as a Factory. In this sense, the Legislature by defining the term in 2021 basically removed all doubts and made it clear that even if only ethanol was manufactured, it would still nevertheless be a Factory or a Sugar Factory for the purposes of the Sugarcane (Control) Order.
86. Admittedly, Askins, the 1st petitioner intends to start manufacturing ethanol only from sugarcane juice or sugar or sugar syrup or molasses and therefore, it would have to be considered as a Sugar Factory for the purposes of the Sugarcane (Control) Order and admittedly Askins is situate in the plot abutting Askins and thereby within the prohibited 15 km radius prescribed in Clause 6 A of the Sugarcane (Control) Order. :
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87. It is not in dispute that Alagawadi has filed an IEM and has taken effective steps and still has time to implement the IEM. It will therefore have to be construed as a new sugar factory and consequently, no other Sugar Factory or Factory can be allowed to be set up within a radius of 15 kilometers.
88. Since, it is held from the discussion narrated above that Askins is indeed a Sugar Factory, for the purposes of the Sugarcane (Control) Order, the order passed by the Cane Commissioner directing Askins to stop construction and directing Bhramanandasagar to stop the supply of sugarcane juice or sugar syrup, cannot be found fault with. The Cane Commissioner has basically ensured that the statutory restriction imposed in Clause 6A of the Sugarcane (Control) Order is adhered to and is not defeated by the setting up an Ethanol Plant by Askins.
89. Learned counsel also tried to construct an argument that the Sugarcane (Control) Order did not use the :
40. : term “Stand-alone Distillery” and therefore, the clarification issued in respect of the Stand-alone Distillery on 13.01.2022 was improper. He submitted that the clarification could not be used to create a restriction which is not available under the Sugarcane (Control) Order.
90. As stated above, since Askins is clearly a Factory or a Sugar Factory as defined under the Sugarcane (Control) Order, the use of the term Stand-alone Distillery in the clarification would be of no relevance and Askins, by virtue of being a Sugar Factory, cannot set up an Ethanol Manufacturing Plant within 15 kilometers of the Factory of Alagawadi.
91. I am, therefore, of the view that there is no merit in this writ petition and the same will have to be dismissed. The writ petition is accordingly dismissed. SD JUDGE Vnp*