M/S BAJAJ HINDUSTAN LTD. versus SIR SHADI LAL ENTERPRISES LTD. & ANR.

Citation: [2010] 15 S.C.R. 156 · Decided: 29-11-2010 · Supreme Court of India · Bench: MARKANDEY KATJU, GYAN SUDHA MISRA · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2010] 15 (ADDL.) S.C.R. 156 
A 
M/S BAJAJ HINDUSTAN LTD. 
B 
v. 
SIR SHADI LAL ENTERPRISES LTD. & ANR. 
(Civil Appeal No. 5856 of 2005) 
NOVEMBER 29, 2010 
[MARKANDEY KAT JU AND GYAN SUD HA MISRA, JJ.) 
Industries (Development and Regulation) Act, 1951: 
C 
s.298 - De-licencing of sugar industry - Press Note 12 
dated 31. 8. 1998, followed by a formal Notification on 
11. 9. 1998 issued u/s. 298( 1) of the Act, de-licencing the sugar 
industry, subject to the condition that there would be a 
minimum of 15 Km. distance between two sugar mills -
D Validity of - Held: Valid. 
E 
s.298 - Power under- Held: Is not tainted by the vice of 
excessive delegation since the essential legislative policy is 
specified in the preamble of the Act and is writ large 
throughout the provisions of the Act. 
s. 298 - Legislative history of - Discussed. 
s. 298 - Notification dated 11. 9. 1998 issued under -
Quashing of, by High Court holding that the de-licencing could 
only be done by the legislature and not by the executive -
F Held: The executive power of Union of India is co-extensive 
with the legislative power under Article 73(1) of the Constitution 
- Therefore, notification uls.298 was sufficient for this purpose 
and it was not necessary to amend the Act to de-license the 
sugar industry - There is nothing in the 1951 Act which 
G required a notification uls. 298(1) to be approved by 
Parliament - Whether there should be licensing of an industry 
or not is for the executive authorities to decide - Constitution 
of India, 1950 - Article 73(1). 
H 
156 
BAJAJ HINDUSTAN LTD. v. SIR SHAD! LAL 
ENTERPRISES LTD. 
Administrative law: 
157 
Judicial review - Administrative decisions -
Scope of 
interference by court - Held: The coµrt cannot sit in judgment 
over the wisdom of the policy of the legislature or the executive 
A 
- Court can, however, interfere with administrative decisions 
8 
when there is clear violation of the statute or a constitutional 
provision, or there is arbitrariness in the Wednesbury sense 
- It is the administrators and legislators who are entitled to 
frame policies and take such administrative decisions as they 
think necessary in the public interest. 
Policy decision - Power to withdraw or change - Power 
to lay policy by executive decisions or by legislation includes 
power to withdraw the same unless it is by ma/a fide exercise 
of power, or the decision or action taken is in abuse of power 
c 
- The doctrine of legitimate expectation plays no role when 
D 
the appropriate authority is empowered to take a decision by 
an executiv_e policy or under law - When the Government is 
satisfied that change in the policy was necessary in the public 
interest, it would be entitled to revise the policy and lay down 
a new policy. 
E 
Economic and fiscal regulatory measures - Judicial 
review - These are fields where judges should encroach upon 
very warily as judges are not experts in these matters - Since 
economic matters are extremely complicated this inevitably 
entails special treatment for distinct social phenomena - The 
F 
State must, therefore, be left with wide latitude in devising 
ways and means of imposing fiscal regulatory measures, and 
the court should not, unless compelled by the statute or by 
the Constitution, encroach into this field. 
Sugar: Historical background of sugar industry -
Industries (Development and Regulation) Act, 1951 - First 
Schedule. 
The Government of India issued Press Note 12 dated 
G 
H 
158 
SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R. 
A 31.8.1998 whereby it de-licenced the sugar industry, 
subject to the condition that there would be a minimum 
of 15 Km. distance between two sugar mills. The Press 
Note was followed by a formal Notification on 11.9.1998 
issued under Section 298(1) of the Industries 
B {Development and Regulation) Act, 1951. The High Court 
quashed the Press Note and the Notification on the 
ground that the delicencing could only be done by the 
legislature and not by the executive. The instant appeal 
c 
was filed challenging the order of the High Court. 
Allowing the appeal, the Court 
HELD: 1. The Industries {Development and 
Regulation) Act, 1951 placed the sugar industry in the 
First Schedule to the Act, which meant that no sugar 
D industry could be set up without a licence from the 
Central Government. Since independence, the situation 
has, however, totally changed in India. Now India has a 
heavy industrial base and also has several sugar mi

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