AYESHA A. MALIK, J.---This common judgment decides upon the issues raised in Writ Petitions Nos.37/2016, 35/2016, 61/2016, 76/2016, 78/2016 and 23145/2016, as all Petitions raise common questions of law and facts. Writ Petitions Nos.37/2016, 35/2016, 61/2016, 76/2016 and 78/2016 were argued on 20.6.2016 and WP No.23145/2016 being similar to the said Petitions was argued on 28 7.2016.
2. The Petitioners have challenged Notification No, AEA-III-3-5/ 2011(Vol-III) dated 4.12.2015 ("Impugned Notification") issued by the Government of Punjab, Industries, Commerce and Investment Department, to the extent of Clauses 6, 7, 8 and 11 which allows existing sugar mills to relocate within the Province. They are also aggrieved by Notification No, AEA-III-3-5/2011 (Vol-III) dated 4.12.2015 issued by the Government of Punjab, Industries, Commerce and Investment Department, to the extent of clause 2(b) ("Second Impugned Notification") which forms a committee to assess the impact of the transportation of sugarcane from the bordering districts of the Punjab to other provinces to determine loss of sugar cess.
3. The Petitioners are public companies, operating sugar mills in the south of Punjab. Writ Petitions Nos.37/2016 and 23145/2016 have been filed by JDW Sugar Mills Limited which is operating a sugar mill in Tehsil Sadiq Abad, District Rahim Yar Khan. Writ Petition No,35/2016 has been filed by RYK Mills Limited which is operating a sugar mill in Rukanabad (Janpur), Tehsil Liaqatabad, Rahim Yar Khan.
Writ Petition No,61/2016 has been filed by Indus Sugar Mills Limited which is operating a sugar mill in District Rajanpur. Writ Petition No,76/2016 has been filed by Ashraf Sugar Mills Limited which is operating a sugar mill in Ashrafabad, District Bahawalpur. Writ Petition No,78/2016 has also been filed by Mian Mahmood Ahmad who is in the cotton ginning business in District Rahim Yar Khan and is aggrieved by the Impugned Notification as the relocation policy has failed to take into consideration the national interest and in particular the plight of the cotton industry.
4. The main contesting Respondent in these Petitions is the Government of Punjab, the Agriculture Department, the Industries, Commerce and Investment Department, the Food Department, the Environment Protection Department as well as the Law and Parliamentary Affairs Department have been impleaded through their competent authorities. The District Coordination. Officers of Muzaffargarh, Rahim Yar Khan, Bahawalpur, Rajanpur have also been impleaded. The Federal Government through the Ministry of Textile Industry and the Ministry of National Food Security and Research, Islamabad have also been impleaded to explain the Federal Government's policy and the national interest. Report and parawise comments have been filed by all the stated Respondents. The Learned Law Officer on behalf of the Provincial Government stated that the report and parawise comments of the Government of Punjab can be read in all the petitions as the position of the Government is the same in all petitions including W.P. No,23145/2016. Same is the position of the learned DAG appearing for the Federal Government.
5. The contesting Respondents also include sugar mills and their owners who are in the process of shifting their mills to a new location. The specific allegation against Respondent Ittefaq Sugar Mills Limited is that it is establishing a new sugar mill in Channi Got, District Bahawalpur. Respondent Haseeb Waqas Sugar Mills Limited is establishing a new sugar mill in Mauza Jagmal, Tehsil Jatoi, District Muzaffargarh. Respondent Abdullah (Yousaf) Sugar Mills Limited is establishing a new sugar mill in Tehsil Jampur, District Rajanpur. Respondent Abdullah Sugar Mills Limited is establishing a new sugar mill in District Rahim Yar Khan and the Respondent Chaudhry Sugar Mills Limited is establishing a new sugar mill in District Rahim Yar Khan. Report and parawise comments have been filed by the stated Respondents.
6. The basic grievance of the Petitioners is that the Respondents under the garb of shifting/relocation of a functional sugar mill are in fact establishing a new sugar mill despite the ban imposed under the Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963 ("Ordinance") read with Notification No,AEA-III-3-3/03 (VOL-HI) dated 6.12.2006. One of the main arguments raised by the. Petitioners is that Respondent sugar mills are owned by the Chief Minister, Punjab and the Prime Minister of Pakistan along with close family relatives. Hence the Impugned Notification has been issued to benefit their business interest. Further that the Impugned Notification has been issued simply to facilitate and legalize the establishment of new sugar mills owned by the families of the Chief Minister, Punjab as well as the Prime Minister given the ban on establishing sugar mills in the Province. In this regard, it is specifically alleged that Ittefaq Sugar Mills Limited and Chaudhary Sugar Mills Limited are owned by Mian Muhammad Nawaz Sharif, Hassan Nawaz Sharif, Hussain Nawaz Sharif, Mrs. Marriyam Nawaz, Mrs. Kalsoom Nawaz and Hamza Shahbaz along with other family members. Haseeb Waqas Sugar Mills Limited is owned by Haseeb Ilyas, Zakia Ilyas, Mrs. Shahzadi Ilyas and other family members. Abdullah Sugar Mills Limited is owned by Mian Mohammad Ejaz Miraj, Yasmin Riaz and other family members. It is noted that the ownership alleged by the Petitioners and the documents relied upon have not been denied by the Respondent sugar mills.
7. Mr. Aitzaz Ahsan, Syed Ali Zafar, Mr. Shehzad A. Elahi, Mr. Jawad Hassan and Mr. Imtiaz Rashid Siddiqui, Advocates on behalf of the Petitioners argued that Section 3 of the Ordinance prohibits the establishment or the enlargement of any industrial undertaking unless specifically permitted in writing by the Provincial Government. It is their case that the Ordinance provides for the organized and planned growth of industry in the Punjab thereby regulating the establishment of an industry as well as its location. In terms of the proviso to Section 3 of the Ordinance, a person may establish an industrial undertaking with the prior permission, in writing, by the Government of Punjab who has to satisfy itself that the establishment of the industrial undertaking will not prejudice the national interest. Section 11 of the Ordinance allows the Government to exempt any industry from the provisions of Section 3 of the Ordinance. It is their case that pursuant to Section 11, Notification dated 6.12.2006 imposed a ban on the establishment or enlargement of sugar mills throughout the Province and that the Impugned Notification violates the mandate of Section 3 of the Ordinance as well as the ban imposed on 6.12.2006 as it was issued to benefit the Respondent sugar mills.
8. Counsel for the Petitioners further argued that the Respondent sugar mills are in the process of establishing new sugar mills and in some cases have already established their sugar mills under the garb of shifting/relocation. They argued that none of the Respondent sugar mills have been given permission to establish or even relocate their sugar mill and Respondents Nos.1 to 6 have acted partially, in collusion with the Respondent sugar mills to give legal cover to their illegal acts.
During the course of arguments it was admitted by the counsel for Ittefaq Sugar Mills Limited, Haseeb Waqas Sugar Mills Limited and Abdullah Sugar Mills Limited that the said mills have relocated and are functional at the new locations. So far as Respondent Chaudhary Mills Limited is concerned, they are still in the process of constructing the mill at the new location. All the Respondent sugar mills accept that they do not have permission for relocating under the Impugned Notification or under the Ordinance.
9. The case of the Petitioner in W.P. No,78/2016 is that the districts of Rahim Yar Khan, Muzaffargarh, Bahawalpur and Rajanpur are primarily cotton producing areas of Punjab. Cotton products are the main exports of Pakistan, contributing over 60% of the export value of the country. Therefore, cotton and the textile industry is a major contributor to the national economy, hence this industry is of national interest. The Petitioner's grievance is that without considering the national interest and in particular the plight of the cotton industry, the Government of Punjab has introduced the relocation policy which is not permitted under the law. Mr. Jawad Hassan, Advocate for the Petitioner argued that additional sugarcane cultivation in these areas will reduce cotton production in the area and will have an adverse effect on the soil and environment thereby causing heavy loss to cotton growers. Consequently national interest will suffer because the growth of cotton will be reduced. It is also his case that the Respondent sugar mills have violated the mandatory provisions of the Punjab Environmental Protection Act, 1997 ("Act") as the Respondent sugar mills have established themselves without fulfilling the requirements under the Act. Learned counsel further argued that relocation of sugar mills is nothing more than relaxation or exemption from the complete ban on establishing sugar mills within the Province. Submitted that the consistent stance of the Government of Punjab and the Federal Government over the years remained to prohibit establishment of new sugar mills especially in the areas of Bahawalpur, Muzaffargrh, Rajanpur and Rahim Yar Khan so as to protect the cotton crop. Therefore the Impugned Notification was issued simply to facilitate the business interest of the Respondent sugar mills owned by the family members of the Chief Minister of the Punjab and the Prime Minister of the country. Further submitted that the Government of Punjab issued the Impugned Notification to validate the concept of relocation and to validate the illegal act of establishing new sugar mills in the Province.
10.In terms of the order of this Court dated 07.03.2016 reports have been submitted by the local commission comprising of the Cane Commissioner, District Coordination Officers and. Syed Waqar Hussain Naqvi, Advocate. The reports testify to the fact that Ittefaq Sugar Mills Limited, Haseeb Waqas Sugar Mills Limited and Abdullah Sugar Mills Limited have shifted and were functional in the crushing season from December 2015 to March 2016. During the course of arguments, counsel for the said sugar mills also admitted to the fact that the mills had shifted and were functional during the crushing season from December 2015 to March 2016. So far as Chaudhary Sugar Mills. is concerned, construction work started in January 2016 and is still under way.
11.The basic case of the Respondent sugar mills is that they are not establishing new sugar mills nor are they enlarging the sugar production capacity of their existing sugar mills. They are simply relocating their sugar mills from one area to another which is not prohibited under the Ordinance or Notification dated 6.12.2006. It is their case, that they have not violated the ban imposed under the Notification of 6.12 2006. It is also their case that since there is no prohibition on relocation, hence they have not committed any illegality and there was no obligation to obtain permission for relocation. Learned counsel for Chaudhry Sugar Mills argued that since the Impugned Notification came in December, 2015 and was suspended by this Court on 4.1.2016, hence the question of taking any permission under the Impugned Notification did not arise.
12.The case of the Government of Punjab set out by the learned Law Officer is that a policy for relocation of existing sugar mills was introduced through the.Impugned Notification in 'order to regulate and facilitate the process of relocating a functional sugar mill. He argued that since relocation does not increase the production capacity of sugar mills hence it does not fall within the domain of Section 3 of the Ordinance read with Notification dated 6.12.2006. He further argued that the relocation policy was introduced after a full deliberative process in which it was concluded that relocation should be permitted in order to save the sugar industry. In this regard, Government of Punjab has relied upon minutes of meeting as well as the reports considered during the deliberation process.
13.A report has been filed on behalf of Respondent No,8, Ministry of Textile Industry, Government of Pakistan, Islamabad. Learned DAG stated that as per report of the stated Respondent the matter falls within the domain of the Government of Punjab. It has been further stated in the report that Pakistan Central Cotton Committee, Multan is working under the administrative control of the Ministry. The said Ministry is responsible to protect the growth and production of cotton in the country. It is further stated that with the installation of new sugar mills in cotton growing areas of Punjab the cultivation of cotton will be adversely affected and curtailed which will cause a decline in cotton production, causing loss to the economy of Pakistan. It is also argued that the stated Ministry is against the installation of sugar mills in the cotton growing areas being against the national interest.
Preliminary Objections 14.Preliminary Objections were raised on the maintainability of the Writ Petitions on the ground that alternate remedy is available to the Petitioners in the form of appeal and revision under Section 7 of the Ordinance. The Petitioners have challenged the government policy on relocation of functional sugar mills and have also challenged the intent behind the issuance of the policy on the ground that it is mala fide and intended to benefit the Respondent sugar mills. Under the circumstances, any remedy before a government functionary in the form of an appeal or revision would not be proper and efficacious as a government functionary cannot deliberate on the vires of the policy nor is it likely that he will comment on the allegations of collusion and mala fide intent given that the Respondent sugar mills are owned by the families of the Chief Minister, Punjab and the Prime Minister. This issue was also considered by the august Supreme Court in Civil Appeals Nos.1242 to 1245 of 2013 vide judgment dated 25.7.2016 where Notification dated 6.12.2006 was challenged. The august Supreme Court held that availing the alternate remedy under the Ordinance would be an exercise in futility since a government functionary is not likely to take a decision contrary to government policy. Hence there is no merit in this objection.
15.Preliminary objections were also raised on the locus standi of the Petitioners that they are not aggrieved parties and that they could not challenge a government policy. The basic contention is that the Petitioners are competitors of the Respondent sugar mills and are operating their own mills in the Southern Region of Punjab where the Respondent sugar mills have relocated. The argument is that these Petitions have been filed simply to oust the competitors and maintain a monopoly in the region. It has been argued that no fundamental or legal right of the Petitioners have been violated, hence they are not aggrieved and cannot invoke the constitutional jurisdiction of this Court.
16.The Petitioners have challenged the Impugned Notification on the ground that the Impugned Notification is arbitrary, discriminatory, tainted with partiality and mala fide. The main grounds are that it has been issued without consideration of national interest and violates the ban of 6.12.2006, that it is a personal relaxation or exemption granted to the Respondent sugar mills who are close relatives of the Chief Executive of the Province and the country. The record shows that the Government has defended the ban on establishment of sugar mills and has consistently maintained the position that the relocation of a functional sugar mill from one district to another tantamounts to establishing a new sugar mill. On this understanding, the Government has time and again rejected applications for relocation by sugar mills. However it changed its long standing position in December 2015 by introducing the relocation policy notwithstanding the ban on the establishment of sugar mills. Furthermore the Respondent sugar mills admittedly did not apply for permission to relocate yet they have relocated their sugar mills despite the ban imposed through Notification dated 6.12.2006. Since the Respondent sugar mills have relocated to the south of Punjab, where the Petitioners have functional sugar mills, the relocation policy and the acts of the Respondent sugar mills give cause to the Petitioners to file the instant Petitions. Furthermore since the policy is stated to be against public interest and national interest, this Court can look into the reasonableness of the policy and review the manner in which the executive exercised its powers to ensure that the rights of the citizens are protected. Reliance is placed on the case titled Engineer Iqbal Zafar Jhagra and others v. Federation of Pakistan and others (PLD 2013 SC 224). The Court can also exercise its power of judicial review to ensure that the decision making process was reasonable and not arbitrary or tainted with mala fide. Reliance is placed on the case titled Dr. Akhtar Hassan Khan and others v. Federation of Pakistan and others (2012 SCMR 455). Therefore as such there is no merit in the preliminary objections.
Law and Policy governing the establishment of sugar mills 17.The basic law governing the establishment or enlargement of sugar mills is the Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963. Section 3 of the Ordinance provides as under:- No person shall establish or cause to be established any industrial undertaking or enlarge or cause to be enlarged any existing industrial undertaking except with the previous permission in writing of Government.
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 the 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 enlarged is situated.
In terms of this Section, an industrial undertaking can only be established with the specific permission of the Government and permission can be refused if national interest is prejudiced or if it adversely affects public health or is source of nuisance for the locality. Section 11 of the Ordinance empowers the Government to grant exemption from the requirements of the Ordinance, in specific from the requirements of Section 3 in the following terms:- Government may, by notification in the official Gazette, exempt any industrial undertaking or class of industrial undertakings from all or any of the provisions of this Ordinance or the rules.
18.The Government of Punjab has from time to time issued several notifications under Section 11 of the Ordinance regulating the establishment of sugar mills. The first Notification was issued on 2.10.1986 in which all industries and areas in the Province of Punjab were exempted from the application of Section 3 of the Ordinance except those specified in the Notification. As a consequence border areas, areas prone to flooding, urban areas and other specified locations mentioned in the Notification were not exempted from the provisions of Section 3 of the Ordinance.
The area-wise restriction in the Notification of 2.10.1986 was referred to as the location policy for the purposes of organizing and planning the growth of sugar mills in the Punjab. In terms of this Notification a sugar, mill was not exempted from Section 3 of the Ordinance, hence for the establishment of sugar mills permission was required from the Government.
19.On 3.11.1988 a new Notification was issued which amended the earlier notification of 2.10.1986. In terms of this Notification, no sugar mill was allowed to be set up in the area of Multan, Bahawalpur, DG Khan and Okara. On 17.9.2002 the location policy continued such that no new sugar mill could be set up or enlarged in the districts of Multan, Sahiwal, Vehari, Khanewal, Pakpattan, Lodhran, Bahawalpur, Rahim Yar Khan, Bahawanagar, DG Khan, Rajanpur, Layyah, Muzaffargarh and Okara.
On 4.9.2003 the location policy was again amended such that no new sugar mill could be set up and no existing sugar mill could be enlarged anywhere in the Province. Therefore by way of the 2003 Notification, an absolute ban was imposed prohibiting the establishment or enlargement of sugar mills throughout the Province. On 1.4.2004 yet another Notification was issued which changed the absolute ban to an area-wise ban. The districts of Multan, Sahiwal, Vehari, Khanewal, Pakpattan, Lodhran, Bahawalpur, Rahim Yar Khan, Bahawalnagar, DG Khan, Rajanpur, Layyah, Muzaffargarh, Okara and Toba Tek Singh were areas within which no new sugar mill could be established or enlarged without the permission of the Government.
20.On 2.10.2004 by way of another amendment in the location policy it was stated that no new sugar mill could be set up in the Province and existing sugar mills could not be enlarged in the Districts of Sahiwal, Pakpattan and Toba Tek Singh. By way of Notification dated 15.7.2005, the ban was lifted but soon. thereafter through letter. dated 23.11.2005 the ban was again imposed on the establishment and enlargement of sugar mill throughout the province of Punjab. Thereafter Notification No,AEA-III-3-5/2003(Vol-III) dated 6.12.2006 was issued whereby a complete ban was once again imposed such that no new sugar mill could be set up and no existing sugar mill could be enlarged within the province of Punjab. This Notification continues even today and states the location policy of the Government of Punjab with respect to sugar mills.
21.On 8.4.2011 the ban imposed vide Notification dated 6.12.2006 was reconsidered by a committee constituted by the Chief Minister. The committee deliberated on the issues and decided that the ban should continue because the establishment of sugar mills in the cotton growing belt of Punjab was not in the national interest in view of the risk of increased production in sugarcane which. would harm the cultivation of cotton as sugarcane is a water intenslive crop which would have an adverse effect on the water resources necessary for cotton production.
Case Law 22.The various notifications issued by the Government of Punjab under Section 11 of the Ordinance have been challenged before this Court- several times. In the judgment cited as Muhammad Aslam v. Government of the Punjab through Secretary Industries Department and another (PLD 2013 Lahore 528) and Madina Sugar Mills v. Secretary, Ministry of Industries and others (PLD 2001 Lahore 506) the location policy of the Government was upheld. The judgment in Muhammad Aslam and others was challenged before the august Supreme Court of Pakistan which ultimately resulted in judgment dated 25.7.2016 passed in Civil Appeals Nos.1242 to 1245 of 2013. Leave was granted to consider the scope of the provisions of Sections 3 and 11 of the Ordinance, that is whether the Government has the power to impose a ban upon the establishment/enlargement of the sugar industry specifically under Notification dated 6.12.2006 and whether the Government had valid reasons for issuing the Notification of 6.12.2006. The august Supreme Court of Pakistan in the above judgment held that:-- The decision to impose the ban was not to benefit or punish anyone but to ensure the organized and planned growth of the industry, which may include the factors noted in paragraph 16 above, even though by imposing a ban, the existing sugar mills may have obtained an advantage of reduced competition. The decision to impose the ban was taken after long deliberations and on the advice of experts and we have not been shown any mala fide or ulterior motive of the Government in taking this decision.
The august Supreme Court of Pakistan further held that: The Act starts with the position of not permitting the setting up of any industry except by the prior written permission of the Government and then proceeds to state that the applications seeking such permission shall not be rejected except for the reasons mentioned in the proviso to Section 3.
Regretfully the rules which were envisaged in the Act and were to be made by the Government have not materialized despite the Act being in the field for over 53 years. Consequently, anyone can submit an application wanting to set up any industry and each such application is to be dealt with on a case to case basis. This, to say the least, is a most unsatisfactory state of affairs. In this terrain unregulated by rules the Government may reject the applications received by it either under clause (a) or clause (b) of the Act. Under clause (a) the Government has to provide an opportunity to show cause against it. However, under clause (b) the Government may reject an application if it is satisfied, on the basis of information available to it and after making such inquiry as it may deem fit. As noted above the Government had inquired into the matter and there was considerable information available with for it to conclude that permitting the establishment of new sugar mills or permitting the expansion of existing ones was prejudicial to the national interest. The Government therefore took the decision to prohibit both new sugar mills and the expansion of existing ones and issued the impugned notification. The decision of the Government was/is in the public and national interest. Such decision was also not motivated by malice, mala fide nor taken for any ulterior reason. Therefore, it is unexceptionable. In respect of such a decision a writ under Article 199 of the Constitution does not lie.
In this way, the august Supreme Court of Pakistan held that the notification of 6.12.2006 was a valid and justified notification which falls within the ambit of the executive authority of the Government.
Furthermore the ban of 6.12.2006 was declared legal and in the national interest.
Shifting/Relocation
23. In this way, the case of the Petitioners is that since a ban has been imposed by the Government on the establishment and enlargement of sugar mills vide Notification dated 6.12.2006, there is no legal justification for issuing a policy for relocating existing sugar mills. It is their case that the relocation policy violates the ban imposed on establishment of new sugar mills, which ban has been upheld by the august Supreme Court of Pakistan for being in the national interest. The Respondents have argued that the relocation policy does not violate the ban on the establishment of new sugar mills as relocation of a functional sugar mill is different from the establishment of a new sugar mill. It is their case that notwithstanding the ban relocation is permissible. On the basis of what was argued the first question before this court is whether relocation of sugar mills falls within the ambit of establishment of new sugar mills as provided under the Ordinance and regulated under the Notification of 6.12.2006 or whether relocation is separate and distinct from establishment of a sugar mill such that it is not governed by the. Ordinance or the ban. For the sake of convenience the relevant portion of the Impugned Notification reads as follows: No,AEA-III 3-5/2011 (Vol-VIII).- In exercise of powers conferred under Section 11 of the Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963 (IV of 1963) and subject to the following exceptions and conditions, Governor of the Punjab is pleased to exempt all industries throughout Province of the Punjab from the provisions of Section 3 of the. Ordinance.
5. No new sugar mill shall be set up in the Province, and the capacity of an existing sugar mill shall not be enlarged.
6. Subject to clause 5 and the conditions, criteria and guidelines mentioned in clause 8, the Government, on the recommendations of the appropriate Committee mentioned in clause 10, may, in public interest, allow the relocation of a functional sugar mill.
7. A sugar mill, which fulfills the requisite criteria and conditions, may submit an application, along with the requisite documents and the proof of deposit of the processing fee, for the relocation of the sugar mill or merger of the sugar mills to the Government in the Industries, Commerce and Investment Department.
8. The appropriate Committee may recommend the relocation of a functional sugar mill, if the following conditions and criteria are fulfilled by the applicant-mill:
(a) The applicant-mill has cleared all the outstanding amount due to the Government and the farmers; and, for the purpose, a certificate to this effect issued by the Cane Commissioner, Punjab shall be annexed with the application.
(b) The applicant-mill has continuously been in operation for the last five years immediately before the submission of application.
(c) The application for the purpose of relocation shall:
(i) Contain complete details and justification for the proposed relocation; and
(ii) be accompanied by the requisite documents, including environmental, ecological and spatial planning feasibility and NOCs from Government department or the agencies concerned, and the original receipt of the deposit of non-refundable process fee of rupees five hundred thousand.
(d) The applicant-mill, on relocation, shall not in any manner whatsoever, enlarge the crushing capacity of the sugar mill.
(e) The ownership of a relocated mill shall not be changed or altered for at least three years from the date the mill starts functioning at relocated site.
9. The Government, on the recommendations of the appropriate committee, may allow the merger of two or more mills which will be subject to surrendering of idle capacity of the sugar mills applying for merger.
10. The following Committees shall be the appropriate committees for purposes of this Notification:-
(a) Intra-district Committee:
(i) Divisional Commissioner Convener
(ii) Administrator/DCO Member
(iii) District Officer Agriculture Member
(iv) District Officer IPW&M Member
(v) Executive Engineer IrrigationMember
(vi) District Officer EnvironmentMember
(b) Inter-district Committee:
(i) Secretary to Government IC&I Department Convener
(ii) Secretary to Government Agriculture Department(Member)
(iii) Secretary to Government Law & PA Department(Member)
(iv) Secretary to Government Food Department(Member)
(v) Secretary to Government Environment Protection Department(Member)
(vi) Member, Board of Revenue, Punjab (Member)
(vii) Member, Planning and Development Board(Member)
(viii) Administrators or DCOs of the districts (Member)
(ix) Any co-opted member (Member)
11. The Government may, after recording reasons, refuse the establishment or enlargement of an industrial unit if it is in derogation of public interest, ecology or environment or contravenes any law or rules for the time being in force.
24. Clause 5 of the Impugned Notification reiterates the ban imposed vide Notification dated 6.12.2006 meaning that by virtue of the Impugned Notification the ban on the establishment or enlargement of new sugar mills continues by way of policy of the Government. Clause 6 allows the Government to recommend relocation of a functional sugar mill subject to the ban imposed in Clause 5 and subject to the conditions D provided in Clause 8, if it is in public interest. A bare reading of Clauses 5 and 6 shows that relocation must be considered in the context of the ban on establishment of new sugar mills and in the context of public interest. In this way the Impugned Notification creates a direct nexus between relocation of a sugar mill and establishment of a new sugar mill. When seen in its historical perspective, the Government has pursuant to Section 11 of the Ordinance issued various notifications from time to time, regulating the location of sugar mills such that there were restrictions on the establishment of new sugar mills in certain areas. The area-wise restriction remains the location policy of the Government which regulates the establishment and growth of new, sugar mills within the Province. This is evident from the fact that various notifications issued up to 2006 restricted the establishment of sugar mills in particular areas such as Multan, Bahawalpur, DG Khan, Rahim Yar Khan and Muzaffargarh amongst others. Ultimately the Notification of 6.12.2006 set out a complete ban on the establishment of new sugar mills and on the enlargement of the capacity of an existing sugar mill throughout the Province. The long standing rationale given for the location policy and for the ban is to protect the national interest that is the cotton crop, cotton growing areas and the textile industry. In essence the location policy of the Government has continuously protected cotton growing areas by restricting the establishment of new sugar mills in those areas.
25.The Notification dated 6.12.2006 was challenged before this Court and the matter regarding the legality of the ban has been put to rest by the judgment of the august Supreme Court of Pakistan dated 25.7.2016 in Civil Appeals Nos.1242 to 1245 of 2013 which upheld the ban on the ground that that the Government can impose such a ban if it has duly considered the national interest as well as other relevant factors. The august Supreme Court considered the national interest as well as the factors on the basis of which the ban was imposed and upheld the decision of the Government on the ground that considerable deliberations were made, advice of experts and relevant departments were considered before issuance of Notification dated 6.12.2006. The august Supreme Court considered the Pakistan Economic Survey 2015-16, heard the stance of the Province as well as the Federation and held that not only is the ban justified but its continuance is imperative to protect the national interest. In this way the policy of the Government to protect the cotton crop and cotton growing areas has been upheld by, the august Supreme Court of Pakistan which recognizes that the location of a sugar mill is relevant in order to protect national interest.
26.Relocation of a functional sugar mill means that the mill will close its operations in one area and relocate to another area. In the instant cases, the relocation is without increasing the production capacity of sugar mills, so essentially relocating the sugar mill 'means moving from one location to another, based on the licensed production capacity of the sugar mill. The key element for the purposes of relocation is the location to which the functional sugar mill will shift. For the purposes of the new location the sugar mill will establish itself in that area and it is a new sugar mill in the local area which does not increase the overall production capacity of sugar. In the way establishment and relocation of sugar mills are correlated when seen in the context of the ban and public interest as the key element for both is the location of the sugar mill. Hence relocation of a sugar mill is the establishment of a new sugar mill in the local area to which the provisions of Sections 3 to 12 of the Ordinance are applicable and for the purposes of the Ordinance relocation falls within the ambit of establishment of a new sugar mill and will have to be planned and organized as per the requirements of Section 3 of the Ordinance.
27.The Ordinance aims to organize and plan the growth of industry within the Province placing special emphasis on the local area within which the industrial undertaking carries out its business.
Organizing and planning the growth of industry itself suggests that the location and factors related to the local area are relevant when considering an application under Section 3 of the Ordinance for grant of permission to set up an industrial undertaking. In terms of Section 3 of the Ordinance read with the Notifications issued under Section 11 of the Ordinance, when determining whether a new sugar mill can be established, the Government of Punjab has emphasized on the location of the sugar mill which means that the local environment, its geographical features and its non- geographical conditions are relevant, The Ordinance also mandates that location be considered in the context of national interest, public health and public nuisance such that it does not cause prejudice to the national interest or the public at large. To argue that relocation is different from establishment of a sugar mill is without merit as the factors considered at the time of grant of permission for establishment or relocation of a sugar mill will be identical since both, are location specific and because the objective of the Ordinance and notifications issued under Section 11 is to control the location where the sugar mill is to carry out its business and to protect the national interest.
28.The august Supreme Court in its judgment dated 25.7.2016 listed the factors on the basis of which the ban of 6.12.2006 was imposed and the factors which support the continuance of the ban today. In terms of the judgment of the august Supreme Court, the relevant factors are as follows: a) Punjab has an arid climate whereas sugarcane is best grown in tropical ones: b) Sugarcane consumes far more water than'other crops; c) The water required for growing sugarcane in non-perennial irrigation canal areas is made up by tapping into groundwater/aquifers inducing water scarcity by depleting aquifers; d) Sugarcane stubble remains rooted in the soil after it has been cut therefore the second (wheat) crop cannot be grown on such land whereas it can be grown on the land from which cotton is harvested; e) Sugarcane adversely affects food security; f) Sugarcane substitutes cotton and wheat; g) Existing sugar mills have underutilized capacity; h) Textile industry is being starved of locally available cotton; i) Cotton bales are imported by using scarce foreign exchange; j) Textiles are a major foreign exchange earner; and k) International price of sugar is cheaper than the local price therefore sugar does not have export potential.
The aforementioned factors confirm that the establishment -of a new sugar mill is not justified simply on the basis of production capacity, but is also seen in the context of its location and the factorsrelevant to the local area The same would be applicable to the relocation of a functional sugar mill because the location policy protects the national interest and there can be no relocation of a functional sugar mill without due consideration of the location it is desirous of shifting to. This understanding is in consonance with the planned policy of the Government to control the location of sugar mills. The judgment cited at PLD 2001 Lahore 506 (supra) considered the establishment of sugar mills and location policy as issued under Section 11 of the Ordinance from time to time and held that the location policy was made with the object of ensuring that additional sugar manufacturing capacity could be set up in the Punjab without displacement of the cotton crop as the same was considered to be of special significance having special interest. It further held that the location policy set out and represented a legitimate exercise of the executive authority of the Government and was consistent with its objectives to ensure organized and planned growth of industries in the Province. The Court further held that the location policy was well considered even though occasionally it was tampered with for extraneous reasons and not for national interest. The establishment of sugar mills and the location policy including the ban of 6.12.2006 When considered by the august Supreme Court, of Pakistan in Civil Appeals Nos.1242 to 1245 of 2013 was .upheld given that the factors regulating the location / policy justified the ban on establishing sugar mills in order to protect cotton growing areas. The factors considered by, the august Supreme Court and relied upon by the Government will also be relevant while considering in application seeking permission to relocate.
29. While the Impugned Notification requires relocation to be considered in the context of the ban imposed on establishing sugar mills as well as in the context of public interest it fails to set out the guidelines H on the basis of which an application for relocation should be considered. It does not provide for any of the conditions or factors on the basis of which a recommendation can be made.
The conditions and criteria given in Clause 8 of the Impugned Notification leave the decision of relocation totally to the discretion of the Committee considering the matter. Clause 8(a) requires all outstanding dues to be paid and 8(b) requires continuous operation for five years. Both conditions are procedural in nature and do not control the substantive decision regarding the relocation. Clause 8 (c)(i) calls for details and justifications from the applicant, for the purposes of relocation. Since no guideline has been provided for this fundamental clause in the policy, the entire decision making process is left open ended with no specific guideline on the basis of which a decision can be made. Hence the basic objective of the policy that is to make relocation subject to the ban on establishment and in public interest is not achieved and cannot be given effect to. In its defense the learned Law Officer explained that there is a dire need to allow sugar mills to relocate on account of the change in cropping patterns and improved environmental conditions and since relocation does not enhance the overall sugar production capacity there is no violation of the ban or national interest. He argued that the policy aims to alloiv relocation to protect the sugar industry.
The stated intent of the Government is a cause of serious concern because the Government has consistently maintained its policy to protect the cotton growing areas of Punjab yet on the basis of the Impugned Notification a sugar mill can move into a cotton growing area under the garb of relocation, which will not only violates the ban but also prejudices the stated national interest. The Government is well versed with all the factors relevant to the location of a sugar mill because it has historically and even before the august Supreme Court of Pakistan while defending the ban on the establishment of sugar mills, emphasized on the fact that the location of a sugar mill is important and must be controlled in order to ensure that the national interest in the cotton, crop is protected.
The purpose of the various notifications issued under Section 11 of the Ordinance from time to time evidence the need to protect the national interest that is cotton growing areas. All the notifications have been location specific intended to control the location of the sugar mill, hence to urge production capacity as the key factor controlling relocation is against the record and Public interest. In fact the record shows that the Government held the view that relocation and establishment are synonymous and since relocation effectively means to establish at a new location, it was not permissible. This is evident from letter dated 29.1.2015 issued by the Deputy Director (Opinion), Government of Punjab, Law and Parliamentary Affairs Department addressed to the Secretary, Government of Punjab, Industries, Commerce and Investment. Department, wherein, the Government of Punjab was of the opinion that relocation of a sugar mill from Sargodha to Muzaffargarh means the establishment of anew sugar mill in Muzaffargarh and relocation would have to be considered against the touchstone of national interest, public health and in the context of public nuisance. To now minimize the emphasis on location and focus on the production capacity in order to justify the Impugned Notification compels the Court to take a harder look at the relocation policy to ascertain whether it was issued for the benefit of the public and whether there is a rational justification for the policy.
30. It is settled law that the Government is entitled to make policies for good governance and the courts in general do not interfere in policy matters. However, there are exceptions to this rule giving this Court the power to review a policy decision to ensure that it is not arbitrary or capricious, and that it does not violate any fundamental right or provision of the Constitution of Islamic Republic of Pakistan, 1973 ("Constitution"). Reliance is placed on the case titled Messrs Al-Raham Travels and Tours (Pvt.) Ltd. and others v. Ministry of Religious Affairs, Hajj, Zakat and Ushr through Secretary and others (2011 SCMR 1621). The august Supreme Court of Pakistan has held that as regards the don-tendon of the learned counsel that the High. Court cannot interfere with the policy;matters in its jurisdiction, we have some reservations, as if the policy is in conflict with any provision of law or is violative of the fundamental rights of a citizen, the same can be called in question before the High Court in its writ jurisdiction. Furthermore there are three grounds on which a policy can be reviewed by this Court under Article 199 of the Constitution. First if the policy is illegal and contrary to the law; secondly if the policy is irrational and unreasonable and thirdly if there has been procedural impropriety. The judicial review of a policy is intended to prevent arbitrariness or favourtism and is exercised in the larger public interest. Reliance is placed on the case titled Asaf Fasihuddin Khan Vardag v. Government of Pakistan and others (2014 SCMR 676). The august Supreme Court of Pakistan has also held that Article 199 of the Constitution can be invoked if the policy is a product of mala fide as held in the case titled Dossani Travels Pvt.. Ltd. and 4 others v.
Messrs Travels Shop (Pvt.) Ltd. and others (2013 SCMR 1749).
31.The question that arises is whether the Impugned Notification could introduce the concept of relocation when it has continued with the ban imposed on the establishment of sugar mills through Notification dated 6.12.2006. The rationale for the Impugned Notification is evidenced through the Summaries prepared for the Chief Minister by the Secretary Industries as well as Secretary (I&C), dated 8.6.2015 and 2.12.2015 (the Summaries) which discusses the factors/relevant to relocation and considers the need for allowing relocation. In this regard, great reliance has been placed on both the Summaries which have been filed with the reply of the Government of Punjab. A Cabinet Committee was formed by the Chief Minister on 22.6.2015 to deliberate and formulate a policy on relocation given that the earlier location policies did not cover the aspect of relocation. The Committee comprised of:--
(i) Minister Industries (ii)Minister for Law (iii)Minister for Agriculture (iv)Minister for Food (v)Secretary Industries (vi)Secretary Law Secretary Agriculture (viii)Secretary Food (ix) Any other member to be co-opted by the committee.
The Cabinet Committee concluded that a relocation policy should be introduced since relocation does not increase the crushing capacity of the overall sugar industry. It opined that notwithstanding the existing ban on the installation of new sugar mills, relocation was inevitable as per market dynamics. It observed that Districts like Rahim Yar Khan, Muzaffargarh, Rajanpur have improved environmental factors which can "sustain a change in cropping patterns. The Cabinet Committee considered the cultivation of sugarcane in Rahim Yar Khan, Muzaffargarh, Rajanpur, Bhakkar and concluded that <i> changes in the water table, better crop variety and other environmental factors justified a relocation policy. It also observed that it would be in the public interest to allow relocation</i>. Hence the Cabinet Committee concluded that relocation of sugar mills was necessary and a policy in support thereof was r commended. Consequently, the Impugned Notification set out the relocation policy while continuing the ban that no new sugar mill can be sat up in the Province. -
32. The significance of the ban is that no new sugar mill can be established nor can the licensed capacity of a sugar mill be enlarged. Consequently if a sugar mill wants to relocate to a new location that is if a sugar mill wants to establish itself at a new location, it would fall under the ban.
The Government has argued that relocation does not fall under the ban because the ban is for the establishment of new sugar mills only and not for functional mills since relocation does not change the overall production capacity of sugar mills the ban will not affect functional mills. This argument is flawed as the relocation of a sugar mill means the establishment of a new sugar mill in the local area which is regulated by the Ordinance. Furthermore since the ban is on the establishment of a new sugar mills and on increasing or enlarging the capacity of sugar mills, to argue that relocation is permissible since it does not change the production capacity of sugar, fails to address the matter in its totality as it does not address the establishment or location aspect of the matter. The Government has stressed on the fact that the relocation policy is necessary to protect the capital investment of the owners of sugar mills and to respond to change in market conditions. This is evident from the Summaries relied, upon. However, these reasons do not justify making relocation a way to shift into cotton growing areas because the policy of imposing the ban means that national interest overrides the capital investment requirements of any sugar mill and the need to respond to market conditions. Section 3 of the Ordinance mandates that individual requirements have to be weighed against national interest, general health of the people and causes of nuisance in the local area. The Notifications issued under Section 11 especially Notification dated 6.12.2006 means that 'a sugar mill cannot establish in a cotton growing area. So while the long standing policy of the ban prevents setting up mills in cotton growing areas, the relocation policy creates a way to defy the ban. In this way, the Impugned Notification does not benefit the public interest nor does it protect the national interest but to the contrary facilitates sugar mills to bypass the requirements of Section 3 of the Ordinance and totally ignore national interest. Further there appears to be no rational connection between the ban on establishing sugar mills and the relocation policy. Looking at in another way Section 3 of. the Ordinance requires a sugar mill to seek permission for establishing itself and the permission must be considered against the touchstone of national interest, public health and public nuisance for the local area The law itself emphasizes on the local area meaning the location of the sugar mill. The objective of the Ordinance read with the Notifications. under Section 11 has been to protect the cotton growing areas. The relocation policy steers away from the objective, of the Ordinance and the ban and allows sugar mills to relocate within the Province with no control over the location. This means that the Respondent sugar mills can set up in cotton growing areas even though the stated national interest is to the contrary.
Under the circumstances the only plausible explanation for introducing the relocation policy is to purportedly relax the effect of the 2006 ban so as to facilitate the relocation of the Respondent sugar mills.
33. Interestingly the Government of Punjab defended the ban on the establishment of sugar mills before the august Supreme Court in Civil Appeals Nos:1242 to 1245 of 2013 on the ground that new sugar mills should not be set up in cotton growing areas as it would encourage farmers to grow sugarcane in areas which would adversely affect the growth of, cotton crop in those areas. Para 4 of the judgment of the august Supreme Court sets out the arguments of the Government of Punjab as follows:-- He referred to a number of documents to show that sugarcane crop consumed considerably more water than cotton or wheat and that the installed capacity of the existing sugar mills was under utilized, therefore, if additional sugar mills were set up or the existing ones expanded it would encourage farmers to grow sugarcane in their vicinity which would be bought by the sugar mills and the growing of cotton or other crops would be discouraged. By referring to the documents on record, he stated that the cotton industry adds considerable value to the harvested cotton and a sizeable portion of the textiles manufactured from it are exported, earning considerable foreign exchange for the country, but the same benefits do not accrue by growing sugarcane and manufacturing sugar. Documents were also referred to show that there was, and is, a considerable shortage of cotton in the country which is adversely impacting the textile industry which has on the one hand reduced foreign exchange earnings and on the other resulted in valuable foreign exchange being spent on the import of raw cotton for consumption by the textile industry.
Reference was also made to reports to show that sugarcane as compared to other crops attracts more bacteria and insects which have an adverse impact on other crops. Under such circumstances, the Government had decided to stop the erection of new sugar mills as well as the expansion of existing ones and this decision of the Government, incorporated in the impugned Notification, was in the national interest which was also one of the stated factors to be taken into account when considering an application under Section 3 of the Act. Therefore, since every application for the setting up of a new sugar mill or the expansion of an existing one, would be contrary to the national interest, good governance and transparency mandated the issuance of the impugned Notification which had removed all discretion and prevented either favouritism or victimization.
He farther defended the ban on the ground that there was no mala fide or ulterior motive while imposing the ban and that the same was done in the national interest since sugarcane is a water intensive crop yet ground water sources have depleted and sugarcane areas will only worsen the situation. Further that sugarcane crop nourishes pests and bacteria which is detrimental to cotton crop. The august Supreme Court also heard the Cane Commissioner, Punjab who also opposed the lifting of the ban and the establishment of new sugar mills for the same reasons as given by the AAG. The Secretary of Agriculture also endorsed the views of the Government on the ground that lifting the ban would adversely affect the production of cotton. Hence the august Supreme Court concluded that not only the ban was justified but also its continuance was necessary. The learned AAG also referred to the comments filed in the writ. petition in which Civil Appeals Nos.1242 to 1245 of 2013 arose. The following reasons have been recorded in the judgment of the august Supreme Court of Pakistan:--
(a) At present, 46 sugar mills exist in the province and there is a deficit of about 35% between requirement and production of sugarcane crop. All the existing sugar mills are working below the installed capacity. The Punjab Province is already overcrowded with regard to sugar mills, therefore, sanction for establishment of new sugar mills would not be feasible and lead to over investment. b) Cotton is the backbone of our economy. It ensures economic security as its value added products contribute 60% to foreign exchange earnings. c) Sugarcane crop poses threat to cotton growing areas as it has very strong substitution effect for cotton. Proliferation of Sugar Mills in the Province would adversely affect production of cotton.
Government of the Punjab constituted and notified a Location Policy committee headed by the Chief Secretary, Punjab to deliberate upon the policy of Government regarding establishment of new sugar mills to maintain a balance between production of sugar and protection of cotton growing areas of the Province in the public interest. On recommendation of committee, ban was imposed on establishment of new sugar mills and enhancement of capacity of existing sugar mills throughout the province vide Industries Department's Notification dated 6.12.2006.
34. Clearly the Government of Punjab has taken an inconsistent and contradictory position before both the Courts. In the august Supreme Court while defending the ban on the establishment of sugar mills the Government of Punjab took the position that setting up new sugar mills in areas such as Rahim Yar Khan Multan, Rajanpur, Bhakkar is detrimental to the cotton crop and that cultivation of sugarcane crop poses a threat to cotton growing areas. It was also stated before the august Supreme. Court that sugarcane is a water intensive crop and since ground water sources have depleted, increase in the sugarcane crop will worsen the situation. The position of the Government before the august Supreme Court of Pakistan was that the establishment of new sugar mills was not in the national interest. However, before this Court, the Government of Punjab, while relying on the recommendations of the Cabinet Committee has argued that while historically the growth of sugarcane in some areas posed a threat to cotton and wheat, today the climate and the environment conditions have changed and as such the cultivation of sugarcane in areas like Rahim Yar Khan Multan, Rajanpur, Bhakkar would not be detrimental to cotton crop. They have also stated that the establishment of sugar mills in the aforementioned areas would not compromise or prejudice national interest. In fact they have urged that the cropping pattern should change as per market dynamics. When confronted with the contradictory position of the Government, the learned AAG appearing before this Court defended the position by relying on the fictional notion that relocation does not amount to establishment of a new sugar mill because it does not increase the total production capacity of sugar mill. In this regard, it is noted that the overall production capacity of sugar is not the driving force behind relocation or the location policy. The Respondent sugar mills have relocated to promote their commercial interest and business prospects. The new location is considered more suitable to business due to its environmental and geographical factors. The Respondent sugar mills want to relocate for better business prospects. Hence the relocation is motivated by personal interest and ignores the national interest in totality.
35. It is the fundamental duty of a Court to protect the integrity of the judicial process. A party cannot approbate and reprobate at the same time. When a party takes an inconsistent position in the same case or in a prior case, the principle of judicial estoppel should be applied. Judicial estoppel is an equitable doctrine which precludes a party from taking inconsistent positions before the Court. It protects the integrity of the judicial system and not of the litigant. It seeks to ensure respect for judicial proceedings and avoid inconsistency and abuse of process. Under the doctrine of judicial estoppal a court can stop a party from taking up contradictory stances because it is clearly inconsistent with the previous position taken by that party before another Court. The application of judicial estoppel depends upon the facts and circumstances of each case. When a party puts forth a position, as a matter of fact in one case and is successful in that assertion, that party is estopped from asserting a different position on the same facts in the second case.
Obviously the party who is to be estopped in the second case is the same party in the earlier case meaning that the party is the same in both cases. Furthermore the issue for which the party is estopped from asserting its facts must have some nexus in both proceedings. It is imperative that this equitable principle be applied so that a judicial process functions properly and effectively.
Litigants must approach the Court in a truthful manner especially if the litigant party is the Government. A party can always vigorously assert its position, but cannot misrepresent the facts in order to gain some advantage in the process. When a party has formally asserted a certain version of the facts in litigation, he or she cannot later change those facts because the initial version no longer suits him or her. Reliance is placed on the case titled Arkison v. Ethan Allen (160 Wn.2d 535 (Wash. 2007). The doctrine of judicial estoppel, in its most generic form, prevents a party from asserting a position in one legal proceeding, that directly contradicts a position taken by that same party in an earlier proceeding. To apply the principle of judicial estoppel, the Court must ascertain that a party has asserted' a contradictory position before another Court which position was accepted by that Court. The case titled New Hampshire v. Maine (532 U.S. 742 (2001) held that there are three conditions necessary to apply the principle of judicial estoppel. First, a party's later position must be clearly inconsistent with its earlier position. Second, courts should inquire whether the party has succeeded in persuading a court to accept its earlier position. And the third consideration is whether the party seeking to assert the inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.
Furthermore the literature on judicial estoppel clarifies that a party's change in its factual or legal position threatens to produce inconsistent decisions by the Courts. It reasons that judicial estoppel is necessary to protect the integrity of the court from the harm caused when a litigant engages in cynical gamesmanship, achieving success on one position yet arguing a different position in another case to satisfy an exigency of the moment. If a litigant is allowed to adopt contradictory positions in different courts it means that one court was misled or perhaps defrauded.
36.This principle is recognized in our jurisdiction in cases where the court finds that inconsistent legal pleas in juxtaposition to each other, in two proceedings, pertaining to same subject matter taken by the same counsel is not desirable. Reliance is on the case titled Habiba Kassam and others v. Habib Bank Ltd. (1989 CLC 1433). A litigant cannot be permitted to assume inconsistent positions in Court, to play fast and loose, to blow hot and cold, to approbate and reprobate, to the detriment of his opponent; and this doctrine applies not only to the successive stages of the same suit, but also in different suits. Reliance is placed on the cases titled Sheikh Gulzar Ali & Co. Ltd. and others v. Special Judge, Special Court of Banking and another (1991 SCMR 590), Noor Muhammad, Lambardar v. Member (Revenue), Board of Revenue, Punjab, Lahore and others (2003 SCMR 708), Overseas Pakistanis Foundation and others v. Sqn. Ldr. (Retd.) Syed Mukhtar Ali Shah and another (2007 SCMR 569) and on the case titled Amrital N. Shah v. A11a Annapurnamma (Andhra Pradesh)
(1959 AIR (A.P) 9:1958(2) An.WR 447:1958 ALT 584:1958 ILR (Andhra Pradesh) 509).
37.In the instant case, the position of the Government of Punjab is clearly inconsistent with its earlier position before the august Supreme Court where the ban of 6.12.2006 was challenged. The Government defended the imposition of the ban on the ground that if new mills are established in cotton growing areas, it will have a negative impact on the cotton crop and the water tables. It defended the continuance of the ban even today on the ground that cotton is the backbone of the economy and that the sugarcane crop poses a threat to the cotton crop in Multan, Bahawalpur, DG Khan, Rahim Yar Khan and Muzaffargarh. Yet before this Court they have stated that the environment has changed since 2006 and now the cotton crop and water tables are not threatened if sugar mills are established in Multan, Bahawalpur, DG Khan, Rahim Yar Khan and Muzaffargarh. They have also stated that relocation will not harm the cotton crop yet have argued before the august Supreme Court of Pakistan that the establishment of a sugar mill will harm the cotton crop, cotton cultivation and the textile industry. The plea of the Government of Punjab was relied upon and accepted by the august Supreme Court in its judgment dated 25.7.2016. Therefore it cannot now adopt a contradictory position before this Court. The matter in issue is related as it deals with the establishment of sugar mills and the location policy that was argued by the Government. Therefore there is a strong nexus in both the cases. The august Supreme Court of Pakistan considered the location policy wherein a ban was imposed and upheld the ban to protect national interest. In this case, the Government has justified the relocation policy even though there is a complete ban on the establishment of sugar mills. Hence, the Government of Punjab is barred from asserting that relocation of a sugar mill will not prejudice the national interest or that a policy1 facilitating relocation is necessary to promote the sugar industry since it has asserted its long standing policy of banning the establishment of sugar mills in the Province. The position taken before the august Supreme Court will be deemed as the correct factual and legal position of the Government of Punjab and will also be relied upon by this Court.
38. In view of the aforesaid, no sugar mill can establish in cotton growing areas as not only does it defy the ban but it also prejudices the national interest. The Impugned Notification creates a mechanism to avoid the ban by allowing sugar mills to relocate within the Province and in this case to relocate in cotton growing areas. The relocation policy undermines the basic intent for imposing a restriction on the establishment and enlargement of sugar mills in the Province. If new sugar mills cannot be established within the Province pursuant to the ban 3f 2006, a functional sugar mill cannot establish itself in a new area on :he pretext of relocation on the justification that it is permissible since :he overall sugar production is not enhanced. The cotton growing areas are protected for the collective benefit of nation. The august Supreme Court of Pakistan had declared the ban to be legal and in national nterest. This being the current position, the relocation policy fails to onsider all important aspects of the problem and leaves the national nterest hostage to the discretion of the relevant committee. A sugar mill s given a licensed capacity to operate and the need to relocate is not based on the need to enhance its licensed capacity. The Respondent sugar mills as well as the Government of Punjab have justified the need to relocate on geographical conditions, climate conditions and on the basis of the overall environment in the areas of Rahim Yar Khan, Muzaffargarh, Bahawalpur and Rajanpur. Therefore clearly its intended to allow sugar mills to function in cotton growing areas. In this case, it has validated the Respondent sugar mills establishment in cotton growing areas.
39. This brings us to another important aspect of the case. Public officers are trustees of public funds and public property and are expected to take decisions based on public interest. Reliance is placed on the case titled Pir lmran Sajid and others v. Managing Director/General Manager (Manager Finance) Telephone industries of Pakistan and others (2015 SCMR 1257). A Government notification or policy is not immune from challenge if it is demonstrated that the notification was issued for reasons against public or national interest. While exercising constitutional jurisdiction, this Court can look into the reasons for issuance of a policy where there are serious allegations of flouting transparency and good governance. There is no cavil to the fact that the Government can exercise its executive authority and formulate policies necessary for governance and that Courts generally do not interfere in policy matters. However, where there are elements of abuse of power, arbitrariness and violation of the process, this Court can look into the legality of the policy. The issue before this Court is whether the relocation policy was issued for national interest or for personal interest. The main allegation against the Impugned Notification is that it was introduced to benefit the business interest of the families of the Chief Minister of Punjab and the Prime Minister, of the country. A transparent and reasonable decision must be free from abuse of public office and from personal advantage. Where there is conflict of interest between private interest and public duty it must be clearly identified, appropriately managed and effectively resolved. This ensures public confidence in public institutions. A conflict of interest will arise where an official decision will impact a personal interest, financially or otherwise such that a public official is seen to have gained from that decision or is perceived to have gained from that decision. Where there is a conflict between a public official's interest as a private citizen and his duty as a public official, there is potential for a conflict of interest to arise. The jurisprudence on conflict of interest aims to ensure that private interest will not prosper from decisions taken in public office, while carrying out official duties and responsibilities. The mandate of any elected government is based on trust and public confidence. Both elements find its tools in transparency, good governance and fairness in the decision making process. Any conflict of interest, in fact or perceived will destroy public trust and malign the decisions making process.
40.In this case, the relocation policy has not benefitted or protected the national interest but is aimed to facilitate certain sugar mills, which happen to be owned by the families of the Chief Minister, Punjab and the Prime Minister of Pakistan. The deliberations on the relocation policy began in June, 2015 when a Cabinet Committee was formed to consider a policy on relocation of sugar mills in the Punjab. However prior to this, the process of relocation was under way by Ittefaq Sugar Mills Limited, Haseeb Waqs Sugar Mills Limited and Abdullah Sugar Mills Limited. Prior to June, 2015 the consistent position of the Government was that relocation and establishment of a mill are synonymous. The record shows that they considered it one and the same and rejected relocation to protect national interest. While maintaining the ban the Government carved out a relocation policy enabling the Respondent sugar mills to relocate on the pretext that relocation will not enhance the production capacity of sugar mills, hence it does not violate the ban. The timing of the' policy conveniently matches the timing of the relocation of the Respondent sugar mills.
Furthermore admittedly none of the sugar mills have permission to relocate or establish themselves at another location yet no action has been taken against any Respondent sugar mills.
In its defense the Government claims that show cause notices were issued to the Respondent sugar mills on account of establishing a new sugar mill without the prior permission of the competent authority. However, the said notices do not establish the vigilance of the Government but instead highlights the contradictory stance as they question the relocation on the ground that there is a ban on establishing new sugar mills. The Government took a contradictory stand before this Court to protect and rationalize its policy, however, there has been no rational justification for the relocation policy.
41. The decision making process in this case was not initiated in national interest or public interest.
The process was initiated to protect certain business interests at the expense of national interest and public interest. The fact that the Government of Punjab supports the ban imposed on establishing new sugar mills means that it has deliberated on the factors relevant to the establishment of new sugar mills within the Province and has accepted that cotton growing areas are to be protected and no sugar mill can be set up in those areas. It is important to note that the ban exists within the Province since 2006 to date and the Government has reiterated the necessity of ban before the august Supreme Court. The relocation of any sugar mill from one area to another is the establishment of the sugar mill in a new location which cannot be rationalized if there is a ban on the establishment of sugar mills. The districts of Rahim Yar Khan, Muzaffargarh, Bahawalpur and Rajanpur are cotton producing areas which have been protected for a considerable period of time through the location policy uncle the Ordinance. The Government in order to protect the interests of cotton growers as well as cotton crop has from time to time issued notifications to control the growth of sugar mills in cotton growing areas. With the ban in place, the decision of the Government is clearly to protect the cotton industry and cotton grower and all factors, environment, geographical and non-geographical relevant to the cotton industry and cotton crop become relevant when allowing the establishment of an industry in those areas. The shifting of the Respondent sugar mills specifically into cotton growing areas evidences their intent to defy the ban and the efforts of the Government to justify their relocation.
42.The matter does not end here. The Government not only designed a policy to cater to a few sugar mills but it also failed to take action against the Respondent sugar mills for establishing new sugar mills without any permission whatsoever required under the law. The Respondent sugar mills have failed to comply with the requirements of the environmental laws of the Province and have admittedly not taken the required permissions. In terms of Section 12 of the Act, no proponent of a project shall commence construction or operation unless he has filed with the Government Agency designed by Federal Environmental Protection Agency or Provincial Government Protection Agencies, as the case may be, or, where the project is likely to cause an adverse environmental effects an environmental impact assessment, and has obtained from the Government Agency approval in respect thereof. Admittedly the requirements of Section 3 of the Ordinance with respect to health and nuisance have not been looked into and the requirements of Section 12 of the Act have not been fulfilled. Yet three of the Respondent sugar mills are functional at the new location and one is in the construction phase without fulfilling the requirements of the Act or the Ordinance. The very commencement of the construction of the mills without filing an Initial Environmental Examination with the competent department and without approval on the Environmental Impact Assessm ent is illegal and in absolute contravention of the Act. This fortifies the view that the policy was issued for the benefit of the Respondent sugar mills and not for the public or national interest. Reliance is placed on the case titled Sheri-CBE and others v. Lahore Development Authority and others (2006 SCMR 1202). The Respondent sugar mills are therefore establishing sugar mills under the garb of shifting/relocation in clear violation of the Ordinance as well as the Act.
43.The facilitation of the Government has given the Respondent sugar mills the ability to circumvent the ban and establish sugar mills in areas where sugar mills prejudice and adversely affect the cotton crop. The relocation policy is therefore a tool established to grant personalized exemptions to the Respondent sugar mills to establish their sugar mills despite the ban. If at all any permission was to be granted, it had to be done prior to the construction of the sugar mills in the new location and any effort now to grant NOCs under the said policy for relocating would be a mockery of public trust, transparency and good governance. Therefore, the Respondent sugar mills are restrained from carrying out the business of sugar mills in their relocated premises.
44.The Petitioners have also challenged Notification No,AEA-III-3- 5/2011 (Vol-III) dated 4.12.2015 issued by the Government of Punjab, Industries, Commerce and Investment Department to the extent of clause 2(b) of the Second Impugned Notification. However the stated clause merely forms a committee to assess the impact of the transportation of sugarcane from the bordering districts of the Punjab to other provinces to determine loss of sugar cess. Hence at this stage there is no action of the Government which infringes upon any rights of the Petitioners. Therefore, the objection of the counsels for the Petitioners against the establishment of the committee is premature and not sustainable at this stage.
45.In view of the aforesaid, all these writ petitions are allowed to the extent of the relocation policy issued by the Government of Punjab which is not permitted under the law and is therefore struck down. However these petitions are dismissed to the extent of clause 2(b) of the Second Impugned Notification which merely forms a committee to assess the impact of the transportation of sugarcane from the bordering districts of the Punjab to other provinces to determine loss of sugar cess being premature and not sustainable at this stage. The Government should take necessary legal action against the Respondent sugar mills pursuant to the show cause notices issued to the Respondent sugar mills on account of their establishing new sugar mills without seeking the prior permission from the competent authority required under the law. In the Cornell Law Review, Volume 89 Issue 1 November, 2003,Article 3, titled Judicial Estoppel and Inconsistent Positions of Law Applied to Fact and Pure law by kira A. Davis. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.