SHAHID KARIM, J.---This constitutional petition brings a challenge to the order passed by the Director General Industries Prices, Weights and Measures Punjab, Lahore on a direction issued by this Court in W.P No.42617 of 2020, which was brought by the present petitioner and the petition was allowed in the following terms: "This petition is allowed. It is directed that the application filed by the petitioner under Section 3 of the Ordinance, 1963 shall be decided by the competent office duly delegated in this behalf by the Government of Punjab within a period of two months from receipt of order of this Court in terms of mandate of section 3 of the Ordinance, 1963."
2. Pursuant to the directions issued by this Court, the application filed under Section 3 of the Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963 ("Ordinance, 1963" ) was dealt with and decided. In conclusion, the decision made by the Director General was to the following ef fect: "AND NOW , THEREFORE, the learned counsel has put emphasis on conditions laid down in Section-3 of the Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963. To justify relocation, he has produced various letters issued by differe nt authorities such as the Director of Agriculture (CRS) Pakpattan Punjab, Under Secretary (Planning), Agriculture Officer (Extension) Punjab, Agriculture Officer (Extension) Markaz Channi Goth Bahawalpur and report of the Cabinet Committee. There is no cavil with the facts narrated by the learned counsel that requirements of Section 3 of the Ordinance are complied with into the matter . But matter of relocation has already been adjudicated upon at the level of Apex Court. Keeping in view the judgments of the superior courts, application of the petitioner cannot be processed at this stage. The petition is hereby disposed of."
3. From the portion of the impugned order set out above it is clear that the Director General formed an opinion from the facts brought forth in the application under section 3 that the petitioner had fulfilled the requirements of section 3 of the Ordinance, 1963. However , the Director General did not proceed any further on the pretext that the matter of relocation had been adjudicated by the superior courts and keeping in view those judgments, the application of the petitioner could not be "processed at this stage". Although the Director General did not specify the judgments of the 'superior courts which were in his contemplation at the time of the passing of the impugned order , doubtless, the Director General had in mind the judgment of the Division Bench of this Court reported as Messrs Chaudhry Sugar Mills Ltd. v. Province of Punjab and others (PLD 2017 Lahore 848) which was affirmed by the Supreme Court of Pakistan in Civil Appeal No.104213 of 2018 and the appeals filed by the petitioners were dismissed. Thus, the question which engages this Court in this petition is whether the holding of the Director General in the impugned order that notwithstanding that the petitioner fulfilled the requirements for setting up of a sugar mill at the location for which the application under Section 3 was made, the matter could not be further processed owing to the judgments of the superior courts, was a valid basis for refusal by the Director General.
4. In Messrs Chaudhry Sugar Mills Ltd., the question was regarding the relocation of certain sugar mills which intended to relocate and establish themselves in the south of Punjab from central Punjab. The findings of Division Bench of this Court are encapsulated in paragraphs 50 and 51 of the judgment and the learned Judges proceeded to hold that: "50. In case of change in circumstances i.e., ecology , economics, environment, etc, the Government is free to reconsider the ban in the light of section 3 of the Ordinance, if so advised. It is also clarified that in future if any sugar mill wishes to relocate or shift from one local area to another in Punjab, it can make an application under section 3, if there is no ban on the estab lishment of a new sugar mill. Any such application will be considered in accordance with the provisions of the Ordinance, especially section 3.
D. Whether the establishment of the Three Sugar Mills is in violation of the Punjab Environmental Protection Act, 1997 ?
51. Section 12 of The Punjab Environmental Protection Act, 1997 and Regulation 4 of the Pakistan Environmental Protection Agency Review of lEE and EIA Regulations, 2000 (--Regulations), read with item B(4) of the Schedule II require that a sugar mill with total cost of Rs. 100 million and above requires an Environmental Impact Assessment (EIA). EIA is mandatory before the commencement of the project, which starts with the financial firming up and physical construction of the project. In the present case no. Environmental Impact Assessment was undertaken.
Water scarcity and climate change are some of the most serious challenges faced by this country . These challenges closely tie in with national interest and health issues provided in section 3 of the Ordinance. Setting up of the Three Sugar Mills without an EIA approval under the law also renders the establishment of these mills illegal.
5. In the opinion of the Division Bench of this Court the government was free to reconsider the ban in the light of section 3 of the Ordinance, 1963 and in case any sugar mill sought to relocate or shift from local area to another in Punjab, it was obliged to make an application under Section 3 in case there was no ban on the establishment of a new sugar mill. While holding so, the Division Bench of this Court held the relocation notification dated 4.12.2015 to be ultra vires the Ordinance, 1963. It was also held to contravene the provisions of the earlier notification issued on 6.12.2006 ("the Notification") (and referred as the Ban Notification in the precedent) which is the document on which the petitioner has placed reliance for seeking to establish its sugar mill at the location described in the application under Section 3. Plainly , the Division Bench of this Court clarified that in future if any sugar mill was sought to be set up, a proper application under Section 3 of the Ordinance, 1963 was required to be made and a determination on that application was sine qua non to the setting up of a sugar mill. This can further be gleaned from the following observations:- "28. The permission required under section 3 of the Ordinance is for the establishm ent of an industrial undertaking in a local area. Therefore, when an existing sugar mill, located in Central Punjab (local area), is shifted or relocated to the South of Punjab (another local area), it is no different from a sugar mill being established for the first time in that local area. Relocation means --- to move to or establish in a new place; to become established in a new residence or place of business. The word -- establish under section 3 means to ---- set up on a firm or permanent basis or----start or create a new organization and is not concerned whether the establishment is totally new or, a result of relocation or shifting from another local area. Relocation or shifting, at best, can be a part of the business plan of an industrial undertaking as it signifies relocation or shifting of the mills or the plant and machinery , but has no relevance for the purposes of section 3 of the Ordinance, which only deals with the setting up or establishment of an industrial undertaking or mills in a local area. The vintage of the mills or the plant and machinery is not relevant. What is relevant is the protection of the local area and its residents and the effects of such establishment on National Interest. Establishment in the context of any local area amounts to setting up of a new industrial undertaking. Similarly , the word ---new sugar mill, under Ban Notification means new in the context of the local area and its residents, but not for the owners or proprietors of the industrial undertaking. It is of little significance for the local area and its residents or the national interest, if an existing industrial undertaking is being relocated and shifted to a new local area or is a totally new industrial undertaking. The purpose and focus of the law is to ensure organized and planned growth in the local areas of Punjab, hence every local area matters and establishment in any local area by an industrial undertaking has to be examined and evaluated afresh by considering the parameters provided under section 3 of the Ordinance.
29. The appellant sugar mills, even though they were relocating or shifting, for the purposes of the Ordinance, they were being established anew in the new local area (South of Punjab) and required prior permission of the Government under section 3 of the Ordinance. Thus, relocation/shifting of the sugar mill, infact amounts to, setting up and establishing a new sugar mill in the local area and is regulated under section 3 of the Ordinance. Relocation Notification, therefore, offends the Ban Notification."
The above observations were made in the contextual setting of the Ordinance, 1963 as well as by juxtaposing the Ban Notification and the Relocation Notification in order to clear the controversy surrounding the process. The Judges clarified that the provisions of Section 3 could not be made a dead letter or a fetish of it by an administrative act. This view was affirmed by the Suprem e Court of Pakistan in the appeals referred to above. The view taken by the Director General that since the matter has already been determined by the superior courts therefore, the Director General was constricted to exercise his powers while deciding the application under Section 3 of the Ordinance, 1963 is clearly erroneous and proceeds on a misconception of the judgment of this Court as well as that of the Supreme Court of Pakistan.
6. Firstly , the Notification provides that: "For Clause 3, the following shall be substituted.
"3. "No new sugar mill shall be set up and no enlargement in capacity of the existing Sugar Mills is allowed in the Province."
7. It can be seen from above that the notification merely makes an amendment in clause 3 and substitutes that clause with the existing clause in the notification earlier issued by the Govt. of the Punjab, Industries Department dated 17.9.2002. It would be proper therefore to refer to the original clause 3 in the notification of 17.9.2002 which reads as under: "3. No new Sugar Mill shall be set up and no existing Sugar Mill be enlarged in the Districts of Multan, Sahiwal, Vehari, Khanewal, Pakpattan, Lodhran, Bahawalpur , Rahimyar Khan, Bahawalnagar , D. G Khan, Rajanpur , Layyah, Muzaffargarh and Okara."
8. The only difference between the two clauses is that in the original notification it was stated that no new sugar mill shall be set up and no existing sugar mill shall be enlarged in certain districts whereas through the notification itself the condition was extended throughout the Province of Punjab. However , in order to properly appreciate the import of the original notification as well as the Notification, the Preamble of the original Notification ought to be adverted to which was in the following terms: "In exercise of the powers conferred upon him under Section 11 of the Punjab Industries (Control on Establishment and Enlargement) Act, 1963 and in the supersession of the Punjab Government Notification No.AEA-1 11-4-1/85 dated 26th October , 1986, amended upto 12th February , 2000, the Govt. of the Punjab is pleased to exempt all industries and areas from the provisions of section 3 of the said Act except as notified hereunder ."
9. Thus, the original notification was issued under the powers conferred upon the Governor of the Punjab by Section 1 1 of the Ordinance, 1963. Section 1 1, in turn, provides that: "11. Exemption.--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% "
10. Section 11 as set out above merely relates to exemption from all or any of the provisions of the Ordinance and confers the power on the Government to do so by notification in the official gazette. Therefore, what the original notification did was to exempt all industries and areas from the provisions of section 3 of the Ordinance, 1963 except those mentioned in the original notification which included industrial underta kings mentioned in clause 3 and therefore, the inference was that the setting up of and establishment of sugar mills was not the subject matter of an exemption in the original notification. As a necessary corollary , any person seeking to establish a sugar mill was required to go through the rigors of applying under Section 3 of the Ordinance, 1963 and thereafter it lies within the discretion of the Government based on the criteria mentioned in clause (b) of section 3 of the Ordinance, 1963 to either grant the request or to refuse it upon reasonable grounds. This is the true construction upon conjoined reading of the original notification and the Notification viewed in the context of the provisions of section 11 and section 3 of the Ordinance, 1963. The construction being put by the Director Gener al on the determination made by this Court as well as the Supreme Court of Pakistan does not chime with that determination and fails to take into account not only the provisions of the Ordinance, 1963 as also the clear import of the notifications issued pursuant to the powers conferred by the provisions of the Ordinance, 1963. In ordinary course, there is a restriction on the establishment of an industrial undertaking or its enlargement except with the previous permission in writing of the Government by virtue of section 3 of the Ordinance, 1963. This may be diluted by an exemption granted by the Government in terms of section 11 of the Ordinance, 1963. Currently , that exemption does not apply to the establishment of a sugar mill or enlargement of an existing sugar mill. Although the Notification has been referred as the Ban Notification in both the judgments referred to above, the ban merely relates to the freedom from exemption as contemplated by the origina l notification but does not mean that any person seeking to set up a sugar mill is completely debarred from applying to the Government for the purpose. If this view were allowed to prevail, then the entire statutory framework of the Ordinance, 1963 would be rendered nugatory and tantamount to conferring upon the Government the unbridled power to prohibit the setting up or the establishment of an industrial undertaking. Clause 3 of the original notification as well as the notification is not happily worded and is, at worst, an isolated drafting anomaly . It gives rise to a confusion which cannot be permitted to prevail so as to debar the future establishment of an industrial undertaking in the Province of Punjab. It could also have the unpalatable effect of making section 3 as redundant which cannot be the intention of the legislature. The discretion which is the sovereignty of choice, must always be deemed to vest in the Govt. of the Punjab to either allow or refuse the establishment of an industrial undertaking. No power vests in the Govt. of the Punjab to place a complete and sweeping ban on the establishment of industrial undertakings in the Punjab nor can any such power be culled out of a reading of the entire Ordinance, 1963 . The preamble enunciates the purpose of the law which is "to provide for the organized and planned growth of industries in the, Punjab." In fact, it was supe rfluous to insert clause 3 in the Notification at all. The effect would have been the same. To recapitulate; in ordinary circumstances, there is a prohibition on establishment of industrial undertakings in Punjab. In case a person seeks to establish an industrial undertaking, he must seek prior permiss ion from the Government which may be granted on objective grounds.
Thus, an overarching regulatory regime has been put in place for the purpose. This is only subject to the exemption from application of Section 3 under the powers conferred by Section 11. This, in essence, is the entire scheme.. It is plain and evident that the Government is not required to place a ban on establishment of industrial undertakings (nor has it done through the Notification). The statute itself has imposed such a ban and while doing so, has placed a discretion in the hands of the Governme nt to grant or refuse permission in a given case on rational basis. Read in this backdrop, clause 3 inserted through the Notification has no other meaning and purport but to hammer in the A statutory enterprise explicated above. The Notification does not use the word ban but merely states that "No new sugar mill shall be set up and no enlargement in capacity of the existing sugar mills is allowed in the Province".
Since an administrative act cannot subvert a statutory provision, the word "except in accordance with Section 3" must be read in to lend actuality to the terms of clause 3 in the Notification.
11. Learned A.A.G contended that the notification had been upheld by the Supreme Court of Pakistan in Tariq Khan Mazari and three others v. Government of the Punjab through Secretary Industries and 3 others (PLD 2016 SC 778). Firstly , in this petition the challenge is not to the legality of the notification and so the question does not arise for determination before this Court. There is no doubt that the Supreme Court of Pakistan upheld the notification and so nothing turns on the submissions made by the learned A.A.G. Some of the observations of the Supreme Court of Pakistan however are relevant and may be reproduced as follows: "...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. Whilst a notification prohibiting a particular class of industry as noted above may not be issued under section 11 of the Act, there is no reason why it could not be issued under section 3 of the Act, even though section 3 does not specifically mandate the issuance of such a notification."
12. Thus, the crux of the holding of the Supreme Court of Pakistan in Tariq Khan Mazari was that a person seeking to establish an industrial undertaking could submit an application under Section 3 which was to be dealt with on case to case basis. This is precisely what was done by the present petitioner and the dismissal of the application or the failure of the Director General to decide upon it finally was an abdication of the powers conferred upon him by section 3 of the Ordinance, 1963.
13. In the reply filed on behalf of the respondents, the alleged violation of the Supr eme Court's earlier order by the petitioner has been put forth as one of the grounds of deny the application under section 3. Suffice to say that no such ground was invoked by the Director General in holding that the ingredients of section 3 existed in the instant case. Secondly , such an alleged infringem ent may form the cause for separate proceedings but cannot be used as a ruse to reject the application. In the impugned order , the Director General did not reject the application but observed that his hands were tied by the decisions of the Superior Courts. The reply, therefore, sets up a new case different from the one given in the order under challenge.
14. In view of the above, this petition is allowed and the impugned order is set aside. Since the Director General found that on the particulars of the claim narrated in the application, the requirements of section 3 of the Ordinance, 1963 were met, the Director General shall proceed to process the case of the petitioner further for the establishment of sugar mill.