Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Companies Law Companies Law + HC Companies Law - 1989 (9) TMI HC This

  • Login
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

1989 (9) TMI 343 - HC - Companies Law

Issues Involved:

1. Refusal of permanent registration as a Small Scale Industrial (SSI) unit.
2. Requirement of obtaining a no objection certificate from the Pollution Control Board.
3. Necessity of an industrial license from the Government of India under the Industries (Development and Regulation) Act, 1951.
4. Application of the principle of promissory estoppel.

Issue-Wise Detailed Analysis:

1. Refusal of Permanent Registration as a Small Scale Industrial (SSI) Unit:

The petitioner, a company engaged in manufacturing Indian made foreign liquor, was initially granted provisional registration by the District Industries Centre (DIC), Khargone. The company completed the factory construction and commenced production within the provisional registration period. However, the DIC later refused permanent registration, citing a ban on manufacturing alcohol by the Government of India. The court noted that the petitioner had complied with all necessary formalities and invested substantial resources based on the provisional registration. The refusal was challenged on the grounds that the provisional registration should automatically convert into permanent registration upon commencement of production. The court found that the refusal was unjustified, especially since the petitioner had met all requirements and the provisional registration implied an assurance of permanent registration.

2. Requirement of Obtaining a No Objection Certificate from the Pollution Control Board:

The petitioner applied for a no objection certificate from the Madhya Pradesh Pollution Control Board (Mandal), which was initially rejected due to the absence of a license from the Directorate General of Technical Development (DGTD). The court observed that the bottling plant did not fall under the category of highly polluting industries, and thus, the requirement for pollution clearance was not applicable. The court directed that the application for pollution clearance, pending with the EPCO Cell of the Director of Industries, should be forwarded and decided promptly.

3. Necessity of an Industrial License from the Government of India under the Industries (Development and Regulation) Act, 1951:

The respondents argued that the petitioner needed an industrial license from the Government of India under the Central Act, as the manufacturing of liquor was a scheduled industry. However, the petitioner contended that such a license was unnecessary since the unit employed fewer than 50 workers. The court referred to the Supreme Court judgment in State of M.P. v. Nandlal Jaiswal, which held that an industrial license under the Central Act was not required for units employing less than 50 workers. The court concluded that the petitioner's unit, with fewer than 50 workers, did not need the license, and the refusal of permanent registration on this ground was invalid.

4. Application of the Principle of Promissory Estoppel:

The petitioner argued that the government was estopped from refusing permanent registration based on the principle of promissory estoppel. The company had altered its position by investing significant resources in reliance on the provisional registration and assurances of permanent registration. The court agreed, noting that the petitioner had established the unit and commenced production based on the provisional registration and government assurances. The principle of promissory estoppel applied, preventing the government from retracting its promise of permanent registration.

Conclusion:

The court allowed the petition, directing the State Government to forward the petitioner's application for pollution clearance to the Pollution Control Board within a month and for the Pollution Control Board to decide on the application within a month thereafter. The State Government was also instructed to grant permanent registration to the petitioner within three months, considering that the main objection regarding the necessity of a license under the Central Act was invalid. The parties were ordered to bear their own costs, and the security deposit was to be returned to the petitioner after verification.

 

 

 

 

Quick Updates:Latest Updates