2010 (11) TMI 859 - SC - Indian Laws

Whether the policy has been framed by the legislature or the executive and in either case there should be judicial restraint? Held that - Appeal allowed. The Court must maintain judicial restraint and not ordinarily encroach in the domain of executive or legislature. There should be judicial restraint in fiscal and economic regulatory measures. The State should not be hampered by the Court in such measures unless they are clearly illegal or unconstitutional. All administrative decisions in the economic and social spheres are essentially ad hoc and experimental. Since economic matters are extremely complicated this inevitably entails special treatment for distinct social phenomena. The State must therefore be left with wide latitude in devising ways and means of imposing fiscal regulatory measures, and the Court should not, unless compelled by the statute or by the Constitution, encroach into this field.

Issues Involved:
1. Validity of the Press Note dated 31.08.1998 and Notification dated 11.09.1998.
2. The impact of the High Court's quashing of the Press Note and Notification.
3. The legislative and executive powers to de-license the sugar industry.
4. Judicial review of economic policies.

Detailed Analysis:

1. Validity of the Press Note dated 31.08.1998 and Notification dated 11.09.1998:
The High Court quashed the Press Note No. 12 dated 31.08.1998 and Notification SO 808(E) dated 11.09.1998, which de-licensed the sugar industry under Section 29B of the Industries (Development and Regulation) Act, 1951. The Supreme Court examined the historical context and the legislative intent behind Section 29B, which allows the Central Government to exempt any scheduled industry from the provisions of the Act if it is in the public interest. The Court noted that the legislative policy is clearly stated in the Act, and the delegation of power to the Central Government is not excessive. The Press Note and Notification were issued as part of the liberalization policy to promote industrial growth.

2. The impact of the High Court's quashing of the Press Note and Notification:
The High Court's decision to quash the Press Note and Notification had significant implications, including the potential illegality of sugar industries established post-11.09.1998 and jeopardizing substantial investments. The Supreme Court noted that the de-licensing was a well-considered step aligned with the liberalization policy. The Court highlighted that the Delhi High Court had upheld the validity of the Press Note in a similar case, and subsequent amendments to the Sugarcane (Control) Order, 1966, addressed the issues raised.

3. The legislative and executive powers to de-license the sugar industry:
The Supreme Court emphasized that the executive power of the Union of India is co-extensive with its legislative power under Article 73(1) of the Constitution. The Court disagreed with the High Court's view that de-licensing required legislative approval, stating that the executive has the authority to issue notifications under Section 29B without needing Parliament's approval. The Court reiterated that the power to frame and withdraw policies lies within the executive's domain unless there is clear illegality or constitutional violation.

4. Judicial review of economic policies:
The Supreme Court stressed the importance of judicial restraint in matters of economic policy, citing precedents that courts should not interfere with policy decisions unless they are shockingly arbitrary or violate statutory or constitutional provisions. The Court noted that economic and fiscal regulatory measures are complex and best left to experts in the executive branch. The Court concluded that the Press Note and Notification were validly issued and set aside the High Court's judgment.

Conclusion:
The Supreme Court allowed the appeal, upheld the validity of the Press Note dated 31.08.1998 and Notification dated 11.09.1998, and emphasized judicial restraint in reviewing economic policies. The Court recognized the executive's authority to de-license industries under Section 29B of the Act, aligning with the broader liberalization policy.

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