Apex court upholds delicensing of sugar industry

The Supreme Court has upheld a 1998 notification of the union government unshackling the country's sugar industry from 'licence raj'.

Setting aside a 2006 order of the Allahabad High Court order, which rejected the 1998 notification, the apex court said, "There should be judicial restraint in fiscal and economic regulatory measures."

A Bench of justices Markandey Katju and Gyan Sudha Mishra scrapped the high court's order, agreeing with petitioner Bajaj Hindustan Ltd's contention that it virtually forced the sugar industry back to 'licence raj' during which a sugar plant, in fact any industrial plant, had to be opened only with government's prior permission, involving a lot of red tapism and often corruption.

"In our opinion, the union government's September 1998 notification was validly issued under section 29B of the Industries (Development and Regulation) Act, 1951," said the Bench.

"Accordingly, the high court's judgment cannot be sustained and it is hereby set aside," the Bench added.

The Bench annulled the high court's verdict, saying "the state should not be hampered by courts 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."

Noting that "economic matters are extremely complicated", the Bench said "the state must be left with wide latitude in devising ways and means of imposing fiscal regulatory measures and the courts should not encroach into this field."