Greater common good for industry

The Supreme Court has stated that even if there is some technical violation by an industry, the judiciary “needs to lean in favour of a particular view which subserves the economic interest of the nation. Conversely, the court needs to avoid that particular outcome which has a potential to create an adverse effect on employment, growth of infrastructure or economy or the revenue of the State.” These observations came in a long discussion on the interplay of economics and law in the judgment, Shivashakti Sugars Ltd vs Shree Renuka Sugar Ltd. The court set aside the judgment of the Karnataka High Court and allowed Shivashakti Sugars to continue to function despite a number of petitions against it. One of the contentious points was the rule under the Sugarcane Control Order that a new mill should not be set up within 15 km of an existing mill. Though the Shivashakti mill was set up near existing mills, it had earlier got approvals from all authorities. However, some rivals continued to oppose its functioning on various grounds. The apex court stated there was surplus sugarcane in the area and most mills were producing more than its capacity. Whether Shivashakti was operating within the 15-km area was also doubtful. Therefore, the Supreme Court exercised its extraordinary discretionary power under the Constitution (Article 142) to allow the mill to carry on its business. “We see that no purpose is going to be served in getting the unit closed. On the contrary, public purpose demands that the factory continues to function,” the judgment said.