1. The petitioner is a medium class manufacturer of white writing, printing and newsprint paper. The petitioner seeks inclusion in Schedule I of the Newsprint Control Order, 1962. The object of such inclusion is that on being so included in the said schedule, a manufacturer is entitled to excise exemption. Thus, inclusion in the said Schedule would give a manufacturer of newsprint a competitive edge and non-inclusion would result in making it difficult for the manufacturer to match up with those who enjoy the excise exemption.

2. In this writ petition the petitioner has prayed for a writ of mandamus ordering and directing the respondent to withdraw the fresh condition imposed in the letter dated 30.5.2001 and to register the petitioner in Schedule I of the Newsprint Control Order, 1962 based on the conditions first laid down in the letter dated 16.1.2001.

3. The facts are that by an application dated 20.10.2000, the petitioner applied for its inclusion in Schedule I of the Newsprint Control Order, 1962. In response thereto, by a letter dated 16.1.2001 the respondent required the petitioner to submit, inter alia a test report in original from the Central Pulp and Paper Research Institute, (CPPRI), Saharanpur or any other laboratory recognised by the Bureau of Indian Standards (BIS) as to whether the paper manufactured by the petitioner conformed to IS: 1168-1999 which is the specification for newsprint paper after following the proper sampling procedure laid down by BIS. By a letter dated 6.2.2001 the petitioner informed the respondent that they are an ISO 9002: 1994 company and that various registered newspapers, namely, the Daily Tej, Amar Ujala, The Aj and Chena Vichardhara have also confirmed that the newsprint manufactured by the petitioner was satisfactory in terms of smoothness, run ability and printability on their printing machines. On 20.2.2001 the respondent required the petitioner to submit certificates as indicated therein from a Chartered Accountant and a Chartered Engineer in respect of the manufacture and supply of newsprint by them. The respondent also wrote directly to the aforesaid four newspapers requiring them to re-confirm that the paper supplied by the petitioner had been utilised as newsprint and had been found to meet their requirements fully. By a letter dated 5.3.2001, the petitioner, after recording that it had submitted all the relevant papers required for the purpose, informed the respondent that the inspection of the petitioners unit had been completed in the last week of February, 2001 and the final test result was likely to come at any time and requested for inclusion of its name in the said Schedule I of the Newsprint Control Order, 1962. By its letter dated 10.3.2001 the petitioner forwarded the test certificate from Indian Institute of Packaging, Delhi in original which, as per the petitioner, was issued after following proper sampling procedure as laid down by BIS. The certificate confirmed that the newsprint manufactured by the petitioner conformed to IS: 11688-1999. The petitioner further stated therein that it had completed all the documentation required in connection with the inclusion of the petitioner in Schedule I of the Newsprint Control Order, 1962. The petitioner requested that the same be expedited so that the petitioner is able to compete with the mills already registered/included in the said Schedule. The laboratory test reports, copies of which have been placed at pages 27, 28 and 29 of the paper book indicated that the samples of newsprint paper drawn on 26.2.2001 at the petitioners mills located in Muzaffarnagar, U.P. conformed to IS:1188-1999.

4. By another letter dated 17.3.2001 the petitioner submitted further documents which were required by the respondent. In this letter, it was clearly recorded that the petitioner was informed that the said four newspaper establishments had also sent their individual confirmations as sought by the respondent. The petitioner once again requested the respondent to expedite the case so that they were in a position to compete with mills who were already included in the said Schedule I. By a letter dated 30.3.2001 the respondent sought further clarifications from the petitioner, which the petitioner supplied by its letter dated 10.4.2001 and once again requested the respondent to expedite its case. The petitioner, thereafter, wrote another letter to the respondent on 27.4.2001. While all previous correspondence with the respondent was with Mr. C.R. Biswas, Under Secretary to the Government of India, Department of Policy and Promotion, Udyog Bhawan, New Delhi, this last letter dated 27.4.2001 was addressed to Mr. Jagdishan, the Joint Secretary. By this letter the petitioner wrote that it had applied for inclusion in Schedule I of the Newsprint Control Order, 1962 long back and that it had one by one complied with all documentation and queries. The petitioner further noted in the said letter that as a result of the delay in its inclusion in the said Schedule, it was unable to complete with units who were already included therein. Accordingly, the petitioner requested the said Joint Secretary to kindly look into the matter and expedite its case so as to enable the petitioner to be competitive and thereby allow it to survive in the newsprint business.

5. In response to this letter of 27.4.2001, the respondent (through the said Shri C.R. Biswas) informed the petitioner that its proposal had been examined by the Department and that it had been decided that the petitioner ought to get its paper tested by the CPPRI, Saharanpur. It was categorically mentioned in this letter that only on receipt of its report from CPPRI would the proposal of the petitioner be considered further. This, according to the petitioner, was a complete volte-face inasmuch as per the original letter dated 16.1.2001 the petitioner was required to submit a test report of CPPRI or any other laboratory recognised by Bureau of Indian Standards. Being aggrieved by this change in stand of the respondent, the petitioner once again wrote a letter dated 14.5.2001 detailing the circumstances under which its report from the Indian Institute of Packaging was obtained and the fact that this was well within the knowledge of the respondent and that the respondent had at no prior time objected to it was highlighted. It was mentioned in the said letter that while other mills who had applied around the same time the petitioner had applied had already been included in Schedule I on the basis of test certificates issued by IIP and/or other Institutes other than the CPPRI and that the new stand of the respondent in insisting upon a test report from CPPRI would amount to discrimination against and singling out of the petitioner. The petitioner, therefore, requested the respondent to honour the test report issued by the Indian Institute of Packaging (IIP) and to include its name in the said Schedule I without further delay.

6.Another similar letter of protest against the sudden change in stand of the respondent was written by the petitioner to the respondent on 28.5.2001. In response to these letters and in particular the letter of 14.5.2001, the respondent through the said Mr. C. R. Biswas sent the impugned letter dated 30/31.5.2001, the contents whereof read as under:

To

M/s. Balaji Cellulose Products Limited,

16-A, New Mandi

Muzaffarnagar - 251001 (UP)

Subject: Inclusion of the name of your Mill in Schedule-I to Newsprint Control Order, 1962.

...............

Dear Sir,

I am directed to refer to your letter dated 14-5-2001 on the subject mentioned above and to say that the procedure followed for determining the grade of the printing paper while considering, the request of the Mill for inclusion of its name in Schedule I to NCO, 1962 has been reviewed keeping in view the past experience in this regard and other relevant aspects. It has been decided that with a view to assess the grade of the newsprint more accurately the sample of newsprint should be got tested from CPPRI, Saharanpur, invariably/simultaneously in addition to the testing done by any of the other institute recognised for the purpose.

You have, therefore, been advised to obtain a Test Report from CPPRI also.

It is mentioned that the decision is a general one applicable to all the Mills seeking inclusion in Schedule-I to the Newsprint Control Order, 1962.

You are, therefore, requested to do the needful to enable this Department to process your proposal further.

This issues with the approval of the Joint Secretary concerned in this Department.

Yours faithfully,

Sd/- C.R. BISWAS

Under Secretary to the Government of India.”

7. The grievance of the petitioner is that while the original letter of 16.1.2001 permitted the petitioner to get the test report of CPPRI or any other institute recognised by the Bureau of Indian Standards, the impugned letter of 30/31.5.2001 insisted on the test report from CPPRI. It is the petitioners case that, apart from the fact that the petitioner having fully complied with the original terms, new terms could not be imposed, the petitioner was singled out and discriminated against inasmuch as, according to the petitioner, a number of paper mills who had applied during the same period had been included in the said schedule-I. In particular, vide notification dated 26.4.2001, Ajanta Paper and General Products Ltd. was included in the said schedule and the condition for testing by CPPRI which had first been imposed have been waived by the Respondent and the test report from IIP was accepted.

8. In response to these allegations, the respondent, as indicated in its counter affidavit, vehemently denied that the condition of obtaining a test report from CPPRI, Saharanpur in the case of Ajanta Paper and General Product Ltd. had been waived. It is categorically stated in paragraph 17 of the counter affidavit that this unit along with other units have also been asked to get the quality of their Newsprint tested by CPPRI, Saharanpur. It is further indicated in paragraphs 19 (A to E) of the counted affidavit that the condition of getting the quality of newsprint manufactured by a Mill, seeking inclusion in Schedule I to Newsprint Control Order, 1962, tested from CPPRI, Saharanpur had since been imposed on all the Mills including those which had already been granted this benefit. It is further indicated in the counter affidavit that the Department had already written in this regard to the Mills who have been extended this facility in the past. Accordingly, it is submitted by the respondent that the petitioner has not been singled out or discriminated against as alleged.

9. The circumstances under which testing by CPPRI, Saharanpur became necessary are indicated in paragraph 12 of the said Counter Affidavit which is set out herein below:

The contents of Para 12 are denied and are specifically wrong and incorrect. In view of certain complaints regarding quality of newsprint manufactured by some Mills which had been included in Schedule I of the Newsprint Control Order, 1962 the Department had under consideration for quite some time a proposal to review the procedure regarding testing of newsprint manufactured by the Mills seeking inclusion as also those already included in Schedule I of the Newsprint Control Order, 1962 which provides for grant of certain benefits in excise duty to the Mills, after considering all the relevant aspects, the Department decided to lay down that all such Mills would be required to have the quality of their Newsprint tested by CPPRI, Saharanpur apart from another Institute like, Indian Institute of Packaging (IIP), Institute of Paper Technology (IPT) Saharanpur. The decision also applies to those which had already got the benefit of Newsprint Control Order, 1962. Thus although the Government had earlier given the benefit on the basis of Test Reports submitted by IIP or IPT Saharanpur, it was decided to get the quality of newsprint tested simultaneously from CPPRI, Saharanpur, and one of the Institutes like IPT, Saharanpur or IIP located in major cities of the

country. The question as to what procedure should be followed falls within the administrative competence of the Department of Industrial Policy and Promotion and the decision was taken after taking into account the relevant aspects of the matter. The decision is based on valid considerations. There is thus no discrimination against the Petitioner as the Government had asked all the Units seeking the benefit of Newsprint Control Order, 1962 as well as those which have already got the benefit to get their Newsprint tested by CPPRI, Saharanpur, invariably. Sample copies of communications No.4(2)/2000-Paper and No. 4(12)/2000-Paper issued in May, June, July/August, 2001 in this connection are Annexed as (R-II, R-III). Thus, the decision is fair and equitable and is based on a proper rationale and not on any malafide or extraneous consideration as alleged by the Petitioner.

10. In the course of the arguments learned counsel for the respondent produced the original file particularly with regard to the requirement of testing by CPPRI. From the noting of the said Mr. C.R. Biswas dated 26.4.2001 which has been approved subsequently by the Joint Secretary on 27.4.2001 the entire history with regard to the testing by CPPRI is indicated. The same is set out herein below:

We have been extending the benefit of Excise Duty exemption by including the names of various newsprint manufacturing units in Schedule-I to Newsprint Control Order 1962. We are taking into account following criteria for determining the inclusion of Paper Mills in Schedule-I to NCO 1962.

(a) whether the printing paper is of grade prescribed by the BIS for newsprint; and

(b) the mill has been supplying substantial quantity of paper to the newspapers during the last 2-3 years and the quality of the paper supplied is acceptable to the newspaper industry,

OR

the mill has made specific investment to produce newsprint grade paper.

On criteria (a) we had advised Paper Mills seeking exemption, by our letter No.4(18)/94-Paper dated 17-01-1995, that a Test Report in original from Central Pulp and Paper Research Institute, Saharanpur or from any other Laboratory recognised by Bureau of Indian Standards has to be submitted to the effect that the paper manufactured by the applying firm conforms to IS:11688-1986 (now it is IS:11688-1999) which is the specification for newsprint paper, after following the proper sampling procedure as laid down by BIS. In the endorsement of aforementioned letter addressed to CPPRI, Saharanpur, they were requested to ensure that either a person should be deputed from CPPRI for collecting the sample or some other suitable procedure may be followed to ensure that paper sampling procedure is done as per the BIS Standard. Only after the prescribed procedure for sampling has been followed should the paper be tested.

However, it appears that none of the Mills follow the procedure strictly. Usually the samples drawn by the Mills are sent for testing to the Institute of Paper Technology, Saharanapur, a Department of Roorki Engineering, University and Indian Institute of Packaging (a grantee Institution of the Ministry of Commerce and Industry, Department of Commerce) having Testing Centres/Laboratories in various large cities like Bangalore, Chennai, Mumbai etc. It is felt that IPT, Saharanpur and IIPs may not have the required expertise and calibrated instruments for testing the paper samples. In the past, only a few samples were received by CPPRI and in most of the cases Test Reports indicated that these paper samples did not conform to BIS specifications. In view of this, CPPRI has proposed that we may advise the concerned Mills, seeking inclusion of their name in Schedule-I to NCO 1962 for getting exemption from Excise Duty. Since there is a possibility of evading excise duty by Units manufacturing writing and printing paper by declaring themselves Newsprint manufacturing Units to get the aforementioned Excise exemption facility, the proposal of CPPRI may be considered in right earnest. This would be a step forward to have some check in the present situation of Units having multi-manufacturing capability, i.e., having installed plant and machinery capable of manufacturing both writing and printing paper and newsprint.

The sole purpose of the proposal is that CPPRI has to be involved in all Test Reports. An added advantage in the measure is that CPPRI would earn some revenue.

Submitted for consideration please.

Sd/- C.R. BISWAS

26-04-2001.

11. The learned counsel for the petitioner submitted that the notings are vague and do not indicate the specific particulars from which they emanate. According to the learned counsel for the petitioner the policy in any event is merely directory and not mandatory and this is so because it does not provide any consequence in case of failure to adhere to the same. In support of this contention the learned counsel has referred to the decision of the Supreme Court in Topline Shoes Ltd. v. Corporation Bank IV (2002) SLT 235=AIR 2002 SC 2487 (Paragraphs 8 and 9). The learned counsel has further submitted that the stand of the respondent apart from being discriminatory is per se actuated by mala fides and the policy is a mere mop up exercise and should apply prospectively a part of fresh eligibility criteria applicable to fresh applications received after 27.4.2003.

12. From the aforesaid facts and circumstances, it is clear that the respondent originally had the policy of permitting inclusion of the names of mills in the said Schedule I on their submitting test reports of either the CPPRI or of any other recognised institute recognised by the Bureau of Indian Standards. This policy, as it appears from the notings and the counter affidavit, has been changed. The policy now is that whether it is a mill whose name is already included or it is one which seeks inclusion in the said Schedule I, they all have to obtain test reports from CPPRI in addition to test reports from other recognised institutes. This, being the case, the question of the new policy being applicable prospectively and not retrospectively as submitted by the learned counsel for the petitioner, does not arise. This is so because even if it is assumed that the petitioner is entitled to have its name included in Schedule I it would still, under the new policy which admittedly would be applicable from 27.4.2001 onwards, require to submit a test report from CPPRI because this requirement, as stated in the affidavit of the respondent, is a requirement which has to be complied with not only by all those seeking inclusion but also by those already included.

13. It is well settled that this court does not undertake and should not undertake review of policy decisions of the Government under Article 226 of the Constitution. Whether the test reports are to be provided by institute A or institute B is not the concern of this Court. Nor is this Court well conversed with scientific or technical matters in this regard. All that this Court has to see is that the action complained of is not arbitrary, unreasonable, unjust or unfair. If there are reasons for an

action and if the action is not discriminatory but is applicable to all then this Court will not and should not interfere. In its decision in M.P. Oil Extraction and Anr v. State Of M.P. and Ors : (1997) 7 SCC 592 [LQ/SC/1997/933] , the supreme court has cautioned against interfering with policy decisions of the government. It observed that the executive authority of the State must be held to be within its competence to frame a policy for the administration of the State. Unless the policy framed is absolutely capricious, not being informed by any reason whatsoever, or can be clearly held to be arbitrary and founded on mere ipse dixit of the executive functionaries thereby offending Article 14 of the Constitution or such policy offends other constitutional provisions or comes into conflict with any statutory provision, the Court cannot and should not out step its limit and tinker with the policy decision of the executive functionary of the State. In the aforesaid decision, the supreme court categorically held that:

This Court, in no uncertain terms, has sounded a note of caution by indicating that policy decision is in the domain of the executive authority of the State and the Court should not embark on the unchartered ocean of public policy and should not question the efficacy or otherwise of such policy so long the same does not offend any provision of the statute or the Constitution of India. (para 41)

If there is an objective and rational foundation for the fixation of royalty, the Court will not interfere with the exercise of governmental decision by itself undertaking an exercise to find out as to whether better fixation was possible or not. It needs to be noted that in matters of economic rights and policy decision, the scope of judicial review is limited and circumscribed. (para 46)

Again in Association Of Industrial Electricity Users v. State Of A. P. and Ors., II (2002) SLT 460: (2002) 3 SCC 711 [LQ/SC/2002/325] , the supreme court held that:

Fixing a tariff and providing for cross-subsidy is essentially a matter of policy and normally a court would refrain from interfering with a policy decision unless the power exercised is arbitrary or ex facie bad in law.

14. I find that there is no arbitrariness or unreasonableness on the part of the respondent to insist upon testing being done by CPPRI, Saharanpur. This change in policy is not without basis or reason. It is neither capricious not discriminatory. All mills, those already included in the said Schedule I and those seeking such inclusion, are now required to have their newsprint sampled and tested by the CPPRI. There is no scope for the petitioner to call this discriminatory. In view of the aforesaid decisions of the supreme court, it is clear that this is not a case where interference with the policy decision is called for.

15. As the requirement of testing by CPPRI has been made compulsory for all, the arguments against retrospectivity are also not tenable. Those who fail to meet the standards as per the test would either not be included in the said Schedule I or if already included would be removed there from. The consequences of not meeting the standards are severe and accordingly, the entire argument of the learned counsel for the petitioner on the question of the policy being merely directory and not mandatory is also untenable.

16. In view of the aforesaid discussions the petitioner is not entitled to any of the reliefs prayed for and the writ petition is, accordingly, dismissed. There shall be no order as to costs.