JUDGMENT A.C. Qureshi, J.

1. The petitioner in this petition is a Company carrying on the business of production of leather board and other business activities in the backward area at Sajwaya and Ekalduna in Distt. Dhar. The State of Madhya Pradesh have declared certain districts as backward districts and Dhar is one of those districts, wherein certain concesssions like exemption from certain levies and provision for subsidy from various departments and similar other facilities have been provided by the Government to prompt the industrialists to instal their industries with an object that if the industries are set up in such backward districts, the living standard of the people of the backward area would be improved.

2. The petitioner-company applied for provisional registration on 3-8-1984 as a Small Scale Industry, to the respondent No.4, for setting up a liquor industry at village Ekalduna, district Dhar. The respondent No. 4, General Manager, Industries Deptt. District Industries Centre, Dhar after considering the application, issued a provisional registration to the pettioner-company. The petitioner-company was also granted a letter of Intent for the establishment of the liquor manufacturing industry by the Secretary the M.P. Government, Separate Revenue Department, Bhopal vide letter dated 13-12-1984. After receiving the aforesaid registration and letter of Intent, the petitioner company started construction work of the aforesaid Industry. The petitioner-company also kept the concerned Departments informed of the progress of the construction work and also obtained financial assistance from other fiancial institutions. As the provisional registration of the ompany was to expire on 3-8-1985, the petitioner-company applied for extention of the registration on 23-7-1985. Thereafter, vide An-nexure P. 4-A, the petitioner-company applied for permanent registration on 7-10-1987.

3. On 31-7-1985 the respondent No. 4 asked the petitioner-company to produce the licence from the Central Government, in reply to which on 7-8-1985 the petitioner informed the respondent No. 4 that the industry of the petitioner does not fall within the purview of the Central Government as the employees in their factory are less than 50 in number and as such it is not an 'industrial undertaking' as defined in the Industries (Development and Regulation) Act, 1951. When the matter pertaining to obtaining of Central Government licence was pending, the petitioner-company was granted a clearance certificate by the M. P. Pradushan Niwaran Mandal. The concerned letter of the M.P. Pradushan Niwaran Mandal was filed by the petitioner, vide letter Annexure P9. Thereafter on 20-12-1985 the petitioner-company made a representation to the Chief Minister, a copy of which is Annexure P-10. The clearance from the M.P. Pollution Control Board, Bhopal under Sections 25/26 of the Water (Prevention and Control of Pollution) Act, 1974 has been filed as Annexure P-12, and vide Annexure P-13 the Pollution Control Board granted clearance under Section 21 of the Air (Prevention and Control of Pollution) Act, 1981. The industry was completed by Sept. 1986. The D-II licence was also issued to the petitioner-company, a copy of which was sent to respondent No. 4 on 24-3-1987.

4. The grievance of the petitioner-company is that despite the fact that the industry was completed and D-II license was granted, the respondents did not issue a permanent registration to the petitioner company in spite of its repeated requests on 28-7-1987 and 24-8-1987. The petitioner-company has also annexed certificate with the petition received from different, departments which are detailed in para 16 of the petition. The petitioner-company has got its claim of capital subsidy registered with the respondent No. 4 and it also made an application to respondent No, 4 for opting the scheme of defendant of payment of sales tax on 7-10-1985. The respondent No. 4, vide its letter dated 7-10-1987 informed the petitioner that the eligibility certificate can only be issued after a photostat copy of the permanent registration is produced. The petitioner-company claimes that although the petitioner-company is a Small Scale Industry and fulfills all conditions which are requisite for registration of such an industry and has completed all the formalities and commenced its trial production on 23-7-1987 and after that commercial production on 25-9-1987, still no permanent registration has been granted to the petitioner-company for want of which the preferential supply of raw materials and other subsidies are not being made available to the petitioner. For the same reasons the respondent No. 4 has refused allotment of coal to the petitioner.

5. The case of the petitioner is that the investment in plant and machinery of the petitioner company on the industry in question is Rs. 25.37 lacs which is below the limit fixed by the department and the unit would be run by workers less than 50 in number. Therefore, the provisions of the Industries (Development and Regulation) Act, 1951 do not apply. As such there is no legal hurdle in granting permanent registration. Still the respondents are not issuing the permanent registration to the petitioner-company, as a result, depriving the petitioner of all the benefits to which it is entitled under the scheme of the Govt. of M.P. The petitioner has also averred that at other places in M.P. the respondents have granted permanent registration to similarly situated industries, but have refused to grant the same to the petitioner, which is discriminatory. Though the State Government is being benefited by way of revenue and skilled and unskilled workers are getting employment in the factory as a result of which there is improvement of the backword area, permament registrtion has not been given to the petitioner-company, thus depriving it from all the benefits to which it is entitled. It has also been averred that if the permanent registration is not immediately issued to the petitioner-company it will not be possible for the company to run the industry at such a remote place for want of incentives like power subsidy, interest subsidy, capital subsidy, raw material facilities and sales tax deferment.

6. The petitioner-company has filed this petition under Article 226 of the Constitution of India for issuance of a suitable order, writ or direction against the respondents compelling them to issue a permanent registration to the industry set up by the petitioner and with a further direction to provide all incentives and benefits which the petitioner company would have enjoyed by virtue of permanent registration.

7. The claim of the petitioner-company has been resisted by respondents Nos. I, 2, 3 and 4 mainly on the ground that the Government of M.P. in the Separate Revenue Department issued letter of intent for grant of licence in Form D-II under the M.P. Excise Act and the Rules made thereunder for establishing a plant for manufacture and bottling of Indian made Foreign Liquor in Dhar District, vide Annexure-P3 of the petition. However, there is a specific condition in Annexure-P3 as under:

"It will be your sole responsibility to obtain any other licence required for your project under the Act, Rules, Regulation and Orders of Government of M.P. as well as Government of India."

As such it was the responsibility of the petitioner to obtain the licence from the Government of India, Ministry of Industry under the Industries (Development and Regu lation) Act 1951 (hereinafter referred to as the Central Act of 1951) as the item manufactured by the petitioner falls in Schedule-IV of the Special Regulation of the Act. A copy of Schedule-IV is also filed as Annexure-R-2. Similarly, condition mentioned at Serial No. 4 in Small Scale Industries provisional registration was not fulfilled by the petitioner and as such the petitioner is not entitled for permanent registration. As condition No. 4 of the provisional registration of obtaining a licence from the Central Government has not been fulfilled by the petitioner-company, the petitioner was not granted a permanent registration. As regards the construction of the Company it was the responsibility of the Company not to start construction and take other steps for establishment of the industry perior to fulfilment of conditions Nos. 1 to 4 indicated in SSI provisional registration. As a result of non-compliance of the conditions of provisional registration, the petitioner was also denied capital subsidy and sales tax deferment payment facility.

8. It has further been averred by respondents Nos. I to 4 that the item manufactured by the petitioner falls within the purview of the Central Act of 1951. As per Clauses 1, 3, 5 of the Licensing Parameters (Policies and Procedure) an entreprenure engaged in manufacture of any item covered by Schedule IV with an investment in fixed asset not exceeding Rs. 35 lacs can seek registration with the Director of Industries of the respective States. For purpose of availing certain benefits admissible to small scale industry units they have to secure suitable certificate from the Administrative Ministry. As the petitioner has failed to obtain the suitable certificate from the Administrative Ministry, the petitioner is not entitled to any benefits available to the Small Scale Industry. Although the State of M.P. have sponsored and declared some incentives for encouraging new industries still the petitioner-company cannot avail of such benefits unless it fulfills the conditions of the provisional registration.

9. The petitioners by way of rejoinder has submitted that although one of the conditions of the provisional registration is that the petitioner has to secure all the necessary licenses from the Central Government, but this does not mean that the petitioner would be compelled to obtain a license from the Central Government even though legally the same is not applicable and also not required by law. Whatever licenses and certificates are required, the same were obtained by the petitioner as stated in para 16 of the petition. The respondents have clearly admitted in the return that the petitioner fulfills all the conditions of a small scale industry, but only because the licence from the Central Government has not been obtained, therefore, permanent registration is denied. As such the only ground on which the permanent registration of the petitioner is denied is non-obtaining of a licence from the Central Government, but the provisions of the Central Act of 1951 do nto apply to the industry in question in view of the investment in the industry in question and the number of workers to be employed in the industry. At the time of granting provisional registration and issuance of the letter of Intent the respondents rightly did not ask for registration from the Government of India. Now the respondents cannot impose such a condition which is not in accordance with law and cannot refuse permanent registration and withhold facilities to which the petitioner is entitled.

10. The respondents Nos 1 to 4 have filed a reply to the rejoinder wherein it has been stated that under Section 29B of the Central Act of 1951 the Government of India is empowered to exempt any industrial undertaking or class of industrial undertakings or any scheduled industry or class of scheduled industries, by notification in the official gazette from the operation of all or any of the provisions of the Act. A notification was issued by the Govt. of India on 16th February, 1973 under Section 29B of the Central Act of 1951, by which it has exempted Small Scale Industrial undertakings from the operation of the provisions of Sections 10, 11, 11A and 13 of the said Act. But a proviso has been added to the Notification to the effect that the Government has excluded the categories of undertakings specified in Schedules II, III and IV annexed to the said notification from the provissions of the notification itself and that the industries falling in ScheduIe-IV of the notification are bound to obtain license under the Act irrespetive of the smallness of the unit. In the industrial unit of the petitioner the activity of distillation of alcoholicdrink is carried on and this item falls under Serial No. 7 of Schedule IV annexed to the said notification. Therefore, unless the petitioner-company complies with the provisions of the Central Act of 1951, it cannot be registered permanently with the District Industries Centre. Reference has also been made to the notification dated 30th June, 1988 wherein it has been reiterated that exemptions shall not be available to any industry falling under Schedule I or Schedule II of the notification and as the industrial unit of the petitioner-company falls under Item No. 7 of Schedule I of the Central Act of 1951. It is necessary for the petitioner to obtain license under the Central Act of 1951 without which a permanent registration cannot be granted to the petilioner.

11. The learned counsel for the petitioner Shri G. M. Chaphekar, has strenuously argued that the permanent registration has wrongly been denied to the petitioner-company in spite of the fact that the other units producing alcoholic drinks have been granted permanent registration in the State of M.P. without obtaining a licence from the Central Government. According to Shri Chaphekar the dispute as has been raised in this petition was raised before the Supreme Court in State of M.P. v. Nandlal Jaiswal, AIR 1987 SC 251, and it has been held in that case, that the provisions of Central Act of 1951 do not apply to the alcohol producing industries where, the number of employees is less than fifty. Therefore, the action of the petitioner in not registering the industrial unit of the petitioner on permanent basis and refusing to extend the facilities to which the petitioner is eligible, is discriminatory, arbitrary and illegal.

12. On the other hand the learned counsel appearing for the State Shri Surjeet Singh has argued that there is distinction between the scheduled industries and industrial undertakings. Therefore, even if an industrial undertaking may not fall within the purview of the Central Act of 1951, still if the industry is a scheduled industry then obtaining of a license from the Central Government is a must, without which the industrial unit cannot be registered permanently. In support of his argument Shri Surjeet Singh has placed reliance on the case reported in AIR 1970 SC 1453. (Harakchand Ratanchand Banthia v. Union of India).

13. In view of the aforesaid averments and arguments of the parties the only question which arises for decision in this case is whether the provisions of the Central Act of 1951 are attracted to the industrial unit of the petitioner and whether, therefore, obtaining of a license from the Government of India by the petitioner for the industrial unit is necessary. For appreciating the respective contentions of the parties, it is necessay to read Section 11 of the Central Act of 1951, which reads as under :--

"11. Licensing of new industrial undertakings :--

(1) No person or authority other than the Central Government, shall after the commencement of this Act, establish any new industrial undertaking, except under and in accordance with a licence issued in that behalf by the Central Government.

Provided that a Government other than the Central Government may, with the previous permission of the Central Government, establish a new industrial undertaking.

(2) A licence or permission under subsection (I) may contain such conditions including, in particular, conditions as to the location of the undertaking and the minimum standards in respect of size to be provided therein as the Central Government may deem fit to impose in accordance with rules, if any, made under Section 30."

This section of the Act is in Chapter III with a heading 'ReguIation of Scheduled Industries'. From a plain reading of this section it is manifest that after the commencement of the Act new industrial undertamg shall not be established except under and in accordance with a licence issued in that behalf by the Central Government. The heading in Chapter III clearly shows that Section 11 is for regulation of scheduled industries. Now we have to consider as to what does the Legislature means by an 'industrial undertaking' for which a licence is necessary. For that purpose we have to refer to the definition of 'industrial undertaking' in the Act.

14. Industrial undertaking is defined in Section 3(d) of the Act which is as under :

"Industrial undertaking" means any undertaking pertaining to scheduled industry carried on in one or more factories by any person or authority including Government."

"Factory" has been defined in Section 3(c) of the Act which says that :--

"Factory" means any premises, including the precincts thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on.

(i) With the aid of power, provided that fifty or more workers are working or were working thereon any day of the preceding twelve months; or

(ii) Without the aid of power, provided that one hundred or more workers are working thereon on any day of the preceding twelve months and provided further that in no part of such premises any manufacturing process is being carried on with the aid of power."

"Scheduled industry" has been defined in Section 3(i) of the Act which reads as under :

"Scheduled industry" means any of the industries specified in first schedule."

15. It is not in dispute that the industry in question falls within the category of fermentation industries at Item 26, Serial No. (1) of First Schedule of the Central Act of 1951. As such according to the definition of industrial undertaking' it should be an undertaking pertaining to scheduled industry carried on in one or more factories. Now the factory as defined in Section 3(c) means any premises wherein the manufacturing process is carried on with the aid of power provided 50 or more than fifty workers are working or were working on any day of the preceding twelve months or where 100 or more workers are working or were working on any day of the preceding twelve months provided that in no part of such premises any manufacturing process is being carried on with the aid of power. In the instant case it is not in dispute that less than fifty workers are working in the industrial unit of the petitioner-company and it is run with the aid of power. As such the industrial unit of the petitioner company does not fall within the purview of definition of 'factory' as defined in Section 3(c) of the Central Act of 1951. Therefore, the industrial unit of the petitioner will also not fall within the definition of 'industrial undertaking' as defined in Section 3(d) of the Central Act of 1951, because conditions precedent for attracting the provisions of the Act for declaring it as an industrial undertaking are -- (i) that it should be in respect of a scheduled industry and (ii) that it should be carried on in one or more factories by any person or authority. As such the industrial unit of the petitioner company is not within the meaning of the provisions of Central Act of 1951. Therefore, the provisions of Section 11 of the Central Act of 1951 shall also not be attracted because a licence for an industrial undertaking is necessary under the provisions of Section 11 of the Central Act of 1951, but the industrial unit of the petitioner being not an industrial undertaking as mentioned above, a licence under Section 11 from the Central Government is not necessary.

16. This matter was considered by the Supreme Court of India in the case of State of M. P. v. Nandlal Jaiswal, (AlR 1987 SC 251) (supra) wherein grant of certain licences on permanent basis by the State of M. P. to the distilling units at different places was challenged before the Supreme Court on the ground that the industries being scheduled industries, a permanent licence could not be granted to these units without a licence under Section 11 having been granted to them by the Government of India. The Supreme Court while deciding the above objections in para 30 of its judgment has held as under :

"The learned counsel appearing on behalf of M/s. Doongaji & Co. also raised another contention based on the provisions of the Industries (Development and Regulation) Act, 1951. The argument of the learned counsel was that respondents Nos. 5-11 were not entitled to set up new distilleries at the new sites without obtaining a licence from the Central Government under Section 11 of this Act and since there was nothing to show that they had obtained such licence before setting up new distilleries, their action in setting up the new distilleries was illegal and could not give rise to any rights in their favour. But this contention is also unsustainable. In the first place, no such contention was raised in the writ petitions and neither the State Government nor respondent Nos. 5-11 had any opportunity of answering such contention. This contention is based on facts and we cannot permit the petitioners to raise it for the first time in the present appeals. The foundation for this contention should have been laid in the writ petitions and the necessary facts should have been pleaded in support of it. No such plea having been raised and no such facts having been pleaded in the writ petitions, we cannot allow this contention being raised before us. Moreover, it is obvious from Section 11 read with the definitions of 'factory' and 'industrial undertaking' contained in Sub-sections (c) and (d) of Section 3 of this act that licence from the Central Government for setting up new distilleries would be necessary only if 50 or more workers would be working in such distilleries and here in the present writ petitions, there is nothing to show that 50 or more workers were going to be employed in the new distilleries. We were told at the Bar that in fact old distilleries were also working without any licence from the Central Government, presumably because less than 50 workers were employed in such distilleries. This contention of the learned counsel on behalf of M/s. Doongaji and Co. must also, therefore, be rejected."

17. In the aforementioned judgment of the Supreme Court the Apex Court was considering the same issue which has arisen for decision before us and has held that if fifty or more workers are employed in an industry then ony a licence from Central Government would be necessary under the provisions of the Central Act of 1951. In the instant case the respondents do not say that 50 or more persons are working or would be working in the industrial unit of the petitioner. The contention of the petitioner that in the industry in question less than fifty workers are employed is not in dispute. As such in view of the aforementioned discussion and the aforesaid dictum of the Supreme Court, we have no hesitation in holding that obtaining a licence form the Central Government for petitioner's industrial unit is not necessary.

18. There can be no dispute with the proposition that a distinction has been made between 'scheduled industries' and 'industrial undertakings' in the Central Act of 1951 and separate provisions have been made for registration of Industrial undertakings, for licencing of new industrial undertakings and for the direct management of industrial undertakings by the Central Government in certain cases. It also cannot be questioned that separate provisions have also been made for regulation of scheduled industries and other matters pertaining to grant of licence, investigation etc. However, the separate provisions contained in the Central Act of 1951, pertaining to industrial undertakings and scheduled industries would not automatically bring the scheduled industries under the definition of industrial undertakings unless the conditions as discussed above are satisfied. Therefore, the decision in AIR 1970 SC 1453 (supra) does not help the case of the respondents in any way especially when the Supreme Court in State of M.P. v. Nandlal Jaiswal (AIR 1987 SC 251) (supra) has clearly given a finding on this point after considering the definitions of 'industrial undertaking' and 'factory' in the Central Act of 1951.

19. As a result of the aforementioned it is held that the petitioner's unit does not require a licence from the Central Government under the Central Act of 1951. It is not in dispute that all the necessary requirements for grant or a permanent licence have been met by the petitioner. The permanent registration has been refused to the petitioner-company only on the ground that it was necessary for it, to obtain a licence from the Central Government, but the petitioner-company has not obtained any licence. In the light of our finding above, it is not necessary for the petitioner-company to obtain the licence from the Central Government. Therefore, now there is no hurdle in the way for grant of a permanent registration to the petitioner-company for the industrial unit in question. The respondents Nos. I to 4 are, therefore, directed to grant the petitioner the permanent registration within one month from the date of this order. As a result of the grant of permanent registration the petitioners shall be entitled to all the benefits which may be available to them according to the industrial policy of the Government of M. P.

20. The petition is accordingly allowed with costs. Advocate's fee Rs. 400/- if certified. The amount of security deposit, after verification, shall be returned to the petitioner.