Rajasthan High Court - Jodhpur
M/S Super Shiv Shakti Chemicals Pvt. Ltd vs Chief Controller Of Explosive on 14 May, 2024
Author: Nupur Bhati
Bench: Nupur Bhati
[2024:RJ-JD:21165]
HIGH COURT OF JUDICATURE FOR RAJASTHAN
AT JODHPUR
S.B. Civil Writ Petition No. 6510/2024
M/s Super Shiv Shakti Chemicals Pvt. Ltd., through authorized
representative Rakesh Satyanarayan Jagetia S/o Shri
Satyanarayan Jagetia, Aged Forty-Six (46) Years, Resident of
Flat No. T-7-1001, Plot No. D 69, Shree Krishna Paradise, Sector
12, Khargar, Raigard, Maharashtra - 410210
----Petitioner
Versus
Chief Controller of Explosive, Petroleum and Explosives Safety
Organization, A Block CGO Complex Fifth Floor Seminary Hills
Nagpur (Maharashtra) - 440006
----Respondent
Connected With
S.B. Civil Writ Petition No. 1032/2024
M/s Super Shiv Shakti Chemicals Pvt. Ltd., through authorized
representative Sh. Rakesh Satyanarayan Jagetiya S/o Shri
Satyanarayan Jagetiya, Aged Forty-Six (46) Years, Resident of
Flat No. T-7-100, Plot No. D 69, Shree Krishna Paradise, Sector
12, Khargar, Raigad, Maharashtra - 410210.
----Petitioner
Versus
Chief Controller of Explosive Petroleum and Explosives Safety
Organization, A Block CGO Complex Fifth Floor Seminary Hills
Nagpur - (Maharashtra) - 440006
----Respondent
For Petitioner(s) : Mr. B.S. Sandhu
Mr. Chirag Kalani
For Respondent(s) : Mr. Mukesh Rajpurohit, Dy. S.G.
Ms. Dimple Rajpurohit
HON'BLE DR. JUSTICE NUPUR BHATI
ORDER
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[2024:RJ-JD:21165] (2 of 26) [CW-6510/2024] REPORTABLE Reserved on: 10/05/2024 Pronounced on: 14/05/2024 [Civil Writ Petition No. 6510/2024]
1. Though the matter has been listed in 'Fresh' category, at the joint request of both the parties, the matter is heard finally today itself.
2. The writ petition has been preferred by the petitioner company challenging the suspension order dated 30.01.2024 (Annex.1) passed by Dy. Chief Controller of Explosives, Petroleum and Explosives Safety Organization ('PESO') and the petitioner company has sought revocation of the suspended licenses. The petitioner company has also sought directions from the respondent to consider the application for change in the name of director in the license granted to the petitioner company and also consider the antecedent certificate issued by the District Magistrate ('DM'), Lalitpur. The petitioner company has also prayed that the respondents may be directed to allow the petitioner company to restart operation of the petitioner company's manufacturing unit until the disposal of the present writ petition. Certain other ancillary relief(s) have also been sought by the petitioner company.
3. Briefly stated, the facts of the case are that the petitioner company had been incorporated on 30.11.2004 by the previous management and is mainly responsible for the production, manufacturing and sale of different classes of Explosives and related ancillaries. Meanwhile in the year 2017, the petitioner company had been declared as Non-Performing Asset ('NPA') on account of being unable to continue its manufacturing, after which (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (3 of 26) [CW-6510/2024] the resolution proceedings commenced in Company Petition No. (IB) - 59/7/JPR/2019 before the National Company Law Tribunal ('NCLT'), Jaipur, wherein the resolution plan dated 22.12.2020 (Annex.2) of one M/s Searock International Pvt. Ltd. had been approved by the NCLT vide order dated 29.04.2022 (Annex.3) and the petitioner company was given a period of 12 months to comply with the rules and regulations regarding the manufacturing of explosives and related ancillaries.
4. Thus, after the culmination of the said Resolution proceedings, the management of the petitioner company assumed control of the company and continued with the work of production, manufacturing and sale of different classes of Explosives and related ancillaries in accordance with the Notifications, Circulars and Regulations as released by the respondent and the Ministry of Commerce and Industry.
5. Subsequently, the petitioner company acquired the necessary licenses and permits from the respondent and the said license was granted afresh for a period of 5 years starting from 31.03.2023 till 31.03.2028.
6. In the meanwhile, the former Director of the petitioner company, Sh. D.S. Kachawaha left the company, under whom the license had been issued and Sh. Ajay Kumar Chaturvedi was appointed as the Director/Occupier of the company on 08.02.2024. Subsequently, the respondent passed an order dated 30.01.2024 (Annex.1) wherein the licenses have been suspended and the petitioner company has been stopped from operating on account of absence of an occupier.
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7. In pursuance to the said order, the petitioner company filed an application dated 12.02.2024 (Annex.6) for the change of name of the occupier/authorized signatory in the license granted to the petitioner company. The petitioner company also submitted required documents vide email and letter along with the antecedent certificate of Sh. Ajay Kumar Chaturvedi, as issued by the District Magistrate, Lalitpur, Uttar Pradesh. In response to the said letter, the respondent replied on 21.02.2024 (Annex.7) seeking the antecedent certificate from the DM, Chittorgarh instead of the antecedent certificate issued by DM, Lalitpur.
8. Meanwhile the petitioner company also submitted an application dated 15.02.2024 (Annex.9) before DM, Chittorgarh seeking antecedent certificate of Sh. Ajay Kumar Chaturvedi, which is still pending and subsequently also sent a reminder letter to the respondent to consider the case of petitioner company for the change in the name of Director/Occupier, however the respondent company imposed a requirement of the antecedent certificate issued only by the DM, Chittorgarh.
9. Thus, aggrieved of the said action of the respondent in not considering the antecedent certificate of Sh. Ajay Kumar Chaturvedi, issued by DM, Lalitpur, the petitioner company has preferred this writ petition.
10. Learned counsel for the petitioner company submitted that the petitioner had duly fulfilled the requirement of getting antecedent certificate from the appropriate authorities as prescribed under Rule 111 (b) of the Explosives Rules, 2008 read with Rule 38 of the Ammonium Nitrate Rules 2012, by way of filing an application for change of name of the authorized (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (5 of 26) [CW-6510/2024] person/occupier in place of Sh. D.S. Kachhawaha on 12.02.2024 (Annex.6). He also submitted that since Sh. Ajay Kumar Chaturvedi, the newly appointed Director/Occupier is a resident of Lalitpur District of Uttar Pradesh, hence, it is reasonable that the antecedent certificate be issued by the DM, Lalitpur, which the petitioner company had duly submitted the antecedent certificate issued by DM, Lalitpur (Annex.8). He further submitted that an application, duly submitted by the petitioner company dated 12.02.2024 (Annex.6) for the issuance of antecedent certificate of Sh. Ajay Kumar Chaturvedi is also pending before the DM, Chittorgarh.
11. Learned counsel for the petitioner company submitted that the respondent has deliberately not considered the certificate submitted by the petitioner company in the absence of any valid reason. He also submitted that there is no provision in the Statute or the Rules wherein it has been prescribed that the antecedent certificate has to be issued only by the authorities where the manufacturing unit is situated, thus, the respondent have been unnecessarily creating hurdles in the business of the petitioner company.
12. Learned counsel for the petitioner company further submitted that the petitioner company has invested a huge amount in repair and refurbishment of the plant which had fallen into the state of complete disrepair during the Corporate Insolvency Resolution Proceedings ('CIRP') and thus, the suspension of licenses by the respondent without giving sufficient reasons is causing serious prejudice to the petitioner company in (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (6 of 26) [CW-6510/2024] terms of loss of money as well as reputation on account of non- completion of the supply orders.
13. Per contra, learned counsel for the respondent submitted that on account of resignation of the Director and Occupier of the factory, Sh. D.S. Kachhawaha resigned, the licenses were suspended temporarily in accordance with Rule 118 of the Explosives Rules, 2008 along with Rule 42 of Ammonium Nitrate Rules, 2012 since it was mandatory under Rule 2(37) of the Explosives Rules, 2008 along with Rule 2(o) of Ammonium Nitrate Rules, 2012, to have an "occupier" in an explosives manufacturing factory to manage day to day affairs and ensure safety of the premises and workers in the factory. He further submitted that in the present case, the Director and Occupier of the factory, Sh. D.S. Kachhawaha resigned and the antecedent certificate of the newly inducted Director/Occupier, Sh. Ajay Kumar Chaturvedi was not issued by the DM, Chittorgarh, therefore in the absence of the antecedent certificate, the licenses have been rightly suspended in accordance with the prescribed Rules.
14. Learned counsel for the respondent also submitted that the fact that the application filed by the petitioner company for issuance of the antecedent certificate before the DM, Chittorgarh dated 12.02.2024 (Annex. 6) is still pending, which makes it apparent that the DM, Chittorgarh has some findings/reservations about the newly inducted Director/Occupier Sh. Ajay Kumar Chaturvedi which may be the reason for not issuing the required certificate.
15. Heard learned counsel for the parties, perused material available on record.
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16. The point for consideration before this Court is whether the petitioner company is required to submit certificate duly issued by the District Magistrate, Chittorgarh in favour of occupier. From the perusal of the record, it is seen that the petitioner company had appointed one Sh. Ajay Kumar Chaturvedi as Director/Occupier of the petitioner company in place of Sh. D.S. Kachhawaha. Initially, the petitioner submitted the certificate issued by the District Magistrate, Lalitpur (U.P.) in favour of Sh. Ajay Kumar Chaturvedi on 08.09.2019. The respondent refused to accept the said certificate by communication dated 21.02.2024 (Annex.7) on the ground that the old certificate had been issued by the Additional District Magistrate, Lalitpur (UP) on 08.05.2019 for Rajesh Explosives Private Limited, Dehradun and thus, the said antecedent certificate issued by the District Magistrate, Lalitpur cannot be considered to update the details of the Directors issued in favour of M/s Super Shiv Shakti Chemicals Private Limited, Chittorgarh and therefore, petitioner company was directed to obtain certificate from the concerned District Magistrate, Chittorgarh. It is also seen that by way of communications dated 30.01.2024, 21.02.2024 (Annex.7), 18.03.2024 (Annex.11) that the respondent directed the petitioner to submit the certificate duly issued by the District Magistrate, Chittorgarh in the light of mandatory provisions of Rule 111 (b) of the Rules of 2008 and Rule 38 (e) of the Ammonium Nitrate Rules, 2012. The respondent very specifically stated in the communication (Annex.7) that induction of new Director Sh. Ajay Kumar Chaturvedi will not be considered without certificate for verification of antecedent from the District Magistrate, Chittorgarh.
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17. It is seen from the documents placed on record, the petitioner company had submitted application dated 15.02.2024 (Annex.9) to the District Magistrate, Chittorgarh for the purpose of issuing a verification certificate of antecedent, however, no such certificate of verification of antecedent was issued by the Magistrate. The petitioner, in the absence of certificate of antecedent being issued in favour of Director/Occupier i.e. Sh. Ajay Kumar Chaturvedi, made a representation to the respondent for taking into consideration the freshly issued certificate of verification by the District Magistrate, Lalitpur dated 23.02.2024 (Annex.8) for permitting the petitioner company to manufacture explosives and for quashing the temporary suspension of license.
18. The Explosives Act, 1884 has been promulgated with the Object to regulate manufacturing, possession, use, sale (transport, import and export of explosives). Under the Act of 1884, in exercise of powers conferred by Sections 5 and 7 of the said Act and in supersession of the Explosives Rules, 1983 the Central Government made the Explosives Rules, 2008, which came into force from the date its publication in the Official Gazette Notification i.e. 29.12.2008. The definition of occupier is laid down under Rule 2 (37) and the same is reproduced herein below:
"2 (37). "Occupier", in relation to a premises means a person a who has the control and is responsible for managing the affairs of the premises, and includes, in relation to any explosives, the person in possession of the explosives : Provided that in relation to a-- (a) proprietary firm, the proprietor; or (b) partnership firm, the partner nominated in writing by all other partners; or (c) company, the director nominated in writing by the board of directors; or (d) society or association, the office-bearer (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (9 of 26) [CW-6510/2024] nominated in writing by the governing body; shall be deemed to be the occupier;"
From a bare perusal of definition of Occupier, it is apparent that Rules bestow upon the Occupier huge responsibility of having control and responsibility for managing the affairs of the premises and including relation to any explosive. Meaning thereby, the occupier is required to have best of antecedents in order to prove his bonafide and authenticity for holding the post of Occupier. Further, under Rule 111 of the Rules of 2008, the procedure for change of partners, director, members or occupier has been laid down, and under Rule 111 (b) of the Rules of 2008, the certificate of verification of antecedent from the District Magistrate of newly inducted partner, member, director or occupier, is to be submitted by the licensee to the licensing authority for accepting the newly inducted partner, member, director or the occupier. In the present case, the petitioner company has inducted one Sh. Ajay Kumar Chaturvedi, as new Director/Occupier in place of Sh. D.S. Kachhawaha and, therefore, in such circumstances in compliance of provisions of Rule 111 (b) of the Rules, the petitioner company is required to submit the certificate of verification of antecedent from the District Magistrate. Though the petitioner has submitted certificate of verification of antecedent dated 23.02.2024 (Annex.8) issued by the DM, Lalitpur, to the respondent, however, looking to the sensitive nature of production, manufacturing and sale of different classes of explosives and related ancillary, the respondent's decision of submitting a certificate of verification of antecedent from the District Magistrate, Chittorgarh cannot be said to be faulty. This fact cannot be ignored that the petitioner (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (10 of 26) [CW-6510/2024] company prior to any communication made by the respondent for submitting the certificate of verification of antecedent of newly appointed Director/Occupier from the concerned District Magistrate, Chittorgarh, had already submitted an application before the District Magistrate, Chittorgrarh on 15.02.2024 (Annex.9), which indicates that the petitioner company was in knowledge of requirement of the certificate of verification of antecedent issued from the District Magistrate, Chittorgarh in the light of provision envisaged in Rules 111 (b) and Rule 2 (37) of the Explosives Rules, 2008. The petitioner has not place on any record any document in order to demonstrate before the Court that after submitting of application dated 15.02.2024 (Annex.9), the petitioner company has further pursued the matter with District Magistrate, Chittorgarh. Rule 111 of the Explosives Rules, 2008 is reproduced as under:
"111. Procedure for change of partners or directors or members or occupier.--Whenever any new partner or member or director is inducted in the partnership firm or society or association or company, as the case may be, without any change in the name of the licensee firm or society or association or company, the licensee shall submit application to the licensing authority for accepting the newly inducted partners or members or directors,--
(a) names and addresses of newly inducted partners or directors or members as the case may be, and in case the occupier is changed, photographs of the new occupier;
(b) certificate of verification of antecedents from the District Magistrate of the newly inducted partners or members or directors or occupier, as the case may be;
(c) requisite scrutiny fee;
(d) any other document as may be called for by the licensing authority."
19. It is also important to note that the insistence of the respondent for submitting the certificate of verification of (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (11 of 26) [CW-6510/2024] antecedent from the District Magistrate, Chittorgarh is having relevance for the reason that looking to sensitive nature of the authority and responsibility of the Director/Occupier, the certificate of verification of antecedent of newly inducted Director/ Occupier in the State of Rajasthan is to be verified by the District/ Police authorities of Rajasthan as well. The certificate issued by the District Magistrate, Lalitpur (UP), is being issued in favour of newly inducted Director/Occupier after verification of his antecedent in the State of UP and not in the State of Rajasthan and, therefore, there is no iota of doubt that looking to sensitive nature of the activity while dealing with explosives and responsibility of the occupier, the petitioner company is required to submit certification of verification of antecedent from the District Magistrate, Chittorgarh. Needless to observe that the petitioner company would be at liberty to pursue its application dated 15.02.2024 (Annex.9) before the District Magistrate, Chittorgarh and submit the same at the earliest before the respondent for the purpose of induction of new Director/Occupier.
20. In the result, the writ petition is dismissed. Stay Petition and other misc. application, if any pending, shall also stand disposed of.
[Civil Writ Petition No. 1032/2024]
1. Though the matter has been listed in 'Fresh' category, at the joint request of both the parties, the matter is heard finally today itself.
2. The writ petition has been preferred by the petitioner company challenging letter passed by the respondent dated 09.01.2024 (Annex.1) and the petitioner company has sought (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (12 of 26) [CW-6510/2024] directions to allow the petitioner company to resume the production of electric detonators with immediate effect under license dated 11.01.2024 and utilize the licensed capacity of 50 million units of electric detonators for the year 2023-24. Certain other ancillary relief(s) have also been sought by the petitioner company.
3. Briefly stated, the facts of the case are that the petitioner company had been incorporated on 30.11.2004 by the previous management and is mainly responsible for the production, manufacturing and sale of different classes of Explosives and related ancillaries. Meanwhile in the year 2017, the petitioner company had been declared as NPA on account of being unable to continue its manufacturing, after which the resolution proceedings commenced in Company Petition No. (IB) - 59/7/JPR/2019 before the National Company Law Tribunal ('NCLT'), Jaipur, wherein the resolution plan dated 22.12.2020 (Annex.3) of one M/s Searock International Pvt. Ltd. had been approved by the NCLT vide order dated 29.04.2022 (Annex.5) and the petitioner company was given a period of 12 months to comply with the rules and regulations regarding the manufacturing of explosives and related ancillaries.
4. Thus, after the culmination of the said Resolution proceedings, the management of the petitioner company assumed control of the petitioner company and continued with the work of production, manufacturing and sale of different classes of Explosives and related ancillaries in accordance with the Notifications, Circulars and Regulations as released by the respondent and the Ministry of Commerce and Industry. (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (13 of 26) [CW-6510/2024]
5. Subsequently, the petitioner company acquired the necessary licenses and permits from the respondent and the said license was granted afresh for a period of 5 years starting from 31.03.2024 till 31.03.2028. In the meanwhile, the petitioner company received a communication from the respondent informing that the licensed capacity for the manufacturing of electric detonators would be reduced and in response to this, the then Director, Sh. D.S. Kachhawaha wrote to the respondents on 10.08.2023 (Annex.7) requesting a special dispensation to continue manufacturing of the electric detonators in accordance with the terms of the license dated 31.03.2024 on account of the petitioner company being acquired by the new management after conclusion of CIRP. The respondents, in their reply dated 11.09.2023 (Annex.8) to the said letter, stated that the request of the petitioner company can be considered. Thereafter, vide letter dated 09.01.2024 (Annex.1), the respondent had directed the petitioner company to stop the production of electric detonators by 0500 hrs, 10.01.2024 and to file for amended license application for the production/manufacturing of 1,25,00,000 units of electric detonators for the year 2023-24, in response to which the petitioner company approached the Hon'ble High Court wherein, vide order dated 24.01.2024 (Annex.4 of S.B. Civil Writ Petition No. 6510/2024) the respondent was directed to allow the petitioner company to restart production at the manufacturing unit. However, the respondent did not comply with the said order.
6. Thus, aggrieved of the said order dated 09.01.2024 (Annex.1) wherein the petitioner company had been directed to (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (14 of 26) [CW-6510/2024] stop the production of the electric detonators, the petitioner has preferred this writ petition.
7. Learned counsel for the petitioner company submitted that the petitioner company has invested a huge amount in repair and refurbishment of the plant which had fallen into the state of complete disrepair during the CIRP proceedings. He also submitted that the petitioner company had already undertaken obligations to supply more than 10 million units of electric detonators and the stoppage of the plant is exposing the petitioner company to penalties.
8. Learned counsel for the petitioner company also submitted that the letter dated 09.01.2024 (Annex.1) is ultra vires and contrary to the Gazette Notification dated 29.09.2023 (Annex.9) since the Notification clearly stipulated that the manufacturers would be allowed to produce the electric detonators in the interim period, however, the letter dated 09.01.2024 (Annex.1) would have the effect of shutting down the plant. Learned counsel for the petitioner company also submitted that under Section 6(1)(a) of the Explosives Act, 1884, it is the 'Central Government' which is the authority which can prohibit the manufacture of any explosive which is of dangerous character and is expedient for the public safety to do so. He thus submitted that PESO was not the appropriate authority and in the present case, has acted beyond its authority while issuing letter to completely stop manufacturing of electric detonators. The relevant provision reads as under:
"6. Power for Central Government to prohibit the. manufacture, possession or importation of specially dangerous explosives.--(1) Notwithstanding anything in the rules under the last foregoing section, the Central Government may, from time to time, by Notification in the (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (15 of 26) [CW-6510/2024] Official Gazette,-- (a) prohibit, either absolutely or subject to conditions, the manufacture, possession or importation of any explosive which is of so dangerous a character that, in the opinion of the Central Government, it is expedient for the public safety to issue the Notification."
9. Learned counsel for the petitioner company also submitted that the letter dated 09.01.2024 (Annex. 1) cannot be retrospectively applied to the petitioner company since the phasing out schedule is only applicable to the manufacturers who were manufacturing on 31.03.2020, with a gradual reduction contemplated from 2020-21 while the petitioner company commenced production only from 31.03.2023. He also submitted that the petitioner company having acquired its license only in 2023, for production and manufacturing of 50 million units makes it a class different from the manufacturers who have been producing electric detonators since the year 2017-18, 2018-19, 2019-20, 2020-21, 2021-22, 2022-23.
10. Learned counsel for the petitioner company also submitted that in response to the letter dated 11.09.2023 (Annex.8) by the respondent seeking amended licenses from the manufacturers, the petitioner company submitted their reply vide letter dated 13.10.2023 (Annex.11), to which there was no response. He further submitted that thus, the letter dated 09.01.2024 (Annex.1) issued by the respondent, violates the principles of natural justice since the petitioner company was not given any opportunity to be heard while prohibiting the petitioner company from producing any electric detonators.
11. Learned counsel for the petitioner company also submitted that the Notification dated 29.09.2023 (Annex.9) does not provide (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (16 of 26) [CW-6510/2024] the actual reduction percentages and thus, the same could not be imposed arbitrarily by the respondent.
12. Learned counsel for the petitioner company also submitted that the virtual meeting held on 03.01.2022 (Annex.12), wherein the proposed reduction table has been provided, clearly mentions in its point no. 13.(e) that the association has not considered the representation of the aggrieved companies and directed that Explosives Manufacturers Welfare Association ('EMWA') to convene a meeting to bring forward the unanimous suggestions to discuss and also that, the PESO may also be included in the meeting with the EMWA. The relevant point reads as under:
"13) Ms. Sumita Dawra, Additional Secretary, DPIIT summarized the meeting and concluded with the following directions:
xxxx e. Chairperson noted that the association has not considered the representation of the aggrieved companies and directed the association to conveno a meeting and bring forward unanimous suggestions to discuss and arrive at a unanimous suggestion. PESO may also be Included in the meeting with association. DPIIT may examine the matter once the suggestions are received from association."
13. Learned counsel for the respondent submitted that in the light of concerns raised by Central Security Forces/Para Military Forces, that the electric detonators are being misused by the Left Extremists resulting in heavy casualties to the Indian soldiers, the Director General, Central Reserved Police Forces ('CRPF') vide letter dated 13.11.2019 (Annex. R/1) suggested to stop to use and progressive use of the electric detonators and instead introduce delay and digital detonators.
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14. Learned counsel for the respondent further submitted that in response to the above suggestions, Ministry of Home Affairs consulted Department for Promotion of Industry and Internal Trade ('DPIIT'), Ministry of Commerce and Industry to examine the interest of security of the nation and after many deliberations, with the EMWA, came up with the decision of reducing the production of electric detonators by 25% each year on the base value which is equivalent to average of last 3 years production, i.e. production of the years 2017-18, 2018-19 and 2019-20 and subsequently achieving the complete phasing out of the electric detonators by the year 2024-25, in the Minutes of Meeting dated 25.02.2020 (Annex. R/2). He further submitted that this gradual phasing out plan was drafted keeping in mind the concerns of all the stakeholders and thus, considerable time was given to develop/introduce/launch/establish manufacturing units for new alternate detonator, i.e., the Electronic Detonators.
15. Learned counsel for the respondent submitted that during the year 2023-24, phasing out of the Electric Detonators could not be implemented due to the order passed by Hon'ble Madras High Court dated 09.12.2022 in response to which a Gazette Notification S.O. 4255(E) dated 29.09.2023 (Annex.9) was issued by DPIIT specifying the complete phasing out of Electric Detonators by the end of financial year 2024-25. He further submitted that subsequent to the Gazette Notification, applications were sought from the Electric Detonator Manufacturers to amend their manufacturing licenses granted under Explosives Rules, 2008 and it was pertinent to mention that all manufacturers submitted their consent to phase out the manufacture of electric detonators, (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (18 of 26) [CW-6510/2024] due to which the respondent along with DPIIT and Ministry of Home Affairs were able to achieve 75% phasing out targeted as on 31.03.2024. He also submitted that for the said amending the manufacturing licenses, all manufacturers agreed, except the petitioner company and thus the license of the petitioner company was not amended in the financial years 2020-21, 2021-22 and 2022-23 due to the fact that they resumed the production in the month of April 2023. He further submitted that thus, in the light of the said circumstances, for phasing out electric detonators, the production of the petitioner company was restricted for the financial year 2023-24.
16. Learned counsel for the respondent also submitted that vide the communication dated 11.09.2023 (Annex.8), due to the oversight, the words are mentioned as "request can be considered" instead of "request cannot be considered", however the intent of the communication is very clear from the first line itself that the production of detonators is being phased out in accordance with the policy of DPIIT, Government of India. He also submitted that though the Gazette Notification dated 29.09.2023 (Annex.9) does not mention the phasing out schedule, however, the progressive reduction in the electric detonator manufacturing capacity was considered keeping in mind that considerable time is given to the manufacturers to develop and make available safe and reliable alternate products.
17. Learned counsel for the respondent also submitted that the letter dated 09.01.2024 (Annex.1) is not contradictory since it clearly prescribes the production of 12.5 million electric detonators is allowed for the 2023-24 as per the phasing out policy, reducing (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (19 of 26) [CW-6510/2024] 25% in license capacity every year and contrary to this, petitioner company had already produced more than the allotted capacity of 12.5 million which is more than 25% of the license capacity and thus, the petitioner was asked to stop further production from the financial year 2023-24, in accordance with the Phasing Out Policy. He also submitted that merely because the petitioner company started production in 2023, does not mean that the phasing out policy cannot be applied to the petitioner company. He submitted that the phasing out policy is uniformly applicable to all the manufacturers otherwise the entire purpose of the Phasing Out policy would be defeated, which was formulated keeping in mind the interest of national security.
18. Learned counsel for the respondent submitted that the phasing out policy for the manufacture of electric detonators has been chalked out in consultation with the stakeholders including the petitioner company and the petitioner company was aware about this phasing out schedule of the electric detonators, thus, there was no need to afford the opportunity of hearing to the petitioner company separately, since the license capacity was reduced only in accordance with the phasing out schedule which is applicable to all the electric detonator manufacturers.
19. Heard learned counsel for the parties, perused material available on record.
20. This Court observes at the outset, that the execution of phasing out of the electric detonators, as decided by the DPIIT, PESO, EMWA and other stakeholders, is matter of security of the nation and thus, it is pertinent to note that the scope of judicial review is much narrower in case of Policy decisions of State and (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (20 of 26) [CW-6510/2024] the Court can interfere only when the policies are unreasonable, arbitrary, unfair and contrary to the letter, intent and philosophy of law and when the policies go beyond the permissible limits of the delegated power. This Court further observes that the scope of judicial review in the matters of policy decisions is not absolute, instead, it depends upon the facts and circumstances of each case and one of the important aspects in adjudicating such a matter is that the Policy should not be opposed to the basic rule of Law. This Court thus finds that in the present case, there was a gradual phasing out mechanism devised while taking into account the concerns of all the stakeholders. Also it is important to note that during the said decision taken, all the stakeholders and the EMWA had duly participated in the meeting and thus all the participants were duly offered an opportunity of hearing. For the purpose of the same, this Court takes into consideration the decision of Hon'ble Apex Court in the case of Brij Mohan Lal v. Union of India and Ors. reported in (2012) 6 SCC 502. The relevant para reads as under:
"75. The correct approach in relation to the scope of judicial review of policy decisions of the State can hardly be stated in absolute terms. It will always depend upon the facts and circumstances of a given case. Furthermore, the Court would have to examine any elements of arbitrariness, unreasonableness and other Constitutional facets in the policy decision of the State before it can step in to interfere and pass effective orders in such cases. A challenge to the formation of a State policy or its subsequent alterations may be raised on very limited grounds. Again, the scope of judicial review in such matters is a very limited one. One of the most important aspects in adjudicating such a matter is that the State policy should not be opposed to basic Rule of Law or the statutory law in force. This is what has been termed by (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (21 of 26) [CW-6510/2024] the courts as the philosophy of law, which must be adhered to by valid policy decisions."
21. This Court also finds that the petitioner company along with other manufacturers were given ample amount of time, giving full regard to their concerns to develop cost-effective/reliable/ safe alternative of electric detonators, but at that time also, the petitioner company did not amend its license under the Explosive Rules and did not undertake the gradual phasing out mechanism, as decided by the stakeholders in the Minutes of the Meeting, including the EMWA, which was present in the said meeting and duly represented the concerns of the manufacturers of the electric detonators. In light of the Notification dated 29.09.2023 (Annex.9), the manufacturing units along with the petitioner company was directed vide 10.10.2023 (Annex.10), to amend its license(s) in light of the gradual phasing out mechanism till 13.10.2023, however, the petitioner did not take any action in furtherance of the said directions. This Court also takes note of the fact that the petitioner company willingly chose not to go with the alternative solution and gradual phasing out mechanism as prescribed by the authorities which implemented this mechanism in the wake the incidents wherein the electric detonators have been used on the convoys of the Central Security Forces/Para Military Forces, thus directly compromising not only the security of the Nation but the safety of public at large. It is also observed that the matter of national security is a matter of policy and in such cases, it is the duty of the Court to read into and provide for statutory exclusion, if not expressly provided. For the purpose of (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (22 of 26) [CW-6510/2024] the same, this Court takes into consideration the decision of Hon'ble Apex Court in the case of Ex. Armymen's Protection Services P. Ltd. v. Union of India and Ors. reported in (2014) 5 SCC 409. The relevant paras read as under:
"16. What is in the interest of national security is not a question of law. It is a matter of policy. It is not for the court to decide whether something is in the interest of State or not. It should be left to the Executive. To quote Lord Hoffman in Secretary of State for the Home Department v. Rehman (2003) 1 AC 153:
"... in the matter of national security is not a question of law. It is a matter of judgment and policy. Under the Constitution of the United Kingdom and most other countries, decisions as to whether something is or is not in the interest of national security are not a matter for judicial decision. They are entrusted to the executive."
17. Thus, in a situation of national security, a party cannot insist for the strict observance of the principles of natural justice. In such cases it is the duty of the Court to read into and provide for statutory exclusion, if not expressly provided in the rules governing the field. Depending on the facts of the particular case, it will however be open to the court to satisfy itself whether there were justifiable facts, and in that regard, the court is entitled to call for the files and see whether it is a case where the interest of national security is involved. Once the State is of the stand that the issue involves national security, the court shall not disclose the reasons to the affected party."
22. It is also seen that the petitioner company has not given challenge to the decision arrived at, in the minutes of the meeting dated 25.02.2020 (Annex.R/2) as there is no prayer to this aspect in the writ petition. Thus, in absence of such a prayer, it is not open to the petitioner company to challenge the said impugned order dated 09.01.2024 (Annex.1) as in the said order, the petitioner company has been directed to reduce the manufacturing for the financial year 2023-24 in light of the meeting dated 25.02.2020 (Annex.R/2). Upon perusal of the decision taken by the respondent in the meeting dated, 25.02.2020 (Annex.R/2), for (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (23 of 26) [CW-6510/2024] the phase-wise reduction on percentage basis for the year 2023- 24, the percentage reduction is 75% and thus, vide order dated 09.01.2024 (Annex.1), the petitioner company has been directed to reduce the licensed capacity to achieve 75% cumulative reduction in the manufacturing quantity as per the Electric Detonator Phasing Out Schedule and therefore, there is no infirmity in the order dated 09.01.2024 (Annex.1). The table mentioned in Annex.12, specifying the Phasing Out schedule as agreed upon, in the meeting dated 25.02.2020 (Annex.R/2), is reproduced as under:
Year 2020-21 2021-22 2022-23 2023-24 2024-25 % 20% 35% 50% 75% 100% Reduction
23. Further the submission of the petitioner company that no opportunity of hearing was afforded to the petitioner company, in the considered opinion of this Court is misplaced, since all the members and stakeholders had participated in the said meeting dated 25.02.2020 (Annex.R/2). A bare perusal of Annex.R/2 filed alongwith the reply would reveal that vide para 9 (i) of the minutes of the said meeting it was resolved that percentage reduction of production of electric detonators in phased manner was proposed and implemented. It was also resolved and decided that the manufacturers agreed for reduction of production of electric detonators by 50% in 2 years and 100% in 4 years (excluding detonators used in underground coal mines and seismic activities) as per plan presented by manufactures. (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (24 of 26) [CW-6510/2024]
24. Thus, after deliberation in the meeting dated 25.02.2020 (Annex.R/2), the decision for phased reduction was arrived at by the respondent after agreement of the manufactures and, therefore, the petitioner company's submission that the said decision is arbitrary and unjust, cannot be countenanced and is not sustainable since the petitioner company has failed to establish that the policy decision of the respondent for gradual phasing out of the electric detonators by the year 2024-25, as decided by the respondent along with DPIIT, EMWA and other stakeholders is unreasonable, arbitrary and contrary to the letter, intent and philosophy of the law.
25. Further, the petitioner company's contention that since the petitioner company commenced the production from 31.03.2023 and thus the said policy of phased reduction would not apply to it retrospectively, has no force since the main object of the reduction was in the interest of national security, therefore, the said policy has to be applied uniformly and its applicability cannot be made in pick and choose manner. The implementation of the decision of reduction of the manufacturing in phased out manner was well within the knowledge of the petitioner company as the EMWA was also one of the participants to the said decision. The petitioner company knew well that if it starts the manufacturing in the year 2023-24, the percentage of reduction for the said year would be 75% and thus, the submission of the petitioner company that it may be permitted to manufacture at the reduced percentage applicable for the year 2020-21 cannot be accepted. (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (25 of 26) [CW-6510/2024]
26. It is seen from the minutes of meeting dated 03.01.2022 (Annex.12) that the participants had given suggestion for the implementation of reduction in phased out manner and subsequently the manufacturing units had submitted their amendments as per the said policy except the petitioner company. It is also seen from Annex.R/1 dated 13.11.2019, a communication has been made from the office of the Directorate Gerneral, CRPF to the DPIIT raising the security concerns relating to the misuse and pilferage of electric detonators by adversaries while suggesting measures to surmount the problems enclosed. In addition to this, the said communication also included a list of possible actions to be considered in order to stop use of instantaneous detonators and bring in detonators with delay. The request made by CRPF vide Annex.R/1 reads as under:
"It is therefore requested to consider to take the following possible actions:
a. To review pilferage of commercial explosives and detonators to strengthen the mechanism to reduce the chance of pilferage.
b. Stop use of instantaneous detonators and bring in detonators with delay.
c. Progressively stopping the use of electric detonators and bring in digital detonator."
27. Thus, on account of the said communication made by CRPF to the DPIIT and accordingly deliberated in the meetings dated 25.02.2020 (Annex.R/2) and 03.01.2022 (Annex.12), the decision of phasing out on percentage basis for the respective years was taken and therefore, the said decision taken by DPIIT, PESO, EMWA along with other stakeholders is to be applied in its letter and spirit and in an uniform manner. Thus, the submission of the petitioner that it may be permitted to manufacture 50 million units (Downloaded on 15/05/2024 at 08:41:08 PM) [2024:RJ-JD:21165] (26 of 26) [CW-6510/2024] of electric detonators for the year 2023-24, cannot be accepted, as permitting the same would be against the security concerns raised in respect to misuse and pilferage of electric detonators by adversaries and also against the decision taken by the respondent for phasing out on percentage basis for the respective years.
28. In view of above discussion, there is no substance in the writ petition, thus do not call for any interference by this Court in the light of national security and safety of public at large. Stay Petitions and misc. applications, if any, also stand dismissed.
(DR.NUPUR BHATI),J (Reserve) Devesh-DJ/-
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