IN THE SUPREME COURT OF PAKISTAN 
 
   (Appellate Jurisdiction) 
 
PRESENT: 
MR. JUSTICE EJAZ AFZAL KHAN 
MR. JUSTICE QAZI FAEZ ISA 
 
 
CIVIL APPEAL NOs. 1242 TO 1245 OF 2013 
 (On appeal from the judgment dated 26.2.2013 
passed in Writ Petition Nos. 5992 of 2010, 8870 
of 2010, 8873 of 2010, 4162 of 2010 and 31331 
of 2012 passed by the Lahore High Court, 
Lahore) 
 
 
 
Tariq Khan Mazari  
 
 
(in C.A. No. 1242/2013)  
M/s Punjnad Sugar Mills Limited  
(in C.A. No. 1243/2013)  
Arshad Javed Ahmed   
 
(in C.A. No. 1244/2013)  
Begum Syeda Iqbal 
 
 
(in C.A. No. 1245/2013)  
….Appellants 
 
Versus 
 
 
 
1. 
Government of Punjab through Secretary Industries and others 
2. 
Secretary Industries, Lahore 
3. 
Assistant Economic Advisor-III, 
4. 
JDW Sugar Mills Limited, Lahore. 
….Respondents 
(in all cases) 
 
 
For the Appellants 
: 
Khawaja Muhammad Farooq, 
(in CA.Nos. 1242 & 1244/2013) 
Senior Advocate Supreme Court 
 
 
Syed Rifaqat Hussain Shah, Advocate-on-Record 
 
For the Appellant  
: 
Mr. Noor Muhammad Chandia,  
(in CA No. 1243/2013)  
 
Advocate Supreme Court 
Ch. Muhammad Anwar Khan, 
Advocate-on-Record (absent) 
 
For the Appellant 
 
: 
Mr. Haq Nawaz Chattha, Advocate Supreme Court 
(in CA No. 1245/2013) 
 
Mr. Faiz-ur-Rehman, Advocate-on-Record 
 
For Respondent Nos. 1 & 3 : 
Mr. Mudassar Khalid Abbasi, 
 
 
Assistant Advocate General Punjab 
 
 
Rao Muhammad Yousaf Khan, 
 
 
Advocate-on-Record (absent) 
 
For Respondent No.4 
: 
Mr. Sikandar Bashir Mohmand,  
 
 
Advocate Supreme Court 
 
 
Mr. Tariq Aziz, Advocate-on-Record (absent) 
 
On Court Notice 
: 
Mr. Sohail Mehmood, DAG 
 
C.As. 1242 to 1245/2013 
2 
In Attendance 
: 
Mr. Aitzaz Ahsan, Senior Advocate Supreme Court 
 
: 
Mr. Salman Akram Raja, Advocate Supreme Court 
 
Dates of hearing  
 
: 
22nd & 23rd June 2016 
  
 
JUDGMENT 
 
QAZI FAEZ ISA, J.-  Through a common judgment dated 26th February 2013 of the 
Lahore High Court at Lahore a number of writ petitions were dismissed including 
those filed by the appellants herein.  This Court through the following order granted 
leave to appeal against the impugned judgment: 
“Leave is granted to consider the scope of the provisions of 
Sections 3 and 11 of the Punjab Industries (Control on 
Establishment 
& 
Enlargement) 
Ordinance, 
1963 
(the 
Ordinance, 1963); whether the government has any power 
under the aforesaid provisions of law to impose a ban upon the 
establishment/enlargement of sugar industry as has been done 
by notification dated 6th December, 2006 and in this context the 
application of the petitioner has been dismissed by the 
Secretary, Government of Punjab, Industries Department on 
24.1.2011; the correctness of the law enunciated in the 
judgment reported as Madina Sugar Mills Vs. Secretary, 
Ministry of Industries and others (PLD 2001 Lahore 506) and 
the effect of the judgment reported as Arshad Mehmood and 
others Vs. Government of Punjab through Secretary, Transport 
Civil Secretariat, Lahore and others (PLD 2005 SC 193) upon 
the facts of this case in relation to the Ordinance, 1963.” 
 
It may however be clarified that The Punjab Industries (Control on 
Establishment and Enlargement), Ordinance, 1963 was promulgated by the Governor 
of West Pakistan on 25th January 1963 and was approved by the Provincial Assembly 
of West Pakistan with amendments on 27th March 1963 and after receiving the assent 
of the Governor was published in the West Pakistan Gazette (Extra Ordinary) dated 
27th March 1963 at pages 1269-1272 as The Punjab Industries (Control on 
Establishment and Enlargement), Act, 1963. 
 
Notices were also issued to the Attorney General for Pakistan and the 
Advocate General of Punjab under Order XXVII-A of the Code of Civil Procedure. 
 
2. 
Khawaja Muhammad Farooq, the learned senior counsel representing the 
appellants in C.A. Nos. 1242 and 1244 of 2013, Mr. Noor Muhammad Chandia, the 
learned senior counsel representing the appellant in C.A. No. 1243 of 2013 and Mr. 
C.As. 1242 to 1245/2013 
3 
Haq Nawaz Chattha, the learned counsel representing the appellant in C.A. No. 
1245/2013, have assailed the judgment of the High Court.  They stated that the 
appellants had challenged the Notification dated 6th December 2006 (“the impugned 
Notification”) issued by the Industries Department of the Government of Punjab, 
which had imposed a complete ban on the setting up of new sugar mills and enlarging 
the installed capacity of existing sugar mills in the Province of Punjab.  This was done 
by inserting a new clause 3 in the earlier Notification dated 17th September 2002.  The 
learned counsel stated that though the impugned Notification was issued under section 
11 read with section 3 of the Punjab Industries (Control on Establishment and 
Enlargement), Act, 1963 (“the Act”) neither of these sections of the Act, or for that 
matter any other section, envisaged such a ban therefore the same was ultra vires of 
the Act and of no legal effect.  It was next contended that an application, seeking 
permission to establish or expand an industrial undertaking, should be dealt with under 
section 3 of the Act and can only be rejected after first giving a person an opportunity 
of showing cause against it or if the grant of the permission is prejudicial to the 
national interest or it is either injurious to health or could be a source of nuisance for 
the residents of the local area in which the industrial undertaking is proposed to be set 
up or expanded and not by simply referring to the impugned Notification. 
 
3. 
Mr. Noor Muhammad Khan, the learned counsel for the appellant in C.A. No. 
1243 of 2013, added to the above contentions by stating that his client had placed 
reliance upon the Notification dated 15th July 2005, which had permitted the 
establishment of new sugar mills up to a capacity of 16,000 TCD (tons crushing per 
day), consequently, the appellant-company was set up to establish a sugar mill with a 
capacity of 8,000 TCD and it had purchased 255 kanals of land, had applied to a 
financial institution for provision of finances, and made payment of an amount of two 
hundred thousand rupees to the financial institution as processing fee.  He also 
referred to the earlier Writ Petition No. 8473/2007 filed by the appellant-company 
before the Lahore High Court which was dismissed vide order dated 16th April 2008, 
C.As. 1242 to 1245/2013 
4 
by holding that the appellant had, “an alternate remedy of filing an appeal before the 
competent authority”.  The order of the High Court was impugned in Intra Court 
Appeal No. 130/2008 which was disposed of vide order dated 26th May 2008, the 
operative part whereof is reproduced hereunder: 
“2. 
Having examined the writ petition file and the 
impugned judgment, we find that the original order i.e. dated 
27.8.2007 (Annex-B to the writ petition) is subject to a revision 
or an appeal under section 7 of the Punjab Industries (Control 
on Establishment and Enlargement) Ordinance, 1963.  The 
learned counsel was confronted accordingly.  He has tried to 
argue that the order does not fall under section 3 of [sic] 
section 4 of the said Ordinance. 
 
3. 
Upon our query, the learned counsel has frankly 
conceded that the said impugned order has the effect of 
stopping or obstructing of the Industrial Project proposed to be 
installed by the appellant.  This being so, the matter squarely 
falls under section 3 of the said Ordinance which is subject to a 
revision under the said section 7.  Needless to state that section 
3 of the Law Reforms Ordinance, 1972, lays down that the 
instant ICA would not be competent where the law under 
which the original order has been passed provides that, inter 
alia, a revision against the same.  The ICA is not competent 
and is accordingly disposed of.” 
 
The appellant aggrieved by the above orders approached this Court in Civil Appeal 
No. 310-L/2011 which was disposed of vide order dated 30th January 2012, 
reproduced hereunder: 
“According to the learned counsel for the appellant the 
notification dated 6.12.2006, on the subject, has also been 
challenged by the appellant in another writ petition which is 
still pending before the High Court. 
 
2. 
In this view of the matter, we are of the opinion that the 
adjudication of the question involved in this matter is only of 
academic nature and the adjudication of the substantive 
notification dated 6.12.2006, is pending in the High Court, this 
appeal is dismissed. 
 
3. 
The decision in the writ petition shall not be prejudiced 
by any finding of the instant appeal.” 
 
 
4. 
Mr. Mudassar Khalid Abbasi, the learned Assistant Advocate General of the 
Government of Punjab (hereinafter “AAG” and “Government” respectively), stated 
that none of the appellants had availed of the alternate remedy of filing a revision or 
C.As. 1242 to 1245/2013 
5 
an appeal under section 7 of the Act therefore the writ petition was not maintainable 
before the High Court in terms of clause (1) of Article 199 of the Constitution of the 
Islamic Republic of Pakistan (“the Constitution”).  He also relied upon the above 
mentioned judgment of the High Court dated 16th April 2008 passed in Writ Petition 
No. 8473 of 2007 and the order of the Division Bench dated 26th May 2008 passed in 
ICA No. 130/2008, which had categorically held that the Act provided a venue for the 
redressal of grievances by filing an appeal or a revision under section 7 and that this 
Court had not set-aside the said finding, consequently, the writ petitions from which 
these appeals arise are not maintainable.   
 
 
He next contended that section 3 of the Act did not permit the establishment of 
an industrial undertaking without the prior permission in writing of the Government 
and such permission had not been granted to any of the appellants.  He stated that it 
was within the executive domain of the Government to ensure organized and planned 
growth of industry and the impugned Notification was issued pursuant to the 
recommendations of experts and decisions made by committees constituted on the 
subject which could not be assailed in Court.  He further stated that the hitherto before 
approach of granting permission or declining permission on a case to case basis had 
created misgiving and had also been castigated by the Lahore High Court in the 
judgment in the case of Madina Sugar Mills v Secretary, Ministry of Industries (PLD 
2001 Lahore 506) and the impugned Notification was in line with the said judgment.  
By referring to the judgment in the case of Arshad Mehmood v Government of Punjab 
(PLD 2005 Supreme Court 193) he said that Article 18 of the Constitution, which 
attends to the freedom of trade and business, does not curtail the power of the 
Government to restrict any particular industry which was against the national or public 
interest.  He referred to a number of documents to show that sugarcane crop consumed 
considerably more water than cotton or wheat and that the installed capacity of the 
existing sugar mills was under utilized, therefore, if additional sugar mills were set up 
or the existing ones expanded it would encourage farmers to grow sugarcane in their 
vicinity which would be bought by the sugar mills and the growing of cotton or other 
C.As. 1242 to 1245/2013 
6 
crops would be discouraged.  By referring to the documents on record, he stated that 
the cotton industry adds considerable value to the harvested cotton and a sizeable 
portion of the textiles manufactured from it are exported, earning considerable foreign 
exchange for the country, but the same benefits do not accrue by growing sugarcane 
and manufacturing sugar.  Documents were also referred to show that there was, and 
is, a considerable shortage of cotton in the country which is adversely impacting the 
textile industry which has on the one hand reduced foreign exchange earnings and on 
the other resulted in valuable foreign exchange being spent on the import of raw 
cotton for consumption by the textile industry.  Reference was also made to reports to 
show that sugarcane as compared to other crops attracts more bacteria and insects 
which have an adverse impact on other crops.  Under such circumstances the 
Government had decided to stop the erection of new sugar mills as well as the 
expansion of existing ones and this decision of the Government, incorporated in the 
impugned Notification, was in the national interest, which was also one of the stated 
factors to be taken into account when considering an application under section 3 of the 
Act. Therefore, since every application for the setting up of a new sugar mill or the 
expansion of an existing one, would be contrary to the national interest, good 
governance and transparency mandated the issuance of the impugned Notification 
which had removed all discretion and prevented either favouritism or victimization.   
 
 
 
Responding to the criticism of the impugned Notification on the ground that 
neither section 3 nor section 11 contemplated issuance of such a Notification, the 
learned AAG stated that even if for the sake of argument, but without conceding, this 
was accepted the appellants still could not set up sugar mills without the prior written 
permission of the Government and each and every one of the applications could be 
rejected on the abovementioned grounds. 
   
 
He next contended that the decision to permit new sugar mills or expand 
existing sugar mills was a policy matter and the courts have always declined to 
interfere with policy matters particularly when no mala fide or ulterior motive was 
C.As. 1242 to 1245/2013 
7 
alleged, let alone demonstrated.  In this regard reliance was placed on the cases of 
Nazar Muhammad Choohan v Faiza Asghar (PLD 2011 Lahore 120) and Government 
of Pakistan v Zamir Ahmad (PLD 1975 Supreme Court 667).  The later judgment was 
also relied upon to contend that Article 18 of the Constitution permits the imposition 
of a complete ban on any profession, trade or business. In interpreting a similar 
provision in the Indian Constitution the Supreme Court of India was also of the same 
view in the case of Narendra Kumar v Union of India (AIR 1960 Supreme Court 430). 
 
The learned AAG responded to Mr. Noor Muhammad Khan Chandia’s 
contention with regard to the Notification dated 15th July 2005 and stated that it had 
held the field for a period of only one year and five months and both prior to the 
issuance of the said Notification and after its withdrawal the prior written permission 
of the Government was required.  As regards the amount spent by Mr. Chandia’s 
client he stated that only some land was acquired, the value of which had gone up; and 
the payment of two hundred thousand rupees, which was the only other amount spent 
by the said appellant, cannot be categorized as a significant investment to create any 
vested right in the circumstances of the case.   
 
The learned AAG also referred to the comments filed in the writ petition from 
which Civil Appeal No. 1245/2013 arises, which had set out the reasons for issuing 
the impugned Notification, as under: 
“The rationale behind this restriction are given below: 
 
 At present, 46 sugar mills exist in the province and there is a 
deficit of about 35% between requirement and production of 
sugarcane crop.  All the existing sugar mills are working below 
the installed capacity.  The Punjab Province is already over 
crowded with regard to sugar mills, therefore, sanction for 
establishment of new sugar mills would not be feasible and 
lead to over investment. 
 
 Cotton is the backbone of our economy.  It ensures economic 
security as its value added products contribute 60% to foreign 
exchange earnings. 
 
 Sugarcane crop poses threat to cotton growing areas as it has 
very strong substitution effect for cotton.  Proliferation of 
Sugar Mills in the Province would adversely affect production 
of cotton.  Government of the Punjab constituted and notified a 
Location Policy committee headed by the Chief Secretary, 
C.As. 1242 to 1245/2013 
8 
Punjab to deliberate upon the policy of Government regarding 
establishment of new sugar mills to maintain a balance 
between production of sugar and protection of cotton growing 
areas of the Proving in the public interest.  On recommendation 
of committee, ban was imposed on establishment of new sugar 
mills and enhancement of capacity of existing sugar mills 
throughout the 
province 
vide 
Industries 
Department’s 
Notification dated 6.12.2006, which is reproduced as under: 
 
“No new sugar mill shall be set up and no 
enlargement in capacity of the existing Sugar Mills is 
allowed in the Province.” 
 
Prime Minister’s Secretariat (Public) Islamabad, vide U.O No. 
3 (2)/E-I-II/08 dated February 9, 2008, also advised the 
provincial governments to consider imposing complete ban on 
new installation and expansion of sugar mills for at least 5 
years owing to following cogent reasons (Annex-F): 
 
i) 
Sugarcane is water intensive crop requiring 18-20 
irrigations for proper growth.  Ground water sources 
are already depleted; increase in sugarcane area will 
only worsen the situation. 
 
ii) 
Sugarcane is already substituting cotton and wheat in 
many areas. 
 
(iii) Sugarcane crop nourishes pests and bacteria, 
detrimental to cotton crop. 
 
In response, Industries Department vide letter dated 24.3.2008, 
endorsed the concerns of Prime Minister’s Secretariat and 
informed that government of the Punjab has already banned 
establishment of new sugar mills throughout the province. 
 
It is added here that in view of growing number of prospective 
entrepreneurs in the sugar sector, a summary was moved to the 
Chief Minister (Annex-G), who was pleased to constitute a 
High Powered Committee headed by Senior Advisor to the 
Chief Minister to examine the issue regarding lifting of ban 
imposed on establishment of new sugar mills and enlargement 
in the capacity of existing sugar mills.  The committee met on 
08.04.2011 (Annex-H).  After thorough deliberations, the 
committee recommended continuing the ban on establishment 
of new sugar mills and enlargement in the capacity of existing 
sugar mills throughout the Punjab.” 
 
5. 
Mr. Aitzaz Ahsan, the learned senior counsel was permitted to make 
submissions on behalf of the Pakistan Cotton Ginners Association, supported the 
submissions of the learned AAG and supplemented his contentions by stating that 
districts of Southern Punjab were traditionally cotton growing areas and in recognition 
of this fact notifications, including Notifications dated 4th September 2003, 9th October 
C.As. 1242 to 1245/2013 
9 
2003, 1st April 2004, 12th October 2004, and finally the impugned Notification, were 
issued stopping the setting up of new sugar mills and expanding the installed capacity 
of the existing ones to ensure that cotton crop is not substituted with sugarcane.  
Attending to the Notification of 15th July 2005, on which certain appellants placed 
reliance, he stated that it was an aberration and was issued contrary to the advice of the 
experts and could be categorized as mala fide as it was designed to benefit certain 
parties and on such an aberration, which was against the national interest, a case for 
the sugar industry could not be raised. According to him prior to the issuance of the 
impugned Notification the matter was attended to in an arbitrary manner by allowing 
the applications of some while disallowing those of others and at times for ulterior 
reasons.   
 
 
He further contended that the expansion of the areas growing sugarcane has 
been economically, agriculturally and ecologically, disastrous.  The cotton industry is 
the backbone of industrialized Pakistan, making value addition to the raw material 
(cotton) and earning considerable foreign exchange for the country, which heavily 
relies on such earnings.  By referring to a number of documents he stated that it is 
established there is a huge shortfall of raw cotton in the country which is adversely 
impacting the production of yarn and textiles which has also reduced the foreign 
exchange earning potential of the country.  As regards the agricultural benefit of 
growing cotton, as compared to sugarcane, the learned counsel stated that land on 
which sugarcane has been  planted cannot be utilized for a second crop since the 
stubble remain rooted to the soil whereas the land on which cotton is grown can be 
utilized.  He referred to the reports of experts who had determined that the food 
security of the country is undermined when sugarcane is grown.  On the ecological 
front he contended that sugarcane used excessive water, as compared to other crops, 
and since Pakistan is a water-stressed country this should be discouraged.  He also 
referred to the judgment in the case of East and West Steamship Co. v Pakistan (PLD 
1958 Supreme Court 41) to state that the power to regulate any industry, trade or 
C.As. 1242 to 1245/2013 
10 
business includes the power to prohibit it if it is aimed at preserving the public 
interest.  
 
 
Many of the documents and reports referred to by the learned counsel were 
somewhat dated, therefore, we queried whether the economic, agricultural and 
ecological factors which had prevailed with the Government at the time of issuance of 
the impugned Notification were still applicable.  In response the learned counsel stated 
that the situation had exacerbated further and referred to an article / report published in 
daily Dawn on 3rd June 2016 which was based on the ‘Pakistan Economic Survey 
2015-2016’, published by the Government of Pakistan, wherein it was stated that 
cotton constituted 21 per cent of the economy, however, it had recorded a growth of 
only 0.19 per cent in the said financial year on account of insufficient cotton crop, 
production of which had dropped by 6.25 per cent and the country managed to 
produce only 10.07 million bales of cotton whereas the previous years’ production was 
13.96 million bales.    
 
6. 
Mr. Sikandar Bashir Mohmand, was permitted to make submissions on behalf 
of JDW Sugar Mills Limited, supported the contentions of the learned AAG and those 
of Mr. Aitzaz Ahsan.  He stated that the Act provides for a regulatory framework for 
the sustainable growth of industry in an organized and planned manner and the 
impugned Notification was in accordance therewith, which even otherwise was in the 
exclusive domain of the executive authority of the Government.  He further stated that 
even under the proviso to section 3 of the Act an application for setting up of a new 
sugar mill or expanding an existing one can be rejected if it is contrary to the national 
interest. The documents on record show that there was sufficient material to support 
the decision of the Government taken in the national interest, which had culminated in 
the issuance of the impugned Notification.  He also relied on the judgment in the case 
of East and West Steamship Co. v Pakistan (above) which had interpreted Article 12 
of the earlier Constitution, which was similar to Article 18 of the 1973 Constitution, 
C.As. 1242 to 1245/2013 
11 
and in doing so had concluded that the words “lawful trade or business” envisaged the 
imposition of a ban on any business or trade if it was in the public or national interest 
to do so. 
 
7. 
Mr. Salman Akram Raja, the learned ASC, had submitted an application 
(CMA No. 2977/2016) on behalf of Ittefaq Sugar Mills Limited to be impleaded as a 
party, as according to him a decision in this matter may adversely affect the said 
company as it had sought the relocation of its sugar mills installed in District 
Pakpattan to District Bahawalpur at a place near the border with District Rahim Yar 
Khan.  Without granting the said application we permitted him to make his 
submissions on behalf of the said Company. JDW Sugar Mills Limited and Hamza 
Sugar Mills Limited,  presumably the competitors of Ittefaq Sugar Mills Limited, had 
filed Writ Petition No. 12879 of 2015 seeking to restrain the said shifting whereas 
Ittefaq Sugar Mills Limited had filed Writ Petition No. 18827 of 2015 wherein the 
impugned Notification has been assailed though in the alternative it has been stated 
that the impugned Notification does not restrict the relocation of existing sugar mills.  
Both these petitions we are told are still pending before the Lahore High Court. The 
petitioners in Writ Petition No. 12879/2015 are opposing the proposed shifting as it 
would increase the installed capacity of sugar mills in the Southern Punjab Districts 
which they state is not sustainable as the available installed capacity is already under 
utilized.  However, Mr. Salman Akram Raja controverted their objection. He also 
referred to a document to show that the cultivation of sugarcane crop in the area has 
considerably increased if the figures for the years 2005-2006 are compared to those of 
2014-2015.  It appears that there is a tussle between two different sugar mills’ owners 
regarding the relocation of an existing sugar mill, whereas the matter considered by us 
is the determination of the legality of the impugned Notification which has imposed a 
ban on the setting up of new sugar mills and also expanding the installed capacity of 
existing ones.  Therefore, it would not be appropriate for us to express any opinion on 
C.As. 1242 to 1245/2013 
12 
this aspect of the matter which has as yet not been decided by the Lahore High Court 
where the said two writ petitions are pending adjudication.  
 
8. 
The questions for determination before us are: (1) whether the impugned 
Notification could have been issued under the Act, (2) whether despite the issuance of 
the impugned Notification the Government was required to give reasons for declining 
an application received under section 3 of the Act, (3) whether the issuance of the 
impugned Notification was within the domain of the executive authority of the 
Government and therefore immune from challenge, (4) whether there were valid 
reasons for issuing the impugned Notification and (5) whether such reasons were 
sufficient to constitute public or national interest.   
 
9. 
Before proceeding to answer the abovementioned questions it would be 
appropriate to reproduce the referred to provisions of the Act, the impugned 
Notification, Notification dated 17th September 2002 and Notification dated 15th July 
2005. 
The Act: 
 
“Preamble.   
Whereas it is expedient to provide for the organized and 
planned growth of industries in the Punjab, in the manner 
hereinafter appearing;” 
 
“3. 
Restrictions 
on 
establishment 
of 
industrial 
undertakings. 
No person shall establish or cause to be established any 
industrial undertaking or enlarge or cause to be enlarged any 
existing industrial undertaking except with the previous 
permission in writing of Government. 
 
 
Provided that the application of any person for the grant 
of such permission shall not be rejected: 
 
(a) 
without giving such person an opportunity of showing 
cause against it; or 
 
(b) 
unless the Government is satisfied, on the basis of 
information available to it and after making such 
inquiry as it may deem fit, that the grant of permission 
to such person will be prejudicial to the national 
interest, or injurious to the health of or a source of 
C.As. 1242 to 1245/2013 
13 
nuisance for, the residents of the local area in which the 
industrial undertaking is proposed to be set up or, as the 
case may be, the industrial undertaking which is 
proposed to be enlarged is situated.” 
 
“7.   Revision and appeal. 
(1) Any person feeling aggrieved by an order passed by 
Government or by any officer or authority under section 3 or 
section 4, may, within thirty days of the date of the order, apply 
to Government for a revision of the order.  
 
(2) Any person feeling aggrieved by an order passed by the 
Director under section 4 may, within thirty days of the date of 
the order, prefer an appeal to Government. 
 
(3) If in any case it shall appear to Government that any order 
passed by Government or the Director, as the case may be, be 
set aside or modified, Government may pass such order thereon 
as may be deemed fit:  
 
 
Provided that no such order shall be passed unless, in 
the case of an appeal, the appellant and in any other case the 
party to be affected adversely, has been given reasonable notice 
to appear and be heard.  
 
(4) Subject to any order passed by Government under the last 
preceding sub-section the order passed by Government or the 
Director under section 3 or section 4, as the case may be, shall 
be final.” 
 
“11. 
Exemption. 
Government may, by notification in the Official Gazette, 
exempt any industrial undertaking or class of industrial 
undertakings from all or any of the provisions of this Act or the 
rules.” 
 
 
Impugned Notification dated 6th December 2006: 
 
   “Government of Punjab Industries Department 
Dated Lahore, the 6th December, 2006 
 
NOTIFICATION 
No. AEA-III-3-5/2003 (Vol-III):- In exercise of the powers 
conferred upon him under Section 11 read with Section 3 of the 
Punjab Industries (Control on Establishment & Enlargement) 
Act, 1963, the Governor of the Punjab is pleased to order that 
in supersession of Notification No. AEA-III-3-5/2003, dated 
15th July, 2005, notified in the Extraordinary issue of the 
Punjab Gazette published on July 20, 2005; the following 
amendment shall be made in the Government of the Punjab, 
Industries Department Notification No. AEA-III 3-9/91 dated 
17.09.2002, with immediate effect: 
 
 
 
 
C.As. 1242 to 1245/2013 
14 
AMENDMENT  
 
For Clause 3, the following shall be substituted: 
 
“No new sugar mill shall be set up and no 
enlargement in capacity of the existing Sugar 
Mills is allowed in the Province.” 
 
Secretary Industries Department” 
 
Notification dated 17th September 2002 (published in The Punjab Gazette 
on 30th September 2002): 
 
“Lahore Monday September 30, 2002 
Government of Punjab  
Industries, Mines & Minerals Department  
 
NOTIFICATION 
 
No.AEA-III.3-9/91:- In exercise of the powers conferred upon 
him under Section 11 of the Punjab Industries (Control on 
Establishment & Enlargement) Act, 1963 and in supersession 
of the Punjab Government Notification No.AEA-III-4-1/85, 
dated 26 October, 1986, amended up to 12th February, 2000, 
the Governor of the Punjab is pleased to exempt all industries 
and areas from the provisions of Section 3 of the said Act 
except as notified hereunder:-  
 
1. No Industrial unit mentioned in Schedule ‘A’ of this 
notification or industrial unit exceeding a total cost of Rs. 
100.00 million (Rupees Hundred million) shall be set up 
within 10 miles (16 KMs) of the International Border.  
2. No Industrial unit shall be set up in areas affected by flood 
flowing transversely in the strip of one mile of either side 
across the Grand Trunk Road from Shahdara Town to 
Muridke Town, without prior permission of the Provincial 
Government.  
3. No new Sugar Mill shall be set up and no existing Sugar 
Mill be enlarged in the districts of Multan, Sahiwal, Vehari, 
Khanewal, Pakpattan, Lodhran, Bahawalpur, Rahimyar 
Khan, Bahawalnagar, D. G. Khan, Rajanpur, Layyah, 
Muzzaffargarh and Okara. 
4. Each District Government may declare “negative area” for 
industry. Such “negative area” be determined by a District 
Committee after consultation with all stakeholders in light 
of general policy guidelines to be issued by the Industries 
Department and exemptions allowed under Schedule ‘B’ of 
this Notification.  
5. No Industrial Unit mentioned in Schedule ‘C’ of this 
Notification shall be set up any where in the Punjab without 
prior approval of the Government.   
C.As. 1242 to 1245/2013 
15 
6. The Government reserves the right to refuse establishment / 
enhancement of any Industrial undertaking which is in 
contravention of the public interest, ecology or any other 
law / rules for the time being in force. 
7. The Government may relax any of the provisions of this 
notification in case of a particular unit or industry or class 
of units of industries.  
Secretary to Government of Punjab 
Industries, Mines & Minerals Department” 
 
Notification dated 15th July 2005: 
   “Government of Punjab Industries Department  
Dated Lahore, the 15th July 2005.  
 
NOTIFICATION  
 
No. AEA-III-3-5/2003. In exercise of the powers conferred 
upon him under Section 11 read with Section 3 of the Punjab 
Industries (Control on Establishment & Enlargement) Act, 
1963, the Governor of the Punjab is pleased to order that in 
supersession of Notification No. AEA-III-3-5/2003, dated  
12-10-2004 notified in the Punjab Weekly Gazette October 20, 
2004; the following amendment shall be made in the 
Government of the Punjab, Industries Department Notification 
No. AEA –III-3-9/91 dated 17-09-2002, with immediate effect:  
 
AMENDMENT 
 
For Clause 3, the following shall be substituted:  
 
i)   The establishment of new sugar mills upto the capacity 
of 16,000 TCD is allowed in the province.  
 
ii) The sugar mills are not allowed to enlarge existing 
capacity over 16,000 TCD.  
 
Secretary Industries Department” 
 
10. 
The purpose of enacting the Act is proclaimed in its preamble which is, “to 
provide for the organized and planned growth of industries in the Punjab”.  The most 
significant provision of the Act is its section 3 which states that the prior permission in 
writing of the Government is to be obtained before establishing or enlarging any 
industrial undertaking.  The proviso to the section 3 however states that an application 
seeking permission shall not be rejected without giving an opportunity of showing 
cause against it (clause (a) of the proviso) or the Government is satisfied, “on the basis 
of information available to it … that the grant of permission … will be prejudicial to 
C.As. 1242 to 1245/2013 
16 
the national interest, or injurious to health or a source of nuisance for, the residents of 
the local area” in which it is to be set up or enlarged (clause (b) of the proviso). 
However, the Government may, in exercise of powers under section 11, “exempt any 
industrial undertaking or class of industrial undertakings from all or any provision of 
this Act or the rules”.  We were informed that no rules have been enacted so far.   
11. 
The impugned Notification has been issued under section 3 read with section 
11 of the Act and has effectively placed a complete ban on the setting up of new sugar 
mills or expanding the existing ones.  There is some merit in the contention of the 
appellants that section 11 is an enabling provision rather than a disabling one, 
therefore, a ban on a class of industrial undertakings could not have been imposed 
thereunder.  However, such an interpretation would not in itself enable the appellants 
to set up or expand any industrial undertaking because section 3 clearly requires the 
previous permission in writing of the Government. There is also not a serious 
challenge to the proposition that each and every application could be rejected by the 
Government on the ground that it was “prejudicial to the national interest”. The 
Government has instead issued the impugned Notification restricting the establishment 
of new sugar mills as well as expanding existing ones.  Let us consider the ambit of the 
proviso first.  The proviso enables the Government to reject applications if it is 
satisfied on the basis of information and any inquiry that it may deem fit to conduct 
that it is prejudicial to the national interest or is injurious to health or is a source of 
nuisance.  Accordingly we proceed to consider the information available with the 
Government and the inquiries made by it before it had issued the impugned 
Notification.  
 
12. 
The Ministry of Food, Agriculture and Livestock of the Government of 
Pakistan reviewed the position that had emerged after the issuance of the Notification 
dated 15th July 2005, by the Government of Punjab, and recommended (on 8th 
September 2005) that the said Notification be withdrawn and, “a country-wide 
complete ban on installation and expansion of sugar mills may be imposed 
immediately by all the provinces”. It also called upon the Provincial Governments to 
C.As. 1242 to 1245/2013 
17 
constitute provincial committees for the preparation of comprehensive guidelines on 
the subject.  The recommendations were made on the basis of the following 
documented reasons: 
“4. 
The new Policy has been examined by the Ministry of 
Food, Agriculture, and Livestock and its views on the mater are 
as follows: 
 
i. 
Sugarcane is a tropical crop as it requires high rainfall 
and moderate temperature for optimum growth. Pakistan does 
not have the tropical climate and irrigation resources needed to 
attain comparative advantage in the cultivation of sugarcane. 
Therefore, it is not in our economic interest to promote this 
crop, particularly in the areas in which it displaces cotton and 
wheat.  
 
ii. 
Sugarcane is typically sown during the months of 
February-March and harvested during November-March. Its 
life cycle has a span of around one year. It needs almost 18-20 
irrigations for proper tillering and growth. Cotton and wheat 
rotation over the same period requires around 10-12 irrigations. 
Sugarcane is thus a highly water intensive crop not suited to 
our cropping system and rainfall patterns. In a future scenario 
where water resources will become scarcer. It is neither 
advisable nor prudent to replace cotton/Wheat rotation with 
Sugar Cane.  
 
iii. 
As a consequence of its water intensive nature, 
sugarcane in the cotton zone is grown in the areas where 
ground water is sweet as canal water alone cannot meet the 
total requirement. Water shortage and low rainfall in previous 
years have led to excessive ground water pumping. Experts are 
already raising serious concerns regarding depletion of our 
ground water resources. Any increase in sugarcane area in the 
cotton zone will only worsen the situation. Availability of 
sweet groundwater is a major source of irrigation in southern 
Punjab, an area which produces the bulk of our cotton and 
wheat crops. These areas are serviced by non-perennial 
irrigation canals that run only for six months, leaving the 
farmer totally dependent on the aquifer for the remaining 
months of the year. Any adverse change in the aquifer in the 
core cotton growing area will, therefore, jeopardize our 
economic future. 
 
iv. 
Sugarcane further loses its economic potential when it 
is grown under the dry and hot conditions of “cotton zone”. In 
such an environment, it substitutes out our most important 
crops i.e. cotton and wheat and its irrigation requirements are 
further increased due to the low rainfall and hot weather 
conditions. Frequent irrigations under hot and dry conditions 
significantly raise humidity levels and create ideal conditions 
for rapid multiplication of pests – conditions not favorable for 
the cotton crop. These were the factors that had led to the 
imposition of the ban on installation of sugar mills in the 
“cotton zone”. These factors have now become even more 
important in view of our “Textile Vision”, changing world 
C.As. 1242 to 1245/2013 
18 
scenario for textile competitiveness, and rapid expansion in our 
textile sector in the recent past.  
 
v. 
In order to achieve the targets of textile vision 2010, we 
need all the available land under cotton cultivation. Billions of 
dollars of investment has taken place in the textile sector 
during the last five years on the firm commitment of the 
Government 
that 
industry-friendly 
policies 
assuring 
uninterrupted and adequate supply of all raw materials will be 
formulated. Consequently, demand for raw cotton has 
substantially increased in the recent past. The Federal and 
Provincial Governments should implement policies and 
programs which encourage growers to bring more area under 
cotton instead of curtailing the area and switching to other 
crops.  
 
vi. 
The Punjab Government had itself initiated a program 
of “Revival of Cotton in old Cotton area” in 2002 to increase 
cotton acreage in Punjab and as a part of the policy had 
actually revised its definition of “cotton zone” by including 
new districts in the negative list and banning the setting up of 
sugar mills in these districts. An abrupt reversal of policy will 
shake the confidence of the textile industrialists which we can 
ill afford at this crucial stage. APTMA has already expressed 
serious concern based on rumours about the change in the 
Policy (annex C). It will take up this issue with the 
Government at all levels more vigorously once they receive 
official Notification. We will not be able to defend this shift in 
Policy given our previous policy statements.” 
 
13. 
The Cane Commissioner of Punjab had also opposed lifting the ban on the 
establishment of new sugar mills and expanding the capacity of existing ones. In 
coming to this decision he gave the following reasons which are contained in his letter 
dated 4th April 2009: 
“1. The Punjab Sugar Industry include 46 sugar mills out of 
which 45 are functional.  The crushing capacity of the 45 
functional sugar mills is 3,21,900 metric ton per day.  Due 
to non availability of sufficient sugarcane these mills have 
never utilized their crushing capacity 100% even in the 
year 2007-08 when there was a  bumper crop of sugarcane.  
In that year the sugarcane crushed was 3,30,63,564 metric 
ton during 150 crushing days as against requirement of 
4,82,85,000 metric ton of sugarcane for 100% utilization of 
crushing capacity of sugar mills.  In the sugarcane glut 
season the mills could run only @ 65 to 70% of their 
crushing capacity. 
 
2. The maximum sugarcane growing area falls in Bahawalpur 
and Faisalabad Divisions.  The number of sugar mills in 
these Divisions are 7 & 16 having a crushing capacity of 
87,000 & 1,04,000 metric ton per day, respectively.  These 
sugar mills despite their having been located in the 
C.As. 1242 to 1245/2013 
19 
favourable sugarcane growing area, have never managed 
utilize their mills crushing capacity fully. 
 
3. Sugarcane is a high water delta crop.  It can not possibly be 
horizontally propagated and extended.” 
 
14. 
The Government had sought the comments and views of the Agriculture 
Department on the “Establishment of New Sugar Mills” which were conveyed by the 
Secretary Agriculture under cover of letter dated 20th February 2008, from which the 
following extracts have been reproduced: 
“Sugarcane and cotton are two important cash crops of the 
Punjab besides rice. However, in the main cotton belt 
sugarcane has emerged as a competing crop with its inroad in 
traditional cotton belt i.e. Rahim Yar Khan due to 
establishment of new crushing unit in the areas. This trend has 
enormous economic and ecological consequences. Sugarcane is 
a one year crop and it requires high delta of water compared to 
cotton as Punjab falls under arid climate whereas sugarcane is a 
tropical crop. Moreover, in case of cotton, wheat can be grown 
after cotton picking which substantially contribute to the food 
security of the country and generate surplus for the deficit 
areas. The wheat grain in cotton belt is of high gluten and free 
from seed born disease.  
 
 
Cotton ensures economic security as its value added 
product contributes 60% to the foreign exchange. There is a 
widening gap in demand and supply due to which country has 
to import cotton to meet the domestic requirements evident 
from data below.  
 
 
In future, import of cotton will not be cost effective due 
to expansion in textile sector of India and China.  
 
 
The country requires about 18 millions bales of cotton 
by the year 2015 and 80% of it has to be produced in the 
Punjab Province. This target can be achieved through increase 
in production per unit area and expansion in area. Therefore, 
we need to maintain the current level of areas under cotton and 
also ensure 1 % expansion in areas every year. The expansion 
of sugarcane in the Province is evident from the table below. 
The mills capacity is already much higher compared to the 
cane supply.”  
 
15. 
A Committee was constituted by the Chief Minister of Punjab which included 
the Chief Secretary, Secretary Industries, Secretary Agriculture, and Secretary Food as 
well as the representatives of the Lahore Chamber of Commerce and Industries and 
representatives of the Punjab Sugar Mills Association. The said Committee, in its 
meeting held on 8th April 2011, recommended the “ban on establishment of new sugar 
C.As. 1242 to 1245/2013 
20 
mills and enlargement in capacity of existing sugar mills of any category throughout 
the Province.”  In supporting the ban the Secretary industries stated:  
“…the imposition of ban on sugar mills by the Government of 
the Punjab was in line with the position of Federal government 
namely that promotion of sugarcane production was not in the 
national interest in view of its substitution effect on cotton and 
wheat crops and its harmful role, being a water intensive crop, 
in the depletion of ground water resources.  He pointed out that 
crushing capacity of sugar mills in the province was 
underutilized to the extent of a 36% deficit between crushing 
capacity of sugar mills and availability of sugarcane in 
Punjab.” 
 
The view of the Chief Secretary of the Province was recorded in the minutes of 
the meeting as under: 
“…applications to setup new / mini sugar mills were mostly for 
setting up units in cotton growing belt of Punjab.  The 
attraction of this area for the investors was mainly on account 
of high sugarcane recovery and if this trend is encouraged, the 
demand for additional sugarcane would come at the expense of 
the cotton crop. However, as sugar requirements of the 
province could easily be met from existing capacity of sugar 
mills, addition of new / mini sugar mills is not needed.  He was 
of the view that the ban on the establishment of new sugar 
mills may be continued.” 
 
 
 
The Secretary Agriculture endorsed the above view adding, “that lifting of ban 
on establishment of sugar mills would affect production of cotton which was presently 
13 million bales and the country’s demand was 15-16 million bales.”   
 
16. 
It is therefore quite clear that the decision of the Government, disallowing the 
setting up of new sugar mills and expanding the capacity of existing ones, was taken 
after considerable deliberations and was in conformity with the advice of experts of 
the relevant departments, including Agriculture, Food and Industries. The decision of 
the Government is also in accordance with the views of the Government of Pakistan. 
The factors taken into consideration in coming to such a decision, as gleaned from the 
referred to documents, included the following ecological / environmental, agricultural, 
industrial and financial ones:  
 
C.As. 1242 to 1245/2013 
21 
● 
Punjab has an arid climate whereas sugarcane is best grown in tropical 
zones; 
 
 
● 
Sugarcane consumes far more water than other crops; 
 
 
● 
The water required for growing sugarcane in non-perennial 
irrigation canal areas is made up by tapping into groundwater / 
aquifers inducing water scarcity by depleting aquifers; 
 
● 
Sugarcane stubble remains rooted in the soil after it has been 
cut therefore the second (wheat) crop cannot be grown on such 
land whereas it can be grown on the land from which cotton is 
harvested;  
 
 
● 
Sugarcane adversely affects food security; 
 
 
 
● 
Sugarcane substitutes cotton and wheat; 
 
 
● 
Existing sugar mills have underutilized capacity;    
 
 
● 
Textile industry is being starved of locally available cotton; 
 
● 
Cotton bales are imported by using scarce foreign exchange;  
 
 
● 
Textiles are a major foreign exchange earner; and  
 
● 
International price of sugar is cheaper than the local price 
therefore sugar does not have export potential. 
 
  
17. 
In order to ascertain whether some or all of the aforesaid factors, which had led 
to the ban being imposed, still prevailed, we examined the current data on the subject. 
The Cane Commissioner of the Punjab as recently as 24th July 2015 pointed out that 
even though sugar mills were operating well below installed capacity the production 
of sugar was considerably more than its consumption, stating that: 
 
“4. Pakistan is producing above 5 MMT of sugar per annum 
and has excess installed crushing capacity (3,47,900 MT / Day 
- Punjab) than domestic consumption, whereas the annual 
domestic consumption is 4.4 MMT on the basis of 200 million 
population and average per capita consumption of 22 kgs per 
annum.”  
 
 
The sugar glut could also not be reduced by exporting it because: 
 
“5. International price of sugar are $360-375 M. Ton and 
domestic price are $500 per M. Ton during 2015.”  
 
 
The “Pakistan Economic Survey 2015-2016”, published by the Finance 
Division of the Government of Pakistan, also does not depict an encouraging situation. 
C.As. 1242 to 1245/2013 
22 
The financial year (FY) 2015-2016 discloses excessive sugarcane production and a 
deficit cotton crop which is adversely affecting the cotton ginning and textile industry 
with negative financial consequences, as can be seen from the following extracts taken 
from the said report: 
“During FY 2016, the performance of agriculture sector as a 
whole remained dismal as it witnessed a negative growth of 
0.19 percent against 2.53 percent growth during the same 
period last year.  The growth of crops declined by 6.25 percent, 
while the other sub component of Agriculture sector like 
Livestock, Forestry and Fishing posted positive growth of 3.63 
percent, 8.84 percent and 3.25 percent, respectively.  The 
growth of sub Sector of crops included important crops, other 
crops and cotton ginning remained negative as it posted a 
growth of -7.18 percent, -0.31 percent and -21.26 percent 
which impacted negatively on crops as a result became the 
reason of negative growth of Agriculture sector.  The last 
negative growth in Agriculture was witnessed in 2000-01, 
when agriculture growth declined to 2.18 percent.  Important 
crops having a share of 23.55 percent in agricultural value 
added has witnessed negative growth of 7.18 percent on 
account of large decline in cotton production (27.83 percent), 
rice production (2.74 percent) and maize production (0.35 
percent) during 2015-16 against negative growth of 0.52 
percent during the same period of last year.  While only wheat 
and sugarcane production witnessed a positive growth of 1.58 
percent and 4.22 percent respectively, as compared to last year.  
Other crops contributed 11.36 percent in value addition of 
agriculture witnessed a decline of 0.31 percent during 2015-16 
against positive growth of 3.09 percent during the same period 
last year due to decline in the production of pulses, fruits and 
oilseeds posting negative growth of 12.49 percent, 2.48 percent 
and 9.56 percent, respectively.  With drop in cotton production 
by around 27.83 percent this year the Cotton ginning having a 
share of 2.32 percent in value addition of agriculture has 
suffered badly and posted a negative growth of 21.26 percent 
compared to 7.24 percent growth during the same period last 
year.” (at pages 24 and 25) 
 
“Cotton being a cash crop and a essential source of raw 
material to the textile, enables the textile industry to survive 
and expand its base.  The cotton has share of 1.0 percent in 
GDP and contributes 5.1 percent in agriculture value addition.  
This year the production of cotton massively declined 
therefore, to maintain the supply chain of cotton to the textile 
industry, the import of raw cotton during July-March 2015-
2016 has increased to 345.363 thousand tonnes compared to 
97.354 thousand tonnes during same period last year showing a 
growth of 254.75 percent while in value terms it reached to 
US$ 588.236 million against US$ 224.647 million witnessing 
growth of 161.85 percent.  During 2015-16, the cotton crop 
was sown on an area of 2917 thousand hectares, showing a 
decrease of 1.5 percent over last year’s area of 2961 thousand 
hectares.  Cotton production for the year 2015-16 stood at 
C.As. 1242 to 1245/2013 
23 
10.074 million bales against 13,960 million bales last year 
showing a decline of 27.8 percent.” (at page 26) 
 
 
The excessive availability of sugar is further confirmed by the statement of the 
Economic Advisor of the Government of the Punjab, which is based upon the statistics 
provided by the Sugar Advisory Board of the Ministry of Industries and Production, 
Government of Pakistan, filed by the learned AAG: 
“As per latest (2015-16) statistics of Sugar Advisory Board, 
Ministry 
of 
Industries 
& 
Production, 
Islamabad 
the 
requirement of sugar per person per annum is 20 kg.  Thus for 
the Punjab population of around 100 million, the sugar 
requirement is approximately 2MM tons per annum and the 
population 
based 
sugar 
requirement 
of 
Pakistan 
is 
approximately 4 MM tons per annum. The detail of Sugar 
Production and Demand is as under: 
 
 
Pakistan 
Punjab 
Production of Sugar 
5.681 Million Metric Ton 
2.900 Million Metric Ton 
Demand of Sugar  
4.0      Million Metric Ton 2.144 Million Metric Ton 
Surplus Sugar  
1.681 Million Metric Ton 
0.756 Million Metric Ton” 
 
 
 
Thus, the situation that had prevailed prior to the ban being imposed appears to 
have been further aggravated. Therefore, not only has the ban been justified but also its 
continuance is imperative.  
 
18. 
Before proceeding to answer the questions formulated in paragraph 8 (above) it 
would be appropriate to attend to the preliminary legal objection taken by the learned 
AAG that the appellants had not availed of the alternate remedy of revision / appeal.  
In our opinion availing of the said remedies would be an exercise in futility in the 
presence of the impugned Notification as it is not expected that a Government 
functionary could, or even should, take a decision contrary to the Government’s policy 
decision incorporated in the impugned Notification of not permitting the setting up of 
new sugar mills or expanding the existing ones. Moreover, it was rightly noted by 
Jawwad S. Khawaja J, when he was a judge of the Lahore High Court, in the case of 
Madina Sugar Mills (above), the havoc caused when discretion was given and how it 
was abused. The judgment sets out the history of the law and how appallingly matters 
C.As. 1242 to 1245/2013 
24 
of national importance were attended to as amply demonstrated by the following 
extracts therefrom: 
“3. 
From time to time the Provincial Government has 
issued notification in exercise of its powers under section 11 of 
the Ordinance. The first such notification, which bears 
relevance to the present case was issued on 2-10-1986 and is 
hereinafter referred to as the “Original Notification”. By means 
of the Original Notification, all industries and areas in the 
province were exempted from the application of section 3 of 
the Ordinance except those specified in the said Notification 
itself. As a consequence, border areas, areas prone to flooding 
and urban areas among other specified locations, were retained 
within the regulatory ambit of section 3 of the Ordinance while 
in the remaining areas of the Province, industries could be set 
up (subject to certain industry-wise restrictions) without 
obtaining the prior permission of the Government under section 
3 of the Ordinance. The area-wise restrictions, which find 
mention in paragraphs Nos.1 to 4 of the Original Notification, 
reflect what is officially termed as the "Location Policy" of the 
Punjab Government.” (at pages 508-509) 
 
 
“5. After the Original Notification the Location Policy 
underwent numerous changes, primarily it would appear, 
effecting the sugar industry. On 3-11-1988 as Notification (the 
“First Amending Notification”) was issued whereby the sugar 
industry was brought into the Location Policy of the 
Government through the incorporation of paragraph 2(a) in the 
Original Notification. Paragraph 2(a) stipulated that no sugar 
mill would be allowed to be set up in a defined negative area 
comprising of the divisions of Multan, Bahawalpur and D. G. 
Khan and the district of Okara.” (at page 509) 
 
“7. What happened subsequent to the First Amending 
Notification is a story of distasteful cronyism which was 
indulged in by the incumbent Chief Ministers of the time which 
undermined the well-considered Location Policy of the 
Government and sacrificed the State and public interest to the 
business, commercial and political interests of persons who 
were influential politically or otherwise. It appears that as and 
when the Government in power wished to favour such 
influential persons, the Location Policy was modified without 
much ado and wholly in disregard of the considerations, which 
had prevailed in the formulation of the Location Policy in the 
first place. New sugar mills as a result, were allowed to be set 
up in the negative area comprising of the divisions of 
Bahawalpur, Multan and D.G. Khan and the District Okara.” 
(at page 510) 
 
“9. … It has become apparent from an examination of the 
official record that each of the notifications mentioned in the 
preceding paragraph, was issued to accommodate influential 
persons desirous of setting up sugar mills in the negative area. 
These notifications are not based on any valid justification for 
modifying the Location Policy. No committees were 
constituted nor was any data, information or opinion gathered 
C.As. 1242 to 1245/2013 
25 
to justify deviation from the Location Policy, which had been 
formulated after the in-depth and extensive deliberations 
preceding the First Amending Notification as set out in 
paragraph 6 above. The learned Advocate-General at the very 
outset conceded that he could not defend what had happened 
during the past. He did, however, argue that any failing of mis-
governance in the past could not be made the basis for allowing 
it to continue in the future also.” (at page 511) 
 
“16.    However, having so held I am not oblivious of the 
abusive manner in which the well-considered Location Policy 
of the Government was tampered with for considerations which 
clearly were based on favouritism and were not motivated by 
the interest of the State. I have little doubt that if any of the 
notifications mentioned in paragraph 8 had been challenged in 
Court, at the relevant time, on the ground of arbitrariness and 
unreasonableness, such challenge would have merited serious 
consideration. In this context I find that the Final Notification 
represents a salutary correction of the waywardness with which 
the Location Policy of the Government was undermined in the 
past. It is not for this Court to sit in judgment over the policy 
decision of the Government once the Court concludes that the 
process through which such policy decision was arrived at was 
not open to exception.” (at page 513) 
 
 
 
We could not agree more with the aforesaid observations with regard to the sad 
state of affairs that prevailed. The cherished objective of transparency in governance 
was obfuscated. Unfortunately, the incumbent Chief Minister/s have continued on the 
path of favoritism as it transpires that despite the said judgment a number of sugar 
mills were given permission to be set up. In this regard, in response to our query, the 
learned AAG placed on record letter dated 24th June 2016 of the Economic Advisor of 
the Government of Punjab which shows that during the period that the Notification 
dated 15th July 2005 held the field a sugar mill of a capacity of 12,000 TCD was set up 
in District Muzaffargarh and another of a capacity of 16,000 TCD was set up in 
District Rahim Yar Khan. Alarmingly two sugar mills were also allowed to be set up 
after the issuance of the impugned Notification which had forbidden the setting up of 
new sugar mills; one of a capacity of 12,000 TCD in District Rahim Yar Khan and 
another of a capacity of 15,000 TCD in District Mianwali.  These facts came to the 
fore incidentally and are not the subject matter of these appeals therefore it would not 
be appropriate to state any thing further in this regard as the same may be subject 
matter for investigation and litigation. 
C.As. 1242 to 1245/2013 
26 
 
19. 
The appellants have also questioned the constitutionality of the impugned 
Notification, even though no challenge was made on this score in the prayer clause of 
the petition before the High Court. It has been contended that the impugned 
Notification violates the appellants’ fundamental right contained in Article 18 of the 
Constitution to conduct the business of setting up sugar mills and manufacturing sugar 
therefore the said ban must yield to the Constitution.  To appreciate the contention it 
would be appropriate to reproduce the said provision of the Constitution, as under: 
“18. Freedom of trade, business or profession. 
Subject to such qualifications, if any, as may be prescribed by 
law, every citizen shall have the right to enter upon any lawful 
profession or occupation, and to conduct any lawful trade or 
business: 
Provided that nothing in this Article shall prevent- 
(a) 
the regulation of any trade or profession by a 
licensing system; or 
(b)  
the regulation of trade, commerce or industry 
in the interest of free competition therein; or 
(c)  
the carrying on, by the Federal Government 
or a Provincial Government, or by a 
corporation 
controlled 
by 
any 
such 
Government, of any trade, business, industry 
or service, to the exclusion, complete or 
partial, of other persons.” 
 
 
The case of Government of Pakistan v Zamir Ahmad Khan (PLD 1975 
Supreme Court 667) considered the licensing regime enabling import of 
cinematograph films and the amendment made therein pursuant to which the 
respondents were disqualified from importing films. A three member bench of this 
Court considered the scope of Article 18 of the Constitution.  It also considered 
whether the issuance of a license can be claimed as a right even if it was contrary to 
the policy objective of the Government and whether a writ can be issued which would 
defeat the policy that was competently made by the Federal Government. Muhammad 
C.As. 1242 to 1245/2013 
27 
Gul J, delivered the courts opinion, and it would be appropriate to reproduce the 
following extracts therefrom:  
 
“It will be appropriate to examine in the first instance, whether 
the respondent can invoke any provision of the Constitution in 
the Chapter relating to the Fundamental Rights for the grant of 
licence for the import of films. Article 18 of the Constitution, 
which relates to the freedom of trade, business or profession, 
which corresponds to Article 15 of the, Interim Constitution, 
and which incidentally held the field at the relevant time, 
assures the citizens the right to enter upon any "lawful 
profession or occupation" and "to conduct any lawful trade or 
business". It is important to point out that the word "lawful" 
qualifies the right of the citizen in the relevant field. This 
clearly envisages that the State can by law ban a profession, 
occupation, trade or business by declaring it to be unlawful 
which in common parlance means anything forbidden by law. 
Prostitution, trafficking in women, gambling, trade in narcotics 
or dangerous drugs are common place instances of unlawful 
profession or trade. These are inherently dangerous to public 
health or welfare. Therefore, on the wording of Article 18 of 
the Constitution, the right to enter upon a profession or 
occupation or to conduct trade or business can hardly be 
described to be a constitutional or fundamental right when such 
right may be denied by law. In this respect our Constitution 
stands in sharp contrast with the corresponding provision of the 
Indian Constitution which omits the use of word "lawful" in the 
relevant provision.” (at page 672) 
 
 
“…law is well settled that in the generality of cases, licence 
(simpliciter) is a privilege and not a legal right; much less there 
is a legal duty for its grant. Therefore, exceptional cases apart, 
mandamus would not issue in such cases. Speaking generally 
in such cases the emphasis is on policy, and any discretion 
vesting in the authorities is directed towards attaining the 
policy objective.” (at page 677) 
 
“Indeed, the Government has all along since the inception of 
the Ordinance, frequently and materially altered import 
policies. These policies are determined generally with 
reference to the domestic needs their priorities, availability of 
foreign exchange and multitudes of other factors of which the 
Federal Government is the sole arbiter in exercise of its 
executive authority. The decision taken, falls within the realm 
of policy making. These policy decisions are binding on the 
subordinate administrative authorities as a matter of duty. In all 
such cases, orders made must conform to the policy decisions 
of the Government. The amendment made on 10-8-1972 in 
item No. 49 signified a change in policy and the respondent 
was informed that he was being refused licence because of "the 
change in policy" and not because of any other reason. On 
these facts, it is not possible to subscribe to the proposition that 
a writ of mandamus would lie against the Licensing Authority 
which would have the effect of defeating the policy, 
C.As. 1242 to 1245/2013 
28 
competently made by the Federal Government.” (at pages 677-
678) 
 
 
The above judgment was referred to and approved (at page 223) in the seven 
member bench judgment of this Court in case of Arshad Mehmood v Government of 
Punjab (PLD 2005 Supreme Court 193). However, the point for determination in 
Arshad Mehmood’s case was quite different, which was to consider the 
constitutionality of section 69-A introduced in the West Pakistan Motor Vehicles 
Ordinance, 1963 in pursuance whereof the appellants had been prevented from plying 
their transport vehicles despite holding valid route permits. This Court held that since 
the exclusion of the appellants by franchise holders pursuant to section 69-A was a 
‘classification’ not permissible under Article 25 (the equality provision of the 
Constitution) section 69-A of the said Ordinance was “violative of Article 25 of the 
Constitution”.  
 
20. 
In the cases heard by us the appellants were not already operating sugar mills 
but were proposing to set up new ones. The owners of existing sugar mills were also 
prevented from expanding their sugar mills. The decision to impose the ban was not to 
benefit or punish anyone but to ensure the organized and planned growth of the 
industry, which may include the factors noted in paragraph 16 above, even though by 
imposing a ban the existing sugar mills may have obtained an advantage of reduced 
competition. The decision to impose the ban was taken after long deliberations and on 
the advice of experts and we have not been shown any mala fide or ulterior motive of 
the Government in taking this decision. On the contrary, it may well be stated that if 
the Government had not finally acted it would have further devastated the 
environment and food security as well as undermining the economy. When the 
Government stopped the expansion of the sugar business it did not offend Article 18 
of the Constitution since the rights guaranteed thereunder are “subject to such 
qualifications” that have been “prescribed by law”. The Act starts with the position of 
not permitting the setting up of any industry except by the prior written permission of 
the Government and then proceeds to state that the applications seeking such 
C.As. 1242 to 1245/2013 
29 
permission shall not be rejected except for the reasons mentioned in the proviso to 
section 3. Regretfully the rules which were envisaged in the Act and were to be made 
by the Government have not materialized despite the Act being in the field for over 53 
years. Consequently, anyone can submit an application wanting to set up any industry 
and each such application is to be dealt with on a case to case basis. This, to say the 
least, is a most unsatisfactory state of affairs. In this terrain unregulated by rules the 
Government may reject the applications received by it either under clause (a) or clause 
(b) of the Act. Under clause (a) the Government has to provide an opportunity to show 
cause against it. However, under clause (b) the Government may reject an application 
if it is satisfied, on the basis of information available to it and after making such 
inquiry as it may deem fit. As noted above the Government had inquired into the 
matter and there was considerable information available with for it to conclude that 
permitting the establishment of new sugar mills or permitting the expansion of 
existing ones was prejudicial to the national interest. The Government therefore took 
the decision to prohibit both new sugar mills and the expansion of existing ones and 
issued the impugned Notification.  The decision of the Government was/is in the 
public and national interest.  Such decision was also not motivated by malice, mala 
fide nor taken for any ulterior reason.  Therefore, it is unexceptionable.  In respect of 
such a decision a writ under Article 199 of the Constitution does not lie. Whilst a 
notification prohibiting a particular class of industry as noted above may not be issued 
under section 11 of the Act, there is no reason why it could not be issued under section 
3 of the Act, even though section 3 does not specifically mandate the issuance of such 
a notification.  
 
21. 
Having answered the first question (formulated in paragraph 8 above) in the 
affirmative leads us to the second question. Since the Government has issued the 
impugned Notification, which is based on valid reasons we do not think there would 
be any point to give reasons for declining an application seeking the establishment of a 
new sugar mill or expanding an existing one. The impugned Notification is 
C.As. 1242 to 1245/2013 
30 
undoubtedly within the executive authority of the Government, which answers the first 
part of the third question, however, it would not be immune from a challenge if it 
could be demonstrated that it was issued for mala fide or for ulterior purposes or was 
against the public or national interest, which answers the second part of the third 
question. Whilst it may have been difficult to determine the line which separates the 
legitimate from the illegitimate assumption of such power there was no difficulty in 
determining this in the present case. As has already been determined that there were 
valid reasons for issuing the impugned Notification the fourth question stands 
answered.  The fact that there were a number of reasons justifying the issuance of the 
impugned Notification and each reason in itself sufficient to be categorized as 
constituting the public or national interest the fifth question too is answered. In 
conclusion we may state that the legal principles enunciated in the case of Madina 
Sugar Mills (above) were correct.  
 
22. 
That for the aforesaid reasons these appeals are dismissed, however, because 
such a matter had not been earlier decided by this Court and there was some 
uncertainty about it there shall be no order as to costs.             
 
 
Judge 
 
 
Judge 
Announced in open Court 
At Islamabad 
 
On 25th July, 2016 
 
 
 
By Justice Ejaz Afzal Khan, J. 
 
APPROVED FOR REPORTING  
     (Zulfiqar)