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PETITIONER: ZIPPERS KARAMCHARI UNION

       Vs.

RESPONDENT: UNION OF INIDA & ORS.

DATE OF JUDGMENT:       03/09/1998

BENCH: S.C. AGRAWAL, S.P. KURDUKAR.

ACT:

HEADNOTE:

JUDGMENT: JUDGEMENT S.P. LURDUKAR.J. MS.  Y.K.K.    Corporation, Japan, (for short ’YKK’) an international group  company,  having  worldwide  net  of companies  and  business  locations in various courtries, on April 29, 1995 submitted a proposal  representation  to  the Foreign  Investment  Promotion  Board,  New Delhi (for short ’FIPB’) seeking approval to set  up  integrated  plants  for manufacturing zip fasteners (metallic and non-metallic) with hundred  per  cent  own  capital  investment  with no export obligation.  On consideration  of  this  proposal  the  FIPB forwarded  the  same  with its recommendation to the Central Government.  The  Deputy  Secretary  to  the  Government  of India, Ministry of Industry, Department of Industrial Policy and   Promotion   vide  its  letter  dated  7th  July,  1995 communicated the approval on behalf  of  the  Government  of India to  YKK.    Accordingly,  YKK  through  its subsidiary company m/s YKK  Zippers,  Singapore  (p)  Ltd.,  the  third respondent set up integrated plants at Bawal in Haryana. (2) The petitioners claiming to be the  members  of  various trade   unions   operating   in  the  companies  engaged  in manufacture of zip fasteners have filed this  Writ  Petition under  Article  32  of  the  Constitution  of  India seeking mandamus to quash the permission granted to YKK for  setting up   "INTEGRATED  PLANTS"  for  manufacturing  metallic  and non-metallic zip fasteners in India.  In  addition  to  this prayer,  a  Writ of Mandamus is also sought to set aside the Notification No.S.O.  309(E) dated 30th May,  1986  and  for declaration  that  new  industrial  policy  of  1991  is  in violation of the  Industries  (Development  and  Regulation) Act, 1951  (for  short  ’the Act’).  First respondent is the Union  of  India  and  the  second  respondent  is   Foreign Investment Pormotion Board (FIPB). (3)  It is alleged by the petitioners that zip fasteners and its components were being manufactured in India since  1949. eversince  1971  the manufacturing of zip fasteners has been reserved exclusively  for  the  small  scale  sector.    Zip fasteners   are  broadly  classified  into  two  categories, metallic and non-metallic zip fasteners.  It  is  undisputed that  the  zip  fastener  is  the  final  product of various

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components.  There are about 150 small scale units in  India engaging over 45,000 workers in the manufacturing process of various components  for  the end product i.e.  zip fastener. Most of these manufacturers fall within  the  parameters  of small scale  industry.    These  manufacturers after putting their  hard  work  and  on  obtaining  knowhow   have   been manufacturing  the  zip fasteners and successfully competing with the international market of zip fasteners.   They  have been   supplying  zip  fasteners  to  the  manufacturers  of readymade garments, leather garments  and  allied  articles. As  of today the High technology used by these manufacturers in successfully  competing  the  world  market  and  earning valuable foreign  exchange  for India.  Notwithstanding this factual position the reservation contained in  Section  29-B (2)  (2B) read with item 38 (3) in the First Schedule of the Act, the Central Government dereserved this  item  providing exception  in  case  of integrated plant - manufacturing zip fasteners (metallic and non-metallic) by violating the  said provisions  of the Act and extending favourable treatment to the foreign investor  for  extraneous  consideration.    The action of the Central Government is illegal and be quashed. (4)  Before we deal with the contentions raised on behalf of the petitioners it may  not  be  out  of  place  to  mention certain  other  proceedings  in which an identical challenge was made to the Notification No.  S.O.  309 (E)  dated  30th May, 1986 as also to the new industrial policy in Bombay and Delhi High  Courts.  Writ Petition No.1987/1986 was filed in the  Bombay  High  Court   challenging   the   validity   of Notification No.S.O.   No.309(3) dated 30th May, 1986 issued under Section 29(B)(2)(2B) of the Act.  This  writ  petition was  filed  by  three  petitioners, namely, (1) Zipper India Pvt.  Ltd., (2) Kishore J.  Vora; and (3) Zipper Association of India.  Of course to this writ petition YKK could not  be a party as it got the approval to start its integrated plant on 7.7.1995.   Learned Single Judge of the Bombay High Court upheld the Notification No.S.O.No.309(3) dated May 30,  1986 and dismissed  the  writ  petition.    Appeal No.220 of 1988 filed  on  behalf  of  unsuccessful  writ  petitioners   was dismissed  by  the Division Bench by its judgement and order dated February 28, 1997.  The  Special  Leave  Petition  was allowed to be withdrawn by this Court. (5)  Zipper  Association  of  India  than  filed  Civil Writ Petition No.  3297 of 1975 in the High Court  of  Delhi,  at New  Delhi  under  Article  226 of the Constitution of India challenging the  New  Industrial  Policy,  1991  and  office Memorandum No.9(90)/91-FC  (1)  dated  22.8.1991.  There was also  a  challenge  to  the  Notification   No.309/E   dated 30.05.1986.   In  these  proceedings  respondent Nos.3 and 4 were arrayed as respondents.  The High Court of  Delhi  vide its  judgement  and  order dated 1.7.1996 dismissed the writ petition.  Special Leave Petition (C) No.1952  of  1996  was also dismissed by this Court on 15.7.1997.  The present Writ Petition was filed on September 23, 1996 under Art.32 of the Constitution of India by Zippers karamchari Union and it was tagged and  heard  along  with Special Leave Petition.  This Court by its order dated 12.8.1997  admitted  Writ  Petition for final disposal but dismissed the Special Leave Petition. It is in this backdrop we have to examine various challenges led by the petitioners in this Writ Petition.  The third and fourth respondent are thus required to face the second round of  litigation  in  this  Court  at  the instance of Zippers Karamchari Union. (6) Mr.  Shanti Bhushan, learned Senior Counsel appearing in support  of this Writ Petition urged that eversince 1973 the policy of the Central Government was to promote small  scale

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industries  as reflected in the Notification dated 16.2.1973 wherein 53 industries  were  exclusively  reserved  for  the small  scale  sector  which  included zip fastener industry. This policy underwent various changes from time to time  but zip fastener  industry  remained  untouched.    However, the Notification dated 30.05.1986 brought about a change  making an  exception  in  respect of integrated plant manufacturing zip fasteners vide Notification No.S.O.309 dated  30.5.1986. It  is under this notification YKK was granted permission to set up an integrated plant in India.  This approval  granted by  the  1st  respondent (Union of India) is ultra virus the provisions of Section 29-B(2B) of the Act To supplement this submission he relied upon the  provisions  of  Section  29-B (2B) of the Act which read as under:-         29-B Power to exempt in special cases:- (1)  If  the         Central  Government  is of opinion, having regard to         the smallness of the number of workers  employed  or         to the amount invested in any industrial undertaking         or   to   the   desirability  of  encouraging  small         undertakings  generally   or   to   the   stage   of         development of any scheduled industry, that it would         not be in public interest to apply all or any of the         provisions  of  the  Act   thereto,   it   may,   by         notification   in   the  Official  Gazette,  exempt,         subject to such conditions as it may  think  fit  to         impose,  any  industrial  undertaking  or  class  of         industrial undertakings or any scheduled industry or         class of scheduled industries as it may  specify  in         the notification from the operation or all or any of         the  provision of this Act or any rule or order made         thereunder.         (2B)  The  Central  Government shall, with a view to         determining the nature of any article  or  class  of         articles  that may be reserved for production by the         ancillary, or small scale  industrial  undertakings,         constitute  an Advisory Committee consisting of such         persons as have, in the opinion of that  Government,         the  necessary  expertise  to  give  advice  on  the         matter. Item 38 in Schedule 1 reads thus: 1................, 2................; and (7) The reading of the above  provisions  and  Entry  38  in Schedule,  the  Legislature’s intent is quite clear that the zip fasteners (metallic and non-metallic) were reserved  for small  scale industry under Section 29-B(2B) read with Entry 38(3) in the Schedule of the Act.  But however, the  Central Government  may  constitute an Advisory Committee consisting of such persons as have in the  opinion  of  the  Government necessary expertise  to  give  advice  on  that matter.  The question that needs to be considered is as  to  whether  the Notification  dated  30.5.1986 issued under the Act is valid and sustain  role.    The  relevant  portion  of  the   said Notification reads as under:-         Against Sl.No.148, for the entries in the second and         third columns, the  following  shall  be  substitute         namely:-         "30391301  Zip  fasteners non-metallic except in the         case  of   integrated   plants   manufacturing   all         components".         Against Sl.No.387, for the entries in the second and         third  columns,  the  following shall be sustituted,         namely:-         "34090601 Zip Fasteners metallic except in the  case         of integrated plant manufacturing all components".

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(8)    From  the  preamble of the notification itself, it is quite clear that in view of the recommendations made by  the Advisory  Committee  constituted  under  sub-section  2-B of Section 29(B) of the Act, the Government of India dereserved the  integrated  plant  manufacturing  all  components.  The concept  of  integrated  plant is well known in the business circle to mean  that  all  components  needed  for  the  end product are manufactured under one roof. (9) Mr.    shanti Bhushan, learned Senior Counsel urged that under Section 29-B (2B) of the Act, the  Central  Government thought  it  fit  to  reserve  Zip  Fasteners  (Metallic and Non-Metallic) industry under Item 38 of Schedule I for small scale industry.  Any change in the policy  of  dereservation by  notification  would  be  illegal and ultra vires Section 29-B(2B) of the Act.  In our considered view,  the  rigidity of such a construction to section 29-B(2B) would not promote the object  and  spirit  underlying  the  said section.  The industry engaged in manufacture of zip  fasteners  (metallic and  non-metallic)  still continues to be in the province of small scale industry.  The Notification dated May  30,  1986 however, dereserved only an integrated plant. (10)    It  is,  therefore,  quite  clear  that  even  today manufacturing  of  zip  fastener (metallic and non-metallic) would continue to be a small scale industry. What  has  been dereserved  in an integrated plant. It is taken out from the purview of small scale industry. This change was made on the basis  of  the  recommendation  of  the  Advisory  Committee constituted  under  sub-section  2(B) of Section 29-B of the Act. (11)  A very identical question was raised before the Bombay High Court in Appeal No.  220 of 1988  decided  on  February 28, 1991  by the Division Bench.  The Report of the Advisory committee was also tendered before  the  said  court.    The Bombay  High  Court  reproduced a passage from the Report of the Advisory Committee which reads as under:-         "Although  there  are  some units in the small scale         sector, most of these are  small  in  operation  and         they  do  not carry out all the operations in-house.         This has resulted in indifferent quality.  Smuggling         of  zip  fasteners  is  taking place on a very large         scale. Much of the technology  is  in  the  machines         itself which has been developed by the manufacturers         of zip-fasteners. An integrated unit for manufacture         of  components  in-house to ensure high quality will         require large investment, with which it is  possible         to get specially foreign collaboration." (12) The Advisory Committee therefore, made  recommendations to the Central Government which thought it fit to accept the same  and consequently the Notification came to be issued on May 30, 1986. (13) The Bombay High Court after considering  the  ambit  of sub-section  (2B)  of Section 29-B and Sections 10, 11, 11-A and 13 of the Act held that the Notification dated 30th May, 1986 was not violative of any of the provisions of the  Act. This dereservation is holding the field since then. (14) It  was  then contended by Mr.  Shanti Bhushan, Learned Senior Counsel that the  Notification  dated  may  30,  1986 issued  by  the  Central Government is arbitrary, irrational and discriminatory.  This Notification has brought about  an artificial  classification  in  the small scale units and an integrated plant which is violative of Guarantee of Equality contained in Article 14 of the Constitution of India.    The said  Notification is totally detrimental to the small scale units which are manufacturing  zip-fasteners  (metallic  and non-metallic).    In   our  considered  view,  there  is  no

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substance in this submission because the integrated plant is a class by itself and totally different from the small scale industry which is engaged  in  manufacturing  zip  fasteners metallic and  non-metallic.  The submission raised on behalf of the petitioner must, therefore, fail. (15)  There  is  also  another  aspect  which  needs  to  be considered in the light of the expanding market of readymade garments,  leather  garments  and  other  articles where zip fasteners metallic and non-metallic are used.   Since  1983, the  export  of  these  goods  gaining a good support in the international market and naturally if India wants to compete with other countries engaged in the said business will  have to improve  upon  the  quality  of  its goods.  In 1983, the Directorate General of technical Development, Government  of India  and  appointed  a  study  team  and the said team was entrusted with the work of  finding  out  asto  (1)  whether small  scale units manufacturing zip fasteners (metallic and non-metallic) have necessary machinery for  the  manufacture of  zip  colla/teeth  or they are simply importing zip chain and components and assembling the same into  finished  zips; and  (2)  the  quality  of  indigenous  zips  vis-a-vis  the imported ones.  The  quality  of  indigenous  zip  fasteners would be  an  important  factor.   The study team during its survey found that zip fasteners were smuggled into India  on large scale and they were being used by the manufacturers of readymade  garments  and  leather  garments and other allied articles.  The Government of India accepted  the  report  of the  said  study  team  and  with a view to have quality zip fasteners  (metallic  and  non-metallic)  and  in  order  to compete   with   the  would  market  and  also  to  generate employment in the field of readymade  garments  and  leather industry,  it  thought  fit to dereserve an integrated plant manufacturing zip fasteners.  The object seems  to  be  that all  components  of  zip  fasteners  if  manufactured  in an integrated plant, the same will have a quality control which will compete with the world market in that behalf.  It is in these circumstances we are of the  considered  opinion  that the  Notification  dated  May  30,  1986 is neither illegal, irrational nor discriminatory. (16) It  was  then contended by Mr.  Shanti Bhushan, Learned Senior Counsel that the integrated plant of YKK owns hundred percent equity  capital  of  foreign  national  without  any corresponding export  obligation.    The  manufacture of zip fasteners  (metallic  and  non-metallic)  does  not  require access  to  high technology and world markets and if this be so,  the  Central  Government  had   committed   a   serious illegality  while  permitting  YKK  to  set up an integrated plant  for  manufacturing  zip   fasteners   (metallic   and non-metallic)   with  its  hundred  percent  equity  capital without any export obligation. He submitted  that  grant  of such  permission  to YKK would mean that they can expand the industry as they like. They could also use the sophisticated machinery where minimal labour  is  needed.  The  production would   be  on  huge  scale  and  resultantly  thousands  of labourers engaged in the small scale units in  manufacturing zip  fasteners (metallic and non-metallic) would be rendered jobless and that is how  the  petitioner  would  be  vitally affected  in  a  very  immediate  near  future.  In a social welfare state and  particularly  India  being  a  developing country  when  labour  is  available  in  abundance  who are equally competent to  meet  the  needs  of  the  country  in producing  zip  fasteners (metallic and non-metallic), their talent will go waste and they would be rendered jobless. He, therefore , urged that the Notification dated May  30,  1986 must  be struck down. To supplement this submission, he drew

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our attention to  the  statement  on  Industrial  Policy  of Government  of  India  and in particular paragraph 30-B (I), (III) and (V) which read as under:-         "(I)   Approval will be  given  for  direct  foreign         investment  up  to 51 percent foreign equity in high         priority industries (annexure III). There  shall  be         no  bottlenecks  of  any  kind in this process. Subh         clearance will be available if foreign equity covers         the  foreign  exchange  requirement   for   imported         capital   goods.  Consequential  amendments  to  the         Foreign Exchange  Regulation  Act,  1973,  shall  be         carried out.         (II)   xxx     xxxxxxx                 xxxxxxxxxxxx         xxxx         (III)    Other  foreign  equity proposals, including         proposal involving 51 percent foreign  equity  which         do  not  meet  the  criteria  under  (i) above, will         continue to need  prior  clearance.  Foreign  equity         proposals  need  not  necessarily  be accompanied by         foreign technology agreements.         (IV)   xxxxxxxx                     xxxxxxxxxxx         (V)     A  specially  empowered   Board   would   be         constituted  to  negotiate  with  a  number of large         international firms and to  approve  direct  foreign         investment  in select areas. This would be a special         programme to  attract  substantial  investment  that         would  provide  access  to high technology and would         markets. The investment  programmes  of  such  firms         would   be   considered   in   totality   free  from         pre-determined parameters or procedures". (17) Relying upon this policy statement, Mr.  Shanti Bhushan urged  that government policy is to promote 51% equity share holding by the foreign companies/nationals  that  too  in  a field  where  it would provide access to high technology and world markets.   According  to  learned  counsel,  there  is nothing  on the record to indicate that the government while granting permission to YKK to set up an integrated plant for manufacturing zip fasteners (metallic and non-metallic)  had considered  that  an  integrated  plant  would be such which "would provide access to high technology and world markets". The  integrated  plant  for  manufacture  of  zip  fasteners (metallic  and  non-metallic)  does not involve an access to high technology and would markets.  If this be  so,  Counsel urged  that the above policy statement on Industrial Policy. He however, conceded that expression and used  in  Clause  V ".............  access to high technology and world markets" could  be  read  as  ’or’ yet the approval granted to YKK to start integrated plant  for  manufacture  of  zip  fasteners (metallic  and non-metallic) would be totally opposed to the Industrial Policy of Government of India.   This  submission again does  not  appeal  to  us.  Because it has come on the record that YKK has acquired a world wide reputation in  the manufacture  of  zip  fasteners (metallic and non-metallic). Mr.  Hiroshi Mitani, Managing Director of 4ht respondent  in his  affidavit  dated  July  31,  1997  has  highlighted the salient  features  of  YKK  corporation  in  the  field   of manufacturing zip  fasteners  all  over  the  world.   It is stated "YKK have the would richest variety  of  items  which are required  by  customers.    YKK  Zippers are produced by using high technology.  The chart prepared with the  nucleus technology  along with new technology is annexed as Annexure "B".  In paragraph 14, it  is  stated  "a  large  number  of Indian exporters,  manufacturers  etc.    are  already using Zippers made  by  YKK  to  meet  the  standard  required  in International Market.    In  the domestic market a number of

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conter-feit  zip  fasteners  bearing  the  brand  YKK   have appeared  and  are  in  circulation  for which the answering respondent has instituted the suit for perpetial injunction, infringement of trade marks, passing off  and  Rendition  of Account etc.    which shows that the product manufactured by YKK is  in  demand  in  India.    We  wish  to  state   that counterfeiting  of  YKK  brand  in  India  is  rampant  many international burers specify use of  YKK  zippers.  Many  of them have had their own brand names damaged due to supply of garments   with  counterfiet  Zippers  from  India  and  are becoming  wary  of  sourcing  such  garments   from   Indian suppliers." (18) After giving our careful thought to  the  pleadings  of the parties before us, we are of the considered opinion that having  regard  to  the  quality  and  worldwise  reputation carried by YKK zip fasteners,  it  would  be  reasonable  to include  that  it  would  provide access to the world market which is indicated in the statement on Industrial Policy  in paragraph V sub clause V quoted hereinabove. (19) Mr.  Nariman, learned Senior  Counsel  urged  that  the integrated  plant  which  has  already  been  set  up by YKK through its subsidiary company, the third and 4th respondent at Bawal in Haryana is highly sophisticated plant  involving high technology.    He  also urged that the third respondent the subsidiary of YKK corporation, Japan being would leaders in zip fasteners have acquired high  reputation  because  of use  of  the  high technology used in their integrated plant for manufacture of metallic and non-metallic zip  fasteners. Having  considered the pleadings of the parties before us we are of the firm opinion that having regard  to  the  quality and  worldwide  reputation  earned  by YKK zip fasteners, it would not be out of place to mention that it  would  provide access  to  the  world  market  which  is  indicated  in the Statement on Industrial Policy  in  paragraph  39  Clause  V quoted hereinabove.    Consequently  we  hold  that approval granted to YKK  is  neither  illegal  non  contrary  to  the Industrial Policy, 1991. (20) Coming to the other limb of the argument of Mr.  Shanti Bhushan Learn ed Senior Counsel that many workers of the present petitioner association wou ld be rendered jobless has also no force.  We are told that as of today, there a re as many as 17 Indian companies which have been granted licences and are outsi de the purview of small scale units.  This statement appearing in the affidav it of Shri Hiroshi Metani in paragraph 12 is contested on behalf of the petition ers contending that many of these Indian companies have been rendered non-functional because of variety of reasons.  But, however, the fact rema ins that some of the Indian companies have started integrated plants for manufacture of metallic and non-metallic zip fasteners, Whether they are successful in their attempt Orr not is really not a devisive factor.  In t his behalf, it is really not a decisive factor.  In this behalf, it is also necessary to highlight the ratio between the production and requirement of  zip fasteners (metallic and non-metallic) in India.  In paragraph 7, Shri Hiro shi Mitani has stated that in 1997, the production of YKK was 2.2 corer pieces . The said figure was calculated on the basis that Indian Market size is abo ut

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100 crore pieces.  Therefore, YKK production was 2-3% of the Indian Market  in the year 1997.  In 1998 onwards the production of YKK is going to be 9.2 c rore pieces i.e.  9-10% of the local market.  There is no effective denial to t his statement in the rejoinder filed on behalf of the petitioners and if this fact has any bearing upon the factual state of requirement, it is quite clear t hat yet a sizeable market is available to the Indian manufacturers and the apprehension entertained by the petitioner appears to us a mere figment of imagination. (21)   On 15th July 1997, when this Court  heard  this  writ petition for preliminary hearing, it observed as under:-         W.P. (C) No. 781/96.         "One  of  the submissions of the learned counsel for         the petitioner is that even according to the opinion         of the Minister of State, Industries  Department  as         contained  in  his  Note  dated  5/9/1995  (at pages         109-110   of   the   paperbook),   entry   to   thee         multinational  company  should  be allowed with a 75         per cent export commitment as is  normally  done  in         clearing  cases  of 100 percent foreign equity where         relatively  low   technology   is   involved,   this         condition should have been imposed on the respondent         company". (22) Mr.   Shanti Bhushan, Learned Senior Counsel urged that non-imposition of condition of export commitment on YKK  was totally   wrong,   irrational  and  contrary  to  thee  note submitted by the Minister of State while allowing  entry  to the multi  national company in India.  A strong reliance was sought to be placed by Mr.  Shanti Bhushan on  the  note  of Minister  of  State  dated  5th  September, 1995 which reads thus:-         "Secretary’s  point  that  YKK  would  help domestic         readymade garment industry is valid.   It  is  quite         clear  that YKK was allowed primarily as a result of         Ministry of Textiles intervention in emphasizing the         need to supply an internationally  acceptable  brand         for the export oriented Ready Made Garment Industry.         This  objective  could  be  better  served if YKK is         allowed entry with a 75%  export  commitment  as  is         normally  done  in  clearing  cases  of 100% foreign         equity where relatively low technology is  involved.         YKK could supply to domestic readymade garment units         against  their  advance  licences on a deemed export         basis.  In no circumstances  should  we  permit  the         decimation  of  thee  small  scale  sector  in a low         technology/low priority industry.  It is  therefore,         recommended,  that  permission  to YKK be amended to         include a 75% export commitment." (23) Admittedly,  YKK  was  granted  permission  to  set  up integrated  plant for manufacture by the Government of India on 7th July, 1995.  It is thus clear that the  note  of  the Minister  of  State  is  dated 5th September, 1995 after the permission was granted to YKK.  The question is what is  the effect of such a note.  Shri Om Prakash, Deputy Secretary to the Government  of  India.    Ministry  of  Industry, in his affidavit has stated:         "...........   A  copy of a note allegedly signed by         the then  Minister  of  State  for  Industry,  dated         5-9-1995  has  been filed from which it appears that         Shri M.Arunachalam on 5-9-1995 as the then  Minister         of  State  for  Industry  had  recommended  that the

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       permission granted  to  MS.    YKK  Corporation   be         amended to include a 75% export commitment.  In this         connection,  I  submit  that  the file in which this         note is said  to  have  been  written  by  the  then         Minister  of  State for Industry is not available in         the concerned  office,   i.e.      Office   of   the         Development Commissioner for Small Scale Industries.         I   am  making  this  submission  on  the  basis  of         communication No.  9(10)/95-Chem.   dated  22-7-1997         from  the office of the Development Commissioner for         Small Scale Industries." (24) He further stated  that  the  Industry  Minister  is  a cabinet  rank  minister  and  a note made by the Minister of State  can  only  be  his  viewpoint/recommendation  to  the Industry  Minister  who has to take a final decision on such recommendation.  The grant of approval to MS YKK Corporation with the approval of  the  Empowered  committee  on  foreign investment  under  the Chairmanship of Finance Minister (Dr. Manmohan Singh), preceded the said note of the then Minister of State for Industry.  The approval letter  was  issued  on 7th  July,  1995  and  the note of the Minister of State was made on 5th September, 1995.  This note  was  considered  in the  department  of Industrial Policy and Promotion which is the department dealing with the foreign investment violation as well as matters  relating  to  approval  of  foreign  and domestic investment.    The  department of Industrial Policy and Promotion expressed the view that the  approval  granted to MS YKK Corporation is in consenance with the notification dated  25th  July,  1991  incorporating  the  list  of items reserved for  small  scale  sector.     According   to   the guidelines for the Foreign Investment Promotion Board issued through press  note  No.    3(1997  series) dated 17th July, 1997, no conditions  specific  to  the  letter  of  approval issued  to a foreign investor would be changed or additional condition be imposed subsequent to the issue  of  letter  of approval.   The stand of the central government contained in the affidavit in reply is that it would neither be desirable nor legally permissible to prescribe 75%  export  obligation on YKK.    The  industry Minister on 13th March, 1997 having considered all aspects of the matters and the  note  of  the Department of International Policy and Promotion has granted approval  to  YKK  Corporation and did not impose any export obligation on YKK. (25) Mr.  Vaidyanathan, Learned  Addl.    Solicitor  General appearing  for  the Union of India urged that since the said note of the Minister of State dated 5th September, 1995  was after  letter  of  approval issued to the YKK corporation on 7th July, 1995 and that theere is no material on the  record to indicate that such a note was approved by the Minister of Industry.   He  further stated that it would not be possible to impose such a condition after a  lapse  of  such  a  long period.   He,  therefore,  urged  that  no relief whatsoever could be granted to the petitioner on the basis of the  said note. (26) Mr.  Nariman, Learned Senior Counseel urged that noting made by the officer/Minister of State on the government file cannot  be  used  to  alter  the situation and, therefore, a letter of approval granted to YKK Corporation on  7th  July, 1995 cannot  be  varied.    In support of his submission, he drew our attention to the decision of this Court in State of Bihar etc.  etc.  Vs.  Kripalu Shanker etc.  etc.  1987  (3) SCR 1.   In our considered view, it would not be possible to direct the first respondent to impose the condition in  tune with the note dated 5th September, 1995 made by the Minister of State.    The  Minister  of  the cabinet rank holding the

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protfolio of  Industry  has  granted  the  approval  to  YKK Corporation on 7th July, 1995.  It is a matter of government policy  and  in  our opinion no sustainable ground was urged before us to hold that  the  approval  granted  to  YKK  was contrary to  the  government policy.  The Court would not be justified  in  inter  ering  in  such  matters  when  it  is satisfied  that  a  grant  of  approval  to  YKK was neither irrational,   non   for   any   extraneous    consideration. Incidentally,  it  may  also be mentioned that the third and fourth respondent have commenced the production  of  zippers in  their factory at Bawal, Haryana on 21st March, 1997 with the investment of 90 crores. Any change  in  the  terms  and conditions of the approval at this stage may lead to several legal complications. (27)     For  the  foregoing  conclusions,  we  are  of  the considered view that the petitioner has made out no case for grant of any of the reliefs claimed in this  petition  under Article  32  of the Constitution of India. The Writ Petition is thus devoid of any merit. The Writ  Petition,  therefore, stands dismissed. In the cirrcumstances of the case, parties are directed to bear their own costs. (28)    When  I circulated my draft judgment for approval to Brother Rajendra Babu, J., he agreed with my judgment.  But, however,  he  has  given  a  separate concurring judgment to which both of us agree. END.