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Judgment
Harphul Singh Brar, J.—This judgment of mine will dispose of Civil Writ Petition Nos. 13499 of 1989, 10495 of 1990 and 7124 of 1989, as the Scheme under challenge in all these Writ Petitions is the same. The facts having been taken from Civil Writ Petition No. 13499 of 1989 are that the Central Government promulgated a Scheme of 10 per cent Central grant or subsidy for industrial units to be set up in certain selected backward districts/area with a view to promoting the growth of industries there. This Scheme was called the 10 per cent Central Outright Grant or Subsidy Scheme 1971 for Industrial Units to be set up in Selected Backward Districts/Areas (hereinafter referred to as the Subsidy Scheme). This Scheme was subsequently amended from time to time. According to this Scheme, industrial units set up in backward areas were entitled to an outright investment subsidy of 10 per cent of the investment made on fixed capital, such as land, building and plant and machinery which was raised to 15 per cent from March 1, 1973. The maximum amount of subsidy payable was restricted to Rs. 15 lakhs per industrial unit. This Scheme came into effect from August 26, 1971 and remained in force till September 30, 1988. In the original Scheme of 1971, a reference is necessary to some of its provisions.
''new industrial unit'' means an industrial unit for the setting up of which effective steps were not taken prior to 1st October, 1970;
''existing industrial unit'' means an industrial unit for the setting up of which effective steps were taken prior to 1st October, 1970;
''effective steps'' means one or more of the following steps:
(i) that 60% or more of the capital issued for the industrial unit has been paid up;
(ii) that a substantial part of the factory building has been constructed;
(iii) that a firm order has been placed for a substantial part of the plant and machinery required for the industrial unit;
10% Central Outright Grant or Subsidy'' means one-tenth of the total fixed capital investment, or additional total fixed capital investment as the case may be, as assessed by the Committee referred to in paragraph 6, or a sum of Rs. 5 lakhs, whichever is less. However, in respect of industrial units coming up on and after 1st March, 1973, the subsidy will be 15% of the total fixed capital investment or additional total fixed capital investment as the case may be, subject to a maximum of Rs. 15 lakhs.
Procedure for claiming outright grant or subsidy:-
Industrial units in selected districts/areas will get themselves registered with the State Government concerned prior to taking effective steps for setting up the new units or undertaking substantial expansion of the existing units and indicate their assessment of the total additional fixed capital likely to be invested by them. Such of the units as had taken ''effective steps'' prior to the date of announcement of the scheme but after October 1, 1970 will get themselves registered by December 31, 1971.
Procedure for disbursement of outright grant or subsidy:-
---- --- --- ---- In respect of a new industrial unit or in respect of substantial expansion of an existing industrial unit to be assisted by a financial institution, the subsidy will be disbursed to the unit by the financial institution in as many installments as the loan is disbursed by the financial institution and simultaneously claimed from the Ministry of Industrial Development. In such cases, the contract to be drawn up between the financial institution and the unit concerned may cover mortgage/pledge hypothecation of the assets of the unit up to the amount of the loan to be advanced by the financial institution concerned and the subsidy.
As a result of further discussions with the representatives of the State Government, it was felt that there was scope for further liberalisation in the procedures adopted. It was decided to consolidate the revised procedures in a Manual and circulate the same to all the State Level Committees and disbursing agencies for ready reference. This Manual was made effective from January 1, 1977.
Para 1.4 of the Manual defines ''New Industrial Unit'' and ''Existing Industrial Unit''; and ''Fee Capital Investment'' as under:
''New Industrial Unit'' means an industrial unit which has made investments in land, building and plant and machinery as defined in Sub-section (e) during the operative period of the Scheme.
''Existing Industrial Unit'' means an industrial unit which has made investments in land, building and plant and machinery as defined in Sub-Section (e) below prior to the operative period of the Scheme.
''Fee Capital Investment'' means investment in land, building and plant and machinery.
Para 2 of the Manual defines ''Eligibility'' as under :-
ELIGIBILITY
2.1. New industrial units engaged in manufacture of items specified in part (B) of Annexure II are eligible to claim 10%-15% Central Investment Subsidy under the scheme provided such industrial units are located in areas specified in part (A) of Annexure II and are also covered by Section 1.3 above. Existing industrial units engaged in manufacture of items specified in part (B) of Annexure II are eligible to claim 10%-15% Central Investment Subsidy under the scheme provided such industrial units are located in areas specified in part (A) of Annexure II and are also covered by Section 1.3 above for purposes of expansion only.
2.2. Condonation of delays in registration : State Level Committee may at its discretion waive the condition of prior registration with the State Industries Department/Director of Industries if it is satisfied that there are sufficient reasons t6 do so.
PROCEDURE FOR CLAIMING SUBSIDY:
2.3. The following information and documents should be submitted along with the application (form prescribed in Annexure III) for claiming Central Investment Subsidy under the scheme :-
(a) Project report wherever it is prepared.
(b) Details of the scheme including the details of the fixed assets to be acquired.
(c) Sanction letter from the financial institution (s) sanctioning the loan or loans for the purpose of implementing the project.
(d) If the project is under implementation a certificate from the Chartered Accountants regarding capital expenditure incurred on the project and a certificate from an Engineer as prescribed in Section 5(6)(b) certifying the civil work done. These certificates should be in the prescribed form (vide Annexures VI and VII).
2.4. The Disbursing Agency with whom the application for Central Investment Subsidy is filed will examine the application and determine the eligibility of the industrial unit. All the cases after the scrutiny will be referred to the State Level Committee constituted under the Scheme with suitable recommendations for final decision. The agenda notes will be submitted to the State Level Committee in the form prescribed in Annexure IV.
EXTENT OF CENTRAL INVESTMENT SUBSIDY ADMISSIBLE :
3.2. In case of eligible industrial units which have made fixed capital investments before 1st March, 1973 and where further investments were made beyond 1st March, 1973, the disbursement of Central Investment Subsidy will be regulated as follows :-
"The maximum Central Investment Subsidy admissible to an eligible industrial unit which has made fixed capital investment prior to 1st March, 1973 will be 10% of the fixed capital investment or Rs. 5 lakhs whichever is less irrespective of the total size of the project. The maximum Central Investment Subsidy admissible to an eligible industrial unit from 1st March, 1973 to the date of expiry of the scheme will be 10% of the fixed capital investment made up to 28th February, 1973 plus 15% of the fixed capital investment made on or after 1st March, 1973 or Rs. 15 lakhs whichever is less."
Disbursement of Subsidy to units assisted by Financial Institutions etc.
5.5. In the case of an assisted unit the disbursement of Central Investment Subsidy may be made in as many instalments as the loans sanctioned by the financial institutions etc. are disbursed. The last instalment of the subsidy, however, shall not be less than 15% of the total subsidy sanctioned and it shall be disbursed only after the unit goes into production.
Acting upon the assurance of the State Government/Central Government given to the public at large through public media that Central Subsidy would be given to entrepreneurs who set up industries in the backward areas of the State of Haryana, the petitioner-Company set up an industrial unit in one of the backward areas of the State of Haryana, that is, at Hazampur, Tehsil Hansi, District Hissar.
The petitioner-Company was incorporated under the Companies Act, 1956 on October 7, 1986 after a Certificate of Incorporation to this effect had been issued by the Registrar of Companies. In pursuance of the Certificate of Incorporation, the petitioner-Company was then issued a Certificate on April 6, 1987 u/s 149(3) of the Companies Act, 1956 by the Registrar of Companies whereafter the petitioner-Company became entitled to undertake and commence its business. The petitioner-Company on April 21, 1987 was granted provisional Registration Certificate for manufacturing prestressed concrete poles, prestressed concrete beams and reinforced cement concrete pipes, by respondent No.3-General Manager, District Industries Centre, Hissar, Haryana, on behalf of Director Industries, Industries Department, Haryana-respondent No.2. The petitioner-Company thereafter submitted an application on May 8, 1987 for the power connection in the Office of the Sub Divisional Officer, Haryana State Electricity Board, Hansi, which was duly sanctioned on June 25, 1987. For setting up of the factory, the petitioner-Company then purchased land measuring 7 acres for a sum of Rs. 1,70,625/- the Sale Deed in respect of which was registered on May 15, 1987.
On May 15, 1987, the Board of Directors of the petitioner-Company passed a Resolution authorising Shri V.K. Saraogi, Shri S.R. Aggarwal and Shri N.K. Kedia, its Directors jointly or severally to file an application or execute any agreement and complete all legal formalities in the Office of the Haryana Financial Corporation or Director or Industries for obtaining subsidy under the Subsidy Scheme of the Government of Haryana Central Government.
The petitioner-Company on June 15, 1987 submitted an application for obtaining loan to the tune of Rs. 26,59,000/- in the Office of Haryana Financial Corporation, respondent No. 4. Thereafter, on July 1, 1987, the petitioner-Company filed another application in the Office of the General Manager, District Industries Centre, Hissar, respondent No. 3 also for the issuance of an eligibility certificate for obtaining Central subsidy. A true copy of this application, dated July 1, 1987 is annexed with the petition as Annexure P-5.
The General Manager, District Industries Centre, Hissar, respondent No. 3 registered the petitioner-Company on August 18, 1987 at Serial No. 727 as an eligible unit for the grant of Central Subsidy under the Subsidy Scheme. A copy of the letter, dated September 3, 1987 issued by respondent No. 3 informing the petitioner-Company that it had been registered as an eligible unit for the grant of Central Subsidy is annexed as Annexure P7 with the petition.
The petitioner-Company was registered permanently with the Department of Industries as a Small Scale Unit for the manufacture of prestressed concrete poles, vide Registration Certificate, dated August 13, 1987, Annexure P6. This Certificate records July 1, 1987 as the date ,of commencement of production by the petitioner-Company.
The Haryana Financial Corporation-respondent No.4 (hereinafter referred to as HFC) on the basis of the ''pre-sanction inspection report on the petitioner-Company'' vide its letter dated February 11, 1988, sanctioned a term loan of Rs.26,56,000/-. ''Pre-sanction Inspection Report'' prepared by and on behalf of respondent No. 4 inter alia recorded :-
"...VIII. FINANCING ARRANGEMENTS :
The total cost of the project estimated at Rs. (Rs. in lacs)
40.30 lacs is proposed to be financed as under:
Paid up Capital 8.90 2. Central Subsidy 4.84 3. Term Loan from HFC 26.56 --------- 40.30" ---------
The HFC-respondent No.4 after having sanctioned the term loan of Rs. 26,56,000/- released the first instalment of loan in favour of the petitioner-Company on June 9, 1988.
The petitioner-Company then requested the Managing Director, HFC vide its application, dated June 21, 1988 to sanction the Central Subsidy in its favour by taking necessary action. Apart from enclosing various documents like a copy of the building plan, copy of the eligibility certificate etc. the petitioner-Company also enclosed an affidavit with that application. According to the petitioner, thus, all the formalities to get the Central Subsidy under the Scheme were completed but in spite of that, at a belated stage, the petitioner-Company received a letter, dated January 30, 1989 from the Office of the HFC, Chandigarh, annexd as Annexure P-11 with the petition wherein it was stated that it had been decided by the Government that cases where delay in registration is involved may not be considered for central investment subsidy purpose and since in the case of the petitioner-Company there was delay in registration, its case for grant of subsidy was closed.
The petitioner-Company aggrieved by the decision of the HFC, dated January 30, 1989 stated above, approach the concerned officials of the Corporation who informed that the case of the petitioner-Company for the grant of Central Subsidy had been closed on the basis of directions contained in Memo. No.15(4)/88-DBA-II, dated September 22, 1988 issued by the Joint Secretary to the Government of India, respondent No.5 in this petition. A true copy of the letter is attached as Annexure P-12 with the petition.
The petitioner-Company approached the concerned Authorities and specifically pleaded that there was no delay on the part of the petitioner in submitting its case and the Company was never informed about such a delay even though it had been registered as an eligible unit entitled to receive Central Subsidy on August 18, 1987.
On representation made by the petitioner-Company, it received a letter dated May 23, 1989 from the Manager (Disbursement) HFC, Chandigarh, wherein it was mentioned that issue regarding eligibility of Central Subsidy had been taken up with the Office of Director of Industries, Haryana, and the case would be re-examined on receipt of reply from them. A copy of the letter, dated May 23, 1989 is annexed as Annexure P-14 with the petition.
Since the petitioner-Company after receipt of the above said letter, dated May 23, 1989 did not hear anything either from the Manager (Disbursement) HFC or the Director of Industries with regard to the decision for the grant of subsidy, it again filed a detailed representation dated June 28, 1989 in the Office of the Director of Industries (Haryana), Chandigarh, requesting it not only to consider its case for the grant of subsidy sympathetically but also provide a hearing in the matter for clarifying and justifying its stand to the effect that it was legally entitled to the grant of subsidy under the Central Subsidy Scheme of the Government. It was highlighted in the representation that the project of the petitioner-Company was not even half way through, not to say of completion when the application was submitted and entertained by the District Industries Officer for grant of subsidy.
The petitioner-Company finally received a letter dated September 20, 1989 issued by the Manager (Disbursement), HFC, Chandigarh, wherein it was mentioned that the unit of the petitioner-Company was not eligible for subsidy and as such the case had been closed on account of delay. It was further stated therein that the petitioner-Company was registered with the District Industries Centre, Hisar, on August 18, 1987 whereas the production commenced on April 6, 1987. It is these letters/orders, dated January 30, 1989 (Annexure P-11). September 22, 1988 (Annexure P-12) and September 20, 1989 (Annexure P-16) which have been challenged now in the petition as illegal, unconstitutional and arbitrary on the following grounds :-
(i) that the State Government/Central Government had given a categorical assurance to the public at large through public media that central subsidy would be given to entrepreneurs who set up industries in the backward areas of the State of Haryana. The petitioner-Company acting upon the assurance set up an industrial unit in one of the backward areas of the State of Haryana and the State government/Central Government was, therefore, bound to honour the assurance by disbursing the requisite amount of subsidy on the basis of the promissory estoppel;
(ii) that the petitioner-Company was registered vide Registration No. 727 dated August 18, 1987 as an eligible unit for the grant of Central subsidy under the central outright grant or subsidy scheme. Having once registered the unit of the petitioner-Company as an eligible unit for the grant of central subsidy, the State Government/Central Government was not justified in law and equity in refusing to disburse the amount of subsidy by saying at a later stage that the petitioner-Company could not be granted subsidy because of delay in its registration, particularly when there was no time limit prescribed for filing application for such registration. Moreover, had there been any delay on the part of the petitioner-Company in applying for its registration, its application in this behalf would not have been entertained; and it would not have been registered as an eligible unit for the grant of the Central Subsidy in question.
(iii) that a reading of the contents of the impugned letter/order, dated September 22, 1988, Annexure P-12, issued by the Joint Secretary to the Government of India respondent No. 5 herein, clearly goes to show that it did not apply to the case of the petitioner-Company inasmuch as, on the facts and in the circumstances stated in the petition, the petitioner-Company had not completed its project the estimated value of which was Rs.40.30 lacs before applying for the grant of central subsidy to it. That apart, the petitioner-Company had not and, in fact, could not have completed its project without the availability of the requisite finance for obtaining which it had applied to the HFC for loan and as a sequel thereto, it had, in fact, not gone into regular production before applying for its registration for the grant of Central Subsidy in question. The denial of the grant of Central Subsidy to the petitioner-Company by the respondents, is, thus, absolutely arbitrary and this has resulted in putting the petitioner-Company to a great disadvantage and harm;
(iv) that the letter/order, dated September 20, 1989, Annexure P-16, is misconceived, ill-founded and totally wrong and the decision taken by the Authorities is without application of their mind to the facts on the records and the decision suffers from the vice of legal mala fides and extraneous consideration;
(v) that the terms and conditions of ''Central Outright Grant of Subsidy Scheme'' could not be modified by letter, dated September 22, 1989 (Annexure P-12) issued by the Joint Secretary to the Government of India-respondent No.5.
(vi) that letter/order, dated January 30, 1989, Annexure P-11, is otherwise cryptic, arbitrary and illegal. It does not disclose as to how there was a delay in registration and of what nature and how on the part of the petitioner-Company;
(vii) that letter/order, dated September 20, 1989, Annexure P-16, is also illegal, arbitrary, void and unconstitutional and liable to be struck down simply on the ground which is based upon wrong facts. It is stated therein that the production of the Company started on April 6, 1987 which is totally wrong and is belied by the factual position stated in the petition. The Company was incorporated on October 7, 1986. Certificate of Registration is dated April 6, 1987. The land was purchased on May 15, 1987. Application for loan to the Corporation was given on June 15, 1987. It is not understood as to how the respondents have reached a conclusion that the production started on April 6, 1987.
Reply has been filed by Miss Asha Jain, the Deputy Director, Small Scale, Cottage and Village Industries, Haryana, Chandigarh, on behalf of respondents 2 and 3. There is no denial about the Scheme floated by the Government of India. Most of the factual position stated in the petition has not been denied but the case of the petitioner has been negatived on the following ground:
(1) that the petitioner-Unit came into production on July 1, 1987 but they got their unit registered for being eligible unit for Central Investment Subsidy on August 18, 1987. Hence, the petitioner unit was not entitled for grant of Central Investment Subsidy under the latest instructions of the Central Government, dated September 22, 1988, Copy Annexure P-12 and also Govt. of India letter, dated May 6, 1988, Copy Annexure R-1.
It is stated in reply to Para No.2 (vii) that sub-para (vii) of para 2 of the Writ Petition so far it relates to the facts regarding going into production of the petitioner-Company on July 1, 1987 is admitted.
In reply to para 2(xviii), it has been stated as under :-
"2(xviii) That in reply to sub-para (xviii) para 2 of the writ petition, it is submitted that the Govt. of India vide their letter dated 22.9.1988 (Annexure P.12) had advised that the entrepreneur who complete their project and go into production without applying for eligibility certificate for the grant of subsidy in time will not be eligible for the grant of subsidy, because main purpose of grant of subsidy to the entrepreneurs is to subsidies, the cost of project set up. The Govt. of India further clarified vide their letter dated 21.7.1989 while drawing attention towards its letter dated 22.9.1988 that grant of subsidy in cases approved by State Level Committee on or before 30.9.1988 should be disbursed. It was further clarified that in cases approval of the committee was given before 30.9.88 by condoning the delay, the Central Govt. would reimburse subsidy in such cases only provided that disbursement is made before 30.9.1989 in non-manufacturing units;
Such case of the petitioner was not covered under the aforesaid letters/clarification of Govt. of India. It was not considered by the respondent No. 4 as the petitioner unit was not for eligible. The averment made in para 2 are also reiterated.
In reply to para 2(xix), it has been stated as under :-
"2(xix) That sub-para (xix) of the para 2 of the writ petition pertains to respondent No. 4. It is, however, submitted as per application for registration as eligible unit for Central Subsidy, the petitioner-company had mentioned in column 7(vi) that the company commenced commercial production on 1.7.1987, therefore as per Govt. of India''s letter dated 22.9.88 the petitioner-company was/is not entitled for grant of Central Subsidy.
Written statement has also been filed on behalf of respondent No-5. It is stated in the reply that in the case of the petitioner, the point for rejection by the State Government was that they did not get them registered claiming Central Investment Subsidy before taking effective steps. Therefore, the State Government was right in rejecting the application of the petitioner claiming Central Investment subsidy.
It is then stated in the reply that since there is no sanction before the expiry of the Scheme on September 30, 1988, no right to subsidy can accrue to any claimant and the Central Government was under no obligation to. reimburse the State Government if subsidy was not sanctioned by the State Level Committee before the expiry of the Scheme and the Scheme, according to the reply, of the respondent, was extended from time to time up to March 30, 1988.
It is further stated in the reply that mere submission of application for registration of a unit or even securing a loan from the Financial Institution and the existence of the Scheme for payment of disbursement of subsidy does not entitle a unit to claim subsidy. It has to be sanctioned by the State Level Committee which has not been done in this case and, thus, rendering the claim of the petitioner inadmissible and untenable.
After hearing the learned counsel for the parties at length, I am of the considered view that orders/letters, dated January 30, 1989 and September 20, 1989, Annexures P-11 and P-16 respectively, vide which the petitioner-Company''s claim for central subsidy under the Scheme was disallowed are liable to be quashed on the following grounds :-
(a) In the order, dated January 30, 1989, Annexure P-11, it is stated that there was delay in registration and, as such, the case has been closed. It was simply mentioned therein that there was delay in registration and, as such, the case of the Company has been closed. It is not disclosed to the petitioner-company as to delay in registration of what ? If at all, it refers to the registration of the Company with the State Department concerned, then the assertion of the respondents made in. this letter/order is incorrect. It may be mentioned here that the petitioner-Company was registered as a New Industrial Unit as described in the Manual, referred to above. The Manual was made effective from January 1, 1987. No date was prescribed in the Manual for the registration of the New Industrial Unit. The petitioner-Company was registered in the Directorate of Industries, Haryana, Chandigarh, in the month of April, 1987 for manufacturing prestressed concrete poles, prestressed concrete beams and reinforced cement concrete pipes. Provisional Certificate, dated April 21, 1987 was granted to the petitioner-Company by General Manager-Respondent No.3 on behalf of Directorate of Industries, Haryana-respondent No.2, true copy of which is attached as Annexure P.3 with this petition. The Company was permanently registered with the Department of Industries as a Small Scale Unit for the manufacture of abovesaid items on August. 13, 1987 and a true copy of the Registration Certificate dated August 13, 1987 is annexed as Annexure P6 with the petition. Even the General Manager, District Industries Centre, Hisar, respondent No.3 registered the Company on August 18, 1987 at Serial No. 727 as an eligible unit for the grant of Central subsidy under the Scheme. A true copy of the letter is annexed as Annexure P7 with the petition. Obviously when the Company itself came into existence in the year 1987 as New Industrial Unit, it cannot register itself with the State Authorities at any earlier date; it got itself registered within time when the Scheme was in operation. Thus, taken from any angle, the letter/order, dated January 30, 1989, Annexure P-11 is vague, illegal and arbitrary insofar as it negatives the rights of the petitioner-Company to claim. Central subsidy. It is, thus, liable to be quashed as such.
(b) Next comes the letter, dated September 20, 1989, Annexure P-16. Here in this letter/order also the sole ground to deny the petitioner-Company the Central subsidy is that the Company got itself registered with the District Industries Officer, Hisar on August 18, 1987, whereas the production commenced on April 6, 1987. This is also factually wrong. Even the respondents in their reply in para No. 2 have admitted that the production of the Company started on July 1, 1987. Thus, the reply of the respondents itself belies the factum of production indicated in this letter as April 6, 1987, though according to the petitioner-Company the production had not started even in the year 1988. It is also mentioned in this letter that the Unit of the Company was not eligible for subsidy on account of delay. The closure of the case of the petitioner also referred to some delay though it is not explained as to which delay is being referred to. If at all this delay is referred to as mentioned in Annexure P-11, then Annexure P-11 already stands quashed on the basis of the reasoning given above.
In the written statement filed by the respondents, another ground for denying the subsidy to the petitioner-Company is reproduced as under :-
"The petitioner-unit came into production on July 1, 1987 as is clear from Annexure P-16, but they got their unit registered for being eligible unit for Central Investment Subsidy on August 18, 1987. Hence, the petitioner-Unit is not entitled for grant of Central Investment Subsidy under the latest Instructions of the Central Government dated September 22, 1988, Copy Annexure P-12 and also Government of India letter, dated May 6, 1988, Copy Annexure R-1."
July 1, 1987, that is, the date of production of the unit is given on the basis of Annexure P-16, but in Annexure P-16, it is stated that the date of production is April 6, 1987, which date is not taken as correct even by the respondents. So, the very basis on which the respondents have reached the conclusion that the petitioner-Unit came into production on July 1, 1987 is wrong. The respondents have not given any reason as to how and on what material they have reached the conclusion that the production of the Company started on July 1, 1987. The petitioner-Company has clearly stated in the application filed for getting Eligibility Certificate for Central Subsidy, to the General Manager, District Industries Centre, Hisar, Department of Industries, Haryana (Annexure P-5 with the petition) that the completion of factory building was expected by November, 1987. In column No.5 of the Application Form where date of installation of machinery if any, is mentioned, it is written partly installed and balance expected to be completed by September, 1987, and in the column against date of going into production it is written that partial production will start by June, 1987. It is an admitted fact on the record that even the power connection was installed in the factory on August 17, 1987. The petitioner-Company had undertaken the production of only 100 poles by way of sample on July 1, 1987 for the purpose of securing orders in advance from the Haryana State Electricity Board and the production of these 100 poles on July 1, 1987 could by no stretch of imagination be treated as the commencement of regular production of the Company after completion of the Project. It is not such a case that the petitioner-Company had constructed the whole building and installed the full machinery and had started full production before claiming Subsidy from the respondents under the Scheme; though even if the full production is started by the Company, to my mind there is no bar under the Scheme to disentitle the Company to claim Subsidy. On the basis of this Application Form, Annexure P-5, the Company was registered with the General, Manager, District Industrial Centre, Hisar-respondent No.3 at Serial No. 727 as an eligible Unit for the grant of Central Subsidy under the Scheme, on August 18, 1987, which is an admitted fact. The stand of the respondents that the Subsidy is not admissible to the petitioner-Company on the basis of Instructions of the Central Government, dated September 22, 1988, Annexure P-12, and of Govt. of India letter, dated May 6, 1988, Annexure R-l, is not tenable and has got no legs to stand upon. First of all, Annexure P-12 is not applicable in the case of the Company at all, as that letter is applicable to non-manufacturing units. The petitioner-Company is not covered under that. This is so indicated from the subject of the letter which reads as under :-
"Subject - Central Investment Subsidy Scheme-Discontinuation of Central Subsidy to non-manufacturing activities."
Secondly, this letter was applicable only to those Units who had established themselves completely and had started full production. This was not the case of the petitioner-Company at all. Before the issuance of this letter, the petitioner-Company had not started its full production. Even if the Company had started full production, this letter could not be made applicable to the petitioner-Company retrospectively, as the letter is dated September 22, 1988 and the Company had taken all the appropriate measures before that and became eligible to get the Central Subsidy earlier to the coming into existence of this letter. It is not understandable as to how it is stated in the reply that the Subsidy will not be available to the petitioner-Company on the basis of Annexure R-1 Annexure R-1 only shows that Central Investment Subsidy Scheme has further been extended from April 1, 1988 to September 30, 1988. A reference to Annexure R-1 seems to have been made on the basis of some misapprehension. Thus, in my considered view, Annexure P-12, that is, the letter/order No.l5(4)/88-DBA-II, dated September 28, 1988 of the Government of India, Ministry of Industry, Department of Industrial Development, is also not applicable to the petitioner-Company and in any case, if it is taken to deny the Subsidy to the petitioner-Company, then it is illegal, arbitrary against the Scheme and is quashed against the petitioner-Company.
Lastly, the plea of promissory estoppel taken by the petitioner-Company against the respondents stares at their face. The petitioner-Company acted on the representation through the original Scheme as well as in the Amended Scheme in the form of a Manual, purchased land, raised part-construction of the factory, secured a part of the loan promised by the HFC and spent money on the building and the machinery, though partially installed; and got themselves registered with the concerned Authorities for production of prestressed concrete pole, prestressed concrete beams and reinforced cement concrete pipes, as a New Industrial Unit for the backward area of the Haryana State in the hope that they will get the Subsidy as promised by them. If the petitioners acting on the representations made in the Scheme, spent huge money by purchasing land and setting up the infrastructure of the Unit as stated above, in the hope that the respondents, that is, the State Government and the Central Government will abide by their word and act according to their representations there is no reason as to why the respondents could not be compelled to abide by the representations made by them. The Government in these circumstances is estopped from going back from the promises made to the petitioner. It is well-settled by a catena of authorities by different High Court as well as the apex Court that if the Government or any authority on behalf of the Government has made a representation and acting on that representation a party has altered its situation, then, it is not open to the Government to resile from that position and at the instance of the party who has altered its situation to its disadvantage. The Court is en-titled to direct the Government or the authority to carry out its promises or its scheme. I am fortified in this view of mine by the authoritative pronouncements of a Full Bench of the Bombay High Court in Tapti Oil Industries and Another etc. Vs. State of Maharashtra and Others, , Kothari Oil Products Company Vs. Government of Gujarat, and Gujarat State Financial Corporation Vs. Lotus Hotels Pvt. Ltd., .
In the light of my discussion above, this petition is allowed with costs which are assessed at Rupees Two Thousand and the respondents are directed to reconsider the case of the petitioner-Company for Central Subsidy under the 1971 Subsidy Scheme which was further extended by the Manual operating from January 1, 1975 to September 30, 1989 in the light of the observations made above without taking into consideration Annexure P-11, P-12 and P-16. They are further directed to decide the case of the petitioner-Company within six months.
Civil Writ Petition No. 10495 of 1990.
Mr. A.K. Mittal, Advocate with Mr. G.S. Sandhawalia, for the Petitioner.
Mr. Ashok Jindal, for the respondent No. 1;
Mr. K.S. Godara, A.A.G, Haryana, for respondent No. 2;
Mr. S.S. Dalal, for respondent No. 3.
In this petition, the petitioner-Firm is alleged to have come into existence in May, 1987 for the purpose of cotton ginning and pressing, and commenced its production from December 19, 1987. The petitioner-Firm is admittedly located at Jakhal, District Hisar and the said District has been made eligible for the grant of Central Subsidy. The petitioner-Firm put in an application for grant of Eligibility Registration Certificate vide Register Receipt No. 1087, dated December 11, 1987, and it was issued the Registration Certificate on January 29, 1988 by the General Manager, District Industries Centre, Hisar and the Firm was duly registered as an eligible Unit on January 28, 1988, for the grant of Subsidy. A copy of the Eligibility Registration Certificate is attached as Annexure P-3 with the petition.
The petitioner-Firm received, a letter, dated May 29, 1989 from respondent No.3, whereby the claim of the petitioner-Firm had been rejected for grant of Central Investment Subsidy. A copy of the said letter is attached as Annexure P7 which has been impugned by the said Firm in this petition, as being illegal, arbitrary, unconstitutional, discriminatory and violative of Articles 14 and 19(1)(g) of the Constitution of India, as well as against the principles promissory estoppel.
A perusal of Annexure P7 would show that grant of Central Investment Subsidy has been declined to the petitioner-Firm on the ground that there was delay in getting the Unit registered with General Manager, District Industries, Centre, Hisar as the Firm-Unit had started production during December, 1987 and got itself registered on January 28, 1988. Thus, according to them there was a delay in getting themselves registered with the General Manager, District Industries Centre, Hisar.
The petitioner-Firm has specifically stated in Para 18 of the petition that the respondents had condoned the so-called delay in eligibility registration under similar circumstances and have released Central Capital Subsidy in the following cases:
------------------------------------------------------------------ S.No. Name of the Party Date of Date of production Registration ------------------------------------------------------------------ 1. M/s Savitri Udyog 29.12.1983 2.7.1985 2. Jallan Chawal Udyog 2.11.1983 9.7.1985 3. Govinda Ram Naveen Kumar 1.9.1985 30.9.1986 4. Garg Oil and Gen. Mills 11.7.1985 6.2.1985 5. Super Tyre Retreading 27.4.1987 27.8.1987 ------------------------------------------------------------------
The petitioner-Firm has affirmed in the petition that there was no delay in getting themselves registered with the concerned Authority for being eligible for Central Subsidy as the Firm itself came into existence in May, 1987 and they commenced its production from December 19, 1987 and there was not fetter in the Scheme or b the Manual which came into existence later on which required the petitioner-Firm to apply before certain date or not to start production before applying for Central Subsidy. Moreover, according to the petitioner, the Firm was registered as an eligible Unit for the grant of Central Subsidy.
Reply has been filed in this case only by respondent. No.3 that is, the Haryana Financial Corporation. Material averments made in the petition have not been rebutted by the respondent. It is rather admitted in Para 2 of the reply that the petitioner applied for grant of loan to the answering respondent which was duly sanctioned and the necessary documents were got executed by the petitioner. The averments made in Para 18 of the petition about giving the same relief to the similarly placed units have also not been rebutted. It is only asserted in the reply that as the petitioner-Unit came into production before their registration with the concerned Authority, they were not entitled to the Central Subsidy, but this stand of the respondent has not been substantiated on the basis of any provision in the Scheme.
In view of my detailed discussion above and on the perusal of the material on the record, I allow this petition (C.W.P. No. 10495 of 1990) with costs which are assessed at Rupees Two Thousand. I quash Annexure P7 and direct the respondents to consider the case of the petitioner-Firm afresh taking into consideration the cases referred to above wherein Subsidy had been granted to the similarly situated Units, within six months.
Civil Writ Petition No. 7124 of 1989.
Mr. M.S. Rakkar, Sr. Advocate with Mr. J.S. Virk, for the Petitioner;
Mr. K.S. Godara, A.A.G., Haryana, for respondents 1 to 3.
Mr. S.S. Dalai, for respondent No. 4;
Mr. Ashok Jindal, for respondent No. 5.
It is stated in this petition that the petitioner-Firm started the establishment of the Unit on 3.3.1985 for manufacturing Horrow Discs Plate, Agricultural implements under the name and style of Messrs Blackmail Steel Industries, Patiala Road, Jakhal Mandi, Tehsil Gohana, District Hisar. It is mentioned in the petition that after the start of the construction work in the Unit as the petitioner was not having so much of the finance with, him, he applied through proper channel to the General Manager, District Industries Centre, Hisar, for recommending his case being the eligible person to have the Central Subsidy from the Centre that is, respondent No.5. After the submission of this application to respondent No.3, the petitioner then applied to respondent No.4, that is, Haryana Financial Corporation for sanctioning of loan for the establishment of the Unit and also for providing money for the purchase of Machinery and construction of building.
It is averred in the petition that respondent No.4 - Haryana Financial Corporation accepted the application of the petitioner for grant of loan including Subsidy. The Unit of the petitioner came into production ultimately on January 27, 1987.
After coming of the Unit in production on January 27, 1987, the petitioner applied to respondent No.2 for issuance of a certificate of final registration from Industrial Department, Haryana, and that certificate was granted to the petitioner-Firm on January 30, 1987.
However, it is contended in the petition that in the meantime, respondent No. 5 issued a letter Annexure P1, and in view of that letter, the case of the petitioner was rejected by respondent No.4, vide letter, dated January 30, 1989 who refused to make the payment of Central Subsidy on the ground that it had been decided by the Government that cases where delay in registration was involved, may not be considered for Central Investment Subsidy purposes and so accordingly the case of the petitioner was rejected without any reason. A copy of that letter is annexed as Annexure P-13 with the petition.
The petitioner has impugned letter/Notification, Annexure P1, as well as letter, Annexure P-13, being illegal, unconstitutional, void, arbitrary and discriminatory.
The petitioner-Firm says that they were allured on the promises set out by the respondents in their Scheme/Policy/Manual and had set up the industry in the backward area. Now the respondents cannot go back on their promises. Moreover, in the Scheme it was not provided as to on what particular time the petitioner had to register the Firm with the Authority concerned. It was also not the condition in any of the policies that the Central Subsidy shall be granted only before the production is started by the Firm.
Reply has been filed on behalf of the respondents. The claim of the petitioner has been negatived mainly on the basis of the letter, Copy Annexure P1 and the letter dated January 30, 1989, Annexure P-13 saying that there was delay in registration and, as such, their case was closed.
In view of my elaborated discussion made above, I allow this petition with costs which are assessed at Rupees Two Thousand. I quash Annexure P-13 and also direct that letter, Annexure P-1, shall not be taken into consideration while considering the case of the petition for granting Central Subsidy to the petitioner-Firm. The case of the petitioner-Firm shall be considered within six months.