State of Punjab and Others vs M/s. Balak Gases Oxygen Gas Plant and Another

Sanjay Kishan Kaul, C.J.

CM No. 3583 of 2013

Leave to place on record the affidavit of Joint Director (Incentive), Department of Industries & Commerce, Punjab is granted and CM disposed of.

CM No. 271 of 2012 and LPA No. 119 of 2012 and other connected matters (O&M)

These are 38 appeals filed against the common order of the learned Single Judge dated 20.05.2011 highly belatedly. The period of delay vary from 145 days to 396 days. The least delay is in Letters Patent Appeal No. 119 of 2012 filed with a delay of 145 days. The reason for delay is stated to be that the order of the High Court dated 20.05.2011 sought to be assailed was received in the office only on 08.07.2011 and thereafter was sent to the office of the Advocate General, Punjab on 12.08.2011 for filing a SLP and the appeal was accordingly prepared and was got ready on 20.09.2011. However, thereafter, the office of the Advocate General, Punjab opined on 15.11.2011 that in fact Letters Patent Appeal would be maintainable and that would be the appropriate remedy instead of filing SLP and whereafter revised instructions for filing of Letters Patent Appeal were issued on 25.11.2011. Thereafter also, the appeal has been filed only on 17th January, 2012. The aforesaid shows either complete ignorance or deliberate neglect qua the issue of limitation knowing fully well that 30 days time is available for filing a Letters Patent Appeal. If the time period after taking the decision to file an appeal is taken into account, even then thereafter more than 30 days have been taken for filing the appeal.

The other aspect is that qua all other appeals where delay varies from 145 to more than 396 days, there is no justification given. When the decision in one out of the batch matter is taken to file the Letters Patent Appeals, we failed to understand as to how the State can justify any delay beyond this period of 145 days for other matters and that too running into months'' together. We are thus of the view that the State has taken no due care to file the appeals within time. The law on this issue stands clearly enunciated by the judgment of the Supreme Court in case Office of The Chief Post Master General and Others Vs. Living Media India Ltd. and Another, observing that there is no need to accept the usual explanation that file was kept pending for several months/years due to considerable degree of procedural red-tape in the process. It has been observed that the Government Departments are under a special obligation to ensure that they perform their duties with diligence and commitment and condonation of delay is an exception and should not be used as an anticipated benefit for government departments. The law of limitation binds everyone equally including government departments.

Despite the aforesaid position, we have at length heard the learned counsels for the parties on-merits because of the submission of learned Addl. Advocate General that matter involves serious financial repercussion.

The common issue which has arisen in these appeals is that the Government had promised prospective investors of industrial units a moon but gave them nothing. There were different schemes of subsidy floated for encouraging investment by the investors especially in the border areas and these Schemes are of 1992, 1996 and 2003. In the later two Schemes, the units had to be established and production started. Thereafter, an application for subsidy could be made. While this regulation for subsidy was not put in 1992 Scheme. This is infact a part of the industrial policy of the State Government of Punjab. Prospective investors raised funds from the market, banks and other institutions based on financial planning of prospective subsidy and the dreams crushed down when the subsidies were not released. The matter is more aggravated on the allegation of there being discrimination even in disbursement of the amounts without following due seniority.

The learned Single Judge in the impugned order has dealt with in detail about the issue in hand and the importance of industrial planning as per the policies published by the Government of Punjab. The larger issue was to diminish the stress on agricultural sector which was itself facing heavy losses, debt etc. When the promises were not forthcoming, the petitioners (herein respondents) moved the Court by filing various writ petitions.

The impugned order is not only one as there have been prior orders dealing with the matter in issue. In Civil Writ Petition No. 8719 of 2002 and connected matters, the assurance of the State Government to release the funds for the Scheme has been recorded as discussed in para No. 21 of the impugned order. The State Government repeatedly admitted its liability to pay the amount of subsidy/incentives to the industrial units and sanctioned the amount after scrutiny but the amounts were not effectively released to the units. The learned Single Judge thus noticed in para No. 23 of the impugned order that the State Government had issued guidelines dated 08.09.2009 to make the payment in public interest but to no avail.

Another aspect which is to be noticed is that the State Government admitted its liability during the course of hearing of the writ petitions and had sanctioned and paid the subsidy amount to other industrial entrepreneurs. It is in view thereof that the plea of discrimination received credence. Suffice it to say that these aspects have been discussed in paras No. 26 and 27 of the impugned judgment. Not only that in para No. 36, a reference has been made to the effect that in the pleadings of the writ petition, there is no specific denial by the respondents rather they have acknowledged the factual matrix of spending huge amounts and arrangement of loans etc. for establishing the industrial units. There is no allegation of fraud. The respondents repeatedly admitted the liability to make the payment of amounts in lieu of subsidies, incentives and all other benefits in pursuance to the industrial policies and relevant Rules. The subsidy is a manner of providing incentives for such investors and entrepreneurs that assume business risk in investments and thus are entitled to believe that the Scheme would be rooted on a sound government policy and therefore, the State cannot be legally permitted to defeat the rights of the investors, as explained in para No. 39 of the impugned order. Despite the aforesaid findings in the operative portion of the order, in para No. 46 the learned Single Judge has only opined that there cannot be guidelines and office orders which seek to deny the incentives/subsidies emanating from the industrial policies and the amounts are to be released by the respondents to the petitioners'' industries "if they are otherwise eligible and entitled to it" within a period of six months from the date of receipt of a certified copy of the judgment.

More than two years have elapsed since the date of impugned judgment but to no avail. We have put a question to the learned Addl. Advocate General, Punjab whether any exercise has been carried out towards the directions contained in the last paragraph of the impugned judgment. It appears that there has been none.

On the other hand, learned counsel for the petitioners (herein respondents) state that it is not as if the amounts are being claimed out of the blue but there are parallel exercise carried out by the State Government to determine the liability and the amount of subsidy which is to be paid to the respondents herein and in each case even sanction letter was issued. The learned Addl. Advocate General, Punjab cannot dispute the position that qua 1992 and 1996 Schemes, the amounts have been paid from time to time. This he claims, on instructions, is as per seniority. Thus, it has to be verified by the State as to where the seniority of the petitioners (respondents herein) stands and if the persons junior to them have been paid, then certainly the petitioners are entitled to the amount. This is so as surprisingly the only defence is of lack of funds and/or allocation of funds for the schemes.

Fiscal planning is an important function of the State Government. Before formulating any policy there has to be fiscal planning and allocation of funds. There cannot be any policy without proper groundwork and matching financial support. The investors and residents of the State cannot be misled in believing that polices have been formulated without appropriate financial backing. This would be disastrous. We thus see no reason to interfere with the directions contained in para No. 46 of the impugned order and must note with regret that the exercise has not been still completed.

In so far as 2003 Scheme is concerned, learned Addl. Advocate General, Punjab on instructions from Mr. G.K. Mehta, Assistant Director, Industries Department, Punjab, states that not a penny has been released to any investor as no funds are made available. Once again, it is shocking to note that the industrial policies are brought into force without any financial backing for the same. Be that as it may, this Court cannot create funds of its own for disbursement but any disbursement, if made, has to be as per the seniority. We may add, as per learned Addl. Advocate General, Punjab, that 2003 Scheme has elapsed and there is a new Scheme of 2009 which does not contain any provision for subsidy. He submits that due to paucity of funds, no amounts have been paid under 2003 Scheme.

Learned counsels for the writ petitioners submit that the State Government is spending amounts on non-essential matters while not adhering to its assurances under the policies. Without going into the specifics, this Court can observe that there has to be financial discipline and prioritization of allocation, distribution and spending of funds in situation of financial difficulties. It gives a wrong signal if non-essential matters receive the attention of the Government as compared to other matters. We are thus of the view that there is no need to entertain the appeals of the State Government against the impugned order except to the extent of our observations made aforesaid qua the Schemes and the manner of disbursement. Accordingly, all the applications for condonation of delay in filing the appeals and the appeals are dismissed in terms of the aforesaid. All the pending applications are also dismissed.