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Judgment
Maibam B.K. Singh, J.—These seven writ appeals being WA No. 31 (SH) 2008, WA No. 30 (SH) 2008, WA No. 32 (SH) 2008, WA No. 26 (SH) 2008, WA No. 27 (SH) 2008, WA No. 28 (SH) 2008 and WA No. 29 (SH) 2008, relate to WPC No. 279 (SH) 2007, WPC No. 280 (SH) 2007, WP (C) No. 281 (SH) 2007, WP (C) No. 282 (SH) 2007, WP (C) No. 283 (SH) 2007, WP (C) No. 284 (SH) 2007 and WP (C) No. 285 (SH) 2007 respectively. All the said seven writ petitions, which had been filed challenging the refusal of the Respondent authorities in the writ petitions to release to the writ Petitioners the financial assistance under the Scheme for promotion of Industries in the North East (SPINE) in terms of the letter dated 22.6.2006 of the Chief of Division, NEC Cell, Planning and Development Department, were disposed of by a Single Judge of this Court vide a common judgment dated 20.06.2008. Purportedly, being aggrieved by the said common judgment, the present writ appeals have been filed challenging its legality. Since similar facts and common question of law are involved in these writ appeals they are heard and proceeded together.
We have heard Mr. S.C. Shyam, learned CGC, appearing on behalf of all the Appellants and Mrs. N. Saikia, learned Counsel appearing on behalf of all the Respondents writ Petitioners.
While disposing of the said seven writ petitions, the learned Single Judge directed the concerned Respondents to process the applications of all the writ Petitioners for grant of subsidy under SPINE in accordance with law for sanctioning the same due to each of them without being influenced by the letter dated 5.2.2007 of the Secretary in the Ministry of DoNER within a period of 90 days from the receipt of the judgment.
On perusal of the records before the Court, we find that the learned Single Judge, after due hearing of the parties and consideration of their pleadings and materials before the Court, held to the effect that the Scheme known as "Scheme for Promotion of Industries in the North East" or in otherwise as SPINE was launched by the Respondent authorities to bring about speedy industrialization of the North Eastern Region through the NEC, that the policy decision of the Respondent authorities for subsidizing 25% of the project cost or Rs. 50 lakhs whichever was less subject to a maximum limit of Rs. 50 lakhs and as deemed proper by the recommending authority under the terms stipulated constituted a valid and unequivocal promise on the part of the Respondent authorities and that the Respondent authorities expected interested persons to act on the said promise.
Further findings of the learned Single Judge were to the effect that the writ Petitioners, relying on the said promise/assurance made under the SPINE, materially altered their respective position by investing a huge amount in connection with setting up of their respective new industrial units after taking huge amount of both secured and un-secured loans, that though the writ Petitioners submitted their respective applications in the prescribed form with all the necessary documents for assistance under the SPINE to the NEC through the Line Departments, the said applications were kept pending by the Secretary, NEC despite due recommendations by the Industries and Commerce Department, Assam, and that in case of not getting financial assistance under the SPINE, the said Industries would be facing closure. After referring to the letter dated 5.2.2007 of the Secretary in the Ministry of DoNER, in terms whereof the SPINE was alleged to have been withdrawn, the learned Single Judge held that there was nothing in the letter to indicate about the alleged withdrawal of the SPINE. In the opinion of the learned Single Judge, merely on the basis of the direction for stopping grant-in-aid under the Scheme pending inquiry about some irregularities, it could not be said that the Scheme had been withdrawn. Moreover, in the opinion of the learned Single Judge even assuming that the Scheme was withdrawn, the concerned Industries of the Petitioners had been started before the said withdrawn. After referring to the above said letter dated 5.2.2007 and minutes of the meeting, dated 21.2.2007, held to review the NEC''s Scheme, the learned Single Judge held that the Respondent authorities had neither withdrawn the SPINE nor had they stopped release of investment subsidy to Industries under the SPINE and as such, there was no earthly reason for the Respondent authorities not to sanction the investment subsidy applied for by the writ Petitioners under the SPINE or at any rate not to process the said applications in accordance with law.
The above said findings of the learned Single Judge are found to have been made after due consideration of the materials in the light of the submissions of the parties and as such, they are acceptable and they cannot be considered as perverse. No interference is called for in respect of the above said findings.
After making the above said findings and also after consideration about the applicability or otherwise of the principles'', of promissory estoppel in the light of the decision of the Apex Court in Motilal Padampat Sugar Mills v. State of U.P. (1987) 1 SCC 409, the learned Single Judge held in effect that the Respondent authorities were bound by their promise made in the SPINE on the principles'', of promissory estoppel, In pursuance of the said decision, the learned Single Judge made the said directions already noted above.
Challenging the above said findings and directions of the learned Single Judge, Mr. S.C. Shyam, learned CGC, submits that since the subsidy under the SPINE was to be granted subject to availability of fund and fulfillment of other requirements under the Scheme, the promise or representation under the SPINE was conditional and not in absolute terms and as such, despite the findings about the alteration of the position of the writ Petitioners having taken place due to huge investment made by them in connection with setting up of their respective industries relying on the said promise, it was not legal on the part of the learned Single Judge to apply the doctrine of promissory estoppel in the cases before him.
Clause C of para 1.4 of the relevant Scheme relating to "incentives for setting up of Industries "states" NEC will subsidize 25% of the project cost of Rs. 50 lakhs whichever is less subject to a maximum limit of Rs. 50 lakhs and as deem proper by the recommending authority subject to the following:
(i) For the purpose of calculating the amount of subsidy eligible the following shall be taken into consideration (a) Land (b) cost of building (c) cost of plant and machinery (d) cost of miscellaneous fixed assets (e) where the total cost of project is below Rs. 25 lakhs, the preliminary and pre-operative costs.
(ii) All sanctions and also the amount sanctioned will be subject to the availability of funds with the NEC for the purpose.
Many other conditions are specified in the other clauses of the above said para of the relevant Scheme. However, it is not the case of the Appellants that the writ Petitioners or any of them did not comply with any of the required conditions under the Scheme. According to the writ Petitioners, they submitted their respective applications along with relevant documents to the NEC through proper channel and their cases were already recommended by the concerned Department. In the facts and circumstances, we cannot accept the submission of the learned CGC to the effect that there was no clear and unequivocal promise from the side of the Respondent authorities knowing and intending that it would be acted upon by the promisees/writ Petitioners. In our considered opinion, there was a clear and unequivocal promise from the side of the Respondent authorities regarding giving of subsidy to the extent and on fulfillment of the conditions mentioned in the said Scheme SPINE. What is required for the application of the doctrine of promissory estoppel is a clear and unequivocal promise knowing and intending that it would be acted upon by the promisee, apart from the requirement of acting upon the promise by the promisee and thereby making it inequitable to allow the promisor to go back on the promise. By saying that the NEC would subsidize 25% of the project cost etc., subject to the conditions mentioned in the Scheme, there was clear and unequivocal promise regarding giving of subsidies. The limitations and conditions mentioned are relevant for determining if one has fulfilled the relevant conditions and if he is entitled to the benefit under the Scheme. As already noted above, it is not the case of the Appellants that the writ Petitioners or any of them did not comply with any of the required conditions and that no amount could be sanctioned infavour of the writ Petitioners or any of them due to non availability of funds with the NEC for the purpose.
In Union of India v. Anglo Afghan Agency AIR 1968 SC 718, the Apex Court held in page 728 para 23:
Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the judge of its own obligation to the citizen on an ex-parte appraisement of the circumstances in which the obligation has arisen.
Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and Others, was a case relating to a representation made by the State Government that the Petitioners'' factory would be exempted from payment of sales tax for the period of three years from the date of commencement of production. It was proved that the Petitioner had, as a consequence of the representation, set up a factory in the State. But the State Government refused to honour its representation. It claimed sales tax from the period it had said that it would not. When the Petitioners went to Court, the State Government took the pleas: (1) in the absence of Notification u/s 4-A, the State Government could not be prevented from enforcing the liability of sale tax imposed on the Petitioner under the provisions of Sale Tax Act.; (2) that the Petitioners had waive their right to claim exemption; and (3) that there could be no promissory estoppel against the State Government so as to inhibit it from formulating and implementing its policies in public interest The Apex Court rejected all the three pleas of the Government. It reiterated the well known preconditions for the operation of the doctrine (1) a clear and unequivocal promise knowing and intending that it would be acted upon by the promise; (2) such acting upon the promise by the promisee so that it would be inequitable to allow the promisor to go back on the promise.
In the above said case, the Apex Court held, at page 442 para 24:
The law may, therefore, now be taken to be settled as a result of this decision, that where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promise, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution.
The above said principles of law were followed in many other subsequent cases. Keeping the above said well settled principles of law in view, in our considered opinion, no interference is called for in respect of the finding of the learned Single Judge to the effect that the essential conditions for the application of the doctrine of promissory estoppel were satisfied in all the cases before him.
Learned CGC submits that the said promise or representation regarding giving of subsidy under the said Scheme was of no legal effect as there was no statutory provisions under which such concessions could be granted. According to the learned CGC, the doctrine of promissory estoppels should not have been invoked in such a case.
We are not inclined to accept this submission. There is no legal requirement that for applying the said doctrine of promissory estoppel, the promise of the promisor should have been made under the provisions of any statue. The said policy decision regarding giving of subsidy was admittedly taken by the NEC which is a Statutory Regional Planning Body constituted u/s 3(1) of the North Eastern Council Act, 1971. That said policy decision was not taken by any unauthorised person beyond its power and there is no legally valid reason for not applying the said doctrine of promissory estoppel only on the ground that the promise was not one made under the provisions of any status. It is not also the case of the Appellants that making of the said promise regarding giving of subsidy was prohibited by any provisions of law or that it was beyond the power of the concerned authorities to take any policy decision for granting the subsidy. In Motilal Padampat Sugar Mills Limited (supra) the Apex Court rejected the pleas of the State to the effect that in the absence of any Notification issued u/s 4-A of the Uttar Pradesh Sales Tax Act, the State was entitled to enforce the liability to Sales Tax imposed on the Petitioners thereof under the provisions of the Sales Tax Act and that there could be no promissory estoppels against the State so as to inhibit it from formulating and implementing its policy in public interest.
Further the learned CGC, submits that the writ Petitioners have no vested and enforceable legal rights and as such, the directions issued by the learned Single Judge in the form of the writ of mandamus are not sustainable in the eye of law.
This submission is also not acceptable. The learned Single Judge made the said directions in order to enforce the promise of the concerned authorities by the force of the doctrine of promissory estoppel after making a finding about the applicability of the said doctrine in the facts and circumstances of the case. It is to be noted that the Apex Court in Motilal Padampat Sugar Mills Limited (supra) pointed out that in India not only has this doctrine been adopted in its fullness but it has been recognized as affording a cause of action to the person to whom the promise is made. The doctrine of promissory estoppel has been evolves by the Courts on the principles of equity to avoid injustice. In the said cases before the learned Single Judge, on finding that the writ Petitioners have altered their respective positions by acting on the promise made by the concerned authorities and that the ingredients for the application of the said doctrine were satisfied, gave the said directions to enforce the rights of the writ Petitioners. The said directions are not directions to carry out a promise or representation which is contrary to law or which was outside the power of the concerned authorities. In our opinion, there was no illegality in issuing mandamus for enforcing promissory estoppel.
The learned CGC, submits that the learned Single Judge failed to appreciate that the concerned authority could change its policy if the situation so warranted and merely because the subsidy was allowed for a particular period it did not mean that the concerned authority could not amend or withdraw the policy under any circumstances inasmuch as, if the party claiming the application of the doctrine acted on the basis of the notification, it should have known that such notification was liable to be amended or rescinded at any point of time if the authority felt that it was necessary to do so in public interest and as such, the impugned judgment is liable to be set aside and quashed. Moreover, according to the learned CGC, the learned Single Judge failed to appreciate the fact that the concerned authority was competent to rescind from the promise even if there was no manifest public interest provided no one was put in adverse situation which could not be rectified and as such, the impugned judgment is liable to be interfered with.
These submissions are not also acceptable. Uncontrovertible findings of the learned Single Judge are that neither the SPINE has been withdrawn nor has further release of the subsidy under the Scheme been stopped. The opinion of the learned Single Judge that the pendency of an enquiry which has no connection whatsoever with the writ Petitioners cannot be a ground for not processing the cases of the writ Petitioners warrants no interference. On perusal of the records, we also do not find anything to show any formal announcement or intimation regarding the alleged withdrawal of the said Scheme in connection with giving of subsidy. At the same time, we are of the view that though the cocerned authority has power to withdraw the said Scheme of giving subsidy, the said power cannot be exercised in violation of the Rules of promissory estoppel.
In Shri Bakul Oil Industries and Another Vs. State of Gujarat and Another, the effect of two exemption notification made in exercise of Government''s power u/s 49(2) of the Gujarat Sales Tax Act, 1960, was considered. In the said case, the Apex Court held to the effect that the State Government was under no obligation in any manner known to law to grant exemption and that it was purely within the Government''s power to revoke the exemption by means of a subsequent notification. Further, as per decision of the Apex Court in the above case, if the exemption notification gave exemption from payment of tax for a particular period and an industry was commissioned after the date of the exemption order but before the exemption was withdrawn, the said industry would be entitled to the benefit of exemption for the period specified in the exemption order though the exemption was withdrawn before the expiry of that period if the industry could rely on any estoppels. The Apex Court at page 37 para 11 of the above said case held as follows:
We must, however, observe that the power of revocation or withdrawal would be subject to one limitation viz. the power cannot be exercised in violation of the rule of promissory estoppel. In other words, the Government can withdraw an exemption granted by it earlier if such withdrawal could be done without offending the rule of promissory estoppel and depriving an industry entitled to claim exemption from payment of tax under the said rule. If the Government grants exemption to a new industry and if on the basis of the representation made by the Government an industry is established in order to avail the benefit of exemption, it may then follow that the new industry can legitimately raise a grievance that the exemption could not be withdrawn except by means of legislation having regard to the fact that promissory estoppels cannot be claimed against a statute.
In Vij Resins Pvt. Ltd. and Others Vs. State of Jammu and Kashmir, on the basis of representation made by the State Government, the Petitioners set up industries in the State by making substantial investments. The Petitioners were invited to set up industries by assuring them supply of raw material. They changed their position on the basis of representations made by the State and when the factories were ready and they were in position to utilize the raw material, an Act being Governor''s Act 7 of 1986 came into force to obliterate their rights and enabled the State to get out of their commitments. The Apex Court, observed at page 127 para 26 of the Judgment:
...We are inclined to agree with the submissions made on behalf of the Petitioners that the circumstances gave rise to a fact situation of estoppel, it is true that there is no estoppels against the legislature and the vires of the Act cannot be tested by invoking the plea but so far as the State Government is concerned the rule of estoppels does apply and the precedents of this Court are clear.
In the cases before us also we have ascertained that the uncontrovertible findings made by the learned Single Judge give rise to a fact situation for application of the doctrine of promissory estoppel in favour of the Petitioners in the writ petitions and as against the Respondents/Appellants. The Petitioners in the writ petitions, who acted in pursuance of the promise of the said authorities and incurred expenditure cannot be deprived of the benefits under the said Scheme simply by taking the plea that the Scheme has been withdrawn subsequently. The said withdrawal cannot be made in violation of the doctrine of promissory estoppel. The submission made by the learned CGC in this regard is not accepted.
In the result, these seven writ appeals are rejected as having no merit. The impugned common judgment dated 20.6.2008 is not interfered with. No order as to cost. The concerned authorities/Appellants will have to comply with the directions of the learned Single Judge within a period of 90 days from the date of receipt of this judgment.