Full Judgment Text
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CASE NO.:
Appeal (civil) 2865 of 1998
PETITIONER:
Union of India
RESPONDENT:
M/s Krimpex Synthetics Ltd.
DATE OF JUDGMENT: 24/08/2005
BENCH:
ASHOK BHAN & S.B. SINHA
JUDGMENT:
J U D G M E N T
With
CIVIL APPEAL NO.5272 OF 2005
(arising out of SLP ) No. 22036 of 1997)
BHAN, J.
Leave granted in SLP ) No. 22036 of 1997.
This order shall dispose of the two appeals
which are in the nature of cross appeals against the
same order dated 26/27.11.1996 of the High Court of
Bombay in Writ Petition No. 245 of 1991. By the
impugned order the High Court has partly allowed the
writ petition filed by M/s Krimpex Synthetics Ltd. \026
Respondent in Civil Appeal No. 2865 of 1998 filed by
the Union of India and the appellant in the Civil
Appeal No..................of 2005 (@ SLP (C) No.
22036 of 1997. Parties shall be referred to as per
their status in Civil Appeal No. 2865 of 1998.
With a view to promote the growth of
industries in certain selected less developed
districts and areas, the Government of India
introduced the Central Outright Grant or Subsidy
Scheme, 1971 (for short "the Scheme") for the
industrial units under notification dated 26th
August, 1971 published in the Gazette of India,
extra-ordinary, Part \026 I, Section-1. Along with the
scheme, a manual was issued setting out the detailed
working of the Scheme. Respondent filed a writ
petition in the High Court of Bombay seeking
quashing of orders at Exs. E and F of the petition.
Exhibit E was a communication to the respondent
informing that in view of the Ministry of Industry
Government of India’s decision under letter No. 45
(2)/89-DBA-II dated 28.6.1990 the claim of the
respondent for Central Investment Subsidy was
rejected. Exhibit F was a communication from the
Government of India to the Administration of Dadra
and Nagar Haveli informing that the claim of Rs.
1,63,28,848/- under the Central Investment Subsidy
Scheme in respect of units which were sanctioned
investment subsidy after cut off date, i.e.,
30.9.1988 as per the provisions contained in
Ministry’s letter dated 21.7.1988 is returned.
The case was disposed of by the High Court vide
its judgment and order dated 22.10.1992. Against
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the order of the High Court several appeals/cross
appeals were filed in this Court which were disposed
of by the judgment and order dated 5.12.1995. The
said judgment and order of this Court may for
convenience is reproduced as under:
"The grievance of the industries
arrayed in these appeals is that
they have not been disbursed the
subsidy to which they are entitled
to, under the Central Outright
Grant or Subsidy Scheme, 1971 for
industrial units to be set up in
the selected backward units/areas.
Some of the industries have
already received the subsidy
consequent upon the impugned order
of the High Court. The claims of
the industries are of various
categories. It is not necessary
for us to go into further details.
We are of the view that it would
be in the interest of justice to
direct all the industries
concerned to make a representation
before Mrs. Pratibha Karan, Joint
Secretary, Ministry of Industry
under Department of Industrial
Development, Udyog Bhavan, either
jointly or severally within three
weeks from today. (the name has
been suggested by learned
Additional Solicitor General after
consulting Government of India).
The representations shall be
decided within eight weeks
thereafter. The learned
Additional Solicitor General
states that Mrs. Karan shall have
the assistance of officers from
the Ministry of Finance and Law.
Mrs. Karan may, if so advised,
hear the representatives of the
industries. She shall decide the
representations without taking
into consideration the earlier
decision/letters issued by the
Government of India from time to
time. We, however, make it clear
that it will be open to her to
take into consideration the 1971
Scheme, as modified from time to
time. Meanwhile we stay the
operation of the impugned
judgment of the High Court till
further orders. Needless to say
that the brief reasons shall be
given in support of the decision
of the representations. The
decision shall be placed before
this Court within one week of the
date it is announced. It will be
open to Mrs. Karan to give
decision on individual
representations or category-wise
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or a common order."
Pursuant to the above quoted order
Mrs. Pratibha Karan, Joint
Secretary, Ministry of Industry
has passed the order dated
November 16, 1995. Copy of the
order has been placed on the file
of this case. WE are of the view
that so far as the cut off date is
concerned, the Joint Secretary,
has taken a fair and just stand.
We agree with her that all the
applications filed upto September
30, 1988 should be considered for
grant of Central Investment
Subsidy provided the said
applications were complete in
terms of the scheme dated August
26, 1971 as modified from time to
time. In this view of the matter
we set aside the judgment of the
High Court and remand the case for
fresh decision. All the
applications filed before
September 30, 1988 may be
considered for grant of the
Central Investment Subsidy
provided the applications were
complete under the scheme. The
High Court may keep in view the
order passed by the Joint
Secretary but shall take its own
decision on merits of the case.
The Joint Secretary in her order
has found 12 industries mentioned
in para 19 of the order to be
eligible for grant of subsidy. We
direct that subsidy be disbursed
to these industries as per the
decision of the Joint Secretary if
not already disbursed. The
appeals and the special leave
petitions are disposed of. No
costs."
It is apparent from the reading of the above
quoted order that in pursuance to the directions
issued by this Court several concerns including the
respondent herein made representations to Mrs.
Karan, Joint Secretary, Ministry of Industry and
Mrs. Karan gave her decision on indivudal
representation. After perusing the same this Court
observed that it agrees with Mrs. Karan that all
the applications filed upto September 30, 1988
should be considered for grant of Central Investment
Subsidy provided the said applications were
complete in terms of the scheme dated 26th August
1971 as modified from time to time. This Court
set aside the judgment of the High Court and
remanded back the matter for fresh decision with the
directions that all applications filed before
30.9.1988 may be considered for grant of Central
Investment Subsidy provided the applications were
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complete in all respect under the scheme. It was
further observed that the High Court shall take its
own decision on merits on each case but may keep in
view the order passed by the Joint Secretary.
The decision taken by Mrs. Karan, Joint
Secretary, was placed before the High Court. The
High Court by the impugned order has disposed of
the petition after the remand by this Court.
Aggrieved against which the present appeals have
been filed by both the Union of India as well as the
respondent.
The High Court has come to the conclusion that
the respondent made an application for registration
of its company on 25.2.1987 and the registration was
granted to it on 18.3.1987. Thereafter, Respondent
made an application for grant of subsidy on
10.12.1987. By communication dated 23.12.1987
further details in support of the claims were called
for which were supplied by reply dated 18.1.1988.
Respondent vide its subsequent communication dated
15.3.1988 made a claim for some additional amount.
On 28.7.1988 the respondent furnished fresh
statement of fixed assets upto 10.6.1988. The
respondent furnished the Chartered Accountant’s
certificate for the plant and machinery affixed upto
30.9.1988 on 24.11.1988.
Along with the form while applying for the
grant of subsidy, the units were supposed to file
the following documents:
"a. Project report.
b. Details of scheme including
the details the fixed assets
to be acquired.
c. Sanction letter from the
financial institutions
sanctioning the loan or
loans.
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 certifying
the civil work done."
Mrs. Karan, in para 18 of her order, mentioned
that for deciding as to whether an application is
complete in material particulars, recourse has to be
had to the provisions of the Manual for the Central
Investment Subsidy Scheme. The application was
required to be made in the prescribed form as per
annexure II of the Manual and filed with
details/documents mentioned in clauses (a); (b), (c)
and (d) of para 2.3 of the Manual which lays down
the procedure for claiming subsidy. Ultimately,
Mrs. Karan had annexed a statement in respect of
individual claimants and the name of the respondent
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appeared as Srl. No. 4. It was held by Mrs. Karan
that the application by the respondent for subsidy
was not complete in all respects and the
deficiencies pointed out by her are as follows:
"a. Certificate regarding plant
and machinery
bank certificate, details of
unloading etc. on 18.1.1988;
b. Invoices of additional fixed
assets on 12.3.1988;
c. C.A. certificate for plant
and machinery on 11th April,
1989."
After taking into consideration the order
passed by Mrs. Karan as was observed by this Court
in the order remitting the case back, the High Court
came to the conclusion that the only point to be
decided by it was as to whether the decision of Mrs.
Karan rejecting the claim of the respondent was
right on the grounds stated by her.
During the course of hearing before the High
Court respondent filed an additional affidavit
showing that respondent had expended more than Rs.
100 lacs in fixed assets before the cut off date and
therefore the respondent was entitled to the
maximum subsidy of Rs. 25 Lacs. This contention
has been rejected by the High Court by observing
that material which had not been placed before Mrs.
Karan could not be taken into consideration because
as per remand order the High Court was to keep in
view the order passed by the Joint Secretary, though
the High Court could take its own decision on merit
of the case. It was observed that since the
respondent had not placed the material before the
Joint Secretary which was sought to be produced
before the High Court the same could not be taken
into consideration. The only material which could
be taken into consideration was the material which
had been placed before Mrs. Karan. After analysing
the order of Mrs. Karan the High Court came to the
conclusion that Mrs. Karan had erred in rejecting
the claim of the respondent in its entirety. It was
held that the respondent was entitled to subsidy of
25% on the sum of Rs. 50,72,258/-
The respondent has filed the Special Leave
Petition No. 22036 of 1997 claiming the maximum
subsidy for the sum of Rs. 25 lacs. It was
submitted by Shri Gopal Jain, learned counsel
appearing for the respondent, that the respondent
was entitled to maximum subsidy available under the
scheme to the tune of Rs. 25 lacs. Mr. Jain, fairly
conceded before us that the material which was
placed along with the additional affidavit before
the High Court had not been placed before Mrs.
Karan, Joint Secretary. We agree with the view
taken by the High Court that the only material which
could be taken into consideration was the one which
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was produced before the Joint Secretary as this
Court had remanded the case to the High Court to
take the final decision keeping in view the order
passed by the Joint Secretary. From the remand
order it can be deciphered that the High Court was
not supposed to entertain any fresh material. An
opportunity was given to the claimants to file their
representations to the Joint Secretary along with
the material on the basis of which decision was
taken by the Joint Secretary regarding the
eligibility of the claimant to get the subsidy. The
material which was sought to be produced before the
High Court should have been produced before the
Joint Secretary and it was for the Joint Secretary
to take the decision on the same. Since the
material had not been placed before the Joint
Secretary the same could not be taken into
consideration by the High Court and the contention
raised by the respondent to the contrary has rightly
been rejected.
Union of India has filed the appeal with the
averment that premises of the respondent-Company
were closed and the Company seems to have gone in
liquidation. According to the counsel for the
Union of India as per scheme a Company which went
out of production within the period of 5 years of
the start of production was not entitled to the
subsidy under the Scheme. Apart from the averment
that Company seems to have gone into liquidation no
other material was placed before the High Court to
show that in fact the company had gone into
liquidation or that the liquidator had been
appointed. Counsel appearing for the respondent in
the High Court had fairly brought to the notice of
the Court that ICICI and other financial
institutions on the original side of the Bombay High
Court had filed the suit bearing O.S. No. 1595 of
1989 and the Court had appointed Court Receiver in
respect of the land, building, plant and machinery
etc. The receiver had been appointed under Order
40 Rule 1 CPC. No order of winding up of the
Company was passed. No official liquidator had been
appointed to take over the assets of the Company.
As per Mr. Gopal Jain, learned counsel appearing
for the respondent, the receiver had appointed the
respondent as its agent. According to him, the
Company did not close down and remained in
production. From the material which had been placed
before the High Court and even before us it cannot
be concluded that the Company had gone into
liquidation or had closed down. Contention raised
by the counsel for the Union of India that the
respondent were not entitled to any subsidy thus
cannot be accepted.
No other point was raised.
Mr. Gopal Jain submitted before us that the
respondent had entered into a settlement with the
ICICI Ltd. and the Industrial Finance Corporation of
India. The consent terms were filed before the Debt
Recovery Tribunal \026 II, Mumbai in Recovery
Proceeding No. 54 of 2001 [Original Application No.
156 of 2001] and that the respondent had already
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made the payment to the ICICI Ltd. and IFCI as per
consent terms. He prayed that instead of depositing
the amount of subsidy in Court as directed by the
High Court the Union of India be directed to make
the payment to the respondent directly along with
interest. It was conceded before us, that the suit
referred to by the High Court in its order is still
pending. Under the circumstances we direct that the
subsidy amount which was supposed to be deposited by
the Union of India within three months from the date
of the order of the High Court, i.e., 26/27th
November, 1996 and which has not been deposited be
deposited within three months from this day in the
Court along with simple interest @ 9% per annum from
the date of the passing of the order by the High
Court till deposit of the amount. Respondent would
be at liberty to apply to the Court for release of
the amount deposited, if it has already settled its
dispute with the ICICI and IFCI. The Court shall
pass an order on such an application on its own
merit in accordance with law.
For the reasons stated above, the appeals filed
by the Union of India as well as by the respondent
are dismissed. There shall be no order as to costs.