Existing industrial units are eligible for BIIPP-2016 incentives if no benefits were availed under previous policies.

The petitioners, two Special Purpose Vehicles (SPVs) of ACME Cleantech Solutions, established solar power projects in Bihar.

Both projects were commissioned on 28.06.2016, two days before the expiry of the Bihar Industrial Incentive Policy, 2011 (BIIP-2011).

The petitioners did not avail incentives under BIIP-2011.

Subsequently, the Bihar Industrial Investment Promotion Policy, 2016 (BIIPP-2016) was notified.

The State Investment Promotion Board (SIPB) granted the petitioners Stage-I clearance in 2018 and financial incentive approval in 2019 under the Bihar Industrial Investment Promotion Rules, 2016.

However, following multiple applications and queries regarding documentation (specifically Fire NOC), the SIPB rejected the petitioners' subsidy claims in 2024, citing that the projects commenced commercial operations (COD) before the effective date of BIIPP-2016.

1. Whether the petitioners are eligible to claim incentives under BIIPP-2016 in view of the amendment dated 14.10.2022 to Clause 8(b).

2. Whether the grant of Stage-I clearance and financial approval by the SIPB created a vested or enforceable right in favour of the petitioners.

3. Whether the rejection of the petitioners' applications for interest subvention and duty reimbursement was arbitrary or in violation of the incentive policies.

The court primarily interpreted Clause 8 of the BIIPP-2016, specifically the amendment to Clause 8(b) via Notification No. 4571 dated 14.10.2022, which allows existing units to receive subsidies under current policies provided they had not previously availed those specific items under earlier policies.

It applied Rule 6 and Rule 7 of the Bihar Industrial Investment Promotion Rules, 2016, which govern the integrated clearance system and mandatory disbursement of sanctioned incentives.

Furthermore, the court relied on the doctrines of Promissory Estoppel and Legitimate Expectation, citing State of Jharkhand v. Brahmputra Metallics Ltd. regarding the duty of public authorities to adhere to representations that induce industrial investment.

The Court found that although the petitioners were "Existing Industrial Units" (having commissioned before 01.09.2016), the amended Clause 8(b) of the 2016 Policy acted as an enabling provision for such units to claim incentives they had not previously exhausted under BIIP-2011.

The Court reasoned that the SIPB's 2018 Stage-I clearance and 2019 financial approval constituted a statutory recognition of eligibility, creating a vested right.

It rejected the State's "hyper-technical" objection regarding the COD date, noting that the 2016 Policy was designed to carry forward benefits to ensure continuity for units that missed the narrow window of the previous policy.

The SIPB's sudden reversal after years of processing applications was deemed a violation of the trust reposed by investors in the State's representations.

Furthermore, Rule 7(4) makes the disbursement of sanctioned incentives mandatory once compliance is verified, leaving no room for arbitrary post-sanction rejection.

It held that the petitioners are eligible for incentives under the amended BIIPP-2016 as they had not availed benefits under the 2011 Policy.

The court quashed the rejection letters and declared the petitioners entitled to interest subvention, reimbursement of stamp duty, and registration fees.

The respondents were directed to release the incentives within three months.

The writ applications were allowed.