1 wp-6905/10 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 6905 OF 2010 Dilipkumar P. Doshi, Managing Partner of M/s. Dura-Chem Industries, R/a : Vanmali Bhuvan, 2nd floor, Navroj Lane, Ghatkopar (West), MUMBAI – 400 086. ] ] ] ] ] ] ..Petitioner. Versus 1] The State Level Committee [Re-constituted] of Silvassa – 396 230, Union Territory of Dadara & Nagar Haveli. ] ] ] ] ] ] 2] The Hon’ble Deputy Secretary to Govt. of India, Ministry of Commerce and Industry (Dept. of Industrial Policy & Promotion), Udyog Bhawan, New Delhi-11011. ] ] ] ] ] ] ..Respondents. Mr. Dilipkumar P. Doshi petitioner party-in-person. Mr. Girish Joshi i/b Mr. S.S.Deshmukh for R-1. Mr. Jaydeep S. Deo for R-2. Coram : SMT. RANJANA DESAI & RANJIT MORE, JJ. Date : July 27, 2011. P. C. : 1. The petitioner by filing this writ petition under Article 226 of the Constitution of India has challenged the legality and srp 2 wp-6905/10 validity of the orders dated 21/4/2010 and 30/4/2010 passed by the 1st respondent and the 2nd respondent respectively whereby the petitioner was held ineligible for grant of subsidy. The petitioner has also asked for a direction to the respondents to forthwith release in his favour an amount of Rs.8,75,542/- alongwith interest at the rate of 12% p.a. from the date of his application i.e., 29/4/1988, towards the expansion subsidy under the Central Investment Subsidy Scheme, 1971 [hereinafter for short referred to as “the said Scheme”]. The petitioner has also prayed for action against concerned Govt. Officials. 2. The petitioner claims to be the managing partner of M/s. Dura-Chem Industries. The said partnership firm and present petitioner had earlier filed Writ Petition in this Court, being Writ Petition No.644 of 1992 against the Union of India, General Manager, District Industries Center, Administration of Dadra & Nagar Haveli, Union Territory, Silvassa and Under Secretary, Ministry of Industries, challenging the refusal of the respondents to grant subsidy to them despite they being entitled to the same under the said scheme. In short, it was the petitioner’s case that after purchasing plot of land in the 3 wp-6905/10 year 1974, the District Industries Center, Administration of Dadra, Nagar and Haveli, Silvassa had issued a provisional small scale industries registration certificate to his factory. It was the case of the petitioner that the State Department of Industries at Silvassa granted permanent small scale industries registration to the petitioner’s factory in the year 1976. The Central Government introduced a scheme by the name “Central Investment Subsidy Scheme, 1971” with effect from 26/8/1971 and same was extended from time to time. The petitioner made an application on 1/6/1986 for registration in accordance with the said scheme for availing the benefit of cash subsidy. The petitioner claims that they were registered by the Industries Department under the said scheme on 21/4/1987 and thereafter they preferred an application on 29/1/1988 for disbursement of subsidy of Rs.18,61,413.94 paise for substantial expansion under the said scheme for 15% and 25% cash subsidy respectively. It was also claimed that the petitioners have already submitted Chartered Accountant’s Certificate for the disbursement of the subsidy of Rs.8,75,542/- for the investments made in the fixed assets during the period 1/1/1988 to 21/1/1988 and remaining amount of Rs. 9,85,871.94 paise was required for expansion in the fixed 4 wp-6905/10 capital investment in the factory. The petitioner claimed that because of non release of the subsidy of Rs.8,75,542/-, they could not complete expansion as indicated by them in their application dated 29/1/1988. The said scheme came to an end on 30/9/1988, however, the petitioner had already made an application claiming subsidy on 29/1/1988 and therefore he was eligible for the subsidy under the said scheme. The petitioner’s application was rejected by the State Department of Industries at Silavassa stating therein that the disbursement of the central investment subsidy after 30/9/1988 cannot be considered. 3. The claim of several other industrial units under the said scheme was also rejected. Therefore they filed separate petitions in this Court. Those writ petitions were decided by the Division Bench of this Court by passing a common judgment and order on 22/10/1992. By the said order, the Division Bench of this Court held that the petitioners who had made applications for grant of subsidy to the State Level Committee before 15/4/1988 and in whose cases the State Level Committee had already sanctioned the subsidy either fully or partly, are entitled to relief to the extent of the amount 5 wp-6905/10 so sanctioned and concerned respondents were directed to disburse the subsidy to those petitioners. This order of the Division Bench was carried in an appeal by the Department as well as by the Petitioners in those writ petitions, as the Division Bench had fixed the cut-off date as 15/10/1988 in stead of 30/9/1988. The Supreme Court having heard the parties, fixed the cut off date as 30/9/1988 and remitted all the matters to the Joint Secretary to Government of India for scrutiny for grant of subsidy. 4. Writ Petition No.644 of 1992 filed by the petitioners was decided by the Division Bench of this Court vide order dated 7/5/2005. In the said order, Division Bench has taken note of the earlier order dated 22/10/1992 passed by the another Division Bench in similarly situated group of petitions and also the order of the Apex Court in SLP carried against the Division Bench order. In its order dated 7/5/2005, the Division Bench noted the cut-off date fixed by the Apex Court, i.e., 30/9/1988 and directed the respondents to hold scrutiny of the petitioner’s case by the Joint Secretary, Ministry of Industries. In spite of this order dated 7/6/2005, the petitioner’s case was not scrutinised by the Joint Secretary, Ministry of Industries and 6 wp-6905/10 therefore the petitioner was constrained to file Civil Application Nos.3059 of 2009 and 719 of 2010. In pursuance of the orders passed in these civil applications from time to time, the State Level Committee, i.e., respondent no.1, was re-constituted. The petitioner’s case was re-examined by the said Committee. As stated above, by its order dated 21/4/2010, the 1st respondent decided not to recommend petitioner’s subsidy claim dated 29/1/1988 to respondent no.2. Respondent no.2 also thereafter scrutinized petitioner’s claim and held that the petitioner’s unit is not entitled to the benefit of subsidy under the said scheme. As stated above, these decisions are being challenged in the present writ petition. 5. We heard the petitioner-in-person on 13/6/2011 and 16/6/2011. During the course of hearing, petitioner submitted that he would advance his oral submissions, however, he would require assistance to read the relevant portion of the writ petition alongwith annexure and affidavit-in-rejoinder because of his weak eye-sight. We, therefore, requested Advocate Mr. Momin to appear for the petitioner and assist the Court and adjourned the matter to 23/6/2011. On 23/6/2011 we heard the petitioner-in-person and Mr. Momin read the relevant 7 wp-6905/10 portions of the writ petition and annexures and affidavits on behalf of the petitioner. We also heard the learned counsel for the respondents. 6. The petitioner submitted that the said scheme was in force till 30/9/1988. During the continuance of the said scheme, he made application on 29/1/1988 for grant of subsidy in accordance with the provisions of the said scheme. He submitted that he complied with all the requirements, however, his subsidy claim was unjustly rejected by the State Department of Industries, Silvassa on the ground that the scheme had come to an end on 30/9/1988 and, therefore, he was constrained to file writ petition in this Court, being W.P.No. 644 of 1992. The Division Bench of this court by its order dated 7/6/2005 directed the Joint Secretary, Ministry of Industries to scrtunise the petitioner’s subsidy claim afresh. In spite of this order, which was passed in the year 2005, nothing was done by the respondents till 2009. Ultimately, petitioner was required to file civil applications in which fresh orders were issued to the concerned department to scrutnise the petitioner’s case. However, the respondents refused to recommend the petitioner’s case for grant of subsidy. He 8 wp-6905/10 submitted that the recommendation of respondent no.1 and decision of respondent no.2 is not correct and same does not stand scrutiny of law. He also submitted that by the order dated 22/10/1992 passed in Writ Petition No.466 of 1991, the petitioner’s firm was made 100% eligible for subsidy under the said scheme for an amount of Rs.8,75,542/-. He took us through the other relevant documents annexed to the petition alongwith written submissions. 7. The 1st respondent by filing affidavit contested the petitioner’s claim. The 1st respondent submitted that the said scheme came to an end on 30/9/1988, however, the petitioners’ claim for grant of subsidy was considered afresh pursuant to the order dated 7/6/2005 passed by the Division Bench in Writ Petition No.644 of 1992. Respondent no.1 having examined the petitioner’s claim afresh came to the conclusion that the petitioner’s unit is not entitled for grant of subsidy on the ground that the petitioner has not complied with the mandatory rules and regulations under the said scheme. The 1st respondent also submitted that the petitioner has already sold his small scale unit in the year 2002 and therefore it was not possible for the petitioner to satisfy the scrutiny 9 wp-6905/10 requirements. The 2nd respondent also opposed the petition by filing affidavit-in-reply. The 2nd respondent stated that they found that the claim of the petitioner’s unit is not eligible for grant of subsidy under the said scheme since petitioner’s application dated 29/1/1988 was not complete in all respects. 8. Having considered submissions of the petitioner-in-person alongwith advocate Mr. Momin appointed to assist him to read the relevant documents/submissions and learned counsel for the respondents and having gone through the writ petition alongwith annexures thereto and affidavits-in-reply, we do not find merit in the petition. In August-1971, the Central Government introduced the said Scheme to promote industrialization in selected districts/backward areas, which were categorised into Categories “A”, “B” and “C” for the purpose of grant of subsidy @ 25% upto a ceiling of Rs. 25 lakhs, @ 20% upto a ceiling of Rs. 20 lakhs and @ 15% upto a ceiling of Rs. 15 lakhs respectively. Union Territory of Dadra, Nagar and Haveli comes under category “A”. Subsidy is provided on fixed capital investment comprising of land, building, plant and machinery. Under the said scheme, it was for the State Government/Union Territory Administration 10 wp-6905/10 concerned to decide whether case of the unit qualifies for the subsidy and it was also for the State Government/Union Territory Administration to determine the quantum of subsidy payable to the unit. The said scheme works on disbursement and re-imbursement basis. Admittedly, the said scheme came to an end on 30/9/1988. There is also no dispute that the petitioners made an application for grant of subsidy for expansion of his SSI unit, which was rejected on 26/7/1990 on the ground that the said scheme came to an end on 30/9/1988. The Apex Court by its order dated 5/12/1995 passed in Civil Appeal No. 6240 of 1994 [Umasha Textiles & Anr. v/s. Union of India and Ors.] fixed the cut-off date as 30/9/1988 and directed the Joint Secretary to consider the application of industrial units filed before this cut-off date for grant of subsidy under the said scheme. The Division Bench of this Court as stated above, by order dated 7/5/2005 in Writ Petition No. 644 of 1992 directed the Joint Secretary, Government of India to scrutinise the petitioner’s case afresh. The 1st respondent considered the petitioner’s case afresh pursuant to the above-said order of this Court and found that the petitioner’s unit is not eligible for grant of subsidy on following grounds :- (a) The unit has not complied with the guidelines contained in 11 wp-6905/10 paragraph 5 of the said scheme inasmuch as additional expansion was made without valid subsidy registration/SSI registration and other clearances from the competent authority such as pollution control board, Controller of Drugs etc., (b) The petitioner’s unit also failed to demarcate the investments in fixed assets in which he has already availed cash subsidy and the proposed expansion project for which the subsidy is claimed. 9. It is laid down in paragraph 5 of the said scheme that industrial unit in the selected districts/areas are required to get registered themselves with the State Department concerned prior to taking effective steps for setting up new industrial 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. The petitioner made an application on 1/6/1986 for registration of his proposed expansion to manufacture following items. (a) Frusumide. (b) Pheneramine Naeate. (c) Iso Propyl Antipynine. (d) 2 Chlora 5 nitro Bengic Acid. (e) 2.6 Dichloro Aniline. 12 wp-6905/10 10. The petitioner was granted registration No.308 dtd 21/4/1987 with specific condition no.6, which reads as follows :- “6. This registration is only for those items for which SSI registration permission has been granted.” . However, the petitioner’s application for addition of above items in the SSI registration was rejected vide letter dated 12/8/1986 on the ground that it was the policy decision of the Administration not to encourage highly polluting chemical units in the territory and therefore, petitioner’s unit could not obtain SSI registration for the proposed expansion and further effective steps such as clearances from the Pollution Control Board and Controller of Drugs were not obtained. In these circumstances, we find that the petitioner’s unit did not comply with the condition no.6, which made his subsidy registration invalid. 11. Apart from the above, it is the specific case of the respondents that the initial application of petitioners for subsidy claim was made on 29/1/1988, which was received on 1/2/1988 and thereafter petitioner was informed to furnish some information vide letter dated 22/3/1988 and 20/4/1988. This information was not at all furnished by the petitioners. 13 wp-6905/10 Thereafter fresh letters were issued on 26/3/2010, 8/4/2010 and 13/4/2010. However, petitioner did not give information. On the contrary, petitioner wrote letter to the respondents dated 30/3/2010 agitating that the respondents’ demands are unwarranted and unreasonable. It is the specific case of the respondents that scrutiny officer is required to identify the said expansion with the original documents of the unit to ensure actual implementation of the proposed project before the proposal for grant of subsidy being placed before the State Level Committee. However, the scrutiny could not be carried out as the petitioner had already sold out his unit in the year 2002 itself. The petitioner does not deny that he has sold his unit in the year 2002. In the absence of scrutiny by the concerned officer to identify the said expansion proposal, we will have to accept the respondents’ case that the petitioner is not eligible for grant of subsidy under the said scheme. 11. So far as the petitioner’s argument that his industrial unit was held eligible for grant of subsidy in view of the judgment of this Court in Writ Petition No. 466 of 1991 delivered on 22/10/1992 is concerned, we find no substance in the same also. The petitioner was not party in the said writ 14 wp-6905/10 petition. In any case, this order is disturbed by the Apex Court in an appeal, being Civil Appeal No.6240 of 1994 and the applications which were made prior to the cut-off date, ie.., 30/9/1988 were directed to be re-considered afresh. We find that the petitioner’s subsidy application was also directed to be re-considered vide order dated 7/6/2005 passed in Writ Petition No.644 of 1992. However, after reconsideration, the respondents have found that the petitioner’s unit is not eligible for the grant of subsidy on the ground that same does not comply with the mandatory rules and regulations especially conditions contained in paragraph no.5 of the said scheme. The grant of subsidy under the said scheme is in the nature of incentive. Same is to be granted subject to the rules and regulations of the said scheme and after fulfillment of the conditions prescribed. Before availing the benefit of subsidy under the said scheme, the mandatory requirements are required to be complied with. On facts, we find that the petitioner has not complied with the mandatory requirements laid down in paragraph-5 of the said scheme and therefore petitioner’s unit is not entitled for grant of subsidy. The respondents have arrived at correct conclusion, which does not call for any interference at the hands of this Court. In any 15 wp-6905/10 case, the petitioner having sold his unit in the year 2002, could not satisfy the scrutiny requirements. Taking overall view of the matter, we do not find any merit in the writ petition. It is accordingly dismissed. No order as to costs. (Ranjit More, J.) (Smt. Ranjana Desai,J.)