CWP No. 13595 of 2010 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No. 13595 of 2010 Date of decision: .02.2011 Anurag Chopra (Advocate) son of Sh. Ravinder Chopra ......PETITIONER VERSUS State of Punjab and others ….. RESPONDENTS CORAM:HON’BLE MR. JUSTICE RANJAN GOGOI, ACTING CHIEF JUSTICE HON’BLE MR. JUSTICE AUGUSTINE GEORGE MASIH Present: Mr. Gaurav Chopra, Advocate, for the petitioner. Mr. R.S. Khosla, Addl. A.G. Punjab, for respondents No. 1 to 3. Mr. D.S.Patwalia, Advocate, for respondent No. 4. Mr. Sanjay K. Dua, Advocate, for respondent No. 5. *** AUGUSTINE GEORGE MASIH, J. This Public Interest Litigation has been preferred to highlight the existence of nexus between the Government officials and industrial units in disbursement of subsidies whereby huge sum of public money is being mis-appropriated while securing subsidy thereby defrauding the CWP No. 13595 of 2010 2 State Exchequer in total violation of the mandate and intention of the incentive schemes as per the Industrial Policies framed by the State of Punjab from time to time. It is the contention of the petitioner that Government of Punjab had formulated Industrial Policies in the years 1978, 1982, 1989, 1992, 1996 and 2003 with an objective to create conducive investment climate through infrastructure creation with the purpose of making small scale industry competitive granted incentives in the form of subsidies. For implementation of the said Industrial Policies, Punjab Government has framed Rules and Schemes which have been duly notified and are required to be followed by the Industries Department before disbursement of the incentives to the concerned industrial units claiming subsidy. These Rules and Instructions are not being followed by the Department of Industries as the officials in connivance with the industrial units are disbursing incentives to industrial units. A particular reference has been made to the incentives disbursed under the scheme to M/s R.C. Paper Mills Pvt. Ltd-respondent No. 4 in contravention of the Rules and Instructions of disbursement of such subsidy. On approval of the claim of the subsidy to respondent No. 4, one Inspector Sh. Gurdev Singh Mahal was deputed by the Industries Department at Amritsar to ascertain and verify the claim and if the conditions, as mandated under the scheme, stood fulfilled, a cheque of ` 30 lacs, as a part payment of the subsidy to the Company, be handed over. The official visited the unit and reported that the machinery of R.C. Paper Mills Pvt. Ltd. was not found in the shed of the unit and wanted to show the machinery of M/s Khanna Paper Mills Ltd., which unit had already availed investment incentive of ` 50 lacs under the Industrial Policy, 1992. On enquiry from the old workers of the factory, it CWP No. 13595 of 2010 3 transpired that the party had disposed of the machinery of M/s R.C. Paper Mills Pvt. Ltd. Instead of probing the matter in detail, the Local Industries Department asked the employee to proceed on leave and immediately on the next day, fresh report was taken and the cheque was delivered to the Company. It was also stated on the basis of a newspaper item dated 18.01.2010 that the Chief Minister of Punjab had taken a serious note of the fact that the State Exchequer is being caused heavy losses for paying subsidies to the closed as well as the non-existent units. Upon notice having been issued, reply on behalf of the State of Punjab-respondents No. 1 to 3 has been filed wherein the Secretary to Government of Punjab, Department of Industries and Commerce has culled out the facts pertaining to the claim of investment incentive under the Industrial Policy, 1996 of respondent No. 4-M/s R.C. Paper Mills Pvt. Ltd., according to which an application was moved by M/s R.C. Paper Mills Pvt. Ltd. in the office of respondent No. 2-General Manager, District Industries Centre, Amritsar on 01.02.1999 along with the required documents indicating that they had made expansion with an investment of `11,05,66,492.09 on the fixed capital to increase the capacity of their industrial unit for the manufacturing of paper and paper board. As per the Policy, the unit was entitled to avail investment incentive @ 30% of the fixed capital investment. Against the entitlement of ` 3,10,35,000/- on the fixed capital investment made under the expansion, claim to the tune of ` 50 lacs was approved which was the maximum permissible incentive under the Policy vide decision dated 01.07.1999 (Annexure P-4) subject to the condition that the disbursement will be made on the availability of funds and strictly as per seniority provided the unit is found in working condition/in operation at the time of disbursement. Before the incentives CWP No. 13595 of 2010 4 could be disbursed on 15.06.2007, M/s Khanna Paper Mills Pvt. Ltd. informed the General Manager, District Industries Centre, Amritsar that M/s R.C. Paper Mills Pvt. Ltd. had been merged with their Company as per the order passed by Delhi High Court dated 15.12.2000 on approval of the Scheme of amalgamation between the two Companies. By virtue of this order, all rights and liabilities of M/s R.C. Paper Mills Pvt. Ltd. stood transferred to M/s Khanna Paper Mills Ltd. All the Directors/Share-holders of M/s R.C. Paper Mills Pvt. Ltd. have become Directors/Share-holders of M/s Khanna Paper Mills Pvt. Ltd. It was further informed that the manufacturing unit of M/s R.C. Paper Mills Pvt. Ltd. is fully operational under the name of M/s Khanna Paper Mills Pvt. Ltd. at Fatehgarh Churian Road, Amritsar. When a cheque of ` 30 lacs was received on 28.05.2008 from the Director of Industries and Commerce, Punjab by the General Manager, District Industries Centre, Amritsar, Sh. Gurdev Singh Mahal, Inspector was deputed to disburse the said cheque vide letter dated 28.08.2008 to respondent No. 4 subject to the condition that the unit is not violating the conditions of Industrial Policy, 1996. Sh. Gurdev Singh Mahal, vide his letter dated 29.02.2008, returned the cheque with the report that machinery of M/s R.C. Paper Mills Pvt. Ltd. is not in the shed of the previous unit and on enquiry from the old workers of the factory, it was found that the machinery has been disposed of by M/s R.C. Paper Mills Pvt. Ltd. As this report was based on oral statements alone, respondent No. 4 was asked to explain their position. The position was accordingly clarified by respondent No. 4 vide its letter dated 03.09.2008 wherein it mentioned about the place of installation of the machinery. Upon receipt of the explanation, Sh. Suresh Kumar, Senior Industrial Promotion Officer was deputed to verify CWP No. 13595 of 2010 5 the facts as stated by them in their letter dated 03.09.2008 and if the same are found to be correct, to disburse the cheque. He reported on 04.09.2008 that the unit is running at its original place and all assets, on which the subsidy is sanctioned, are intact. The unit was never shifted. It was further reported that the unit fulfils the conditions required for release of the incentives i.e. subsidy as sanctioned in favour of respondent No. 4. Copy of the report has been appended as Annexure R-3. Accordingly, the cheque was disbursed to respondent No. 4. It has further been clarified that the petitioner has based his contention on the Industrial Policy, 2003 whereas the claim of respondent No. 4 is under the Industrial Policy, 1996. We have heard counsel for the parties and have gone through the records of the case. Though the petitioner in the writ petition had approached this Court with the prayers for initiating appropriate proceedings against the guilty and delinquent officials as well as beneficiary units involved in the fraudulent disbursement of subsidy and to recover the illegally disbursed public money but his main plank of attack in the writ petition primarily is the disbursement of subsidy to respondent No. 4. In the writ petition, he has not come out with any other instance with regard to the wrongful disbursement of subsidy as per the Industrial Policy under the scheme. Even after filing of the reply by the respondent-State repelling the averments made by the petitioner, no replication has been filed nor during the arguments any other case of irregularity in the disbursement of subsidy in the State of Punjab as per the Industrial Policies framed by the State of Punjab from time to time been brought to our notice. As regards the disbursement of the incentives to respondent No. 4, the position has been explained by the Secretary, Industries and CWP No. 13595 of 2010 6 Commerce in his reply which has been detailed above. A perusal of the same does not indicate that there has been any irregularity, illegality or violation of any of the Instructions, Rules or Scheme formulated under the Industrial Policy, 1996. The claim of respondent No. 4 has been duly considered as per the Industrial Policy and the disbursement of the incentives in the form of subsidy has been made after due verification and compliance of the requirements of the terms and conditions for the grant of incentives as per the Policy and Scheme applicable to the claim of respondent No. 4. As no other case/claim has been brought to the notice of the Court which would show non-compliance or violation of the Industrial Policy, Scheme, Instructions in disbursement of the incentives, the present Public Interest Litigation does not survive and deserves to be closed. Ordered accordingly. ( RANJAN GOGOI ) ( AUGUSTINE GEORGE MASIH ) ACTING CHIEF JUSTICE JUDGE February , 2011 pj