The Hon'ble Sri Justice C.V.Nagarjuna Reddy Writ Petition Nos.13943 of 2002 & Writ Petition No.8032 of 2002 Dated: 15-10-2009 Between: M/s.Raghavendra Aqua Culture, Represented by Dr.P.Nagabhushanam. …Petitioner and 1.The Marine Products Export Development Authority, P.B.No.1663, Ponampillay Avenue, Kochi – 682 036 and 2 others. …Respondents The Court made the following: Common Order : These two Writ Petitions raise common issues of fact and law and therefore, they are heard and disposed of together. The petitioners in these two Writ Petitions proposed to establish units for prawn culture. The petitioner in W.P.No.13943 of 2002 and the petitioner in W.P.No.8032 of 2002 filed applications on 17-06-1994 and 01-10-1993 respectively to respondent Nos.1 and 2 for payment of subsidy on the loan to be sanctioned by the Banks. It is not in dispute that the representatives of respondent Nos.1 and 2 prepared project reports wherein they have recommended for subsidy amounts to be paid to the petitioners from out of the loan to be sanctioned by the Banks. It is the case of the petitioners that they have completed the projects and started the prawn culture but respondent Nos.1 and 2 did not sanction the subsidy. It is the common case of the parties that by judgment, dated 11-12-1996, in W.P.(Civil) No.561 of 1994, the Hon’ble Supreme Court held that except in case of prawn culture being carried on through traditional methods outside the Coastal Regulation Zone and 1000 meters of Chilka and Pulicat lake, others should obtain prior approval of the Authority constituted by the Supreme Court for setting up new farms and those Industries, which were already operating in the exempted areas shall obtain authorization from the Authority on or before 30th April, 1997. It is not in dispute that both the petitioners do not fall within the exempted areas and therefore, they are required to obtain approval of the Authority, which they did not. As a result of the same, the petitioners were forced to close down their prawn culture activities and the projects have, thus, become abortive. Neither the pleadings nor the material filed by the petitioners show that they have reminded the respondents about the payment of subsidy. Evidently, respondent Nos.1 and 2, on their own, issued showcause notices on 10-03- 2001 to the petitioners calling upon them to produce the approval of the ‘Authority’ constituted by the Supreme Court. As the petitioners failed to respond to the said notices, respondent No.1 passed the impugned orders on 24-05-2001 rejecting their applications for sanction of subsidy. The petitioners filed the present Writ Petitions feeling aggrieved by the said rejection orders. Counter-affidavits have been filed on behalf of respondent Nos.1 and 2 wherein it has been inter alia stated that the project reports submitted in the cases of the petitioners unambiguously stated that the projects are eligible for subsidy subject to the Subsidy Committee’s selection and approval by the Head Office. It is further stated that the report covers only the technical feasibility and economic viability of the scheme and the same also directed the party to take all necessary permissions and clearances from the concerned departments and local bodies, if any, before the development of the site. It is further stated that the subsidy assistance is on actual capital investment in the farm; that the petitioners become eligible for subsidy upon completion of construction of the farm and selection and approval by subsidy committee and its final sanction by the Chairman, MPEDA and only after assessing the actual capital investment incurred for constructing the farm. It is further stated that the subsidy could not be sanctioned to the petitioners in view of the judgment of the Hon’ble Supreme Court and that at no time in the past many years, the petitioners made claims for sanction of the subsidy, let alone its release. At the hearing, Sri Siva Ram Prasad, learned Counsel for the petitioners, made strenuous efforts to convince this Court that having promised payment of subsidy, the respondents cannot be allowed to resile therefrom. He further submitted that when once the project reports have been approved, and the loans have been sanctioned by the Bank, a right came to be vested in the petitioners to claim subsidy, and therefore, rejection of their applications for grant of subsidy defeats their legitimate rights. The learned Counsel placed reliance on the judgment of a learned single Judge of this Court in Smt.B.Jayalakshmi vs. Project Director (Prawn Farming)[1] and contended that the petitioners herein are similarly situated to the petitioner therein. Opposing the contentions of the learned Counsel for the petitioners, Sri C.Suman, learned Counsel representing respondent Nos.1 and 2 submitted that the projects of the petitioners have become abortive as they failed to obtain approvals from the ‘Authority’ constituted by the Supreme Court and therefore, the projects have ceased to be viable. The learned Counsel further submitted that the petitioners, having obviously realized that they were no longer eligible for subsidy, did not approach respondent Nos.1 and 2 at any time after they made their applications in the years 1994 and 1993 respectively and therefore, their claims are purely speculative in nature and the Writ Petitions are filed as an after thought. The learned Counsel further submitted that the judgment of the learned single Judge referred to above was considered by a Division Bench of this Court in Writ Appeal No.1039 of 2000 and that though the said judgment was not interfered with, the Division Bench, observed that in the peculiar facts and circumstances of the case, the judgment of the learned single Judge shall not be treated as a precedent laying down any principle of law. He therefore, submitted that the petitioners cannot place reliance upon the above-mentioned judgment of the learned single Judge. Having regard to the above rival submissions of the learned Counsel for the parties, the issue that requires to be considered is, whether the impugned orders rejecting the petitioners’ applications for grant of subsidy suffered from illegality or arbitrariness. It is not in dispute that the project reports prepared by the representatives of respondent No.1 found that the petitioners were eligible for grant of subsidy. The purpose of granting investment subsidy is to ensure that the burden of the entrepreneur is lessened so that the same will act as an incentive in order to develop the prawn Industry. However, unexpected turn of events leading to the judgment of the Supreme Court frustrated the very purpose for which the scheme was envisaged by the respondents. Significantly, the petitioners having made their applications in the years 1993 and 1994, have not evidently approached the respondents at any point of time till Showcause notices were issued by respondent No.1 in March, 2001. By that time, the petitioners in both the Writ Petitions have closed down their Industries. The learned Counsel for respondent Nos.1 and 2 placed before the Court, a proforma bond to be executed by the Industries at the time of receiving the subsidy. Clause 1 (a) of the Bond reads as under: “He/she/they will operate the prawn farm for a minimum period of ten years from the date of its going into farming after availing the subsidy.” Obviously, this clause was intended to ensure that the project, which was found feasible for subsidy, will run for a minimum period so that the intended purpose viz., development of prawn culture, is achieved. As stated above, with the judgment of the Supreme Court, the whole purpose of providing subsidy is defeated. Every person, who intends to receive the benefit of subsidy, is bound to execute the bond in the prescribed proforma. Even if the petitioners want to receive the subsidy, at present, it is not possible for them to execute the bond with the stipulation as referred above as the Industries have already been closed down and there is no possibility of reviving and running them for a minimum period of ten years. Therefore, in the changed scenario, evolved on account of the judgment of the Supreme Court, it is not possible for this Court to hold that rejection of the petitioners’ applications for subsidy is either illegal or arbitrary. As the intended purpose, for which subsidy was envisaged by the scheme cannot be achieved, the respondents cannot be found fault with for not sanctioning the subsidy. Until subsidy is sanctioned, the petitioners did not acquire any vested right to insist that they should be paid subsidy. Though the petitioners’ applications were pending for more than seven years, there is no material to show that they have ever pursued the same. Obviously, the Industries were closed down in the year 1996 itself and even thereafter, the petitioners have not approached respondent Nos.1 and 2 for release of subsidy. Respondent No.1, on its own, issued a showcause notice and passed the impugned orders rejecting the petitioners’ applications. Hence, on the facts of these cases, where the petitioners were not diligent in pursuing their applications for subsidy and allowing the same to lie for a number of years, they cannot approach this Court thereafter for enforcement of their purported rights to receive subsidy. The learned Judge in Smt.B.Jayalakshmi (supra) held that the judgment of the Supreme Court cannot be linked with the rights of the petitioner therein to receive subsidy. With the judgment of the Supreme Court, the projects themselves have become unviable and they were forced to be closed down. As the Division Bench has declared that the judgment of the learned single Judge cannot be treated to have laid down any legal principle, I feel free to disagree with the reasoning of the learned single Judge on this aspect. In my view, the right to receive subsidy is inextricably linked with the viability of the unit. The petitioners failed to make out any case of promissory estoppel, though they have made a vain attempt in their affidavits that on the basis of the promise made by the respondents, they have set up their Industries. No details were given as to the nature of the promise made by the respondents and how they have acted on such a promise in setting up the Industries. Had that been the case, the petitioners would not have slept over for more than seven years without pursuing their applications for subsidy until respondent No.1 itself has issued a showcause notice and passed orders rejecting their applications for subsidy. For all the above-mentioned reasons, I do not find any merit in the Writ Petitions and they are, accordingly, dismissed. As a sequel to dismissal of the Writ Petitions, interim order, dated 24-12-2002, is vacated and WPMP.No.10024 of 2002 in W.P.No.8032 of 2002 is dismissed. ___________________________ (C.V.NAGARJUNA REDDY, J) 15th October, 2009 lur [1] W.P.No.1372 of 1998, dated 26-06-2000