1 D.B.CIVIL SPECIAL APPEAL NO.562/2000 M/s B.D. Textiles Mills, Pali Marwar v. State of Rajasthan & Ors. Date of Judgment :: 11 th August, 2009 HON'BLE MR.JUSTICE N.P.GUPTA HON'BLE MR.JUSTICE GOVIND MATHUR Mr. Dinesh Mehta for the appellant. Mr. Rajat Dave ] Mr. Mukul Singhvi] for the respondents. .... To question correctness of the judgment dated 23.5.2000, passed by learned Single Judge, this appeal is preferred by the appellant petitioner firm (hereinafter referred to as “the firm”). The factual matrix, necessary to be noticed, is that the Government of India announced 10% Central Outright Grant of Subsidy Scheme, 1971 (hereinafter referred to as “the scheme of 1971”) for industrial units to be set up in selected backward districts/ areas. Though the scheme initially was for a term of five years, however, the same was extended time to time. The appellant, a partnership firm, was allotted with a piece of land measuring 2000 square meters at Mandia Road, Pali on execution of a lease 2 deed on 13.7.1988. An application was submitted by the firm to the disbursing agency i.e. the Rajasthan Financial Corporation on 20.7.1988 for grant of loan as well as the subsidy under the scheme of 1971. The firm sent certain letters to the disbursing agency to disburse subsidy but of no consequence, thus, a petition for writ was preferred before this Court and that came to be dismissed. However, an appeal preferred before the Division Bench of this Court by the firm came to be accepted on 13.2.1998 with following observations and directions:- “Since the petitioner had applied for Central Investment subsidy prior to 30.9.88, his case has to be considered by the authorities and could not have been disposed of as a case which could not considered after 30.9.88. We, therefore, set aside the order of the learned Single Judge, allow the petition and direct that the appellant's application if filed before Sept.30, 1988 be considered for grant of subsidy under the Central Investment Subsidy Scheme, 1971 as modified from time to time provided the application moved by the appellant is compete as per the scheme. This is done within a period of three months from today. If the appellant is found eligible for grant of subsidy the subsidy shall be disbursed within next three months. The appeal is allowed accordingly.” The firm, after disposal of the appeal as aforesaid, again approached to the State Level 3 Screening Committee constituted as per the scheme of 1971 to consider eligibility and the quantum of central investment subsidy admissible to the industrial units. A representative of the firm personally appeared before the State Level Committee with all relevant records, however, the committee was of the view that the loan for the firm was sanctioned by the Rajasthan Financial Corporation on 15.12.1988 i.e. after closure of the central subsidy scheme, as such the firm was not entitled to avail the subsidy. The State Level Committee recorded reasons for declining the firm's claim and those are as follows:- “The unit was financed by RFC, hence application for grant of subsidy was submitted to RFC. The case was examined by the RFC and they informed that the above said unit submitted the subsidy application together with the loan application at their Pali Branch on 20.7.1988. However, after completing the appraisal formalities the loan of Rs.4.10 lacs was sanctioned by the Corporation on 15.12.1988. Thus, the project could not be approved by the Corporation upto 30.9.1988 and no valuation was carried out by the Corporation upto 30.9.1988. The case was discussed in detail by the SLC in its 60th Meeting held on 19.6.1998 and observed that although the unit was prima facie not eligible for grant of subsidy as loan was sanctioned by RFC on 15.12.1988 i.e. after the cut off date 30.9.1988 as notified by the Government of India, the SLC decided 4 to defer the case with a direction to obtain clarification from RFC regarding causes of delay in sanction of loan and approval of project report. In compliance of SLC decision, RFC informed that the main reasons for delay in sanction of loan was that the unit did not furnish the required documents such as details of its guarantors, firm registration, approved building map from RIICO, balance sheet and profit & loss, documents of its sister concerns, copies of income tax returns, proposed plant and machinery and their cost etc. The requisite information were submitted by the party only by 30.11.88. The case was examined by the SLC keeping in view the guidelines issued by the Government of India. Government of India directed that the complete application of subsidy must have been filed upto 30.9.1988 along with the following documents:- (a) Project report, wherever it prepared. (b) Details of the scheme including details of fixed assets to be acquired. (c) The sanction letter from the financial institutions, sanctioning the loan for the purpose. (d) If the project is under implementation, a certificate from the CA regarding capital expenditure incurred on the project and a certificate from an Engineer certifying the civil work done. In the 60th SLC meeting of 5.11.1998 the unit was heard and it was observed that the unit is not covered under the scheme as the loan 5 was sanctioned to the unit after 30.9.1988 and a project report was also apprised by the RFC after the cut off date. Hence, the case was rejected.” Learned Single Judge dismissed the writ petition filed by the firm against denial for subsidy under the scheme of 1971 being suffered with a gross delay of 18 months, that remained unexplained. Counsel for the firm while submitting that the delay caused in filing the writ petition was sufficiently explained, also urged that the impugned decision of the State Level Committee is illegal as the scheme of 1971 nowhere prescribes that loan must be sanctioned prior to the cut off date. It is also asserted that the firm applied for availing loan quite earlier to 30.9.1988 and it was not in its hand to get the loan sanctioned. The firm could not be deprived from its legitimate right to have subsidy for any wrong on part of disbursing agency. Without entering into the question of delay in filing petition for writ, we have examined entitlement of the firm for subsidy as per the scheme of 1971. It is not in dispute that the scheme aforesaid was in currency upto 30.9.1988. As per para 2.3 of the scheme, the firm should have submitted an application in prescribed form along with certain informations and documents. It was obligatory for the 6 firm to submit a sanction letter from the financial institution sanctioning the loan or loans for implementing its project. The firm admittedly submitted the application form prior to 30.9.1988 but that was not complete as sanction letter for loan from the financial institution was not there. As a matter of fact the loan was sanctioned by the Rajasthan Financial Corporation in the month of December, 1988 i.e. quite later to the closure of Central Subsidy Scheme. The delay in sanctioning loan was also due to the firm itself, as it is apparent from minutes of the State Level Committee meeting dated 5.11.1998 wherein it is stated that “main reasons for delay in sanction of loan was that the unit did not furnish the required documents such as details of its guarantors, firm registration, approved building map from RIICO, balance sheet and profit & loss, increments of its sister concerns, copies of income tax returns, proposed plant and machinery and their cost etc”. The formalities aforesaid were completed by the firm only on 30.11.1988. The factual background noted above depicts that the application submitted by the firm was incomplete and as such the Rajasthan Financial Corporation was not in position to sanction loan at least prior to 30.11.1988. In such circumstances, the firm's claim for getting subsidy under the scheme of 1971 was not as per the requirements of the scheme, hence the same was rightly rejected. 7 For the reasons mentioned above, we do not find any merit in this appeal and, therefore, the same is dismissed. ( GOVIND MATHUR ),J. ( N.P.GUPTA ),J. kkm/ps