Case: Supertex Industries Limited Vs. S Union of India

the subsidy is liable to be given to the petitioner. Relying on certain cases decided by the Supreme Court of India, it was submitted by Mr. Agarwal that this Court, in writ jurisdiction, should not normally issue a mandamus directing doing of a particular thing when the allegation is that there is failure on the part of the respondents to do that particular thing which the law enjoins it to do. He, therefore, opposed adjudication of the question of grant of subsidy by this Court directly. ( 9 ) IT was also submitted by Mr. Joshi, learned Counsel for the petitioner, canvassing for adjudication of the entire dispute by this Court that the petitioner has lost the advantage of subsidy for last 12 years. Severe financial stress has been caused to the company and it would further suffer if the matter is again remitted to the Joint Secretary to the Government of India for adjudication. According to the learned Counsel, even if certain facts are required to be investigated into, the facts already on record disclose that the dispute of fact is not such as would require intensive investigation by this Court and, therefore, taking into consideration the delay of 12 years caused in the matter of awarding of the subsidy, the matter should be decided by this Court once and for all here only. As another limb of his argument, it was pointed out by Mr. Joshi that the petitioner having started and run the industry for last 12 years and on the promises by the respondents that subsidy will be received by it some day, the petitioner has incurred certain obligations because of the chequered career of the litigation since 1990 to date the subsidy is not forthcoming. It is likely to be postponed further. In the circumstances, principles of law of equity demand that the respondents be directed to pay interest to the petitioner on the amount of subsidy from the date the same ought to have been paid in 1990 to the date of actual payment. Mr. Agarwal opposed the prayer for grant of interest and wanted to rely on a large number of cases for his contention that no interest can be paid in the present case. Thereafter, during the course of arguments. Mr. Joshi, learned Counsel for the petitioner, stated that the petitioner would give up his claim for any interest, if the matter is adjudicated upon finally by this Court. He stated that he was willing to do only to avoid a lengthy litigation which was bound to be involved if the matter was remanded. ( 10 ) WE have considered the rival submissions and given appropriate weight. It will be seen that the application of the petitioner company was rejected on the ground that it belongs to a group of companies and, therefore, is not entitled to grant of subsidy. Therefore, it does not fulfill the requirements mentioned in the four different circulars which govern the grant. The petitioner company has been held to be a group of companies only because one Director Mr. Khemani is a Director in two companies, the ultimate product manufactured by both of them being very similar. However, from the fact disclosed by the affidavits on record, it will be seen that the holding of Mr. Khemani in the petitioner company is very minimal, less than one per cent, and it cannot be said that he has any control over the petitioner company. On this ground alone the company cannot be treated as a group of companies. Mr. Joshi correctly pointed out, relying on one of the circulars issued by the Government of India, that in order to ascertain what is meant by group company the definition of group company contained in the Monopolies and Restrictive Trade Practices Act, 1969 (M. R. T. P. Act) is liable to be taken into consideration. So considered, as held by the Supreme Court, a company can be called a group of two or more individuals or associations of individuals and associations of firms etc. It must have control directly or indirectly over any body corporate, firm or trust. What is meant by "associated persons" is also defined by the Act and it means any company of which such Director, whether independently or together with his relatives, constitutes one-fourth of its Board of Director. According to Mr. Joshi, therefore, holding Mr. Khemani being only 10 shares he did not constitute one-fourth of the Board of Directors and was therefore, not an associated person and it did not make Mr. Khemani, a person of the petitioner company a group as defined by the Act. Prima facie, there appears to be much substance in this submission made by Mr. Joshi. However, taking into consideration the objections raised by Mr. Agarwal to the adjudication of the petitioners entitlement to subsidy by this Court directly, we do not think it proper to pronounce our opinion on this aspect. It is true, as pointed by Mr. Agarwal, that it is for the Government of India to consider the factual position in the light of the four circulars issued by the State and to decide as to whether in the circumstances so disclosed, the petitioner company is or is not entitled to grant of investment subsidy. We are inclined to accept this argument for yet another reason and that is availing of possible remedy against the decision of Government of India. To elaborate, if the competent authority decides in favour of the petitioner and grants subsidy and if the Government is not satisfied with the decision, it can be challenged appropriately. Similarly, a refusal if it ensues can be challenged by the petitioner appropriately. If the submission of the petitioner is accepted, we short circuit the process and decide the matter ourselves possibly the petitioner or the State loose one remedy. It is also better that we keep ourselves with the tradition of not entertaining disputed facts or adjudicating upon disputed facts unless it is directly necessary.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]( 10 ) WE have considered the rival submissions and given appropriate weight. It will be seen that the application of the petitioner company was rejected on the ground that it belongs to a group of companies and, therefore, is not entitled to grant of subsidy. Therefore, it does not fulfill the requirements mentioned in the four different circulars which govern the grant. The petitioner company has been held to be a group of companies only because one Director Mr. Khemani is a Director in two companies, the ultimate product manufactured by both of them being very similar. However, from the fact disclosed by the affidavits on record, it will be seen that the holding of Mr. Khemani in the petitioner company is very minimal, less than one per cent, and it cannot be said that he has any control over the petitioner company. On this ground alone the company cannot be treated as a group of companies. Mr. Joshi correctly pointed out, relying on one of the circulars issued by the Government of India, that in order to ascertain what is meant by group company the definition of group company contained in the Monopolies and Restrictive Trade Practices Act, 1969 (M. R. T. P. Act) is liable to be taken intois true, as pointed by Mr. Agarwal, that it is for the Government of India to consider the factual position in the light of the four circulars issued by the State and to decide as to whether in the circumstances so disclosed, the petitioner company is or is not entitled to grant of investment subsidy. We are inclined to accept this argument for yet another reason and that is availing of possible remedy against the decision of Government of India. To elaborate, if the competent authority decides in favour of the petitioner and grants subsidy and if the Government is not satisfied with the decision, it can be challenged appropriately. Similarly, a refusal if it ensues can be challenged by the petitioner appropriately. If the submission of the petitioner is accepted, we short circuit the process and decide the matter ourselves possibly the petitioner or the State loose one remedy. It is also better that we keep ourselves with the tradition of not entertaining disputed facts or adjudicating upon disputed facts unless it is directly necessary.