Case: U O I Vs. M/S.Krimpex Synthetics Ltd

fixed assets before the cut off date and therefore the respondent was entitled to the maximum subsidy of Rs. 25 Lacs. This contention has been rejected by the High Court by observing that material which had not been placed before Mrs. Karan could not be taken into consideration because as per remand order the High Court was to keep in view the order passed by the Joint Secretary, though the High Court could take its own decision on merit of the case. It was observed that since the respondent had not placed the material before the Joint Secretary which was sought to be produced before the High Court the same could not be taken into consideration. The only material which could be taken into consideration was the material which had been placed before Mrs. Karan. After analysing the order of Mrs. Karan the High Court came to the conclusion that Mrs. Karan had erred in rejecting the claim of the respondent in its entirety. It was held that the respondent was entitled to subsidy of 25% on the sum of Rs. 50,72,258/- 12. The respondent has filed the Special Leave Petition No. 22036 of 1997 claiming the maximum subsidy for the sum of Rs. 25 lacs. It was submitted by Shri Gopal Jain, learned counsel appearing for the respondent, that the respondent was entitled to maximum subsidy available under the scheme to the tune of Rs. 25 lacs. Mr. Jain, fairly conceded before us that the material which was placed along with the additional affidavit before the High Court had not been placed before Mrs. Karan, Joint Secretary. We agree with the view taken by the High Court that the only material which could be taken into consideration was the one which was produced before the Joint Secretary as this Court had remanded the case to the High Court to take the final decision keeping in view the order passed by the Joint Secretary. From the remand order it can be deciphered that the High Court was not supposed to entertain any fresh material. An opportunity was given to the claimants to file their representations to the Joint Secretary along with the material on the basis of which decision was taken by the Joint Secretary regarding the eligibility of the claimant to get the subsidy. The material which was sought to be produced before the High Court should have been produced before the Joint Secretary and it was for the Joint Secretary to take the decision on the same. Since the material had not been placed before the Joint Secretary the same could not be taken into consideration by the High Court and the contention raised by the respondent to the contrary has rightly been rejected. 13. Union of India has filed the appeal with the averment that premises of the respondent-Company were closed and the Company seems to have gone in liquidation. According to the counsel for the Union of India as per scheme a Company which went out of production within the period of 5 years of the start of production was not entitled to the subsidy under the Scheme. Apart from the averment that Company seems to have gone into liquidation no other material was placed before the High Court to show that in fact the company had gone into liquidation or that the liquidator had been appointed. Counsel appearing for the respondent in the High Court had fairly brought to the notice of the Court that ICICI and other financial institutions on the original side of the Bombay High Court had filed the suit bearing O.S. No. 1595 of 1989 and the Court had appointed Court Receiver in respect of the land, building, plant and machinery etc. The receiver had been appointed under Order 40 Rule 1 CPC. No order of winding up of the Company was passed. No official liquidator had been appointed to take over the assets of the Company. As per Mr. Gopal Jain, learned counsel appearing for the respondent, the receiver had appointed the respondent as its agent. According to him, the Company did not close down and remained in production. From the material which had been placed before the High Court and even before us it cannot be concluded that the Company had gone into liquidation or had closed down. Contention raised by the counsel for the Union of India that the respondent were not entitled to any subsidy thus cannot be accepted. 14. No other point was raised. 15. Mr. Gopal Jain submitted before us that the respondent had entered into a settlement with the ICICI Ltd. and the Industrial Finance Corporation of India. The consent terms were filed before the Debt Recovery Tribunal - II, Mumbai in Recovery Proceeding No. 54 of 2001 [Original Application No. 156 of 2001] and that the respondent had already made the payment to the ICICI Ltd. and IFCI as per consent terms. He prayed that instead of depositing the amount of subsidy in Court as directed by the High Court the Union of India be directed to make the payment to the respondent directly along with interest. It was conceded before us, that the suit referred to by the High Court in its order is still pending. Under the circumstances we direct that the subsidy amount which was supposed to be deposited by the Union of India within three months from the date of the order of the High Court, i.e., 26/27th November, 1996 and which has not been deposited be deposited within three months from this day in the Court along with simple interest @ 9% per annum from the date of the passing of the order by the High Court till deposit of the amount. Respondent would be at liberty to apply to the Court for release of the amount deposited, if it has already settled its dispute with the ICICI and IFCI. The Court shall pass an order on such an application on its own merit in accordance with law.

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

Explanation:
0[ds]It was submitted by Shri Gopal Jain, learned counsel appearing for the respondent, that the respondent was entitled to maximum subsidy available under the scheme to the tune of Rs. 25 lacs. Mr. Jain, fairly conceded before us that the material which was placed along with the additional affidavit before the High Court had not been placed before Mrs. Karan, JointSecretary.We agree with the view taken by the High Court that the only material which could be taken into consideration was the one which was produced before the Joint Secretary as this Court had remanded the case to the High Court to take the final decision keeping in view the order passed by the JointSecretary.From the remand order it can be deciphered that the High Court was not supposed to entertain any fresh material. An opportunity was given to the claimants to file their representations to the Joint Secretary along with the material on the basis of which decision was taken by the Joint Secretary regarding the eligibility of the claimant to get the subsidy. The material which was sought to be produced before the High Court should have been produced before the Joint Secretary and it was for the Joint Secretary to take the decision on the same. Since the material had not been placed before the Joint Secretary the same could not be taken into consideration by the High Court and the contention raised by the respondent to the contrary has rightly been rejectedom the material which had been placed before the High Court and even before us it cannot be concluded that the Company had gone into liquidation or had closed down. Contention raised by the counsel for the Union of India that the respondent were not entitled to any subsidy thus cannot be accepted14. No other point was raisedMr. Gopal Jain submitted before us that the respondent had entered into a settlement with the ICICI Ltd. and the Industrial Finance Corporation of India.The consent terms were filed before the Debt Recovery Tribunal - II, Mumbai in Recovery Proceeding No. 54 of 2001 [Original Application No. 156 of 2001] and that the respondent had already made the payment to the ICICI Ltd. and IFCI as per consent terms. He prayed that instead of depositing the amount of subsidy in Court as directed by the High Court the Union of India be directed to make the payment to the respondent directly along with interest. It was conceded before us, that the suit referred to by the High Court in its order is still pending. Under the circumstances we direct that the subsidy amount which was supposed to be deposited by the Union of India within three months from the date of the order of the High Court, i.e., 26/27th November, 1996 and which has not been deposited be deposited within three months from this day in the Court along with simple interest @ 9% per annum from the date of the passing of the order by the High Court till deposit of the amount. Respondent would be at liberty to apply to the Court for release of the amount deposited, if it has already settled its dispute with the ICICI and IFCI. The Court shall pass an order on such an application on its own merit in accordance with law