IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF AUGUST, 2019 BEFORE THE HON'BLE MR. JUSTICE B. VEERAPPA WRIT PETITION Nos.59639-59640 OF 2014 (GM-RES) Between:
M/s. Fluid Power Enterprises, No.22, Duggalamma Temple Road, 8th Main, 3rd Phase, Peenya Industrial Estate, Bengaluru-560 058.
Represented by its Proprietor, A. Prasad Shetty. ... Petitioner (By Sri. Pavana Chandra Shetty, Advocate) And:
1. Deputy General Manager, Government Scheme Cell, Small Industries Development, Bank of India, SIDBI Tower, 15, Ashok Marg, Lucknow-226 001.
2. The Regional Manager, State Bank of Mysuru, SME Division, Bengaluru Branch, Avenue Road, Bengaluru-560 002.
3. The Branch Manager, State Bank of Mysuru, SME Peenya Industrial Estate, Peenya, Bengaluru-560 058. …Respondents (By Sri.Prashanth.N.Hegde, Advocate for R1; Sri.S.K.M.Shetty, Advocate for R2 & R3) These writ petitions are filed under Articles 226 and 227 of the Constitution of India praying to direct R1 and R3 to consider the petitioner’s representation made on 07.11.2014 produced at Annexures-A and G, respectively.
These writ petitions coming on for Preliminary Hearing in ‘B’ Group, this day, the Court made the following:
O R D E R The petitioner filed the present writ petitions for a writ of mandamus directing the respondent Nos.1 and 3 to consider his representations dated 07.11.2014 as per Annexures ‘A’ and ‘G’, to re-consider Subsidy Scheme to his enterprises under Credit Linked Capital Subsidy Scheme (‘CLCSS’ for short) of Rs.3,73,490/- as forwarded on 12.03.2012 by State Bank of Mysuru, SME Branch, Peenya Industrial Area, Bengaluru-560 058.
2. It is the case of the petitioner that the petitioner being the proprietor of M/s. Fluid Power Enterprises, opened small-scale industries during the year 2000 for establishment and intended to integration for technology upgradation in his industry, installation of CNC vertical machine centre. For purchase of CNC vertical machine, the petitioner approached third respondent – Bank during the month of June, 2011 for borrowing a loan of Rs.12,00,000/-. The third respondent – Bank sanctioned a loan on 14.01.2012 and disbursed to the petitioner account on 25.01.2012. Accordingly, the petitioner has installed the CNC vertical machine on 01.02.2012 in the petitioner’s industry. Subsequently, for installation of the above said machinery in the petitioner’s industrial shed, petitioner made necessary application for sanction of Credit Linked Capital Subsidy of Rs.3,73,490/- @ 15% cost of machinery as per CLCSS Scheme on 10.03.2012 to the third respondent – Bank. It is further contended that the petitioner entered into an agreement with third respondent – Bank on 12.03.2012 for purchase of CNC vertical machine under CLCSS Scheme. As per the terms and conditions of the agreement, the petitioner is entitled to get the said benefit. The Government of India appointed Small Industries Development Bank of India as Nodal Agency and permitting the financial institution/bank under the scheme for claiming capital subsidy on the terms of loan sanctioned and disbursed by the financing institution/bank to the beneficiary. As per the terms and conditions of the said agreement, the petitioner is entitled to get the benefit of CLCSS subsidy scheme. On the basis of petitioner’s application dated 10.03.2012, the third respondent – bank send the application for release of Capital Subsidy under CLCSS Scheme on 12.03.2012. The third respondent – bank also approved eligibility of petitioner’s unit, who have been sanctioned loan for procurement of eligible plant and machinery.
3. It is further contended that the things stood thus, the third respondent – bank send a letter dated 06.06.2012 to the petitioner informing about return of CLCSS subsidy due to the non application of mind and it is also informed that the petitioner is eligible under the scheme only from 16.01.2012, whereas the loan was sanctioned on 14.01.2012. Therefore, the petitioner made representation to the third respondent – Bank for consideration of the benefit under subsidy scheme. Even after submitting representations to the respondent Nos.1 and 3 as per annexures ‘A’ and ‘G’, respectively, the respondents have not considered, nor passed any orders till the date of filing the writ petitions. Therefore, the petitioner is before this Court for a writ of mandamus.
4. The first respondent filed objection to the writ petitions and specifically contended in paragraph No.4 of the statement of objection that the first respondent has received the claim of the petitioner through the third respondent by their letter dated 29.03.2012 and after processing the application, it is observed by respondent No.1 that certain discrepancies are in the said application. Accordingly, the application was returned to the third respondent by letter dated 30.03.2012 stating that CNC vertical machine is made eligible under the scheme only from 16.01.2012 whereas loan was sanctioned on 14.01.2012. The concept was introduced by Government of India from 16.01.2012 and banks (PLIs) have submitted applications since then as per guidelines issued in this respect from time to time and as per the scheme the CNC vertical machine is made from 16.01.2012. However, as per the application submitted by the petitioner, the loan was sanctioned on 14.01.2012 which is prior to introduction of the scheme. Hence, the said machinery was not eligible under CLCSS scheme. Therefore, the application was returned and he further contended that the petitioner is not entitled for the relief sought for.
5. Respondent Nos.2 and 3 also filed statement of objections denying the averments made in the writ petitions and reiterated the statement of objection filed by the first respondent and contended as the loan admittedly availed by the petitioner by virtue of sanction made on 14.01.2012 and the Scheme covered the particular “machinery” (i.e., CNC Vertical Machine) only from 16.01.2012, which fact is not known either to the petitioner or to answering respondent any mutual or individual “mistake of fact” (that is noticed later) would make the agreement voidable and is not binding on the answering respondent and sought for dismissal of the writ petitions.
6. I have heard the learned counsel for the parties to the lis.
7. Sri H. Pavana Chandra Shetty, learned counsel for the petitioner reiterating the grounds urged in the writ petitions has contended that due to the inaction on the part of respondent Nos.1 and 3, petitioner is unnecessarily driven before this Court. It is the duty of respondent Nos.1 and 3 to consider the representations of the petitioner and pass appropriate orders. Admittedly, according to the petitioner, he is entitled to the subsidy under the Scheme and the same has not been considered. Therefore, he sought for allowing the writ petitions.
8. Per contra, Sri Prashanth N. Hegde, learned counsel for respondent No.1 raised a preliminary objection that, the Scheme introduced by the Central Government and the Central Government has not made out a party. Therefore, the writ petitions filed for the relief sought for is not maintainable. He would further contended that the case of the petitioner has been considered as long back as in the year 2012 and rejected and returned his application on the ground that the petitioner was not eligible as per the CLCSS Scheme for vertical machine as the loan was sanctioned to the petitioner on 14.01.2012, which is prior to introduction of the Scheme. Therefore, he is not entitled for the relief as sought for in the writ petitions.
9. Sri S.K.M.Shetty, learned counsel for respondent Nos.2 and 3 adopted the arguments of learned counsel for the first respondent and contended that the petitioner has not made out any ground to issue a writ of mandamus as prayed for. Therefore, he sought to dismiss the writ petitions.
10. Having heard the learned counsel for the parties, it is the specific case of the petitioner that on the application filed by him, the third respondent – Bank sanctioned a loan of Rs.12,00,000/- on 14.01.2012 and subsequently disbursed the amount on 25.01.2012. The petitioner made an application on 10.03.2012 for sanction of Credit Linked Capital Subsidy of Rs.3,73,490/- at the rate of 15% cost of eligible machinery. On 06.06.2012, the third respondent – Bank informed the petitioner about return of CLCSS subsidy due to the non application of mind and it is also informed that the petitioner is eligible under the scheme only from 16.01.2012, whereas the loan was sanctioned on 14.01.2012. In this regard, the petitioner has made detailed representations on 07.11.2014 to the respondent Nos.1 and 3 as per Annexures-A and G, respectively, stating that how he is entitled under the Scheme.
11. In the entire Statement of Objections by respondent Nos.1 to 3, they have not whispered anything about consideration of representations dated 07.11.2014 made by the petitioner. The specific contention raised by respondent No.1 in paragraph No.4 of the statement of objections is that, the first respondent has received the claim of the petitioner through the third respondent by their letter dated 29.03.2012 and after processing the application, it was observed by respondent No.1 that certain discrepancies in the said application. Accordingly, the application was returned to the third respondent by letter dated 30.03.2012 stating that CNC vertical machine is made eligible under the scheme only from 16.01.2012 whereas the loan was sanctioned on 14.01.2012. The concept was introduced by Government of India from 16.01.2012 and banks (PLIs) have submitted applications since then as per guidelines issued from time to time and as per the scheme the CNC vertical machine is made from 16.01.2012. However, as per the application submitted by the petitioner, the loan was sanctioned on 14.01.2012 which is prior to introduction of the scheme. Hence, the said machinery was not eligible under CLCSS scheme. Therefore, the application was returned. Except the return of application, nothing has been stated in the statement of objections by the respondents about the representations dated 07.11.2014 made by the petitioner. Therefore, the contention of the respondents that the petitioner’s representations dated 07.11.2014 have been considered and pass orders, cannot be accepted.
12. Insofar as the contention of the learned counsel for the first respondent is that the writ petitions are not maintainable without impleading the Central Government as a party. The Scheme is introduced by the Central Government. The representations made by the petitioner not to the Central Government, it is only for respondent Nos.1 and 3 to apply their mind and pass appropriate orders. Therefore, the preliminary contention raised by the first respondent cannot be accepted.
13. For the reasons stated supra, the petitioner has made out a prima facie case to issue a writ of mandamus as prayed for.
14. In view of the above, the writ petitions are allowed. The respondent Nos.1 and 3 are hereby directed to consider the representations of the petitioner dated 07.11.2014 as per Annexures ‘A’ and ‘G’ and pass appropriate orders in accordance with law, if not considered and disposed off within a period of eight weeks from the date of receipt of the copy of this order.
cp* Sd/- JUDGE