IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF OCTOBER, 2019 BEFORE THE HON' BLE MR. JUSTICE B. VEERAPPA WRIT PETITION No.42140/2018(GM-RES) BETWEEN:
1. HIMATSINGKA SEIDE LIMITED A COMPANY REGISTERED UNDER THE COMPANIES ACT, HAVING ITS REGISTERED OFFICE AT: NO. 10/24, KUMARA KRUPA ROAD, HIGH GROUNDS, BENGALURU-560 001, REPRESENTED BY ITS AUTHORISED SIGNATORY, MR. C. B. GANAPATHY.
2 . UMASHANKAR A. R. SON OF MR. RAJARAM, AGED ABOUT 42 YEARS, RESIDING AT NO. 59, 1ST CROSS, GOVERNMENT PRESS LAYOUT, ULLAL MAIN ROAD, BENGALURU-560 056.
...PETITIONERS (BY SRI ADHITYA SONDHI, SENIOR COUNSEL A/W SRI KARAN JOSEPH, ADVOCATE) AND:
1 . THE UNION OF INDIA, REPRESENTED BY THE SECRETARY, MINISTRY OF TEXTILES, UDYOG BHAWAN, NEW DELHI-110 011.
2 . THE OFFICE OF THE TEXTILE COMMISSIONER, MINISTRY OF TEXTILES, NO.48, NEW MARINE LINES, NISHTHA BHAVAN (NEW CGO BUILDING), CHURCHGATE, MUMBAI-400 020, REPRESENTED BY ITS DEPUTY DIRECTOR.
…RESPONDENTS (BY SRI MADAN PILLAI R., CGC FOR R1 & R2) … THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE RESPONDENT-2 CONSIDER APPLICATION No.NO13/2015-2019 DATED 1.1.2016 (AT ANNEXURE-C) AS PER THE REVISED RESTRUCTURED TECHNOLOGY UPGRADATION FUND SCHEME (AT ANNEXURE-A) AND CONSEQUENTLY RELEASE TO THE PETITIONER THE SUM OF RS.49,26,21,785/-.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER The petitioners have filed the present writ petition for a writ of mandamus directing respondent No.2 – the Office of the Textile Commissioner, Ministry of Textiles to consider Application No.NO13/2015/2019 dated 1.1.2016 as per Annexure-C as per the Revised Restructured Technology Upgradation Fund Schedule, Annexure-A and consequently release to the petitioner a sum of Rs.49,26,21,785/-.
2. It is the case of petitioners that petitioner No.1, who is the Public Limited Company has been incorporated in the year 1985 under the provisions of the Companies Act, 1956 and is one of the world’s leading Company in the spinning, weaving and finishing of textiles. On 4.10.2013, respondent No.1 introduced the Revised Restructures Technology Upgradation Fund Scheme (RR-TUFS) to catalyse investment in all sub- sectors of the textile and jute industry by way of capital subsidy and interest reimbursement. In the year 2015, petitioner No.1 announced a composite expansion plan interalia doubling its sheeting capacity from 23 milion metres to 46 million meters at its Hassan Unit. On 8.10.2015, a loan of Rs.180 Crores was sanctioned to petitioner No.1 for the sheeting project by the Nodal Bank under the RR-TUFS viz., the Export Import Bank of India. On 1.1.2016, petitioner No.1 applied for RR- TUFS subsidy vide application No.NO13/2015/2019 and on 13.1.2016, respondent No.1 introduced the amended Technology Upgradation Fund Scheme. On 29.2.2016, respondent No.1 clarified that the budget allocation for the applications made under RR-TUFS until 12.1.2016 was Rs.4,005 Crores.
3. It is further contended that on 22.5.2017, respondent No.2 issued a Circular offering a one-time chance to applicants under RR-TUFS to apply under the ATUFS in view of the fact that, if such option was not exercised, the applicants were to remain in the waitlist under RR-TUFS. On 7.7.2018 the petitioner No.1 made representation to the respondents calling upon them to release the subsidy. In turn on 22.5.2018, respondent No.2 issued a letter to petitioner No.1 informing that its application for subsidy ought to be made under ATUFS. It is the further case of the petitioners, that inspite of the representation made by them; the respondents have not processed their application despite being legal obligation and constitutional duty to consider the same.
It Is the fundamental right which has adversely affected the shareholders. Therefore, the petitioners are before this Court for the relief sought for.
4. Respondents have filed objections to the main writ petition.
5. I have heard the learned Counsel for the parties to the lis.
6. Sri Adhitya Sondhi appearing on behalf of Sri Koran Joseph, learned Senior Counsel for the petitioners reiterating the grounds urged in the writ petition contended that as per the communication dated 22.5.2018 issued by the Government of India, Ministry of Textiles, Annexure-H at para-1, it has specifically stated that the UID under RR TUFS were issued to the units, who have submitted their applications to Textile Commissioner upto 12.01.2016 midnight on FIFO basis. The applications submitted latter are pending due to non availability of subsidy cap under RR TUFS. The learned Senior Counsel further contended that admittedly petitioner No.1 filed an application on 1.1.2016, Annexure-C within the time stipulated and hence the petitioners are entitled to the subsidy under RR-TUFS Scheme. Because of inaction on the part of respondent No.2, the petitioners are driven before this Court unnecessarily.
7. In support of his contentions, the learned Senior Counsel relied upon a judgment of the Division Bench of the Madhya Pradesh High Court in the case of Shri Bajrang Extraction Pvt. Ltd. and Another –vs- The Secretary to the Government of the M.P. and Others reported in AIR 1993 MP 202 to contend that, once the eligibility for grant of subsidy is acquired, the right to sanction also is acquired. If the State Level Committee delays or denies sanction, the applicant has a right to seek judicial review of such a decision on the ground that it is arbitrary or discriminatory. Paragraphs-16 and 17 of the said judgment read as under:
“16. Applying this test to the present case we find that the substantive conditions for entitlement to subsidy were contained in Clause 2 of the Manual for Central Investment Subsidy Scheme (Annexure B to the petition) which prescribed the eligibility qualifications. The esxential conditions for qualifying for grant of subsidy according to the Scheme were that the Unit must be a new industrial unit engaged in manufacturing items specified in the Scheme and must be located in area specified in the Scheme. Existing Units engaged in manufacturing of items specified in the Scheme were also eligible to claim subsidy under the Scheme provided they were located in areas specified in the Scheme if such Units wanted to undertake expansion of their existing Units. Clause 1.3 of the Scheme declared that the Scheme had come into operation with effect from 1-10-1970 in respect of the areas indicated in column 3 of the Part A of Annexure 2. It was also declared that the Scheme was expected to remain in operation up to the end of 5th Five Year Plan and could be extended further if considered necessary by the Government of India. The Scheme has been amended from time to time but the essential eligibility qualifications remain the same i.e. the area in which the Unit was located and the date of commencement of production of the Unit. The procedure to be followed for grant of subsidy cannot, therefore, be said to be of substance while deciding the eligibility for subsidy of a particular Unit. Thus, when the subsidy was applied for, whether or when it was sanctioned and whether or when it was disbursed will not be relevant for the purpose of deciding eligibility to the grant of subsidy. While deciding eligibility the only consideration will be whether on following the entire procedure for claiming subsidy the Unit would have got subsidy under the Scheme or not. This view is also in consonance with the principles of reasonableness and fairness because if grant of subsidy is made dependent on the date of its sanction by the State Level Committee, Units similarly situated may get different treatment. If the application of a Unit was processed speedily and sanction was granted by the State Level Committee before withdrawal of the Scheme, such Unit would receive subsidy and a Unit which has applied earlier but whose application was delayed in process of sanction and, therefore, could not be sanctioned before the date of expiry of the Scheme, such Unit would be made to suffer for no fault on its part. Similarly, if defects not substantial in character are found in an application of the Unit and the sanction of subsidy is delayed because of this, such a Unit though eligible for grant of subsidy would not get it only because its application was defective in form though not in substance. In the case before us the subsidy is being denied only on the ground that before it could be sanctioned by the Slate Level Committee, the Scheme was withdrawn by the Government. It is not the case of the respondents that the petitioner was not eligible for subsidy because of lack of essential eligibility qualifications prescribed by the Scheme. The only reason for rejection of the claim was that the application was not processed and sanctioned by the Stale Level Committee before the Scheme expired. For the aforesaid reasons, we are of the opinion that the respondents had to consider the case of the petitioner on merits and could not have rejected the claim of the short ground that it was not sanctioned before the expiry of the scheme.
17. Finally, award about the decision of the Madras High Court in M/s. Javkar Fire Works' case (supra), a copy of which has been filed by the respondents after the hearing was over and the case was closed for orders. The facts are similar to the case in hand. The view taken by the Madras High Court is that till the subsidy is sanctioned by the State Level Committee there is neither any promise nor is there any eligibility in the applicant unit to claim subsidy. According to the Madras High Court mere filing of an application does not confer any right on the applicants for subsidy any right either under the Scheme or on the principles of promissory estoppel. We regret our inability to agree with this view. In our opinion, there is a definite promise held out by the respondents by declaring the Scheme that the entrepreneurs who fulfil the eligibility qualifications under the Scheme would be given subsidy. The promise does not come into being on sanction of subsidy by the Stale Level Commitlee. Sanctions of the subsidy after due processing of the application is procedure and not substantial part of the Scheme. Once the eligibility for grant of subsidy is acquired, the right to sanction also is acquired. If the State Level Committee delays or denies sanction, the applicant has a right to seek judicial review of such a decision on the ground that it is arbitrary or discriminatory. Moreover, the Madras High Court seems to have missed the consequences of the view taken by it. If the grant of subsidy is made dependant on date of sanction by the State Level Committee absurd results will follow. As already pointed out if two applicants similarly situated apply on the same day but application of one is processed fast and receives sanction before the expiry of the Scheme but the other application is not processed as fast and before it is sanctioned the Scheme expires, the latter applicant shall suffer for no fault on his part. We, therefore, find ourselves unable to follow the decision of the Madras High Court.”
Therefore, the learned Senior Counsel sought to allow the writ petition.
8. Per contra, Sri Madan Pillai R., learned Central Government Counsel appearing for respondent Nos.1 and 2 submits that the petitioners have not corrected certain things as contended by them. Therefore, their application has been returned.
9. Sri Adhitya Sondhi, learned Senior Counsel further contended that though the application was returned on 29th August, 2016 by the Office of the Textile Commissioner, on 12th September, 2016, the application was re-submitted as suggested by the Office Commissioner of the Textile Commissioner. The said submission is placed on record.
10. The fact remains that the application filed by the petitioners dated 1.1.2016 is not considered till today even after the request made by the petitioners on 12th September, 2016 as suggested by the Office of the Textile Commissioner. Therefore, it is for the 2nd respondent – Office of the Textile Commissioner, Ministry of Textiles to consider application dated 1.1.2016 bearing No.NO13/2015/2019 as per the Revised Restructured Technology Upgradation Fund Scheme and pass appropriate orders in the light of the dictum of the Division Bench judgment of the High Court of Madhya Pradesh stated supra within a period of three months, after affording an opportunity of being heard to the petitioners and in accordance with law.
11. All the contentions raised by both parties are kept open to be urged before the concerned authority and it is for the concerned authority to decide the application after hearing the petitioners in accordance with law.
Ordered accordingly.
Sd/- Judge Nsu/-