IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF NOVEMBER, 2019 BEFORE THE HON’BLE MR. JUSTICE ARAVIND KUMAR W.P. NO.36510/2014 (GM-RES) BETWEEN:
SRI. K.N. SHESHADRI GOWDA S/O SRI. NARAYANAPPA AGED ABOUT 53 YEARS PROPRIETOR OF TOOL TECH (REGISTERED SMALL SCALE INDUSTRY) AT C-102, DEVASANDRA INDUSTRIAL ESTATE, MAHADEVAPURA BANGALORE - 560 048.
...PETITIONER (BY SRI. P.B. RAJU, ADVOCATE) AND:
1 . BRANCH MANAGER STATE BANK OF INDIA, MAHADEVAPURA INDUSTRIAL ESTATE, BANGALORE – 560 048.
2 . STATE BANK OF INIDA SMEC, KUMARA PARK BRANCH SESHADRIPRAM, BANGALORE – 560 020 REPRESENTED Y ITS ASSISTANT GENERAL MANAGER KUMARA PARK, BADAGANODU SANGHA BUILDING, BANGALORE – 560 020.
3 . STATE BANK OF INIDA REPRESENTED BY ITS GENEAL MANAGER REGIONAL OFFICE AT ST. MARKS ROAD BANGALORE – 560 001.
4 . THE OFFICER INCHARGE TUFSL CELL, STATE BANK OF INDIA COMMERCIAL BRANCH LG N. VIDYA MARK OPP:HORMINAN CIRCLE FORT MUMBAI – 400 001.
5 . STATE BANK OF INDIA RAJAJINAGAR SSI BRANCH INDUSTRIAL ESTATE REP BY CHIEF MANAGER WEST OF CHORD ROAD BANGALORE - 560 010.
6 . M/S SUDHIR ENTERPRISES A CONSULTANT OF SBI CONSTITUENT PROPRIETOR MR. SUDHIR RAJAJINAGAR INDUSTRIAL ESTATE LAZER CUTTING SERVICE PROVIDER 200/A, 12TH MAIN ROAD, IIIRD PHASE PEENYA INDUSTRIAL AREA BANGALORE – 560 058.
7 . THE OFFICE OF THE DEVELOPMENT COMMISSIONER (SSI) MINISTRY OF SMALL SCALE INDUSTRIES GOVERNMENT OF INDIA, NIRMAN BHAVAN, NEW DELHI – 110 011 REPRESENTED BY ITS CHIEF COMMISSIONER.
…RESPONDENTS (BY SRI. A. RAVISHANKAR, ADVOCATE FOR R-1-R5;
SRI. A SANJAY KUMAR, ADVOCATE FOR R-6; SMT. K.S. ANASUYADEVI, CGC FOR R-7) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF CONSTITUTION OF INDIA PRAYING TO DIRECT THE R-4 TO REMIT A SUM OF RS.15,00,000/- (RUPEES FIFTEEN LAKHS ONLY) AS CAPITAL SUBSIDY TO THE LOAN ACCOUNT TO THE PETITIONER WITH THW R-2 STATE BANK OF INDIA. IN TERMS OF THE CREDIT LINKED CAPITAL SUBSIDY SCHEME & OR FROM OUT OF ITS OWN FUNDS.
THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R The short point that arises for consideration in this writ petition revolves around entitlement of petitioner for grant of subsidy.
2. Facts in short for disposal of this writ petition can be crystalised as under:
Petitioner is a small scale industry as per the certificate issued by the Directorate of Industries and Commerce vide Annexure-A. Having commenced industry in the year 1985, petitioner has been transacting with State Bank of India – first respondent herein from the date of inception as said bank is pioneer in servicing small scale industries. Second respondent branch caters to the need of small and modern size entrepreneurs. The Ministry of Small Scale Industries through the Office of Development Commissioner has issued certain guidelines for Credit Linked Capital Subsidy after having formulated scheme for technology upgradation of small scale industries with an aim and object to encourage small scale industries to upgrade their technology by modernization of their production equipment, plant and machinery, etc. Under the said Scheme 9 public sector banks/Government agents were identified as Nodal Banks for implementation and for release of capital subsidy under the Scheme vide Annexure-B. Said Scheme was effective from 04.04.2006 and in order to reap the benefit of said Scheme petitioner purchased a laser cutting machine valued at Rs.234 Lakhs by availing loan from second respondent – Bank. The invoice for having purchased the said machinery dated 22.12.2009 has been produced at Annexure-C.
3. In terms of above said Scheme petitioner entered into an agreement with second respondent to act as nodal agent for the Government of India for disbursement/sanction of subsidy to the beneficiaries vide agreement dated 13.03.2010-Annexure-D.
4. Having purchased the equipment/ machinery petitioner submitted an application on 15.03.2010 for sanction of capital subsidy of Rs.15 Lakhs i.e., with interest at 15% of the cost of machinery, which was upper the ceiling limit fixed under the Scheme vide Annexure-E. Petitioner enclosed all the relevant documents along with application and requested second respondent to process the said application for release of subsidy. In fact, second respondent enclosing application of petitioner had forwarded the same to fourth respondent-Bank by communication dated 15.03.2010 – Annexure-F opining thereunder that petitioner unit is eligible for subsidy. In fact, by communication dated 11.05.2011-Annexure- H second respondent has intimated fourth respondent to sanction the subsidy at the earliest. It would be apt and appropriate to note the certification made by second respondent with regard to eligibility of petitioner for grant of subsidy, which reads:
“The captioned unit xxxxx 194.81 lacs. The unit is eligible for CKCS Subsidy of Rs.15,00,000/- @ 15% (Maximum CLCS Subsidy Rs.15.00 lacs on ceiling of Rs.1.00 Crore) of cost of eligible machinery installed under the scheme.”
5. In fact second respondent had also followed up with fourth respondent by sending a reminder on 12.07.2012-Annexure-J and second respondent by communication dated 23.07.2012-Annexure-K intimated petitioner of declining the claim for subsidy. No reasons whatsoever was forthcoming from said communication. Hence, petitioner was perforced to approach its parent bank namely, first respondent renewing its request for grant of subsidy pursuant to which first respondent-bank by communication dated 08.02.2013 –Annexure-L also renewed the claim of petitioner for grant of subsidy or in other words, espoused the prayer of petitioner before fourth respondent. However, said request was not considered and fourth respondent declined to entertain the claim of petitioner and by communications dated 18.02.2013 – Annexure-M and letter dated 25.01.2011 – Annexure- Q is said to have intimated second respondent declining to entertain claim of petitioner or in other words, as to why claim of petitioner is being rejected. Hence, this writ petition.
6. It is the contention of Sri.P.B.Raju, learned counsel appearing for petitioner that when there is no dispute to the fact that petitioner was entitled for a subsidy to purchase CNC Wire Cut Machine on the ground that technical details specified in the invoice did not match with the list of machineries given in the booklet issued by the Ministry. He would also contend that claim for subsidy cannot be turned down or in other words, prayer of the petitioner for grant of subsidy cannot be rejected by taking too technical view. Hence, he prays for allowing the petition.
7. Per contra, Sri.A.Ravi Shankar, learned counsel appearing for respondent Nos.1 to 5 as well as Smt. K.S.Anasuyadevi, learned CGC appearing for respondent No.7 would support the order of rejection and prays for dismissal of the petition contending interalia that financial institution cannot go beyond what has been prescribed under the Scheme and any infraction of same would disentitle the applicant for subsidy being granted.
8. Having heard the learned Advocates appearing for parties and on perusal of records it is noticed that claim of petitioner was based on the Scheme, which was formulated by respondent No.7 to encourage small scale industries namely, to enable or encourage them to upgrade their technology by modernization of their production equipment, plant and machinery, etc. Said Credit Linked Capital Subsidy Scheme (CLCSS) for technology upgradation of small scale industries, which is at Annexure-R-1 would clearly indicate that CLCSS was available for small scale industries who undertake technology upgradation of their respective small scale industries. However, extension of subsidy was not for small scale industries in general but on the other hand to such of those industries which are specified in the Scheme. There is no dispute to the fact that claim of petitioner for grant of subsidy to machinery which it claims to have purchased under the invoice dated 22.12.2009- Annexure-C, is treacable to the entry under the heading General Engineering Works in CLCSS Scheme and said entry as found in the Scheme (Annexure-R-1) is extracted herein below for immediate reference:
Sl.No. Activity Technology Cost (in lakh) 1. General Engineering for Multiple use:- Hand tools, Surgical equipment, Bicycle parts, Auto parts, Machine tools, Precision machined parts General Engineering Works for Multiple Use CNC wire cut machine, EDM, CNC lathe, CNC milling, CNC drilling machine etc.
5.0 to 55.0 9. A plain reading of above entries would indicate that establishment/s which are carrying out activity of General Engineering for multiple use namely hand tools, surgical equipment, bicycle parts, etc. as morefully and specifically indicated hereinabove and who adopt the technology specified therein would be entitled to subsidy. The technology which has been specified and which enables the applicants to seek for subsidy insofar as said activity is concerned is relatable to CNC Wire Cut Machine, EDM, CNC lathe, CNC Milling, CNC drilling machine, etc. machinery or equipment, petitioner has purchased even according to respondent as evidenced from invoice (Annexure-C) the machinery as described thereunder. The entry found in the purchase invoice dated 22.12.2009 (Annexure-C) reads:
“TURMPF HIGH PRECISION LASER CUTTING MACHINE TRULASER 3030 BASIC EDITION WITH TRUMPS TRUFLOW AND CNC CONTOURING CONTROL SINUMERIK 840 D/500 MB valued at Rs.234 LAKHS.”
10. As per communication dated 21.05.2011 – Annexure-Q from fourth respondent to second respondent claim of petitioner has been rejected on the ground that description of machinery given is “TRUMPF High Precision Laser Cutting Machine & CNC Contouring Control is not found under Sub Section of General Engineering works and under cross reference of CLCSS booklet is not eligible for subsidy”.
11. A plain reading of the Scheme (Annexure-R- 1) which has been extracted hereinabove together along with description of machinery as described in the invoice dated 22.12.2009 (Annexure-C) as well as description of the machinery as reflected in the application submitted by petitioner for grant of subsidy are one and the same. In other words, machinery which petitioner has purchased for upgradation of its technology is CNC Wire Cutting Machine. Attempt made by fourth respondent to read each of the words found in the Scheme to reject the claim of petitioner is not only hyper technical but also does not appeal to logic. In fact, second respondent as already noticed hereinabove while forwarding the application of petitioner to fourth respondent has in unequivocal terms opined that unit (petitioner) is eligible for CLCS subsidy. In other words, second respondent - bank itself was conscious of the fact that machinery which the petitioner had purchased for its upgradation of the technology is CNC Wire Cutting Machine and what has been specified in the invoice about the details of said machinery purchased are one and same. Hence, on account of entire details of the machinery purchased like its number, edition, model, which has been specified in the invoice does not find a place in the Scheme, cannot be a ground to turn down claim of petitioner for grant of subsidy or application for subsidy cannot be termed as contrary to Scheme and thereby petitioner would not be entitled for subsidy. In fact, it requires to be noticed at this juncture itself that at no point of time second respondent or fourth respondent had intimated the petitioner that machinery which has been purchased by it, for which subsidy has been sought for, is contrary to the Scheme or petitioner had purchased equipment/ machinery to which it was not entitled for subsidy. That apart, petitioner has submitted that application for grant of subsidy to second respondent on 11.05.2011 which was well within time allowed (i.e., on or before 30.09.2011) after having purchased on 22.12.2009 which was also well within the time permitted (i.e., on or before 30.09.2011) and as such no ground whatsoever application of petitioner for grant of subsidy could have been rejected by fourth respondent.
12. For the cumulative reasons aforestated, this Court is of the considered view that petitioner is entitled to the relief sought for.
Hence, I proceed to pass the following:
ORDER (i) Writ petition is allowed.
(ii) A writ of mandamus is issued to respondent Nos.1 to 4 to release and remit the sum of Rs.15,00,000/- (Rupees Fifteen Lakhs Only) as capital subsidy to the loan account No.30031541576 of petitioner in terms of CLCS Scheme (Annexure-R-1).
(iii) Second respondent shall credit the said sum of Rs.15 Lakhs to the loan account of petitioner by appropriating it to said account and proportionately waive the interest for the period for which petitioner was entitled for subsidy i.e., with effect from 11.05.2011 (date of submission of application) till the date of credit.
(iv) Communication dated 08.02.2013 bearing No.319/2012-13 - Annexure-L and communication dated 21.05.2011 - Annexure-Q issued by fourth respondent stands quashed.
No order as to costs.
SD/- JUDGE DR