Allowed

Meekamalil Polymers Pvt.Ltd. v. the Director of Industries & Commerce

Kerala HC17 Oct 2008WP(C)/5546/2008

Case brief

AI extract

What is this about?

The petitioner, a small-scale industrial unit, filed a writ petition challenging the rejection of its subsidy application. The government had discontinued the scheme with retrospective effect after the petitioner applied. The court held that units acting on the strength of the scheme before its withdrawal are entitled to benefits, preventing retrospective deprivation.

What did the court decide?

Impugned order ext.P5 is quashed. Respondents 1 and 2 shall consider the petitioner's application with reference to the scheme and disburse the eligible subsidy within three months.

Meekamalil Polymers Pvt.Ltd. Vs the Director of… — Company and Corporate | Kerala HC (2008)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT :

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THE HONOURABLE MR. JUSTICE V.GIRI

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FRIDAY, THE 17TH OCTOBER 2008 / 25TH ASWINA 1930

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WP(C).No. 5546 of 2008(I)

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-----------------------------------

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PETITIONER(S):

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----------------------

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MECKAMALIL POLYMERS PVT.LTD., KODANAD, ALATTUCHIRA P.O., ERNAKULAM DISTRICT, REPRESENTED BY THE MANAGING DIRECTOR, ABISON VARGHESE.

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BY ADV. SRI.ABRAHAM VAKKANAL (SR.)

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SRI.PAUL ABRAHAM VAKKANAL SRI.BIJIMON C.CHERIAN SRI.ARUL KUMAR.P SRI.LOWEL CHERIAN

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RESPONDENT(S):

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-------------------------

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1. THE DIRECTOR OF INDUSTRIES & COMMERCE, VIKAS BHAVAN, THIRUVANANTHAPURAM.

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2. GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, GANDHINAGAR, ERNAKULAM, COCHIN-20.

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3. THE STATE OF KERALA, REPRESENTED BY THE PRINCIPAL SECRETARY, INDUSTRIES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.

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4. THE MONITORING AND TECHNOLOGY APPROVAL BOARD, REPRESENTED BY ITS CONVENER, THE DIRECTOR OF INDUSTRIES & COMMERCE, VIKAS BHAVAN, THIRUVANANTHAPURAM.

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GOVERNMENT PLEADER SMT.M.R.SREELATHA FOR R1 TO R4

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17/10/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.P.(C). NO. 5546/2008-I

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APPENDIX

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PETITIONER'S EXHIBITS:

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EXT.P1: COPY OF THE COMPUTERIZED STATEMENT ISSUED BY UTI BANK (NOW AXIS BANK).

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EXT.P2: COPY OF THE GO(MS)NO.2/2003/ID.

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EXT.P2(a): COPY OF THE GO(RT)NO.1346/2006/ID .

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EXT.P3: COPY OF THE CERTIFICATE ISSUED BY HEAD OF DEPARTMENT, DEPARTMENT OF POLYMER SCIENCE & RUBBER TECHNOLOGY, CUSAT, COCHIN-22.

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EXT.P4: COPY OF THE APPLICATION FORM SUBMITTED PETITIONER FOR SUBSIDY.

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EXT.P4(a): COPY OF THE ACKNOWLEDGMENT AND RECEIPT FOR Rs.10,000/- BY 2ND RESPONDENT.

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EXT.P4(b): COPY OF THE SSI UNIT ACKNOWLEDGMENT CERTIFICATE NO.A5/6552/07 ISSUED TO THE PETITIONER.

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EXT.P5: COPY OF THE COMMUNICATION FROM THE 2ND RESPONDENT INFORMING REJECTION OF APPLICATION.

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EXT.P6: COPY OF THE APPLICATION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT UNDER THE RTI ACT.

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EXT.P6(a): COPY OF THE APPLICATION FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT UNDER THE RTI ACT.

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EXT.P6(b): COPY OF THE REPLY GIVEN BY THE STATE PIO TO THE PETITIONER UNDER THE RTI ACT.

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EXT.P7: COPY OF THE GO (RT)NO.799/2007/ID.

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EXT.P7(a): COPY OF THE MINUTES OF THE MEETING OF THE MONITORING AND TECHNOLOGY APPROVAL BOARD.

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EXT.P8: COPY OF THE DOCUMENT RECEIVED FROM THE STATE PIO UNDER THE RTI ACT BY THE PETITIONER.

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RESPONDENT'S EXHIBITS: NIL

//TRUE COPY//

P.S. TO JUDGE

Rs/

V.GIRI, J.

W.P.(C).No.5546 of 2008

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Dated this the 17^th day of October, 2008.

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JUDGMENT

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The petitioner company, incorporated under the Companies Act, is engaged in the manufacture of plastic moulded Goods, PET preforms and PET Bottles etc. The unit started functioning on 7.3.2001.

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Ext.P2 is a scheme which was floated by the Government in order to encourage small scale unit holders to increase productivity by upgrading technology, by providing a credit capital subsidy. The scheme, inter alia, comprehended existing SSI units registered with the Directorate of Industries and Commerce, which upgrades to State–of-art technology with or without expansion. The scheme provided that the existing units which undertake a technology upgradation by improving productivity or quality of the products or resulting in reduction of cost of production would entitle the unit for subsidy. The scheme further states that subsidy @ 12% of loan amount sanctioned and disbursed by the financial institutions will be given. The

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W.P.(C).NO.5546/08

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further terms and conditions, under which the subsidy could be availed of, are also mentioned in Ext.P2. The technology, if it is deployed by the unit which is reported as eligible for the capital subsidy scheme, will have to be approved and monitored by a Monitoring and Technology Approval Board. The Board is to be headed by the Principal Secretary of Industries Department. The Technical Expert in the relevant field would be co-opted to the Board by the convener. The maximum eligibility would be 12% of the loan amount. The scheme was brought into force with effect from 2.1.2003 as is evidenced by G.O.NO. 2/2003/ID.

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The petitioner contends, inter alia, that, on the strength of the capital subsidy scheme floated as per Ext.P2, it had decided to upgrade the technology. Accordingly it availed financial facility from the UTI bank, now renamed as Axis Bank, which is also a financial institution in terms of Ext.P2. It is also the case of the petitioner, which does not seem to be controverted by the respondent, that the last instalment of the loan availed was disbursed on

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W.P.(C).NO.5546/08

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29.3.2007. This is sought to be substantiated by Ext.P1 statement issued from the bank. It is seen from Ext.P1 that the first instalment was availed on 18.1.2007.

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Ext.P2 scheme further provided that the unit, which claims eligibility in terms of Ext.P2, is to file an application for subsidy within three months from the date of availing the last instalment from the financial institution. Accordingly, the petitioner had time till 29.6.2007 to submit the application. It submitted the application Ext.P4 on 6.6.2007. The said application was met with Ext.P5 communication from the 2^nd respondent intimating that the 1^st respondent had rejected the application on the premise that Ext.P2 scheme was discontinued with effect from 1.4.2007. Thereafter the petitioner, on enquiries, came to know that Ext.P2 scheme was discontinued with effect from 1.4.2007 and orders in this regard were issued as per Government Order dated 20.6.2007. It is in the wake of this, the petitioner has filed this writ petition, challenging Ext.P5. He also sought for

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W.P.(C).NO.5546/08

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consideration of the application for subsidy in terms of Ext.P2 scheme.

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A counter affidavit has been field by the respondents affirming that Ext.P2 scheme was discontinued with effect from 1.4.2007; that the petitioner's application was originally processed and recommended to the respondent and thereafter the application was rejected on the basis of Ext.P7 Government Order issued by the Government. It is affirmed that applications received after 1.4.2007 will not be considered in the light of the GO.

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I heard learned senior counsel for the petitioner Sri.Abraham Vakkanal and learned Senior Government Pleader.

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That the petitioner had availed a loan from a financial institution listed in that behalf under Ext.P2 is not a matter in dispute. The petitioner's case is that it had acted on Ext.P2 scheme and it is, therefore, that it had upgraded its technology. The respondents have rejected the petitioner's application on the ground that the petitioner had submitted an application for the benefit of the scheme only

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on 6.6.2007 and that by Ext.P7 order the Government had accepted the recommendations made by the Monitoring Committee to discontinue the scheme with effect from 1.4.2007. The scheme contemplated availing of financial facility from scheduled/nationalised financial institutions and deploying of the same by the small scale industrial units. In other words, if an industrial unit is to avail the benefit of the scheme, it should first upgrade its technology and the said upgradation of the technology should have entailed a capital investment. It should further have made upgradation by availing a credit facility from the financial institutions. Once it is done, then it is entitled to apply for financial assistance under the scheme. The competent Board under the scheme should evaluate whether the technology has been upgraded by the industrial unit. Thereafter the competent authority is to consider the amount which the unit is entitled to.

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What is crucial in the present context is whether the petitioner had acted on

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W.P.(C).NO.5546/08

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the strength of the scheme as it existed and whether it had, in pursuance of the said scheme availed a financial facility from the financial institution and deployed the technology. Going by Ext.P1 and as per the stand taken in the counter affidavit, the last among the instalments from the UTI bank was drawn by the petitioner on 29.3.2007. In such circumstances, there is prima facie material to show that the petitioner had acted on the strength of the scheme as is listed in Ext.P2. There does not seem to be any serious dispute on this aspect on the part of the respondents.

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If therefore the petitioner had acted under the scheme as it existed, the mere fact that the petitioner had applied only on 6.6.2007 should not act in derogation of the petitioner's eligibility to avail the benefit under Ext.P2 scheme. After all, the question of applying for the benefit under the scheme is only a consequential action to avail the benefit available under the scheme. In such

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circumstances, the reason afforded in Ext.P5 does not seem to be sustainable.

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W.P.(C).NO.5546/08

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The Government is entitled to withdraw a scheme offered to industrial units. If therefore, the Government decides to put an end to a scheme with reference to a report of the Monitoring committee as done in Ext.P5, there is nothing wrong in doing that. But if any unit, which has acted in accordance with the scheme, that was already in existence, the benefit which would have otherwise gone to it cannot be taken away with retrospective effect. This is the law that has been consistently laid down by the Apex Court. The law has been reiterated in Kusumam Hotels (P) Ltd. v. KSEB 2008(KHC 792}. In other words, if the petitioner had acted on the strength of Ext.P2 scheme, it is entitled to the benefits thereunder. Such benefit cannot be withdrawn on the strength of Ext.P7 Government order.

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For all these reasons, I find that the petitioner is entitled to succeed. Ext.P5 is quashed. Respondents 1 and 2 shall consider the petitioner's application Ext.P4 with reference to Ext.P2 scheme. If the petitioner is found eligible in terms of Ext.P2 scheme, the

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W.P.(C).NO.5546/08

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amount which it is entitled to, by way of subsidy in terms of Ext.P2 shall be disbursed to it. Appropriate decision, in this regard, shall be taken within three months from the date of

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receipt of a copy of this judgment.

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Writ petition is allowed as above.

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Sd/- (V.GIRI) JUDGE

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sk/

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//true copy//

Meekamalil Polymers Pvt.Ltd. v. the Director of Industries & Commerce

Case brief

What is this about?

What did the court decide?

Meekamalil Polymers Pvt.Ltd. v. the Director of Industries & Commerce

Case brief

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