Allowed

Sreevel Vanitha Handloom Weavers Indust v. Director of Handlooms and Textiles & Ors.

Kerala HC31 May 2016WP(C)/32023/2009

Case brief

AI extract

What is this about?

The Court quashed the Government Orders directing an investigation by the Crime Branch and withholding reimbursement under a Central handloom sales scheme. The Court held that since the Scheme has no condition regarding yarn source and sales were certified correct, the State must re-examine if procurement irregularities disqualify the societies or extinguish their entitlement to the benefit.

What did the court decide?

Quashed the GOs directing investigation and withholding benefits; remanded to the State Government to pass a fresh decision within three months.

Sreevel Vanitha Handloom Weavers Indust Vs Director of… — Company and Corporate | Kerala HC (2016)

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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 A.K.JAYASANKARAN NAMBIAR

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TUESDAY, THE 31ST DAY OF MAY 2016/10TH JYAISHTA, 1938

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WP(C).No. 32023 of 2009 (W)

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PETITIONER(S):

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SREEVEL VANITHA HANDLOOM WEAVERS

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INDUSTRIAL (PRODUCTION-CUM-SALE), CO-OPERATIVE SOCIETY LTD.H IND (T) 683, NEMOM P.O.,THIRUVANANTHAPURAM,, REPRESENTED BY ITS SECRETARY.

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BY ADV. SRI.D.SREEKUMAR

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RESPONDENT(S)/ADDITIONAL 4TH RESPONDENT:

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1. DIRECTOR OF HANDLOOMS AND TEXTILES THIRUVANANTHAPURAM.

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2. STATE OF KERALA,

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REPRESENTED BY THE PRINCIPAL SECRETARY TO, GOVERNMENT,INDUSTRIES (C) DEPARTMENT,, GOVERNMENT SECRETARIAT,THIRUVANANTHAPURAM.

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3. GENERAL MANAGER,

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DISTRICT INDUSTRIES CENTRE,THIRUVANANTHAPURAM.

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4. STATE OF KERALA REPRESENTED BY ADDITIONAL CHIEF SECRETARY, HOME DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM

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R1 TO 3 BY ADV. GOVERNMENT PLEADER SRI.BABY THOMAS

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 31-05-2016, ALONG WITH WPC. 3783/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No. 32023 of 2009 (W)

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APPENDIX

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PETITIONER'S EXHIBITS: EXT.P1: A TRUE COPY OF THE REGISTRATION CERTIFICATE

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EXT.P2: A TRUE COPY OF THE RREPORT DATED 28.01.2009 OBTAINED AS PER THE RIGHT TO INFORMATION ACT 2005 AND THE ORDER DIRECTING TO CONDUCT INSPECTION

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EXT.P3: A TRUE COPY OF THE GUIDELINES

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EXT.P4: A TRUE COPY OF THE LETTER DATED 11.02.2009 OBTAINED UNDER THE RIGHT TO INFORMATION ACT

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EXT.P5: A TRUE COPY OF THE REPORT

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EXT.P6: A TRUE COPY OF THE REPORT

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EXT.P7: A TRUE COPY OF THE CASH BILLS SHOWING SUCH PURCHASES

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EXT.P8: A TRUE COPY OF THE RELEVANT PORTION OF THE AUDIT CERTIFICATE

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EXT.p9: A TRUE COPY OF THE GOVERNMENT ORDER

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EXT.P10: A TRUE COPY OF THE INTERIM ORDER IN W.P(C).nO.3783/2009

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RESPONDENTS' EXHIBITS:

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EXT.R1(A): A TRUE COPY OF STATEMENT SUBMITTED BY THE PETITIONER SOCIETY SHOWING THE DETAILS OF YARN PURCHASED DURING THE PAST THREE YEARS.

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EXT.R1(B): A TRUE COPY OF GUIDELINES ISSUED BY THE GOVERNMENT OF INDIA VIDE NO.9/1/2007-DCH/IHDS/P.11 DT.7.3.2008

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//TRUE COPY//

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P A TO JUDGE

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A.K.JAYASANKARAN NAMBIAR, J.

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............................................................. W.P.(C).No.32023 of 2009 & W.P.(C).No.3783 of 2009

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............................................................. Dated this the 31^st day of May, 2016

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J U D G M E N T

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As both these writ petitions involve the same issue they are taken up together for consideration and disposed by this common judgment.

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The petitioners in both these writ petitions are Primary Handloom Weavers Co-operative Societies constituted in terms of the Kerala Co-operative Societies Act, having members and approved looms under them. The issue in these writ petitions pertains to the entitlement of the petitioners to the benefit of the 10% rebate on the sales generated by them during the festival seasons in accordance with a Scheme formulated by the Central Government for reimbursement of the rebate given by them on sale of handloom products for the period between 2006-2007 and 20082009. For the sake of convenience, the reference to facts and exhibits is from W.P.(C).No.3783 of 2009.

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W.P.(C).No.32023 of 2009 &

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W.P.(C).No.3783 of 2009

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The petitioner had during the period from 01.10.2007 to 14.11.2007, and the period from 06.12.2007 to 31.12.2007, submitted claims for reimbursement of rebate on sales effected by the petitioner society during the said period. The said claims were preferred in the proforma indicated in the Notification of the Government of India, Ministry of Textiles, produced in the writ petition as Ext.P1. It will be seen from Ext.P1 Scheme that the objective of the Scheme was to provide marketing support to agencies like the petitioner by way of reimbursement of 10% of the rebate on sale of handloom cloth generated by them through their sales outlets, or by organising fairs, exhibitions etc. The Scheme was meant to supplement the ongoing marketing efforts of these agencies and for keeping the production cycle alive and thereby sustaining the existing employment of handloom weavers. The Scheme was to be reimplemented through the State Government, and the implementing agencies had to prepare the claims in the prescribed proforma and submit it to the Director-in-Charge of Handlooms in the State, who in turn had to scrutinise the claim and submit it to the office of the Development Commissioner for

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W.P.(C).No.32023 of 2009 &

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W.P.(C).No.3783 of 2009

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Handlooms along with a recommendation for release of the eligible amounts. As per the Scheme, the Central Government was to release the assistance amount to the State Government for subsequent payment to the implementing agencies. It is relevant to note that, the Scheme was to be funded completely by the Central Government with a budgetary support of Rs.100 crores. A perusal of the Scheme would clearly indicate that the ultimate beneficiaries of the Scheme were to be the handloom weavers, and then the implementing agencies, since the Scheme was intended to boost the marketing efforts of the implementing agencies and thereby benefit the weavers who were responsible for weaving of the cloth that was subsequently sold. The terms and conditions stipulated under the Scheme indicate that the claim for reimbursement had to be scrutinised by the various authorities mentioned under the Scheme and, as long as the said authorities had certified that the claim of the implementing agencies with regard to the quantum of sales effected during the festival season was found to be correct, the benefit envisaged under the Scheme had to be sanctioned and disbursed to the implementing agency in question. For the purposes of these writ petitions, it is also

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W.P.(C).No.32023 of 2009 &

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W.P.(C).No.3783 of 2009

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relevant to note that, under the Scheme, there is no condition with regard to purchase of yarn by the implementing agencies and the manner in which it is to be done, or any stipulation with regard to who the yarn is to be purchased from.

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It is the case of the petitioners that the amounts due to them by way of reimbursement of the 10% rebate for the period from 01.10.2007 to 14.11.2007 and 06.12.2007 to 31.12.2007 were withheld by the respondents, inter alia, on the ground that, there was some discrepancy with regard to the procurement of yarn by the petitioner society. When, pursuant to a notice issued to the petitioner society, the matter reached the State Government consequent to a report of the Director of Handlooms and Textiles of the State Government, the State Government in the Industries Department decided to entrust the Crime Branch of the Police Department with the investigation of the allegations against the petitioner society. It is these orders of the State Government, directing an investigation to be done by the Crime Branch of the Police, that have been impugned in these writ petitions, where a stay against further proceedings has also been granted by this

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W.P.(C).No.32023 of 2009 &

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W.P.(C).No.3783 of 2009

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Court. In the writ petitions, the petitioners also impugn the orders passed by the Director of Handlooms and Textiles which recommend the withholding of the reimbursement under the aforementioned Scheme for the period from 01.10.2007 to 14.11.2007 and 06.12.2007 to 31.12.2007.

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A counter affidavit, as well as an additional counter affidavit, have been filed on behalf of the 1^st respondent wherein it is alleged that the petitioners had prepared false production statements by showing bogus purchases of yarn which was required for the said production. In W.P.(C).No.32023 of 2009, the allegation is that the purchase of yarn by the petitioner society was from non-approved yarn banks. The case of the respondents is essentially that, inasmuch as there was evidence to suggest that the petitioner society had shown bogus bills in respect of purchase of yarn, as also bills showing purchase of yarn from agencies other than approved yarn banks, they had violated the terms of the Scheme which governs their entitlement to the benefit of reimbursement of 10% rebate of sales effected by them during the festival period. It is relevant to note, however, that in none of the

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W.P.(C).No.32023 of 2009 &

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W.P.(C).No.3783 of 2009

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documents issued to the petitioner is there a mention about any dispute with regard to the extent of sales that was shown by the petitioner society as having been made during the relevant period, or the correctness of the said statements as certified by the authorised agencies under the Scheme formulated by the Central Government. In other words, the fact of sale, of the declared quantity of cloth, by the petitioner society during the relevant period has not been disputed by the respondents. Their only allegation is with regard to a discrepancy in the procurement of yarn by the petitioner society. It is for a further enquiry with regard to the aforementioned irregularity alleged against the petitioners that the State Government in the Department of Industries directed a further investigation to be done by the Crime Branch of the Police Department.

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I have heard the learned counsel appearing for the petitioners in both the writ petitions and the learned Government Pleader appearing for the respondents in both the writ petitions.

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7.On a consideration of the facts and circumstances of the

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W.P.(C).No.32023 of 2009 &

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W.P.(C).No.3783 of 2009

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case and the submissions made across the bar, I am of the view that, inasmuch as in the Scheme formulated by the Central Government, contemplating the grant of the benefit of the reimbursement of the 10% rebate extended by the petitioners societies on sales effected by them during the festival season, there is no stipulation with regard to purchase of yarn from any approved agency, the State Government would have to consider whether the irregularities alleged to have been committed by the petitioners, even if eventually established, could deprive them of the benefit of a Scheme wherein the said irregularity would have no relevance. As already noted above, it is not the case of the respondents before me that the petitioner societies have not actually sold the cloth in respect of which they were claiming the benefit of reimbursement of the 10% rebate. As a matter of fact, it is seen that the sales declared by the petitioners, have been certified as correct by all the authorities, who are named as agencies in the Scheme of the Central Government for the purposes of implementation of the Scheme. There is no finding to the contrary in the audit reports prepared under the Scheme either. If it is the case of the respondents that the sales in question

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W.P.(C).No.32023 of 2009 &

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W.P.(C).No.3783 of 2009

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had not materialised on account of the petitioner societies not having purchased the yarn for the manufacture of the cloth in the first instance, then it was incumbent upon the respondents to first dispute the correctness of the claim of the petitioner with regard to the quantity of sales that was declared by them as having been effected. Under the said circumstances, I am of the view that, the State Government in the Department of Industries must take a fresh decision with regard to the entitlement of the petitioner societies for the benefit of the Scheme, which entitlement has been withheld for the period aforementioned. In particular, the State Government shall consider whether there is any evidence on record that would suggest that the petitioner societies had violated any of the conditions under the said Scheme which would dis-entitle them to the benefit of the Scheme. If no such violation is found to have been occasioned by the petitioner societies, then they shall promptly be disbursed the reimbursement amounts that were due to them during the period in question since, as already noted above, the Incentive Scheme was intended for the benefit of weavers who had produced the cloth which was ultimately sold by the petitioner societies. The State Government shall take a

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W.P.(C).No.32023 of 2009 & W.P.(C).No.3783 of 2009

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decision in the matter, after hearing the petitioner societies, within an outer time limit of three months from the date of receipt of a copy of this judgment. To enable the State Government to do this Exts.P4 and P7 in W.P.(C).No.3783 of 2009 and Exts.P5 and P9 in W.P.(C).No.32023 of 2009 are quashed.

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A.K.JAYASANKARAN NAMBIAR JUDGE

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mns/31.05.16

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W.P.(C).No.32023 of 2009 & W.P.(C).No.3783 of 2009

Sreevel Vanitha Handloom Weavers Indust v. Director of Handlooms and Textiles & Ors.

Case brief

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Sreevel Vanitha Handloom Weavers Indust v. Director of Handlooms and Textiles & Ors.

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