Remanded

Efl Foods Limited v. State of Rajasthan

Rajasthan HC14 Aug 2019SAW/645/2019

Case brief

AI extract

What is this about?

The High Court allowed the appeal against a Single Judge order that dismissed a writ petition challenging subsidy recovery and interest levied by the State Industrial Corporation. The High Court remanded the matter for fresh adjudication due to the Single Judge's failure to address contradictions regarding production continuity and compulsion in payment.

What did the court decide?

The appeal was allowed; the impugned order of the Single Judge was set aside, and the matter was remitted for fresh decision.

Efl Foods Limited Vs State of Rajasthan — Contract and Commercial Disputes | Rajasthan HC (2019)

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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D.B. Special Appeal (Writ) No.645/2019

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S.B. Civil Writ Petition No.10240/2009

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EFL Foods Limited, Having Its Registered Office At 687, Anandpur, E.M. Bye-Pass, Kolkata, Through Its Authorized Signatory Mr. Saurabh Mittal

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----Appellant

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Versus

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State Of Rajasthan, Through Secretary, Central Secretariat, Industries Dept. Bhagwan Das Road, Jaipur (Raj.)

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Rajasthan State Industrial Development And Investment Corporation Limited, Having Its Registered Office At Udyog Bhawan, Tilak Marg, Jaipur (Raj.)

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Commissioner Of Industries, Government Of Rajasthan, Industries Department, Udyog Bhawan, Tilak Marg, Jaipur (Raj.)

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----Respondents

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For Appellant(s) : Mr. Anant Kasliwal with
Mr. Vaibhav Kasliwal
For Respondent(s) : Mr. Shailesh Prakash Sharma with
Mr. Gaurav Gupta

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HON'BLE MR. JUSTICE MOHAMMAD RAFIQ HON'BLE MR. JUSTICE NARENDRA SINGH DHADDHA

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Judgment

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Per Hon’ble Mr. Justice Mohammad Rafiq:

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14/08/2019

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This appeal has been preferred by petitioner-appellant EFL Foods Limited challenging the judgment of learned Single Judge dated 25.01.2019, whereby writ petition filed by petitioner-appellant has been dismissed.

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The petitioner-appellant in the writ petition had challenged the decision taken by the Commissioner Industries vide letter dated 15.06.2009 restricting the waiver of the interest to the extent of 75%

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(2 of 5)

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[SAW-645/2019]

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only. Prayer was also made for declaring the proceedings in respect of recovery of the subsidy released of Rs.11,25,000/- after a lapse of 12 long years and charging of interest at the rate of 15% per annum, to be illegal. Further prayer was made that the petitioner-appellant be declared entitled to get waiver of entire 100% on the interest amount levied by RIICO, as the company’s industrial unit functioned for full period of five years.

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Mr. Anant Kasliwal, learned counsel for petitioner-appellant, submitted that learned Single Judge has erred in law in dismissing the writ petition on the basis of various disputed questions of fact. Learned Single Judge was also not justified in holding that since the petitioner-appellant had accepted the decision of waiver only to the extent of 75% interest taken by the screening committee, therefore it was estopped from challenging the same and further that the petitioner-appellant conveyed deposit of the amount in pursuance of the decision of the said committee dated 02.06.2009 and got the document released and therefore also it was estopped from challenging the decision.

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It is argued that the learned Single Judge instead of appreciating the real controversy involved in the matter, was unduly swayed away by the submissions made on behalf of the respondents. Basic issue raised by the petitioner-appellant was not about the waiver of 75% interest and non-waiver of 25% interest amount by the committee. The question was whether the respondents could recover the amount of subsidy given to the petitioner-appellant, even though the conditions for grant of subsidy had been fulfilled, for which various documents have been filed. Learned counsel in this connection referred to the findings recorded by learned Single Judge vis-a-vis pleadings of the parties and submitted that not a single question of

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(3 of 5)

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fact was disputed by the respondents anywhere in whole of their reply to the writ petition or even during the oral hearing. Therefore, the learned Single Judge was not justified in dismissing the writ petition on that reservation.

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It is argued that the learned Single Judge failed to appreciate that the screening committee in their meeting held on 02.06.2009 categorically noted that as per Clause 14(b) of the State Capital Investment Subsidy Scheme for New Industry, 1990, formation of the industrial unit is required to continuously remain in production for five years. There is no requirement in the scheme of running the unit upto a particular capacity. The report of the General Manager, District Industries Centre, Bhiwadi, vide letter dated 25.05.2009 wrote that as per the report of the Chartered Accountant for the year 1990-91 to 1994-95 and the proceedings of the one time settlement committee dated 22.03.1996, the production in the unit was continuous for the years 1989-90 to 1994-95. Once the committee has accepted the report of the General Manager, District Industries Centre, Bhiwadi, it could not direct recovery of interest on the amount of incentive of Rs.29,94,504/-. The amount of incentive was merely Rs.11,25,000/and non-waiver was to the extent of 25%. It was argued that the consent obtained from the Committee was under duress as the respondents have withheld their title document and it was under compulsion that the petitioner-appellant had to deposit the aforesaid amount to get the title document released.

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Mr. Shailesh Prakash Sharma, learned counsel for the respondents, opposed the appeal and, referring to para 11 of the reply, submitted that in terms of the subsidy scheme, if the unit was not in continuous operation for a period of 5 years from the date of starting commercial production, any amount of subsidy received by it,

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(4 of 5)

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was liable to be refunded along with interest. It is therefore that the notice dated 27.10.2008 (Annexure-5) was sent to the petitionerappellant. The petitioner-appellant unit was therefore liable to refund the amount of subsidy along-with interest for any violated terms and conditions of the subsidy.

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It is argued that the letter dated 15.06.2009 was sent to the petitioner-appellant by the respondents conveying that an amount of Rs.18,73,626/- was to be paid by the petitioner-appellant on or before 01.07.2009 as against total dues of Rs.41,19,504/-. It was on receipt of the amount, the security was released in favour of the petitionerappellant. Since the petitioner-appellant not only voluntarily agreed before the screening committee to pay 25% amount of the interest on the condition of waiver of 75% and deposited the amount on 29.06.2009, it cannot be allowed to challenge the same.

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Having heard learned counsel for the parties and perused the impugned judgment, we find that disinclination of the learned Single Judge to entertain the writ petition in exercise of its jurisdiction under Article 226 of the Constitution of India as it involved so many disputed questions of fact, does not appear to be well founded. The Court having gone through the reply to the writ petition filed by the respondents, could not find any questions of fact having been disputed by them. Moreover, the learned Single Judge has not analyzed the effect of the finding recorded by the screening committee in the proceedings dated 02.06.2009 based on the report of the General Manager, District Industries Centre, Bhiwadi, vide letter dated 25.05.2009 that it would be appropriate to treat the unit in production activities for the entire period of five years from 1989-90 to 1994-95. This was the very foundation of the decision of the respondents to recall the subsidy and recover interest as the

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[SAW-645/2019]

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allegation was that the unit was not in production during the relevant period, which amounted to violation of Clause 14(b) of the State Capital Investment Subsidy Scheme for New Industry, 1990. This contradiction was required to be examined by the learned Single Judge. The learned Single Judge also ought to have examined the question whether the petitioner-appellant was not under compulsion to deposit the amount to get the security released. The argument was put forth by the petitioner-appellant that the amount of Rs.7,48,626/and its original papers were withheld by the respondents. What would be the effect of all this, has not been considered. Owing to all these reasons, we are of the considered view that the matter requires reconsideration by the learned Single Judge with due application of mind on all these aspects.

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In the circumstances, we are persuaded to allow the appeal. The appeal is accordingly allowed. The impugned order dated 25.01.2019 of learned Single Judge is set aside. The matter is remitted back to the learned Single Judge for deciding it afresh in the light of the observations made above. The findings recorded by the learned Single Judge in the impugned order would not in any way influence the interest of either parties in fresh adjudication of the matter on merits.

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(NARENDRA SINGH DHADDHA),J

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(MOHAMMAD RAFIQ),J

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//Jaiman//62

Efl Foods Limited v. State of Rajasthan

Case brief

What is this about?

What did the court decide?

Efl Foods Limited v. State of Rajasthan

Case brief

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