Purposive interpretation of industrial incentive schemes extends expansion benefits by treating licensed capacity as installed capacity after delicensing

A purposive and contextual reading of the Incentive and Deferment Schemes required the expression "original licensed/registered capacity" in the expansion clause to be adapted to the post-delicensing regime. A literal construction would have frustrated the schemes' beneficial object, created inconsistencies between pre- and post-delicensing units, and excluded units that no longer held licences. The term was therefore treated as "original installed capacity" for determining eligibility, and the industrial units' claims were to be considered on that basis.

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Issues: Whether, after delicensing of the industrial sector, the expression "original licensed/registered capacity" in clause 2(f) of the Incentive and Deferment Schemes governing expansion had to be understood as "original installed capacity", so that the industrial units concerned could qualify for benefits on the ground of expansion.

Analysis: The definition of "expansion" in the schemes was framed in the context of a licensing regime, where the object was to ensure that incentive benefits were not granted before the original licensed capacity had been substantially implemented. Once compulsory industrial licensing had been dismantled, a literal insistence on "licensed/registered capacity" would defeat the object of the schemes, create anomalies between units established before and after delicensing, and deny any benefit to units that no longer had a licence at all. The Court applied a purposive and contextual interpretation, holding that the definition had to be adapted to the changed legal environment so as to preserve the beneficial object of industrial growth and avoid absurd or discriminatory consequences.

Conclusion: The expression "original licensed/registered capacity" was rightly read as "original installed capacity" for determining eligibility under the expansion clause, and the industrial units were entitled to have their claims considered on that basis.

Ratio Decidendi: Where a statutory or scheme-based definition framed for a discontinued licensing regime becomes unworkable in changed circumstances, the court may construe it purposively to give effect to the scheme's object and avoid absurd or discriminatory results.

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