Subsidy eligibility depends on verifiable capital investment and project viability under the scheme's conditions.

Subsidy eligibility under an incentive scheme was linked to proof of the prescribed capital investment threshold and to the scheme's object of supporting viable projects. The court noted that claimed investment based on financial lease assets was not fully verifiable, unpaid lease liabilities remained outstanding, and the asserted expenditure did not satisfy the net present value threshold. It also accepted that acute liquidity stress and the risk of diversion to creditors could justify refusal of disbursement where the scheme was meant to bridge a viability gap. On these facts, the subsidy claim was not established and the refusal to release funds was upheld.

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Issues: (i) whether the petitioner satisfied the Scheme's requirement of requisite capital investment measured by the prescribed Net Present Value threshold; (ii) whether the respondent was justified in refusing subsidy on the ground that the project's viability and liquidity position made disbursement unwarranted.

Issue (i): whether the petitioner satisfied the Scheme's requirement of requisite capital investment measured by the prescribed Net Present Value threshold.

Analysis: The Scheme made subsidy contingent on completion of the prescribed capital investment threshold within the relevant project period. The petitioner's claimed investment depended substantially on assets acquired on financial lease, but the lease rentals remained unpaid for many years. The respondent was entitled to verify whether the claimed investment had in fact been made, and the inability to verify expenditure of Rs. 96.95 crores further weakened the petitioner's claim. Excluding the unpaid lease liabilities and unverifiable expenditure, the investment did not cross the threshold.

Conclusion: The petitioner did not establish compliance with the capital investment requirement, and the claim to subsidy failed on this ground.

Issue (ii): whether the respondent was justified in refusing subsidy on the ground that the project's viability and liquidity position made disbursement unwarranted.

Analysis: The Scheme was intended to support eligible and viable projects by bridging the viability gap, not to release public funds where the project's financial condition was doubtful. The petitioner's acute liquidity stress and the likelihood that any disbursement would be diverted to creditors supported the respondent's refusal. On the facts, the decision not to release subsidy was consistent with the object of the Scheme.

Conclusion: The refusal to disburse subsidy on viability grounds was upheld.

Final Conclusion: The writ petition was rejected because the petitioner neither proved satisfaction of the Scheme's investment threshold nor established a legal entitlement to subsidy in the face of serious doubts about project viability.

Ratio Decidendi: Subsidy under an incentive scheme conditional on a prescribed capital-investment threshold can be denied where the claimed investment is not verifiable or remains unpaid, and the authority may also refuse disbursement when the scheme's object of supporting viable projects would not be served.

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