Crystallised industrial subsidy rights cannot be retrospectively reduced by later policy amendments after units have acted on the promise.

An industrial subsidy promised under an operative policy, and acted upon by setting up and running units, was treated as an accrued entitlement that had crystallised during the policy period. The High Court held that later notifications and amendments could not retrospectively curtail or rewrite that completed arrangement, because the subsidy was part of the inducement on which the petitioners had made substantial investments. A plea of rectification of mistake did not justify reducing benefits already earned, and the asserted public interest was insufficient on these facts to defeat the accrued right. The impugned action was set aside to the extent it reduced the promised subsidy, and the original policy benefit was restored.

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Issues: Whether the State could retrospectively curtail the investment subsidy promised under the industrial policy and related rules after the petitioners had acted upon the policy by setting up and operating their units, and whether the impugned notifications and amendments could defeat the petitioners' entitlement to the original subsidy.

Analysis: The subsidy scheme formed part of the inducement on which the petitioners established their units and made substantial investments. The benefits were specifically quantified and acted upon under the policy as originally notified, and the entitlement had crystallised during the policy period. A later notification and subsequent amendment, issued after the policy period had expired, could not be used to rewrite the completed arrangement or to curtail benefits already earned on the strength of the earlier promise. The plea of rectification of mistake was not accepted as a justification for retrospectively reducing benefits, and the claim of public interest was not sufficient to override the accrued entitlement in the facts of the case.

Conclusion: The retrospective curtailment of subsidy was held impermissible, and the petitioners were found entitled to the subsidy under the original policy terms.

Final Conclusion: The impugned action was set aside to the extent it reduced the promised subsidy, and the petitioners' entitlement under the original industrial policy was restored, with direction to compute and release the benefit accordingly.

Ratio Decidendi: A subsidy promise forming part of an industrial policy, once acted upon and crystallised into an accrued entitlement during the operative policy period, cannot be retrospectively withdrawn or reduced by a later policy amendment unless the change is justified by a legally sustainable ground that overrides the accrued right.

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