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2011 (5) TMI 1153
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.... time, inter-alia, in order to, strengthen the economy, attract fresh investment, further boost the growth of industry, increase annual present industrial growth rate from 8% to 12% in the next two years, to increase the present share of industry in Gross Domestic Product (GDP) from 17% to 25% in the next five years and to divert 15% of the present rural population to manufacturing & related occupations through rapid industrialization in the State of Punjab. 3. Not only that, the object of the publication of Industrial Policies was also to diminish the stress of agricultural sector, which predominates the State of Punjab being predominantly an agricultural State, occupying once a pride place in India. Subsequently, the agriculture sector witnessed the heavy losses, debt and stress on the farmers. So, with an eye to meet the hopes of the people and to engage them in a variety of larger, medium and small scale industrial units, based on agricultural produce to generate the required GDP, the State notified the different Industrial Policies, promising to grant various incentives, concessions, subsidies, interest, tax exemptions and other benefits indicated therein, such as:- ....
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....o be true, they set up their respective industrial units by spending huge amounts and started production as per the terms and conditions of the policies. The State of Punjab did not fulfill its promises and failed to make the payment, in lieu of various kinds of concessions, interest & fax exemptions, incentives, subsidies and other benefits on untenable grounds, leaving them in lurch. 5. The petitioner-Industries did not feel satisfied with the action of the respondents and preferred the present writ petitions, invoking the provisions of Articles 226 and 227 of the Constitution of India. 6. As identical questions of law and facts are involved and collectively argued by the counsel for the parties, therefore, I propose to dispose of the instant writ petitions, by virtue of this common judgment, in order to avoid the repetition. However, the facts, which require to be noticed for the limited purpose of deciding the core controversy, involved in these matters, have been extracted from (1) C.W.P. No. 19007 of 2002 titled as "M/s Balak Gases Oxygen Gas Plant and another v. State of Punjab and others", in this context. Be that as it may, the facts of individual cases would also be....
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....lage industry unit, tourism industry, electronic unit, export oriented unit, project of special significance, incentives to fly ash based units and incentives for rehabilitation of sick industry units including the exemption from taxes and interest so on and so forth. 9. According to the petitioner-Industries that in the same sequence, the Indian Boilers Act, 1923 and Standards of Weights & Measures (Enforcement) Act, 1985, Indian Electricity Act, 1910 and Rules, 1956, implementation of Environmental Laws were promised to be amended to improve and to match the industrial atmosphere. Self Certification scheme under Labour Laws and mechanism of forming the Monitoring Committees were also introduced. Similarly, for the development of border area, the State Government assures to provide capital subsidy to Small Scale Industrial Units to the extent of 30% of the Fixed Capital Investment upto maximum of Rs.30 lac per unit. 10. The case set up by the petitioner-Industries, in brief in so far as relevant, was that deeply believing the promises of the State to be true and sincere and in pursuance of the indicated Industrial Policies (Annexure PI), coupled with the relevant rules (Anne....
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...., it was further pleaded in para 28 as under:- "That it is the prerogative of the State government to assign priorities with the intention to have all-round development of the State and to attract investment in the State. The matter regarding disbursement is not mentioned in the policy Rules. The decision taken by the Government is an administrative decision for which Government is competent to make, priority to Export Oriented Units, was assigned with a view to earn valuable foreign exchange and similarly priority to Poultry Farms and persons belongs to Scheduled Caste Entrepreneurs was assigned with a view to uplift the weaker section of the society, moreover this was in lieu of special component scheme which was discontinued. The disbursement is made as per inter-district seniority list maintained at Head Office of unit pertaining to General category and priority categories, 80% of funds released were disbursed to units of General category and only 20% of funds released were used for making disbursement to priority categories. However, in compliance with the order dated 07.08.2001 passed by this Hon'ble High Court in another Case No. 14456 of 2000 - M/s Bassi Tubes ....
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....ts, then the State is estopped from denying the payment of the indicated benefits to them on the doctrine of promissory estoppel. In support of their contentions, they have placed reliance on the judgments of Hon'ble Apex Court in cases U.P. Power Corporation Ltd. and another v. Sant Steel and Alloys P. Ltd., 2008 (2) S.C.C .777 : A.I.R. 2008 (S.C.) 693 and Assistant Commissioner of Commercial Taxes (Asst.), Dharwar and others v. Dharmendra Trading Co. etc. etc., A.I.R. 1988 SC 1247. 18. On the contrary, the State counsel appearing on behalf of the respondents has acknowledged the existence of the Industrial Policies in question (Annexure PI) and the relevant rules framed thereunder (Annexure P2). He has also fairly ocucaded that the Government has already paid or is going to release the amount of subsidies to the different categories of Industries as per the Policy dated 8.9.2009, formulated OK the basis of the recommendations of the Committees constituted by the State. However, the State counsel further took pain to argue that the petitioner-Industries have no legitimate right, which can legally be enforced and Government has the power to amend the policies and to issue gu....
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....itions, which again was disposed of by a Division Bench of this Court, by virtue of order dated 11.5.2006 (Annexure P5 attached with CWP No. 4917 of 2007), which, in substance, is as under- "Learned Senior Deputy Advocate General appearing for the State of Punjab has placed on record a decision dated February 6, 2006, taken by the State Government of Punjab on the basis of the decision taken by the Council of Ministers in its meeting dated January 30, 2006. Decision taken by the Council of Ministers on January 30, 2006 is extracted as below: "The Council of Ministers noted that the State Government has already discussed the matter with Ministry of Finance, Government of India to issue bonds for discharging the liability created under Subsidies announced from time to time and it is expected that their formal approval will be received during February 2006 after which the Scheme will be notified. With the implementation of this Scheme, liability worth Rs.100 Crores Per Annum from 2006-07 will be cleared till the total liability created is discharged. However, in case this Bond Scheme could not be notified duetto any reason then the State Government will rele....
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....he promise were required to be carried out by the Government and determine which way the equity lies." 24. Possibly, no one can dispute with regard to the aforesaid observations, but, to me, the come would not come to the rescue of the respondents-State In the instant controversy, as at the same time and in the same judgment, it was also ruled in M/s Motilal Padampat's case (supra) in para 24 as under:- "Under our jurisprudence the Government is not exempt from liability to cany out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the judge of its own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen. The law may, therefore, now be taken to be settled as a result of this decision, that where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promisee would be enforceable against the....
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....i industrialists that they are surviving in Punjab despite every kind of odds and neighbouring States are taking away a major chunk of industries by attractive fiscal policies and incentives. To my mind, instead of taking immediate steps to save the industry in the State, which is fast falling prey to other States, having better atmosphere and facilities, the State of Punjab is still denying the benefits already announced, promised and accrued, leaving the petitioner-Industries in lurch in this direction. 26. In the instant cases, as the State has miserably failed to point out and no material, much less cogent, is forth coming on record, even to suggest remotely that how, when, at what stage and in what manner, the public interest is going to be served by denying the legitimate rights of the petitioner-Industries, accruing to them in pursuance of the indicated Industrial Policies/relevant rules published by the Government itself. On the contrary, to me, if the amount of incentives and subsidies is not paid to the petitioner-Industries, then, the industrial growth, which is already in doldrums, would further be jeopardized, causing huge loss to the State exchequer directly advers....
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.... Government offers certain benefits to attract the entrepreneurs and the entrepreneurs act on those beneficial offers. Thereafter, the Government withdraws those benefits. This will seriously affect the credibility of the Government and would show the shortsightedness of the governance. Therefore, in order to keep the faith of the people, the Government or its instrumentality should abide by their commitments. In this context, the action taken by the appellant-Corporation in revoking the benefits given to the entrepreneurs in the hill areas will sadly reflect their credibility and people will not take the word of the Government. That will shake the faith of the people in the governance. Therefore, in order to keep the faith and maintain good governance it is necessary that whatever representation is made by the Government or its instrumentality which induces the other party to act, the Government should not be permitted to withdraw from that. This is a matter of faith." 30. Meaning thereby, the doctrine of promissory estoppel is also applicable to the State and its instrumentality/officers. The Rule of estoppel is a principle of law by which a person is held bound by the represe....
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.... in exercise of their respective powers under Articles 154 and 162. Such notifications have the force of Saw as contained under Article 13(3) of the Constitution. 34. In this regard, the petitioner-Industries (in CWP No. 19007 of 2002) have specifically pleaded that they got prepared a project report taking into consideration various aspects, such as availability of land, production of gas and its possible uses, market potential, future scope of the industry and production targets. They worked out the production detail and process of manufacturing. The project report involving the investment of more than Rs.106 crores was prepared, which was accepted by the respondents. Thereafter, they approached the Union Bank of India for a term loan, which was sanctioned for a sum of Rs.57 lacs, vide letter (Annexure P4). Then, considering its case, sanction of Rs. 18,48,800/- as subsidy was granted to them, by means of letter (Annexure P3). 35. Likewise, the petitioner-Industries (in CWP No. 4917 of 2007) have reiterated that in pursuance of the promises sand policies of the respondents, they invested the huge amount for their projects in border area of Amritsar, after obtaining a term l....
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....t was not open to the State to backtrack and it was directed to implement the promises and confer such rights and benefits as were promised thereunder in entirety. 38. Similarly, in case Hardwari Lal, Rohtak v. G.D. Tapase, Chandigarh and others, A.I.R. 1982 P&H 439 (F.B.), the petitioner was appointed as Vice-Chancellor of the Maharshi Dayanand University for a period of three years with a further promise to the appointee that on the expiry of term of office of three years, his term will be renewed. After the expiry of period of three years, further term was not extended/renewed by the Chancellor. The petitioner challenged the action of the respondents on the basis of doctrine of promissory estoppel based under section 115 of the Evidence Act. Having considered the relevant provisions of law, it was authoritatively ruled by a Full Bench of this Court that the respondents were duty bound to fulfill and cannot backtrack the promises and a direction was issued to the Chancellor of the University to issue notification renewing the term of the petitioner as Vice-Chancellor. 39. In the present cases, the offer of subsidy is a manner of providing incentives for such investment and ....
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....es in a legal manner that too prospectively and even State cannot take away any such rights already accrued to a party by way of subsequent amendment. In the present cases, as the impugned guidelines are based on recommendations of the officers' committees, therefore, the administrative instructions/guidelines will not in any way override the effect and operation of Industrial Policies and relevant rules framed thereunder in this regard by the State. 41. Moreover, the respondents cannot be permitted to keep on changing the eligibility criteria for the benefit emitting from the scheme, which was primarily intended to promote the industrial growth in the specified category of area and industry in general and production and employment in border area in particular. As indicated earlier, the entitlement of petitioner-Industries to claim the incentives and subsidies under the scheme has not been denied and was sanctioned, but the respondents did not release the amount for one or the other untenable grounds in the garb of impugned orders, which are entirely beyond the scope and jurisdiction of the original Industrial Policies and relevant | rules framed thereunder. In the same mann....