Gujarat High Court
M/S Sureshchandra Dhulabhai Patel vs Secretary, Industries And Mines ... on 30 November, 2023
Author: Vaibhavi D. Nanavati
Bench: Vaibhavi D. Nanavati
NEUTRAL CITATION
C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 13056 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 389 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 1139 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 1191 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 6823 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 9167 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 9151 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 13154 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 13271 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 13156 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 17393 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 13669 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 13173 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 15535 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 13604 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 13601 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 13550 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 13486 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 13553 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 13552 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 15778 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 15249 of 2021
Page 1 of 113
Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION
C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023
undefined
With
R/SPECIAL CIVIL APPLICATION NO. 15250 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 14221 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 14376 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 14379 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 14954 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 14610 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 14623 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 15812 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 14604 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 14607 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 17445 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 15810 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 17426 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 17584 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 14906 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 15875 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 17444 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 3013 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 15776 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 15774 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 16009 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 16029 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 17396 of 2021
With
Page 2 of 113
Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION
C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023
undefined
R/SPECIAL CIVIL APPLICATION NO. 16669 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 16619 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 16634 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 16594 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 16763 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 17052 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 17276 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 17172 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 19192 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 17390 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 17788 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 18542 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 20084 of 2021
With
R/SPECIAL CIVIL APPLICATION NO. 1771 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 9450 of 2009
With
R/SPECIAL CIVIL APPLICATION NO. 11500 of 2008
With
R/SPECIAL CIVIL APPLICATION NO. 26697 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 160 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 164 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 26701 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 172 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 174 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 175 of 2023
FOR APPROVAL AND SIGNATURE:
Page 3 of 113
Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION
C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023
undefined
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
=============================================
1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
=============================================
M/S SURESHCHANDRA DHULABHAI PATEL
Versus
SECRETARY, INDUSTRIES AND MINES DEPARTMENT, GOVT. OF
GUJARAT
=============================================
Appearance:
AISHWARYA REDDY(9713) for the Petitioner(s) No. 1,2
GUPTA LAW ASSOCIATES(9818) for the Petitioner(s) No. 1,2
PARITOSH R GUPTA(7583) for the Petitioner(s) No. 1,2
GOVERNMENT PLEADER for the Respondent(s) No. 3
MR PREMAL R JOSHI(1327) for the Respondent(s) No. 4,6
NOTICE SERVED for the Respondent(s) No. 1,2,5
=============================================
CORAM:HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 30/11/2023
CAV JUDGMENT
1. Since the issues raised in all the captioned petitions are identical in nature, heard analogously and are being disposed of by this common order. For the sake of convenience, the Special Civil Application No.13056 of 2021 be treated as the Page 4 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined lead matter at the request by learned counsels appearing for the petitioners in the respective petitions.
2. By way of present petition, the petitioners herein have invoked Article 226 of the Constitution of India challenging the legality and validity of the three communications dated 20.07.2021, 02.08.2021 and 05.08.2021 issued by the concerned respondents along with subsequent addendum issued by the respondent No.2 dated 8/9.06.2022 adding Clause - 8 in the Solar Policy, 2019 wherein, the said addendum clarifies that the beneficiaries under the Solar Policy, 2019 shall not be eligible for any subsidy from the State Government under any of the schemes/policies. Being aggrieved by the same, the petitioners herein have prayed for the following reliefs:
"(A) Your Lordships may be pleased to issue a writ of Mandamus, or writ in the nature of Mandamus or any other appropriate writ, order or direction, quashing and setting aside the impugned communication dated 20.07.2021 issued by the respondent no.2-Department as well as the impugned communication dated 02.08.2021 issued by the respondent no.1-Department on the basis of the impugned communication issued by the respondent no.2 as aforesaid, and so also the impugned communication dated 05.08.2021 issued from the office of the respondent no. 3 and addressed to the General Manager, District Industries Centers (ALL) as regards withdrawal of the subsidy at Annexure-"H" (Colly) of this petition, by holding and declaring that the same as illegal and unlawful and violative of the provisions of Article 14 and 19(1) (g) of the Constitution of India;
(B) Your Lordships may be pleased to issue a writ of Mandamus, or writ in the nature of Mandamus or any other appropriate writ, or order directing the respondents to extend the benefit of subsidy provided under Page 5 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined the "Gujarat Industrial Policy, 2020 (Scheme for assistance to Micro, Small and Medium Enterprises)" to Small Scale Distributed Solar Projects set up by the Petitioner under the "Policy for Development of Small Scale Distributed Solar Projects-2019";
(C) Pending admission, hearing and final disposal of the captioned petition. Your Lordships may be pleased to stay the operation and implementation of the impugned communications dated 20.07.2021, 02.08.2021 and 05.08.2021 issued by the respondent authorities;
(D) Your Lordships may be pleased to grant ex-parte ad-interim relief in terms of Para-8(C) above in the interest of justice;
(E) Any other and further relief, as this Hon'ble Court deems fit and proper in the interest of justice.
Following prayers are added pursuant to order dated 27.7.2022 passed by this Hon'ble Court in C.A. (Amendment) No.2 of 2022. (F) Your Lordships may be pleased to issue appropriate writ, order or direction holding and declaring that the addendum dated 8.6.2022 at Annexure-JJ to the petition, to the extent of it having been given a retrospective effect, is bad, illegal and violative of Article 14 of the Constitution of India;
(G) Your Lordships may be pleased to issue appropriate writ, order or direction holding and declaring that the addendum dated 8.6.2022 at Annexure-JJ to the petition is inapplicable in the case of the petitioners; (H) Your Lordships may be pleased to issue appropriate writ, order or direction to the Respondent authorities to extend the Scheduled Commercial Operation Date (SCOD) as provided in the Power Purchase Agreement;
Following prayers are added pursuant to order dated 8.9.2022 passed by this Hon'ble Court in C.A. (Amendment) No.3 of 2022. (I) Your Lordships may be pleased to hold and declare the action of the respondents in encashing the bank guarantee during the pendency of the petition for recovering the amount of penalty imposed for the purported delay in commissioning of the project, as bad, illegal, arbitrary and violative of Article 14 of the Constitution of India; (J) Your Lordships may be pleased to direct the respondents to refund the amount recovered by them by encashing the Bank Guarantee or otherwise with interest @9% from the date of recovery till such refund is made available;
(K) During the pendency and final hearing of the captioned writ petition, Your Lordships may be pleased to restrain the respondents herein from taking any further action against the petitioners including cancellation of the Power Purchase Agreement (PPA) executed between the petitioners and MGVCL and / or any such action which is detrimental to the interest of the petitioners concerning the cause raised in the writ petition, in the interest of justice;
Page 6 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined (L) Your Lordships may be pleased to hold and declare that the provisions of Government Resolution dated 5.10.2022 whereby Aatmanirbhar Gujarat Scheme for Assistance to MSMEs is floated, would not be applicable to the petitioners in view of the claim raised by the petitioners in the captioned petition;
(M) Your Lordships may be pleased to declare clauses 7, 21 and 24 of Government Resolution dated 5.10.2022 as bad, illegal, arbitrary and violative of Article 14 of the Constitution of India; (N) Your Lordships may be pleased to struck down clause 7, 21 and 24 of Government Resolution dated 5.10.2022, in the interest of justice."
3. The brief facts leading to the filing of the present petition read thus:
3.1 The petitioner No.1 - M/s Sureshchandra Dhulabhai Patel is a Proprietary concern, registered with the government as a MSME unit holding Udyam Registration Certificate bearing Registration No. UDYAM-GJ-31-0000458 wherein petitioner No. 1 is classified as a "Micro" enterprise under the manufacturing sector. The petitioner No. 2 is the sole proprietor of the petitioner No. 1 Proprietary concern and is joined to the present proceedings because the petitioner No.2 is materially and substantially interested in the conduct and business affairs of the proprietary concern.
3.2 The respondent No.1 amongst other objects in order to support the development of small and medium enterprises, value addition on local primary sources and increasing the share of manufacturing in State gross domestic product, Page 7 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined introduced an Industrial Policy, 2015 providing for Scheme for assistance to Micro, Small and Medium Enterprises (MSME) within the State of Gujarat. The said policy scheme Policy was introduced by the respondent No.1 on 19.01.2015 with effect from 01.01.2015 and the same was to remain in operation for a period of five years. The said Policy, 2015 is duly attached at Annexure - A, Page 39.
3.3 The Policy for development of Small Scale Distributed Solar Projects, 2019 (for short 'the Solar Policy, 2019') came to be issued by the respondent No.2 vide Resolution dated 06.03.2019 which aimed at facilitating development of Small Scale Solar Project with size of 0.5 MW and above but, up to 4 MW in the distribution network of licensees of Gujarat State in rapid manner. The operative period for this Solar Policy, 2019 was fixed as 5 years and the Solar Projects that were to be installed and commissioned during the operative period would be eligible for the benefits and incentives declared under the Solar Policy, 2019, for a Power Purchase Agreement (PPA) term of 25 years. The policy was for development of Small Scale Solar Projects, which was specifically defined in Clause - 5.13 of the Solar Policy, 2019, to mean solar projects installed at Page 8 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined single/multiple locations with aggregate capacity of 0.5 MW and above but, not exceeding 4 MW installed and commissioned during the operative period of the said Policy.
Thus, the focal point of introduction of the Solar Policy, 2019 was development and incentivization of investment of Small Scale Solar Projects having an aggregate capacity between 0.5 MW to 4 MW. The said Solar Policy, 2019 is duly attached at Annexure - B. 3.4 In terms of the said Solar Policy, 2019, the State of Gujarat intended to promote the generation and sale of energy to State Discom at tariff determined through competitive bidding process along with addition of Rs.0.20 per unit. The said addition of Rs.0.20 per unit was allowed for Rs.0.12 per unit for saving in transmission loss as power was to be injected in distribution grid and Rs.0.08 per unit was to compensate for expensive land cost, higher capital investment and maintenance cost due to small size of the projects. The Policy further revealed that capital cost for setting up the projects was to be borne entirely by the applicant and no financial support was intended to be provided for setting up such solar power plant. The guidelines for implementation of the said Page 9 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined Solar Policy, 2019 dated 15.11.2019 is duly attached at Annexure - C.
4. It is the case of the petitioners that the petitioners have applied for setting up Solar Power Project under the Solar Policy, 2019 and pursuant to the same, the project has been duly registered with the GEDA. Subsequent to the registration of the project, a Power Purchase Agreement (PPA) has also been executed between the petitioners and the respondent No.6 - Madhya Gujarat Vij Company Limited (MGVCL) on 24.04.2021. As required, an amount of Rs.3,12,500/- has also been furnished towards the Performance Bank Guarantee in favour of the respondent No.6 - MGVCL, which is duly produced at Annexure - M1.
4.1 In terms of the Solar Policy read with the regulations framed thereunder, the developers are required to declare 'Scheduled Commercial Operation Date' (SCOD) of the project, being a date within the period of 12 months from the date of signing of the PPA. In terms of the PPA signed by the petitioners, the Scheduled Commercial Operation Date was declared as 19.03.2022 and therefore, the project was required to be commissioned by the said date. In order to meet with the Page 10 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined said deadline, the petitioners took necessary steps which are enumerated in paragraph 4.10 in the petition. 4.2 It is the case of the petitioners that while the project was in the process of being commissioned, the impugned communication dated 20.07.2021 came to be issued which created serious doubt with regard to the economic viability of the project as the subsidies which were otherwise eligible under the Gujarat Industrial Policy, 2020 (for short 'the Policy, 2020') were declared not to be available to the projects set up under the Solar Policy, 2019. Being aggrieved by such action on part of the concerned authorities, the petitioners preferred present petition challenging the said communication. It is the case of the petitioners without the benefit of subsidy as envisaged under the Policy, 2020, the project would not be commercially viable. It was therefore, prayed that appropriate directions be issued to hold and declare that the benefits envisaged under the Policy, 2020 would also be available to the projects set up under the Solar Policy, 2019. 4.3 The period within which the project was required to be commissioned by the petitioners under the Solar Policy, 2019 expired on 19.03.2022. The respondent No.6 vide Page 11 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined communication dated 17/18.05.2022 informed that though the SCOD was over on 19.03.2022, the petitioners have not completed the solar project and therefore, in light of the Clause - 3.3 of the PPA, the liquidated damages for delay in commissioning the project at the rate of Rs.3000/- per day per MW for the capacity delayed beyond SCOD subject to ceiling of Rs.5 lakhs/MW was required to be recovered and as per the PPA, the amount payable towards penalty by the petitioners up to 17.05.2022 comes to Rs.98,412/-. Accordingly, the petitioners were informed and called upon to deposit the said amount of penalty immediately. The said communication dated 17/18.05.2022 is duly attached at Annexure - M2. 4.4 The petitioners state that in view of the aforesaid communication dated 17/18.05.2022, the petitioners addressed a communication dated 24.05.2022 to the respondent No.6 and informed that the penalty imposed by the said communication was not acceptable to the petitioners. Amongst other submission, the petitioners also additionally requested for extension of time for execution of the project by communication dated 24.05.2022, duly attached at Annexure - M3. The said communication was replied to by the respondent Page 12 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined No.6 vide reply dated 10.06.2022 whereby, the respondent No.6 informed the petitioners that the request for extension of SCOD was placed before the competent authority however, the same was rejected and therefore, the petitioners should pay the penalty as imposed by the communication dated 17/18.05.2022. The said reply/communication is duly attached at Annexure - M4.
4.5 The petitioners wrote a letter dated 15.07.2022 to the Chief Engineer/Additional Chief Engineer (RA&C), MGVCL, Vadodara and pointed out necessary facts and thereby, requested for reviewing the decision for extension of SCOD keeping in mind the fact concerning the decision taken by the Government of India with regard to extension of time period. The said letter dated 15.07.2022 along with the Office Memorandum dated 12.05.2021 issued by the Government of India, Ministry of New and Renewable Energy (MNRE), New Delhi, is duly attached at Annexure - M5.
4.6 Pursuant to the aforesaid letter, the Additional Chief Engineer (RA&C), MGVCL, Vadodara vide reply dated 27.07.2022 stated that by communication dated 16.07.2022, the Office has asked for the guidelines from the respondent Page 13 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined No.5 - GUVNL as regards whether the request for extension of project under SSDSP Scheme should be granted or not. It was thus, informed that on receipt of the information received, the same would be conveyed to the petitioners.
4.7 It is the case of the petitioners that pending the aforesaid, by communication dated 03.08.2022 addressed by the respondent No.6 to the Branch Manager, Baroda Gujarat Gramin Bank, the Performance Bank Guarantee furnished by the petitioners is encashed in terms of Clause - 4.2.2 of the PPA. The aforesaid action of recovering the amount from the petitioners by encashing the bank guarantee is bad, illegal, arbitrary and violative of Article 14 of the Constitution of India and the same is questioned and challenged in the present proceedings.
4.8 It is the case of the petitioners that while the Solar Policy, 2019 introduced on 06.03.2019, the State of Gujarat came out with another revised policy namely the Gujarat Industrial Policy, 2020 (for short 'the Policy, 2020'), specifically targeted for development and promotion of MSME units in the State of Gujarat. The said Policy would show that it was continuation of the earlier Policy which was introduced in the year 2015. The Page 14 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined preamble of the Policy, 2020 also envisaged that its primary mission includes support for development of MSMEs, focus on export competitiveness; Vocal for Local to become Global and thus, strengthen integrated value chains across product segments. Under the said Policy, various schemes have been introduced for manufacturing and service sector. For the present petition, Scheme - 1 and Scheme - 2 which provides for 'Assistance of Capital Investment Subsidy' and 'Assistance for Interest Subsidy' respectively are relevant. The Policy on the whole envisages investment by the applicant - enterprise, being a MSME unit, in Gross Fixed Capital Investment for forward integration, backward integration and/or diversification. In line with the area where such investment is made and the quantum of investment made, the Policy, 2020 envisages subsidy in the nature of Capital Investment Subsidy and Interest Subsidy to support such applicant enterprise. 4.8.1 Scheme 1 i.e. the Capital Investment Subsidy, envisages benefits in the form of certain percentage of Term Loan utilized by the applicant enterprise for acquisition of 'Gross Fixed Capital Investment. The term 'Gross Fixed Capital Investment' has been defined under Clause 1 (v) to the said Policy to mean Page 15 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined and include investment made in building, plant and machinery, utilities, tools and equipment, and other assets (excluding land) required for manufacturing the end product. Moreover, the said benefit is a one-time benefit ascertained on the basis of Term Loan disbursed to the applicant enterprise required for setting up such infrastructure.
4.8.2 Scheme 2 under the said Policy, pertains to Interest Subsidy and envisages conferment of benefits in the form of certain percentage of Term Loan utilized by the applicant enterprise for acquisition of gross fixed capital investment. Unlike the Capital Subsidy, the Interest Subsidy is calculated per annum for a period as provided thereunder. Perusal of clause 3.1.1 (c), 3.3 (g), (h) & (i) clearly shows that in contrast with the Capital Subsidy, the said Interest Subsidy benefit is intended not to counteract the initial investment but to reduce the burden of interest component incurred for availing Term Loan from Bank/Financial Institution.
Thus, by virtue of the said two schemes under the Policy,2020, MSME units are not only encouraged but also supported to set up infrastructure for forward integration, backward integration and/or diversification for overall Page 16 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined development of MSMEs and manufacturing competitiveness in the State of Gujarat. It is stated that the Solar Policy of 2019 was not successful and the projects setup there under were not economically viable, however, it is only after the Industrial Policy-2020 is introduced the Solar Projects seem to have become economically viable on account of the subsidy benefit extended under the said policy. The said Policy, 2020 is duly attached at Annexure - D. 4.9 It is further the case of the petitioners that under the Policy, 2020, endeavor was to give support to all MSMEs engaged in the manufacturing sector. The petitioners further state that the generation of power through conventional as well as non-conventional processes has always been treated as a manufacturing activity. Reliance is placed by the petitioners on clarification dated 05.11.2014 on categorization of activities under manufacturing and service under the MSMED Act, 2006 issued by the Director MSME (Pol.), New Delhi, where power generation by conventional as well as by non-conventional processes has been considered as a manufacturing activity. The said clarification dated 05.11.2014 is duly produced at Annexure - E. Page 17 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined 4.10 In the aforesaid facts, the Solar Power Projects set up for generation of power were very much covered under the Policy, 2020. It is the case of the petitioners that the present policy introduced in September, 2020 is not a new endeavor for the State of Gujarat but continuation of the earlier Industrial Policy which was introduced on 19.01.2015 for the period 2015-2020. Even under the said Policy, such support and encouragement was given to MSMEs in form of Capital Investment Subsidy and Interest Subsidy for setting up similar renewable and non- conventional energy projects. Thus, the scope of the present Scheme and manufacturing facilities covered under the present Scheme has remained the same. Reference in the said regard has also been made to a letter dated 07.03.2020 issued by the Additional Industries Commissioner from the office of the respondent No.3 whereby, it was clarified that provisions of Circular - 19 dated 28.11.2017 prepared during the meeting of the State Level Implementation Committee on 21.09.2017, shall also be applicable to all renewable energy projects. It is further stated that the Circular - 19 was prepared for extending the assistance to the Windmill Projects set up under the Industrial Policy of 2009 and 2015. In view thereof, it is Page 18 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined clear that the assistance in the form of subsidy was also undoubtedly extended to the renewable energy projects. Moreover, the clarification is also issued by the Deputy Commissioner, MSME recently on 27.10.2020 again conveying that power generation through renewable energy falls under the manufacturing activity and the same would be entitled to MSME incentive schemes. Copies of the letter dated 07.03.2020 and 27.10.2020 are duly attached at Annexure - F colly.
4.11 It is the case of the petitioners that in light of the aforesaid clarifications, the MSMEs who have set up power generation projects have also been extended the benefit of subsidy under the earlier Gujarat Industrial Policy, 2015. Reference is made with respect to the provisional sanction letter issued in favour of one M/s Milan Sun Power, duly attached at Annexure - G. 4.12 It is the case of the petitioners that, there being no change in the overall scheme of the Policy regarding its coverage, there is no doubt or dispute that the Solar Projects set up by the MSMEs were also covered under the Policy, 2020 and were eligible to receive the benefits conferred under Page 19 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined Scheme 1 and Scheme 2 of the said Policy. There has been no change in the scheme to warrant such interpretation and moreover, no clarifications to the contrary has ever been issued by the respondent No.1 while introducing the Policy, 2020 to justify the same.
4.13 In view of the aforesaid set of facts, the petitioners herein are constrained to approach this Court for the prayers as referred above.
5. Heard Mr. Mihir Joshi, learned Senior Counsel assisted by Mr. Partitosh R. Gupta, learned advocate for Gupta Law Associates for the petitioners in Special Civil Application No. 13056 of 2021, Mr. Rohan Lavkumar Shah, learned advocate with Mr. Aaditya P. Dave, learned advocate for Nanavati Associates in Special Civil Application No. 9167 of 2023 and Special Civil Application No. 9151 of 2023 and learned advocates appearing for the respective petitioners, Mr. Kamal Trivedi, learned Advocate General assisted by Mr. Vinay B. Vishen, learned Assistant Government Pleader appearing for the respondent - State and Mr. Prakash Jani, learned Senior Counsel assisted by Mr. Premal Joshi, learned advocate appearing for the respondents- Gujarat Urja Vikas Nigam Page 20 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined Limited and Madhya Gujarat Vij Company Limited. Submissions on behalf of the petitioners
6. Mr. Mihir Joshi, learned Senior Counsel appearing for the petitioners, at the outset, submitted that the petitioners herein are entitled to be extended the benefit of subsidies provided under the Scheme - 1 and Scheme - 2 of the Policy, 2020; the petitioners having invested huge amounts in setting up the Solar Projects. It was further submitted that there is no room for creating any doubt as regards the applicability of the Scheme - 1 and Scheme - 2 of the Policy, 2020 to the MSME units. The aforesaid submission was fortified by Mr. Mihir Joshi, learned Senior Counsel in view of the fact that the Policy, 2020 in itself endeavors to support the MSMEs engaged in manufacturing sectors. The generation of power through conventional and non-conventional process/method has always been treated as a manufacturing activity. The aforesaid being the case, the solar power project set up by the petitioners for generation of powers is very much covered by the Policy, 2020 and there was no occasion for the respondent authorities to arbitrarily withdraw the benefits conferred under the said policy by altering the very object with which the Policy, 2020 is Page 21 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined framed.
6.1 Mr. Joshi, learned Senior Counsel, submitted that the Policy, 2020 is an extension of the earlier policy of 2015 wherein the identical benefits were envisaged and extended to the MSME units for setting up the power generation projects. It was submitted that with the alteration of the said policy, the benefits conferred therein cannot be withdrawn by mere issuance of a communication. It was also submitted that the Policy, 2020 having been brought into existence by way of Resolution, has an effect of law. In view thereof, the benefits flowing from such Resolution could not be taken away by administrative actions. It was submitted that the benefits qua the petitioners under the Policy, 2020 are sought to be withdrawn on account of ill-conceived misunderstanding that over-lapping benefits are availed on the benefits. It was submitted that there are no over-lapping benefits under the Policy, 2020 and the Policy for Development of Small Scale Distributed Solar Projects, 2019.
6.2 Mr. Joshi, learned Senior Counsel, submitted that the Solar Policy, 2019 does not contemplate conferment of any financial assistance in setting up the plant. It was submitted Page 22 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined that the Solar Policy, 2019 is targeted to promote Small Scale Solar Projects with a size of 0.5 MW to 4 MW amongst all units, whether by MSME unit or otherwise. Clause - 8 of the Solar Policy, 2019 provides that the applicable tariff shall include the tariff contracted in the competitive bidding process along with addition of Rs.0.20 per unit which shall also form part of the PPAs signed for setting up the Solar Project. Further, Clause - 16 of the guidelines dated 15.11.2019 provides that capital cost of the project including the cost of transmission/electrical line from the plant site to the interface point at the GETCO Substation etc. shall be entirely at the cost of the applicant. It was further submitted that Clause - 17 further in no uncertain terms, clarifies that no financial support shall be provided towards setting up the solar power plant. Placing reliance on the aforesaid, it was submitted that clearly the Solar Policy, 2019 does not grant any financial support in setting up the plant but confers benefits to offset the operational financial obligations of the entities.
6.3 Placing reliance on Scheme 1 and Scheme 2 of the Policy, 2020, Mr. Joshi, learned Senior Counsel, submitted that the said Policy provides support towards offsetting financial burden Page 23 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined in setting up the building, plant, machinery etc. for the manufacturing process. Placing reliance on the aforesaid, it was submitted that there is no overlapping of benefits as erroneously believed by the respondent authorities. It was submitted that in fact the Solar Policy, 2019 and the Policy, 2020 are mutually exclusive and independent. It was submitted that Clause - 16 of the Policy, 2020 provides that the enterprise that has availed assistance under these schemes will not be entitled to avail benefit under any other scheme of the department of the State Government for the same component, unless and otherwise specified under that scheme. The said clause does not get attracted in the present case inasmuch as benefits conferred under the Solar Policy, 2019 is not for setting up the infrastructure but to counteract only operational burden incurred by the applicant therein. The said clause therefore, does not dis-entitle the benefit of subsidy extended under the Policy, 2020 to solar projects set up under the Solar Policy, 2019. In view of the aforesaid submissions, it was submitted that the impugned communications as referred to in the prayer clause are required to be quashed and set aside.
Page 24 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined 6.4 Mr. Joshi, learned Senior Counsel, submitted that the impugned communications at the instance of the respondent authorities are hit by the principle of 'Promissory Estoppel'. It was submitted that in view of the Policy, 2020 and the Solar Policy, 2019, the petitioners have invested hugely towards the purchase of land, equipments, services etc., for setting up the solar project. Had there been no promise made by the State Government for providing subsidy under the Policy, 2020, the petitioners would not have ventured into setting up of the solar project but, having promised to extend the benefit of subsidy, the investments were made and the Solar Project is set-up, resulting into alteration of the position of the petitioners. It was submitted that by the impugned communications, the State Government is estopped from going back on their promises and assurances. It was submitted that time and again it was held by the Hon'ble Apex Court that where the promise is made by the person knowing that it would be acted ypon by the person on whom it is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and would not be entitled to go back upon it.
To substantiate the aforesaid submission, Mr. Joshi, Page 25 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined learned Senior Counsel, placed reliance on the ratio as laid down by the Hon'ble Apex Court in (1979) 2 SCC 409 in case of M/s Motilal Padampat Sugar Mills Company Limited vs. State of Uttar Pradesh & Ors., AIR 2008 SC 693 in case of U.P. Power Coproration Limited & Anr. vs. Sant Steels & Alloys P. Ltd. & Ors.. Placing reliance on the aforesaid position of law, Mr. Joshi, learned Senior Counsel, reiterated the contention that the impugned communications therefore, being hit by the principle of 'Promissory Estoppel' are required to be quashed and set aside.
6.5 Mr. Joshi, learned Senior Counsel, submitted that the petitioners as well as other entities have acted on the promise made by the Government which is sought to be retracted on the basis of such promise, the petitioners having invested huge amounts and having altered their position, the same cannot now be reversed. With regard to setting up of a solar project, the scheme under Solar Policy envisages execution and operation of the plant within strict time frame. The setting up of the Solar Plant involves prospective planning ranging from procurement of material as well as the parcel of land on which the plant is to be erected. Upon declaration of the Policy, the Page 26 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined petitioners have not only made various investments but also undertaken various obligations as referred above. It was submitted that under such circumstances, it is now not open for the respondent to change its stand on the benefits available under the Policy to the detriment of the petitioners. It was submitted that the action on the part of the respondent is arbitrary, unfair and contrary to the principle of promissory estoppel.
6.6 Mr. Joshi, learned Senior Counsel, submitted that the respondent herein is concerned with promotion of generation of power through conventional and non-conventional sources. The benefits conferred by the State for promotion of MSMEs and for development of manufacturing facilities across the State of Gujarat is not a matter with which the said respondent is concerned in any manner. That being the case, the purported decision by the respondent No.2 regarding non- availability of benefit of subsidy on the face of it, is illegal and without any authority of law. The Policy, 2020 has been introduced with a view to accelerate the growth of MSME and investment in manufacturing sector by such MSME units within the State of Gujarat. Placing reliance on the aforesaid, it was Page 27 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined submitted that there is no rationale in excluding the case of the petitioners from the purview of the benefits conferred under the Policy, 2020. Ousting of the investment made by MSME units in setting up Solar Projects would not only be in violation of the clear letter of the Policy, 2020 but, would also arbitrary and discriminatory in nature. The petitioners being MSME unit and having invested amounts for setting up a Solar Project, which is considered as a manufacturing facility, the benefits promised under the Policy, 2020 be extended to the petitioners and on the aforesaid ground alone, the impugned communications are required to be quashed and set aside. 6.7 Mr. Joshi, learned Senior Counsel, submitted that the reason for introducing the addendum in question as given in the preamble to the addendum is that despite giving benefits under the Solar Policy, 2019, representations were received for passing of benefits by way of subsidy under MSME scheme and therefore, to avoid such ambiguities, the addendum is issued. It was submitted that the aforesaid issue was taken up for discussion at the relevant point of time at the appropriate level by the respondent authorities and therefore, it appears that an amendment was brought on 24.03.2021 in the Solar Policy, Page 28 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined 2019. It was submitted that the said addendum dated 8/9.06.2022 has been issued after completion of pleadings in the writ proceedings inasmuch as it is clearly contended by the petitioners in their affidavit-in-rejoinder as to how the bar contained in Clause - 16 of the Policy, 2020 would be inapplicable in the case of the petitioners. It was submitted that the petitioners have clearly contended that the prohibition contained in Clause - 16 of the Policy, 2020 is qua receiving benefits in any other schemes of other departments of the State Government for the 'same component'.
6.8 It was reiterated by Mr. Joshi, learned Senior Counsel, that if Clause - 8 of the Solar Policy, 2019 is perused in juxtaposition to Scheme - 1 and Scheme - 2 of the Policy, 2020, the bar as contained in Clause - 16 of the Policy, 2020 is not attracted and it is only after having realized about the said fact, the impugned addendum is introduced to Solar Policy, 2019. Placing reliance on the aforesaid submissions, it was submitted that the addendum is unwarranted and is required to be struck down. To substantiate the aforesaid contention, Mr. Mihir Joshi, learned Senior Counsel, placed reliance on (2015) 1 SCC 1 in case of CIT vs. Vatika Township (P) Limited , Page 29 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined and submitted that the action of giving retrospective effect to the said addendum is also contrary to the rules of interpretation and the legal position in the said regard. It was submitted that the addendum could not have been given a retrospective effect. It was also submitted that it was not a clarification and in view thereof, the question of giving retrospective effect does not arise and therefore, the same is bad in law. It was submitted that the addendum issued on 8/9.06.2022 is against the public interest and is averse to the cause raised in the present petition. As the addendum takes away the rights that have accrued in favour of the petitioners seeking subsidy under Policy, 2020 and the bar under Clause - 16 thereof being not attracted, the addendum is required to be declared as ultra-vires to the provisions of Article 14 of the Constitution of India.
6.9 Mr. Joshi, learned Senior Counsel, submitted that the amendments brought in the Policy, 2020 by virtue of introducing Aatmanirbhar Gujarat Scheme for assistance to MSMEs vide Government Resolution dated 05.10.2022 are illegal. It was submitted that the action of incorporating Clause
- 7, 21 and 24 in the said scheme for assistance to MSMEs in Page 30 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined itself is bad as the same are incorporated with ill intention so as to frustrate and eliminate the cause raised in the present petition. The genesis of the entire dispute is that the petitioners have been denied the benefits of subsidy provided under the Policy, 2020 therefore, the developers who are availing the benefit of the said scheme cannot be heard to say that they want the benefits of subsidy under the Policy, 2020. The aforesaid contention is specifically dealt with by the petitioners in their affidavit in rejoinder more particularly, paragraphs 5.5 and 5.6 wherein, it is clearly pointed out as to how there is no overlapping of the Solar Policy, 2019 and the Policy, 2020. It was submitted that the Aatmanirbhar Gujarat Scheme for assistance to MSMEs, 2022 (for short 'the Policy, 2022') is also bad and illegal for the reason that it seeks to deny benefits to the petitioners which they were otherwise eligible to receive under the Policy, 2020. Such change in stance by the Government is also ex-facie, arbitrary and unreasonable inasmuch as it seeks to modulate available benefits after the recipients have already acted on the promise extended by way of the earlier policy. In view of the declaration made under the earlier policy and the petitioners having acted on it, the respondent State should not be Page 31 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined permitted to alter its promises by incorporating any change in the policy which may have an impact on the investments made prior thereto.
6.10 Mr. Joshi, learned Senior Counsel, submitted that the contents of Clauses - 7, 21 and 24 of the Policy, 2022 are applied retrospectively which was not the case during the subsistence of Clause - 16 of the Policy, 2020. The said clauses fail to take into consideration the cases where investments have been made pursuant to the promises made by the Government to extend the benefit of subsidy under the Policy, 2020 to the MSMEs who have set up their solar projects under the Solar Policy, 2019. In view thereof, it was submitted that as the pipeline projects are not protected and the clauses in question seek to apply restrictions even in cases where substantial investments have been made, Clause - 21 and 24 are required to be struck down. Placing reliance on the aforesaid submissions, Mr. Joshi, learned Senior Counsel, submitted that the petition is required to be allowed and the impugned communications issued by the respondents are required to be quashed and set aside.
6.11 Mr. Joshi, learned Senior Counsel, lastly submitted that Page 32 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined the benefits of both the schemes i.e. Solar Policy, 2019 and the Policy, 2020 be made available to the petitioners. The addendum dated 8/9.06.2022 be quashed and set aside. Clause - 16 wherein the word 'component' is used in the Policy, 2020, is 'expressly inclusive' and in view thereof, the petitioners be granted the benefits of the Policy, 2020. Submissions on behalf of the respondent No.1
7. Mr. Kamal Trivedi, learned Advocate General appearing for the respondent - State, placed reliance on the affidavit-in- reply filed by the respondent No.1- State dated 24.02.2022 duly produced at page 113, the additional affidavit of the respondent No.1 dated 01.07.2022 duly produced at page 173 and the affidavit-in-reply filed by the respondent No.1 in response to the amendment carried out by the petitioners dated 11.04.2023 duly produced at page 208.
7.1 Mr. Kamal Trivedi, learned Advocate General, at the outset, submitted that the petitioners having decided to avail the benefits of Solar Policy, 2019 by having executed PPAs with the GUVNL/DISCOMs, the petitioners herein are not entitled to the benefits of both the worlds. It was submitted that the Page 33 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined Policy, 2020 prohibits the availment of benefits under any other scheme of the other department of the State Government. In view of the same, the petitioners are not justified in contending that the petitioners were encouraged to make huge investments solely relying upon the announcement of the benefits under the Policy, 2020 inasmuch as the petitioners decided to avail the benefits of Solar Policy, 2019 by having applied under the same.
7.2 Mr. Trivedi, learned Advocate General, submitted that the decision of the State Government conveyed through the impugned communications is well thought and the same has been taken after due deliberations and consultations with the concerned departments. The aforesaid policies have been promulgated by the State Government in public interest. It was submitted that the Solar Policy, 2019 aims to facilitate the development of small scale solar projects with the size of 0.5MW to 4 MW, inter-alia, providing for signing of PPAs with Discoms. Under the said policy, the solar projects which have applied and have entered into PPA and which would be installed and commissioned during its operative period, shall become eligible for the benefits and incentives declared under Page 34 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined the said policy for a PPA term of 25 years. Under the Solar Policy, 2019, over and above the base tariff contracted, an addition of Rs.0.20 per unit is allowed to the developers like the petitioners wherein, Rs.0.12 per unit is available towards the transmission loss on power and Rs.0.08 per unit is to compensate for expensive land cost, higher capital investment and maintenance cost due to small size of projects. 7.3 Mr. Trivedi, learned Advocate General, submitted that the Policy, 2020 provides for the Scheme for Assistance to Micro, Small and Medium Enterprise (MSME) in general and confers the benefit in form of subsidy i.e. Scheme - 1 Capital Investment Subsidy and Scheme - 2 - Interest Subsidy. Placing reliance on the aforesaid submission, Mr. Trivedi, learned Advocate General, submitted that both the policies aim to cater difference classes and apply differently and in the particular sets of circumstances; thus, it cannot be inferred that the developers like the petitioners who have applied under the Solar Policy, 2019, would also be entitled to the benefit of the subsidy under the Policy, 2020. Therefore, the developers who are availing the benefit of the Solar Policy, 2019, cannot be heard to say that they also want the benefit of Page 35 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined subsidy under the Policy, 2020.
7.4 Mr. Trivedi, learned Advocate General, submitted that the contention of the petitioners that the benefit of Solar Policy, 2019 and the Policy, 2020 both would be available, the petitioners having invested huge amounts towards purchase of lands, equipment, services etc. for setting up the Solar Projects with an understanding that benefit of subsidy would be made available to the developers like the petitioners and thus, the impugned communications are hit by the principle of 'Promissory Estoppel', the said contention would not be applicable in the facts of the present case more particularly, as regards the claim being covered under the Policy, 2020. It was submitted that the petitioners are not justified to claim that they tried to alter the positions by relying upon the Policy, 2020 because whatever they did to alter their position was based upon the promise contained in the Solar Policy, 2019. It was submitted that it is not open for the petitioners to claim that the petitioners are entitled to simultaneous benefits though, both the policies aimed to cater different sets of classes. It was also submitted that the said policies operate for particular period of time and just because, if one has availed Page 36 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined some benefit under the previous policy which ceases to exist, one cannot seek refuge of doctrine of 'Promissory Estoppel'. It was further submitted that it is settled position of law that the doctrine of 'Promissory Estoppel' cannot be invoked in abstract and in such matters, it would be a matter of policy of the State Government and the same does not bind the Government to its policy for all time to come. Placing reliance on the aforesaid contention, it was submitted that both the policies i.e. the Solar Policy, 2019 and the Policy, 2020 aimed to cater different sets of classes.
7.5 Mr. Trivedi, learned Advocate General, submitted that the plea of violation of violation of Article 14 of the Constitution of India would not be available to the petitioners herein. 7.6 Mr. Trivedi, learned Advocate General, placing reliance on the additional affidavit filed by the respondent No.1 duly produced at page 173, submitted that the petitioners and other similarly situated parties have made representations for availing the benefit of the subsidies available under the Policy, 2020 in addition to the benefits available to them under the Solar Policy, 2019. Placing reliance on the aforesaid submission, it was submitted that the respondent No.1 after Page 37 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined detailed deliberations and consultations with the concerned departments, came to the conclusion that originally it was never contemplated to allow the beneficiaries of the Solar Policy, 2019 to have dual benefits but, mistakenly such a provision was omitted to be provided in the said Solar Policy, 2019. Ultimately, the State Government vide communication dated 20.07.2021 conveyed that no subsidy would be applicable to the applications received for developing solar projects under Solar Policy, 2019 and the said communication is also challenged in the captioned petition. 7.7 Mr. Trivedi, learned Advocate General, submitted that in order to remove any ambiguity with this regard, the State Government introduced an addendum to Clause - 8 in the Solar Policy, 2019 vide Government Resolution dated 8/9.06.2022. As per the addendum, after the last paragraph of Clause - 8 of the Solar Policy, 2019, the line "Beneficiaries under this policy shall not be eligible for any subsidy from the State Government under any other Schemes/Policies" came to be added. It was submitted that the said addendum dated 8/9.06.2022 further states that the said addendum shall be effective from the same date when the Solar Policy, 2019 came Page 38 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined into effect on 06.03.2019. Placing reliance on the aforesaid submission, it was submitted that the addendum issued vide GR dated 8/9.06.2022 was clarification by the respondent No.1 with retrospective effect considering the representations received from the petitioners and other parties from time to time.
7.8 Reliance was also placed on further affidavit-in-reply filed by the respondent No.1 replying to the challenge with respect to Clauses - 7, 21 and 24 of the "Aatmanirbhar Gujarat Scheme for assistance to Micro, Small and Medium Enterprises" (for short 'the Policy, 2022') which came to be introduced vide Government Resolution dated 05.10.2022 by making amendments to the "Scheme for Assistance to Micro, Small and Medium Enterprises" introduced vide Government Resolution dated 01.09.2020 under the Policy, 2020. It was submitted that though, the said Policy, 2022 seeks to revise the benefits available under the Policy, 2020, the same is independent and separate policy with its operative period from 05.10.2022 till 04.10.2027 with an object to boost the investments in the State of Gujarat so as to achieve larger goal of Aatmanirbhar Gujarat for Aatmanirbhar Bharat whereby, the Page 39 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined quantum of incentives has increased in comparison to what was available under the previous scheme introduced vide GR dated 01.09.2020 under the Policy, 2020.
7.9 Mr. Trivedi, learned Advocate General, submitted that as per Clause - 1.13 of the said Scheme, to become eligible under the said Policy, the enterprise must have commenced commercial production/rendering services during the operative period of the said scheme. It was submitted that as per Clause
- 7, the MSMEs that have applied under the previous scheme introduced vide GR dated 01.09.2020 and not commenced commercial production before the date of issuance of the GR dated 05.10.2022, it shall have an option to either continue under previous scheme or opt under the said scheme. The said option is to be exercised within a period of six months from the date of issuance of the GR. If the enterprise does not exercise the option within the prescribed time period of six months, it shall be deemed that the enterprise has opted to continue under the previous scheme.
7.10 Mr. Trivedi, learned Advocate General, submitted that the present petition is filed seeking benefits under the Policy, 2020 introduced vide GR dated 01.09.2020 whereas, by virtue of Page 40 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined amendment, the petitioners seeks to challenge the Aatmanirbhar Gujarat Scheme (Policy, 2022) which otherwise in no manner affects the petitioners. It was submitted that on one hand, the petitioners are seeking benefits of the said Policy, 2020 and on the other hand, the petitioners seeks to challenge the Policy, 2022. Placing reliance on the aforesaid, it was submitted that the same would lead to inconsistencies in the stand taken by the petitioners with distinct and independent cause of actions. It was submitted that the said scheme introduced by the State Government which is otherwise a policy matter of the State Government, cannot be challenged by any party which considers the scheme not suitable to it. Such schemes are prepared taking a holistic view of the matter and after taking into consideration wide range of factors including different kinds of industries operating in the State. Just because the scheme seems not suitable to one particular industry, the whole scheme cannot be challenged in the present manner.
7.11 Mr. Trivedi, learned Advocate General, also controverted to the submissions advanced by the petitioners that the Government came up with the Aatmanirbhar Scheme (Policy, Page 41 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined 2022) to overcome and defeat the plea of the petitioners. It was submitted that such allegations are devoid of merits and are farfetched. It was submitted that the Policy, 2022 has nothing to do with the developers who have signed PPAs under the Solar Policy, 2019. It was submitted that it is the contention of the petitioners that the Clauses -7, 21 and 24 which are subject matter of challenge in Policy, 2022, are applied retrospectively and the said clauses failed to take into account substantial investments made by those who have set up their solar projects under the Solar Policy, 2019. The operative period of the Policy, 2022 is from 05.10.2022 till 04.10.2027. Under Clause - 7, an option is provided to an enterprise which has not commenced commercial production to either continue under the previous scheme or opt under the Policy, 2022. Thus, the operative period of the scheme coupled with Clause - 7 leaves no scope of there being any retrospectivity involved.
7.12 Mr. Trivedi, learned Advocate General, submitted that when benefits are extended under the policies of the Government, as a matter of public policy it is always an idea underlined that if one is availing the benefits under one policy, Page 42 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined cannot claim benefits under another policy of the State Government. One cannot, as a matter of right, can claim benefits under the two policies of the State Government more particularly, once subscribing to the benefits under one policy. It was reiterated that one cannot avail the simultaneous benefits of the State Government Policies when it is clearly transpired from the aforesaid clauses that if a person is availing the benefits of similar nature under one particular policy, cannot claim as a matter of right to the benefits under another policy of the Government.
7.13 Reliance was placed on the noting by the Hon'ble Finance Minister and endorsed by the Hon'ble Chief Minister at the time of introduction of the Solar Policy, 2019. Placing reliance on the same, it was submitted that the file noting makes it clear that right from day one, there was a clear intention on the part of the State Government that if an enterprise avails the benefits under the Solar Policy, 2019, shall not be entitled to avail the benefits under any other policy. Ultimately, the benefits which are extended to the enterprises are from public exchequer and if the same is not regulated in an above manner, the same shall result into loss of public exchequer.
Page 43 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined 7.14 Summing up the aforesaid submissions, it was submitted that the underlying policy matter which was very much there under aforesaid two policies and the same was clarified later on vide addendum to the Solar Policy, 2019 vide Government Resolution dated 8/9.06.2022 so as to remove any doubt or ambiguity in that regards. In view thereof, the same was made effective from the date when the Solar Policy, 2019 came into effect i.e. 06.03.2019. It was submitted that in view of the aforesaid, the present petition is required to be dismissed being devoid of merits.
Submissions on behalf of respondent Nos.5 and 6
8. Mr. Prakash Jani, learned Senior Counsel appearing for the respondent Nos.5, submitted that the respondent No.5 has followed the Solar Policy, 2019 and guidelines for the same issued by the Government and also provided exit options as conveyed by the Government. It was submitted that the Climate Change Department, Government of Gujarat, Gujarat Energy Development Agency issued guidelines/terms and conditions for setting up of Small Scale Distributed Solar Project (SSDSP) wherein, it is specifically stated that the Page 44 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined registration of SSDSP shall be governed by the provisions of the policy for Development of Small Scale Distributed Solar Projects- 2019 of Government of Gujarat, resolution No. SL/11/2019/51/B1 dated 06.03.2019 and guidelines for the implementation of policy for Development of Small Scale Distributed Solar Projects-2019 of Government of Gujarat, resolution No. SLR/11/2019/51/B1 dated 15.11.2019 and the terms and conditions mentioned. In the application for registration under the said project, the applicant has to give declaration that the applicant has read and understood and shall abide by the provisions of the Solar Policy, 2019. 8.1 Mr. Jani, learned Senior Counsel, submitted that PPAs signed between parties and its terms and conditions are binding on both the parties as per Contract Act, 1872. There is no provision in PPA for extension of Schedule Commercial Operation Date (SCOD) except in case of event of Force Majeure. It was further submitted that the extension of SCOD is a matter of PPA executed between DISCOM and generator and the same is governed by the provision of the Electricity Act, 2003 as per which the same falls under the jurisdiction of Gujarat Electricity Regulatory Commission. It was submitted Page 45 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined that it is the sole responsibility of the applicant to bear the capital cost of the project including the cost of transmission/electrical line from the plant site to the interface point at the GETCO Substation, providing ABT compliant meter and RTU at the interface point, all the statutory requirements including ROW for laying the transmission/ electrical line etc. Government/ GEDA/ DISCOM/ SLDC shall be absolved of any such responsibilities that may arise at later date on account of ownership of the land/ ROW issues etc. 8.2 It was submitted that Power Purchase Agreements have been signed by Distribution Companies and not by Gujarat Urja Vikas Nigam Limited.
8.3 Reliance was placed on the PPA dated 24.04.2021 executed with the petitioners and placing reliance on the same, it was submitted that by communication dated 20.07.2021, the Energy and Petrochemicals Department, Government of Gujarat has informed the GUVNL that the solar projects to be installed under the Solar Policy, 2019, shall not be eligible for any subsidy. In view thereof, the GUVNL has published a public notice to the said effect on 20.07.2021. It was submitted that the Energy and Petrochemicals Page 46 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined Department vide letter dated 07.08.2021 has conveyed their decision to GUVNL regarding providing one time exit option to the developers who have signed PPAs with DISCOMs and to refund charges recovered from them who opt for one time exit option, accordingly, the GUVNL has published a public notice dated 09.08.2021 for availing one time exit option on or before 31.08.2021 which was extended vide another public notice dated 27.08.2021 up to 05.09.2021.
8.4 Mr. Jani, learned Senior Counsel, submitted that one time exit option was proposed to be given in view of the various representation received from various project developers who desired to exit out of the PPA signed on the basis that establishment of project may not be commercially viable. It was submitted that the exit option was purely optional and there was no compulsion whatsoever on any of the project developer to exit out of the PPA that has been signed. Placing reliance on the aforesaid submission, it was submitted that the petition be dismissed.
8.5 Mr. Prakash Jani, learned Senior Counsel appearing for the respondent Nos.6 - MGVCL, submitted that the petitioners herein have entered into PPAs with the respondent No.6. It was Page 47 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined submitted that neither the petitioner commissioned the solar project before SCOD dated 19.03.2022 as per the PPA executed with the respondent No.6 nor applied for the first exit option given by the GUVNL as per public notice issued on 09.08.2021 under the Solar Policy, 2019. It was submitted that vide letter Nos. (i) Lunawada/o&m/Tech-2/164, dated 07.01.2022, (ii) Lunawada/o&m/Tech-2/2318 dated 01.04.2022; (iii) Lunawada/o&m/Tech-2/2766 dated 16.04.2022; (iv) Lunawada/Tech-2/SSDSP/3512 dated 18.05.2022, the Executive Engineer, (O&M), Lunawada Division had informed the petitioners for non-commissioning the solar plant works and the penalty for liquidated damages should be imposed as per Article 3.3 of the PPA executed with the respondent No.6 on 24.04.2021.
8.6 Mr. Jani, learned Senior Counsel, submitted that On 22.04.2022, the petitioners submitted an application to Ex. Engr. (O&M) Lunawada for 4 months time extension upto July, 2022 for completion of solar plant. On 09.05.2022, the request came to be reiterated by the petitioners be preferring an application to Executive Engineer (O & M), Lunawada for giving extension in project completion date. Ex. Engr. (0 & M) Page 48 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined Lunawada had sent their application to Superintending Engineer (O&M), Godhra Circle, Office vide Letter no. Lunawada/o&m/Tech-2/3447 dated 12.05.2022 whether extension in project completion date should be given or not. Vide L.no. GDC/o&m/Tech-2/3957 dated 20.05.2022, Godhra circle office, wrote a letter to Additional chief Engineer (RA&C) for giving extension in project completion date. It was submitted that Additional Chief Engineer (RA&C) Corporate Office, MGVCL vide Letter MGVCL/RA&C/DSM/SSDSP/573 25.05.2022 denied the representation of the petitioners for giving extension in project completion date as there is no provision in the Solar Policy, 2019.
8.7 Mr. Jani, learned Senior Counsel, submitted that vide Letter No. Lunawada/o&m/4234 dated 10.6.2022, Executive Engineer (O&M), Lunawada informed the petitioner Shri. S D Patel that their application of giving extension in project completion date is denied and penalty should be imposed as per PPA executed with MGVCL. It was submitted that due to Non Commissioning of Solar plant under Solar Policy, 2019 by petitioners as per the SCOD 19.03.2022 declared by him during the execution of PPA with MGVCL, Executive Engineer Page 49 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined (O&M), Lunawada, encashed the bank guarantee submitted by the petitioners in favour of MGVCL as per PPA. It was submitted that the performance bank guarantee of the petitioners of Rs.3,12,500/- encashed to MGVCL account by Baroda Gujarat Gramin bank vide cheque no.711 dated 04.08.2022 and the same was informed to petitioners vide letter No. BGGB/KIDIA/45/2022-23 dated 04.08.2022 against development of solar plant under SSDSP. As per PPA "Force Majeure Event" shall have the meaning set forth under Clause
8. 8.8 Mr. Jani, learned Senior Counsel, submitted that the MGVCL has followed the Solar policy, 2019 and guidelines for the same issued by Government and provided Exit options as conveyed by the Government from time to time. Placing reliance on the aforesaid submissions, it was submitted that the present petition be dismissed.
Analysis:-
Though, the issues raised in the present petition are inter-connected, for the sake of convenience, the said issues are dealt with independently as under:Page 50 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined
9. The respondent No.1 - State Government in order to support the development of Small and Medium Enterprises introduced the Industrial Policy, 2015 on 19.01.2015. The said Policy envisaged two kinds of subsidy i.e. Scheme - 1 - Capital Investment Subsidy and Scheme - 2 - Interest Subsidy. The said Policy was in operation for a period of 5 years from 01.01.2015 to 01.01.2020 which came to be extended twice and accordingly, remained in operation up to 06.08.2020. The said policy supported and encouraged the MSMEs in form of Capital Investment Subsidy and Interest Subsidy for setting up similar renewable and non-conventional energy projects. By communication dated 07.03.2020 issued by the Additional Industries Commissioner from the Office of the respondent No.3, it was clarified that the provisions made in the Circular - 19 dated 28.11.2017 prepared during the meeting of the State Level Implementation Committee on 21.09.2017 shall also be applicable to all renewable energy projects.
10. The petitioner No.1 is a proprietary concern registered with the Government as a MSME Unit holding Udyam Registration Certificate bearing Registration No.UDYAM-GJ-31- 0000458. The petitioner No.2 is the sole proprietor of the Page 51 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined petitioner No.1 and has filed the present proceedings being materially and substantially interested in the conduct of business affairs of the proprietary firm.
10.1 The petitioners entered into PPA with the respondent No.6 on 24.04.2021 under the Solar Policy, 2019.
11. The Government of Gujarat floated the Policy for development of Small Scale Distributed Solar Projects, 2019 (for short 'the Solar Policy, 2019') on 06.03.2019. The said Solar Policy, 2019 aims at facilitating development of Small Scale Solar Project with size of 0.5 MW and above but, up to 4 MW in the distribution network of licensees of Gujarat State in rapid manner. Under the said Solar Policy, 2019, the Solar Projects are to be installed and commissioned and the power so generated is to be sold to the Discom. The said Solar Policy, 2019 envisaged the Power Purchase Agreement (for short 'PPA') to be entered into between the parties concerned and the Discom for a validity period of 25 years. By way of incentive to attract investment for setting up Solar Projects, the said policy envisages the benefit of Rs.0.12 per unit which are allowed to be added to the determined tariff for sale of energy to the Discom. The said Solar Policy, 2019 is duly Page 52 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined produced at page 50 to 57.
11.1 The respondent - State issued guidelines for implementation of the Solar Policy, 2019 on 15.11.2019, duly produced at Annexure - C, page 58 to 64.
11.2 As per the said Solar Policy, 2019, the solar projects that are installed and commissioned during the operative period shall become eligible for the benefits and incentives declared under the Policy for a PPA term of 25 years.
11.3 Pursuant to the Solar Policy, 2019 and the guidelines issued thereon on 15.11.2019, the petitioners having entered into the PPA with the respondent No.6 on 24.04.2021, failed to commissioned the solar projects before Scheduled Commercial Operation Date (for short 'the SCOD') 19.03.2022 as per the PPA executed with the respondent No.6.
11.4 By communications vide Letter No.(i) Lunawada/o&m/Tech-2/164, dated 07.01.2022, (ii) Lunawada/ o&m/Tech-2/2318 dated 01.04.2022; (iii) Lunawada/o&m/Tech- 2/2766 dated 16.04.2022; (iv) Lunawada/Tech-2/SSDSP/3512 dated 18.05.2022, the Executive Engineer, (O&M), Lunawada Division informed the petitioners for non-commissioning the Page 53 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined solar plant works and the penalty for liquidated damages should be imposed as per Article 3.3 of the PPA executed with the respondent No.6 on 24.04.2021. The said communications are duly produced at Annexure-R/1 colly.
11.5 On 22.04.2022, the petitioners submitted an extension application seeking 4 months extension up to July, 2022 for completion of the solar plant. On 09.05.2022, the petitioners again submitted an application to the Executive Engineer (O&M), Lunawada for giving extension in project completion date. The Executive Engineer, Lunawada by communication vide letter No.Lunawada/o&m/4234 dated 10.06.2022 informed the petitioners that the application of giving extension in project completion date came to be declined. Copy of the said letter/communication is duly produced at Annexure - R/2. The petitioners were also informed by the said communication that having failed to comply with the terms of the PPA, penalty was directed to be imposed.
11.6 Due to non-commissioning of the solar plant under the Solar Policy, 2019 by the petitioners as per the SCOD 19.03.2022 declared by the petitioners during the execution of the PPA with the respondent No.6, the Executive Engineer Page 54 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined (O&M), Lunawada, vide Letter No.(i) LWD/o&m/Tech-2/SSDSP/2860 dated 21.04.2022; (ii) LWD/o&m/Tech-2/SSDSP/3423 dated 12.05.2022; (iii) LWD/o&m/Tech-2/SSDSP/4118 dated 06.06.2022; and (iv) LWD/o&m/Tech-2/SSDSP/5535 dated 03.08.2022 informed to the Branch Manager, Baroda Gujarat Gramin Bank, Kidia Branch, At Po. Kidia, Tal. Lunawada, Dist. Mahisagar, to encash the bank guarantee submitted by the petitioners in favour of the respondent No.6 as per the PPA. The performance bank guarantee of the petitioners of Rs.3,12,500/- came to be encashed to the respondent No.6 account by Baroda Gujarat Gramin Bank vide Cheque No.711 dated 04.08.2022 and the same was informed to the petitioners vide letter No.BGGB/KIDIA/45/2022-23 dated 04.08.2022 against development of solar plant under SSDSP. Copy of the said letter dated 04.08.2022 is duly produced at Annexure - R/3.
12. The respondent No.1 - State Government on 01.09.2020 through its Industries and Mines Department introduced the Gujarat Industrial Policy - 2020 (for short 'the Policy, 2020') as a "Scheme for Assistance to Micro, Small and Medium Enterprises (MSME)". The said scheme is in operation from Page 55 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined 07.08.2020 to 06.08.2025. The said policy envisaged two kinds of subsidy i.e. Scheme - 1 - Capital Investment Subsidy and Scheme - 2 - Interest Subsidy.
12.1 Clause - 16 of the said Policy, 2020, stipulates that those enterprises which have availed assistance under the aforesaid schemes, will not be entitled to avail benefit under any other scheme of other department of the State Government for the same component, unless and otherwise specified under that scheme.
12.2 In the meantime, several representations were made and in one of such representations, a request was made to extend the Capital and Investment Subsidy under the Policy, 2020 to the Small Scale Distributed Solar Projects envisaged under the Solar Policy, 2019. The representation dated 22.06.2021 is duly produced at Annexure -R-III, page 156. On the basis of the decision taken by the respondent No.1, the respondent No.2 by communication dated 20.07.2021 conveyed to the Managing Director, Gujarat Urja Vikas Nigam Limited (GUVNL), that no subsidy would be applicable to the applications received for Small Scale Distributed Solar Projects under Solar Policy, 2019. The said communication is duly produced at page 91-91/A. The Page 56 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined aforesaid was communicated by the respondent No.1 to the respondent No.3 by communication dated 02.08.2021 that the subsidy would not be applicable to the applications received under the Solar Policy, 2019. On 05.08.2021, the respondent No.3 addressed the communication to the respondent No.4 with respect to the aforesaid decision taken by the State Government.
12.3 On 09.08.2021, in view of the aforesaid representations, the respondent No.5 - GUVNL issued public notice conveying that a one-time option to exit from PPA is extended to the developers who have signed PPAs with DISCOMs and charges recovered from the developers who exercised such option shall be refunded. The developers who were willing to avail such one time exit option were required to submit written request along with prescribed undertaking on or before 31.08.2021. The petitioners herein chose not to avail the said exit option. 12.4 It is pertinent to note that though, the Policy, 2020 came into effect from 07.08.2020, the petitioners herein entered into the PPA on 24.04.2021 with the respondent No.6 after the said Policy, 2020 came into effect.
Page 57 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined
13. The respondent No.1, on 8/9.06.2022, issued an addendum to the Solar Policy, 2019 wherein it is clarified that the beneficiaries under the Solar Policy, 2019 shall not be eligible for any subsidy from the State Government and under other Schemes/Policies. To avoid such ambiguities, the said addendum came to be issued after due consideration by the State Government to remove the difficulties in implementation of the Solar Policy, 2019.
13.1 It is apposite to refer to Clause 8 of the Solar Policy, 2019, which reads thus:
"8. APPLICABLE TARIFF Tariff applicable under this Policy shall be as per following mechanism:
The tariff contracted in the competitive bidding process conducted by GUVNL at which PPAs are signed for procurement of Solar Power from projects located outside Solar Park prevailing as on 31 March (computed based on simple average of such tariff discovered and contracted over six months ending on 31 March) of any given year with an addition of Rs. 0.20 per unit shall be the applicable tariff at which the PPAs shall be signed during the immediately succeeding period of April to September by Obligated Entities with these Solar Projects under this policy and similarly the contracted tariff prevailing as on 30th September of any given year (computed based on simple average of such tariff discovered and contracted over six months ending on 30th September) with an addition of Rs. 0.20 per unit shall be the applicable tariff for PPAS to be signed during the immediately succeeding period of October to March. However, the above mechanism of applicable tariff shall be subject to approval of GERC. The Obligated Entities shall take one time approval of GERC. The Rs. 0.20 per unit addition in tariff is allowed for Rs.0.12 per unit for saving in transmission loss as power will be injected in distribution grid and Rs.0.08 per unit is to compensate for expensive land cost, higher capital investment and maintenance cost due to small size of projects.
The above mentioned tariff shall be applicable for a PPA term of 25 years from Commercial Operation Date of the Projects.
13.2 The addendum issued on 8/9.06.2022 to Clause - 8 reads Page 58 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined thus:
"READ (1) Energy & Petrochemicals Dept. G.R. No. SLR/11/2019/51/B1, dated 06/03/2019.
(2) Energy & Petrochemicals Dept. G.R. No. SLR/11/2019/51/B1, dated 24/03/2021.
PREAMBLE The Government of Gujarat has declared Policy for Development of Small Scale Distributed Solar Projects - 2019 vide G.R. No. SLR/11/2019/51/B1, dated 06/03/2019 and its amendment dated 24/03/2021.
The aim of the SSDSP-2019 policy is to promote Small Scale Distributed Solar Projects in the State. Accordingly, under the said policy, over and above the tariff contracted, an addition of Rs. 0.20 per unit is allowed. That is, Rs. 0.12 per unit for saving in transmission loss as power will be injected in distribution grid and Rs.0.08 per unit is to compensate for land cost, capital investment and maintenance cost due to small size of projects.
Further, MSME Scheme of Industries and Mines Department was declared in the year 2020. Therefore, it could not be mentioned in Energy & Petro Department's Policy of 2019 that the one having opted for the Policy for Development of Small Scale Distributed Solar Projects-2019, will not be entitled to get benefit under any other scheme.
Despite giving benefit under SSDSP, representations are received for passing of benefit by way of subsidy under MSME Scheme. Therefore, to avoid such ambiguities, this addendum needs to be issued.
The matter was under active consideration of the State Government to issue clarification/interpretation to remove difficulties in implementation of the SSDSP-2019 policy.
RESOLUTION Accordingly, The State Government has decided to clarify and issue addendum to the Clause No: 8 of G.R. dated 06/03/2019 as under:-
In Clause 8 of the policy, the following line is added after the last paragraph:
"Beneficiaries under this policy shall not be eligible for any subsidy from the State Government under any other Schemes/Policies."
Further, The State Government has also decided that the aforementioned addendum shall be effective from the date of original G.R. i.e. 06th March 2019.
Other provisions/ clauses of Policy for development of Small Scale Distributed Solar Projects - 2019 vide G.R. No. SLR/11/2019/51/B1, dated Page 59 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined 06/03/2019 and its amendment issued vide G.R. dated 24/03/2021 remains same."
(a) Addendum:-
14. Considering the aforesaid addendum dated 8/9.06.2022, in the opinion of this Court, the same is clarificatory in nature and clarifies clause - 8 of the Solar Policy, 2019 that the beneficiaries under the said policy, 2019 shall not be eligible for any subsidy from the State Government under any other Schemes/Policies. Further, the State Government has resolved that the said addendum shall be effective from the date of original Government Resolution dated 06.03.2019 when the said Solar Policy, 2019 came to be introduced. The stance of the respondent No.1 vide impugned communications dated 20.07.2021, 02.08.2021 and 05.08.2021 that the benefit of subsidy under the Policy, 2020 is not available to the projects set up under the Solar Policy, 2019 stands further clarified by issuance of addendum dated 08/9.06.2022. The petitioners having not applied for the benefit of the Policy, 2020, cannot be said to be prejudiced by the issuance of addendum dated 8/9.06.2022 as referred above.
14.1 At this stage, it is apposite to refer to the position of law Page 60 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined wherein, it is held that once any statues/notifications are held to be clarificatory/explanatory, the earlier enactment is usually held to be retrospective.
(a) 1993 Suppementary 3 SCC 234 in case of S.S. Grewal vs. State of Punjab & Ors. Paragraph 9 of the said decision reads thus:
"9. From a parusal of the letter dated April 8,1980, we find that it gives clarifications on certain doubts that had been created by some Departments in the matter of implementation of the instructions contained in the earlier letter dated May 5,1975. Since the said letter dated April 8,1980 is only clarificatory in nature, there is no question of its having an operation independent of the instructions contained in the letter dated May 5, 1975 and the clarifications contained in the letter dated April 8, 1980 have to be read as a part of the instructions contained in the earlier letter dated May 5, 1975. In this context it may be stated that according to the principles of statutory construction a statute which is explanatory or clarificatory of the earlier enactment is usually held to be restrospective. (See: Craies on Statute Law, 7th Ed., p.58). It must, therefore, be held that all appointments against vacancies reserved for Scheduled Castes made after May 5, 1975 (after May 14, 1977 in so far as the Service is concerned), have to be made in accordance with the instructions as contained in the letter dated May 5, 1975 as clarified by letter dated April 8, 1980. On that view, the appointment of Shri Balwant Rai in 1979 has to be treated to be an appointment made under the said instructions and operation of these instructions cannot be postponed till April 8, 1980. If the matter is considered in this light then the sub-roster as indicated in the letter dated April 8, 1980 would have to be applied in respect of the post on which Shri Balwant Rai was appointed in 1979 and the said appointment has to be regarded as having been made against the vacancy at point No 1. in the the roster which was reserved for Balmikis or Mazhbi Sikhs but since no Balmiki or Mazhbi Sikh was selected for that post, the said vacancy was assigned to Shri Balwant Rai who belonged to a scheduled Caste other than a Balmiki or Mazhbi Sikh. The said vacancy which was reserved for Balmikis or Mazhbi Sikhs could not be carried forward in view of the directions contained in the letter dated April 8, 1980. The next post reserved for Scheduled Castes at point No. 5 in the roster was meant for a person belonging to a Scheduled Caste other than Balmikis and Mazhbi Sikhs. In the selections that were made in 1981 and 1982 no person belonging to a Scheduled Caste was selected and, therefore, posts at Points nos. 5 and 6 in the Roster became available to candidates in the general category and the vacancy at Point no.5 reserved for Scheduled Castes was carried forward to point No.7 In 1986, two persons belonging to Scheduled Castes, namely Shri G.S. Samra and respondent No.3 were selected. Shri G.S. Samra belonged to a Scheduled Caste other than Balmiki and Mazhbi Sikh whereas respondent No. 3 was a Page 61 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined Mazhbi Sikh. Since the post at point No.5 which had been carried forward to point No.7 was reserved for a candidate belonging to a Scheduled Caste other than Balmiki or Mazhbi Sikh it had to be assigned to Shri G.S. Samra falling in that category and respondent No. 3 who was a azhbi Sikh could only be appointed against the reserved vacancy at point No.9 in the Roster. Respondent No. 3 can not claim that the vacancy at Point No.7 should be assigned to him. If respondent No.3 is adjusted against the vacancy at Point No. 9 in the Roster, he has to be placed in seniority below the appellant who was appointed against point No. 8 in the Roster.
In the aforesaid decision, the Hon'ble Apex Court held that the notification being clarificatory/explanatory in nature to earlier enactment, is usually held to be retrospectively.
(b) (2021) 9 SCC 657 in case of Ghanashyam Mishra & Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Ltd. , wherein the Hon'ble Supreme Court observed and held as under:
"2. The short but important questions, that arise for consideration in this batch of matters, are as under:-
(i) As to whether any creditor including the Central Government, State Government or any local authority is bound by the Resolution Plan once it is approved by an adjudicating authority under sub-section (1) of Section 31 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'I&B Code')?
(ii) As to whether the amendment to Section 31 by Section 7 of Act 26 of 2019 is clarificatory/declaratory or substantive in nature?
(iii) As to whether after approval of resolution plan by the Adjudicating Authority a creditor including the Central Government, State Government or any local authority is entitled to initiate any proceedings for recovery of any of the dues from the Corporate Debtor, which are not a part of the Resolution Plan approved by the adjudicating authority?"
The aforesaid issue No.2(ii) was answered as under:
"73. Vide Section 7 of Act No.26 of 2019 (vide S.O. 2953(E), dated 16.8.2019 w.e.f. 16.8.2019), the following words have been inserted in Section 31 of the I&B Code:
"including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under Page 62 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined any law for the time being in force, such as authorities to whom statutory dues are owed"
74. As such, with respect to the proceedings, which arise after 16.8.2019, there will be no difficulty. After the amendment, any debt in respect of the payment of dues arising under any law for the time being in force including the ones owed to the Central Government, any State Government or any local authority, which does not form a part of the approved resolution plan, shall stand extinguished.
75. The only question, which remains is, what happens to such dues if they pertain to a period wherein Section 7 petitions have been admitted prior to 16.8.2019.
76. To answer the said question, we will have to consider, as to whether the said amendment is clarificatory/declaratory in nature or a substantive one. If it is held, that it is declaratory or clarificatory in nature, it will have to be held, that such an amendment is retrospective in nature and exists on the statute book since inception. However, if the answer is otherwise, the amendment will have to be held to be prospective in nature, having force from the date on which the amendment is effected in the statute.
77. It will be relevant to refer to the "Statement of Objects and Reasons" (hereafter referred to as "SOR") of the Insolvency and Bankruptcy Code (Amendment) Bill, 2019, which read thus:
"The Insolvency and Bankruptcy Code, 2016 (the Code) was enacted with a view to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order or priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India.
2. The Preamble to the Code lays down the objects of the Code to include "the insolvency resolution" in a time bound manner for maximisation of value of assets in order to balance the interests of all the stakeholders. Concerns have been raised that in some cases extensive litigation is causing undue delays, which may hamper the value maximisation. There is a need to ensure that all creditors are treated fairly, without unduly burdening the Adjudicating Authority whose role is to ensure that the resolution plan complies with the provisions of the Code. Various stakeholders have suggested that if the creditors were treated on an equal footing, when they have different pre insolvency entitlements, it would adversely impact the cost and availability of credit. Further, views have also been obtained so as to bring clarity on the voting pattern of financial creditors represented by the authorised representative.
3. In view of the aforesaid difficulties and in order to fill the critical gaps in the corporate insolvency framework, it has become necessary to amend certain provisions of the Insolvency and Page 63 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined Bankruptcy Code.The Insolvency and Bankruptcy Code (Amendment) Bill, 2019, inter alia, provides for the following, namely:-
"(a) - (e)
(f) to amend sub - section (1) of section 31 of the Code to clarify that the resolution plan approved by the Adjudicating Authority shall also be binding on the Central Government, any State Government or any local authority to whom a debt in respect of payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, including tax authorities;
78. Perusal of the SOR would reveal, that one of the prime objects of I&B Code was to provide for implementation of insolvency resolution process in a time bound manner for maximisation of value of assets in order to balance the interests of all stakeholders. However, it was noticed, that in some cases there was extensive litigation causing undue delays resultantly hampering the value maximisation. It was also found necessary to ensure, that all creditors are treated fairly. It was therefore in view of the various difficulties faced and in order to fill the critical gaps in the corporate insolvency framework, it was necessary to amend certain provisions of the I&B Code. Clause (f) of para 3 of the SOR of the Insolvency and Bankruptcy Code (Amendment) Bill, 2019 would amply make it clear, that the legislative intent in amending sub-section (1) of Section 31 of I&B Code was to clarify, that the resolution plan approved by the Adjudicating Authority shall also be binding on the Central Government, any State Government or any local authority to whom a debt is owed in respect of payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, including tax authorities.
84. It is clear, that the mischief, which was noticed prior to amendment of Section 31 of I&B Code was, that though the legislative intent was to extinguish all such debts owed to the Central Government, any State Government or any local authority, including the tax authorities once an approval was granted to the resolution plan by NCLT; on account of there being some ambiguity, the State/Central Government authorities continued with the proceedings in respect of the debts owed to them. In order to remedy the said mischief, the legislature thought it appropriate to clarify the position, that once such a resolution plan was approved by the Adjudicating Authority, all such claims/dues owed to the State/Central Government or any local authority including tax authorities, which were not part of the resolution plan shall stand extinguished.
85. In Justice G.P. Singh treatise on "The principles of Statutory Interpretation", 14th Edition, Revised by Justice A.K. Patnaik, former Judge of this Court, it is observed thus:
(i) Declaratory Statutes The presumption against retrospective operation is not applicable to declaratory statutes. As stated in CRAIES and approved by the Supreme Court:Page 64 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined "For modern purposes a declaratory Act may be defined as an Act to remove doubts existing as to the common law, or the meaning or effect of any statute. Such Acts are usually held to be retrospective. The usual reason for passing a declaratory Act is to set aside what Parliament deems to have been a judicial error, whether in the statement of the common law or in the interpretation of statutes. Usually, if not invariably, such an Act contains a preamble, and also the word 'declared' as well as the word 'enacted'.
But the use of the words 'it is declared' is not conclusive that the Act is declaratory for these words may, at times, be used to introduce new rules of law and the Act in the latter case will only be amending the law and will not necessarily be retrospective 14. In determining, therefore, the nature of the Act, regard must be had to the substance rather than to the form15. If a new Act is 'to explain' an earlier Act, it would be without object unless construed retrospective16. An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well settled that if a statute is curative or merely declaratory of the previous law retrospective operation is generally intended. The language 'shall be deemed always to have meant' or 'shall be deemed never to have included' is declaratory, and is in plain terms retrospective. In the absence of clear words indicating that the amending Act is declaratory, it would not be so construed when the pre-amended provision was clear and unambiguous. An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect and, therefore, if the principal Act was existing law when the constitution came into force, the amending Act also will be part of the existing law.
The above statement of the law relating to the nature and effect of a declaratory statute has been quoted with approval by the Supreme Court from earlier editions of this book in a number of cases.
"In Mithilesh Kumari v. Prem Bihari Khare, section 4 of the Benami Transactions (Prohibition) Act, 1988 was, it is submitted, wrongly held to be an Act declaratory in nature for it was not passed to clear any doubt existing as to the common law or the meaning or effect of any statute. The conclusion, however, that section 4 applied also to past benami transactions may be supportable on the language used in the section."
These observations and criticism of Mithilesh Kumari's case also received the approval in R. Rajgopal Reddy v. Padmini Chandrasekharan, where the Supreme Court after quoting them (from G.P. Singh: Principles of Statutory Interpretation, 5 th Edn., pp.315-16) said:
"No exception can be taken to the above observations"Page 65 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined A proviso added from 1.4.1988 to section 43 B inserted in the Income Tax Act, 1961 from 1.4.1984 came up for consideration in Allied Motors(P.) Ltd. v. Commissioner of Income-tax and it was given retrospective effect from the inception of the section on the reasoning that the proviso was added to remedy unintended consequences and supply an obvious omission so that the section may be given a reasonable interpretation and that in fact the amendment to insert the proviso would not serve its object unless it is construed as retrospective. In Commissioner of Income-Tax, Bombay v. Podar Cement Pvt. Ltd., the Supreme Court held that amendments introduced by the Finance Act, 1987 in so far they related to section 27(iii), (iiia) and (iiib) which redefined the expression 'owner of house property', in respect of which there was a sharp divergence of opinion amongst the High Courts, was clarificatory and declaratory in nature and consequently retrospective. Similarly, in Brij Mohan Das Laxman Das v. Commissioner of Income- tax. Explanation 2 added to section 40 of the Income-tax Act, 1961 from 1.4.1985 on a question on which there was a divergence of opinion was held to be declaratory in nature and, therefore, retrospective. And in Zile Singh v. State of Haryana, substitution of the word 'upto' for the word 'after' in the proviso to section 13A (added in 1994) in Haryana Municipal Act, 1973 by the Haryana Municipal (Second Amendment) Act, 1994 was held to be correction of an obvious drafting error to bring about the text in conformity with the legislative intent and, therefore, retrospective. Even without the amendment of the proviso, the court in all probability would have read and interpreted the section as corrected by the amendment.
93. As discussed hereinabove, one of the principal objects of I&B Code is, providing for revival of the Corporate Debtor and to make it a going concern. I&B Code is a complete Code in itself. Upon admission of petition under Section 7, there are various important duties and functions entrusted to RP and CoC. RP is required to issue a publication inviting claims from all the stakeholders. He is required to collate the said information and submit necessary details in the information memorandum. The resolution applicants submit their plans on the basis of the details provided in the information memorandum. The resolution plans undergo deep scrutiny by RP as well as CoC. In the negotiations that may be held between CoC and the resolution applicant, various modifications may be made so as to ensure, that while paying part of the dues of financial creditors as well as operational creditors and other stakeholders, the Corporate Debtor is revived and is made an ongoing concern. After CoC approves the plan, the Adjudicating Authority is required to arrive at a subjective satisfaction, that the plan conforms to the requirements as are provided in sub-section (2) of Section 30 of the I&B Code. Only thereafter, the Adjudicating Authority can grant its approval to the plan. It is at this stage, that the plan becomes binding on Corporate Debtor, its employees, members, creditors, guarantors and other stakeholders involved in the resolution Plan. The legislative intent behind this is, to freeze all the claims so that the resolution applicant starts on a clean slate and is not flung with any surprise claims. If that is permitted, the very calculations on the basis of which the resolution applicant submits its plans, would go haywire and the plan would be unworkable.Page 66 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined
94. We have no hesitation to say, that the word "other stakeholders"
would squarely cover the Central Government, any State Government or any local authorities. The legislature, noticing that on account of obvious omission, certain tax authorities were not abiding by the mandate of I&B Code and continuing with the proceedings, has brought out the 2019 amendment so as to cure the said mischief. We therefore hold, that the 2019 amendment is declaratory and clarificatory in nature and therefore retrospective in operation."
In the aforesaid decision, the Hon'ble Apex Court held that the amendment as declaratory and clarificatory in nature and therefore, retrospective in operation. 14.2 Reliance as placed on (2015) 1 SCC 1 in case of CIT vs. Vatika Township (P) Limited, by the learned Senior Counsel appearing for the petitioners wherein, the Hon'ble Apex Court held that considering the Finance Act, 2002, the surcharge in respect of block assessment of undisclosed income was made prospective. By way of an amendment under Section 113 of the Act, the change in respect of surcharge created for the first time by insertion of proviso to Section 113 being a substantiate provision is directed to be construed prospective in operation. In the aforesaid set of facts, the Hon'ble Supreme Court held that the amendment could not be said to be merely clarificatory nor was there any material to suggest that it was the intention of the parliament.
In the facts of the present case, the addendum issued on Page 67 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined 8/9.06.2022 is a clarification and in view thereof, the said principle as laid down by the Hon'ble Apex Court in (2015) 1 SCC 1 in case of CIT vs. Vatika Township (P) Limited , would not be applicable.
14.3 Considering the aforesaid position of law, in the opinion of this Court, the addendum issued by the respondent No.1 dated 8/9.06.2022 being clarificatory in nature, is retrospective. The petitioners have failed to show how the impact of addendum has led to deprivation of any legal or fundamental right accrued in favour of the petitioners. The addendum is clarificatory in nature as it clarifies the applicability of policy. Considering the submissions advanced by the learned counsels appearing for the respective parties and the documents produced on record, the stance taken by the respondent No.1 is being consistent and the petitioners have altered their position to accrue the benefit of Solar Policy, 2019, is in no way altered by the issuance of the addendum. 14.4 Reliance as placed on 2022 SCC Online SC 1280 in case of Bharat Sanchar Nigam Ltd. & Ors. vs. TATA Communications Ltd., by the learned counsel appearing for the petitioners, is not applicable to the facts of the present case. In the said Page 68 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined decision, the Hon'ble Supreme Court held that administrative/executive orders or circulars as the case may be, in absence of any legislative competence, cannot be made applicable with effect from retrospective effect and only law can be made retrospectively if it was expressly provided by the legislature in the statute.
In the facts of the present case, the addendum dated 8/9.06.2022 issued by the respondent No.1 is a clarification. 14.5 After issuance of the addendum on 8/9.06.2022, the Exit option dated 25.07.2022 came to be introduced by the respondent No.5 by way of public notice providing for exercise of second time exit option on or before 09.08.2022, for the developers like the petitioners operating under the Solar Policy, 2019, with a refund of penalty/charges i.e. application fees, connectivity charges, bank guarantee, provisional line supervision charges and performance bank guarantee encashed/liquidated damages amount.
The petitioners chose not to exercise the aforesaid exit option which was introduced for the second time subsequent to the addendum issued by the respondent No.1 on Page 69 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined 8/9.06.2022.
(b) Promissory Estoppel:-
15. It is the contention of the petitioners that the impugned communications dated 20.07.2021, 02.08.2021 and 05.08.2021 are bad and illegal; the same being hit by the Principle of Estoppel, the petitioners having invested huge towards purchase of land, equipments, services etc. for setting up the Solar Project in view of the Solar Policy, 2019 and the Policy, 2020. Had there been no promise made by the State Government for providing subsidy under the Policy, 2020, the petitioners would not have ventured into setting up the Solar Project but, having promise to extent the benefit of subsidy, the investments were made and the Solar Project is set up resulting into the alteration of position of the petitioners. That, the respondent - State Government is estopped from going back from their promises and assurances.
15.1 The petitioners have placed reliance on a letter dated 07.03.2020 issued by the Additional Industries Commissioner wherein, it was clarified that the provisions made in Circular - 19 dated 28.11.2017 prepared during the meeting of State Page 70 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined Level Implementation Committee on 21.09.2017, shall also be applicable to all the Renewable Energy Projects. In view thereof, it is the contention the petitioners that assistance in form of subsidy would also be extended to the Renewable Energy Projects. Similar clarification was also issued by the Deputy Commissioner, MSME on 27.10.2020 conveying that the power generation through renewable energy falls under the manufacturing activity and the same would be entitled to MSME incentive schemes.
At this stage, it is apposite to refer to Clause - 16 of the Policy, 2020, which reads thus:
"16.0 General conditions
(a) The enterprise that has availed assistance under these schemes will not be entitled to avail benefit under any other scheme of other department of State Government for the same component, unless bed otherwise specified under that scheme, benefit under such schemes of Government of India, if any. However in any case total assistance shall not exceed the actual Investment/expenditure.
(b) Enterprise will be eligible for assistance under all the schemes, if it fulfills all provisions of relevant scheme.
(c) The detailed procedures and implementation guidelines will be issued by the MSME Commissionerate for all the schemes under this resolution and it will be final and binding to all."
15.1.1 In the opinion of this Court, the Policy, 2020 being a revised policy the communications dated 07.03.2020 and 27.10.2020 would not be binding to the respondent No.1 - State taking into consideration the larger public interest. Page 71 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined Clause - 16 of the Policy, 2020 clarifies the stance of the respondent No.1. The impugned communications which are subject matter of challenge, dated 20.07.2021 issued by the Managing Director, GUVNL, 02.08.2021 issued by the Under Secretary, Industries and Mines Department to the Commissioner, MSME and 05.08.2021 issued to the General Manager, District Industries Centers by the Deputy Commissioner, MSME, further clarify the stance of respondent No.1 that the stake holders are not entitled to the benefits of both the policies i.e. Solar Policy, 2019 and Policy, 2020. Both the aforesaid policies cater to separate and distinct classes. 15.1.2 Subsequently, the addendum dated 8/9.06.2022 issued clarifies that the stake holders of the Solar Policy, 2019 are not entitled to the benefits of any other policy. 15.2 The doctrine of promissory estoppel is a doctrine representing a principle evolved by equity to avoid injustice. It is not dependent on the pure questions of law but the same requires an appreciation of facts in each case which is required to be established by the party claiming the benefit of the said doctrine. The doctrine can be invoked only when there is a clear, sound, and positive foundation laid in the petition itself Page 72 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined by the party invoking the doctrine by the contents of the petition and supporting material and by demonstrating that the party has altered its position relying on the assurance of the other party. The law is well settled on the issue that the doctrine of promissory estoppel, cannot be invoked in the abstract and the Courts are bound to consider all aspects as the doctrine is based on the foundation of the equities. It is also an essential requirement on the part of the party claiming the applicability of the said doctrine that the party acted pursuant to the promise made but for the promise it would not have so acted which is also not made out in the present case. 15.3 The aforesaid principle is based on a promise expected to be fulfilled. In Promissory Estoppel, truth is immaterial and equity prevails over it. To claim the benefit of promissory estoppel, the petitioners must fulfill (a) A representation or conduct amounting to representation must have been made;
(b) The other party to whom representation was made must have acted upon such representation; and (c) He must have acted to his detriment or suffered as a result of such representation.
15.4 It is apposite to refer to the observations of Bhagwati J. Page 73 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined (as he then was) in AIR 1979 SC 621 in case of M/s Motilal Padampat Sugar Mills Company Limited vs. State of Uttar Pradesh & Ors..
"It is elementary that in a republic governed by the rule of law, no one, howsoever high or low, is above the law. Everyone is subject to the law as fully and completely as any other and the Government is no exception. It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned: the former is equally bound as the latter. It is indeed difficult to see on what principle can a Government, committed to the rule of law, claim immunity from the doctrine of promissory estoppel. Can the Government say that it is under no obligation to act in a manner that is fair and just or that it is not bound by considerations of 'honest and good faith'? Why should the Government not be held to a high standard of rectangular rectitude while dealing with its citizens'?.... The law cannot acquire legitimacy and gain social acceptance unless it accords with the moral values of the society and the constant endeavour of the Courts and the legislature, must, therefore, be to close the gap between law and morality and bring about as near an approximation between the two as possible. The doctrine of promissory estoppel is a significant judicial contribution in that direction."
The ratio as laid down in the aforesaid decision would apply once there is an explicit promise. In absence of any promise, the doctrine of promissory estoppel is not applicable. In the facts of the present case, in absence of any explicit promise by the respondent No.1 State, the said ratio would not apply.
15.5 It is also apposite to refer to the position of law, which are as under:
(a) (1987) 1 SCC 31 in case of Shri Bakul Oil Industries & Anr. vs. State of Gujarat & Anr..Page 74 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined "11. For the purposes of this appeal we do not think it necessary to go into the question whether the earlier Notification had created existing rights and whether the im- pugned Notification had the effect of only taking away the existing rights. We are taking this view because we have already pointed out that the State Government was under no obligation to grant exemption and that the granting of tax exemption was only by way of a concession. Having regard to this conclusion there is no need for any probe to be made to determine whether the Notification had created vested rights or only existing rights. The exemption granted by the Gov- ernment, as already stated, was only by way of concession for encouraging entrepreneurs to start industries in rural and undeveloped areas and as such it was always open to the State Government to withdraw or revoke the concession. We must, however, observe that the power of revocation or withdrawal would be subject to one limitation viz. the power cannot be exercised in violation of the rule of Promissory Estoppel. In other words, the Government can withdraw an exemption granted by it earlier if such withdrawal could be done without offending the rule of Promissory Estoppel and depriving an industry entitled to claim exemption from payment of tax under the said rule. If the Government grants exemption to a new industry and if on the basis of the representation made by the Government an industry is estab- lished in order to avail the benefit of exemption. it may then follow that the new industry can legitimately raise a grievance that the exemption could not be withdrawn except by means of legislation having regard to the fact that Promissory Estoppel cannot be claimed against a statute. In the present case the appellants had not raised the plea of Promissory Estoppel before the High Court. This is understandable because the principle of Promissory Estoppel had not found crystalised acceptance by courts of law when the Special Civil Application came to be heard by the High Court in the year 1972. Be that as it may, we find that the appellants have not made out any case of Promissory Estoppel either on the basis of the averments made in their petition or with reference to the facts which have emerged from the affidavits filed in the case. In order to claim the benefit of Promissory Estoppel the appellants must establish:--
(i) that a representation was made to grant the exemption for a particular period to a new industry established in view of the representation held out by the State Govern- ment; and
(ii) that the appellants had established the new industry acting upon the representa- tion made by the State Government.
The facts in the present case do not go to establish that the appellants had put up the new industry in question subsequent to and in pursuance of the promise held out by Notification dated 29.4.1970 granting exemption. Putting it differently the appellants have not proved that but for the concession offered in the first Notification, they would not have established the industry in question and that the entire venture was attributable only to the inducement offered by the Government. From the facts set out supra it may be seen that the first Notification was made on 29.4.1970 while the oil mill constructed by the appellants came to be commissioned on 17.5. 1970 itself. It is not the appellants' case and indeed it can never be so contended that they launched the project and commenced the construction of the oil mill only after the Notification of 29.4.1970 was made and that the entire construction was completed in about two weeks' time so as to enable the appellants to commission the Page 75 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined plant on 17.5. 1970. What is envisaged under the Notification is that the project must have been undertaken and construction work itself should have been started in response to and acting on the Notification. It is not sufficient to rely on the commissioning of an industry after completion of construction work which had been commenced long before the Notification was made by the Government. In respect of such an industry as .the present one, the issuance of a Notification granting tax exemption would only constitute a fortuitous circumstance and by no stretch of imagination can it ever be said that the commissioning of the industry was directly the outcome of the Government's Notification granting tax exemption. The con- cession offered by the Government under the first Notifica- tion dated 29.4.70 did not prescribe any period or time limit, and hence the appellants cannot claim anything more than the benefit of the Notification for such period the exemption was in force. Once the Government decided, in exercise of the powers vested in it, to revoke the original Notification, the benefit of exemption from sales tax en- joyed by the appellants came to an automatic end. The period of five years mentioned in the second Notification will have no reference to the appellants' oil mill commissioned much earlier because the Notification had only prospective ef- fect. We have, therefore, to affirm the view of the High Court that the appellants will be entitled to the benefit of tax exemption only for the limited period during which the concession was offered by the Government."
(b) (2006) 3 GLH 422 in case of Sarvottam Cement & Anr. vs. State of Gujarat & Ors.
"2. By this petition under Article 226 of the Constitution of India, the writ petitioners challenge the Government Resolution dated 9th October, 1984 of the Government of Gujarat, Industries, Mines & Power Department, whereby it has been directed that the State Cash Subsidy should be restricted to the amounts to make the total subsidy (the Central as well as the State) admissible to as the concerned eligible units under the State Subsidy Scheme in respect of assets created after 1st April, 1983. The petitioners also seek direction against the respondents to pay the petitioner the balance amount of Rs.22 lakhs as subsidy at 25% of the fixed assets along with interest till the date of payment as well as to release the amount of Rs.2,32,193/- recovered from the petitioner No.1 (hereinafter referred to as the "petitioner Company").
28. As regards the retrospective effect of the impugned Government Resolution, it is apparent that insofar as the facts of the present case are concerned, subsidy has been sanctioned in favour of the petitioner in May 1985. At the relevant time, the impugned Government Resolution was already in existence and the petitioner is deemed to have been aware of the same. It may be that the petitioner 10 may have created assets prior to the date of the impugned notification, however, nothing has been brought on record to show that the petitioner has in fact created assets prior to the said date. Even in case the petitioner may have created assets prior to the said date of the impugned notification, the petitioner cannot claim subsidy under both the Schemes dehors the impugned notification as a matter of right. It is a settled legal position that cash subsidy is a concession granted by the State Government and no one can claim it as a Page 76 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined matter of right.
29. As regards the invocation of the doctrine of promissory estoppel, the same has to be supported by relevant facts. In the present case, no precise data has been furnished by the petitioner in support of its plea. Except for bald averments that the petitioner has established the industry on the basis of the promise held out by the respondents, no specific facts are stated as to when exactly a was the industry established; or as to when the fixed assets were created. The petitioner has neither bothered to place on record the order of registration, nor the order sanctioning subsidy. The petition is bereft of basic facts necessary for making out a case to substantiate the plea of promissory estoppel. In the circumstances, on the basis of the vague averments made in the petition, the claim of the petitioner cannot be sustained.
30. Besides, as can be seen from a reading of the Scheme as a whole, the same has been framed by the State Government in public interest and in the interest of industrial development for disbursement of subsidy for industrial units which are set up in developing areas. While framing the Scheme of 1977, the State Government must have considered all relevant aspects before fixing subsidy at 15% of the fixed assets or Rs.25 lakhs whichever is less in respect of "C" Grade Growth Centres. At the relevant time, when the said Scheme was framed, the Central Subsidy Scheme was not made applicable to "C" Grade Growth Centres, consequently the amount of subsidy available under the said Scheme could not have been taken into consideration while determining the rate of subsidy in respect of "C" Grade Growth Centres. Subsequently, on account of application of the Central Subsidy Scheme, the total subsidy made available to industrial units situated in "C" Grade 35 Growth Centres increased to 25%, which was beyond the limit fixed by the State Government. In the circumstances, the State authorities in their wisdom have thought it fit to revise the State Scheme so as to limit the combined subsidy payable to a unit situated in the "C" Grade Growth Centres to 15%. By virtue of the impugned Government Resolution dated 9th November, 1984, the State government has given effect to the aforesaid policy decision and limited the extent of subsidy to 15% inclusive of both State as well as Central Subsidy. The impugned Government Resolution, therefore, merely lays down a policy decision of the State Government, which is entirely within the domain of the State Government. This being would not interfere case for invoking the doctrine of promissory estoppel.
31. Insofar as the contention regarding the applicability of the doctrine of promissory estoppel is concerned, it is settled legal position that promissory estoppel has not only to be pleaded but also has to be established. It is only if a plea of promissory estoppel supported by factual particulars is put forth that the other side has an opportunity to answer the same. If we look at the aver made in the petition, except for vague averments to the effect that the petitioner has established the industry on the basis of the promise held out by the respondents, no factual particulars to establish s the same are furnished. There are no factual averments as regards the period during which the fixed assets were created; nor the break up of the assets created before the Central Subsidy Scheme was announced and those created thereafter. If it is the case of the petitioner that it was induced by the Central Subsidy Scheme to create further assets, the same should be specifically stated with factual particulars. Nothing is brought on record, to point out with exactitude as to Page 77 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined when the petitioner became entitled to subsidy under the said Schemes, whether prior to or after the date of the impugned Government Resolution. In fact, the petitioners have failed to mentioned even the date of the orders sanctioning subsidy. In absence of even these basic facts, the plea of promissory estoppel is misconceived.
33. The Supreme Court in the case of Kasinka Trading v. Union of India, (1995) 1 SCC 274 wherein the withdrawal of a time-bound Notification for import of PVC resin issued in exercise of powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 was subject-matter of challenge, has laid down that, to invoke the doctrine of promissory estoppel, clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine. The doctrine of promissory estoppel cannot be invoked in the abstract and the Courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the Courts have to do equity and the fundamental principles of equity must for ever be present in the mind of the Court, while considering the applicability of the doctrine.
34. The Apex Court held that withdrawal of a concession in public interest is a matter of policy and the courts would not bind the Government to its policy for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the "public interest". The Courts, do not interfere with the fiscal policy where the State Government acts in "public interest" and neither any fraud or lack of bona fides is alleged much less established. The Government has to be left free to determine the priorities in the matter of utilization of finances and to act in public interest while issuing or modifying or withdrawing an exemption Notification under Section 25(1) of the Act.
35. Though the aforesaid decision was rendered in the context of exemption Notification under Section 25(1) of the Customs Act, the principles stated therein would apply with equal foion. In incentive scheme framed by the State Government, which is also in the form of a concession. eri the circumstances, the plea of promissory estoppel, in the facts of the present case, does not merit acceptance.
36. The Apex Court has, in the case of State of Rajasthan v. J.K. Udaypur Udyog Ltd., (2004)7 SCC 673, held that, the right to enjoy benefits of a concession is defeasible and, unless barred by principle of estoppel, can be withdrawn in exercise of the very power under which it was granted. It has been held that the recipient of a concession has no legally enforceable right against the Government to grant of a concession except to enjoy the benefits of the concession during the period of its grant. The Court held that, what is granted can be withdrawn unless the Government is precluded from doing so on the ground of promissory estoppel, which principle itself is subject to the considerations of equity and public interest. This Court is of the view that the same principle would be applicable in the case of grant or non-grant of subsidy, which is also, in the nature of a concession. Thus, the State Government is empowered to change its policy in respect of a concessions granted by it, subject to considerations of equity and public interest. The impugned Government Resolution having been issued to effectuate the policy decision of the State Government and no case on the ground of equity having been made Page 78 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined out, there cannot be said to be any infirmity in the impugned Government Resolution dated 9th November, 1984.
37. Besides, the petitioner has not been able to make out any case for applicability of the principles as of promissory estoppel, hence, no infirmity can be found in the impugned Government Resolution dated 19th November, 1994 in seeking to merge the amount of Central Subsidy with the State subsidy, thereby putting a limit to the subsidy admissible to a unit to the amount admissible under the State Scheme. Hence, the challenge to the same cannot be sustained."
(c) (2020) 20 SCC 57 in case of Union of India & Anr. vs. V.V.F. Ltd. & Anr..
"21.1 In the case of Kasinka Trading (supra), in paragraphs 12, 20 and 23, it is observed and held as follows:
"12. It has been settled by this Court that the doctrine of promissory estoppel is applicable against the Government also particularly where it is necessary to prevent fraud or manifest injustice. The doctrine, however, cannot be pressed into aid to compel the Government or the public authority "to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make". There is preponderance of judicial opinion that to invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine and that bald expressions, without any supporting material, to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. In our opinion, the doctrine of promissory estoppel cannot be invoked in the abstract and the courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must for ever be present to the mind of the court, while considering the applicability of the doctrine. The doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation.
20. The facts of the appeals before us are not analogous to the facts in Indo-Afghan Agencies or M.P. Sugar Mills. In the first case the petitioner therein had acted upon the unequivocal promises held out to it and exported goods on the specific assurance given to it and it was in that fact situation that it was held that Textile Commissioner who had enunciated the scheme was bound by the assurance thereof and obliged to carry out the promise made thereunder. As already noticed, in the present batch of cases neither the notification is of an executive character nor does it represent a scheme designed to achieve a particular purpose. It was a notification issued in public interest and again withdrawn in public interest. So far as the second Page 79 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined case (M.P. Sugar Mills case) is concerned the facts were totally different. In the correspondence exchanged between the State and the petitioners therein it was held out to the petitioners that the industry would be exempted from sales tax for a particular number of initial years but when the State sought to levy the sales tax it was held by this Court that it was precluded from doing so because of the categorical representation made by it to the petitioners through letters in writing, who had relied upon the same and set up the industry.
23. The appellants appear to be under the impression that even if, in the altered market conditions the continuance of the exemption may not have been justified, yet, Government was bound to continue it to give extra profit to them. That certainly was not the object with which the notification had been issued. The withdrawal of exemption "in public interest" is a matter of policy and the courts would not bind the Government to its policy decisions for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the "public interest". The courts, do not interfere with the fiscal policy where the Government acts in "public interest" and neither any fraud or lack of bona fides is alleged much less established. The Government has to be left free to determine the priorities in the matter of utilisation of finances and to act in the public interest while issuing or modifying or withdrawing an exemption notification under Section 25(1) of the Act."
Thus, it can be seen that this Court has specifically and clearly held that the doctrine of promissory estoppel cannot be invoked in the abstract and the courts are bound to consider all aspects including the objective to be achieved and the public good at large. It has been held that while considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must forever be present to the mind of the court, while considering the applicability of the doctrine. It is further held that the doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation. It is further held that an exemption notification does not make items which are subject to levy of customs duty etc. as items not leviable to such duty. It only suspends the levy and collection of customs duty, etc., wholly or partially and subject to such conditions as may be laid down in the notification by the Government in "public interest". Such an exemption by its very nature is susceptible of being revoked or modified or subjected to other conditions. The supersession or revocation of an exemption notification in the "public interest" is an exercise of the statutory power of the State under the law itself. It has been further held that under the General Clauses Act an authority which has the power to issue a notification has the undoubted power to rescind or modify the notification in a like manner. It has been observed that the withdrawal of exemption "in public interest" is a matter of policy and the courts would not bind the Government to its policy decisions for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the "public interest". It has been held that where the Government acts in "public interest" and neither any fraud or lack of bonafides is alleged, much less established, it would not be appropriate for the court to interfere with the same.
Page 80 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined 21.2 In the case of Shrijee Sales Corporation (supra), it is observed and held that the principle of promissory estoppel may be applicable against the Government. But the determination of applicability of promissory estoppel against public authority/Government hinges upon balance of equity or "public interest". In case there is a supervening public interest, the Government would be allowed to change its stand; it would then be able to withdraw from representation made by it which induced persons to take certain steps which may have gone adverse to the interest of such persons on account of such withdrawal. Once public interest is accepted as the superior equity which can override individual equity, the aforesaid principle should be applicable even in cases where a period has been indicated for operation of the promise.
21.3 In the case of Shree Durga Oil Mills (supra), it has been held that when the withdrawal of exemption is in public interest, the public interest must override any consideration of private loss or gain. In the said case, the change in policy and withdrawal of the exemption on the ground of severe resource crunch have been found to be a valid ground and to be in public interest.
21.4 In the case of Mahaveer Oil Industries (supra), after considering the decision of this Court in the case of Kasinka Trading (supra), a similar view has been taken and it has been observed that public interest requires that the State be held bound by the promise held out by it in such a situation. But this does not preclude the State from withdrawing the benefit prospectively even during the period of the Scheme, if public interest so requires. Even in a case where a party has acted on the promise, if there is any supervening public interest which requires that the benefit be withdrawn or the scheme be modified, that supervening public interest would prevail over any promissory estoppel. 21.5 In the case of Shree Sidhbali Steels Ltd. (supra), in paragraphs 32 and 33, it has been observed and held as follows:
"32. The doctrine of promissory estoppel is by now well recognised and well defined by a catena of decisions of this Court. 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 promise would be enforceable against the Government at the instance of the promisee notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 229 of the Constitution. The rule of promissory estoppel being an equitable doctrine has to be moulded to suit the particular situation. It is not a hard-and-fast rule but an elastic one, the objective of which is to do justice between the parties and to extend an equitable treatment to them. This doctrine is a principle evolved by equity, to avoid injustice and though commonly named promissory estoppel, it is neither in the realm of contract nor in the realm of estoppel. For application of the doctrine of promissory estoppel the promisee must establish that he suffered in detriment or altered his position by reliance on the promise.
33. Normally, the doctrine of promissory estoppel is being applied Page 81 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined against the Government and defence based on executive necessity would not be accepted by the court. However, if it can be shown by the Government that having regard to the facts as they have subsequently transpired, it would be inequitable to hold the Government to the promise made by it, the court would not raise an equity in favour of the promisee and enforce the promise against the Government. Where public interest warrants, the principles of promissory estoppel cannot be invoked. The Government can change the policy in public interest. However, it is well settled that taking cue from this doctrine, the authority cannot be compelled to do something which is not allowed by law or prohibited by law. There is no promissory estoppel against the settled proposition of law. Doctrine of promissory estoppel cannot be invoked for enforcement of a promise made contrary to law, because none can be compelled to act against the statute. Thus, the Government or public authority cannot be compelled to make a provision which is contrary to law."
Thus, as held by this Court, when the public interest warrants, the principles of promissory estoppel cannot be invoked. It is further held that the rule of promissory estoppel being an equitable doctrine has to be moulded to suit the particular situation. It is not a hard-and-fast rule but an elastic one, the objective of which is to do Justice between the parties and to extend an equitable treatment to them." 15.6 In view of the aforesaid position of law, in the facts of the present case, the respondent No.1 made an unequivocal promise on 01.09.2020 by introducing the Policy, 2020 whereby, the respondent No.1 promise to confer capital subsidy and interest subsidy and the procedure to apply under Clause - 2.1.2 of the said Policy. Having considered the pleadings, it appears that the petitioners have chosen not to apply under Clause - 2.1.2 to avail the benefit of the Policy, 2020. Even otherwise, the benefit under Policy, 2020 would not be extended to the petitioners herein; the petitioners having categorically applied under the Solar Policy, 2019. The benefit of subsidy under the Policy, 2020 would not be available to the Page 82 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined beneficiaries of Solar Policy, 2019. The stance having been clarified by the respondent No.1 from time to time and the petitioners having chosen not to avail any of the options to fall in line with the existing policies.
15.7 Reliance as placed on (2006) 8 SCC 702 in case of MRF Ltd., Kottayam Vs. Asst. Commissioner (Assessment) Sales Tax & Ors., by the learned counsel appearing for the petitioners, does not apply to the facts of the present case. 15.7.1 In the facts of the said case, the MRF had made huge investment in the State of Kerala under a promise held to it that it would be granted exemption from payment of sales tax for a period of seven years. It was granted eligibility certificate. Exemption order was also passed. The Hon'ble Supreme Court held that it was not open for the State Government to deprive MRF having taken away the benefit of exemption with effect from 15.1.1998 and thereby, depriving MRF of the benefit of exemption for more than 5 years out of the total period of seven years. It was held that the State Government has no power to make a retrospective amendment affecting the rights already accrued in favour of the MRF thereunder.
Page 83 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined In the facts of the present case, there is no promise at the end of the respondent No.1 by virtue of which, the petitioners have altered their position and to the determent. 15.8 Further, reliance as placed on 2020 SCC Online SC 968 in case of State of Jharkhand & Ors. vs. Brahmputra Metallics Ltd., Ranchi & Anr., by the learned counsel appearing for the petitioners, is not applicable to the facts of the present case. In the said decision, the Hon'ble Supreme Court has discussed the doctrine of promissory estoppel and legitimate expectations. Further, under the doctrine of promissory estoppel, there may be a requirement to show a detriment suffered by a party due to the reliance placed on the promise.
In the facts of the present case, in the opinion of this Court, in absence of any promise by the respondent No.1, the doctrine of promissory estoppel is not applicable. 15.9 Reliance as placed on AIR 2008 SC 693 in case of U.P. Power Corporation Ltd. & Anr. vs. Sant Steels & Alloys (P) Ltd. & Ors., wherein, pursuant to the representations made by the State Government that they will be given certain benefits and pursuant thereto, the same was acted upon. The Corporation Page 84 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined to withdraw the said benefit before expiry of the stipulated period by issuing Notification revoking the same to which the stake holders were legitimately entitled to avail, was held to be against the settled principle of promissory estoppel.
In the facts of the present case, in absence of any representation by the State Government, the petitioners herein could not be said to be suffered to the detriment. In view thereof, the aforesaid position of law would not be applicable to the facts of the present case.
15.10 In the opinion of this Court, considering the aforesaid position of law and the facts of the present case, the petitioners have failed to make out a case of promissory estoppel either on the basis of the averments made in the petition or the documents which are produced on record as also the affidavits filed in the petition.
15.11 Pursuant to the representations, the respondent No.1 authority has taken a clear stance that the petitioners would not be entitled to the benefit of subsidy under the Policy, 2020. The petitioners having altered their position pursuant to the introduction of the Policy, 2020 is on their own volition; having Page 85 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined not even applied under the Policy, 2020.
15.12 The stance of the respondent No.1 has been consistent that the benefit of only one policy can be availed by the stake holders and the petitioners herein are also required to fall in line with the same. The conduct of the respondent No.1 expressly and impliedly has been consistent and in view thereof, the aforesaid principle of promissory estoppel does not apply in the facts of the present case.
(c) Policy Decision:-
16. The petitioners have entered into the PPA with the respondent No.1 on 24.04.2021 expressly and the same is undisputed. The petitioners have availed the benefit under the Solar Policy, 2019 and are seeking the benefit of the Policy, 2020 on the ground that the Policy, 2020 in itself endeavors to give support to MSMEs engaged in manufacturing sectors. The generation of power through conventional and non- conventional method/process is considered as manufacturing activity. In view thereof, the Solar projects set up by the petitioners for generation of power is very much covered under the Policy, 2020. The Policy, 2020 being in continuation of the Page 86 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined Policy, 2015 wherein, identical benefits of subsidy are envisaged and extended to the Small and Medium Enterprises who have set up power generation projects.
16.1 Considering the preamble to the Policy, 2020, the respondent No.1 constituted a task force to review the existing scheme under the Industrial Policy, 2015. On analyzing the task force recommended modifications to the existing schemes to further simplify the benefits and expansion of scope of the existing benefits. On recommendations of the task force and in consultation with the Industries, the Government decided to form a new assistance scheme for MSME sector to strengthen the MSMEs and make them globally competent as a part of the Policy, 2020. Considering the aforesaid, the Policy, 2020 is formulated by the respondent No.1 as a new revised Policy and the same is not a clarification to the Policy, 2015. The Policy, 2015 was in operation up to 06.08.2020 and the Policy, 2020 came into effect on 07.08.2020.
16.2 The contention of the petitioners that the petitioners do not fall within the ambit of Clause - 16 of the Policy, 2020 which bars the benefit under the Policy, 2020 for the same component. The petitioners herein have themselves in the Page 87 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined petition stated that the petitioners herein are in generation of power through renewable energy/sources and the component is the same under the Solar Policy, 2019 and the Policy, 2020. For the aforesaid reasons, the petitioner herein is estopped to contend that the components are separate and distinct. 16.3 The respondent No.1 categorically replied to the representations and on deliberation and consultation with the various departments, took the impugned decision that the beneficiaries under the Solar Policy, 2019 would not be entitled to the benefit of the subsidy. Further, both the Policies operate for a particular period of time and the same would not bind the State for all time to come. Both the Policies apply to different sets of classes. The Solar Policy, 2019 applies to the solar projects having size of 0.5 MW and above but not exceeding 4 MW having applied for the benefits of Solar Policy, 2019 installed and commissioned to the projects during the operative period of the said Policy which qualifies to be termed as Small Scale Solar Projects and are eligible for benefits of the said policy. Whereas, the Policy, 2020 provides Scheme for Assistance to Micro, Small and Medium Enterprises (MSMEs) in general and confers the benefit in form of subsidy i.e. Scheme Page 88 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined
- 1 Capital Investment Subsidy and Scheme - 2 Interest Subsidy.
In view of the aforesaid, the respondent No.1 clarified its stance from time to time that both the policies cater to different classes and applied differently in particular set of circumstances and therefore, the developers like the petitioners having applied under the Solar Policy, 2019, pursuant to which having entered into the PPA on 24.04.2021, would not be entitled for the benefits of subsidy under the Policy, 2020.
16.4 The respondent No.1 issued exit options from the PPAs with the Discoms under the Solar Policy, 2019. A Public notice came to be issued by the GUVNL on 09.08.2021 for availing one time exit option on or before 31.08.2021 which was extended vide another Public notice dated 27.08.2021 up to 05.09.2021. After issuance of clarification by way of addendum to Clause - 8 of the Government Resolution under the Policy, 2020, another exit option came to be issued on 25.07.2022 wherein the public notice was also issued on 25.07.2022 and the last date for the same was 09.08.2022.
Page 89 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined 16.5 In view of the aforesaid, this Court deems it fit to refer to the status of applications under the Solar Policy, 2019, which is as under:
Status of Small Scale Distributed Solar Project (SSDSP) as on 31.08.2022 Discom Total No. of PPAs Total No. of Exit Net Total No. of Net Applications Commissioned Application Executed Applications Applications Exit after Second up to 31.08.2022 Received Received under after first Exit Applications Exit Option first Exit Received under Second Exit Nos. MW Nos. MW Nos. MW Nos. MW Nos. MW Nos. MW Nos. MW UGVCL 3540 2502 1227 836.78 789 476.41 438 360.37 271 184.57 167 175.80 49 50.94 DGVCL 252 177 57 33.75 25 16.25 32 17.5 31 17.00 1 0.50 0 0 PGVCL 7953 4899 2483 1496.14 1624 963.25 859 532.89 625 359.40 324 173.49 115 84.55 MGVCL 659 381 235 131.14 171 92.54 64 38.6 50 29.60 14 9.00 4 3.5 Total 12404 7959 4002 2497.81 2609 1548.45 1393 949.36 977 590.57 416 358.79 168 138.99 16.6 Considering the aforesaid table as placed on record by the respondent No.6, it emerges that (a) approximately 1809 developers availed the benefit of exit options; [(i) first exit option (ii) second exit option] and; (b) approximately 168 solar projects are commissioned under the Solar Policy, 2019 up to 31.08.2022 as referred above. The petitioner herein having chosen not to avail the said exit options or chose to apply under the Policy, 2020, it is not open for the petitioners herein to contend that the petitioners are "expressly inclusive" in line with the Clause - 16 of the Policy, 2020.
17. This Court has also considered Clause - 2.1.2 of the Policy, 2020 stipulates that the enterprise shall have to apply at online portal within one year from the date of first Page 90 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined disbursement of loan, or on or before the date of commencement of commercial production whichever is later. The application submitted after one year will not be entitled for capital subsidy.
In the facts of the present case, the petitioner herein has neither applied under the Policy, 2020 nor commenced the commercial production and having failed to comply with the conditions of the PPA under the Solar Policy, 2019, the bank guarantee has been invoked/encashed by the respondent authority.
18. Further, pending the present petition, the petitioner approached the respondent No.6 seeking extension for implementation of the PPA by communication 24.05.2022. Having availed the said Solar Policy, 2019 and knowing fully well that the petitioner is governed by the terms and conditions of the PPA and the respondent authorities having informed thrice i.e. on 20.07.2021, 02.08.2021 and 05.08.2021, that the option of subsidy is not available to the petitioners under the Policy, 2020.
In the opinion of this Court, the respondent State - Page 91 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined Government has clarified its stand that the option of subsidy under the Policy, 2020 is not available to the petitioners having availed the Solar Policy, 2019. This Court has perused the said communications duly produced at page 91/A, 92 and 93. 18.1 Considering the aforesaid communications, in the opinion of this Court, the respondent State Government refused the extension of subsidy qua the stake holders of the Solar Policy, 2019. It was never considered by the respondent No.1 to extend the benefit of subsidy under the Policy, 2020 to the stake holders of the Solar Policy, 2019 however, for the benefit of stake holders, exit options were extended as referred above. The petitioners chose not to avail the said Exit options.
19. The respondent - State Government introduced the Atmanirbhar Gujarat Scheme for Assistance to MSMEs by virtue of Government Resolution dated 05.10.2022 making amendments to the Policy, 2020. Clauses 7, 14 and 21 of the said scheme provides that the MSMEs that have applied under the previous scheme introduced vide Government Resolution dated 01.09.2020 and not commenced commercial production before the issuance of the Government Resolution dated 05.10.2022, shall have the option either to continue with the Page 92 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined previous scheme or opt under the Atmanirbhar Scheme. The said option is to be exercised within a period of six months from the issuance of the GR dated 05.10.2022. If such option was not exercised within the prescribed period of six months, it would be deemed that the enterprise has opted to continue with the previous scheme.
19.1 The petitioner herein having chosen not to avail the benefit of Aatmanirbhar Scheme within a period of six months in line with the said GR dated 05.10.2022, the question of exercising option under the Atmanirbhar Scheme, does not arise. Even otherwise, the said scheme would not apply to the petitioners herein having not applied either under the Policy, 2020 as referred above nor having not exercised the option to Exit the Solar policy, 2019. The petitioners' grievance with respect to the Atmanirbhar Gujarat Scheme and its retrospective application, in the opinion of this Court, does not in any way affect the rights of the petitioners herein. 19.2 The submissions advanced by Mr. Kamal Trivedi, learned Advocate General, require consideration. The operative period of Atmanirbhar Scheme is from 01.10.2022 to 04.10.2017. Clause - 7 of the said Scheme, as referred above, grants the Page 93 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined aforesaid option. The petitioners has not commenced the commercial production, either to continue under the previous scheme or opt under the Atmanirbhar Scheme. Thus, the operative part of the said Scheme i.e. Clause - 7 leaves no scope of there being any retrospectivity involved.
20. The policies that are introduced by the State Government from time to time are in the interest of public and subject to change considering the benefits of the stake holders. The stance of respondent No.1 has been consistent that one availing the benefits under one policy, cannot avail the benefits under another policy of the State Government. At this stage, it is apposite to refer to the following position of law:
(a) (1998) 4 SCC 117 in case of State of Punjab & Ors. vs. Ram Lubhaya Bagga & Ors.. Paragraphs 23 and 25 of the said decision read thus:
"23. The right of the State to change its policy from time to time, under the changing circumstances is neither challenged nor could it be. let us now examine this new policy. learned senior counsel for the appellants submits that the new policy is more liberal in as much as it gives freedom of choice to every employee to undertake treatment in any private hospital of his own choice any where in the country. The only clog is that the reimbursement would be to the level of expenditure as per rates which are fixed by the Director, Health and Family Welfare, Punjab for a similar package treatment or actual expenditure which ever is less. Such rate for a particular treatment will be included in the advice issued by the District/State Medical Board for fixing this. Under the said policy a Committee of Technical Experts is constituted by the Director to finalize the rates of various treatment packages and such rate list shall be made Page 94 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined available to the offices of the Civil surgeons of the State. Under this new policy, it is clear that none has to wait in a queue. One can avail and go to any private hospital anywhere in India. Hence the objection that, even under the new policy in emergency one has to wait in a queue as a argued in Surjit Singh case (supra) does not hold good.
25. Now we revert to the last submission, whether the new State policy is justified in not reimbursing an employee, his full medical expenses incurred on such treatment, if incurred in any hospital in India not being a Government hospital in Punjab. Question is whether the new policy which is restricted by the financial constraints of the State to the rates in AIIMS would be in violation of Article 21 of the Constitution of India. so far as questioning the validity of governmental policy is concerned in our view it is not normally within the domain of any court, to weigh the pros and cons of the policy or to scrutinize it and test the degree of its beneficial or equitable disposition for the purpose of varying modifying or annulling it, based on however sound and good reasoning, except where it is arbitrary or violative of any constitutional, statutory or any other provision of law. When Government forms its policy, it is based on number of circumstances on facts, law including constraints based on its resources. It is also based on expert opinion. it would be dangerous if court is asked to test the utility, beneficial effect of the policy or its appraisal based on facts set out on affidavits. The Court would dissuade itself from entering into this realm which belongs to the executive. It is within this matrix that it is to be seen whether the new policy violates Article 21 When it restricts reimbursement on account of its financial constraints."
(b) 1998 (1) GLH 653 in case of Ahmedabad Electricity Co. Ltd. vs. Union of India & Ors. . Paragraph 23 of the said decision reads thus:
"23. The question, therefore, is as to whether such a decision could have been taken by Railway Administration. If yes, could it be said to be arbitrary, unreasnable or violative of rights of the petitioners ? In our opinion, it is not. If a policy decision is taken by an authority, normally, in exercise of extraordinary jurisdiction under Art.226 of the Constitution of India, this court will not interfere with it. The jurisdiction under Art.226 of the Constitution cannot be invoked to interfere with such decision. The question of policy is essentially for the authorities to decide. The decision on policy matters depend upon a number of circumstances and considerations and it is neither desirable nor advisable for Courts to direct or sermonize the Government to adopt a particular policy which the Court deems fit and proper. As observed by the Apex Court, "the court cannot be propelled into the unchartered ocean of Government policy" (Vide Bennett Colemman & Co. v. Union of India, AIR 1973 SC 106). The Court has also no jurisdiction to sit over the judgment or wisdom of a policy evolved by authorities. It may be right or wrong or it may even be follish. True it is that if such policy is arbitrary, unreasonable or violative of fundamental or legal rights of the parties, the Court can interfere with it. But if it is not violative of any right of a party, the court cannot interfere with it only on the ground that other policy would have served the interest of general Page 95 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined public better."
(c) (2021) 8 SCC 511 in case of Small Scale Industrial Manufactures Association (Registered) vs. Union of India and Ors., wherein, the Hon'ble Supreme Court has observed and held as under:
"59. While considering the aforesaid submissions/reliefs sought, the scope of judicial review on the policy decisions in the field of economy and/or economic policy decisions and/or the policy decisions having financial implications which affects the economy of the country are required to be considered.
60. In catena of decisions and time and again this Court has considered the limited scope of judicial review in economic policy matters. From various decisions of this Court, this Court has consistently observed and held as under:
60.1 The Court will not debate academic matters or concern itself with intricacies of trade and commerce.
60.2 It is neither within the domain of the courts nor the scope of judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are the courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical. Wisdom and advisability of economic policy are ordinarily not amenable to judicial review.
60.3 Economic and fiscal regulatory measures are a field where Judges should encroach upon very warily as Judges are not experts in these matters.
61. In R.K. Garg (supra), it has been observed and held that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It is further observed that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this particularly true in case of legislation dealing with economic matters.
62. In the case of Arun Kumar Agrawal (supra), this Court had an occasion to consider the following observations made the Supreme Court of the United States in the case of Metropolis Theatre Co. v. Chicago, "43....The problems of Government are practical ones and may justify, if they do not require, rough accommodation, illogical, if may be, and unscientific. But even such criticism should not be hastily expressed. What is the best is not always discernible; the wisdom of any choice may be disputed or condemned. Mere errors of Government are not subject to our judicial review. It is only its Page 96 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined palpably arbitrary exercises which can be declared void..."
63. This Court in the case of Nandlal Jaiswal (supra) has observed that the Government, as laid down in Permian Basin Area Rate Cases, 20 L Ed (2d) 312, is entitled to make pragmatic adjustments which may be called for by particular circumstances. The court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide.
64. In the case of BALCO Employees' Union (Regd.) (supra), this Court has observed that Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. In other words, it is not for the courts to consider relative merits of different economic policies and consider whether a wiser or better one can be evolved. It is further observed that in the case of a policy decision on economic matters, the courts should be very circumspect in conducting an enquiry or investigation and must be more reluctant to impugn the judgment of the experts who may have arrived at a conclusion unless the court is satisfied that there is illegality in the decision itself.
65. In the case of Peerless General Finance and Investment Co. Ltd. (supra), it is observed and held by this Court that the function of the Court is to see that lawful authority is not abused but not to appropriate to itself the task entrusted to that authority. It is further observed that a public body invested with statutory powers must take care not to exceed or abuse its power. It must keep within the limits of the authority committed to it. It must act in good faith and it must act reasonably. Courts are not to interfere with economic policy which is the function of experts. It is not the function of the courts to sit in judgment over matters of economic policy and it must necessarily be left to the expert bodies. In such matters even experts can seriously and doubtlessly differ. Courts cannot be expected to decide them without even the aid of experts. It is further observed that it is not the function of the Court to amend and lay down some other directions. The function of the court is not to advise in matters relating to financial and economic policies for which bodies like RBI are fully competent. The court can only strike down some or entire directions issued by the RBI in case the court is satisfied that the directions were wholly unreasonable or in violative of any provisions of the Constitution or any statute. It would be hazardous and risky for the courts to tread an unknown path and should leave such task to the expert bodies. This Court has repeatedly said that matters of economic policy ought to be left to the government.
66. In the case of Narmada Bachao Andolan (supra), in paras 229 & 233, it is observed and held as under:
"229. It is now well settled that the courts, in the exercise of their jurisdiction, will not transgress into the field of policy decision. Whether to have an infrastructural project or not and what is the type of project to be undertaken and how it has to be executed, are part of policymaking process and the courts are ill-equipped to adjudicate on a policy decision so undertaken. The court, no doubt, has a duty to see that in the undertaking of a decision, no law is violated and Page 97 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined people's fundamental rights are not transgressed upon except to the extent permissible under the Constitution.
233. At the same time, in exercise of its enormous power the court should not be called upon to or undertake governmental duties or functions. The courts cannot run the Government nor can the administration indulge in abuse or non-use of power and get away with it. The essence of judicial review is a constitutional fundamental. The role of the higher judiciary under the Constitution casts on it a great obligation as the sentinel to defend the values of the Constitution and the rights of Indians. The courts must, therefore, act within their judicial permissible limitations to uphold the rule of law and harness their power in public interest. It is precisely for this reason that it has been consistently held by this Court that in matters of policy the court will not interfere.When there is a valid law requiring the Government to act in a particular manner the court ought not to, without striking down the law, give any direction which is not in accordance with law. In other words, the court itself is not above the law."
67. In Prag Ice & Oil Mills (supra), this Court observed as under:
"24. We do not think that it is the function of the Court to set in judgment over such matters of economic policy as must necessarily be left to the government of the day to decide. Many of them are matters of prediction of ultimate results on which even experts can seriously err and doubtlessly differ. Courts can certainly not be expected to decide them without even the aid of experts."
68. In P.T.R Exports (Madras) P. Ltd. (supra), this Court observed as under:
"In matters of economic policy, it is settled law that the Court gives a large leeway to the executive and the legislature Government would take diverse factors for formulating the policy in the overall larger interest of the economy of the country. The Court therefore would prefer to allow free play to the Government to evolve fiscal policy in the public interest and to act upon the same."
69. What is best in the national economy and in what manner and to what extent the financial reliefs/packages be formulated, offered and implemented is ultimately to be decided by the Government and RBI on the aid and advise of the experts. The same is a matter for decision exclusively within the province of the Central Government. Such matters do not ordinarily attract the power of judicial review. Merely because some class/sector may not be agreeable and/or satisfied with such packages/policy decisions, the courts, in exercise of the power of judicial review, do not ordinarily interfere with the policy decisions, unless such policy could be faulted on the ground of mala fide, arbitrariness, unfairness etc.
70. There are matters regarding which Judges and the Lawyers of the courts can hardly be expected to have much knowledge by reasons of their training and expertise. Economic and fiscal regulatory measures are a field where Judges should encroach upon very warily as Judges are not experts in these matters.
Page 98 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined
71. The correctness of the reasons which prompted the government in decision taking one course of action instead of another is not a matter of concern in judicial review and the court is not the appropriate forum for such investigation. The policy decision must be left to the government as it alone can adopt which policy should be adopted after considering of the points from different angles. In assessing the propriety of the decision of the Government the court cannot interfere even if a second view is possible from that of the government.
72. Legality of the policy, and not the wisdom or soundness of the policy, is the subject of judicial review. The scope of judicial review of the governmental policy is now well defined. The courts do not and cannot act as an appellate authority examining the correctness, stability and appropriateness of a policy, nor are the courts advisers to the executives on matters of policy which the executives are entitled to formulate.
73. Government has to decide its own priorities and relief to the different sectors. It cannot be disputed that pandemic affected the entire country and barring few of the sectors. However, at the same time, the Government is required to take various measures in different fields/sectors like public health, employment, providing food and shelter to the common people/migrants, transportation of migrants etc. and therefore, as such, the government has announced various financial packages/reliefs. Even the government also suffered due to lockdown, due to unprecedented covid-19 pandemic and also even lost the revenue in the form of GST. Still, the Government seems to have come out with various reliefs/packages. Government has its own financial constraints. Therefore, as such, no writ of mandamus can be issued directing the Government/RBI to announce/declare particular relief packages and/or to declare a particular policy, more particularly when many complex issues will arise in the field of economy and what will be the overall effect on the economy of the country for which the courts do not have any expertise and which shall be left to the Government and the RBI to announce the relief packages/economic policy in the form of reliefs on the basis of the advice of the experts. Therefore, no writ of mandamus can be issued.
74. No State or country can have unlimited resources to spend on any of its projects. That is why it only announces the financial reliefs/packages to the extent it is feasible. The court would not interfere with any opinion formed by the Government if it is based on the relevant facts and circumstances or based on expert advice. It is not normally within the domain of any court to weigh the pros and cons of the policy or to scrutinize it and test the degree of its beneficial or equitable disposition for the purpose of varying, modifying or annulling it, based on howsoever sound and good reasoning, only where it is arbitrary and violative of any Constitutional, statutory or any other provisions of law. When Government forms its policy, it is based on a number of circumstances on facts, law including constraints based on its resources. It is also based on expert opinion. It would be dangerous if court is asked to test the utility, beneficial effect of the policy or its appraisal based on facts set out on affidavits.
75. No right could be absolute in a welfare State. Man is a social animal. He cannot live without the cooperation of a large number of persons. Every article one uses is the contribution of many. Hence every Page 99 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined individual right has to give way to the right of the public at large. Not every fundamental right under Part III of the Constitution is absolute and it is to be within permissible reasonable restriction. This principal equally applies when there is any constraint on the health budget on account of financial stringencies.
76. It is the cardinal principle that it is not within the legitimate domain of the court to determine whether a particular policy decision can be served better by adopting any policy different from what has been laid down and to strike down as unreasonable merely on the ground that the policy enunciated does not meet with the approval of the court in regard to its efficaciousness for implementation of the object and purpose of such policy decision.
77. With the limited scope of judicial review on the policy decisions affecting the economy and/or it might have financial implications on the economy of the country, the reliefs and submissions stated hereinabove are required to be considered. Whether there shall be a waiver of interest during the moratorium period or whether there shall be sector-wise relief packages and/or RBI should have issued directions which are sector specific and addressing such sector specific issues and/or whether the moratorium period should be extended beyond 31.08.2020 or the last date for invocation of the resolution mechanism, namely, 31.12.2020 provided in the 6.8.2020 circular should be extended are all in the realm of the policy decisions. Not only that, if such reliefs are granted, it would seriously affect the banking sectors and it would have far reaching financial implications on the economy of the country."
(d) (2022) 5 SCC 314 in case of Satya Dev Bhagaur and Ors. vs. State of Rajasthan & Ors.. wherein, the Hon'ble Supreme Court has observed and held as under:
"15. It is trite that the Courts would be slow in interfering in the policy matters, unless the policy is found to be palpably discriminatory and arbitrary. This court would not interfere with the policy decision when a State is in a position to point out that there is intelligible differentia in application of policy and that such intelligible differentia has a nexus with the object sought to be achieved.
16. This Court in the case of Krishnan Kakkanth vs. Government of Kerala and others has observed thus:
"36. To ascertain unreasonableness and arbitrariness in the context of Article 14 of the Constitution, it is not necessary to enter upon any exercise for finding out the wisdom in the policy decision of the State Government. It is immaterial whether a better or more comprehensive policy decision could have been taken. It is equally immaterial if it can be demonstrated that the policy decision is unwise and is likely to defeat the purpose for which such decision has been taken. Unless the policy decision is demonstrably capricious or arbitrary and not informed by any reason whatsoever or it suffers from the vice of discrimination or infringes any statute or provisions of the Constitution, the policy decision cannot be struck down. It should be Page 100 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined borne in mind that except for the limited purpose of testing a public policy in the context of illegality and unconstitutionality, courts should avoid "embarking on uncharted ocean of public policy".
17. A three Judge bench of this Court in Sher Singh and Others vs. Union of India and Others has observed thus:
"As a matter of fact the courts would be slow in interfering with matters of government policy except where it is shown that the decision is unfair, mala fide or contrary to any statutory directions."
Considering the aforesaid position of law and the facts of the present case, in the opinion of this Court, in absence of any malafide, arbitrariness and discrimination in the Policies introduced by the State Government i.e. the Solar Policy, 2019 and the Policy, 2020 and the Aatmanirbhar Policy, 2022, the said Policies are not subject to judicial review. This Court is not inclined to exercise its extra-ordinary jurisdiction under Article 226 of the Constitution of India and sit in appeal over the policy decision by the respondent No.1 - State Government on due deliberations with the experts and having introduced the policies taking into consideration the interest of public at large. Considering the position of law, as referred above, a change in policy can be affected in the interest of public at large even after making a promise. In the facts of the present case, though, there is no promise by the respondent No.1 having been very clear in its stance right from introduction of the policies and the addendum dated 8/9.06.2022 having been issued clarifying the stance with respect to the Solar Policy, Page 101 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined 2019.
21. Mr. Rohan Lavkumar Shah, learned advocate with Mr. Aaditya P. Dave, learned advocate for Nanavati Associates in Special Civil Application No. 9167 of 2023 and Special Civil Application No. 9151 of 2023 for the petitioners, adopted the submissions advanced by Mr. Mihir Joshi, learned Senior Counsel appearing for the petitioners in Special Civil Application No.13056 of 2021.
21.1 Mr. Rohan Lavkumar Shah, learned advocate, placed reliance 2023 SCC Online SC 640 in case of Sree Sankaracharya University of Sanskrit & Ors. vs. Dr. Manu & Anr., more particularly, paragraph 56 wherein, the Hon'ble Supreme Court held that merely because the subsequent Government Order has been described as a clarification/explanation or is said to have been issued following a clarification that was sought in that regard, the Court is not bound to accept that the said order is only clarificatory in nature. Further, it was held that the subsequent order by the State Government, was not clarificatory, but is a substantial amendment wherein the State sought to withdraw the benefit of two advance increments in favour of a certain Page 102 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined category of lecturers. The benefit withdrawn was not anticipated under the previously existing scheme and in view thereof, it was held that the amendment could not be given retrospective effect.
21.2 In the facts of the present case, as stated above, the State Government having not promised the benefits of both the policies at any stage either while introducing (i) Solar Policy, 2019; or (ii) the Policy, 2020. It was only in view of the representations preferred by some petitioners and others with respect to the benefit of both the schemes qua the developers/ the stake holders, the State Government clarified its stance by communications dated 20.07.2021, 02.08.2021 and 05.08.2021 and the addendum to Clause - 8 dated 8/9.06.2022 issued thereunder.
21.3 The aforesaid ratio as laid down in case of Sree Sankaracharya University of Sanskrit & Ors. (supra), does not apply to the facts of the present case. This Court has formed an opinion that the impugned addendum dated 8/9.06.2022 is clarificatory in nature, the same would assumes retrospective effect in line with the ratio laid down in the decisions as referred above.
Page 103 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023
NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined
22. The contention with respect to the noting raised by learned advocate appearing for the petitioners in Special Civil Application No.6823 of 2022 is considered separately by this Court as under:
22.1 Pending the present petition, the petitioner by filing an additional affidavit, duly produced on record at page 172 of the petition, has placed on record certain documents which are internal communications between the various departments of the State Government stating that the said documents are received by the petitioner from one Mr. Vipul M. Solanki (not known to the petitioner personally). It is stated that the petitioner preferred an application to get certified copies of the said documents under the Right to Information Act which came to be refused by the competent authority and an appeal is preferred challenging the said decision.
22.1.1 The petitioner herein has relied on documents received through one Mr. Vipul Solanki and states that different departments of the State Government were actively discussing during the period of October, 2020 to February, 2021 the issue of applicability of capital and interest subsidy Page 104 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined as envisaged under the Policy, 2020 to the Solar Policy Distributed Projects availing the benefit of the Solar Policy, 2019. Placing reliance on the said notings/communications between the departments, it is stated that on having clarified on aspect of availability of capital and interest subsidy under the Policy, 2020 in favour of the Solar Policy, 2019, the PPAs were signed by approximately 4000 developers.
22.3 Mr. Kamal Trivedi, learned Advocate General, vehemently submitted that the file notings are internal communications between the departments and are nothing but mere expression of one's opinion and not the ultimate decision of the State Government. The said communications do not confer any right upon the petitioners. It was submitted that the said notings are also incomplete and misleading and it does not contain several other notings and final decision having taken at the highest level which do not form a part of the record. It was submitted that to move on the part of the petitioner to attempt to produce the aforesaid documents, is mischievous with ulterior design but, also malafide in nature.
21.4 It is apposite to refer to the position of law:
(a) Kapilbhai Tansukhlal Sameja vs. State of Gujarat reported Page 105 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined in 2003 (3) GLR 2302 wherein, it has observed and held as under:
"24. As to what is the efficacy and strength of the notings on the file and their value in relation to the pending dispute has to be decided in context of principles laid down by the Supreme Court of India in case of State of Bihar and Ors. v. Kripalu Shankar and Ors., 1987 (3) SCC 34.
A Government functions by taking decisions on the strength of views and suggestions expressed by the various officers at different levels. Ultimately getting finality at the hands of the Minister concerned. Till then, conflicting opinions; views and suggestions would have emanated from various officers at the lower level. There should not be any fetter on the fearless and independent expression of opinions by officers on matters coming before them through the files xxx xxx xxx The expression of opinion by the officers in the internal files are for the use of the department and not for outside exposure or for publicity xxx xxx xxx The notings in a notes file do not have behind them the sanction of law as an effective order. It is only an expression of a feeling by the concerned officer on the subject under review XXX XXX XXX Business of a State is not done by a single officer. It involves a complicated process. In a democratic set-up, it is conducted through the agency of a large number of officers.
"Now, the functioning of Government in a State is governed by Article 166 of the Constitution, which lays down that there shall be a Council of Ministers with the Chief Minister at the Head, to aid and advise the Governor in the exercise of his functions except where he is required to exercise his functions under the Constitution, in his discretion".
"15. Article 166(1) requires that all executive action of the State Government shall be expressed to be taken in the name of the Governor:
This clause relates to cases where the executive action has to be expressed in the shape of a formal order or notification. It prescribes the mode in which an executive action has to be expressed. Noting by an official in the departmental file will not, therefore, come within this Article nor even noting by a Minister. Every executive decision need not be as laid down under Article 166(1) but when it takes the form of an order, it has to comply with Article 166(1). Article 166(2) states that orders and other instruments made and executed under Article 166(1), shall be authenticated in the manner prescribed. While Clause (1) relates to the mode of expression, Clause (2) lays down the manner in which, the order is to be authenticated and Clause (3) relates to the making of the rules by the Governor for the more convenient transaction of the business of the Government. A study of this Article, therefore, makes it clear that the notings in a file get culminated into an order affecting right of parties only when it reaches the head of the department and is expressed in the name of the Governor, authenticated in the manner provided in Article 166(2).
In the aforesaid decision in case of State of Bihar (supra) the Court finally concludes :
"18. This Court observed in this judgment that business of State is a Page 106 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined complicated one and has necessarily to be conducted through the agency of a large number of officials and authorities. Before action is taken by the authority concerned in the name of the Rajpramukh which formality is a constitutional necessity, nothing done would amount to an order creating rights or casting liabilities on third parties. It is possible, observed this Court, that after expressing one opinion about a particular matter at a particular stage a Minister or Council of Ministers may express quite a different opinion which may be opposed to the earlier opinion. In such cases, which of the two opinions can be regarded as the order of the State Government ? It was, held that an opinion becomes a decision of the Government only when it must be communicated to the person concerned and that this is the essence of the matter. We seek support from these observations for our purpose that notings in a notes files, not only of officers but even that of a Minister will not constitute an order to affect others unless it is done in accordance with Articles 166(1) and (2) and communicated to the person concerned."
25. Applying the aforesaid principles to the facts of the case, it is apparent that right from communication dated 3-9-1997 till the aforesaid communication dated 4-10-1999 there have been various inter- departmental communications and notings on the file. One can also go to the extent of saving that from time to time conflicting tentative decisions were arrived at. However, as stated by the Apex Court there is a distinction between the decision recorded on the file and an order made in accordance with the provisions of Article 166 of the Constitution of India. The reliance by the petitioners on communication dated 7-10-1997 (or 9- 10-1997) and communication dated 4-10-1999 does not assist the petitioners inasmuch as there is no order by Government, envisaged by law, which would give rise to corresponding right in favour of the petitioners, to seek implementation thereof. A decision communicated by the Government to the Collector cannot assume form of an order as required by Article 166 of the Constitution of India, and if that be so, it would not be open to the petitioners to rely upon such a decision and seek relief on basis of such decision. In fact, as can be seen from various communications and nothing on the file the Government recorded contrary tentative decisions at different points of time. In contradiction to this tentative decisions one finds that a specific order dated 15-9-2001 in the name of Governor of Gujarat was issued in favour of respondent No. 5
- Hansadevi. However, even that order did not exist for more than a week as can be seen from communication dated 22-9-2001 (Annexure-W) and the said order has also been directed to be kept in suspension, till further orders.
26. Therefore, in absence of any order, which is valid in law, the petitioners cannot seek compliance of communication. This is apart from the fact that as submitted on behalf of the State Government, the petitioners could not have been officially in possession of the inter- departmental communication. Apart from the absence of an order as required in law under Article 166 of the Constitution of India, none of the documents (communications dated 7/9-10-1997, Annexure 'S' or dated 4- 10-1999, Annexure 'T') was ever communicated to the petitioner. This is also a necessary requirement so that the petitioner can claim that a right has accrued in his favour. Therefore, in light of this, settled legal position the petitioners cannot successfully assail either the earlier decision dated 3-9-1997 or seek relief on the basis of subsequent communication of Page 107 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined October, 1997 and 4-10-1999."
(b) Sethi Auto Service Station & Anr. vs. Delhi Development Authority & Ors., reported in (2009) 1 SCC 180 wherein, the Hon'ble Apex Court has observed and held as under:
"14. It is trite to state that notings in a departmental file do not have the sanction of law to be an effective order. A noting by an officer is an expression of his viewpoint on the subject. It is no more than an opinion by an officer for internal use and consideration of the other officials of the department and for the benefit of the final decision-making authority. Needless to add that internal notings are not meant for outside exposure. Notings in the file culminate into an executable order, affecting the rights of the parties, only when it reaches the final decision-making authority in the department; gets his approval and the final order is communicated to the person concerned.
15. In Bachhittar Singh Vs. The State of Punjab, a Constitution Bench of this Court had the occasion to consider the effect of an order passed by a Minister on a file, which order was not communicated to the person concerned. Referring to the Article 166(1) of the Constitution, the Court held that order of the Minister could not amount to an order by the State Government unless it was expressed in the name of the Rajpramukh, as required by the said Article and was then communicated to the party concerned. The court observed that business of State is a complicated one and has necessarily to be conducted through the agency of a large number of officials and authorities. Before an action is taken by the authority concerned in the name of the Rajpramukh, which formality is a constitutional necessity, nothing done would amount to an order creating rights or casting liabilities to third parties. It is possible, observed the Court, that after expressing one opinion about a particular matter at a particular stage a Minister or the Council of Ministers may express quite a different opinion which may be opposed to the earlier opinion. In such cases, which of the two opinions can be regarded as the "order" of the State Government? It was held that opinion becomes a decision of the Government only when it is communicated to the person concerned.
16. To the like effect are the observations of this Court in Laxminarayan R. Bhattad & Ors. Vs. State of Maharashtra & Anr.4, wherein it was said that a right created under an order of a statutory authority must be communicated to the person concerned so as to confer an enforceable right.
17. In view of the above legal position and in the light of the factual scenario as highlighted in the order of the learned Single Judge, we find it difficult to hold that the recommendation of the Technical Committee of the DDA fructified into an order conferring legal right upon the appellants.
22. From the afore-extracted notings of the Commissioner and the order of the Vice Chairman, it is manifest that although there were several notings which recommended consideration of the appellants' case for Page 108 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined relocation but finally no official communication was addressed to or received by the appellants accepting their claim. After the recommendation of the Technical Committee, the entire matter was kept pending; in the meanwhile a new policy was formulated and the matter was considered afresh later in the year 2004, when the proposal was rejected by the Vice Chairman, the final decision making authority in the hierarchy. It is, thus, plain that though the proposals had the recommendations of State Level Co-ordinator (oil industry) and the Technical Committee but these did not ultimately fructify into an order or decision of the DDA, conferring any legal rights upon the appellants. Mere favourable recommendations at some level of the decision making process, in our view, are of no consequence and shall not bind the DDA. We are, therefore, in complete agreement with the High Court that the notings in the file did not confer any right upon the appellants, as long as they remained as such. We do not find any infirmity in the approach adopted by the learned Single Judge and affirmed by the Division Bench, warranting interference."
In the opinion of this Court, considering the documents which are produced on record and the position of law, as referred above, notings in the departmental file would not assume the effect of an order. The noting is merely an opinion by an Officer for internal communications purposes for the other officials of the department and for the appraisal of the final decision making authority. In view thereof, the aforesaid contention raised by the learned advocate appearing for the petitioner apart from the other contentions that are adopted by the petitioners as raised in Special Civil Application Nos.13056 of 2021 and allied matters, does not weigh with the Court.
23. For the aforegoing reasons, this Court is not inclined to exercise extra-ordinary jurisdiction under Article 226 of the Page 109 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined Constitution of India and is inclined to pass the following order:
(a) The impugned communications dated 20.07.2021, 02.08.2021 and 05.08.2021 issued by the Commissioner of MSME, the Secretary, Industries and Mines Department and Commissioner of MSME respectively are pursuant to the directions from the respondent No.1 after due deliberation with the concerned departments and in view thereof, the said communications require no interference.
(b) The petitioners have expressly entered in to PPA with the respondent No.6 on 24.04.2021 under the Solar Policy, 2019. After issuance of the addendum dated 8/9.06.2022 to the Solar Policy, 2019, applied for extension to comply with the PPA entered into with the respondent No.6 after introduction of Policy, 2020 and the conditions enumerated in Clause - 16 of the Said Policy, which is undisputed. The petitioners having chosen not to apply under Clause 2.1.2 of the Policy, 2020, impliedly, the benefit of the Policy, 2020 would not be available to the petitioners.
(c) The policies by the State Government are in the interest of public and this Court is not inclined to interfere in the said Page 110 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined policies at the instance of the petitioners considering the fact that large numbers of stake holders have availed the benefits of the policies which are prevailing as they are. The petitioners have subjectively interpreted the policies. The State is best suited to frame policies and in absence of any arbitrariness, malafide and discrimination, this Court is not inclined to interfere in the said decision. It is within the realm of expert body to decide the same. The stance of the respondent No.1 - State that both the policies i.e. the Solar Policy, 2019 and the Policy, 2020 cater to separate classes as discussed above and the benefit of both the policies would not be available simultaneously, require no intereference.
(d) The contention of the petitioners that the petitioners have invested huge amounts pursuant to the issuance of the Policy, 2020 and have altered their position, is a subjective act of the petitioner having not even applied for the benefit of Policy, 2020. The petitioners on their own volition incurred the expenses which otherwise would not create any right or equity in favour of the petitioners.
(e) The respondent No.1 - State Government has been clear right from the beginning having clarifying that the subsidy Page 111 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined option under the Policy, 2020 would not be available to those having availed the benefits under the Solar Policy, 2019. In view thereof, the addendum issued by the respondent authority on 8/9.06.2022 is clarificatory in nature which clarifies the stance taken by the State Government and in view thereof, retrospective, considering the position of law as referred above which requires no interference.
(f) The facts of the present petition are not hit by the doctrine of promissory estoppel in absence of explicit promise made by the respondent No.1 and in absence of any specific averments in the petition that there is a explicit promise made by the respondent No.1 pursuant to which the petitioners have altered their position to avail the benefit of the Solar Policy, 2019. In absence of any promise explicitly by the respondent No.1 to extend the benefit of the Policy, 2020 to the petitioners, the submissions of the petitioners with respect to the doctrine of promissory estoppel fails. The petitioners have chosen not to invoke Clause 2.1.2 to fall within the realm of the Policy, 2020.
(g) The petitioners having also known the stance of the State Government, chose not to avail the exit options issued from Page 112 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023 NEUTRAL CITATION C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023 undefined time to time.
24. For the aforesaid reasons, the captioned petitions fail and the same are hereby dismissed.
(VAIBHAVI D. NANAVATI,J) NEHA Page 113 of 113 Downloaded on : Fri Dec 01 20:43:13 IST 2023