Himachal Pradesh High Court
M/S Harisons Hydel Construction Pvt. ... vs Union Of India & Others on 26 June, 2023
Author: Sandeep Sharma
Bench: Sandeep Sharma
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CWP No.1239 of 2016 Date of Decision:26.06.2023 .
_______________________________________________________ M/s Harisons Hydel Construction Pvt. Ltd. .......Petitioner Versus Union of India & others ... Respondent _______________________________________________________ Coram:
Hon'ble Mr. Justice Sandeep Sharma, Judge. Whether approved for reporting? 1 For the Petitioner: Mr. Ajay Vaidya, Advocate. For the Respondents: Mr. Nand Lal Thakur, Senior Panel Counsel. _______________________________________________________ Sandeep Sharma, Judge(oral):
Being aggrieved and dissatisfied with the issuance of communications dated 12.11.2009 and 19.3.2014 (Annexures P-7 & P-9), whereby prayer made on behalf of the petitioner for release of Balance Capital Subsidy of Rs. 60 lacs, came to be rejected, petitioner has approached this Court in the instant proceedings filed under Article 227 of the Constitution of India, praying therein for following main reliefs:-
i). A writ of Certiorari or any other appropriate writ may kindly be issued quashing Annexures P-7 & P-9, dated 12.11.2009 and 19.03.2014 being illegal arbitrary contrary to the notification (Annexure P-
2).
(ii). A writ of Mandamus to may kindly be issued directing the respondents to release the balance subsidy amount of Rs. 60 lacs with interest @18% p.a. in time bound manner.".1
Whether the reporters of the local papers may be allowed to see the judgment?
::: Downloaded on - 27/06/2023 20:36:48 :::CIS 22. For having bird's eye view, certain undisputed facts, which may be relevant for adjudication of the case at hand are that the Ministry of Non-Conventional Energy Sources ( for short 'MNES') with a object to .
improve the economic viability of Small Hydro Power (for short 'SHP') Projects floated subsidy scheme for commercial 'SHP' projects upto 25 MW station capacity (Annexure P-2). If the aforesaid scheme is read in its entirety, it clearly provides that very object to float the same was to enable 'SHP' to repay the loan provided to it by financial institution. The quantum of subsidy was to be released in following manner:-
Areas Upto 100 KW From 101 KW to FROM
999 KW 1MW upto
25 MW
N.E.
Region, 45% of project cost 45% of project 45% of
Sikkim, J&K, H.P. & limited to Rs. Cost limited to project cost
Uttaranchal 30,000 per KW. Rs.30 lakhs + limited to
(Special category Rs.21,625 per KW Rs. 2.25
States) crores + Rs.
37.5 lakhs
per MW
Notified hilly 30% of project cost 30% of project 30% of
regions of all other up to limited to Cost limited to Rs. project cost
States & Islands Rs.20,000 per KW 20 lakhs limited to
*** +Rs.14,400 per KW Rs. 1.5
crores + Rs.
25 lakhs per
MW
Plain and other 20% of project cost 20% of project 20% of
regions of all other limited to Rs. Cost limited to Rs. project cost
States 10,000 per KW 10 lakhs + Rs. limited to
7,200 per KW Rs. 0.75
crores +12.5
lakhs per
MW
3. For release of subsidy, the developer at first instance through financial institution concerned would inform the Ministry about successful completion of the project, fulfillment of performance guarantee tests, testing and certification of performance of the project and the commencement of commercial generation. The developer would send monthly generation ::: Downloaded on - 27/06/2023 20:36:48 :::CIS 3 report to the Ministry after start of commercial generation till the time project attains 80% of the quantum of generation for the corresponding months as envisaged in the DPR, for a minimum of three continuous months. The .
developer beside above, would also provide proof of energy generation such as certificate from SEB regarding purchase/ wheeling of power. After being satisfied regarding power generation from the project for a minimum of three months, the Ministry would release the subsidy to financial institution in one go, subject to availability of funds. The financial institution after receipt of the subsidy amount would reduce the loan by the equal amount as pre-payment of loan. Pre-payment penalty, if any, will be borne by the developer. After utilization of the subsidy amount as pre-payment, the financial institution would submit a utilization certificate as per format (Proforma-P) to the Ministry. In the case at hand Clause 16 of the Scheme is very relevant and same reads as under:-
"16.In case the project is delayed for any reason( except natural calamities) by more than 9 months from the expected date of commissioning indicated by the developer, the subsidy amount would be reduced by 10%. The subsidy would be further reduced @ 3% for very quarter delay in commissioning of the project."
4. As per aforesaid Clause, in case the project is delayed for any reason(except natural calamities) by more than 9 months from the expected date of commissioning indicated by the developer, the subsidy amount agreed to be released would be reduced by 10%. In case, there is further delay in commissioning the project, subsidy would be further ::: Downloaded on - 27/06/2023 20:36:48 :::CIS 4 reduced @ 3% for every quarter. In the case at hand, Memorandum of Understanding was singed interse parties i.e. Project proponent and Government of Himachal Pradesh for setting up 5 MW Small Hydro Project .
at Brahm-Ganga Hydroelectric Project, District Kullu, Himachal Pradesh on 2.8.2002. After completion of necessary codal formalities, implementation of the agreement came to be signed interse parties i.e. petitioner and Government of Himachal Pradesh.
5. As per aforesaid implementation agreement, electric generation was to commence on or before 31st October, 2006. However, on account of certain unforeseen reason, petitioner 'SHP' failed to complete the project and as such, it was repeatedly granted extension by HIMURJA for completion of project. It is not in dispute that on 29.3.2008, petitioner's project started generation of energy. On 26th August, 2009, capital subsidy amounting to Rs.315 lakh for petitioner 'SHP' District Kullu was released against permissible claim of Rs.375 lakh. Since petitioner was not released full subsidy and there was a shortfall of Rs. 60 lakhs, it sent communication dated 23.10.2009 (Annexure P-6) to the Ministry of New and Renewable Energy, praying therein to release the balance amount of capital subsidy of Rs. 60 lakh through RTGS. However, such plea of petitioner was not acceded to rather Ministry vide communication dated 12.11.2009(Annexure P-7) refused to release the amount of subsidy on account of the fact that there was delay in commissioning the project. Again vide communication dated 24.02.2015 (Annexure P-8) petitioner wrote to the Ministry that delay in commissioning of project was on account of unforeseen reason i.e. ::: Downloaded on - 27/06/2023 20:36:48 :::CIS 5 natural calamities and as such, it is entitled to entire subsidy agreed to be paid at the time of setting up the project in question. However, again vide communication dated 19.3.2014(Annexure P-9) 'MNES' rejected the case .
on the ground that subsidy of petitioner has been reduced in terms of Clause of Section 16 on account of delay in commissioning the project. In the aforesaid background, petitioner is compelled to approach this Court in the instant proceedings, praying therein for reliefs, as have been reproduced hereinabove.
6. Pursuant to the notices issued in the instant proceedings, respondent-Union of India has filed short reply, wherein facts, as have been taken note hereinabove, have not been disputed, but it has been reiterated that balance subsidy of Rs. 60 lakhs could not be issued on account of delay in commissioning the project. It has been stated in the reply that if project would have been commissioned by 31st July, 2007 (with the nine months from 31st October, 2006) there would have been no penalty on the project. Though, in reply respondent-Union of India has fairly acknowledged factum with regard to cloud burst occurred on 1st July, 2007, but yet has attempted to justify rejection of claim of the petitioner on the ground that HIMURJA informed respondent-Union of India that project would not have been completed even if there was no flash flood in the stream as IPP had approved for extension of the completion date upto 31st December, 2007.
7. Having heard learned counsel representing the parties and perused material available on record, this Court finds that there is no dispute that project was to be commissioned by 31st July, 2007(with the ::: Downloaded on - 27/06/2023 20:36:48 :::CIS 6 nine months from 31st October, 2006), however, work could not be completed well in time for the reason that cloud burst occurred on the site, as result of which, work done on the site till 1st July, 2007 by project .
proponent has washed away. Having taken note of aforesaid natural calamities, HIMURJA with whom petitioner had signed implementation agreement granted extension for completion of project upto 31.3.2008. It is not in dispute that well before aforesaid date, petitioner commissioned the project and started generating electricity. On 26.8.2009, respondent-Union of India released capital subsidy amounting to Rs. 315 lakh in favour of the petitioner against permissible claim of Rs. 375 lakh. Now dispute is with regard to less subsidy of Rs.60 lakh, which has been not released on account of delay in commissioning the project. If the reply filed by the respondent-Union of India is perused in its entirety, there is no dispute, if any, with regard to cloud burst i.e. natural calamities occurred on 1st July, 2007. It is not in dispute that cloud burst occurred 30 days prior to the completion date i.e. 31st July, 2007. Had cloud burst not occurred on 1st July, 2007 and yet petitioner had not completed the work on the site within stipulate time , respondent-Union of India could be right in refusing the claim of the petitioner for release of balance subsidy.
8. Though, Mr. Nand Lal Thakur, learned Senior Panel Counsel representing the respondent-Union of India, vehemently argued that no material, worth credence, ever came to be placed on record by the petitioner with regard to damage caused on the site on account of cloud burst as well as work done till that date but such plea of him does not ::: Downloaded on - 27/06/2023 20:36:48 :::CIS 7 appear to be correct on the face of the record. Careful perusal of communications dated 24.02.2015 and 15.03.2016 (Annexure 8-A) sent by the petitioner to the Ministry, clearly reveals that details with regard to .
damage caused on the site on account of cloud burst was furnished to the Ministry.
9. Most importantly, HIMURJA vide communication dated 5.7.2010, apprised the Ministry with regard to delay and damage caused to the project on account of the cloud burst. Vide aforesaid communication, Director HIMURJA, specifically apprised Ministry that delay in completion of project is merely due to natural calamities and force majeure events beyond the control of the petitioner and as such, extension for commissioned of the project was granted upto 31st March, 2008 by the State Government from time to time. At this stage, it would be apt to take note of communication dated 5.7.2010 hereinbelow:-
"HIMURJA (H.P.Govt. Energy DEVELOPMENT AGENCY) SHIMLA-171009 NO HIMURJA/SHP. IA/HH/20/2002- Dated:
To Director, SHP MNRE, GOL Block-14, CGO Complex.
Lodi Road, New Delhi Subject: Setting up Brahmganga (5MW) SHEP in District Kullu Himachal Pradesh Sir, ::: Downloaded on - 27/06/2023 20:36:48 :::CIS 8 May kindly refer to your letter No7/14/2005-SHP dated 12.11.2009 on the subject cited matter, addressed to Shri Ghanshyam Sood, Director Executive of Harison Hydel Construction Company Ltd, Akhara Bazaar, Kullu, HP) (Copy .
enclosed herewith for ready reference).
The above said applicant, in regard to the deduction made from his subsidy amount, has represented to this office and has submitted additional documents in support of force majeure events which prevailed at the project site for long period and obstructed constructional activities at site, which caused delay in completion of the project in the scheduled time period.
Brief description of the events pertaining to completion of the project is as per details given below:-
i) As per approved Construction Schedule the project was originally to be commissioned in Oct. 2006.
ii) Extension in time period for completion was granted upto May 2007.
iii) But due to natural calamities Le heavy rain and excessive snow fall in the area from Nov. 2006 to April 2007 construction activities at site were severely affected in that area, so no work could be done by the IPP during this period Report of Gram Panchayat Manikaran and a copy of Rojnamcha of Police Post Manikaran are attached herewith.
In view of these unforeseen circumstances the IPP requested for extension in time period for completion of the project upto 31.12.2007 (copy enclosed).
v) The matter for extension in time period for completion of the project was under consideration, in the mean time cloud burst occurred at the project site on 1.7 2007, which caused damage to the project components and hampered the pace of progress at project site. A report of cloud burst alongwith cuttings of the newspaper in this regard are enclosed herewith. it was also not possible to restore the damaged components during the prevalent rainy season. Therefore ::: Downloaded on - 27/06/2023 20:36:48 :::CIS 9 the PP again requested to provide extension upto 31.3.2008 so as to restore the damage caused and complete the construction work (copy enclosed).
(v) Consequently the project was successfully commissioned by .
the IPP on 29.3.2008 From the facts and circumstances given above, it is evident that delay in completion by the project has mainly due to natural calamities & force majeure events beyond the control of the IPP and that is why the extension for the commissioning of the project had been given upto 31.3.2008 by the State Government from time to time (copies enclosed).
Therefore it is requested to re-consider the case of the IPP to refund the deducted subsidy.
r Yours faithfully,
Sd/
Director
Himurja, Shimla-9"
10. Vide aforesaid communication, respondent No.2 specifically acknowledged factum with regard to cloud burst occurred at project site on 1.7.2007 as well as damage caused to the project components on the site.
Alongwith aforesaid communication, Director HIMURJA also made available report of cloud burst alongwith cutting of the newspaper in that regard. Vide aforesaid communication, Director HIMURJA also informed Ministry that it was not possible to restore the damaged components during the prevalent rainy season and as such, time was extended, enabling the petitioner to complete the project within extended time. Despite having received aforesaid clarification, Ministry failed to release the balance subsidy, which action of it by no stretch of imagination can be said to be ::: Downloaded on - 27/06/2023 20:36:48 :::CIS 10 justifiable or reasonable, rather same being result of colourable exercise of power, deserves to be rectified in accordance with law.
11. Though, by way of filing short reply to the petition at hand, .
attempt came to be made by the respondents to carve out a case that respondent-HIMURJA had informed that project would not have been completed even if there was no flash flood in the stream but neither there is any document on record to prove such fact nor Sh. Nand Lal Thakur, learned Senior Panel Counsel was able to place on record communication, if any, made in that regard by HIMURJA. To the contrary, communication dated 5.7.2010, issued under the signature of Director, HIMURJA clearly reveals that there was a delay in commissioning of project on account of cloud burst occurred on the site on 1.7.2007. If it is so, there was no occasion, if any, for respondent No.1 to withhold the release of balance subsidy of 60 lakh. Clause 16 of the scheme, clearly provides that in case project is delayed for any reason (except natural calamities) by more than 9 months from the expected date of commissioning indicated by the developer, the subsidy amount would be reduced by 10%. However, in the case at hand, project was delayed on account of natural calamities i.e. cloud burst and as such, action of the respondents in withholding the balance subsidy of Rs.60 lakh is not tenable in the eye of law.
12. Consequently, in view of the detailed discussion made hereinabove, this Court finds merit in the present petition and accordingly, same is allowed and action of the respondents inasmuch as denying the rightful claim of the petitioner for release of balance payment of subsidy by ::: Downloaded on - 27/06/2023 20:36:48 :::CIS 11 issuing communications dated 12.11.2009 and 19.3.2014 (Annexures P-7 & P-9) is quashed and set-aside. The Respondents are directed to release the balance subsidy expeditiously, by remitting the same in the loan .
account of the petitioner. Pending applications, if any, also stands disposed of.
(Sandeep Sharma),
Judge
June 26, 2023
(shankar)
r to
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