Bombay High Court
K. M. Sakhar Karkhana Private Ltd. And ... vs Commissioner Of Sugar And 3 Ors on 27 August, 2019
Equivalent citations: AIRONLINE 2019 BOM 921
Author: S. J. Kathawalla
Bench: Akil Kureshi, S.J. Kathawalla
Nitin 1 / 15 13-WP-568-2018.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 568 OF 2018
1. K.M. Sakhar Karkhana Pvt. Ltd. )
A private limited company, having its registered)
address at 509, Himalaya House, Palton Road )
Mumbai - 400 001 )
2. P.C.Jhunjhunwala, Director, K.M. Sakhar )
Karkhana Limited, having its address at 509, )
Himalaya House, Palton Road, )
Mumbai - 400 001 ) ... Petitioners
Versus
1. The Commissioner of Sugar, )
Sugar Commissionerate, Sakhar Sankul )
Shivaji Nagar, Pune - 411 005 )
2. The Secretary Cooperative Marketing & )
Textile Department, Mantralaya, Madam Cama)
Road, Mumbai - 400 032 )
3. The State of Maharashtra, )
Though the Secretary, Cooperative Department)
Mantralaya, Madam Cama Road, )
Mumbai - 400 032 ) ... Respondents
Ms. Sneha Prabhu i/b. Ms. Lesar Caracao De Jesus Pereira for the Petitioners.
Mr. Himanshu Takke, AGP for Respondent Nos.1 to 3.
Mr. Dhananjay Deshpande - Regional Joint Director (Sugar), Pune Division, present.
CORAM : AKIL KURESHI AND
S.J. KATHAWALLA, JJ.
RESERVED ON : 10th JULY, 2019
PRONOUNCED ON : 27th AUGUST, 2019
JUDGMENT PER S. J. KATHAWALLA, J. :
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1. By the above Writ Petition, the Petitioners have challenged the legality and correctness of two letters dated 2 nd August, 2017 and 29th August, 2017. The frst letter is written by the Deputy Secretary of the Government of Maharashtra to Respondent No. 1 - Sugar Commissioner, Sakhar Sankul, Shivajinagar, Pune inter alia recording that the Finance Department has advised that the proposals submitted by the Sakhar Karkhana (including the Petitioners) for sugar export subsidy were submitted very late and therefore it is decided to close the case. The second letter dated 29th August, 2017 is addressed by Respondent No.1 inter alia to the Executive Director of Petitioner No. 1 Company, whereby the addressees are inter alia informed that as per the recommendation of the Finance Department a decision is taken to close the fle / case pertaining to the proposals submitted by the sugar Karkhanas claiming export subsidy.
2. Some of the relevant facts in the matter are as under :-
2.1 On 13.04.2007, a Government Resolution ('GR') was passed by Respondent No.2 - Secretary, Co-operative Marketing and Textile Department, Mantralaya, Mumbai, whereby it was resolved that if any sugar factory exported upto 10 Lakhs metric tonne of sugar during the period 2007-08 then they would be provided Rs.1000/- per metric ton as subsidy.
2.2 Petitioner No.1 at the relevant time was in the business of manufacturing and exporting sugar, who claims to have exported approximately 16,000 metric tonnes of sugar during the period 2007-08 and therefore entitled to a sum total of ::: Uploaded on - 27/08/2019 ::: Downloaded on - 28/08/2019 02:52:34 ::: Nitin 3 / 15 13-WP-568-2018.doc approximately Rs.1,60,00,000/- in subsidy from the State Government. 2.3 The Petitioners admittedly submitted proposals to the Respondent No. 1 claiming subsidy in three batches. First batch of proposals for Rs.43,01,000/- was approved by Respondent No.1 on 31st March, 2009 and is received by the Petitioner No.1. The Petitioner No.1 submitted its second batch of proposals to Respondent No. 1 claiming subsidy of Rs.78,28,000/- which was approved by Respondent No.1 on 31 st December, 2010 and released within two months thereafter. Under the cover of its letter dated 26th February, 2011, the Petitioners submitted its third batch of proposals to the Respondent No. 1 claiming subsidy of Rs.40,16,000/-. 2.4 By letter dated 28th February, 2013 addressed by Respondent No.1 to the Respondent No.2, the Respondent No.1 has set out particulars of the subsidy proposals received from two Sakhar Karkhanas which includes the third batch of proposals of the Petitioner aggregating to Rs.40,16,000/-. Respondent No.1 has recorded in the said letter that the quantity of sugar exported during the period 13 th April, 2007 to 30th September, 2008 is set out in the documents produced with the proposals and that the said proposals are submitted for further action. 2.5 Respondent No. 1 by its letter dated 6 th September, 2014, addressed inter alia to the Petitioner No. 1 informed the Petitioner that its proposals are forwarded to the Government for making necessary provision in the budget for the year 2012-2013.
It is further recorded by Respondent No. 1 in the said letter dated 6 th September, 2014, that the proposals of the Petitioners were inter alia found to be eligible by Respondent ::: Uploaded on - 27/08/2019 ::: Downloaded on - 28/08/2019 02:52:34 ::: Nitin 4 / 15 13-WP-568-2018.doc No. 1 and therefore the same have been submitted on 17 th October, 2013 to the Government for approval by the State Level Sugar Export Grant Committee. However, Respondent No.1 had not received information about the date and time of the meeting of the Committee under the Chairmanship of Hon'ble Minster (Co- operation).
2.8 On 13th October, 2015, a meeting was held under the Chairmanship of Hon'ble Minister (Co-operation) to approve proposals for sugar export grant in respect of sugar exported in the year 2007-08, when amongst others the following decisions were recorded :
i. That reasons be assigned as to whether the proposals have been submitted late.
ii. That the department should verify the proposal submitted by the Sakhar Karkhanas (including the Petitioners) and Respondent No. 1 - Commissioner of Sugar, Sugar Commissionerate should re-verify the proposals. iii. That in GR dated 5th May, 2008, it has been mentioned that for the sugar exported during 1st October, 2007 to 31st March, 2008, grant at the rate of Rs.1000/- per metric tonne, is being sanctioned during that fnancial year. It is therefore necessary to amend and extend / revalidate the said GR.
iv. That in the supplementary demands for the year 2015-16, an amount of Rs.20 Crores has been sanctioned under the accounting head 'Financial Assistance to the Sugar Factories for Export of Sugar'. However, the claim of sugar export subsidy ::: Uploaded on - 27/08/2019 ::: Downloaded on - 28/08/2019 02:52:34 ::: Nitin 5 / 15 13-WP-568-2018.doc cannot be paid to the above Karkhanas from this grant. For that a supplementary demand is required to be made.
v. That the proposal for supplementary demand be verifed by the Finance Department.
vi. That the Chairman - Hon'ble Minister (Co-operation) suggested that after taking action as recorded above, grant may be paid to the Karkhanas (including the Petitioners).
3. The Petitioners fled an Application on 18th October, 2016 under the Right to Information Act, 2005 with Respondent No. 1 seeking information about the Sugar Export Grant Scheme for the year 2007-08 and whether the subsidy sanctioned to the Petitioners by letter dated 16th May, 2014, has been paid or not and as to when the same shall be payable. The Public Information Ofcer and Assistant Director of Respondent No. 1 by his letter dated 28 th October, 2016 informed the Petitioner No. 1 that the Government had convened a meeting of Sugar Export Grant Committee on 13th October, 2015 and in this meeting the Secretary - Finance had suggested that information be gathered as to how many Karkhanas have not been provided the grant and a meeting be convened afresh. The Petitioners were also informed that in this connection, the Government has sent a letter to the ofce of the Respondent No. 1 and the same is being followed up.
4. By letter dated 2nd August, 2017, the Deputy Secretary, Government of Maharashtra, after referring to the letters dated 7th March, 2017 and 15th March, 2017, ::: Uploaded on - 27/08/2019 ::: Downloaded on - 28/08/2019 02:52:34 ::: Nitin 6 / 15 13-WP-568-2018.doc received from Respondent No. 1 inter alia recorded that as per the decision taken in the meeting of the State Legal Sugar Export Grant Committee held on 13 th October, 2015, under the chairmanship of the Hon'ble Minister (Cooperation), the proposal was sent to the Finance Department for verifcationn the Finance Department has recommended that as the proposals were submitted belatedly and since the grant was permissible only with regard to the sugar exports during the period 1 st October, 2007 and 31st March, 2008 and also that the High Court has passed an Order holding that the grant should not be given to Private Sugar Karkhanas, it is decided to close the case. Accordingly, Respondent No. 1 by its letter dated 29th August, 2017 also conveyed the said decision to the Sakhar Karkhanas including the Executive Directors of the Petitioner No.1.
5. As stated hereinabove, the Petitioners have fled the above Writ Petition challenging the said two communications dated 2 nd August, 2017 and 29th August, 2017.
6. The learned Advocate appearing for the Petitioners submitted that the impugned letters are contrary to the GR dated 13 th April, 2007 issued by Respondent No. 1 to pay subsidy at the rate of Rs.1000 per metric tonne for the export of sugar upto 10 Lakhs metric tonnes during the period 2007-08; that the Inter Ministerial Meeting held on 13th October, 2015 erred in holding that there was delay in making proposal for subsidy; that there was no prescribed period of time to make the proposals and claim the subsidy; that at the said meeting the members erred in ::: Uploaded on - 27/08/2019 ::: Downloaded on - 28/08/2019 02:52:34 ::: Nitin 7 / 15 13-WP-568-2018.doc holding that the proposals were required to be forwarded to the Finance Department of the Government for its separate sanction; that Respondent No. 1 having sanctioned an amount of Rs.78,28,000/- in the year 2010 is not justifed in denying payment of the remaining amount of Rs.40,16,000/- in August-2017 inspite of having sanctioned the same in the Inter Ministerial Meeting held on 16th October, 2017.
7. Respondent No. 1 has fled its Afdavit in Reply dated 17th June, 2019 inter alia contending that vide Order dated 21 st January, 2010 passed by this Court in Civil Application Nos. 128, 130 and 137 of 2009 in PIL No. 20 of 2006 directed the State Government not to provide any fnancial assistance in the nature of subsidy to private sugar factoriesn that in Writ Petition No. 415 of 2013 fled before the Aurangabad Bench of this Court, the Court by its Order dated 6 th May, 2016 was pleased to allow the said Petition by directing the State Government to reimburse the sugar factory in respect of expenses incurred by them as per the policy decision of the Government n that the Review Application No. 59 of 2018 seeking review of the Order dated 6th May, 2016 was dismissed on 4th April, 2018 by the Aurangabad Bench of this Court n that the State Government carried both the orders before the Apex Court by way of Special Leave Petition (Civil) Diary No (s). 33513 of 2018 and the Apex Court has granted an order of Status Quo vide order dated 22nd November, 2018n that the issue of granting sugar export subsidy is sub-judiced before the Apex Court and also before this Court.
8. Respondent No. 1 has in its reply also stated that the GR dated 13 th April, ::: Uploaded on - 27/08/2019 ::: Downloaded on - 28/08/2019 02:52:34 ::: Nitin 8 / 15 13-WP-568-2018.doc 2007 was issued for sanctioning the sugar export subsidy to sugar factories in the State of Maharashtra for the period from 1 st October, 2007 to 31st January, 2008n that the Scheme foated by the above GR was for a limited period of one yearn the Petitioners submitted the third batch of proposals at a belated stage i.e. on 26 th February, 2011. However, after receiving the proposals from the Petitioners, the same were scrutinized by them and thereafter forwarded to the State Level Committee for its sanction. The State Level Committee had in its meeting dated 13 th October, 2015 recorded its decisions as set out hereinabove and in paragraph 5 of the Afdavit in Reply. The Petitioners had delayed submitting their proposals. The Finance Department rejected the proposals due to inordinate delay on the part of the Petitioners.
9. The Petitioners have fled their Afdavit in Rejoinder, wherein they have stated that the frst proposal of the Petitioners was approved by the Respondent No. 1 on 31st March, 2009 and payment of Rs.43,01,000/- was paid to Petitioner No.1. The second proposal was approved on 31st December, 2010 and an amount of Rs.78,28,000/- was paid to the Petitioner No. 1. However, the third proposal, which was submitted on 26th February, 2011 was rejected by the Respondents on the ground of delay. Since the second proposal was sanctioned and the subsidy amount was released after the fnancial year during which the sugar was exported, the Respondents now cannot impose new conditions, which were not in existence at the stage of approval of the earlier grants. It is further stated in the Afdavit in Rejoinder that the delay if any, was caused due to Respondent No. 1 requesting all the Sakhar Karkhanas ::: Uploaded on - 27/08/2019 ::: Downloaded on - 28/08/2019 02:52:34 ::: Nitin 9 / 15 13-WP-568-2018.doc to submit the proposals in batches. It was further stated in the Afdavit in Rejoinder that since the sugar was admittedly exported during the crushing period as per GR dated 13th April, 2007, the Respondent No. 1 now cannot arbitrarily refuse the subsidy.
10. We have heard the learned Advocates appearing for the parties and have considered the submissions made by them. We have also considered the case law relied upon by the Advocates for the parties.
11. As recorded hereinabove, Respondent No. 1 has relied upon the Order dated 21st January, 2010 passed by this Court in Civil Application Nos. 128, 130 and 137 of 2009 in Public Interest Litigation No. 20 of 2006. The issue raised in the said PIL, pertained to serious imbalance between permissions granted for set up of sugar factories and the availability of sugarcane. By an Order dated 12 th July, 2006 passed in the said PIL, the Division Bench of this Court directed the Commissioner of Sugar and the State Government not to issue any fresh permission for new sugar factories in the State of Maharashtra. In view of the said Order dated 12 th July, 2006, certain Civil Applications were fled by the Applicants therein, for intervention in the said PIL No. 20 of 2006 and for direction to the Commissioner of Sugar, Pune to consider their Applications for grant of permission for crushing of the sugarcane for the year 2009-10 and thereafter. By a common Order dated 21 st January, 2010, the Division Bench of this Court directed the Commissioner for Sugar, Pune to grant permission to the said Applicants for crushing of the sugarcane for the year 2009-10 and thereafter, subject to condition that the State Government shall not provide any fnancial assistance in the ::: Uploaded on - 27/08/2019 ::: Downloaded on - 28/08/2019 02:52:34 ::: Nitin 10 / 15 13-WP-568-2018.doc nature of grant / subsidy or guarantee for the establishments of the said Applicants. It was further clarifed that the Order dated 12 th July, 2006 directing the State Government not to issue any fresh permission for opening private sugar factories shall not come in the way of the State Government in considering similarly situated Applicants for opening private sugar factories, provided that no fnancial assistance in the nature of grant / subsidy or guarantee was granted to the said Applicants.
12. The claim of the Petitioners in the present Writ Petition pertains to their entitlement to receive subsidy pursuant to sugar exported by them during the fnancial year 2007-08 in accordance with the GR of the State Government dated 13 th April, 2007. The Order dated 21st January, 2010 passed in the Civil Applications taken out in PIL No. 20 of 2006, by no stretch of imagination can preclude the Petitioners from claiming subsidy in respect of the sugar exported by them in the year 2007-08. The Respondents have neither in their Afdavit in Reply nor across the bar sought to explain how the Order dated 21st January, 2010 passed by the Division Bench of this Court in Civil Application Nos. 128, 130 and 137 of 2009 in PIL No. 20 of 2006, would disentitle the Petitioners from receiving the balance amount of subsidy as claimed.
13. The decision of the Nagpur Bench of this Court dated 6 th May, 2016 passed in Writ Petition No. 415 of 2013 directs the Respondent to pay the transport and other subsidy to the Petitioners therein as per GR's dated 14 th March, 2011, 6th May, 2011 (the said GR's) and Circular dated 25 th May, 2011. By the said GRs, the State Government had taken a policy decision that on and after 1 st May, 2011 the sugar ::: Uploaded on - 27/08/2019 ::: Downloaded on - 28/08/2019 02:52:34 ::: Nitin 11 / 15 13-WP-568-2018.doc factories which will crush excess sugarcane 50 kms beyond their area of operations, shall be entitled to transport subsidy at the rate of Rs.3/- per metric tonne per km. It was also decided to provide subsidy at the rate of Rs.65/- per tonne as reduction in percentage of sugar crushed during the period of 1 st May, 2011 to 15th November, 2011. By the Government Circular dated 25th May, 2011 issued by the Department of Cooperation, Marketing and Textile Industry, the transport subsidy is also made available to private sugar factories. The GR, which is the subject matter of the present Petition is dated 13th April, 2007. The same is not the subject matter of Writ Petition No. 415 of 2013. In any event, the same would not be afected by the Order dated 21 st January, 2010 which directed the Commissioner of Sugar to permit the Applicants to commence new sugar factories on the condition that such new sugar factories will not be entitled to any subsidies. Therefore, the said decision dated 6 th May, 2016, allowing subsidy based on the said GRs, the order dismissing the Review Petition being (Civil) No. 59 of 2018 by the Aurangabad Bench of this Court or the order passed by the Apex Court directing the parties to maintain Status Quo in Special Leave Petition (Civil) Diary No(s). No. 33513 of 2018, would not assist the Respondents in the present Writ Petition.
14. Therefore, the only important issue, which needs to be decided in the present Writ Petition is as to whether the Respondents are justifed in rejecting the third batch of proposals submitted by the Petitioners on the ground of delay. As set out hereinabove and also stated in the Afdavit in Reply of the Respondents, by the ::: Uploaded on - 27/08/2019 ::: Downloaded on - 28/08/2019 02:52:34 ::: Nitin 12 / 15 13-WP-568-2018.doc GR dated 13th April, 2007 subsidy was ofered to sugar factories in the State of Maharashtra for the sugar exported in the fnancial year 2007-08. The sugar factories, to whom the said GR was applicable and consequently those who were entitled to the sugar export subsidy, were certainly expected to claim the said subsidy at the earliest and at one go.
15. In the instant case, admittedly the Petitioners herein exported sugar during the fnancial year 2007-08. However, they submitted their proposals claiming subsidy in three diferent batches / tranches. The frst proposal was submitted on 31 st March, 2009 for Rs.43,01,000/-. The date of submission of the second proposal is not given. However, it is an admitted fact that the second proposal was approved by Respondent No. 1 on 31st December, 2010 for Rs.78,28,000/- and the subsidy was released within two months thereafter. The third proposal was submitted on 26 th February, 2011 i.e. approximately three years after export of sugar qua which the subsidy was sought. In the present Writ Petition, not a whisper is made as to why the proposals were submitted in three batches and not in one go. Instead the Petitioners have in the Writ Petition argued that in the subject GR, no time is prescribed by which the proposal was required to be submitted. Such an argument is baseless and untenable. If such an argument is accepted, parties may submit / fle their proposal/s even 10 years after the date of exports and claim subsidy. The Petitioner for the frst time in the Afdavit in Rejoinder sought to explain the delay and the reasons for forwarding their proposals in three batches to the Respondents by stating that it was ::: Uploaded on - 27/08/2019 ::: Downloaded on - 28/08/2019 02:52:34 ::: Nitin 13 / 15 13-WP-568-2018.doc the request of Respondent No. 1 to the Petitioners to submit their proposal in batches. However, no such request of the Respondents is placed before the Court. In any event, if that would have been so, the Petitioners would have mentioned the same in the Writ Petition itself instead of raising an untenable and baseless ground that the said GR dated 13th April, 2007 does not provide for time limit within which the proposal was to be submitted. However, at the time of arguments, the learned Advocate appearing for the Petitioners did not contend that the proposals were submitted in batches at the alleged request of the Respondents. Instead when this Court inquired as to why the said proposals were not submitted in one go but submitted in batches, the learned Advocate appearing for the Petitioners informed the Court that she is unable to give any reason for the same.
16. The Petitioners have also submitted that the second proposal was approved by the Respondents on 31st December, 2010 for Rs. 78,28,000/- and the amount was paid to them two months thereafter, which is not during the fnancial year when the sugar was exported. It is submitted that the Respondents now cannot impose new conditions, that were not in existence at the stage of approval of earlier grant. In our view only because the proposal forwarded in the second batch, were approved by the Respondents in December-2010 and the amount paid within a period of two months thereafter, the Petitioners cannot be heard to say that the Respondents are estopped from refusing to clear the proposal submitted on 26 th February, 2011 (the third batch) for the sugar exported more than three years back, on the ground of delay. There are ::: Uploaded on - 27/08/2019 ::: Downloaded on - 28/08/2019 02:52:34 ::: Nitin 14 / 15 13-WP-568-2018.doc several aspects which are required to be taken into consideration whilst making such payments. The Respondents should be able to make budgetary provisions in a particular year to enable the Respondents to sanction such payments, more so when a proposal seeking subsidy is made three years after exporting the sugar knowing fully well that the subsidy was applicable only for the year 2007-2008. The fact that the Respondents paid huge amounts under the second proposal despite delay on the part of the Petitioners in submitting the proposal shows that there are no malafdes involved in the decision of the Respondents, who when the funds were available with them sanctioned and disbursed the same though they could have rejected even the second proposal of the Petitioners also on the ground of delay.
17. Even as far as the third proposal is concerned, the Respondents could have outrightly rejected the same on the ground of delay. However, the Respondents did not do so. Instead the Respondents admitted that the claim of the Petitioners was genuine and attempted to see whether it was possible to pay the amount as claimed. A meeting was also called under the chairmanship of the Hon'ble Minister of Cooperation on 10th October, 2015, wherein the frst issue which was taken into consideration was that the proposals were submitted late and therefore it was provided that reasons be assigned as to why the proposals were submitted late. It was also clarifed in the minutes that in the GR it was provided that Sugar Kharkanas were entitled to subsidy for the sugar exported during the period from 1 st October, 2007 to 31st March, 2008 and therefore it is necessary to amend and revalidate the GR. It was ::: Uploaded on - 27/08/2019 ::: Downloaded on - 28/08/2019 02:52:34 ::: Nitin 15 / 15 13-WP-568-2018.doc also decided that the subsidy for sugar exported by such Karkhanas during the relevant period, cannot be paid from the amount of Rs.20 Lakhs which was sanctioned under the head "Financial Assistance to the Sugar Factory for Export of Sugar" and therefore, for making payments of the said subsidy, a supplementary demand is required to be made for the year 2015-16. It was also decided that the supplementary demand will have to be verifed by the Finance Department. It was also suggested by the Hon'ble Minister, who chaired the meeting that after taking steps as decided, the Karkhanas may be paid the amounts as claimed by them. However, the proposal was rejected by the Finance Department as the same were submitted belatedly. The Petitioners therefore, are not correct in contending that at the Inter Ministerial Meeting held on 13th October, 2015, the third proposal was sanctioned or that the same ought not to have been forwarded to the Finance Department.
18. For the above reasons, the Respondents cannot be faulted for rejecting the proposals received from the Petitioners three years after the export of sugar on the ground of delay and the question of quashing the impugned letters dated 2 nd August, 2017 and 29th August, 2017 addressed by the Respondents to the Petitioners by exercising the powers under Article-226 of the Constitution of India, does not arise. In view thereof, the above Writ Petition is dismissed.
( S.J.KATHAWALLA, J. ) ( AKIL KURESHI, J. )
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