Calcutta High Court (Appellete Side)
Bdg Metal & Power Limited vs State Of West Bengal & Ors on 13 December, 2019
Author: Shampa Sarkar
Bench: Shampa Sarkar
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
Appellate Side
Present:
The Hon'ble Justice Shampa Sarkar
W.P. No.12359 (W) of 2015
BDG Metal & Power Limited
Versus
State of West Bengal & Ors.
For the petitioner : Mr. Jaydip Kar,
Ld. Senior Advocate,
Ms. Sumita Shaw,
Mr. Parag Chaturvedi
For the WBIDCL : Mr. Ayan Banerjee,
Ms. Debasree Dhamli,
Mr. Suman Banerjee
For the respondent : Mr. Abhratosh Mazumder,
Ld. Addl. Advocate General,
Mr. Prithu Dudhoria
Heard on : 31/07/2019, 22/08/2019, 09/09/2019, 11/09/2019, 17/09/2019 &
18/09/2019
Judgment on: 13/12/2019
Shampa Sarkar, J. :
The case of the writ petitioner is that, the petitioner company was previously a private limited company under the name and style "Bishan Dayal Goyal & Sons Private Limited" incorporated under the Companies Act, 1956.
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2. The petitioner company was inter-alia, engaged in manufacturing various types of iron and steel goods including pig iron, steel ingots/billets and various types of hot rolled products.
3. Subsequently, the said private limited company was converted into a limited company under the name and style "Bishan Dayal Goyal & Sons Private Limited" and a fresh certificate of incorporation was issued by the Registrar of Companies, West Bengal on February 12, 2009.
4. Finally, the name of the company was again changed to "BDG Metal & Power Limited", the petitioner herein, and a fresh Certificate of Incorporation was issued by the Registrar of Companies, West Bengal being Corporate Identity Number U51109WB1999PLC088908 dated May 28, 2009.
5. The Government of West Bengal initially notified the West Bengal Incentive Scheme (WBIS1988) followed by (WBIS 1999) and (WBIS 2000). The duration of WBIS 2000 was for the period January 1, 2000 to December 31, 2004.
6. On or about March 2004, the petitioner made an application before the West Bengal Industrial Development Corporation Limited, (WBIDC) the respondent no.4 herein, for approval of the package of incentive under WBIS 2000 for their manufacturing unit of pig iron at Bagnan. The Joint Secretary, Government of West Bengal, Commerce and Industries Department, by his letter no.1286/JS/DC dated March 25, 2004 approved the incentive package along with the Modalities of Payment of Benefits to the unit of the petitioner company. 3
7. In view of the aforesaid letter bearing no. 1286/JS/DC dated March 25, 2004, the State Government had approved the package in favour of the petitioner company for setting up of its pig iron manufacturing unit at Bagnan in the district of Howrah with an investment of Rs.62 crores for the purpose of manufacturing pig iron.
8. Though the petitioner obtained approval for special package of incentive to the proposed pig iron manufacturing unit at Bagnan, the petitioner was unable to find a suitable plot of land. The petitioner approached the WBIDC for extending its co-operation in getting a suitable plot of land.
9. On the request of the petitioner, the petitioner was allotted 22 acres of land at Plot No. KLMN at the said Plasto Steel Park, Phase- I at Barjora in the district of Bankura. The Special Secretary, Government of West Bengal, also confirmed the said change of location and allowed the petitioner company to enjoy the benefit of special package of incentive sanctioned earlier vide memo no. 1286/JS/DC dated March 25, 2004 under his letter No. 115(2)- CI/O/Incentive-037/04/1 dated April 10, 2007 as a Mega Unit.
10. As the petitioner intended to manufacture various types of Steel Ingots/Billets and Hot Rolled Steel items including, TMT Bars and Structurals, it applied to the Government of West Bengal through WBIDC for making necessary amendments in the said special package of incentive sanctioned vide Government Memo No.1286/JS/DC dated March 25, 2004.
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11. The Director of Industries, Government of West Bengal, being the respondent no. 3, issued necessary registration certificate for manufacturing of Steel Ingots/Billets etc. to the petitioner under RC No. DI/2000/644 (C) [644(1) 2000] dated June 12, 2009 and forwarded the same under their covering letter no. (RC) 131/Incent/0601/00/04 dated June 18, 2009. The WBIDC being the respondent no. 4, issued necessary Eligible Certificate (EC) for manufacturing of Steel Ingots/ Billets etc, to the petitioner vide EC No. INC-2000/EC-485(C) dated August 24, 2009. Thus the existing unit of Pig Iron was sought to be expanded by manufacturing of Steel Ingots/Billets etc, i.e., Ferro Alloy units.
12. The petitioner also obtained necessary consent to establish (NOC) certificate from The West Bengal Pollution Control Board. The petitioner applied to Indian Bank, Kolkata for sanction of necessary loan facilities for its forthcoming two ferro-alloy plants and also approached the Director of Industries, Kolkata, the respondent no. 3 for grant of necessary registration for its two units of ferro alloy under Phase I & Phase II. In the meantime, the WBIS 2004 had been notified and was made effective from April 1, 2004 to March 31, 2009. The petitioner desired to avail of the said scheme for its expanded unit of ferro alloys over and above the Mega Unit of Pig Iron for which the incentive under WBIS 2000 had been approved. It has been alleged that upon refusal by the Directorate of Industries to accept the petitioner's application in the absence of bank loan sanction letter, the petitioner wrote to the respondent no.1 on January 25, 2008 for 5 provisional registration under WBIS 2004. The said letter was sent to respondent no. 1 under Certificate of posting. The petitioner further submitted its application in the prescribed form for grant of Registration Certificate & Eligibility Certificate under WBIS-2004, for its ferro-alloys plant in the office of respondent no. 3 on June 12, 2008.
13. Inspite of various requests made to the concerned respondent authorities for grant of necessary Registration Certificate and Eligibility Certificate, for its two ferro alloy units, the respondent authorities did not consider the same and ultimately rejected the applications for registration. The petitioner alleged that an officer of the Directorate of Industries, Government of West Bengal had asked the unit to make individual applications for the two units for grant of Registration Certificate and Eligibility Certificate under WBIS 2004, and acting on such advice, the petitioner for the third time, submitted two individual applications on February 12, 2009 and March 12, 2009 respectively for its two separate ferro alloy units, before the respondent no.3.
14. Upon receipt of the same, the Deputy Director of Industries, Government of West Bengal by a letter bearing no.
14/Incent/0610/2004/2009 dated March 27, 2009 intimated the petitioner that pursuant to the Commerce and Industries Department's Notification No.105-CI/O/Incentive-38/CC/Admin. Dated April 26, 2008, a new Scheme, namely, West Bengal State Support for Industrial Scheme, 2008 (WBISSIS 2008) for Industrial 6 Projects of large and medium scale units had been announced under Gazette Notification dated February 26, 2009 and the said scheme was to come into effect on and from April 1, 2008 in the whole of West Bengal and would remain valid till March 31, 2013. The petitioner was asked to apply under the new scheme along with necessary documents and fees. On July 22, 2009, the petitioner made another representation before the Managing Director, West Bengal Industrial Development Corporation Limited, being the respondent no. 5 to take up the issue with the Directorate of Industries, Government of West Bengal. It has been stated that the company had started establishing its ferro alloy units from the year 2007-08 and the said units started production on April 5, 2009 itself. Ultimately, when these communications were in progress, the petitioner came to know that the case of the petitioner was forwarded to the Standing Committee of the Cabinet, on January 29, 2013. While the matter was pending before the Standing Committee of the Cabinet, by a Memo bearing no. 406/Incent/0629/Misc/2014 dated July 9, 2014, the Director of Industries, Government of West Bengal rejected the prayer of the petitioner/company for grant of necessary registration under the West Bengal Incentive Scheme, 2004 for its two ferro alloy units viz. Phase-I and Phase-II on the ground that the application of the petitioner was submitted after the expiry of the validity of WBIS 2004 and there was no provision in the said scheme to consider the application after the expiry of the validity of West Bengal Incentive Scheme, 2004. 7
15. On July 19, 2014, the petitioner made a detailed representation before the Minister-in-Charge, Commerce and Industries Department, Government of West Bengal praying for reconsideration of the prayer for grant of necessary registration under the WBIS 2004. On September 1, 2014, the petitioner made another representation before the Director of Industries, Government of West Bengal, being the respondent no. 3 for his kind consideration of the prayer of the petitioner for grant of Registration Certificate and Eligibility Certificate under the WBIS 2004.
16. Aggrieved by the refusal on the part of the respondent authorities in issuing the Registration Certificate and the Eligibility Certificate under the West Bengal Incentive Scheme, 2004, this writ petition has been filed.
17. The respondent's case is that the State of West Bengal had published the WBIS-2004, which came into effect on and from April 1, 2004 in the whole of West Bengal and was to remain valid for the period ending on March 31, 2009. The Government of West Bengal by notification no.105-CI/O/Incentive-38/08/Admin dated April 28, 2008 withdrew the WBIS-2004 with a view to formulating a new incentive scheme and it was notified that all applications received for registration on and from April 1, 2008 would be considered for registration under the new Scheme once it was notified. The WBSSIS 2008 came into effect on and from the April 1, 2008 by Notification No.: 53-CI/01/Incentive-03/07-Admin (Part-II) Dated, Kolkata, February 26, 2009. The petitioner made an application in the 8 prescribed format but without complete papers on June 12, 2008 for registration of ferro alloy unit (Phase-I) under WBIS-2004, well beyond the cut off period for receiving applications under WBIS 2004 and the same was rejected by the Respondent No.3 i.e the Directorate of Industries, Government of West Bengal by a letter no. 014/Incent/0610/2004/2009 dated March 27, 2009, on the ground that such applications had been submitted after expiry of WBIS-2004. The petitioner was advised to apply for registration under the new scheme of WBSSIS-2008, which had come into effect from April 1, 2008.
18. It was stated that as the petitioner could not submit any conclusive documentary evidence of receipt of an application dated January 25, 2008, in the office of the Department of Commerce & Industries, or in the Directorate, there was no reason to presume that an application had been made by the petitioner in the prescribed format. Copy of the receipt of registration charges from the Post Office, dated January 25, 2008, was not considered as an adequate proof that such a letter had been sent under certificate of posting which was the same as the letter dated January 25, 2008, or that it was duly delivered to, or received by, any of the offices of the concerned Department.
19. The applications of the petitioner was referred to the Department of Commerce & Industries, for consideration as a time barred application under memo no. 433/Incent/0172/2004/2005 dated March 5, 2010 but it was not considered by the Department. 9
20. 54 industrial units, who had applied to the Directorate for registration under WBIS-2004 on or before March 31, 2008, but without documents, were allowed registration on submission of documents subsequently, as special cases by a letter No. 38- CI/O/Incentive/60/08/Admin dated February 13, 2009 and the two ferro alloy units of the petitioner was not in the list of those 54 units, as the applications of the petitioner for Phase I & II could not be traced out.
21. The petitioner company was sanctioned special package of incentive under WBIS-2000 as "Mega" project for production of pig iron, ingots, billets and hot-rolled products and was allowed registration as a special case and it had withdrawn the allowed incentive under the WBIS-2000.
22. The petitioner by a letter dated December 16, 2013 again prayed for reconsideration of its earlier applications for registration of two ferro alloys units under WBIS-2004, dated February 12, 2009 and March 12, 2009 and the same was rejected under memorandum no- 406/Incent/0629/Misc./2014 dated July 9, 2014 by the Director of Industries, West Bengal.
23. That the WBIS-2000 was made effective on and from January 1, 2000 and the scheme closed on December 31, 2004. The WBIS-2004 came into effect on and from the April 1, 2004 in the whole of West Bengal and was to remain valid for the period ending on the March 31, 2009. The Government of West Bengal by notification no.105-CI/O/Incentive-38/08/Admin dated April 28, 2008, withdrew 10 the WBIS-2004 with a view to formulating a new incentive scheme and it was notified that all applications received for registration on and from April 1, 2008 would be considered for registration under the new Scheme, once it was notified. The application submitted on June 12, 2008 (received on June 16, 2008) for registration certificate under WBIS 2004, was time-barred as the scheme was closed on March 31, 2008, to be superseded by a new Scheme in terms of the Notification of the Department of Commerce & Industries vide No. 105- CI/O/Incentive-38/18/Admin dated April 28, 2008. In the same notification, it was specifically mentioned that all applications under WBIS-2004, submitted after April 1, 2008 would be considered under the new Scheme of 2008, as and when published. Thus the respondents denied that the petitioner was entitled to registration under WBIS 2004.
24. Mr. Jaydip Kar, learned Senior Advocate appearing on behalf of the petitioner submitted that the order dated July 9, 2014 passed by the Director of Industries, West Bengal, refusing to issue registration certificate and eligibility certificate under the WBIS 2004, was arbitrary, mala fide, discriminatory and thus liable to be set aside. According to Mr. Kar, the first ground for rejection shown by the authority was non-receipt of the application under the WBIS 2004. Such a finding was completely contrary to the records. Mr. Kar relied on the original records produced before this Court at the instance of the petitioner and submitted that, from the note sheets it would appear that the Joint Secretary, Commerce and Industries 11 Department recommended the case of the petitioner for subsidy under the said scheme on May 10, 2010. That the file showed that the Commerce and Industries Department had agreed to grant post facto approval to the petitioner company. He further submitted that, if 54 industrial units, who had applied for registration but could not submit their documents within March 31, 2008, were allowed registration and benefits of WBIS 2004, in that case, the petitioner should also be treated equally with these units.
25. Mr. Kar relied on the note sheets and records of some of the departmental communications involved in the matter concerned and submitted that the industrial units which had submitted incomplete applications by March 31, 2008 but, submitted the complete documents subsequently by March 31, 2009, were granted registration under the scheme, but the petitioner was discriminated against and singled out, inasmuch as, the petitioner had filed an application on January 25, 2008, but filed the complete set of documents on February 12, 2009 and March 12, 2009 which were prior to March 31, 2009. Thus, according to Mr. Kar, the petitioners were similarly situated as those industrial units and should be considered and granted the subsidy under the said scheme.
26. Mr. Kar further submitted that the reasons assigned by the Director of industries for rejecting the claim of the petitioner were incorrect, inasmuch as, the question of producing evidence to show that an application was filed by the petitioner with the department for registration under the said scheme did not arise, when the records 12 reveal that the authorities had received the letter dated January 25, 2008. The said letter was the application made by the petitioner. According to Mr. Kar, if other industrial unit which had submitted belated documents like the petitioner was accepted as a pipeline case and granted the benefit of the scheme, there was no reason to refuse the claim of the petitioner. Records also reveal that the Directorate of Industries and the Finance Department had recommended that the case of the petitioner should be treated as a special case and the proposal was approved by the finance department too. Finally with the approval of the Hon'ble Chief Minister the matter was placed before the Standing Committee of the Cabinet for consideration. Thus, according to Mr. Kar, when the concerned Directorate as also the Finance Department were in favour of granting the subsidy under the WBIS 2004, the subsequent denial by the Director of Industries, West Bengal was wholly illegal, arbitrary, discriminatory and without any justifiable grounds.
27. Mr. Kar relied on the decisions in Union of India & Ors. vs. N.S. Rathnam & Sons, reported in (2015) 10 SCC 681 and Rashmi Metalliks Limited & Anr. vs. Union of India & Ors., reported in 2019 SCC Online Cal 857 in support of his above contentions.
28. Mr. Abhratosh Mazumder, learned Additional Advocate General submitted that the application dated January 25, 2008 was a letter written by the petitioner to the Principal Secretary, Commerce and Industries Department, requesting the authority to issue a provisional certificate for establishing the Ferro Alloy Plant, Phase-I 13 and Phase-II, pending the bank sanction letter. Such letter was written by the petitioner to the Principal Secretary as allegedly the Directorate of Industries was not accepting the application of the petitioner being Form-I. According to Mr. Mazumder, this letter was not an application in the prescribed form and thus the petitioner could not be considered as a pipeline case along with the 54 industrial units inasmuch as, those 54 units had submitted their application but the documents were not complete. Their applications in Form 1 had been submitted within the time limit under the WBIS 2004. He further submitted that the petitioner was given registration under the WBIS 2000 as a mega industrial unit and they were considered as a special case even though the application under the WBIS 2000 was also belated. The petitioner was given the benefit and they availed of the same. Now the petitioner could not be allowed further benefit under WBIS 2004 for the expanded portion of the same mega unit of ferro alloys established subsequently, as the applications in the prescribed format was not made before March 31, 2008.
29. According to Mr. Mazumder, the question of discrimination did not arise because the petitioner was not similarly situated with the 54 industrial units. However, the petitioner was also treated as a special case under the WBIS 2000. Mr. Mazumder further submitted that the registration under the WBIS 2004 could not be granted as, by the time the petitioner applied in the prescribed format along with all documents the scheme was already repealed and the West Bengal State Support for Industries Scheme, 2008 (hereinafter referred to as 14 the WBSSIS 2008) had already come into effect on and from April 1, 2008. He further submitted that the bank sanction letter was received by the petitioner only on September 5, 2008 which proves that the petitioner had failed to submit the complete documents prior to coming into effect of the WBSSIS 2008.
30. Mr. Mazumder drew the attention of the Court to annexure P-10 and submitted that the complete application in Form-I was filed by the petitioner on February 12, 2009 for registration of the Ferro Alloy Plant Phase-I under the WBIS 2004 and on March 12, 2009 for Phase-II. Referring to annexure P-8 of the writ petition, Mr. Mazumder submitted that an incomplete application was submitted on June 12, 2008 before the concerned Directorate. According to Mr. Mazumder, the 54 units who were treated as pipeline cases had submitted their application in the prescribed form to the Directorate for registration under WBIS 2004 on or before March 31, 2008 but without complete documents. Those units submitted their documents within March 31, 2009, that is, during the validity period of the WBIS 2004 commencing from April 1, 2004 and ending on March 31, 2009.
31. He further referred to the letter dated March 27, 2009, being annexure P-11 to the writ petition and submitted that the Deputy Director of Industries, writing on behalf of the Director, had informed the petitioner that a new scheme namely, WBSSIS 2008 had been announced which would come into effect from April 1, 2008 and would be valid till March 31, 2013. In view of the fact that the application of the petitioner was received after March 31, 2008, the 15 petitioner was asked to apply afresh, if eligible, under the new scheme with all necessary documents and fees. The petitioner did not challenge the said letter but on the contrary, by a letter dated July 20, 2009 requested the Director of Industries for a favourable consideration and to be treated as a pipeline case, on the ground that the petitioner was not aware that the expiry date of the WBIS 2004 was March 31, 2009, and as such had not applied for registration before March 31, 2008. It was further submitted by Mr. Mazumder that the petitioner had admitted that they did not submit the application with the documents within validity period of the scheme, and as such, they were not entitled to registration under the WBIS 2004 after the scheme was repealed. According to Mr. Mazumder, approval of the departments and their recommendations as would appear from the note sheets, do not grant the petitioner any right to claim the benefits of the scheme. Those were internal departmental communications. The decision was pending with the Standing Committee of the Cabinet. The decision was deferred and thereafter the Director of Industries informed the petitioner that the petitioner was not entitled to registration under the WBIS 2004 which was the ultimate decision of the State in this regard. According to Mr. Mazumder, the petitioner was not an eligible unit under the WBIS 2004, inasmuch as, the approval of the bank came in September 2008 and as such the petitioner could not have applied within March 31, 2008. He submitted that by the WBIS 2004, WBIS 2000 was repealed. By virtue of Clause 23.1 of the WBIS 2004, units which had 16 applied for registration with the Directorate of Industries under WBIS 2000 but whose application had not been disposed of prior to coming into effect of WBIS 2004, were entitled to the benefit under WBIS 2000. Thus, although the petitioner had applied late for registration under the WBIS 2000, the benefit of the said scheme was granted to the petitioner. According to Mr. Mazumder, under the WBSSIS 2008, such a provision was not available and as such the belated application of the petitioner could not be considered.
32. He submitted that even if the 54 industrial units were granted registration under the WBIS 2004, contrary to the scheme there could not be negative equality and the Government could not be directed to deviate from the exemption policy announced for development of industries, as two wrongs could not make a right.
33. Mr. Mazumder relied on the decisions of Union of India & Anr. vs. International Trading Co. & Anr., reported in (2003) 5 SCC 437, Anand Buttons Ltd. vs. State of Haryana & Ors., reported in (2005) 9 SCC 164, Commissioner of Customs (Import), Mumbai vs. Dilip Kumar & Company & Ors., reported in (2018) 9 SCC 1 and one unreported judgment of this High Court in Modern India Concast Limited & Ors. vs. The State of West Bengal & Ors. (In re: W.P. No.75 of 2019) in support of his above submissions.
34. He submitted that in case of any ambiguity in the interpretation of a clause in an exemption notification the benefit should not be extended to the industry but should go in favour of the 17 State. He submitted that these provisions of exemption notifications should be strictly construed.
35. Thereafter Mr. Mazumder relied on the decision of this Court in Modern India Concast Limited & Ors. Vs. The State of West Bengal & Ors. (In re: W.P. No.75 of 2019) wherein it has been held that if the applicant seeking subsidy under a scheme did not satisfy the eligibility criteria prescribed under the said scheme, the concerned department would not be liable to disburse any benefit under a particular scheme.
36. Heard the parties.
37. It is not in dispute that the petitioner had sent a letter to the Principal Secretary, Commerce and Industries Department on January 25, 2008. The relevant portion of the letter is set out below:-
"Dear Sir, We are to inform to your goodself that we are establishing our 9 MW capacity Ferro Alloy Plant at the above location for manufacturing of Ferro Silicon, Silico Manganese etc. We have taken a lease about 25 Acre of land from WBIDC comprising in Scheme Plot No. KLMN at WBIDC Plasto Steel Park, Barjora, Dist. Bankura. We have already established our Steel Manufacturing Unit (Induction Furnace) and the production has already been commenced. We have also applied for grant of Bank Loan with our Banker, Indian Bank. We have already obtained necessary Consent to Establish for manufacturing of Ferro Alloy from West Bengal Pollution Control Board vide their Memo No. 835-2N-161/2005 dated 10.11.06, a copy of which is enclosed herewith for your ready reference. We have also prepared our Project Report.
Please note that we are establishing the above Factory pursuant to call given by our beloved Chief Minister during his previous industrial meet "Resurgence of Bankura District". We have already placed our order for purchase of Plant & Machinery etc. Sir, the Directorate of Industries is not accepting our application being Form-I in absence of appraisal and sanction letters from our Bank which we are awaiting. We are earnestly request you Sir to atleast grant us provisional registration certificate for establishing our 9 MW Ferro Alloy Plant, Phase -I & Phase - II pending the Bank sanction letter. The final and permanent registration may be issued subsequently.
Thanking you,"18
38. The departments concerned having acknowledged this letter had approved the proposal for extending the benefit of the WBIS 2004 to the petitioner. However, ultimately the decision was pending before the Standing Committee of the Cabinet. The decision was deferred and ultimately the case of the petitioner was rejected. The petitioner was not treated to be similarly situated as those 54 industrial units which were treated as pipeline cases. Admittedly the letter was not an application in the prescribed format. WBIS 2004 contemplates that an application in the prescribed form should be submitted before the Director of Industries for registration of the unit in Form-I. Records reveal that the unit of the petitioner was granted registration under the WBIS 2000 and by a communication dated February 13, 2009 the Special Secretary to the Government of West Bengal Commerce and Industries Department, clarified that registration of 54 industrial units which had applied to the Director of Industries on or before March 31, 2008 for registration under WBIS 2004, may be allowed to be registered and registration of three mega projects (one of which was the petitioner's project of manufacturing pig iron, steel ingots/billets) may be allowed to be registered subject to the provisions of the scheme. It was specifically clarified that all these industrial units which had received package of incentive under WBIS 2000, having failed to register with the industries by March 31, 2009 shall not be allowed registration under WBIS 2004. Thus the policy of the Government with regard to eligibility of industrial units to come under 19 the WBIS 2004 was not to allow registration for those units which had applied after March 31, 2008.
39. It appears from the records that the letter of the petitioner was lost and there is a note of the Joint Secretary to the effect that the letter could not be traced out by the Director of Industries and the application was not included in the pending list of the pipeline cases.
40. Admittedly, the petitioner did not file an application in the prescribed format although the note sheets revealed that the 54 units had applied on or before March 31, 2008 but not with the complete details. However, such detail was submitted within March 31, 2009 and the Government had taken a policy decision to allow these units to be registered under the WBIS 2004. There is no manner of doubt that the petitioners submitted a letter with the Principal Secretary to allow them provisional registration as their application in the prescribed format was originally refused by the Directorate of Industries. It is also true that the petitioner had not applied in the prescribed format with complete documents before February 12, 2009 for Phase-I and March 12, 2009 for Phase-II.
41. The distinguishing factors between the petitioner's case and the case of the 54 industrial units, who had been treated as pipeline cases and granted registration under WBIS 2004, are that those units had already submitted their applications in the prescribed format but without complete details. In the case of the petitioner there was no application in the prescribed format. The petitioner was aware of such defect/deficiency in its case and by several letters requested 20 sympathetic consideration. The petitioner also stated that had it been aware that the scheme would be repealed prior to the expiry date of March 31, 2009 then it would have applied for registration before March 31, 2008. The relevant portion of the letter of the petitioner dated July 20, 2009 written to the Director of Industries is quoted below:-
"To be eligible for obtaining benefits under the 2004 Scheme a new unit required registration with Directorate of Industries and also an eligibility certificate from WBIDC. It may please be observed that the 2004 scheme did not contain any stipulation that application for registration was to be made to the director of industries prior to taking steps for implementing a proposal. In fact, under the provisions of the scheme, an application for registration was required to be submitted within the duration period from 01/04/2004 to 31/03/2009. The information regarding prior repealing of the said scheme before the scheduled expiry date of 31/03/2009 was not available to us, otherwise we could have applied for registration before 31/03/2008.
You will please appreciate that in our state, normally, from concept to commissioning, a period of 2 years is required to complete a project. In our case the plant was ready for starting commercial production. It is therefore obvious that we initiated required steps at least two years before starting commercial production, which is within the duration of 2004 scheme i.e. our proposal, remained in pipeline for a period of 2 (two) years prior to 31/03/2008, the date of withdrawal of the 2004 scheme. So far an investment of Rs. 26 crores has already been made in the project. Please note that the total investment in plant and machinery will be Rs.36.98 crores in both the phases, hence a substantial investment has already been made by us. Even the first phase of ferro alloy plant has been inaugurated on 05.04.09 by the Chairman of Indian Bank which reflects that the plant has already been established in 2008-09.
Sir, you have considered few cases as pipeline case and our case should also be considered as a pipeline case as we have relied upon your previous notification related to WBIS-2004 which was valid up to 31.03.09.
The Director of Industries has asked us vide their letter dated 27.03.09 to apply a fresh under 2008 scheme which is neither tenable nor feasible. Even the clause 3.12 of your WBSSIS-2008 scheme says that investment made in plant and machinery after the date of obtaining the RC in Part- I will be eligible for the purpose of FCI. We have already made the 21 investment in plant and machinery etc. long ago before modifying the 2008 scheme.
We therefore request you to kindly consider our prayer favourably in the light of the submissions made above and grant registration for the mega ferro alloy manufacturing project under the 2004 scheme itself."
42. Several letters were issued by the President of Merchants' Chamber of Commerce, from which it appears that a request was made to consider the petitioner's case favourably. Thus, nothing is revealed from the records or the documents relied on by the petitioner, on the basis of which it is established that the petitioner had acquired a legal right to be registered under the WBIS 2004. The petitioner does not come within the eligibility criteria as contemplated under the WBIS 2004. The letter dated January 25, 2008 which had been quoted for convenience is not an application in the prescribed format. Had it been a case that the petitioner had submitted an incomplete application in prescribed Form-I, that is, without supporting documents within March 31, 2008, but, submitted the required documents within March 31, 2009, the case of the petitioner could be considered along with the 54 industrial units as a pipeline case. As a policy decision, the concerned Directorate had allowed registration to those units, which had applied for registration under WBIS 2004 in Form-I by March 31, 2008, and had submitted the documents within March 31, 2009. The petitioner applied in the prescribed form in June 2008, for Phase 1 but without complete documents, i.e., bank sanction letter.
43. Moreover, it now appears that the subsidy schemes have all been withdrawn by the Government. Records which have been 22 produced before this Court at the instance of the petitioner revealed that the petitioner had at one point of time requested to switch over from WBIS 2000 to WBIS 2004. But, ultimately the petitioner was found eligible to be registered under WBIS 2000 as a mega project and the petitioner had taken the benefit of the said WBIS 2000. It was also clarified while granting the benefit to the petitioner that the claim for registration under WBIS 2004 would not be available. The relevant portion of the letter dated February 13, 2009, memo no.38.CI/O/Incentive/60/08.Admin, Annexure P-22 in the second affidavit-in-reply filed by the petitioner written by Shri S. Kishore, IAS, Special Secretary to the Government of West Bengal to The Director of Industries, West Bengal, 1, K.S.Roy Road, Kolkata-700001, is quoted below:-
"Sir, In response to your clarifications sought for in the letters under reference, I am directed to communicate you the decisions of the Government in the following manner:
1) Registration of 54 (fifty four) industrial units having applied to the Director in Industries, on or before 31.03.2008, for registration under the West Bengal Incentive Scheme-2004 may be allowed to be registered as prayed for, subject to the provisions of the scheme.
2) Registration of 3 (three) mega projects which applied to the Director of Industries for registration under the West Bengal Incentive Scheme-2000 may also be allowed to be registered as prayed for, subject to the provisions of the scheme. All such Industrial units that received package of Incentive under the WBIS-2000 failing to register with the Director of Industries by 31.03.2009 shall no longer be allowed registration under the Yours faithfully, Special Secretary"
44. With regard to the decision cited by the respondents in the matter of Modern India Concast Limited & Ors. (supra) Mr. Kar submitted that the decision was distinguishable, inasmuch as, the 23 petitioner claiming incentive therein had applied for registration after the expiry of the scheme. The submission of Mr. Kar is not accepted. The petitioner in the instant case did not apply in the prescribed format that is, Form-I as contemplated under the scheme within the validity period that is, March 31, 2008. The WBSSIS 2008 came into effect from April 1, 2008. The petitioner wrote a letter to the Principal Secretary and not to the appropriate authority which was sent under certificate of posting, dated January 25, 2008 praying for provisional registration under WBIS 2004 on the allegation that their incomplete application in Form-I was not being accepted by the concerned Directorate. Whereas, records reveal that an application in Form-1 without all documents was accepted by the department in June 2008 for Phase 1.
45. Moreover, it is a settled principle of law that subsidy schemes should be strictly construed and the petitioner was not eligible under the WBIS 2004. Some provisions from the WBIS 2004 are quoted below:-
3. Definitions:
xv) "Approved Project" means the industrial project of a unit for which registration certificate and eligibility certificate have been issued under the 2004 Scheme. However, for the units in the small scale sector the details of the investment in the project indicated in the application for permanent/final registration as verified and accepted by the Registering Authority shall be construed to be the approved project for the purpose of considering subsidy under WBIS' 2004 subject to fulfillment of the conditions specified in para 6.1.2 of this Scheme.;
xviii) "Eligible Unit" means a unit in the large/small scale sector having registration certificate issued by the Directorate of Industries and eligibility certificate by the W.B.I.D.C. or registration certificate issued by the District Industries Centre, as the case may be;
For a Tourism Unit an "eligible unit" shall be a unit having registration certificate issued by the Directorate of Tourism and the eligibility certificate by the West Bengal Tourism Development 24 Corporation for its approved project. For such units in the small scale sector, 'eligible unit' shall mean the unit registered with the District Industries Centre(s) of the Directorate of Cottage & Small Scale Industries;
6. Eligibility criteria for incentives under the 2004 Scheme:
6.1.1 Any industrial project in the large sector to which this scheme applies, shall be eligible for securing an eligibility certificate provided:
(a) the project is covered by a detailed feasibility report/project prepared for the purpose:
(b) the project has been approved and sanctioned by the Central Financial Institution or the commercial Banks or the State Financial Institutions, as the case may be. In the case of projects with arrangement of finance from own resources, issue of eligibility certificate shall be considered provided the WBIDC is satisfied about the arrangement of such finance.
8. State Capital Investment Subsidy:
8.1 An eligible unit located in a group 'B' area and set up in the State on or after the 1 April, 2004 will be entitled to the State Capital Investment Subsidy @ 7.5% of the Fixed Capital Investment subject to a limit of Rs.150.00 lakhs.
8.2 An eligible Industrial unit located in a group 'C' area and set up in the State on or after 1st April, 2004 will be entitled to State Capital Investment Subsidy @ 10% of the Fixed Capital Investment subject to a limit of Rs.250.00 lakhs.
22. Power to amend and/or relax/repeal:
Notwithstanding anything contained in any of the provisions of the 2004 Scheme, the State Govt. may at any time-
i) make any amendment to this Scheme or repeal it, but the commitments already made for an approved project shall not be affected by any such amendments or repeal;
ii) make any relaxation in applying the provisions of this Scheme but such relaxation shall be made on the merits of the approved project in each case, as the State Govt. may consider necessary and appropriate;
iii) many issue instructions and guidelines to facilitate implementation, to remove anomalies and to clarify the interpretations of the provisions of this Scheme.
23. Repeal and Saving:
23.1 The West Bengal Incentive Scheme, 2000 shall be repealed except in respect of para 17.1 of the present Scheme and shall stand substituted by the West Bengal Incentive Scheme, 2004 from the date of commencement of the 2004 - Scheme. It is further provided that the units which have applied for registration with the Directorate of Industries/Directorate of Cottage & Small Scale Industries/Directorate of Tourism as the case may be under WBIS'2000 and whose applications have not been disposed of prior to the coming into effect of the WBIS'2004, shall be entitled to all benefit under WBIS'2000.25
23.2 The benefits extended to the units under any of the previous Incentive Scheme shall continue to be governed under the respective Scheme.
46. Admittedly, the petitioner was not entitled to register under the WBIS 2004 as the petitioner was not an approved eligible unit to come under the said scheme, inasmuch as, the project had not been approved by the bank and the bank sanction letter for the financial assistance was issued as late as September 5, 2008 that is, after the WBIS 2004 was repealed. Moreover, WBSSIS 2008 does not provide that pending applications for registration under WBIS 2004 could be considered despite coming into effect of WBSSIS 2008, unlike the saving clause in WBIS 2004.
47. The decision of Anand Buttons Ltd. (supra) reiterated the principle of law that Article 14 does not mandate that similarly situated persons should be granted similar relief, if it is found that those persons were granted an unjustified relief. Exemptions given to persons who did not qualify under the Government scheme for subsidy at the highest would make the subsidy granted to them vulnerable. But, this would not justify granting such relief to the petitioner, which would mean perpetuating a wrong. The concept of equal treatment presupposes the existence of similar legal foothold.
Even if it is accepted that a wrong had been committed the Court cannot introduce the concept of negative equality. In the decision of International Trading Co. & Anr. (supra) a similar view was expressed by the Hon'ble Apex Court. Thus the cases of the 54 industrial units were different. Those units had applied in the 26 prescribed form within March 31, 2008, but had submitted the complete document within March 31, 2009 and the Government had adopted a policy to grant them the subsidy under WBIS 2004 . The petitioner has not been able to demonstrate that these 54 persons had not applied in the prescribed form but had only submitted letters like the petitioner. Moreover, even assuming that such special treatment could not have been granted to these units, the law is clear, that there could not be any negative equality and similar relief could not be permitted under the scheme to the petitioner. The concept of equal treatment on the logic of Article 14 of the Constitution of India cannot be pressed into service in such cases. As the petitioner had not applied in the prescribed form within March 31, 2008, the petitioner was not treated to be eligible for the benefits under the WBIS 2004 as per the policy of the government.
48. The decision of the Hon'ble Apex Court in N.S. Rathnam & Sons (supra) has reiterated the proposition that benefit of an exemption should be extended to all similarly situated persons. The Court reiterated that when two sets of persons were similarly situated/placed they should be treated equally. It also reiterated that the State had the power to classify persons for legitimate purpose and every such classification was in some degree likely to produce some inequality but mere production of inequality was not enough. The facts of the case in hand are distinguishable and the judgment will not help the petitioner.
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49. The decision of Rashmi Metalliks Limited & Anr. (supra) does not help the petitioner, inasmuch as, in the said decision the Court observed that when the Union of India as per the direction of the Orissa High Court had granted permission under the WIS to the petitioners before the Orissa High Court, then the Union of India could not discriminate against the petitioners before the Calcutta High Court and not grant them permission under the WIS, if they were found to be similarly situated like the petitioner before the Orissa High Court. The reason assigned was that if the decision of the Orissa High Court was accepted then the Union of India should apply the said decision universally and not only in respect of the State of Orissa as the WIS was applicable all over India.
50. The petitioner also placed reliance on the notes of the different departments where proposals for approving the case of the petitioner as a pipeline case was approved by the Directorate as also Finance Department and the matter was placed before the Standing Committee of the Cabinet for a decision. However, the petitioner was never sent any communication with regard to such approval nor did the authorities write to the petitioner at any point of time that the case was approved by the departments and was awaiting the decision of the Cabinet. Reference is made to the decision of the Hon'ble Apex Court in this regard in Union of India and Others vs. Vartak Labour Union(2) reported in (2011) 4 SCC 200 and the relevant portions of the above decision is quoted below:-
"15. It is trite that inter-departmental communications and notings in departmental files do not have the sanction of law, 28 creating a legally enforceable right. In Sethi Auto Service Station v. DDA [(2009) 1 SCC 180], a Division Bench of this Court, in which one of us (D.K. Jain, J.) was a member has observed thus:
(SCC pp. 185-86, para 14) "14. ... 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."
(emphasis in original)
16. Similar views are echoed in Jasbir Singh Chhabra v. State of Punjab [(2010) 4 SCC 192]. This Court has observed that: (SCC p. 209, para 35) "35. It must always be remembered that in a democratic polity like ours, the functions of the Government are carried out by different individuals at different levels. The issues and policy matters which are required to be decided by the Government are dealt with by several functionaries some of whom may record notings on the files favouring a particular person or group of persons. Someone may suggest a particular line of action, which may not be conducive to public interest and others may suggest adoption of a different mode in larger public interest. However, the final decision is required to be taken by the designated authority keeping in view the larger public interest."
51. The decision of the Hon'ble Apex Court in this regard in the decision of Sethi Auto Service Station and Another vs. Delhi Development Authority and Ors., reported in (2009) 1 SCC 180 and the relevant portions of the above decision is quoted below:-
"15. In Bachhittar Singh v. State of Punjab [AIR 1963 SC 395 :
1962 Supp (3) SCR 713] , 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 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 29 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 v. State of Maharashtra [(2003) 5 SCC 413] , 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 DDA fructified into an order conferring legal right upon the appellants."
52. For the reasons aforesaid the petitioner cannot be granted the reliefs prayed for as the petitioner has not acquired a legally enforceable right to be registered under the WBIS 2004, nor has the petitioner been able to establish that the petitioner was similarly situated as those 54 industrial units who were considered as a special case.
53. The writ petition fails, there will be, however, no order as to costs.
Urgent photostat Certified Copy of this judgment, if applied for, be given to the parties, on priority basis.
(Shampa Sarkar, J.) 30 Later:-
The learned Advocate for the petitioner prays for stay of the operation of the judgment and order.
The prayer for stay is considered and rejected.
(Shampa Sarkar, J)