Patna High Court
M/s Responce Renewable Energy LimitedversusThe State of Bihar
- Decided
- Disposal
- ALLOWED
- Bench
- ANIL KUMAR SINHA
Holding
The court set aside the authorities' orders and directed that the subsidy be granted from the date of SIPB approval, as the denial was arbitrary and contrary to the policy.
Summary
M/s Responce Renewable Energy Ltd. and M/s Glatt Solution (P) Ltd. filed writ petitions challenging the denial of a 2% interest subsidy under the Bihar Industrial Incentive Policy, 2011 (as amended in 2014). The State of Bihar authorities rejected their claims on the ground that the companies had commenced commercial production before obtaining approval from the State Investment Promotion Board (SIPB). The petitioners argued that the policy does not make SIPB approval a condition precedent and that the authorities’ reliance on this ground was arbitrary and contrary to earlier judgments. The court examined the policy provisions, the letters from the Deputy Director (Technical) indicating that the date of the Power Purchase Agreement would be deemed the approval date, and prior case law. Finding no legal basis to deny the subsidy, the court set aside the impugned orders and directed the respondents to grant the subsidy from the date of SIPB approval and make payment within three months. The writ petitions were allowed to the extent indicated.
Issues considered
- The denial of the 2% interest subsidy on the ground that commercial production started before SIPB approval is legally valid.
- Whether the Bihar Industrial Incentive Policy, 2011 (as amended) requires SIPB approval as a condition precedent to eligibility for the subsidy.
- Whether the authorities' order denying the subsidy should be quashed.
- From which date the petitioner is entitled to receive the interest subsidy.
Subjects
- interest subsidy
- industrial incentive policy
- SIPB approval
- Bihar
- writ petition
- quashing order
- eligibility
- commercial production
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.16164 of 2022
======================================================
M/s Responce Renewable Energy Limited a Limited Company incorporated
under the provisions of Companies Act, 1956, having its registered office at
76, Pandit Purushottam Roy Street, 3rd floor, Kilkata - 700007, West Bengal,
through its General Manager namely Sant Prasad, (Male), aged about 45
years, son of Sri Dudh Nath Tiwari, Resident of Baramudi, P.S. Baramudi,
District - Dhanbad (Jharkhand).
... ... Petitioner/s
Versus
1. The State of Bihar through the Principal Secretary, Department of Industry,
Government of Bihar, Patna.
2. The Principal Secretary, Department of Industry, Government of Bihar,
Patna.
3. The Director of Industries, Department of Industry, Government of Bihar,
Patna.
4. The Deputy Director (Technical), Department of Industries, Government of
Bihar, Patna.
5. The General Manager, District Industry Centre, Patna.
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 16335 of 2022
======================================================
M/s. Glatt Solution (P) Limited, A Private Limited Company incorporated
under the provisions of Companies Act, 1956, having its registered office at
76, Pandit Purshottam Roy Street, 3rd Floor, Kolkata- 700007 through its
General Manager namely Sant Prasad, (Male), aged about 45 years, Son of Sri
Dudh Nath Tiwari, Resident of Baramudi, P.S.- Baramudi, District- Dhanbad
(Jharkhand).
... ... Petitioner/s
Versus
1. The State of Bihar through the Principal Secretary, Department of Industry,
Government of Bihar, Vikash Bhawan, Baily Road, Patna.
2. The Principal Secretary, Department of Industry, Government of Bihar,
Vikash Bhawan, Baily Road, Patna.
3. The Director of Industries, Department of Industry, Government of Bihar,
Vikash Bhawan, Baily Road, Patna.
4. The Deputy Director (Technical), Department of Industries, Government of
Bihar, Vikash Bhawan, Baily Road, Patna.
5. The General Manager, District Industry Centre, Patna.
... ... Respondent/s
======================================================
Appearance :
(In Civil Writ Jurisdiction Case No. 16164 of 2022)
For the Petitioner/s : Mr. SD Sanjay, Sr. Adv.
: Mr. Mohit Agarwal, Adv.
Patna High Court CWJC No.16164 of 2022 dt.15-12-2023
2/8
: Mr. Lokesh Kumar, Adv.
: Mr. Rahul Kumar, Adv.
For the Respondent/s : Mr. Ravish Chandra, AC to SC6
(In Civil Writ Jurisdiction Case No. 16335 of 2022)
For the Petitioner/s : Mr. Mohit Agarwal, Adv.
For the Respondent/s : Mr. Zaki Haider, AC SC9
======================================================
CORAM: HONOURABLE MR. JUSTICE A. ABHISHEK REDDY
ORAL JUDGMENT
Date : 15-12-2023
Heard the parties.
Both the cases are disposed off by this common order as
the issue in both the matters is one and the same.
CWJC No. 16164 of 2022 has been filed for the
following reliefs:-
“i) For quashing of the Letter
dated 12.09.2022 bearing Memo No. SIPB/906
issued under the signature of the Respondent
Director of Industries, Bihar Patna whereby
the Petitioner's entitlement for grant of 2%
Interest Subsidy under the Industrial Incentive
Policy, 2011 was rejected on the ground that
the said subsidy was introduced with effect
from 20.01.2015 and the Petitioner had its
SIPB approval prior to the date of coming into
effect of the said subsidy without considering
the fact that the Respondent Dy. Director
(Technical), Bihar, Patna vide its letter No.
1209 dated 28.06.2013 has communicated the
decision taken by SIPB Committee vide its
minutes of meeting dated 24.05.2013 that the
date of entering into Power Purchase
Agreement shall be considered to be the date of
SIPB approval of the project of the Petitioner
and in Petitioner has entered into Power
Purchase Agreement with BSPHCL on
14.09.2016 which is post the date of
Amendment No.11 dated 5.01.2015 and hence
the decision of the said Respondent is wholly
arbitrary and contrary to the scheme of the
Industrial Incentive Policy, 2011;
Patna High Court CWJC No.16164 of 2022 dt.15-12-2023
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ii] For issuance of
writ/direction/order, directing the respondents
to forthwith reimburse the interest subsidy of
2% for the period 01.04.2017 to 31.07.2018
and subsequent there upon, on the term loan
amount of rupees 49.92 crores availed from
State Bank of India, by the Petitioner Company
as promised under the Industrial Incentive
(Amendment) Policy, Bihar, 2014 vide letter
bearing letter no. 11/Patna dated 5.01.2015, as
the same has not yet been credited in the
account of the petitioner company despite
fulfillment of eligibility condition;
iii) For a declaration that the
Petitioner is entitled for the interest subsidy
from the date of its commercial production ie
since 30.03.2017 till 7 years as promised by the
Respondents under the Industrial Incentive
(Amendment) Policy, Bihar, 2014 vide letter
bearing letter no. 11/Patna dated 5.01.2015;
iv) For a declaration that the
respondent cannot deny the benefits promised
under the Industrial Incentive Policy, 2011 as
amended by Industrial Incentive (Amendment)
Policy, Bihar, 2014 as the petitioner company
fulfilled all the eligibility criteria as required
under the said policy;
v) For a direction to the
Respondents for grant of subsidies at the
earliest to save the Petitioner's unit as it is
suffering due to non imbursement of the
amount of interest subsidy of 2% on term loan;
and/or for any other relief[s] for which the
Petitioner may be found entitled to in the facts
& circumstances of the present case.”
CWJC No. 16335 of 2022 has been filed for the
following reliefs:-
“(i) For quashing of the order
dated 26.09.2022 issued vide Mermo No.
SIPB/1114 dated 26.09.2022 under the
signature of the Respondent Principal
Secretary, Department of Industries,
Government of Bihar, Patna where by the claim
Patna High Court CWJC No.16164 of 2022 dt.15-12-2023
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of the Petitioner for 2% interest subsidy as
promised under the Industrial Incentive
Amendment) Policy, Bihar, 2014 vide letter
bearing letter no. 11/Patna dated 5.01.2015
was denied on the ground that the SIPB and
competent authority approval to the project of
the Petitioner was prior to the date of
amendment ignoring the fact that the
Respondent Deputy Director (Technical),
Department of Industries, Government of
Bihar, Vikash Bhawan, Baily Road Patna vide
its Letter No. 1208 dated 28.06.2013 had
communicated that the SIPB vide its meeting
dated 24.05.2013 had given consent that the
date of Power Purchase Agreement with
BSPHCL shall be considered the date of
approval by SIPB and the Petitioner had
entered Power Purchase Agreement with
BSPHCL vide agreement dated 14.09.2016
which is after the date of Industrial Incentive
(Amendment) Policy, Bihar, 2014 bearing letter
no. 11/Patna dated 5.01.2015;
ii] For issuance of
writ/direction/order, directing the respondents
to forthwith reimburse the interest subsidy of
2% for the period 01.03.2017 to 31.07.2018
and subsequent there upon, on the term loan of
an amount of rupees 16.50 crores availed from
State Bank of India, by the Petitioner Company
as promised under the Industrial Incentive
(Amendment) Policy, Bihar, 2014 vide letter
bearing letter no. 11/Patna dated 5.01.2015, as
the same has not yet been credited in the
account of the petitioner company despite
fulfillment of eligibility condition;
iii) For a declaration that the
Petitioner is entitled for the interest subsidy
from the date of its commercial production ie
since 28.02.2017 till 7 years as promised by the
Respondents under the Industrial Incentive
(Amendment) Policy, Bihar, 2014 vide letter
bearing letter no. 11/Patna dated 5.01.2015;
iv] For a declaration that the
respondent cannot deny the benefits promised
under the Industrial Incentive Policy, 2011 as
Patna High Court CWJC No.16164 of 2022 dt.15-12-2023
5/8
amended by Industrial Incentive (Amendment)
Policy, Bihar, 2014 as the petitioner company
fulfilled all the eligibility criteria as required
under the said policy;
v) For a direction to the
Respondents for grant of subsidies at the
earliest to save the Petitioner's unit as it is
suffering due to non imbursement of the
amount of interest subsidy of 2% on term loan;
and/or for any other relief[s] for which the
Petitioner may be found entitled to in the facts
& circumstances of the present case.”
2. Learned counsel for the petitioner has stated that the
impugned order is passed by the authority concerned solely on the
ground that the petitioner has started production even before the
approval has been granted by the State Investment Promotion
Board (SIPB).
3. Learned counsel has stated that under the Bihar
Industrial Incentive Policy, 2011, the petitioner’s entitlement for
grant of 2% interest subsidy was denied on the ground that the
petitioner has started commercial production even before the
approval by SIPB and rejected the case of the petitioner.
4. Learned counsel has stated that there is nothing under
the regulation which states that the approval of the SIPB is a
condition precedent for starting the commercial production. The
stand taken by the authorities is not only arbitrary, bad and illegal
but also contrary to the scheme floated by the State of Bihar under
the Bihar Industrial Incentive Policy, 2011, and therefore, prayed
this Hon’ble Court to allow the present writ petition and give a
Patna High Court CWJC No.16164 of 2022 dt.15-12-2023
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direction to the authorities concerned for granting the incentives
under the Bihar Industrial Incentives policy, 2011.
5. Per contra, the learned counsel appearing on behalf of
the respondents has vehemently opposed the prayer of this writ
petition and has stated that the petitioner has violated the terms
and conditions of the policy.
6. Learned counsel has stated that the petitioner has not
taken prior approval of the SIPB before starting the production.
The act of the petitioner in starting the production even before the
approval was granted is in violation of the incentive policy, and
therefore, the petitioner is not entitled to any incentive as
envisaged under the Incentive Policy, 2011. Further, it is stated
under similar circumstances the authorities have rejected the case
of M/s Jagaran Prakash Limited, Gaya after taking opinion of the
Law Department, and therefore, the petitioner’s case which is also
similar has also been rejected. Learned counsel for the respondents
has prayed to dismiss the present writ petition.
7. In the present case, the State of Bihar has floated
Bihar Industrial Incentive Policy, 2011 to attract investments in the
State. The petitioner, admittedly, has applied to the Competent
Authority i.e. SIPB and was granted approval on 14.09.2016. But,
the case of the petitioner has been rejected on the sole ground that
Patna High Court CWJC No.16164 of 2022 dt.15-12-2023
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the petitioner has started commercial production even before the
grant of approval by SIPB. The said stand taken by the official
respondents appears to be an arbitrary and frivolous one.
Admittedly the authorities have invited investors/ industrialists to
invest in the State of Bihar by floating the Bihar Industrial
Incentive Policy, 2011 and under the scheme some incentives have
being offered to the Businessmen who have established their
industries in the state of Bihar. The stand taken by the respondent
that the petitioner has started production even before the grant of
approval and therefore not entitled to any incentive under the
scheme is without any legal basis. The aforesaid policy does not
lay any guideline or restrictions on the industrialists that the
production cannot be started before the approval by SIPB is
granted and does not state that any industry which starts
production without getting the necessary approvals from SIPB is
dis-entitled to the incentives under the scheme. Admittedly in the
present case, the approval was granted on 14.09.2016 and it is the
case of the respondents that the commercial production has started
on 30.03.2017, merely because the production is started the
incentive under the scheme cannot be disallowed. At the most, the
incentives can be granted from the date of the approval of SIPB
but the authorities cannot deny the incentives under the scheme all
Patna High Court CWJC No.16164 of 2022 dt.15-12-2023
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together. This Hon’ble Court vide order dated 10.10.2023 in
CWJC No. 11004 of 2023 and in other judgments has held that the
incentive under the Bihar Industrial Incentive Policy, 2011 cannot
be denied solely on the ground that the commercial production has
been started prior to obtaining permission from SIPB.
8. Having regard to the above, the court does not find
any valid reasons for upholding the impugned order passed by the
authorities and the same is set aside. The authorities are directed to
grant the incentives as envisaged under the Bihar Industrial
Incentive Policy, 2011 from the date of approval of the SIPB and
make necessary payments to the petitioner as per the entitlement
within a period of three months from the date of receipt of the
copy of this order.
9. The present writ petitions are allowed to the extent
indicated.
(A. Abhishek Reddy, J)
Ayush/-
AFR/NAFR NAFR
CAV DATE NA
Uploading Date 23.01.2024.
Transmission Date NA
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