Patna High Court
ACME Nalanda Solar Power Private LimitedversusThe State of Bihar
- Decided
- Disposal
- ALLOWED
- Bench
- ANIL KUMAR SINHA
Holding
The Court held that the petitioners, as existing industrial units that had not availed any incentive under the 2011 policy, are eligible for incentives under the amended BIIPP‑2016, and the rejection letters are set aside.
Summary
The petitioners, two solar power SPVs, sought declaration that they were eligible for incentives under the Bihar Industrial Investment Promotion Policy 2016 (BIIPP‑2016) and the quashing of rejection letters issued by the State Investment Promotion Board (SIPB). Their projects were commissioned on 28‑06‑2016, just before the BIIPP‑2016 came into force, and they had not received any benefit under the earlier 2011 policy. The petitioners argued that the Stage‑I clearance and financial approval granted in 2018 created a vested right, and that the amendment to clause 8(b) of BIIPP‑2016 (2022) made existing units that had not availed prior incentives eligible for the new policy. The State contended that the projects were operational before the 2016 policy and therefore ineligible. The Court examined the wording of clause 8(b), the purpose of the amendment, and principles of promissory estoppel and legitimate expectation, concluding that the petitioners fell within the category of “existing industrial units” eligible for incentives. Consequently, the Court set aside the rejection letters and ordered the respondents to grant the claimed interest subvention, stamp duty, and registration fee reimbursements within three months.
Issues considered
- Whether the petitioners are eligible to claim incentives under BIIPP‑2016 in view of the amendment dated 14‑10‑2022.
- Whether the grant of Stage‑I clearance and financial approval created a vested or enforceable right in favour of the petitioners.
- Whether the rejection of the petitioners' applications is arbitrary and violative of the statutory policy and principles of administrative law.
Legislation cited
Subjects
- Industrial incentives
- Administrative law
- Promissory estoppel
- Legitimate expectation
- Vested right
- Policy interpretation
- Clause 8(b)
- Arbitrariness
- Discrimination
- Article 14
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.63 of 2025
======================================================
ACME Nalanda Solar Power Private Limited a company registered under the
Companies Act, 2013 having its registered office at Plot No. 152, Sector- 44,
Gurugram- 122 002, Haryana, through its authorised representative Ajay Ku-
mar Chaudhary (M) aged about 41 years S/o Parmanand Chaudhary R/o
House Number- 16, Baluwa Tapa Kathut, Ghazipur, P.S.- Mohammadabad
District- Ghazipur, Uttar Pradesh 233227.
... ... Petitioner/s
Versus
1. The State of Bihar through the Secretary, Department of Industries, Govern-
ment of Bihar, Patna.
2. The State Investment Promotion Board, through Industrial Development
Commissioner, Department of Industries, Government of Bihar, Patna.
3. Secretary, Department of Industries, Government of Bihar, Patna.
4. Industrial Development Commissioner, Department of Industries, Govern-
ment of Bihar, Patna.
5. The Director (Technical Development), Department of Industries, Govern-
ment of Bihar, Patna.
6. The Director, Industries, Department of Industires, Government of Bihar,
Patna.
7. The Assistant Industries Director, SIPB Cell, Department of Industries, Gov-
ernment of Bihar, Patna.
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 19772 of 2024
======================================================
ACME Magadh Solar Power Private Limited a company registered under the
Companies Act, 2013 having its registered office at Plot no. 152, Sector - 44,
Gurugram- 122002, Haryana, through its authorised representative Ajay Ku-
mar Chaudhary (M) aged about 41 years S/o Parmanand Chaudhary R/o
House Number- 16, Baluwa Tapa Kathut, Ghazipur, P.S. - Mohammadabad
District- Ghazipur, Uttar Pradesh- 233227.
... ... Petitioner/s
Versus
1. The State of Bihar through the Secretary, Department of Industries, Govern-
ment of Bihar, Patna.
2. The State Investment Promotion Board through Industrial Development
Commissioner, Department of Industries, Government of Bihar, Patna.
3. Secretary, Department of Industries, Government of Bihar, Patna.
4. Industrial Development Commissioner, Department of Industries, Govern-
ment of Bihar, Patna.
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
2/32
5. The Director (Technical Development ) Department of Industries, Govern-
ment of Bihar, Patna.
6. The Director, Industries, Department of Industries, Government of Bihar,
Patna.
7. The Assistant Industries Director, SIPB Cell, Department of Industries, Gov-
ernment of Bihar, Patna.
... ... Respondent/s
======================================================
Appearance :
(In Civil Writ Jurisdiction Case No. 63 of 2025)
For the Petitioner/s : Mr. Satyabir Bharati, Sr. Adv.
Mr. Aniket Prasoon, Adv.
Mr.Brisketu Sharan Pandey
For the Respondent/s : Mr.Standing Counsel (28)
(In Civil Writ Jurisdiction Case No. 19772 of 2024)
For the Petitioner/s : Mr. Satyabir Bharati, Sr. Adv.
Mr. Aniket Prasoon, Adv.
Mr.Brisketu Sharan Pandey
For the Respondent/s : Mr.Standing Counsel (28)
======================================================
CORAM: HONOURABLE MR. JUSTICE ANIL KUMAR SINHA
CAV JUDGMENT
Date : 27-02-2026
1. Since both the writ petitions involve identical questions
of law and arise out of a common factual matrix, with the con-
sent of the parties, both petitions were heard together and are
being decided by this common judgment/order.
2. The present writ applications have been filed seeking
declaration that the petitioners were eligible to avail incentives
under the Bihar Industrial Investment Promotion Policy, 2016
(in short ‘BIIPP-2016’) on the ground that the petitioners have
not availed any incentive or benefit either under the Bihar In-
dustrial Incentive Policy, 2011 (in short ‘BIIP-2011’) or under
BIIPP-2016 including as permitted under Notification No. 4571
dated 14.10.2022.
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
3/32
3. The petitioners have further prayed for quashing of the
rejection letters dated 03.11.2023, 30.12.2023, 21.10.2023 and
12.07.2024 issued by the State Investment Promotion Board (in
short “SIPB”) and for a direction upon the respondents to
process the petitioners’ applications for interest subvention sub-
sidy and reimbursement of stamp duty and registration fee under
BIIPP-2016.
CWJC No. 63 of 2025 - ACME Nalanda Solar Power
Private Limited vs The State of Bihar & CWJC No. 19772 of
2024 -ACME Magadh Solar Power Private Limited vs The
State of Bihar.
4. Brief facts giving rise to the present writ petitions are
that the Government of Bihar initially notified the Industrial In-
centive Policy, 2006 with the object of accelerating the indus-
trial growth and reviving sick and closed industrial units by cre-
ating a favourable investment climate. Subsequently, in view of
changing global industrial dynamics, the State Government in-
troduced the BIIP- 2011, which came into effect on 01.07.2011
and remained operative till 30.06.2016.
5. Clause 2(v)(d) read with Clause 9 of the BIIP – 2011
provided that new and / or existing industrial units generating
energy through non-conventional sources were eligible to re-
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
4/32
ceive subsidy up to 60% of the expenditure incurred on plant
and machinery subject to the condition that such units has not
availed benefits under any other Government policy.
6. ACME Cleantech Solutions Private Limited (ACSPL)
the parent company of both petitioners participated in a compet-
itive bidding process floated by Bihar State Power (Holding)
Company Limited (BSPHCL) vide bid document dated
04.06.2014 for selection and establishment of solar power de-
velopers of Solar Photovoltaic Projects of an aggregate capacity
of 100 MW for supply of solar power to BSPHCL for a period
of 25 years. ACSPL emerged as a successful bidder and was al-
lotted solar projects of 15 MW and 10 MW capacity. Pursuant
thereto, two Special Purpose Vehicles (SPV) were incorporated,
namely ACME Nalanda Solar Power Private Limited for estab-
lishment of a 15 MW solar power project and ACME Magadh
Solar Power Private Limited for establishment of a 10 MW solar
power project. Both were to be established at Block Kakwara,
District Banka, Bihar.
7. Separate Power Purchase Agreements were executed
between the petitioners and South Bihar Power Distribution
Company Limited and North Bihar Power Distribution Com-
pany Limited for supply of solar power for a period of 25 years.
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
5/32
8. Both projects were commissioned on 28.06.2016 pur-
suant to approval of their respective investment proposals by the
SIPB. The project of ACME Nalanda Solar Power Private Lim-
ited involved an investment of Rs. 113.33 Crores approved on
23.02.2016 whereas the project of ACME Magadh Solar Power
Private Limited involved an investment of Rs. 71.55 Crores ap-
proved on 17.03.2016. Commissioning Certificates were issued
by the Department of Industries (Technical Development), Gov-
ernment of Bihar. At the time of commissioning, the BIIP- 2011
was in force, which expired on 30.06.2016 i.e., two days after
commissioning of the petitioners’ projects. It is undisputed that
none of the petitioners have availed any incentive under the
2011 Policy.
9. Subsequently, the State Government notified the BIIPP-
2016 on 01.09.2016, which, inter alia, provides incentives to re-
newable energy projects. Clause 3.7 of BIIPP-2016 identifies re-
newable energy, particularly solar energy, as a priority sector
and specifically emphasized promotion of investment in solar
power generation, hybrid energy systems and their utilization in
domestic as well as industrial sectors. Clause 6.2 of BIIPP-2016
underscores the State Government’s commitment of promoting
industrial growth by creating an entrepreneur-friendly ecosys-
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
6/32
tem supported by an attractive incentive framework. The policy,
inter alia, provides reimbursement of stamp duty and registra-
tion fees for new industrial units along with interest subvention
on term loans for eligible units. Enhanced incentives have also
been extended to micro and small enterprises and units falling
within identified priority sectors. The upper limit of interest sub-
vention have been fixed at Rs. 10 Crore.
10. Clause 8 of the BIIPP-2016 provides for transitional
provisions concerning the carry forward of benefits under earlier
policies. Clause 8(a) stipulates that projects approved by the
competent authority, as defined under Circular No. 128 dated
16.01.2006 issued by the Department of Industries, Government
of Bihar, but which have not commenced commercial produc-
tion as on the effective date of BIIPP-2016 would be granted an
option to choose between the earlier policy and BIIPP- 2016.
Clause 8(a) further provides that these units will have to apply
separately with their choice or else they will be covered under
the BIIPP-2016 by default.
11. Clause 8(b) provides that existing units which have al-
ready availed incentives under the BIIPP- 2011 would not be el-
igible to seek incentives under BIIPP-2016. However, existing
units continuing to avail benefits under 2011 policy would re-
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
7/32
main entitled to such benefits in accordance with the prescribed
terms and conditions.
12. Subsequently, the Bihar Industrial Investment Promo-
tion Act, 2016 (hereinafter referred to as “BIIP Act, 2016”) was
published in the Bihar Gazette on 02.09.2016 and came into
force. In exercise of powers conferred under Section 16 of the
BIIP Act 2016, the Department of Industries, Government of Bi-
har, notified the Bihar Industrial Investment Promotion Rules,
2016 (hereinafter referred to as “BIIP Rules, 2016”) on
28.12.2016. Rule 6 of the BIIP Rules, 2016 provides for an inte-
grated clearance system for approval of investment proposals.
Rule 7 of the BIIP Rules provides financial incentives to eligible
industrial units.
13. After coming into force BIIP Rules, 2016 a fresh SIPB
clearance was taken for grant of financial incentives. In terms of
Rule 6 of the BIIP Rules, 2016, both petitioners applied for
Stage-I clearance before SIPB on 15.05.2018. In the SIPB meet-
ing dated 21.06.2018 Stage-I clearance was granted for invest-
ment of Rs. 11,333 Lakhs in respect of ACME Nalanda Solar
Power Private Limited and Rs. 7,543 Lakhs in respect of ACME
Magadh Solar Power Private Limited.
14. The approval was formally communicated to the peti-
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
8/32
tioners vide letter dated 05.07.2018 wherein it was specifically
recorded that the petitioners have been granted Stage-I clearance
under Rule 6(2)(i) of the BIIP Rules, 2016 pursuant to the deci-
sion taken in the SIPB meeting dated 21.06.2018. The said com-
munication further clarified that the petitioners were eligible to
apply for other statutory and financial clearances in accordance
with Rule 6(2) of the BIIP Rules, 2016.
15. Thereafter, on 14.01.2019, the SIPB vide letter bearing
No. SIPB1805000142/07 & /06 informed the petitioners that
pursuant to the Stage-I clearance granted in the SIPB meeting
dated 21.06.2018 and upon submission of documents relating to
land purchase, Detailed Project Report, loan sanction letter is-
sued by PTC India Financial Services Limited and Project Ap-
praisal Report, the SIPB in its meeting held on 18.09.2018, ap-
proved establishment of the petitioners’ unit at a project cost of
Rs. 10,733.00 lakhs in respect of ACME Nalanda Solar Power
Private Limited and Rs. 7155 lakhs in respect of ACME Mag-
adh Solar Power Private Limited and granted consent for finan-
cial incentives clearance under Rule 6(2)(iv) of the BIIP Rules,
2016, subject to verification of actual project expenditure at the
time of disbursement. The said communication further said that
the petitioners unit falls under the priority renewable energy sec-
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
9/32
tor and that the proposal had received approval of the competent
authority under Rule 7(2)(iv) of the BIIP Rules, 2016.
16. Pursuant thereto, both petitioners submitted applica-
tions dated 01.02.2019 bearing Application No.
INC1902000280 & INC1902000282 seeking reimbursement of
stamp duty under BIIPP-2016. Thereafter, on 08.02.2019, both
petitioners also submitted another application bearing Applica-
tion No. INC1902000298 & INC1902000299 seeking interest
subvention subsidy under Clause 6.2 of BIIPP-2016.
17. Subsequently, the Department of Industries, Govern-
ment of Bihar, vide Notification No. 883 dated 29.06.2020 in
exercise of powers under Clause 10.2.2 of BIIPP-2016 amended
the policy and extended its operational period up to 31.03.2025.
18. Further, vide Notification No. 4571 dated 14.10.2022,
Clause 8(b) of BIIPP-2016 was amended, whereby it was clari-
fied that an existing unit will be eligible to receive subsidy as
per the terms/rates prescribed under the Industrial Promotion
Policy unless the time limit and/or limitation of the unit has ex-
pired. The units which have availed any kind of incentive under
the earlier incentive policies will be eligible for incentives in the
present policy only in those items which they have not availed
earlier.
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
10/32
19. Thereafter, SIPB issued Notice No. 1630 dated
07.07.2023 directing all operational units eligible for any grant
or incentive under the 2011 & 2016 policies to submit pending
subsidy or grant applications, along with requisite documents,
on the departmental portal on or before 31.07.2023.
20. In compliance thereof, the petitioners submitted a let-
ter dated 24.07.2023 to the Director, Industries, Government of
Bihar, informing that the petitioners have already been granted
approval under the BIIP Rules, 2016. It was further stated that
although the project had been commissioned on 28.06.2016, i.e.,
prior to enforcement of BIIPP-2016, the subsidy approval
process had remained in abeyance, and accordingly, the petition-
ers submitted its online applications in light of the Clause 8(b)
of BIIPP-2016 amended vide Notification dated 14.10.2022 and
the Notice dated 07.07.2023 issued by SIPB.
21. Consequently, on 27.07.2023, the petitioners submit-
ted their applications seeking interest subvention subsidy under
Clause 6.2 of BIIPP-2016 and also submitted their applications
for reimbursement of stamp duty and registration fees.
22. Upon submission of the applications, SIPB raised
queries on its web portal on 17.08.2023 seeking certain docu-
ments to which the petitioners responded by submitting the
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
11/32
same on 28.08.2023 and thereafter furnished additional docu-
ments vide email dated 12.09.2023. Subsequently, SIPB again
raised queries on 15.09.2023 requiring submission of documents
in a prescribed format for processing of the interest subvention
subsidy.
23. In view of the repeated queries, a meeting was con-
vened on 25.09.2023 between the petitioners and officials of the
Department of Industries, wherein the petitioners explained the
documents already submitted. The Director, Industries, directed
submission of certain documents in the prescribed format within
seven days. SIPB communicated vide email dated 26.09.2023
and the petitioners clarified vide email dated 27.09.2023 that the
financial sanction letter and pollution control NOC had already
been submitted.
24. On 21.10.2023, the SIPB vide memo no 2680, rejected
the petitioner’s 2023 applications for interest subvention subsidy
submitted on 27.07.2023 by the ACME Magadh Solar Power
Private Limited, purportedly on the ground of non-submission
of certain documents.
25. Thereafter, on 25.10.2023, both the petitioners, vide
letter bearing No. ACME / BUS / 251023 / 5221 and ACME /
BUS / 251023 / 5220 submitted the requisite documents as de-
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
12/32
manded by the SIPB. The petitioners further informed that NOC
from the Fire Department, Banka was awaited and assured that
the same would be submitted immediately upon its issuance.
Accordingly, the petitioners requested SIPB to keep the online
portal open and active to enable submission of the Fire NOC.
26. However, to the utter shock and surprise of the peti-
tioner, the SIPB, vide memo no. 2827 dated 03.11.2023, rejected
the petitioners 2023 applications for interest subvention subsidy
submitted on 27.07.023 by the ACME Nalanda Solar Power Pri-
vate Limited purportedly on the ground of non-submission of
certain documents. Subsequently, the Fire Department issued the
requisite NOC to both the petitioners for its project on
19.12.2023.
27. Upon obtaining all requisite documents, both the peti-
tioners submitted a fresh application dated 02.01.2024 seeking
interest subvention subsidy under Clause 6.2 of BIIPP-2016.
28. Despite full compliance by the petitioners, no subsidy
was released. The petitioners accordingly submitted representa-
tions dated 27.02.2024 and 23.05.2024 requesting release of the
subsidies. As no action was taken, representation was also
served upon the Hon'ble Minister, Department of Industries and
to the Additional Chief Secretary, Department of Industries,
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
13/32
Government of Bihar, seeking necessary directions for release
of subsidy.
29. However, in a complete turn around SIPB, vide letter
dated 12.07.2024 rejected the petitioners’ 2024 application
solely on the ground that the commercial operation date of both
the petitioners project was 28.06.2016, i.e., prior to the effective
date of BIIPP-2016, and therefore the application could not be
considered under the said Policy.
30. Aggrieved thereby, the petitioners submitted detailed
representations dated 15.07.2024 explaining that the petitioners
project had been rendered eligible for incentives in view of the
amendment dated 14.10.2022 and requested parity with simi-
larly situated industrial units whose claims had already been
processed under BIIPP-2016.
31. Subsequently, on 03.09.2024, the petitioners submitted
representations to the Secretary, Department of Industries, Gov-
ernment of Bihar, seeking withdrawal of the impugned rejection
letter dated 12.07.2024 and release of subsidies to the extent of
Rs. 10 crores under BIIPP-2016.
32. Mr. Satyabir Bharti, learned senior counsel assisted by
Mr. Aniket Prasoon, learned counsel appearing on behalf of the
petitioners argued that subsequent to the issuance of the BIIPP-
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
14/32
2016, the SIPB, in its meeting dated 21.06.2018 granted Stage-I
clearance to the petitioners, which was formally communicated
vide letter dated 05.07.2018. Thereafter, SIPB, vide letter dated
14.01.2019 granted financial approval under Rule 6(2)(iv) of the
BIIP Rules, 2016, declaring the petitioner eligible for fiscal in-
centives including interest subvention subsidy and reimburse-
ment of stamp duty and registration fee. The grant of Stage-1
clearance followed by financial approval constituted a statutory
recognition of the petitioners eligibility and created a vested and
enforceable right in favour of the petitioners. The subsequent
failure of the respondents to process the petitioners’ applications
and their arbitrary rejection is contrary to the statutory mandate
and settled principles governing fair administrative action.
33. Learned counsel next argued that between 2019 to
2024, the petitioners submitted multiple applications seeking
grant of interest subsidy, stamp and registration fee, all of which
were repeatedly entertained and processed by SIPB. During this
prolonged period, SIPB consistently sought additional docu-
ments, conducted meetings, directed further compliances, re-
quested submission of bank mandates and affidavits and pro-
cessed the petitioners applications through the official online
portal. Significantly, throughout this entire period, SIPB ac-
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
15/32
knowledged the petitioners eligibility and never raised any ob-
jection with respect to the Commercial Operation Date (COD)
or the date of execution of the lease deed. The continuous pro-
cessing of the petitioners applications, without any adverse find-
ing regarding eligibility, created a legitimate expectation that the
petitioners would be granted statutory benefits under the policy
framework.
34. The unexplained and inordinate pendency of the peti-
tioners 2019 application and abrupt rejection of later applica-
tions are legally unsustainable and undermine the very object of
the incentive policy, which is intended to promote industrial in-
vestment through procedural certainty and administrative fair-
ness.
35. It has further been submitted that the petitioners eligi-
bility stood further reinforced by the amendment introduced in
BIIPP-2016 through Notification No. 4571 dated 14.10.2022,
whereby Clause 8(b) of the Policy was amended to expressly
provide that existing industrial units are eligible to avail incen-
tives under the prevailing policy subject to the condition that
such units had not availed any benefit under the earlier BIIP,
2011.
36. It is contended that the petitioners project commenced
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
16/32
commercial operation on 28.06.2016, i.e., barely two days prior
to the cessation of the 2011 Policy. It is an admitted position that
the petitioners did not avail any incentive or benefit under the
2011 Policy. In view thereof, the petitioners squarely fall within
the eligibility criteria as contemplated under the amended policy
framework.
37. It is next argued that the petitioners duly complied
with all procedural requirements and furnished all documents as
sought by the SIPB from time to time and that the only docu-
ment which remained pending was the Fire NOC, the issuance
of which was beyond the control of the petitioners and was un-
der active consideration by the competent authority. It is con-
tended that despite substantial compliance and repeated requests
seeking reasonable opportunity to furnish the remaining docu-
ment, SIPB rejected the petitioners’ application on the ground of
non-submission of requisite documents, overlooking that all
other required documents had already been submitted and that
the Fire NOC was subsequently issued by the Fire Department
on 19.12.2023 to the petitioners for its project.
38. It is next argued that the impugned rejection letter
dated 12.07.2024 is wholly unsustainable in law as the same is
non-speaking and proceeds on the erroneous ground that the
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
17/32
Commercial Operation Date (COD) of the petitioners’ project is
28.06.2016, i.e., prior to the effective date of the 2016 Policy. It
is contended that SIPB has acted in a discriminatory and arbi-
trary manner in violation of Article 14 of the Constitution of In-
dia inasmuch as several similarly situated industrial units,
whose commercial operation dates were prior to the enforce-
ment of the 2016 Policy have been granted subsidies under the
amended policy framework whereas the petitioners claim has
been rejected on identical grounds without any rational basis
thereby resulting in discrimination and unequal treatment.
39. The impugned action of the SIPB violate the doctrine
of Promissory Estoppel and Legitimate Expectation also. The
State Government through the 2011 Policy and subsequently
through the 2016 Policy assured fiscal incentives to renewable
energy projects. Acting upon such promise, the petitioners made
substantial investments and established its solar power project
and having induced the petitioners to alter its position, the State
cannot now deny incentives by adopting a contrary stand, partic-
ularly in absence of any overriding public interest.
40. Learned Counsel also submits that the respondents
have done interpretation of the Clause-8(b) which is wholly er-
roneous, contrary to the plain language of the provision and de-
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
18/32
feats the very object and purpose of the policy. It is argued that
Clause 8(b) is required to be interpreted in two parts, namely,
the first part enables existing units to continue to draw incen-
tives under the prevailing policy framework, while the second
part operates as a proviso restricting duplication of benefits by
restricting incentives under the 2016 Policy only to those heads
for which benefits were not availed under earlier policies. Since
the petitioners admittedly did not avail any benefit under the
2011 policy, they remain eligible to claim incentives under the
2016 Policy.
41. Learned Counsel next submits that SIPB vide Notice
No. 1630 dated 07.07.2023 invited all legible operational units
to submit pending claims under the 2011 and 2016 policies. Pur-
suant thereto, the petitioners which were eligible to receive in-
centives under 2011 policy but had not availed any incentive un-
der either 2011 and 2016 policy submitted fresh applications
along with requisite documents. It is further submitted that
Clause 12 of the 2011 Policy only requires commencement of
commercial production within five years from 01.07.2011 and
the petitioners project commenced commercial production on
28.06.2016 which falls within the prescribed eligibility period.
There was no requirement under the 2011 Policy that an applica-
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
19/32
tion for incentives must be submitted prior to cessation of the
policy.
42. Learned Counsel next submits that although the peti-
tioners satisfied the essential eligibility condition under the 2011
policy, the narrow two-day window between COD and cessation
of the 2011 Policy rendered it practically impossible for the peti-
tioners to complete procedural formalities for claiming incen-
tives. It is contended that the carry-forward mechanism incorpo-
rated under the 2016 Policy was intended precisely to address
such situations and ensure continuity of benefits to industrial
units which commenced production during the 2011 Policy pe-
riod but were unable to avail incentives due to procedural or ad-
ministrative constraints. It is submitted that rejection of the peti-
tioners claim on the ground that COD was achieved under the
2011 Policy defeats the very purpose of the carry-forward provi-
sion, renders the policy intent redundant, and results in manifest
arbitrariness.
43. He relies upon the following judgments of Hon’ble
Supreme Court as well as this Court:-
1. State of Kerela and Ors. V. K.G. Madhavan Pillai and
Ors (1988) 4 SCC 669
2. Commissioner of Central Excise, New Delhi v. Hari
Chand Shri Gopal (2011) 1 SCC 236
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
20/32
3. A.L Kalra v. P& E Corp. of India Ltd. 1984 SC 1361
4. Sivanandan C.T. v. High Court of Kerala reported in
(2024) 3 SCC 799
5. Food Corporation of India v. Kamdhenu Cattle Feed In-
dustries (1993) 1 SCC 71
6. U.P Awas Evam Vikash Parishad Vs. Gyam Devi & Ors
(1995) 2 SCC 32
7. M/s Sunny Stars Hotels Private Limited Vs. The State
of Bihar and Ors. CWJC No. 12104 of 2018
8. M/s Leoline Foods Private Limited Vs. The State of Bi-
har and Ors. CWJC 4051 of 2021
9. State of Jharkhand v. Brahmputra Metallics Ltd. re-
ported in (2023) 10 SCC 634
10. State of Jharkhand & Ors. v Tata Cummins Ltd. and
Another (2006) 4 SCC 57
44. Per contra, learned counsel for the respondents argued
that the claim of the petitioners for grant of incentives under the
BIIPP-2016 has rightly been rejected as the date of commercial
production of the petitioners’ unit admittedly precedes the
commencement of BIIPP-2016.
45. The petitioners unit commenced commercial produc-
tion on 28.06.2016, whereas BIIPP-2016 came into force subse-
quently on 01.09.2016. Since eligibility for incentives under the
2016 Policy is governed strictly by its provisions, the petitioners
whose unit was already operational prior to enforcement of the
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
21/32
said policy cannot claim incentives thereunder as a matter of
right.
46. Learned Counsel further submits that although BIIPP-
2016 contains transitional provisions under clause 8 relating to
carry forward of benefits under earlier policies, the amendment
introduced vide Memo No. 4571 dated 14.10.2022 substituting
clause 8(b) clarifies that existing units shall continue to avail
incentives at the rates and conditions prescribed under the
earlier policy until exhaustion of the eligible limit or period.
47. The amended provision further stipulates that only
those units which had availed incentives under earlier policies
would be eligible to claim incentives under new heads which
had not been granted earlier. The said amendment does not ex-
tend blanket eligibility to all pre-existing units, and therefore,
the petitioners, who admittedly did not avail incentives under
the BIIP- 2011 cannot claim benefit under the amended provi-
sion in a manner inconsistent with the scheme of the policy.
48. Reliance placed by the petitioners upon Notice bearing
Memo No. 1630 dated 07.07.2023 is wholly misplaced. The said
notice merely called upon operational industrial units whose
claims were pending under the 2011 or 2016 policies to submit
applications along with requisite documents within the stipu-
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
22/32
lated time through the departmental portal. The notice neither
created any new substantive right nor expanded the scope of eli-
gibility under BIIPP-2016 and was purely administrative in na-
ture intended only to facilitate processing of pending claims
in accordance with the existing policy framework.
49. The allegation of discrimination is wholly unfounded
as the units cited by the petitioners namely M/s Koshi Uday
Foods Product Pvt. Ltd., M/s GHPCL Begusarai and M/s Janki
Toofan Agro Industries Pvt. Ltd. stand on a different factual
footing having availed incentives under BIIP-2011 and there-
after granted benefits under amended clause 8(b) in accordance
with policy provisions and therefore the petitioners cannot claim
parity with such units, nor is any violation of Article 14 of the
Constitution of India made out.
50. Petitioners are not entitled to any relief in the present
writ petitions and the impugned letters have been issued strictly
in accordance with law and policy provisions and consequently
do not warrant interference by this Court in exercise of its writ
jurisdiction.
51. I have heard learned counsel for the parties and pe-
rused the materials available on record.
52. On the basis of pleadings and submissions advanced
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
23/32
on behalf of the parties the questions which requires considera-
tion are as follows:-
(A) Whether the petitioners are eligible to claim incentives un-
der BIIPP-2016 in view of the amendment dated 14.10.2022 ?
(B) Whether grant of Stage-I clearance and financial approval
created a vested or enforceable right in favour of the petitioners ?
(C) Whether the rejection of the petitioners applications suffers
from arbitrariness and violation of statute and policies ?
53. This Court has carefully examined the BIIPP- 2016 as
well as the amendment introduced therein vide Notification No.
4571 dated 14.10.2022.
54. The BIIPP-2016 defines an “Existing Industrial Unit”
under Clause 4 as an industrial unit which had commenced com-
mercial production prior to the enforcement of the said policy.
In the present case, it is an admitted and undisputed position that
both the petitioners units commenced commercial production on
28.06.2016 i.e. prior to the enforcement of BIIPP-2016. There-
fore, the petitioners clearly fall within the category of an “Exist-
ing Industrial Unit”.
55. Clause 8 of BIIPP-2016 talks about carry forward of
the existing policy and has made provisions with respect of car-
rying forward of the existing policy.
56. Clause 8(a) & 8(b) are quoted herein below for ready
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
24/32
reference:-
(a) All projects which have been approved by
the competent authority (as defined vide Circular
No. 128, dated 16.01.2006 of Department of Indus-
tries, Government of Bihar) but have not com-
menced commercial production as on the effective
date of the new policy will be given a choice be-
tween the existing policy and the new policy. These
units shall have to apply separately with their
choice or else they will be covered under the Indus-
trial Investment Promotion Policy, 2016 by default.
Those units which opt to be governed under Incen-
tive Policy, 2011 shall continue to be governed un-
der that policy by the Department of Industries
provided they shall commence Commercial Pro-
duction/Operations by 31st March, 2017 or they
shall complete the implementation and commence
operations as per the timeline in the approved DPR
(in case the approved time line is beyond 31 March,
2017). Units that do not commence commercial
production/operations till 31 March, 2017 shall not
be eligible for any incentives under the Incentive
Policy, 2011, subject to all existing conditions of the
Department of Industries. Such units shall have to
apply afresh under the current policy. Further,
units which opt to be governed under this policy
shall apply afresh to the competent authority as
may be notified by the State Government.
(b) Existing unit will continue to draw the in-
centive at rates and conditions of the Incentive Pol-
icy, 2011 till their limit is exhausted on completion
of the eligible period, whichever is earlier. A unit
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
25/32
which has availed any incentive under the previous
incentive policy shall not be eligible to apply under
this policy subject to the above mentioned clause.
57. Subsequently the State Government issued notification
no. 4571 dated 14.10.2022 whereby clause 8(b) was amended.
The amended provision stipulates that “existing industrial units
will be eligible to receive subsidy as per the conditions / rates
prescribed under Industrial Promotion Policy unless time limit
and / or limitation of the unit has expired. The units which have
received any type of incentive in the previous incentive policies
will be eligible for incentives in the current policy only in those
items which they have not received earlier”.
58. Amended clause 8(b) is as follows:-
“Existing units will be eligible to receive sub-
sidey as per the conditions / rates prescribed under
the Industrial Promotion Policy, unless the time
limit and / or limitation of the unit has expired. The
units which have received any type of incentive in
the previous incentive policies will be eligible for in-
centives in the current policy only in those items
which they have not received earlier.”
59. On a close reading of clause 8(b) amended by resolu-
tion of 2022 it is evident that it consists of a general enabling
rule which confers eligibility upon existing units and a restric-
tive provision operating in the nature of a proviso applicable
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
26/32
only to those units that have already availed incentives for
particular items under earlier policy.
60. Petitioners admittedly did not avail any incentive ear-
lier, therefore the restrictive provision of clause 8(b) does not
apply to the petitioners and the petitioners case falls to be exam-
ined under the general enabling part of clause 8(b).
61. The main objection of the State is that the petitioners
never applied for incentives during the currency of 2011 policy.
That commercial production of the petitioners unit commenced
on 28.06.2016 whereas BIIPP -2016 came in force subsequently
on 01.09.2016 which is prior to coming into force of 2016
policy as such the petitioners are not entitled for benefits under
2016 policy.
62. Giving purposive interpretation of clause 8 of 2016
policy along with its amendment which carry forward benefits
to the existing policy it would be evident that this provision
does not create any bar upon existing industrial units from
claiming incentives under the present policy of 2016.
63. Clause 8(b) clarifies that those industrial units which
had availed incentives under the incentive policy earlier, would
remain eligible under 2016 policy but only in respect of such
incentives components which had not been been availed earlier.
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
27/32
64. Petitioners unit though an existing industrial unit has
admittedly not availed any incentive or subsidy under previous
policy of 2011 as such clause 8(b) as amended suggests that the
petitioners unit is eligible for grant of incentives under the
present policy of 2016. The amendment of 2016 policy is
specific in language and says that existing units will be eligible
to receive subsidy as per the conditions / rate prescribed under
the Industrial Promotion Policy i.e. 2016. It further says that
units which have received any type of incentive in the previous
incentive policies will be eligible for incentives in the current
policy only to those items which they have not received earlier.
65. Thus, there is no ambiguity in the amendment which
seeks to grant incentives to existing units to the extent that the
existing units have not received incentives in the previous
incentive policies. The amended provisions of 8(b) creates eligi-
bility of existing industrial units for incentives under the current
policy.
66. The object of the amendment is to ensure equitable
treatment of industrial units and to promote industrial growth by
enabling eligible existing units to avail incentives under the
prevailing policy frameworks.
67. Bihar Industrial Investment Promotion Act, 2016 was
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
28/32
enacted with an objective of providing structured statutory
framework for facilitating the promotion and development of in-
dustrial investment within the State. In exercise of powers
conferred under Section 16 of the aforesaid Act, the Bihar
Industrial Investment Promotion Rules, 2016 was framed. The
rules provide structured, multi stage statutory approval mecha-
nism through the integrated clearance system.
68. Rule 6 of the said rules provides for grant of clearance
through statutory process conducted by the SIPB which is the
competent authority empowered to evaluate investment
proposal, examine eligibility criteria and accord approval for
financial incentive.
69. The grant of stage -I clearance and subsequently finan-
cial incentives approval in favour of the petitioners assumes sig-
nificant legal importance and cannot be treated as a mere admin-
istrative formality or provisional acknowledgment devoid of
enforceable consequences.
70. The Hon’ble Supreme Court has consistently held that
industrial incentive policies amount to representations by the
State and once eligibility conditions are satisfied and the entre-
preneur has altered position by investment, benefits cannot be
denied on hyper technical or procedural ground.
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
29/32
71. The doctrine of promissory estoppel and legitimate ex-
pectation reinforce this approach. The doctrine of legitimate ex-
pectation which is firmly embeded in administrative law man-
dates that where public authority by its representation or consis-
tent past practice creates an expectation in favour of an appli-
cant such expectation cannot be defeated arbitrarily or without
rational justification.
72. In the judgment rendered in the case of State of Jhark-
hand versus Brahmputra Metallics Ltd. reported in (2023) 10
SCC 634 the Supreme Court has observed in paragraph 39 as
follows:-
“39. ........ Representations by public
authorities need to be held to scrupulous stan-
dards, since citizens continue to live their lives
based on the trust they repose in the State. In
the commercial world also, certainty and con-
sistency are essential to planning the affairs of
business. When public authorities fail to ad-
here to their representations without providing
an adequate reason to the citizens for this fail-
ure, it violates the trust reposed by citizens in
the State. The generation of a business friendly
climate for investment and trade is conditioned
by the faith which can be reposed in Govern-
ment to fulfil the expectations which it
generates.”
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
30/32
73. The grant of statutory approvals followed by continu-
ous processing of application attracts the doctrine of promissory
estoppel. Industrial incentive policies are framed to attract capi-
tal investment and encourage industrial investment. Industries
act upon such policy representation by making substantial finan-
cial commitment and establishing industrial infrastructure. Once
the State through its statutory authorities acknowledges eligibil-
ity and induces investment it cannot subsequently withdraw or
deny the benefit by raising hyper technical or inconsistent
objections
74. The Stage-I clearance and financial incentives ap-
proval granted to the petitioners created a vested and enforce-
able right to have their applications considered and processed in
accordance with the policy framework. The respondents cannot
subsequently treat such approvals as illusory, tentative or incon-
sequential merely to defeat the petitioners entitlement. The
subsequent refusal of incentives by the respondents in disregard
to earlier statutory approvals and long standing administrative
conduct is arbitrary, unreasonable and not sustainable.
75. The language employed in Rule 7(4) is mandatory in
nature which clearly reflects legislative intent to eliminate ad-
ministrative uncertainty and to ensure expeditious disbursement
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
31/32
of sanctioned incentives. The Rule consciously restricts post-
sanction administrative interference and limits the scope of
scrutiny only to verification of compliance with conditions at-
tached to the sanction.
76. In the present case, it is evident from the record that
SIPB vide letter dated 14.01.2019 granted financial incentive
approval under Rule 6(2)(iv) of the BIIPP Rules 2016. The said
approval specifically acknowledged that the petitioners unit falls
within the priority renewable energy sector and are eligible for
subsidy.
77. In view of the aforesaid discussions, this Court comes
to the conclusion that petitioners unit are entitled for incentive
under clause 8(b) of the amended BIIPP 2016 policy. The denial
of the incentives by the impugned letters is arbitrary and viola-
tive of the incentive policy and the statutory rules. 2016 policy
carries forward the incentives to their existing units and the con-
cerned authorities under the statutory rules granted approval for
financial incentive to the petitioners unit.
78. Accordingly, the impugned rejection letters including
the letter dated 12.07.2024 are set aside.
79. It is ordered that the petitioners are entitled to interest
subvention, reimbursement of stamp duty and the registration
Patna High Court CWJC No.63 of 2025 dt.27-02-2026
32/32
fee under BIIPP- 2016.
80. The respondents are directed to ensure that the
petitioners are given incentives under 2016 policy within a
maximum period of three months from the date of receipt / pro-
duction of a copy of this order.
81. With the aforesaid observation and direction, these
writ applications are allowed.
(Anil Kumar Sinha, J)
praful/-
AFR/NAFR AFR
CAV DATE 02-12-2025
Uploading Date 27-02-2026
Transmission Date NA
Checking your session…