National Banker Marketing Co-operative Federation Ltd. , Azamgarh, v. Secretary, Small Scale
1987-01-06
A.N.VERMA, R.S.DHAVAN
body1987
DigiLaw.ai
JUDGMENT A. N. Verma, J. - These two petitions provide a classic instance of how a beneficial policy of the Government designed to reach economic benefits to the Weavers Co-operative Societies by enabling them to dispose of accumulated stocks of handloom cloth can be frustrated by sheer red tape. 2. The petitions are being disposed of by a common judgment as the issues involved therein are identical. 3. These are the facts. The Government of India has been for the last several years sanctioning a scheme of the grant of 20% special rebate to the Weavers Co-operative Societies throughout India with the object of enabling them to dispose of their accumulated stocks of handloom cloth at the Handloom Exhibitions organised/sponsored by the Central Government in different States every year. The liability arising from the grant of this rebate is shared equally by the Central and the State Governments. Under the scheme, the rebates are paid to the weavers in the first instance by the State Government which are subsequently reimbursed by the Central Government. These Handloom Exhibitions have been described as 'Expos' at which the Weavers Co-operative Societies and Handloom Development Corporations bring their accumulated stocks for sale in response to the previously announced policy of the Government of India of allowing 20% special rebate. 4. Pursuant to the aforesaid policy, National Handloom Expos were held in Bangalore in the year 1982, Ahamedabad in 1982-83, Bombay 1983, Madras and Hyderabad in 1983-84 and Gauhati in 1984 85. It is the petitioner's case that it applied for and was granted by the Central Government allotment of stalls at these Expos held between 1982-85 with the requisite sanction of the State Government. Armed with the allotment of the stalls at these Expos the petitioners which are Marketing Co-operative Societies of weavers registered under the U.P. Co-operative Societies Act participated in these exhibitions--and,-according to them, in terms of the aforesaid policy became entitled to special rebate of 20% announced by the Central Government.
Armed with the allotment of the stalls at these Expos the petitioners which are Marketing Co-operative Societies of weavers registered under the U.P. Co-operative Societies Act participated in these exhibitions--and,-according to them, in terms of the aforesaid policy became entitled to special rebate of 20% announced by the Central Government. After the exhibitions the petitioners submitted their claim for rebate to the State Government whereupon the Special Secretary, Department of Industries Government of Uttar Pradesh issued a letter dated 14-1-1986 (vide Annexure 5 to the writ petition No., 10241,of 1986) to the Director of Handloom and Textiles directing the latter to pay to the petitioners the special rebate in respect of the sales effected at all the Expos held between 1982 to 1985 (except that held in Bombay in 1982-83). The letter states that the direction is being issued in pursuance of the decision of the Government. The letter further states that as the petitioners had participated at the Expos held at Bangalore, Ahamedabad, Madras and Gauhati during these years with the consent of the Central Government and the State Government, there should be no objection to the payment of the rebate claimed by the petitioners. A similar D.O. had been written by the Secretary Department of Small Scale and Rural Industries Government of Uttar Pradesh to the Director, Handloom and Textiles, Government of U.P. (vide Annexure 6(1) to the writ petition N. 10241 of 1986). A telegram was also sent by the Special Secretary, Industries Department, Government of U.P. to the Director, Handloom and Textiles U.P. on 29-3-1986 asking the latter to expedite the payment to the petitioners and report action by 31-3-1986 (vide Annexure 6(b) to the petition). Yet another telex message was sent to the Special Secretary on 21-4-1986 to the Director asking him to expedite payment to the petitioners. 5. For reasons which are not easily comprehensible, in spite of these very categorical directions, the Directorate of Handloom and Textiles did not make the payment. On 9-4-1986, however, the Joint Director, Handloom and Textiles asked the petitioners vide his letter of that date to send the cash memos of the sales made at these Expos along with the list of their members and audited balance-sheets.
On 9-4-1986, however, the Joint Director, Handloom and Textiles asked the petitioners vide his letter of that date to send the cash memos of the sales made at these Expos along with the list of their members and audited balance-sheets. It is not disputed -that the petitioners did submit the cash memos along with the list of the members of the Societies as well as audited balance sheets and the same were received in the office of the Director of Industries (Handloom and Textiles) Kanpur. 6. In spite of due compliance with the directions issued by the Directorate, Handloom and Textiles as regards the submission of the cash memos, the audited balance sheets and the list of the members the petitioners continued to be deprived of the rebates claimed by it. No payment whatever was made to the petitioners whereupon they approached this Court by means of these petitions in July 1986. The learned Standing Counsel was asked to obtain instructions and to file a counter affidavit. 7. Strangely, the stand taken in the counter-affidavit on behalf of the Directorate, Handloom and Textiles is not that the sales effected by the petitioners are not verifiable by the cash memos and audited balance sheets submitted by them. Nor is it alleged that the petitioners' Societies are otherwise ineligible as Societies entitled to the Special rebates in question. The stand taken by the respondent-Directorate, on the other hand, is a novel one, not hinted at directly or indirectly in any of the letters exchanged between the parties during the last several years. The contention raised is that the petitioners' names had not been forwarded by the State Government for participation at the Expos mentioned above and consequently, they were not entitled to any rebate whatever. Such an objection is indeed startling and it is surprising that it should have emanated from the Directorate of the Handloom and Textiles in spite of a clear and categorical direction issued by the State Government through the letter of the Special Secretary dated 14-1-1986 referred to hereinabove. 8.
Such an objection is indeed startling and it is surprising that it should have emanated from the Directorate of the Handloom and Textiles in spite of a clear and categorical direction issued by the State Government through the letter of the Special Secretary dated 14-1-1986 referred to hereinabove. 8. Apart from the fact that the correspondence exchanged between the petitioners and the Central Government as well as between the State Government and the Director, Handloom and Textiles, U.P. Kanpur furnishes overwhelming evidence of the fact that the petitioners had participated at these Expos within the knowledge and with the consent of the Central Government and the State Government. In our considered view, it was not open to the Director or raise the above objection after the receipt of specific directions by the Special Secretary conveying in very categorical terms the decision of the Government to pay the rebate claimed by the petitioners-except in regard to the one held in Bombay in 1982-83 for their participation at these Expos indicated in the letter of the Special Secretary dated 14-1-1986 (annexed to the two petitions). The Director is a functionary of the Government and cannot, therefore, sit in judgment over. the decision of the Government. The paying authority being the Government itself, it passes on comprehension as to how and why the Director chose not to order payment to the petitioners. The letter very categorically states that the petitioners had participated at these Expos with the consent and approval of the Central and the State Government. After this letter, the refusal of the Director to make payment to the petitioners on the wholly untenable ground that the petitioners had participated at these Expos without any authorisation must be characterised as unjust, unfair and arbitrary. 9. The respondents in their counter-' affidavit have, however, relied on a letter of the Government of India dated 6-9-1986 (vide Annexure 1 to the counter-affidavit filed on behalf of the respondents in writ petition No. 10241 of 1986) which states : "Such of those Societies and Corporations who are not entitled to any rebate claim should not later on try to claim any rebate. If they cannot give 20% rebate of their sales of Expos site, they are advised not to participate in the Expo." 10. It is difficult to see how these observations can possibly negative the claim of the petitioners.
If they cannot give 20% rebate of their sales of Expos site, they are advised not to participate in the Expo." 10. It is difficult to see how these observations can possibly negative the claim of the petitioners. The petitioner-Societies were not, during the years in question, ineligible or disqualified from participating in those Expos. They had participated under the express allotments and authorisation of both the Central and State Governments. Indeed, the learned Standing Counsel did not even attempt to argue or demonstrate that the petitioners' Society suffered from any inherent ineligibility for participating at these Exhibitions. He merely repeated the objection taken in the counter-affidavit, namely, that the petitioners' Societies' names not having been forwarded by the State Government they were not entitled to the rebate. We have already demonstrated above that this objection is wholly untenable. 11. Indeed, after the letter of the Special Secretary dated 14-1-1986 and the telex message sent by the Government asking the Director to expedite payment, the persistent omission of the latter to comply with the same clearly amounted to deliberate negation of the policy and decision of the Central Government to grant the special rebate. Such intransigence also breeds distrust amongst the participants in these Exhibitions as to the genuineness of these declarations, namely, grant of special rebates. 12. Our conclusion, therefore, is that the petitioners are clearly entitled to the special rebate in respect of the sales effected by them in terms of the aforesaid letter dated 14-1-1986. There remains for consideration a preliminary objection raised by the learned Standing Counsel. He submitted that the petition ought to be dismissed on the ground of alternative 'remedy. It was urged that a remedy by way of suit was clearly available to t 4e petitioners, and, that indeed a Civil Court would be a more appropriate forum for adjudicating the sort-,of controversy which is raised in this case. 13. We are unable to agree. In the facts and circumstances of the present case, the petitioners are clearly entitled to a writ of mandamus. Their complaint is that in spite of the repeated 'directions of the State Government, the Directorate is refusing to pay the rebate. The receipt of the letter dated 14-1-1986 and the telegrams issued by the State Government to the Director from time to time is admitted by the respondents.
Their complaint is that in spite of the repeated 'directions of the State Government, the Directorate is refusing to pay the rebate. The receipt of the letter dated 14-1-1986 and the telegrams issued by the State Government to the Director from time to time is admitted by the respondents. In this backdrop to relegate the petitioners to the remedy of suit would be unfair and unjust to them. As mentioned at the beginning of the judgment, a very salutory policy conceived by the Central Government with a view to helping the Weavers Co- operative Societies to tide over a serious economic problem confronting them as a result of accumulation of huge stocks of handloom cloth, is in our opinion, being completely frustrated by hypertechnical objections and intransigence of the Directorate of Handloom and Textiles. We consider the present to be a pre-eminently fit case where the extraordinary powers vested in the Court under Article 226 of the Constitution should be invoked. We, therefore, overrule the objection raised by the learned Standing Counsel. The objection that Sri Shyam Manohar who has filed the petition was not competent to present this petition was not pressed after what has been stated in the supplementary affidavit filed on behalf of the petitioners stating that fresh election of the Federation took place on 15- 7-84 at which the petitioner was re-elected as Chairman. 14. Coming to the claim of the petitioners for the Expo held in Bombay in 1982-83, we are of the opinion that the matter being still under investigation, no directions can be issued in respect thereof. If and when the matter is fully investigated and the State Government finds that the petitioners are entitled to rebate in respect of that Exhibition also, the Director, Handloom and Textiles may consider the request of the petitioners for payment and pass appropriate orders there on. 15. In the result, the petitions succeed and are allowed. The Director, Handloom and Textiles, U.P. Kanpur is directed to make payment of the special rebate claimed by the petitioners in respect of the Expos mentioned in the letter of the Special Secretary dated 14-1-1986 (vide Annexure 5 to the writ petition No. 10241 of 1986 and Annexure 4 to the writ petition No. 10245 of 1986) within six weeks of the date on which a certified copy of the judgment is filed before him.
The petitioners shall be entitled to their' costs from the respondent No. 2 in each of the two petitions.