JUDGMENT R. L. Khurana, J- We propose to dispose of the above noted two Civil Writ Petitions by this single judgment since common question of law and facts is involved therein. 2. The matrix of the cases is this. The petitioner is a public limited company incorporated under the Companies Act. It has set up an industrial Unit known as Gagal Cement Works at Barmana in District Bilaspur. For the purpose of manufacture of cement, the petitioner Company gets raw material, such as, CCP material, Ply ash. Iron Ore and Gypsum from outside the State of Himachal Pradesh. The finished product, that is, cement is transported outside the state of Himachal Pradesh 3. The Central Government has framed a scheme known as Transport Subsidy Scheme, 1972 (hereinafter referred to as the Scheme) This Scheme came into effect for the State of Himachal Pradesh from August 24 1973. It was to remain in operation initially till March 1979. However the Scheme has been extended from time to time It has been last extended upto March 31, 2000. The Scheme provides for disbursement of a subsidy on the transport of raw material as well as finished goods. The Scheme is applicable to both new industrial units as also the existing industrial units in the selected areas The industrial unit of the petitioner is registered under the Scheme and as such, eligible for the transport subsidy The petitioner has been granted transport subsidy on the raw materials from July 1993 and on finished goods from April 1984 onwards till January 1990 and for April/June 1990. 4. The licenced production capacity of the petitioner company which was initially 56 lakhs ton per annum (LTPA) was revised and increased in 7.6 LTPA with effect from 1-4-1989. 5. Though the petitioner company was being allowed the transport subsidy in the past, such subsidy for the period February/March 1990 and from July 1990 to June 1992 has not been released and paid to them in accordance with the Scheme inspite of the fact that quarterly returns were duly submitted by the petitioner Company. The petitioner company has therefore, approached this Court by virtue of C W P No 78 of 1993 seeking directions to the respondents to implement the Scheme and grant transport subsidy for the period February/March 1990 and July 1990 to June 1992 amounting to Rs. The petitioner company has therefore, approached this Court by virtue of C W P No 78 of 1993 seeking directions to the respondents to implement the Scheme and grant transport subsidy for the period February/March 1990 and July 1990 to June 1992 amounting to Rs. 13,64,02,927/21 paise alongwith interest at the rate of 18 per cent per annum thereon. 6. During the pendency of C W. P No. 78 of 1993 transport subsidy for the subsequent period, that is, from July 1992 also became due The petitioner Company filed a Civil Writ Petition being No. 1049/93 in respect of transport subsidy for the period July 1992 to March 1993 amounting to Rs 6,97,08,470. This writ petition was decided by a Division Bench of this Court vide judgment dated 28-9-1993 It was, inter alia, directed :— “………..We further direct respondents 2 to 4 to pay the amount of transport subsidy to the petitioners within a period of six weeks from today and also direct respondent No. 1 to reimburse the State Government with the amount of subsidy so paid by respondents No 2 to 4 within a period of two weeks thereafter. 7. In pursuance of the above directions of this court, out of claim of transport subsidy of Rs. 6,97,08,470, a sum of Rs. 5,26,65,400 stands paid to the petitioner company. An amount of Rs 1,70,42,135 in respect of the period July 1992 to March 1993 is still outstanding This claim has been refuted by the respondents on the ground that the same was beyond the licenced production capacity. The petitioner company has accordingly filed C W. P No 450 of 1994 for issuance of directions to the respondents to pay the outstanding amount of Rs 1,70,42,135 alongwith interest at the rate of 18 per cent per annum. 8. Respondents 2 to 4 have averred that the Scheme providing for transport subsidy is a Centrally sponsored Scheme being implemented by the State Government. The Scheme works on 100 per cent reimbursement basis from the Central Government. 8. Respondents 2 to 4 have averred that the Scheme providing for transport subsidy is a Centrally sponsored Scheme being implemented by the State Government. The Scheme works on 100 per cent reimbursement basis from the Central Government. As per instructions issued by the Department of Industrial Development, Ministry of Industry, Government of India, transport subsidy was admissible to the petitioner company as per its original licenced capacity of 5 6 LTPA No subsidy was to be granted on the additional capacity, In accordance with these instructions the claim for transport subsidy for the period February/March 1990 and from July 1990 to June 1992 (subject-matter of C W. P. No. 78 of 1993) was found admissible to the extent of Rs. 8,30,24,240. This amount stands paid to the petitioner and now nothing is due, 9. In so far as C. W. P. No 450 of 1994 is concerned, the stand of respondents No. 2 to 4 is that the claim in respect of transport subsidy amounting to Rs. 1,70,42,135 was returned to the petitioner company since the same was found beyond licenced capacity. 10. Respondent No 1 vide its reply affidavit in C. W. P No. 78 of 1993 has denied the entitlement of the petitioner company on the basis of revised capacity of 7.6 LTPA during the period ending June 1992 It is stated that though the additional capacity of the petitioner company was recognised but due to financial constraints, it was decided that subsidy on additional capacity would be admissible only from July 1992 and not from retrospective effect. It is further pointed out that under para 6 (xvii) of the Scheme, the Government has full discretion to refuse to entertain any claim for subsidy. 11. The stand taken by respondent No, 1 in C. W. P. No 450 of 1994 is that since the amount has not been disbursed by the State Government, no claim is maintainable against it. The Scheme works on reimbursement basis. The amount of subsidy is first to be disbursed by the State Government and thereafter reimbursement is claimed from and made by the Central Government. 12. We have heard the learned Counsel for the parties and have also gone through the record of the case. 13. The Scheme works on reimbursement basis. The amount of subsidy is first to be disbursed by the State Government and thereafter reimbursement is claimed from and made by the Central Government. 12. We have heard the learned Counsel for the parties and have also gone through the record of the case. 13. There is no dispute that the petitioner company is eligible for transport subsidy under the Scheme and has been paid such subsidy in accordance with its original licenced capacity of 5 6 LTPA. This licenced capacity was increased to 7.6 LTPA with effect from 1-4-1989 vide letter dated 2-9-1992 (Annexure P-49) of the Ministry of Industry, Department of Industrial Development, Government of India. The necessary endorsement regarding such increased capacity was also made on the Industrial licence of the petitioner company. The transport subsidy on such increased capacity of 2 LTPA, that is, from 5 6 LTPA to 7.6 LTPA, has not been paid to the petitioner company for the period ending June 1992, According to respondents, such subsidy on the additional capacity is admissible only from July 1992 and not retrospectively. 14. Thus, the short question which calls for determination is whether the transport subsidy on the additional capacity is admissible from July i992 or retrospectively? 15. As stated above, the initial licenced capacity of 5.6 LTPA was increased to 7.6 LTPA and recognised by the respondents with effect from 1-4-1989. The petitioner company submitted its return claiming transport subsidy on the basis of such increased capacity. The subsidy so claimed by the petitioner company was initially not paid by the respondents. However, during the pendency of C. W. P No 78 of 1993 subsidy to the extent of Rs. 8,30,24,240 calculated on the basis of the licenced capacity of 5.6 LTPA came to be paid as detailed in Annexure P-47. Subsidy on the increased capacity amounting to Rs. 5,33,77,606/62 paise was refused as not admissible. Similarly, subsidy for the period July 1992 to March 1993 amounting to Rs. 5,26,62,400 (calculated on the basis of the initial licenced capacity of 5 6 LTPA) has been paid as detailed in Annexure P-6 in C. W. P. No 450 of 1994. The balance amount of subsidy of Rs 1,70,42.135 on the increased capacity has not been paid. Similarly, subsidy for the period July 1992 to March 1993 amounting to Rs. 5,26,62,400 (calculated on the basis of the initial licenced capacity of 5 6 LTPA) has been paid as detailed in Annexure P-6 in C. W. P. No 450 of 1994. The balance amount of subsidy of Rs 1,70,42.135 on the increased capacity has not been paid. Assuming for the sake of arguments that subsidy on the increased capacity is admissible from July 1992 as alleged by the respondents, the petitioner company is entitled to the subsidy amount of Rs. 1,70,42,135 as claimed in C. W. P. No. 450 of 1994 on the increased capacity since the same pertains to the period July 1992 to March 1993. Therefore, the respondents are not justified in withholding the payment of this amount. 16. The learned Senior Standing Counsel for respondent No. 1 has laid great stress on para 6 (xvii) of the Scheme (Annexure P-l), The said para reads :— "Notwithstanding the provisions of the Scheme, Government of India and/or the Government of State/Union Territories have full discretion to refuse to entertain or reject any claim for transport subsidy." 17 It has been contended that the Government under the said provision has vast discretion to reject the claim for subsidy. Therefore, no fault can be found if the claim for subsidy on the enhanced capacity made by the petitioner company has been rejected. 18. We do not find force in the contention of the learned Counsel. It is well settled principle that when an authority is vested with discretionary powers, such discretion is not to be exercised in an arbitrary manner. It has to be exercised in a judicious manner. Moreover, reasons are required to be recorded therefor. In the present case, the claim for subsidy of Rs. 1,70,42,135 has not been rejected Respondent No 1 in its reply affidavit dated 3 5 1995 vide para 8, has averred in this regard in the following terms :— .........In so far as answering respondent is concerned, the State Government has not yet disbursed the claim of the petitioner company pertaining to the period from January 1993 to March 1993. However, no claim lies with the Union of India". 19. However, no claim lies with the Union of India". 19. As against the stand taken by respondent No. 1, the case put forward by respondents No. 2 to 4 in para 8 of their reply affidavit dated 9-8-1994 is that the balance portion of the- claim amounting to Rs. 1,70,42,135 was not found in order as per the guidelines and instructions of the Central Government and that the claim was returned to the petitioner company No further explanation is forthcoming as to how the said claim was not found to be in order. In para 9 of the reply affidavit, it has further been averred by respondents 2 to 4 that the said claim of the petitioner company was returned since the same was in respect of the increased licenced capacity of the petitioner company. The stand put forward by the respondents No 2 to 4f on the face of it, is not tenable in view of the fact that as p^r respondents own showing the subsidy on the increased capacity was admissible from July 1992 Since the claim pertains to the period July 1992 to March 1993, the same was admissible and payable to the petitioner company. 20. Coming to the claim made in C W P No. 78 of 1993, admittedly, the said claim pertains to the period prior to July 1992 on the increased capacity of 7.6 LTPA The increased capacity was recognised by the respondents with effect from 1-4-1989 Such increased capacity having been recognised in June 1992 with effect from the previous date i e. 1-4-1989, the petitioner company is entitled to transport subsidy on such increased capacity from that date. Annexure P48 is the letter dated 11-8-1992 of the Ministry of Industry, Government of India, addressed to respt. No 3, whereby it was desired that the additional capacity from 5.6 LTPA to 7.0 LTPA may be recognised for the purpose of transport subsidy. Annexure P48 is the letter dated 11-8-1992 of the Ministry of Industry, Government of India, addressed to respt. No 3, whereby it was desired that the additional capacity from 5.6 LTPA to 7.0 LTPA may be recognised for the purpose of transport subsidy. It has further been stated in the said letter that "owing to reasons of resource constraint, subsidy on the additional capacity would be admissible only from July 1992 and not retrospectively" It was on the basis of this letter (Annexure P48) that the claim of the petitioner company for transport subsidy on the additional capacity was not sanctioned and paid as not admissible being for the period prior to July 1992 The respondent No. 3 on 15-6-1993 (Annexure P-50) had addressed a letter to the respondent No. 1 to the effect that the petitioner company had got their licenced capacity enhanced from 5 6 LTPA to 7.6 LTPA with effect from 1 4-1989. The request was, therefore, made to consider the claim of the petitioner company favourably and advise decision in the matter. In view of the letter Annexure P-50, it is established that even as per respondents No. 2 to 4, the claim of the petitioner company with regard to transport subsidy on the enhanced capacity of 7.6 LTPA was admissible and payable to the petitioner company Nothing has been placed on the record to show as to what decision was taken by respondent No. 1 on the reference made by respondent No. 3 vide Annexure P-15. Clause (x) of para 6 of the Scheme (Annexure P-J) provides that the existing industrial unit in the selected areas are also eligible for transport subsidy in respect of the additional transport costs of raw material and finished goods arising as a result of substantial expansion or diversification effected by them after the commencement of the scheme There is no dispute that there has been a substantial expansion in the industrial unit of the petitioner company, whereby its licenced capacity was increased from 5 6 LTPA to 7.6 LTPA with effect from 1-4-1989. Therefore, the petitioner company is entitled to the transport subsidy on such increased capacity with effect from the date the increase in the licenced capacity was recognised by the respondents i, e, 1-4-1989, The respondents cannot arbitrarily fixed a date subsequent to the date on which the petitioner company became entitled to transport subsidy on the increased capacity In the present case, such date has been fixed by the respondents as July 1992. Financial constraints cannot be a ground for denying the petitioner company to claim subsidy on the increased capacity from a future date so long as the scheme remains operative. 21. It will no be out of place to mention that in the earlier writ petition being C W P No, 1049 of 1993 filed by the petitioner company was for seeking transport subsidy on the increased capacity. The respondents did not take the stand which is sought to be taken in the present case In the said case, it was never averred by the respondents that the petitioner company was not entitled to the transport subsidy on the increased capacity for the period prior to July 1992. The pure and simple case set up by respondent No 1 in the said case was that the amount of subsidy was required to be released and paid by the respondents No. 2 to 4 to the petitioner company first and thereafter reimbursement was to be made by the respondent No. 1. In view of the said stand taken by the respondent in the earlier writ petition that this court directed the respondents vide judgment dated 28-9-1993 (Annexure P-5 to C. W. P. No. 450 of 1994) to pay the amount of subsidy to the petitioner company on the increased capacity The respondents for the first time raised the objection that the subsidy on the enhanced capacity was admissible from July 1992 only after the decision of this court in the earlier civil writ petition being C, W. P. No. 1049 of 1993. The respondents are, therefore, estopped from raising such a plea in the present case. 22. In view of the fact that the increase in the licenced capacity was recognised by the respondents with effect from 1-4-1989, we hold that the petitioner company is entitled to transport subsidy on the increased capacity for the period claimed by them in Civil Writ Petition No. 78 of 1993. 23. 22. In view of the fact that the increase in the licenced capacity was recognised by the respondents with effect from 1-4-1989, we hold that the petitioner company is entitled to transport subsidy on the increased capacity for the period claimed by them in Civil Writ Petition No. 78 of 1993. 23. As a result, both the petitions are allowed and we direct the respondents No. 2 to 4 to pay the amount of transport subsidy to the petitioner company as claimed within a period of three months from today. We further direct respondent No. 1 to reimburse respondent No. 2 the State Government, with the amount of subsidy so paid by respondents No. 2 to 4 to the petitioner company with a period of four weeks thereafter. We are not awarding any interest on the outstanding amount as claimed by the petitioner company since neither there is any provision for payment of such interest ill the Scheme nor the learned Counsel for the petitioner company has been able to bring to our notice any provision entitling them to such an interest The parties are left to bear their respective costs. Petitions allowed.