C. M. Nayar, J. ( 1 ) THE petitioners have moved this petition for issuance of an appropriate writ/direction commanding the respondents to pay a sum of Rs. 29,30,290. 00 being the alleged subsidy payable for the fertiliser already supplied by the petitioner which subsidy is alleged to be illegally withheld by the respondents. ( 2 ) THIS petition also relates to maximization of production and re-endorsement as a consequence thereto and same question arises for consideration as in CWP No-1970/95 titled Udaipur Phosphates and Fertilisers Ltd. vs Union of India and another. Paragraphs 11 and 12 of this petition may be reproduced as follows: 11. That the Government of India, Ministry of Industry, Department of Industrial Development vide its press note 9 dated 6th April, 1998 decided to allow the industrial unit to maximise their production subject to the condition that the industrial unit does not spend more than 10% of its existing investment for such enhancement of capacity. Under the scheme it was provided that any industrial undertaking would be allowed to get its registered capacity revised to the actual production in the industrial unit in the two financial years starting from 1st April, 1988 and ending on 31st March, 1990. In other words, any industrial undertaking which could achieve production in excess of its capacity in these two financial years in terms of the conditions laid down in press note 9 was entitled to get the said production endorsed as the units capacity. 12. That the petitioner No. l in the financial year 1988-89 could achieve the production of 101612 tons as compared of its registered capacity of 66,000 p. a. Since the petitioner had not made any investment in the year 1988-89, it was completely eligible to get its capacity re-endorsed to 101612 p. a. from 66,000 p. a. The petitioner on 23rd April, 1990 made an application to the Ministry of Agriculture, Deptt. of Agriculture Cooperation for getting its capacity re-endorsed in terms of press te 9 to 102000 in lieu of 66000 tons. " ( 3 ) THE factual position as well as the amount claimed by the petitioners are stated in paragraphs 15,16,17 and 20 of the writ petition which read as follows: 15. That in January/february,1991 when the production plans for units were finalised for kharif 1991-92 a specific decision was taken by the Govt. " ( 3 ) THE factual position as well as the amount claimed by the petitioners are stated in paragraphs 15,16,17 and 20 of the writ petition which read as follows: 15. That in January/february,1991 when the production plans for units were finalised for kharif 1991-92 a specific decision was taken by the Govt. not to permit units to manufacture more than 125% of their original licenced capacity and EC allocation were made accordingly. Thus in view of the deductions made in the earlier year and the govts. decision not to permit production beyond 125% of the original capacity became apparent that any production beyond 125% by an industrial unit would call for punitive action and the units were also liable to get their subsidy cut for such production. Because of the limitation imposed on production the petitioner had to keep their plant closed for some time in the financial year 1991. 16. Thus the embargo of producing within 125% of the existing installed capacity continued for the industrial units including the petitioner upto 24. 8. 92 i. e. the date on which SSP was de-controlled and the present system of payment of subsidy was abolished. 17. That on 31. 3. 1993 the respondent No. 2 wrote to the petitioner in reply to the petitioner s letter dated 24. 3. 90 for re-endorsed of capacity. The respondent no. 2 in their letter dated 31. 3. 93 agreed for the enhancement of capacity of the petitioner to 102000 mt ton p. a. and in the same letter the respondent No. 2 informed the petitioner that due to the enhancement of capacity w. e. f. 1. 4. 90 the fixed charges of the petitioner has been revised downward and accordingly the tentative recovery of 65. 49 lakhs was to be made from the bills of the petitioner. The letter of the respondents came as a complete shock to the petitioner because clearly between 1. 4. 90 to 24. 8. 92 i. e. the time when the existing system of payment of subsidy was in vogue the petitioner had never been allowed to produce upto its installed capacity as being fixed vide letter dated 31. 3. 1993 but at the same time the fixed cost of the petitioner was sought to be revised downwards w. e. f. 1. 4. 90 taking into account the enhanced capacity of the petitioner. 20. 3. 1993 but at the same time the fixed cost of the petitioner was sought to be revised downwards w. e. f. 1. 4. 90 taking into account the enhanced capacity of the petitioner. 20. In this regard it will be relevant to note that an amount of Rs. 38. 79 lakhs was released to the petitioner because the FICC accepted the fact that the unit of the petitioner was not allowed to produce more than 125% of its initial licenced capacity in the year 1991-92 and in the year 1992-93 upto August, 1992 and thus no downard revision of subsidy for the period Was possible. Clearly this fact was known to the respondents at the time of stopping the payment of subsidy and clearly withholding of this amount initially was itself unfounded. The petitioner accordingly in these facts is clearly entitled to payment of interest for the amount of Rs. 38. 79 lakhs illegal withheld by the respondents from 15. 6. 90 to 3. 10. 94 in the same manner in which the respondents seek payment of interest from units in case of excess payment being made to the industry. " ( 4 ) THE impugned order as passed in this case is similar to the one passed in the other writ petition No. 1970/95 which reads as follows: ( 5 ) THE learned counsel for the respondents has contended that the petitioner Unit had already achieved maximum production as compared to its licenced capacity as 66,000 MT to 1,02,ooomt for the years 1988-89 and 1989-90 for which no additional investment was required. This will be indicated from reading of clause 9 of the application of the petitioners which is filed by the respondents and reads as under: "proforma OF APPLICATION FOR RE-ENDORSEMENT OF CAPACITY IN RESPONSE TO MINISTRY OF INDUSTRY, DEPARTMENT OF INDUSTRIAL DEVELOPMENT, PRESS NOTE N0. 9 (1988 SERIES) DATED 6. 4. 88 1-8. . . . . . . . . . . . . . . . . . .- 9. Please state whether any additional investment was made after 1. 4. 88 in plant, machinery and equipment, if so, the quantum thereof as also its percentage of the book value of investment that existed on 1. 4. 88 in plant, machinery and equipment related to the particular item of manufacture. : No additional investment. . . . . . . . . . . 4. 88 in plant, machinery and equipment, if so, the quantum thereof as also its percentage of the book value of investment that existed on 1. 4. 88 in plant, machinery and equipment related to the particular item of manufacture. : No additional investment. . . . . . . . . . . . . " THE explanation by the respondents is categorically stated in paragraphs 12 to 18 of the counter affidavit which may be reproduced as follows: "12, That in reply to contents of para 12, it is submitted that an application was made by the petitioner. Perusal of the application shows that the said petitioner had promised and committed itself to maintain the level of production at 101612 MT per annum from the installed capacity of 66,000 MT per annum. This letter was not however addressed to the Ministry of Industries but to the respondents. Thereafter, inspection of the premises took place and eventually this prayer of the petitioner was accepted and the petitioner was also communicated about the said acceptance of its higher capacity production. However, it was made clear by the petitioner that it had not to incur any additional investment while increasing its production. Hence, the respondents were well within their right to determine the fixed assets by keeping in mind I he production capacity of the petitioner at 101612 MT per annum. Consequently, the fixed charges got automatically reduced as there was no element of any additional investment in the process of increasing the production, even as per the petitioner s own admission. 13. That in reply to contents of para 13, it is submitted that withholding of an amount from April, 1990 subsidy bill of the petitioner unit was due to that the fixed charges of the petitioner unit were likely to go down as a result of its indicated enhanced capacity and NIL additional investment as declared by it in their application dated 23. 4. 1990 (Annexure R-l ). It was denied that there was any indication by the respondents to the petitioner to restrict the production as alleged in para under reply. 14. That in reply to contents of para 14, it is submitted that the question of sending such letter is a matter of record. However, it is submitted that there was no suggestion and/or compulsion from the respondents regarding the restriction of any production. 14. That in reply to contents of para 14, it is submitted that the question of sending such letter is a matter of record. However, it is submitted that there was no suggestion and/or compulsion from the respondents regarding the restriction of any production. It was open for the petitioner to keep the production level to the extent as was indicated by it in its letter dated 23. 4. 1990. Misconceived inference has been drawn by the petitioner from the deduction earlier made by the respondents to the tune of Rs. lo-6 lakhs. 15-18. That the contents of paras 15 to 18 of the petition except in so far as these relate to matter of record are not admitted to be true and correct. It may be mentioned that the petitioner unit applied for enhancement under the press note No. 9 (1988 scries) issued by the Department of Industrial Development which envisaged recognition of the enhanced capacity subject to material additional investment, if any, on machinery and equipment not exceeding 10% of the existing book value of investment in plant and machinery and equipment etc. The petitioner unit in its application for re-endorsement had indicated the additional investment as nil. As the enhancement of the capacity of 102000 MT per annum was w. e. f. 1. 4. 1990, the fixed charges of the unit which had earlier been calculated on the basis of production capacity of 66000 MT per annum were required to be recalculated. Hence, taking into account the enhanced capacity as well as nil additional investment, the fixed charges of the unit were likely to be reduced from 1. 4. 90. This is because the fixed charges are calculated on the basis of 90% capacity utilisation. (Therefore, keeping in view the enhanced capacity with nil investment, the fixed charges were likely to be reduced w. e. f. 1. 4. 90 ). Accordingly, on a provisional basis, a sum of Rs-65. 49 lakh was withheld from the claims of the petitioner unit. No instructions were issued to the petitioner unit to restrict their production upto any level. Hence, the statement that the respondents did not allow the petitioner to produce in terms of the enhanced capacity is not correct. In fact, the ECA allocation was restricted to 125% of the production capacity in the case of all the fertilizer manufacturing units only in 1991-92. Hence, the statement that the respondents did not allow the petitioner to produce in terms of the enhanced capacity is not correct. In fact, the ECA allocation was restricted to 125% of the production capacity in the case of all the fertilizer manufacturing units only in 1991-92. However, in the case of the petitioner unit, the ECA allocation given was more than 125% of their original production capacity. Some of the SSP units including the petitioner unit requested the respondents to reconsider the issue of acceptance of the enhanced capacity taking into account the fact that ECA allocation for 1991-92 was of the units. Further, though the petitioner unit and some other units had applied for enhancement of their capacity under the press note No. 9 (1988 series) which recognised only upto 10% marginal investment in the existing book value of plant and machinery and equipment, the respondents considered the investment made in the original sulphuric acid plant which had not been recognised earlier, as this capacity was surplus for the original SSP production capacity as well as the additional investment made by these units including the petitioner unit upto 31. 3. 88 which had already been reported during the technical inspection of the unit. On this basis, the fixed charges were recalculated in the case of the concerned units inciuding the petitioner unit w. e. f. 1. 4. 90 as applicable. Accordingly, against the earlier recoverable amount of Rs. 68. 09 lakh, the recoverable amount on account of revision of fixed charges on the basis of enhanced capacity came down to Rs. 29. 30 lakhs. Accordingly, a sum of Rs. 38. 79 lakh was refunded to the unit. The sum of Rs. 29. 30 lakh cannot be refunded as the said amount was due from the petitioner unit on the basis of the fixed charges revised w. e. f. 1. 4. 90. It may also be mentioned that in the case of the petitioner unit, the revised fixed charges on the basis of the enhanced capacity are applicable only upto 31. 3. 91. The petitioner unit has already represented to the respondents on the restriction of the ECA allocation in 1991-92 and on the basis of the same thefixed charges for 1991-92 and 1992-93 (upto 24. 8. 92, date of decontrol of SSP) have been recalculated on the basis of the original production capacity ). 3. 91. The petitioner unit has already represented to the respondents on the restriction of the ECA allocation in 1991-92 and on the basis of the same thefixed charges for 1991-92 and 1992-93 (upto 24. 8. 92, date of decontrol of SSP) have been recalculated on the basis of the original production capacity ). " ( 6 ) IN view of the accepted position that in case Unit manufactured more, the fixed cost would come down and subsidy had to be re-calculated. In the present case, the respondents have explained as to how the deductions were made and the petitioner cannot have any grievance as they have, in fact, achieved maximum production in view of the facts as stated above. The petitioners did not require any additional investment and took advantage of the increase in production from the licenced capacity. The fixed costs,therefore, have been reduced by the process of manufacturing more. ( 7 ) FOR the aforesaid reasons the present petition is liable to be dismissed and it is ordered accordingly. There will be no order as to costs.