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2003 DIGILAW 208 (CAL)

S. M. Cold Storage Pvt. Ltd. v. Union of India

2003-04-25

Pranab Kumar Chattopadhyay

body2003
JUDGMENT Pranab Kumar Chattopadhyay, J. The petitioners herein challenged the validity and/or legality of the huge amount of interest claimed by the bank for delayed payment of the bridge loan on account of delay in disbursement of the central subsidy. Admittedly, central investment subsidy to the extent of Rs. 23.75 lacs was sanctioned by the State Level Committee at its 59th meeting held on 30th December, 1987. 2. Although the said subsidy was sanctioned on 30th December, 1987 but there had been some delay in making the actual disbursement of the sanctioned amount available to the petitioner company. Because of the delay in disbursement of the aforesaid sanctioned amount the petitioner company took the loan from the respondent bank to facilitate the progress of the project which was undertaken by the petitioner company. 3. The West Bengal Financial Corporation by the written communication to the bank undertook to repay the said bridge loan to the bank although undertaking was limited to the extent of Rs. 23.75 lacs (maximum). Admittedly, the respondent bank sanctioned the bridge loan of Rs. 23.75 lacs to the petitioner company on 8th March, 1988. The respondent West Bengal Financial Corporation ultimately on 23rd February, 1990 forwarded a cheque to the respondent bank for the aforesaid amount of Rs. 23.75 lacs being the subsidy amount of the petitioner company. 4. As a matter of fact, Central Government introduced a scheme to encourage the entrepreneurs to set up industries in the backward areas of the country. In order to encourage the entrepreneurs, Central Government also prepared a scheme for grant of subsidy to the entrepreneurs concerned on the basis of the recommendation of the State Level Committee through various financial institutions including the WBFC. 5. The petitioner No. 1 in order to avail the benefit under the aforesaid scheme submitted a project for setting up of a cold storage in the industrially backward area at Mouza, Katora in the district of Bankura. In order to set up the said cold storage in the industrially backward area, petitioner company submitted a proposal for Central Investment Subsidy which was placed in the 59th meeting of the State Level Committee held on 30th December, 1987 and the said Committee sanctioned the subsidy of Rs. 23.75 lacs to the petitioner company. The West Bengal Financial Corporation was the disbursing agency in the matter. 6. 23.75 lacs to the petitioner company. The West Bengal Financial Corporation was the disbursing agency in the matter. 6. It has been specifically provided in the said Central Investment Subsidy Scheme that if there is any delay in the financial institution concerned getting reimbursement of the subsidy from the Central Government then, the financial institution shall be reimbursed by the Central Government of the interest chargeable from the industrial concern for the period between the relevant date of disbursement of the loan by the financial institution to the industrial concern and the date of correspondent reimbursement thereof to the financial institution by the Central Government. The relevant Clause 8 of the said Scheme is quoted hereunder : "8. In respect of an industrial unit to be assisted by the State Government/Union Territory Administration concerned, the subsidy will be disbursed to the unit by the State Government/Union Territory Administration concerned, in as many instalments as the loan is disbursed by the State Government/Union Territory Administration concerned and simultaneously claimed from the Central Ministry of Industrial Development. In such cases, the contract to be drawn up between the State Government/Union Territory Administration and the unit concerned may cover mortgage/pledge/hypothecation of the assets up to the amount of loan to be advanced by the State Government/Union Territory Administration concerned and the subsidy. In respect of a new industrial unit or in respect of substantial expansion of an existing industrial unit to be assisted by a financial institution, the subsidy will be disbursed to the unit by the financial institution in as many instalments as the loan is disbursed by the financial institution and simultaneously claimed from the Ministry of Industrial Development. In respect of a new industrial unit or in respect of substantial expansion of an existing industrial unit to be assisted by a financial institution, the subsidy will be disbursed to the unit by the financial institution in as many instalments as the loan is disbursed by the financial institution and simultaneously claimed from the Ministry of Industrial Development. In such cases, the contract to be drawn up between the financial institution and the unit concerned may cover mortgage/ pledge/hypothecation of the assets of the unit up to the amount of the loan to be advanced by the financial institution concerned and the subsidy : Provided however, if there is any delay in the financial institution concerned, getting reimbursement of the subsidy or instalment thereof from the Central Government the financial institution shall be reimbursed by the Central Government of the interest chargeable from the industrial concern for the period between the relevant date of disbursal of the loan by the financial institution to the industrial concern and the date of corresponding reimbursement thereof of the instalment of the element of subsidy to the financial institution by the Central Government." 7. As already stated hereinbefore, because of delay in actual disbursement of subsidy amount, petitioner No. 1 approached the respondent bank for short term loan against the amount already sanctioned towards the subsidy. The respondent bank sanctioned a short-term loan by way of bridge loan to the petitioner company on 8th March, 1988 for a sum of Rs. 23.75 lacs which was the sanctioned amount of Central Investment Subsidy to the petitioner company. The bank also decided to charge interest at the rate of 15.5% p.a. on the aforesaid amount of bridge loan. 8. The respondent bank by the written communication dated 25th May, 1988 informed the WBFC that the said bank has already disbursed short-term loan of Rs. 23.75 lacs to the petitioner company and requested the West Bengal Financial Corporation to claim reimbursement of the said amount from the Government of India on behalf of the said bank. The respondent bank by the subsequent written communication dated 13th June, 1988 requested the Managing Director, West Bengal Financial Corporation to take up the issue with the appropriate authority on behalf of the bank and to forward the Government Subsidy of Rs. 23.75 lacs to square off the short-term loan given to the petitioner company. The respondent bank by the subsequent written communication dated 13th June, 1988 requested the Managing Director, West Bengal Financial Corporation to take up the issue with the appropriate authority on behalf of the bank and to forward the Government Subsidy of Rs. 23.75 lacs to square off the short-term loan given to the petitioner company. The relevant extract from the said written communication dated 13th June, 1988 is quoted hereunder:- "We were informed by you that in the 59th meeting held on 30.12.87 SLC sanctioned Rs. 23.75 lacs as Central Investment Subsidy to S.M. Cold Storage (P) Ltd. Accordingly, short term loan of Rs. 23.75 lacs was sanctioned and disbursed on 8.3.88 to them by us. You have given undertaken also to remit Rs. 23.75 lacs to us on receipt of the amount from the concerned authority by you. We request you to take up the issue with the concerned authority on our behalf and forward us the Government Subsidy of Rs. 23.75 lacs to square off the short term loan given to above named borrower." 9. From the aforesaid communication, it does appears that the actual claim of the bank as on 13th June, 1988 is Rs. 23.75 lacs and the respondent bank did not charge any interest admittedly, upto 13th June, 1988 and asked the respondent WBFC only to take up the issue on behalf of the respondent bank for reimbursement of the aforesaid sum of Rs. 23.75 lacs only in order to square off the short-term loan of the petitioner company. 10. Admittedly, on 22nd February, 1990 respondent West Bengal Financial Corporation sent a cheque of Rs. 23.75 lacs to the respondent bank towards the subsidy amount of the petitioner company. The respondent bank after reimbursement of the aforesaid short-term loan amount of Rs. 23.75 lacs informed the petitioner company by a written communication dated 27th February, 1990 that an amount of Rs. 7,17,352/- has become due and payable towards the interest from the petitioner company. The aforesaid amount of interest was charged on account of delayed disbursement of the subsidy amount by the Government of India and the West Bengal Financial Corporation. 11. The Assistant Secretary, Commerce and Industries Department, Government of West Bengal by the written communication dated 9th April, 1990 asked the Managing Director to clarify why disbursement was made after receiving reimbursement which is contrary to the rules. 11. The Assistant Secretary, Commerce and Industries Department, Government of West Bengal by the written communication dated 9th April, 1990 asked the Managing Director to clarify why disbursement was made after receiving reimbursement which is contrary to the rules. The relevant portion from the said written communication dated 9th April, 1990 written by the Assistant Secretary to the West Bengal Financial Corporation is quoted hereunder : "I am further directed to request you to consult the proviso under Clause 8 of the Central Investment Subsidy Scheme vide Ministry of Ind. Dev., Govt. of India's Notification No. 7(15)/71-IC dated 19.6.1973 regarding delayed disbursement and the stipulations under their letter No. 6/1/89-DBA-II dated 21.7.89 regarding disbursement to non-manufacturing concerns in this connection and to clarify why disbursement was made after receiving reimbursement which is contrary to the rules." 12. In any event, after actual repayment of the short-term loan of Rs. 23.75/- lacs on 22nd February, 1990, respondent bank claimed only Rs. 7,17,352/- towards outstanding interest as on that date on the loan amount. Form the record it also appears that on 28th March, 1995, petitioner company paid a sum of Rs. 9.35 lacs towards the interest. Admittedly, short-term loan was sanctioned on 8th March 1988 and the same was repaid on 24th May, 1990. Accordingly, for a period of less than 2 years bank charged interest of Rs. 7,17,352/- and ultimately, the petitioner company on 28th March, 1990 paid a sum of Rs. 9.36 lacs. 13. Furthermore, the bank en cashed the fixed deposits of the petitioner company pre-maturely and adjusted the same against the bridge loan account. The value of the term deposit for Rs. 10,33,157/- dated 8th November, 1996 became Rs. 17,23,512/- on maturity on 31st March, 2000 which was adjusted against the bridge loan account of the petitioner company. 14. The bank thus, recovered the total sum of Rs. 26,59,512/- from the petitioner company as interest for granting a short-term financial accommodation by sanctioning a loan on 8th March, 1988 for a sum of Rs. 23.75 lacs only, which was repaid on behalf of the petitioner company within a period of less than two years. 15. According to the respondent bank, no relief can be granted to the petitioner herein as according to the respondent bank interest has been charged on the bridge loan at the contractual rate as specifically mentioned in the banking documents. 23.75 lacs only, which was repaid on behalf of the petitioner company within a period of less than two years. 15. According to the respondent bank, no relief can be granted to the petitioner herein as according to the respondent bank interest has been charged on the bridge loan at the contractual rate as specifically mentioned in the banking documents. The learned Counsel of the bank further submitted that the fixed deposits made by the writ petitioners with the bank are in the nature of pledge which on maturity can be adjusted against the dues of the bank. The learned Counsel of the respondent bank also submitted that the issue concerning the correctness of the total amount of interest charged by the bank on the bridge loan sanctioned earlier to the petitioner company is a disputed question of fact which cannot be adjudicated in the present writ petition. 16. The learned Counsel of the respondent bank also submitted whether the writ petitioner is entitled to any concession or rebate from the bank towards interest or otherwise cannot be considered at this stage in view of the provision of section 21A of the Banking Regulations Act (as amended). The learned Counsel of the respondent bank also referred to and relied upon the decision of the Supreme Court reported in (1993) 2 SCC 299 [U.P. Financial Corporation vs. Gem Cap (India) Pvt. Ltd.] in support of the contention that promoting industrialisation at the cost of the public funds does not serve public interest. 17. The learned Counsel of the Government of India however, submits that the petitioner company is not eligible to claim reimbursement of the interest amount, as the interest cannot be regarded as subsidy. 18. Referring to the decision of the Supreme Court reported in 2002 AIR SCW 2649 (Equipment Conductors & Cables Ltd. vs. Haryana State Electricity Board & Anr.), learned Counsel of the Union of India submits that the petitioner Company herein should have filed suit in the Civil Court challenging the claim of interest of the respondent bank. 19. The learned Counsel of the respondent bank also submitted before this Court that the disputes raised in this petition should be decided by the appropriate Civil Court and the petitioner company should have filed a civil suit instead of the present writ petition. 19. The learned Counsel of the respondent bank also submitted before this Court that the disputes raised in this petition should be decided by the appropriate Civil Court and the petitioner company should have filed a civil suit instead of the present writ petition. The learned Counsel of the respondent bank cited the following decisions in support of his aforesaid contentions : 1) Kulchinder Singh vs. Hardayal Singh ( AIR 1976 SC 2216 ). 2) DLF Housing Constructions P. Ltd. vs. Delhi Municipal Corporation, ( AIR 1976 SC 386 ). 3) Divisional Forest Officer vs. Biswanath Tea Co., (1981) 3 SCC 238 . 4) Noida Entrepreneurs Association vs. U.P. Financial Corporation, 1994 Supp. (2) SCC 108. 5) Central Bank of India vs. Rooplal Bansal, (1999) 9 SCC 254 . 6) State of Bihar vs. Jain Plastics & Chemicals Ltd., (2002) 1 SCC 216 . 20. On behalf of the respondent West Bengal Financial Corporation, it has been specifically submitted before this Court that the respondent bank was categorically informed by the West Bengal Financial Corporation in writing on 27th January, 1988 that the said Corporation would take the responsibility to remit the maximum amount to the extent of Rs. 23.75 lacs if the bridge/midterm loan is sanctioned to the petitioner company. 21. The learned Counsel of the respondent West Bengal Financial Corporation submits that at-least two months before sanctioning the bridge loan to the petitioner company respondent bank was informed in writing by the West Bengal Financial Corporation that the said Financial Corporation will take steps to the maximum extent of Rs. 23.75 lacs only and specific undertaking was also given to the respondent bank on behalf of the West Bengal Financial Corporation only to the aforesaid extent. The relevant extract from the written communication dated 27th January, 1988 addressed to the respondent bank by the West Bengal Financial Corporation is quoted hereinbelow : "In this connection, we do hereby undertake to remit to the extent of Rs. 23.75 lacs (maximum) to you on receipt of the amount from the concerned authority if the bridge/ mid-term loan is considered at your end." 22. The learned Counsel of the West Bengal Financial Corporation submits that in terms of the aforesaid undertaking respondent Corporation duly forwarded the aforesaid amount of Rs. 23.75 lacs (maximum) to you on receipt of the amount from the concerned authority if the bridge/ mid-term loan is considered at your end." 22. The learned Counsel of the West Bengal Financial Corporation submits that in terms of the aforesaid undertaking respondent Corporation duly forwarded the aforesaid amount of Rs. 23.75 lacs to the respondent bank immediately upon receipt of the subsidy amount i.e. on 22nd February, 1990 which has subsequently been acknowledged by the respondent bank also. According to the West Bengal Financial Corporation, respondent bank asked the West Bengal Financial Corporation to take up the issue on behalf of the said respondent bank for reimbursement of the Government Subsidy of Rs. 23.75 lacs only in order to square off the short-term loan given to the petitioner company. 23. Mr. A.K. Dhandhania, learned Counsel of the respondent Financial Corporation referred to and relied upon the letter dated 13th June, 1988 written by the Branch Manager of the respondent bank to the Managing Director, West Bengal Financial Corporation in this regard. The learned Counsel of the respondent Financial Corporation further submits that the respondent bank never asked the West Bengal Financial Corporation to reimburse any amount towards interest and only asked the respondent Corporation to take up the issue for reimbursement of the subsidy amount of Rs. 23.75 lacs only which has already been paid. 24. Mr. Dhandhania further submits that the authorities of the respondent bank failed and/ or neglected to claim any amount towards the interest on the bridge loan sanctioned to the petitioner company and in order to cover up their own laches and lapses subsequently claimed an exorbitant amount from the petitioner company towards the interest even after payment of the principal amount of Rs. 23.75 lacs by the respondent Corporation on account of the Central Investment Subsidy of the petitioner company. 25. The Government of India introduced the aforesaid scheme to encourage the entrepreneurs to set up industries in the industrially backward areas and the nature of encouragement would appear from the conduct of the respondent authorities. The petitioner company cannot be blamed for delay in making the payment of loan amount. 26. 25. The Government of India introduced the aforesaid scheme to encourage the entrepreneurs to set up industries in the industrially backward areas and the nature of encouragement would appear from the conduct of the respondent authorities. The petitioner company cannot be blamed for delay in making the payment of loan amount. 26. Admittedly, the subsidy was sanctioned by the State Level Committee by on account of delay in making actual disbursement of the said subsidy amount petitioner company took the short-term loan equivalent to the subsidy amount from the respondent bank and in terms of Clause 8 of the scheme if any interest is claimed from the concerned industrial unit then, the same has to be reimbursed by the Central Government. 27. The respondent bank only after receiving specific intimation from the West Bengal Financial Corporation regarding sanction of the subsidy to the petitioner company agreed to sanction the short-term loan equivalent to the subsidy amount. The entire transaction of loan was governed and/or guided under the Central Outright Grant/Subsidy Scheme, 1971 for industrial unit to be set up in selected backward districts/areas. The respondent authorities are under an obligation to render financial assistance to the entrepreneurs under the said scheme but in the present case, instead of rendering assistance virtually the entrepreneur like the petitioner company herein has been considerably penalised for no fault on its part. 28. The petitioner had no role to play in the matter of disbursement of the subsidy amount and/or reimbursement of the same to the respondent bank. The West Bengal Financial Corporation acted as a disbursing agency and the bank also received direct payment from the said West Bengal Financial Corporation. 29. One other important factor which can be highlighted in this regard is that after disbursement of the term loan of Rs. 23.75 lacs to the petitioner company the Branch Manager of the respondent bank by the written communication dated 13th June, 1988 requested the Managing Director of the West Bengal Financial Corporation to take up the issue with the concerned authority of the Government of India on behalf of the said bank and to forward the Government Subsidy of Rs. 23.75 lacs directly to the bank in order to square off the short-term loan of the petitioner company. 30. 23.75 lacs directly to the bank in order to square off the short-term loan of the petitioner company. 30. Again by the subsequent communication dated 12th June, 1991, Branch Manager of respondent bank requested the Managing Director, West Bengal Financial Corporation to take steps for payment of the interest amount of Rs. 9,36,570.85. In the said communication, the Branch Manager specifically admitted that the short-term loan of Rs. 23.75 lacs was sanctioned to the petitioner company against Central Investment Subsidy Scheme and as per the undertaking of the West Bengal Financial Corporation. The relevant extract of the said letter dated 12th June, 1991 is quoted hereinbelow : "We have disbursed short term loan of Rs. 23.75 lacs to M/s. S.M. Cold Storage (P) Ltd. against Central Investment Subsidy Scheme as per your undertaking given by you vide your letter No. SKP/ADV, SMCSPL/24627 dated 27.01.1988." 31. Although, it was contended on behalf of the Government of India that on 22nd September, 1988 the Government of India issued a circular discontinuing the grant of Central Investment Subsidy to the non-manufacturing activities like the cold storage but admittedly, on 10th July, 1989, Government of India issued another circular reintroducing Central Investment Subsidy to non-manufacturing activities like the cold storage. 32. In any event, undisputedly, Central Investment Subsidy of Rs. 23.75 lacs was sanctioned to the petitioner company and the respondent West Bengal Financial Corporation also communicated the same not only to the petitioner company but also to the respondent bank. 33. Furthermore, the respondent bank also sanctioned and disbursed the short-term loan to the petitioner company against Central Investment Subsidy Scheme. Under the said scheme, the concerned industrial unit is not required to make payment of any interest and in the event on account of delay in getting the reimbursement of the subsidy from the Central Government if any interest is chargeable from the industrial concern then, under the said scheme, Central Government would take responsibility for reimbursement of the same as per Clause 8 of the said scheme. 34. In the present case, respondent bank also did not ask the Financial Corporation to claim reimbursement of the interest and by a written communication dated 13th June, 1988 asked the West Bengal Financial Corporation to take up the issue on behalf of the bank for payment of the amount of Rs. 34. In the present case, respondent bank also did not ask the Financial Corporation to claim reimbursement of the interest and by a written communication dated 13th June, 1988 asked the West Bengal Financial Corporation to take up the issue on behalf of the bank for payment of the amount of Rs. 23.75 lacs only to square off the short-term loan of the petitioner company. Although after a lapse of 3 years and even after receiving the payment of entire principal loan amount of Rs. 23.75 lacs, Branch Manager of the respondent bank asked the Managing Director, West Bengal Financial Corporation to take necessary steps for reimbursement of the interest amount of Rs. 9,36,570.85, but before actual disbursement of the principal amount the respondent bank never raised any demand before the West Bengal Financial Corporation for payment of any amount towards the interest. 35. The Assistant Secretary, Commerce and Industries Department, Government of West Bengal also asked the Managing Director of the West Bengal Financial Corporation by Memo. No. 457-C&I/PL dated 9th April, 1990 to clarify why disbursement was made after receiving reimbursement, as the same was contrary to the rules according to the said Assistant Secretary. However, the reaction of the West Bengal Financial Corporation in this regard has not been discussed before this Court. 36. Scrutinising the conduct of the respondent authorities, I find serious laches and lapses on the part of the respondents herein. The respondent bank after sanctioning the short-term loan to the petitioner company admittedly, asked the Managing Director, West Bengal Financial Corporation to take up the issue for reimbursement of the said loan amount as according to the bank, the said short-term loan amount was disbursed to the petitioner company against Central Investment Subsidy Scheme and as per the undertaking given by the said West Bengal Financial Corporation. Accordingly, the respondent bank initially all along requested the West Bengal Financial Corporation to take up the matter on behalf of the said bank before the appropriate authority for reimbursement of the said loan amount. 37. Admittedly, the respondent bank at the relevant point of time never asked the West Bengal Financial Corporation to claim any further amount towards the interest apart from the principal loan amount as would also appear from the written communication dated 13th June, 1988 written by the respondent bank to the West Bengal Financial Corporation. 38. 37. Admittedly, the respondent bank at the relevant point of time never asked the West Bengal Financial Corporation to claim any further amount towards the interest apart from the principal loan amount as would also appear from the written communication dated 13th June, 1988 written by the respondent bank to the West Bengal Financial Corporation. 38. The authorities of the respondent, West Bengal Financial Corporation came to know at-least on 12th June, 1991 about the interest amount demanded by the respondent bank for disbursement of the short-term loan to the petitioner company against Central Investment Subsidy Scheme and as per undertaking given earlier by the said West Bengal Financial Corporation but the authorities of the West Bengal Financial Corporation thereafter, did not put forward the aforesaid claim of interest of the respondent bank before the Government of India for necessary reimbursement of the said amount. 39. Although, it is an admitted fact that the respondent Financial Corporation has been given undertaking to remit the amount maximum to the extent of Rs. 23.75 lacs only but when the respondent bank raised the demand for payment of interest then, it was the duty of the respondent Financial Corporation to approach the appropriate authority of the Central Government for reimbursement of the aforesaid amount under Clause 8 of the aforesaid scheme. 40. Scrutinising the aforesaid scheme of the Central Government, I find that the Ministry of Industry, Government of India introduced the aforesaid Investment Subsidy Scheme only to promote industrial growth at the backward areas of the country. In order to create interest amongst the industrialists for the purpose of setting up of industries in the backward area of the country, the aforesaid scheme was conceived by the Central Government. In the backward areas, several odds are required to be faced by the industrialists in order to set up the industrial units and for this purpose Government of India decided to grant financial assistance to the industrialists under the aforesaid scheme. 41. Unfortunately, the respondent authorities herein failed to realise the actual purpose for introduction of the aforesaid scheme and instead of granting actual financial assistance to the petitioner company for setting up an industrial unit in the backward area of this country under the aforesaid Subsidy Scheme realised an exorbitant amount from the said petitioner company towards interest. 42. 41. Unfortunately, the respondent authorities herein failed to realise the actual purpose for introduction of the aforesaid scheme and instead of granting actual financial assistance to the petitioner company for setting up an industrial unit in the backward area of this country under the aforesaid Subsidy Scheme realised an exorbitant amount from the said petitioner company towards interest. 42. Admittedly, the petitioner company got a financial accommodation under the aforesaid scheme for a sum of Rs. 23.75 lacs but the respondent bank who sanctioned loan against the aforesaid scheme realised interest from the petitioner company to the tune of Rs. 26,59,512/- even though the said loan amount of Rs. 23.75 lacs was paid back within less than a period of two years. 43. From the aforesaid discussions it is clear that the respondent bank never sanctioned short-term loan to the petitioner company under normal circumstances but the said short-term loan was admittedly, sanctioned to the petitioner company against Central Investment Subsidy Scheme as has been admitted by the respondent bank in its letter dated 12th June, 1991 addressed to the Managing Director of the West Bengal Financial Corporation. 44. The respondent bank being a public sector bank is also duty bound to implement various schemes undertaken by the Government of India by granting financial assistance for implementing those schemes. In the instant case also, the respondent bank sanctioned loan, amount against Central Investment Subsidy Scheme but instead of enjoying the benefit of subsidy under the said Central Investment Subsidy Scheme the petitioner company had to make payment of interest more than the amount of subsidy received by the said bank. 45. The respondent authorities although at the time of sanctioning the subsidy to the petitioner company made it clear that in the event any amount is charged towards the interest then, under Clause 8 of the said scheme such amount of interest would be reimbursed but subsequently when the respondent bank charged fabulous amount towards interest on the petitioner company no steps were taken for reimbursement of the said interest under Clause 8 of the scheme. 46. It is true that the said scheme was discontinued afterwards. But the conditions stipulated in the scheme at the time of sanctioning the subsidy to the petitioner must remain operative at-least in respect of the petitioner company herein. 47. 46. It is true that the said scheme was discontinued afterwards. But the conditions stipulated in the scheme at the time of sanctioning the subsidy to the petitioner must remain operative at-least in respect of the petitioner company herein. 47. In any event, this Court cannot allow the respondent authorities to frustrate the Central Government schemes to promote industrial growth in the backward areas by penalising industrialists like the petitioners herein without any fault on their part. Admittedly, the respondent bank has been able to realise Rs. 9,36,000/- from the petitioner company towards interest on 28th March, 1995 and the same has also been mentioned by the respondent bank at paragraph 4(g) of the affidavit-in-opposition filed before this Court in the present proceeding. 48. As I have already observed that the petitioner herein was not supposed to pay any amount of interest for the delay in getting reimbursement of the subsidy in terms of Clause 8 of the aforesaid scheme and the Government of India should reimburse the same but in the present case, since, the amount of Rs. 9.36 lacs has already been realised by the respondent bank from the petitioner company towards interest, the same should not be refunded. 49. The authorities of the West Bengal Financial Corporation are, however, directed to claim the reimbursement of the aforesaid amount of interest on behalf of the respondent bank within a period of 2 weeks from date and the Government of India is directed to reimburse the aforesaid amount in terms of Clause 8 of the aforesaid scheme within a period of 4 weeks thereafter. 50. On reimbursement of the aforesaid amount of interest by the Government of India, respondent West Bengal Financial Corporation will remit the amount to the petitioner company herein as the said amount of interest has already been paid by the petitioner company to the bank as far back as on 28th March, 1995. The respondent bank should not have recovered any further amount even after realising the aforesaid amount of Rs. 9.36 lacs from the petitioner company towards the outstanding interest but unfortunately the bank after maturity of the fixed deposits of the petitioner company in the DRC Scheme adjusted the total sum of Rs. 17,23,512/- towards the alleged outstanding loan amount of the petitioner company. 51. 9.36 lacs from the petitioner company towards the outstanding interest but unfortunately the bank after maturity of the fixed deposits of the petitioner company in the DRC Scheme adjusted the total sum of Rs. 17,23,512/- towards the alleged outstanding loan amount of the petitioner company. 51. The respondent bank should not have adjusted any amount from the fixed deposits of the petitioner company under DRC Scheme after the maturity for the purpose of realisation of the alleged unpaid interest of the petitioner company. The aforesaid adjustment of amount by the respondent bank on the maturity of the fixed deposits of the petitioner company cannot be approved by this Court under any circumstances. 52. The respondent bank even after payment of the principal amount maintained the loan account of the petitioner company on the basis of the inflated claim upon charging interest on interest. The respondent bank unfortunately forgot that the short-term loan was sanctioned to the petitioner company against the Central Investment Subsidy granted to the petitioner company under the specific scheme introduced by the Central Government for encouraging industrial growth in the backward areas of the country. The respondent bank therefore, could not penalise the petitioner company even though no fault was committed by the said company for reimbursement of the subsidy amount to the bank. 53. As a matter of fact, the respondent bank asked the disbursing agency namely, the West Bengal Financial Corporation to collect the subsidy amount directly from the Government of India and to reimburse the same directly to the bank and the respondent bank also authorised the Corporation to take up the issue on their behalf and so the subsidy amount was reimbursed to the respondent bank by the West Bengal Financial Corporation. In the aforesaid circumstances, the respondent bank cannot be allowed to maintain the loan account of the petitioner company by charging interest on interest even after reimbursement of the subsidy amount. 54. The respondent bank by charging interest on interest made a fabulous claim against the petitioner company even after receiving Rs. 9,36,000/- towards interest from the petitioner company against disbursement of total subsidy amount of Rs. 23.75 lacs. The amount of subsidy is disbursed to an industrial undertaking by the Central Government under the aforesaid scheme to help the industrial unit to combat various odds for setting up an industry in the backward areas. 9,36,000/- towards interest from the petitioner company against disbursement of total subsidy amount of Rs. 23.75 lacs. The amount of subsidy is disbursed to an industrial undertaking by the Central Government under the aforesaid scheme to help the industrial unit to combat various odds for setting up an industry in the backward areas. But in the instant case, the respondent authorities herein by their acts have virtually penalised the petitioner company as the amount of subsidy granted to the petitioner company towards the financial assistance is less than the amount of interest actually claimed by the respondent bank. 55. The learned Counsel of the respondents herein although cited several decisions as have been mentioned hereinbefore but I failed to understand how the same are at all applicable in the facts of the present case. The principles of law as laid down in the aforesaid judgments cited by the learned Counsel of the respondents cannot be made applicable at all in the facts of the present case and in my view, the aforesaid judgments are clearly distinguishable on facts alone. 56. Accordingly, I direct the respondent bank to make payment of the maturity value of the aforesaid fixed deposits to the petitioner company forthwith together with admissible rate of interest till the date of actual repayment of the same. 57. This writ petition thus, succeeds and the same is therefore, allowed. 58. There will be, however, no order as to costs. 59. Xerox certified copy of this judgment be handed over to the learned Advocates of the parties, if applied for, on urgent basis. Later : Learned Counsel of the respondent Bank prays for stay of the operation of this judgment and order. I do not find any reason to grant such stay. Accordingly, the aforesaid prayer for stay is refused. Writ petition allowed. Pray for stay refused.