Under Secy, G. O. I. , Min. of Inds. v. Marchon Textile Inds. Pvt. Ltd.
2004-03-18
A.R.LAKSHMANAN, R.C.LAHOTI
body2004
DigiLaw.ai
ORDER : R.C. Lahoti, J. The Ministry of Industrial Development, Government of India, New Delhi promulgated a Scheme No. F-7(15)/79-IC entitled the Central Outright Grant/Subsidy Scheme, 1971 for Industrial Units to be set up in Selected Backward Districts/Areas (hereinafter called 'the Scheme', for short). The object of promulgating the Scheme, as set out in the preamble to the Scheme itself, is to encourage the setting up in certain selected backward districts/areas industrial units with a view to promote the growth of industry there and to release central grant or subsidy for the purpose. The Scheme contemplates its implementation through the State Governments/Union Territory Administrations, to be worked on reimbursement basis, except in case of Union Territories without legislatures. The initial period appointed for the availability of the Scheme expired but it was extended from time to time. The last of such extensions was dated 3rd May, 1988 whereunder the Scheme was to remain in operation upto 30th September, 1988. It appears that there was some controversy as to how and in what manner the cut-off date of 30th September, 1988 was to be applied. The dispute travelled upto this Court and came to be decided vide order dated 5th December, 1995 in CA No. 6240/1994 Umesh Textiles & Anr v. Union of India & Anr. The Court having invited the comments of the Ministry of Industry decided that all the applications filed upto 30th September, 1988 should be considered for grant of central investment subsidy provided the said applications were complete in terms of the Scheme dated 26th August, 1971 as modified from time to time. 2. M/s Adilon Synthetics (for short "Adilon"), a partnership firm, which had proposed to establish industry at Masat, Silvassa in the Union Territory of Dadra & Nagar Haveli, had made an application claiming benefit of the Scheme. The application was filed and registered on 18th September, 1987. Adilon was having industrial plot No. 19A in the Government Industrial Estate at Masat, Silvassa. It is not disputed that the said industrial estate was an area covered by the Scheme and entitled to benefits thereunder. Adilon was a small scale industrial unit. On 14th July, 1988 M/s Marchon Textile Industries Private Limited ('Marchon', for short), the respondent herein, a public limited company purchased the industrial unit from Adilon and stepped into its shoes. Marchon is a medium size industry.
Adilon was a small scale industrial unit. On 14th July, 1988 M/s Marchon Textile Industries Private Limited ('Marchon', for short), the respondent herein, a public limited company purchased the industrial unit from Adilon and stepped into its shoes. Marchon is a medium size industry. On 30th September, 1988, Marchon also moved an application of its own for registration under the Scheme. The benefit claimed by Marchon was to some extent more than the benefit which was claimed by its predecessor Adilon for the reason that Adilon happened to be a small scale industrial unit while Marchon is a medium-size industry. 3. The appellants refused to allow the benefit of the Scheme to the respondent. The respondent filed a writ petition which was allowed by the High Court. The High Court formed an opinion that the requirement of the Scheme was one of registration before the cut-off date and as Adilon had got itself registered prior to the cut-off date the benefit of the Scheme could not be denied to the respondent as successor of Adilon. So far as the controversy as to whether the benefit claimed in the application dated 30th September, 1988 by Marchon could be allowed or only the one claimed in the application made by Adilon was allowable, the High Court formed an opinion that at least to the extent of the benefits which were claimed by Adilon in its application the same could not have been denied to the respondent. To that extent, the writ petition was allowed and the rule was made absolute by the High Court. 4. However, the respondent filed a review petition before the High Court pointing out to the fact that the respondent had itself moved its own application on 30th September, 1988 and once the application was filed before the cut-off date as appointed by the order of the Supreme Court, the same was entitled to consideration if it was complete in terms of the Scheme. The review petition was allowed by the High Court by making an observation by way of clarification that the Central Government shall reconsider the said application dated 30th September, 1988 in accordance with rules in that behalf. 5. The Union of India has come up in appeal by special leave putting in issue the orders of the High Court. 6.
The review petition was allowed by the High Court by making an observation by way of clarification that the Central Government shall reconsider the said application dated 30th September, 1988 in accordance with rules in that behalf. 5. The Union of India has come up in appeal by special leave putting in issue the orders of the High Court. 6. Having heard the learned counsel for the parties, we are satisfied that no fault can be found with the view taken by the High Court. So far as the application filed by Adilon is concerned, the submission of the learned counsel for the appellants is that the application filed by Adilon and registered by the appellants suffers from certain deficiencies and, therefore, the same is not entitled for consideration. The deficiencies pointed out by the appellants are as under:- "The details of plant and machineries as required in accordance with Annexure-B of the Scheme/Manual has not been furnished by the petitioner. Certificate from Financial Institutions i.e. Sanction letter and annexure IX has not been furnished by the petitioner." 7. So far as the application dated 30th September, 1988 is concerned, it is not disputed that the application filed by the respondent Marchon on 30th September, 1988 was registered by the appellants on 2nd December, 1988. Whether the application is complete in all respects as required by the Scheme or not - the answer to the question is not available on record. It appears that the decision on the application dated 30th September, 1988 has not yet been taken; at least the same is not available before the Court. 8. The Schemes floated by State releasing grant of subsidy for industrial units to be set up in certain selected backward districts/areas have a benevolent and public purpose to achieve, and that is, to promote the growth of industries in such districts/areas which but for the State encouragement would continue to remain backward and the industrial investment will not be attracted to such areas. Such schemes have to be construed with practical and pragmatic approach so as to achieve and not frustrate the purpose sought to be achieved. The benefit of the scheme ought to be allowed, if it can be done. The applications should not be dealt with a hyper-technical approach or in a pedantic manner.
Such schemes have to be construed with practical and pragmatic approach so as to achieve and not frustrate the purpose sought to be achieved. The benefit of the scheme ought to be allowed, if it can be done. The applications should not be dealt with a hyper-technical approach or in a pedantic manner. If the application filed before the cut-off date is substantially in order and satisfies the formalities expected of the scheme, then an opportunity should be allowed to the applicant to cure the defects which are not of substantial nature or are capable of being cured so that the deserving units are not left out of the scheme. 9. So far as the application made by Adilon is concerned, having taken into consideration the defects or the deficiencies pointed out in the affidavit filed on behalf of the appellants, we are satisfied that they are not of such nature or character as would deprive the application of its essential character and efficacy. It is not clear from the record whether the defects pointed out on behalf of the appellants to Adilon have been cured or not. We make it clear that if the defects have not already been cured, the respondent shall be allowed a reasonable opportunity of removing the defects. 10. So far as the application dated 30.9.1988 registered on 2.12.1988 is concerned, it is clear from the order dated 5.12.1995 passed in the case of Umesh Textiles & Ors. (supra) by this Court, the cut- off date appointed is for the purpose of filing of the application and not the registration of the application by the Ministry. Any application filed on or before the cut-off date is available for consideration without regard to the date on which it was actually registered by the appellants. The test to be applied is : whether in substance the application satisfies the requirement of the Scheme or suffers from such defects or deficiencies which if taken into consideration would leave the application as no application in the eye of law. In the former case the application deserves consideration and the minor deficiencies should be allowed to be made up or cured; in the later case it can be assumed that the application was not filed at all. 11.
In the former case the application deserves consideration and the minor deficiencies should be allowed to be made up or cured; in the later case it can be assumed that the application was not filed at all. 11. The respondent Marchon is still at liberty to press its application dated 30.9.1988 for consideration by the appellants and the appellants are at liberty to take up the application for consideration and take a decision thereon in the light of the Scheme, the order of this Court dated 5.12.1999 and the observations made hereinabove. If the appellants find the application dated 30.9.1988 filed by Marchon to be in order and substantially satisfying the requirements of the Scheme, such benefits under the Scheme shall be released to the respondent as to which it is found entitled. If it is found that the application dated 30.9.1988 is not substantially meeting the requirements of the Scheme, then the benefits available under the application made by Adilon only shall be released to the respondent. 12. The appeal is disposed of in the terms above-said and the judgment of the High Court stands modified to the extent indicated hereinabove. 13. No order as to the costs.