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2016 DIGILAW 1808 (RAJ)

Bhiwadi Metal Rollwell P. L. v. State of Raj.

2016-12-13

DINESH MEHTA, K.S.JHAVERI

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JUDGMENT : By way of this appeal, the original petitioner has assailed the judgment and order of the learned Single Judge whereby learned Single Judge has dismissed the petition on 13.6.2006. 2. Counsel for the appellant contended that in the original petition which was filed by the petitioner, he has claimed for following relief:- "(i). issue a writ of certiorari or a writ, order or direction of similar nature quashing and setting the orders dated 4.10.2001, 26.11.2011, 11.1.2002 and the notice dated 27.11.2002. (ii). issue a writ of mandamus or a writ, order or direction of similar nature directing that the remainder subsidy sanctioned to the petitioner company vide letter dated 31.3.94 be disbursed to the petitioner company along with 18% interest thereon till the date of payment." 3. He further contended that in another appeal preferred by the present appellant being D.B. Special Appeal (W) No.777/2006 wherein in a Civil Misc. Application No.23745/2009 on 19.8.2009, the Division Bench has passed the following order:- "1. This appeal has been preferred against the order dated 13.06.2006 whereby the writ petition of the appellant-petitioner, seeking to release the documents of Plot No. A 1131 situated at Industrial Area, Phase-III, Bhiwadi pledged with RIICO as guarantee for obtaining loan, has been dismissed. 2. The appellant-petitioner applied for subsidy under the State Capital Investment Subsidy Scheme in the year 1990 which was sanctioned by the State Level Committee. Amount of subsidy sanctioned was to the tune of Rs. 17,82,070/-. Half of the subsidy amount i.e. Rs. 8.91 lakhs was paid to the appellant. The factory for which the subsidy was obtained could not be made operative because of the electric disconnection. The appellant failed to make payment to the RIICO through whom the subsidy was paid to the appellant. The RIICO sought to recover it and approached the Collector to recover the subsidy under the Rajasthan Public Demands Recovery Act, 1952(for short 'the Act'). 3. The Collector issued notice dated 27.11.2002 and a certificate was also issued for a sum of Rs. 18,95,755/- under Section 4 of the Act. The RIICO also raised a demand vide letters dated 04.10.2001, 26.11.2001 and 11.01.2002. 4. Aggrieved of these orders, the appellant approached the Court by way of writ petitions for release of balanced subsidy and release of the documents. The learned Single Judge has dismissed the writ petitions vide judgment dated 13.06.2006. 18,95,755/- under Section 4 of the Act. The RIICO also raised a demand vide letters dated 04.10.2001, 26.11.2001 and 11.01.2002. 4. Aggrieved of these orders, the appellant approached the Court by way of writ petitions for release of balanced subsidy and release of the documents. The learned Single Judge has dismissed the writ petitions vide judgment dated 13.06.2006. Against this order, two separate appeals have been filed, one for release of the balanced subsidy and another for release of documents. We are dealing with the appeal which pertains to release of the documents. 5. Today, an application for release of the documents has been listed before the Court wherein it has been stated by the appellant-applicant that the appellant is prepared pay a sum of Rs. 8.91 Lakhs which has been released as subsidy out of the sanctioned subsidy of Rs. 17,82,070/-. 6. Learned counsel for the respondents have objected submitting that the total amount along with interest at present is Rs. 27,96,885/- and if the documents are released, the respondents shall not be able to recover the balance amount from the appellant. 7. We have proposed to the learned counsel for the parties that if the appellant deposits a sum of Rs. 8,91,000/- in cash and offers a bank guarantee for the rest of the amount to the respondents, the interest of the respondents shall be protected. Learned counsel for the respondents at the instance of the representatives of the RIICO has submitted that interest shall accrue every year and that also needs to be protected. Learned counsel for the appellant has no objection thereto also. 8. Therefore, we dispose of the appeal as well as the application in the following terms: (i) The appellant shall deposit in cash Rs. 8,91,000/- with the respondents and for the balance amount along with the interest till end of July, 2009, which comes to Rs. 19,05,885/-, the appellant shall furnish bank guarantee to the respondents and shall renew the same every year. (ii) The appellant shall also submit bank guarantee yearly to the respondents for the future interest accrued on the subsidy and shall renew the same yearly. (iii) In case the appellant succeeds in the Special Appeal No. 799/2006 wherein he has sought the relief of release of balance amount of subsidy, he shall be entitled to interest at the same rate." 4. (iii) In case the appellant succeeds in the Special Appeal No. 799/2006 wherein he has sought the relief of release of balance amount of subsidy, he shall be entitled to interest at the same rate." 4. Learned counsel submits that in view of the above order they have already deposited the subsidy amount, with the bank guarantee and have taken back the original documents from RIICO. 5. He further contended that subsidy which was required to be refunded pursuant to the letter which was written on 27.6.2001, no notice was issued and they were called upon to pay back the subsidy awarded only by way of a letter written by the Financial Advisor. He further submitted that order of recovery, if required, can be passed by the committee constituted under the provisions who is the sanctioning authority. He has challenged the final notice issued by the Financial Advisor of RIICO dated 26.11.2001 where also he was called upon to refund the subsidy which was already granted and final notice dated 11.1.2002 and the notice for recovery issued by the Collector, Alwar dated 27.11.2002. His main argument is that no notice was issued even if the same was recoverable in view of Clause-14B of the Scheme. The learned Single Judge has failed to appreciate the petitioner ought to have been given a notice of any recovery was to be made for breach of Clause-14B. He submitted that the production was closed because of circumstances which were beyond the control of the appellant. He contended that the word used in Clause-14B are illustrative and not exhaustive and disconnection of electricity will be covered under Clause-14B and the subsidy can be recovered even if closure extends beyond six months. In light of these submissions, he contended that learned Single Judge has committed serious error in not allowing the writ petition. 6. Clause 14B of the Scheme reads as under:- "The industrial unit will remain in production continuously for at least five years after it is commissioned except in cases when it remains out of production for short periods extending upto six months due to reasons beyond its control such as shortage of raw material etc." 7. 6. Clause 14B of the Scheme reads as under:- "The industrial unit will remain in production continuously for at least five years after it is commissioned except in cases when it remains out of production for short periods extending upto six months due to reasons beyond its control such as shortage of raw material etc." 7. He further contended that the procedure which has been followed by the respondents is required to be depricated and in view of the additional affidavit filed by him recently, where he has furnished that pursuant to the demand draft number 727187 dated 12.7.2010 of Rs.8,91,000/- along with interest in the form bank guarantee vide BG No.0876000141 of Rs.21,63,656/- dated 12.7.2010. After that appellant company also furnished the following bank guarantee on account of interest: (a). BG on 08760002713 dated 19/6/2013 for the amount of Rs. 400950/-; (b). BG No 08760002714 for the amount of Rs. 133650/- dated 31/05/2014; (c). BG No 08760003215 for the amount of Rs. 133650/- dated 28/05/2015. 7.1 All the above bank guarantees have been renewed regularly by the appellant company every year, for protecting the amount of interest on disbursed amount of Subsidy of Rs.8.91 Lacs the same was already paid to RIICO by the appellant company along with interest on 12.07.2010. 8. Counsel for the respondent Mr. Anurag Sharma, AAG appearing for the State Government has supported the order of the learned Single Judge and contended that the production was closed beyond six months. It should not be appropriate to extend beyond six months and the disconnection was because of the non payment of the electricity dues. Therefore, it cannot be compared with the language which has been used under clause 14B where it has been stated that the reasons beyond its control, shortage of raw material etc. and disconnection of electricity cannot be compared with shortage of raw material. The production of the appellant was closed because of financial crisis, and not because of non availability of the raw material or reasons which is not within the control of the petitioner. He further contended that the three letters/reminders issued by RIICO fulfil the requirement of issuing the notice. In light of these submissions, he contended that the order of the learned Single Judge is just and proper. 9. We have heard the learned counsel for the parties. 10. He further contended that the three letters/reminders issued by RIICO fulfil the requirement of issuing the notice. In light of these submissions, he contended that the order of the learned Single Judge is just and proper. 9. We have heard the learned counsel for the parties. 10. Before proceeding with the matter, it may not be out of place to mention here that we have gone through the order and while considering the order passed by the learned Single Judge, we are in complete agreement with the view taken by the learned Single Judge on third point regarding non availability of subsidy and in view of language of Section 14-B, it is very clear that for extending of six months' period is within the domain of the sanctioning authority and it is not for this court under Article 226 of the Constitution of India, to extend the same. In that view of the matter, the first issue, the petitioner will not be entitled for the subsidy under the Scheme, since the production was closed for about 18 months which is beyond six months. Therefore, contention of Mr. Mathur that treating or considering the shortage of electricity has the factor beyond the control of the appellant is not acceptable. The same deserves to be rejected. Therefore, non entitlement of the subsidy is upheld. To that extent, the writ petition has been rightly dismissed by the learned Single Judge. 11. However, on the second issue, regarding recovery of subsidy which was required to be refunded without a notice in our view, the contention raised by the appellant is required to be accepted. The appellant is required to be given a notice as a basic principle of natural justice, since it was a case of refund of the subsidy which was already availed of. As the basic requirement of following principle of natural justice is not followed, the order of recovery is required to be quashed and hence set aside. 12. However, we make it clear that it will be open for the respondent Department to follow the basic principle of natural justice and thereafter it will be open to recover the subsidy in accordance with law. With the above observations, the appeal is partly allowed. 12. However, we make it clear that it will be open for the respondent Department to follow the basic principle of natural justice and thereafter it will be open to recover the subsidy in accordance with law. With the above observations, the appeal is partly allowed. We make it clear that the directions contained in the order passed by the Division Bench on 19.8.2009 that the payment of subsidy will be subject to final order which is to be passed by the authority as referred herein above shall be adhered to. The process of recovery, if not started within a period of three months from today, it will not be open for the authority to take further proceedings after 1.4.2017. 13. The appeal is partly allowed to the aforesaid extent. Appeal partly allowed with to bail to proceed afresh for recovery.