Research › Search › Judgment

Orissa High Court · body

2016 DIGILAW 826 (ORI)

Hotel Raj Kamal v. State of Orissa

2016-09-16

B.R.SARANGI, VINEET SARAN

body2016
JUDGMENT VINEET SARAN. CJ. - The petitioner is a proprietorship firm and running a hotel. For construction of a hotel, the petitioner took a loan from the Orissa State Financial Corporation. Prior to approaching the Orissa State Financial Corporation, the petitioner had approached the State Bank of India and was advanced an initial amount of loan, but then on 3.5.1995 the Tourism Department of the State Government had certified that “as per procedure and guidelines for establishment of hotels and other tourism related activities under Industrial Policy Resolution, 1992, Pr. 11 the Hotel Rajkamal comes under Janata Hotel category as per the specifications and facilities available for the visitors.” 2.Pursuant thereto, the petitioner applied for loan from Orissa State Financial Corporation, and subsidy of 30% as per the policy of the Corporation. By order dated 31.5.1990, the Orissa State Financial Corporation sanctioned a loan of Rs.18,78,883/- and categorically mentioned in the sanctioned letter that “on the basis of the above, the amount of 30% subsidy to which you are entitled to is determined at Rs5,63,665”. Then by the impugned order dated 23.2.1998, the petitioner was informed that as per the decision of the Government of Orissa in its meeting dated 30.11.1996, the petitioner would not be eligible to get capital investment subsidy under IPR-1992. It was thus informed to the petitioner that the subsidy granted by the Corporation has been cancelled. 3.Challenging the said order, this writ petition has been filed. 4.We have heard Mr.L. Pradhan, learned Counsel for the petitioner, Mr. N.C. Mishra, learned Counsel for the contesting opposite parties No.4 and 5-OSFC as well as learned Government Advocate for the State opposite parties. 5.The sequence of vents leading to the grant of subsidy of 30% vide sanction letter dated 31.5.1996 would make it clear that the project relating to construction of hotel comes within the purview of tourism related activities and hence the petitioner was found entitled to the grant of subsidy. Consequently, as per the policy as it existed at the time of sanction of loan on 31.5.1996, the petitioner was granted subsidy of Rs.5,63,665/- after categorically mentioning in the letter that the petitioner was entitled to such subsidy. Consequently, as per the policy as it existed at the time of sanction of loan on 31.5.1996, the petitioner was granted subsidy of Rs.5,63,665/- after categorically mentioning in the letter that the petitioner was entitled to such subsidy. 6.In the counter affidavit, it has been stated that in the meeting of the State Level Committee on 30.11.1996, it was held that the hotel related activities would not be covered under the tourism related activities and as such, they would not be entitled to grant of subsidy. 7.Learned Government Advocate has stated that since there was change in the policy, hence the subsidy, which was granted in favour of the petitioner on 31.5.1996 was withdrawn. He, however, could not justify as to how the change in the policy, which had come into effect on 30.11.1996, could be given effect retrospectively. Such loans which were granted by the OSFC after 30.11.1996 alone could be effected by the decision of the State Level Committee, but the subsidy which was already granted on 31.5.1996 (i.e. prior to 30.11.1996 as in the case of the petitioner) could not be effected by the subsequent decision/change in policy. 8.It is not disputed that the tourism department of the State Government itself had categorically certified that the hotel of the petitioner would be covered under the tourism related activities as provided under Industrial Policy Resolution, 1992 (IPR-1992).Such being the position, we are of the clear view that the order dated 23.2.1998 cancelling the grant of subsidy, which was by order dated 31.5.1996, cannot be justified in law. The same is accordingly quashed. The petitioner would be entitled to the subsidy, along with interest at the rate which the OSFC charges for late payment of its dues. The petition stands allowed to the extent indicated above. No order as to cost. Petition allowed.