The judgment establishes the principle that eligibility for subsidy under a government scheme is contingent upon meeting the specified capital investment requirements and demonstrating project viability.

Vibhu Bakhru, J.

Cm No.8791/2019

1. Allowed, subject to all just exceptions.

W.P.(C) 1876/2019

2. The petitioner has filed the present petition, inter alia, impugning a letter dated 15.01.2019 (hereafter "the impugned letter") issued by the Ministry of Electronics and Information Technology (the respondent). Further, the petitioner prays that this Court issue directions to the respondent to disburse the subsidy amounting to Rs.269,70,00,000/- to the petitioner.

3. The petitioner is a company registered under the Companies Act, 1956 and is, inter alia, involved in the manufacture of Solar PV Cells and Modules. It is also engaged in the engineering, procurement and construction of solar power plants. The petitioner submits that it is entitled to subsidy under "The Special Incentive Package Scheme to Encourage Investments for Setting up Semiconductor Fabrication and other Micro and Nano Technology Manufacture Industries" (hereafter "the Scheme"), announced by the respondent vide a gazette notification dated 21.03.2007. The petitioner submits that even though insolvency proceedings initiated by one of its financial creditors are pending, it is entitled to the subsidy under the Scheme.

4. The petitioner applied to the respondent to be considered for the subsidy under the Scheme under the cover of a letter dated 10.12.2007. The petitioner submits that after the submission of certain documents, the respondent by a letter dated 11.02.2015 (No. 24(4)/2007-IPHW Vol. XIII), approved an amount of Rs.269,70,00,000/- to be disbursed to the petitioner as subsidy under the Scheme. The petitioner first filed a claim for disbursement of the incentive on 19.03.2015. Thereafter, between 24.06.2016 and 07.08.2017, there was a regular exchange of communication between the petitioner, the respondent and other auditing agencies.

5. On 19.03.2018, the National Company Law Tribunal (NCLT) appointed a resolution professional, commencing the procedure for insolvency under the Insolvency and Bankruptcy Code, 2016. The same was done pursuant to an application filed by one of the petitioner company's financial creditors.

6. It is stated that the resolution professional so appointed approached the respondent on various occasions between March, 2018 and September, 2018 seeking disbursement of the subsidy. However, the respondent did not disburse the same.

7. Aggrieved, the petitioner preferred an application before the NCLT seeking directions be issued to the respondent herein to disburse the subsidy. However, the NCLT dismissed the application observing that the relief as prayed for is beyond its jurisdiction.

8. Thereafter, the petitioner preferred a writ petition before this court captioned Moser Baer Solar Limited v. Ministry of Electronics and Information Technology: W.P. (C) 10696 of 2018, which was disposed of by this court on 21.01.2019, directing the respondents to communicate its decision regarding the issue of subsidy to the petitioner within a period of one week. In compliance with this order, the respondent issued the impugned letter rejecting the petitioner's claim for subsidy.

9. Aggrieved by the same, the petitioner has filed the present petition.

10. The learned counsel appearing for the petitioner contended that the provision of subsidy was envisioned to provide the gap funding for the project. He submitted that in the circumstances, the subsidy could not be withheld on account of the petitioner being referred to NCLT since it had already taken steps to commence the project. He further submitted that the petitioner needs the subsidy as that would considerably enhance its prospects for being rehabilitated. Next, he contended that the decision of the respondents to decline disbursement of the subsidy on the ground that lease rentals were outstanding, was flawed. He submitted that even though lease rentals were outstanding, the same are considered as a capital cost of the project in terms of the relevant accounting standards. He submitted that