2016 Supreme(Raj) 1068

IN THE HIGH COURT OF RAJASTHAN, JODHPUR BENCH
Gopal Krishan Vyas, Pratap Krishna Lohra, JJ.
State of Rajasthan and Ors. - Appellants
Vs.
Shree Cement Limited and Ors. - Respondents
Spl. Appeal (Writ) Nos. 1719 of 2011 & 644 of 2012
Decided On : 06-12-2016

Headnote:

[KEYWORD] - Promissory estoppel - Legitimate expectation - Vested right - Contemporanea expositio - Revisional jurisdiction - Subsidy - Rajasthan Investment Promotion Scheme (RIPS), 2003 - Clause 7(vi) and (vii) - Notification dated 2.12.2005 - Notification dated 28.4.2006 - Order dated 31.3.2009 - Writ of certiorari - State Level Screening Committee (SLSC) - Entitlement certificates - Rajasthan Value Added Tax (VAT) Act, 2006 - Rajasthan Sales Tax Act, 1994 - Central Sales Tax Act, 1956 - Budget Speech - Chief Minister's assurance - Public interest - Review or modification of scheme - Clause 13 and 14 of RIPS, 2003 - Principle of promissory estoppel and legitimate expectation - Vested right created under the statute or a scheme - Subsidy cannot be claimed as a matter of right - Welfare state - Public money - Financial condition of the State - Industrial development - Enhancement of subsidy from 50% to 75% - Deletion of provision for grant of subsidy upto 75% - SLSC's misinterpretation of the provision - Legitimate expectation is not a legal right - Reasonable, logical and valid expectation - Not enforceable as such - Procedural in character based on the requirement of a higher degree of fairness in administrative action - Vested right is a right belonging completely and unconditionally to a person as a property interest which cannot be impaired or taken away (as through retroactive legislation) without the consent of the owner - Contemporanea expositio is a guide for interpretation of documents or statutes - Intention of the parties can be known by their conduct at the time and after the execution of the instrument - Acts done under it as a clue to the intention of the parties - Revisional jurisdiction can be exercised to check the illegality or error committed by the Screening Committee to grant entitlement certificate - State Government can provide incentive to the industrial sector to develop industrial growth but at the same time, it has to be considered by the State Government that benefit should not be granted contrary to public interest.

Fact of the Case:

The petitioner-respondent Shree Cement Company Ltd. claimed its right on the basis of judgment of the Hon'ble Supreme Court in the case of Srinivasa Jute Twine Mills Pvt. Ltd. Vs. Union of India reported in 2006(2) SCC 740. The said case was related to Section 16(1)(d) of the Employees Provident Fund Act, 1952, which confer the benefit of "infancy protection" of a new industrial undertaking for a period of five years. Section 16(1)(d) was omitted w.e.f. 22.9.1997, at that time, Srinivasa Jute Twine Mills had availed of "infancy protection" for only two years. The PF authorities sought to contend that as Section 16(1) (d) was no longer in the statute book, it was not permissible for Srinivasa Jute Twine Mills, to claim the benefit of "infancy protection" for the balance period of three years. In aforesaid case, the Hon'ble Supreme Court rejected the contention and held that vested right to infancy protection for five years had come into existence when Section 16(1)(d) was on the statute book and that vested right continued even after the omission or deletion of Section 16(1)(d), but in this case, according to the appellant-State subsidy cannot be claimed as a matter of right.

Finding of the Court:

The core question arises in the present appeal whether 75% subsidy within clause 7(vii) of RIPS, 2003 can continue after deletion of clause 7(vii) vide notification dated 28.4.2006? To consider the said aspect of the matter, we have examined the arguments of both the parties. Upon assessing the law laid down by the Hon'ble Supreme Court in various pronouncements cited by the learned counsel for the parties, this Court cannot lose sight of the fact that in this case the question of enhancement of subsidy from 50% to 75% is involved. In our opinion, the State Government being welfare state requested to act in public interest to consider the financial condition of the State so as to grant subsidy for industrial development. The subsidy cannot be granted for the benefit of individual because public money is required to be utilized by the State for welfare of public. It is true that under original RIPS, 2003 all eligible units fall within the scheme were entitled to claim subsidy upto the percentage provided initially, but here in this case, the subsidy was enhanced in one point of time vide amendment in the RIPS Scheme, 2003 vide notification dated 2.12.2005, but same was deleted vide notification dated 28.4.2006, but respondent company has claimed subsidy as a matter of right knowingly well that the provision for grant of subsidy upto 75% is not in existence. It is admitted fact of the case that both the meetings of SLSC were not conducted prior to 28.4.2006 when the amendment made in the scheme on 2.12.2005 remained in currency upto 28.4.2006. All the judgments cited by the learned counsel for the respondent company are not related for enhancement of percentage to grant subsidy, therefore, in our opinion, none of the judgment cited by the learned counsel for the respondent company can come to the rescue of the respondent company to get benefit of amendment dated 2.12.2005, which was subsequently deleted vide amendment notification dated 28.4.2006 in the RIPS Scheme, 2003.

Issues: A. Whether the learned Single Judge rightly applied the "principle of promissory estoppel" to quash the order impugned dated 31.3.2009? B. Whether the respondent company is entitled for the relief prayed on the ground of "legitimate expectation"? C. Whether any "vested right" remained in existence even after deletion of clause 7(vi) and (vii) of RIPS, 2003 vide notification dated 28.4.2006? D. Whether the ground raised by the respondent company with regard to doctrine of "contemporanea expositio" will apply in this case or not? E. Whether the order passed by the Principal Secretary, Finance exercising revision petition can be interfered in the writ of certiorari preferred by the respondent-company?

Ratio Decidendi: In our opinion, the finding of the learned Single Judge to quash the order dated 31.3.2009 passed by the Principal Secretary, Finance, Government of Rajasthan, Jaipur is contrary to law and against the public interest because it is not a case in which the principle of promissory estoppel will come to the rescue of respondent company to get the benefit of subsidy upto 75% under RIPS, 2003 on the basis of misinterpretation of the provision by the SLSC.

Final Decision: Consequently, the special appeal (DBSAW No. 1719/2011) filed by the State of Rajasthan is allowed. The order passed by the learned Single judge dated 11.10.2011 is hereby quashed and the judgment given by the Principal Secretary, Finance, Government of Rajasthan while exercising revisional power dated 31.3.2009 is hereby restored. In view of the fact, that the judgment of the learned Single Judge dated 11.10.2011 has been quashed and judgment of the Principal Secretary, Finance, Government of Rajasthan dated 31.3.2009 has been restored, therefore, the special appeal (DBSAW No. 644/2012) filed by the appellant Shree Cement Company Ltd. is hereby dismissed.