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2006 Supreme(Mad) 1412

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE M. KARPAGAVINAYAGAM, THE HONOURABLE MR. JUSTICE AR. RAMALINGAM & THE HONOURABLE MR. JUSTICE V. DHANAPALAN
M/s.Vairavikulam Lime Products Private Limited - Appellant
Versus
Government of India & Others - Respondents
Writ Petition Nos.16669 of 1999, 3733 to 3737 & 14722 of 2001
Decided On : 19 June 2006

Advocates Appeared:For the Petitioner:R. Muthukumarasamy, Senior Counsel, C.S. Krishnamoorthy, R. Thenmozhi Sivaperumal, Abdul Saleem, M/s. Anand, Abdul, Vinod Associates, Advocates. For the Respondents: R1, T.S. Sivagnanam, Senior Central Government Standing Counsel, R2 to R5, K.K. Sasidharan, Additional Government Pleader.

Public interest would prevail over Private Interest.

Headnote:Administrative Law - Doctrine of Promissory Estoppel - Withdrawal of incentive scheme- Government order was in the nature of incentive/promise offered to encourage setting up of industries - Such a promise cannot be withdrawn by a subsequent order - Doctrine of Promissory Estoppel would apply to Government also-In absence of any material relating to Public Interest, the Doctrine of Promissory Estoppel would come into play.

Judgment :-

M. Karpagavinayagam, J.

The common question that arises for consideration in these batch of Writ Petitions, which has been referred to this Full Bench, is as follows:

"Whether the order of the Government of Pondicherry, in G.O.Rt.No.30, Industries, dated 28.05.1997, withdrawing its earlier order in G.O.Rt.No.9 of 1991, Industries, dated 11.02.1991, granting Subsidy Incentive Scheme to the industrial units for five years, even before the expiry of the said period, is valid or not?"

2. The short facts, leading to the reference of the matter to this Full Bench, are as follows:

"(i) Writ petitioners are industries, situated in Karaikal and Mahe regions of the Union Territory of Pondicherry.

(ii) The Government of Pondicherry called upon the promoters to set up industries within the Union Territory of Pondicherry, promising certain incentives and various concessions.

(iii) On 11.02.1991, the Government of Pondicherry issued an order in G.O.Rt.No.9 of 1991, providing for a fresh scheme of electricity subsidy tariff to all industries, which are energised on or after 01.03.1991 in Karaikal and Mahe regions, in the nature of incentives, offered to encourage setting up of industries, for a period of five years.

(iv) The petitioners sought to act upon the above incentive scheme and set up industries in the backward regions of Karaikal and Mahe regions of Pondicherry and commenced their production, after investing huge sums, on the assumption that they would be given the benefit of the above scheme for the full term of five years.

(v) However, by a subsequent order in G.O.Rt.No.30, Industries, dated 28.05.1997, the Subsidy Incentive Scheme was withdrawn by the Government of Pondicherry, even before the expiry of five year period.

(vi) Based on the above order, the Government of Pondicherry discontinued the tariff concession, given to the petitioners.

(vii) It is, under those circumstances, Writ Petitions were filed by the petitioners in the year 1999, challenging the same.

(viii) A learned single Judge of this Court disposed of the said Writ Petitions on 12.07.2000, directing the petitioners to approach the Government of Pondicherry and make a representation which would be disposed of by the Government within a stipulated period.

(ix) Accordingly, the petitioners made representations to the Government, contending that they had acted on the basis of tariff concession in G.O.Rt.No.9 of 1991 and altered their position and requesting the Government to extend the benefits for the remaining period. However, the Government of Pondicherry rejected the said representations, by an order dated 05.10.2000. Thereupon, the petitioners have filed these batch of Writ Petitions, seeking to quash the orders passed by the Government, by holding that the withdrawal of tariff concession is invalid in law and consequently to direct the Government of Pondicherry to extend the tariff concession for the full period of five years.

(x) In the meantime, one of the industries by name M/s.Isas Thermo Alloys, instead of approaching the Government by making a representation, straightaway filed a writ petition in W.P.No.8010 of 1999, immediately after passing of the withdrawal order, dated 28.05.1997.

(xi) The said Writ Petition was dismissed by the learned single Judge, mainly on the ground that the writ petitioner had not set up the unit and no production was commenced and, therefore, he was not entitled to tariff concession.

(xii) Challenging the said order, the above industry, namely, M/s.Isas Thermo Alloys filed W.A.No.2081 of 1999 and the same was dismissed by the First Bench on 14.01.2000, holding that the said order of withdrawal by Pondicherry Government is valid.

(xiii) Thereupon, these batch of writ petitions, filed by the persons who failed before the Government of Pondicherry, came up for hearing before the learned single Judge, Justice K.P. Sivasubramaniam, as he then was.

(xiv) At that time, it was brought to the notice of the learned single Judge that a





























































































































































































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