IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Reserved on: 18.02.2025 Pronounced on: 28.02.2025 PUNJAB NATIONAL BANK AND ANR. -PETITIONERS V/S M/S MAHESH INDUSTRIES AND ANR. -RESPONDENTS CORAM: HON'BLE MR. JUSTICE KULDEEP TIWARI Present: Mr. H.S. Bhatia, Advocate for the petitioners.

Mr. Nirbhay Garg, Advocate for the respondent No. 1.

Mr. Parveen Gupta, Advocate for Mr. Karan S. Gill, Standing Counsel for the respondent No.2.

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KULDEEP TIWARI, J. (ORAL)

1. What has propelled the petitioner(s)-Bank to institute the present writ petition, is the drawing of the order dated 30.09.2014, whereby, the Permanent Lok Adalat, Kapurthala, has directed it to pay the amount of ₹ 4,52,000/-, as subsidy claim of the respondent No.1, within one month, failing which the award amount shall carry interest @ 9% and along with litigation cost of ₹ 2500/-.

FACTUAL MATRIX

2. Succinctly stated; the respondent No.1 filed a petition under Section 22-C of the Legal Services Authority Act, 1987, before the Permanent Lok Adalat, thereby claiming subsidy amount of ₹ 4,52,000/- from the petitioner(s)-Bank, along with penal interest and compensation. The grounds averred in the petition for claiming the relief (supra) were that, the respondent No.1 is a Small-Scale Unit and is engaged in manufacturing of auto parts and auto bushes. The petitioner(s)-Bank was appointed as Nodal Office by the Government of India for claiming capital subsidy on term loan sanctioned and disbursed by the bank to the beneficiary under the Credit Limit Capital Subsidy Scheme (hereinafter referred to as the ‘CLCSS’). Earlier, the respondent No.2 was acting as the Nodal Office. The Ministry of Small-Scale Industry was/is operating a scheme for technology upgradation by providing upfront capital subsidy to SSI units. As per the said scheme, the respondent No.1- firm was/is an “industry” within the approved list of industries entitled to get subsidy from the Government under the CLCSS. Accordingly, the respondent No.1 availed the first term loan of ₹ 8,50,000/- from petitioner(s)-Bank on 16.02.2006, and then, availed the second term loan of ₹ 12,96,000/- on 15.10.2009 for technology upgradation. The subsidy claim of ₹ 1,71,000/- and ₹ 2,81,000/- respectively was raised by the respondent No.1 by submitting the requisite documents and fulfilling all other formalities required by the petitioner(s)-Bank. However, the petitioner(s)- Bank miserably failed to perform its duty to get release of subsidy despite issuance of many notices. Moreover, the petitioner(s)- Bank deliberately did not inform the respondent No.1 about decline of subsidy. The HO AGM, through circle office Kapurthala, vide letter dated 03.10.2012, specifically intimated that there was no response/compliance and there was delay on the part of the petitioner(s)-Bank. Even the file in respect of subsidy amount of ₹ 1,71,000/- was also misplaced.

3. Upon notice, the petitioner(s)-Bank controverted all the pleadings canvassed in the petition by filing a specific reply. The main contention raised in the reply was that, the petition preferred by the respondent No.1 is bad for mis-joinder and non-joinder of necessary parties, i.e., Ministry of MSME of Government of India, which is to pay the capital subsidy. Another contention raised was that, the respondent No.1 is not eligible for capital subsidy under CLCSS, which is manufacturing of the products/subsector nonferrous metal bushes and does not fall in the approved list of Government of India. It was specifically denied that, the respondent No.1 is engaged in manufacturing of auto parts. Moreover, it was averred in the reply that, the Government of India appointed Small Industries Development Bank of India (hereinafter referred to as the ‘SIDBI’) for technology upgradation of SSI units, hence the petitioner(s)- Bank cannot be fastened with any liability in that regard.

4. After considering the contentions of the parties and perusing the available record, the Permanent Lok Adalat