TMI Blog2010 (1) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is, therefore, issued that the amount deposited by the company in the designated account opened and operated pursuant to the order of this court dated November 18, 2002 together with accrued interest shall be released to the appellant-State, forthwith. - Civil Appeal No. 5181 of 2002 - - - Dated:- 8-1-2010 - TARUN CHATTERJEE AND SURINDER SINGH NIJJAR JJ. Dr. Rajiv Dhawan and Dinesh Dwivedi, Senior Advocates (Mohit Kumar Shah, Gopal Singh, Ravi Bhushan and Ms. Pallavi Mohan, Advocates, with them) for the appellants. Ravi Shankar Prasad and Ranit Kumar (for M/s. Suresh A. Shrooff Co.), Senior Advocates, (Ms. Suprana, Srivastava, Rajiv Ranjan, Ms. Sudershini Ray and Ram Swarup Sharma, Advocates, with them) for the respondent. -------------------------------------------------- The judgment of the court was delivered by SURINDER SINGH NIJJAR J. This appeal has been filed by the State of Bihar challenging the judgment and order dated April 24, 2002 of the High Court of Judicature at Patna in C.W.J.C. No. 6838 of 2000, whereby, the High Court has allowed the writ petition filed by the respondent herein. The respondent-M/s. Kalyanpur Cement Ltd. (h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for a period of five years from the State Government, in terms of Industrial Policy, 1995. Accordingly, the company submitted an application to the State Government on November 21, 1997 for grant of sales tax exemption under the Industrial Policy, 1995 for a period of five years with effect from January 1, 1998. Thereafter, the matter remained pending for consideration by the State Government and the financial institutions. There were a series of joint meetings of the Government, financial institutions and the company, over the next three years. In all these meetings, as well as the correspondence categoric assurances were given that the necessary sales tax exemption notification would be issued shortly. However, no such notification was issued causing great hardship to the company. It was, therefore, constrained to file writ petition (C.W.J.C. No. 6838 of 2000) in the High Court at Patna. In this writ petition, the prayer was for issuance of a writ in the nature of mandamus directing the State of Bihar to issue necessary notification under clause 24 of the 1995 Policy. The claim of the company was that notification under clause 24 of the Industrial Policy, 1995 ought to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Level Empowered Committee under the Chairmanship of Chief Secretary under clause 22(1) of the Industrial Policy, 1995. It is worth mentioning here that in absence of above mentioned, even approval cannot be provided. (4) Tax reforms at all India level, which has been continuing last one year it has been decided at the conference of Chief Ministers that except States of special category sales tax facility must be ended by rest all other States. The States would not do this, there could be possibility of cut down the payable Central assistance to those States." Therefore, the company amended the writ petition and challenged the decision dated January 6, 2001 of the State Government. It was pleaded by the company that the grounds for rejection of the company's case and non- issuance of the notification was not in accordance with law. It appears that another counter-affidavit was filed on February 16, 2001 by respondent No. 4. This was followed by yet another supplementary counter-affidavit filed by Virendra Kumar Singh, Joint Commissioner, Commercial Taxes, Headquarters, Patna on August 2, 2001. In this affidavit it was brought to the notice of the court that the decision ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The appellants are directed to issue the exemption orders and on receipt of such order, the abovesaid amount shall be deposited. The issuance of the exemption orders is without prejudice to the case of the parties in this appeal. The I.A. is thus disposed of." Thereafter I.A. No. 3 of 2006 was filed by the appellant seeking stay of the judgment of the High Court. It has been stated that the application has been necessitated because of the intervening circumstances and the conduct of the company. It was further stated that pursuant to the direction issued by this court on November 18, 2002, the appellant issued Notification No. SO-174 dated October 18, 2004 granting exemption to the company. The notification was to have effect for five years from the date of publication in the official gazette or till the disposal of the special leave petition. The notification was issued on the following terms: "2. Terms and conditions (a) Tax payable by M/s. Kalyanpur Cement Ltd., shall be deposited per month in an interest-bearing account in a nationalized bank. (b) M/s. Kalyanpur Cement Ltd., shall provide information of such bank account to the circle where he is registered. (c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount with a nationalized bank but could not deposit the amount equivalent to the sales tax due because of the circumstances beyond its control. During the pendency of the interim application, a proposal for the approval of the reconstruction package of the company was under the active consideration of the State. Therefore, the proceedings were adjourned from time to time. During this period an application was also filed by the Assets Reconstruction company (I) Ltd. for being impleaded as a party. The aforesaid application has been allowed by this court on September 4, 2006 and the applicant has been impleaded as respondent No. 2. We have heard the counsel for the parties. Dr. Rajiv Dhawan and Mr. Dinesh Dwivedi, senior advocates, made the submissions on behalf of the appellant. Dr. Dhawan submits that in the aforesaid judgment the High Court has held that: (i) the petitioner had a right to be granted sales tax exemption under 1995 Industrial Policy; (ii) the decision of January 6, 2001 denying such exemption was arbitrary (which was challenged but alleged not to be on record); (iii) the decision of March 5, 2001 was wrong, even though not on record and not challenged. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany during the limited period from December 5, 2000 to January 6, 2001. Yet the High Court issued a writ in the nature of mandamus directing the State to issue the exemption notification. In support of his submissions, learned senior counsel has made detailed reference to the facts and the documents on record. According to him, the facts in this case are not such as to give rise to a cause of action, relying on the doctrine of "promissory estoppel". There is no material on the record to show that any unequivocal promise was made to the company and it had acted on such a promise. All the meetings were only exploratory in nature. In any event, no mandamus could have been issued after the Scheme had lapsed and no default by the appellant-State has been established. According to the learned senior counsel, the impugned judgment of the High Court is wrong in law, in respect of the rules, orders of the State and the scheme of the Industrial Policy. It is also wrong on facts. The learned senior counsel relied on a number of judgments in support of the submissions: Central London Property Trust Ltd. v. High Trees House Ltd. [1956] 1 All ER 256, Kasinka Trading v. Union of India [199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e meaning of exemption. They are under the impression that they can collect tax and not pay to the Government. That according to the learned senior counsel is not correct. Exemption simply means that no tax shall be chargeable on goods. In the affidavit filed in reply to I.A. No. 3, it is admitted by the company that the tax collected has not been deposited. Therefore, the company is in contempt of the interim orders passed by this court. The company is liable to refund the amount of Rs. 60 crores to the Government. The learned senior counsel submitted that no relief can be granted to the company as it had taken advantage of the interim order without complying with the preconditions of the order. In support of this, he relied upon Prestige Lights Ltd. v. State Bank of India [2007] 8 SCC 449. It is submitted that a direction ought to be issued to the company to refund the amount of tax collected. He relied on Amrit Banaspati Co. Ltd. v. State of Punjab [1992] 2 SCC 411 [1992] 85 STC 493 (SC).. Mr. Dwivedi, thereafter, submitted that the policy of granting exemption had lapsed on August 31, 2000. Therefore, no exemption notification could have been issued thereafter. He further sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary sales tax exemption. It is, therefore, not open to the appellant to submit that the Government can now resile from the promise. According to him, that the justification with regard to the discontinuation of the sales tax related concessions/exemptions consequent upon introduction of the VAT regime is without any basis. These incentives are continuing even under the Industrial Policy, 2003 and 2006. It was for these reasons that the High Court set aside the decisions dated January 6, 2001 and March 5, 2001. Mr. Prashad further submits that by now it is settled that promissory estoppel gives a cause of action and also preserves a right. The action of the appellants in passing the impugned orders is arbitrary and whimsical. It cannot be supported on any of the four reasons mentioned in the order dated January 6, 2001. In support of its submissions, the learned senior counsel relied on Mangalore Chemicals Fertilizers [1992] Suppl. 1 SCC 21 [1991] 83 STC 234 (SC)., Union of India v. Godfrey Philips India Ltd. [1986] 158 ITR 574 (SC); [1986] 59 Comp Cas 526 (SC); [1985] 4 SCC 369, State of Punjab v. Nestle India Ltd. [2004] 6 SCC 465 [2004] 136 STC 35 (SC)., Southern Petrochemic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... institutions in reducing non-performing assets (NPA) by adopting method for recovery or reconstruction. As such it has been assigned the loan outstandings of a number of financial institutions noted above. Now it is a secured creditor to the extent of approximately 94.2 per cent of the total secured debt of the company. Therefore, respondent No. 2 being an assignee of the outstanding is committed to the rehabilitation and revival of the company. The company has already filed a scheme of arrangement under section 391 of the Companies Act, 1956 for revival of the company. The scheme has the support of respondent No. 2. However, the scheme is pending approval as it is based on certain relief and concessions to be granted to the company by the State Government. One such concession is the sales tax exemption to be given by the State Government. The claim made by the company with regard to being one of the most modernized and efficient cement plants is reiterated. It is further stated that the plant has a capacity of about 10 lakh tonnes per annum at Rohtas District of the State. It is further pointed that the main reason for the sickness of the company has been the industry and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is observed by Denning J. as follows: "If I consider this matter without regard to recent developments in the law there is no doubt that the whole claim must succeed. . . As to estoppel, this representation with reference to reducing the rent was not a representation of existing fact, which is the essence of common law estoppel; it was a representation in effect as to the future a representation that the rent would not be enforced at the full rate but only at the reduced rate . . . So at common law it seems to me there would be no answer to the whole claim. What, then, is the position in view of developments in the law in recent years? The law has not been standing still even since Jorden v. Money [1854] 5 H. L. Cas. 185. There has been a series of decisions over the last fifty years which, although said to be cases of estoppel, are not really such. They are cases of promises which were intended to create legal relations and which, in the knowledge of the person making the promise, were going to be acted on by the party to whom the promise was made, and have in fact been so acted on. In such cases the courts have said these promises must be honoured. . . . . . I am sat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be invoked in the abstract and the courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must for ever be present to the mind of the court, while considering the applicability of the doctrine. The doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation." In our opinion, the aforesaid statement of law covers the submissions of Dr. Dhawan and Mr. Dwivedi that in order to invoke the aforesaid doctrine, it must be established that (a) a party must make an unequivocal promise or representation by word or conduct to the other party, (b) the representation was intended to create legal relations or affect the legal relationship, to arise in the future, (c) a clear foundation has to be laid in the petition, with supporting documents, (d) it has to be shown that the party invoking the doctrine has alte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to grant exemption from sales tax. The appellants could not, therefore, have insisted on the State Government granting exemption to them from payment of sales tax. What consequently follows is that the exemption granted by the Government was only by way of concession. Once this position emerges it goes without saying that a concession can be withdrawn at any time and no time-limit can be insisted upon before the concession is withdrawn. The notifications of the Government clearly manifest that the State Government had earlier granted the exemption only by way of concession and subsequently by means of the revised notification issued on July 17, 1971, the concession had been withdrawn. As the State Government was under no obligation, in any manner known to law, to grant exemption it was fully within its powers to revoke the exemption by means of a subsequent notification. This is an additional factor militating against the contentions of the appellants." In Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. [1979] 2 SCC 409 [1979] 44 STC 42 (SC)., it is held that: "We do not think it is necessary, in order to attract the applicability of the doctrine of promissory estop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment. Mere claim of change of policy would not be sufficient to exonerate the Government from the liability; the Government would have to show what precisely is the changed policy and also its reason and justification so that the court can judge for itself which way the public interest lies and what the equity of the case demands. It is only if the court is satisfied, on proper and adequate material placed by the Government, that overriding public interest requires that the Government should not be held bound by the promise but should be free to act unfettered by it, that the court would refuse to enforce the promise against the Government. The court would not act on the mere ipse dixit of the Government, for it is the court which has to decide and not the Government whether the Government should be held exempt from liability. This is the essence of the rule of law. The burden would be upon the Government to show that the public interest in the Government acting otherwise than in accordance with the promise is so overwhelming that it would be inequitable to hold the Government bound by the promise and the court would insist on a highly rigorous standard of proof in the discharge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation made by it." In Shrijee Sales Corporation v. Union of India [1997] 3 SCC 398 it was held that: "It is not necessary for us to go into a historical analysis of the case-law relating to promissory estoppel against the Government. Suffice it to say that the principle of promissory estoppel is applicable against the Government but in case there is a supervening public equity, the Government would be allowed to change its stand; it would then be able to withdraw from representation made by it which induced persons to take certain steps which may have gone adverse to the interest of such persons on account of such withdrawal. However, the court must satisfy itself that such a public interest exits. . ." In Pawan Alloys Castings (P) Ltd. v. U.P. State Electricity Board [1997] 7 SCC 251 it is held that: "(31) . . . the appellants will not be able to enforce the equity by way of promissory estoppel against the Board if it is shown by the Board that public interest required it to withdraw this incentive rebate even prior to the expiry of three years as available to the appellants concerned. It has also to be held that even if such withdrawal of development rebate prior to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure people and all persons who set up industries were entitled to an exemption; and (c) where the exemption would apply only after a considered decision is taken to consider eligibility and worthiness (e.g., Rom Industries Ltd. [2006] 147 STC 575 (SC).). According to the learned senior counsel there is also a distinction between cases where (a) an exemption is granted but taken away prematurely (e.g., Pawan Alloys [1997] 7 SCC 251); (b) an exemption is to be given after due consideration. Thus, in the present appeal, the promise would be considered to be made only when a decision is actually made by the empowered authority after being satisfied that the revival of the company was possible. The learned senior counsel also placed reliance on Sharma Transport [2002] 2 SCC 188 wherein it was held that "It is equally settled law that the promissory estoppel cannot be used to compel the Government or a public authority to carry out a representation or promise which is prohibited by law or which was devoid of the authority or power of the officer of the Government or the public authority to make. . ." The learned senior counsel also relied on the decision in State of Jharkhand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a court of law if the promise which furnishes the cause of action nor the agreement, express or implied, giving rise to binding contract is statutorily prohibited or is against public policy. . . 11.. Exemption from tax to encourage industrialization should not be confused with refund of tax. They are two different legal and distinct concepts. An exemption is a concession allowed to a class or individual from general burden for valid and justifiable reason. . . 12.. But refund of tax is made in consequence of excess payment of it or its realization illegally or contrary to the provisions of law. A provision or agreement to refund tax due or realised in accordance with law cannot be comprehended. No law can be made to refund tax to a manufacturer realized under a statute. It would be invalid and ultra vires. . ." In the case of Dinkar Sinha [2007] 10 SCC 548, this court observed that: "31. The 1973 Rules was a temporary statute. It died its natural death on expiry thereof. The 1980 Rules do not contain any repeal and saving clause. The provisions of the relevant provisions of the General Clauses Act will, thus, have no application. Once a statute expires by efflux of time, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Let us now examine the factual situation in the light of the observations made by this court in various judgments relied upon by the learned counsel for the parties. The company applied to the State Government on November 21, 1997 for grant of sales tax exemption under the Industrial Policy, 1995. Even though the company was entitled under the aforesaid Policy to exemption for eight years, it made an application only for five years' exemption. This request of the company was considered by the State Level Committee on Rehabilitation in a meeting held on January 7, 1998. This was attended by the senior officers of the State Government, representatives of the financial institutions and the company. It was observed as follows: "It was felt that the company is potential sick unit and is fit for consideration for exemption from payment of sales tax for a period of fiver years from January 1, 1998. The committee recommended that as per the provision of Industrial Policy, 1995 the sales tax exemption on finished products can be granted to M/s. Kalyanpur Cement Ltd. for a period of five years from January 1, 1998 to December 31, 2002 to improve liquidity of the company for its rehabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and were requested to respond to the observations of the participants. It was explained on behalf of the company that although the performance of the company was consistently above the rated capacity, it had not been able to achieve optimum level of operations mainly due to lack of adequate working capital. Since the promoters were not to bring any further funds, most of the required amount would have to be met out of the proposed funding and expected sales tax exemption. In the summary record of the proceedings of the joint meeting, it was recorded that: "There was further discussion amongst the participants and there was a general consensus that a restructuring package would be necessary for ensuring the revival of KCL and accordingly, KCL be advised to submit, at the earliest, a revised restructuring proposal with a cut-off date of December 31, 1999. . . It was considered necessary to stipulate preconditions such as the State Government of Bihar granting the sales tax exemption and renewal/revalidation of the mining leases for the proposed restructuring packages, as and when sanctioned. " Thereafter, the representatives of the company were invited to join the meeting he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Mr. Ganguly that the financial institutions have always been supporting the company and will support it in the future. It was also stated by him that in the Industrial Policy, 1995 there is a provision of giving sales tax exemption for eight years to a sick company. However, the company had asked for the above facility only for five years. So far as the viability of the company is concerned, it was stated to have already been established. After hearing all the concerned parties, the minister mentioned that the Government of Bihar is very keen for rehabilitation of the company and that all possible support will be provided for implementation of the rehabilitation package prepared by financial institutions. So far as the sales tax relief is concerned, it was stated that "a decision will be taken in a day or two and the notification relating therewith will be issued by second week of January, 2000. . . ". With this assurance a consensus had emerged among the financial institutions and the banks that if the Government implements the Industrial Policy, 1995 in its true spirit particularly on the issue relating to deferment/ exemption sales tax, the financial institutions and banks w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he financial institutions that the necessary notification under clause 24 of the Industrial Policy, 1995 would be issued. The assurances/promises are contained in official documents. It was, therefore, submitted that the Government cannot be permitted to resile from the representations. During the course of the proceedings in the writ petition, the State Government in its supplementary affidavit dated December 5, 2000 filed on behalf of respondent No. 4 (i.e., Secretary-cum-Commissioner, Commercial Taxes Department) again categorically reiterated that "the honourable Minister, Department of Commercial Taxes has approved the proposals along with draft notification regarding extension of sales tax related incentives to sick industrial units . . .". It had been submitted to the Chief (Finance) Minister on November 18, 2000. It shall be possible to issue necessary notification after approval of the proposal by the Chief (Finance) Minister. Having made the aforesaid statements in an affidavit before the High Court, the Government has resiled from the unequivocal representations in the decisions dated January 6, 2001 and March 5, 2001. There- fore, strong reliance was placed on clauses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to adjustment having regard to the words of the notification of August 11, 1975, that 'until permission of renewal is granted by the Deputy Commissioner of Commercial Taxes, the new industry should not be allowed to adjust the refunds'. The contention virtually means this: 'No doubt you were eligible and entitled to make the adjustments. There was also no impediment in law to grant you such permission. But see language of clause 5. Since we did not give you the permission you cannot be permitted to adjust.' Is this the effect of the law. 10.. The sales tax already paid by the appellant on the raw materials procured by it is the subject-matter of the refunds. The sales tax against which the refund is sought to be adjusted is the sales tax payable by the appellant on the sales of goods manufactured by it. If the contention of the Revenue is correct, the position is that while the appellant is entitled to the refund it cannot, however, adjust the same against current dues of the particular year but should pay the tax working out its refunds separately. The situation may well have been such but the snag comes here. If the adjustments made by the appellant in its monthly sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rasekhara Aiyar, J. concurred with the conclusion of Das, J. but based his reasoning on the fact that by the resolution, representations had been made to the Corporation by the Government and the accident that the grant was invalid did not wipe out the existence of the representation nor the fact that it was acted upon by the Corporation. What has since been recognised as a signal exposition of the principle of promissory estoppel, Chandrasekhara Aiyar, J. said: (AIR page 476, paras 21 and 22) '. . . The invalidity of the grant does not lead to the obliteration of the representation. . . . . . Can the Government be now allowed to go back on the representation, and, if we do so, would it not amount to our countenancing the perpetration of what can be compendiously described as legal fraud which a court of equity must prevent being committed. If the resolution can be read as meaning that the grant was of rentfree land, the case would come strictly within the doctrine of estoppel enunciated in section 115 of the Evidence Act. But even otherwise, that is, if there was merely the holding out of a promise that no rent will be charged in the future, the Government must be deemed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sential prerequisites for the operation of promissory estoppel had been established, directed the issuance of the exemption notification. " In Southern Petrochemical [2007] 5 SCC 447, this court has clearly reiterated the promissory estoppel would apply where a party alters his position pursuant to or in furtherance of the promise made by a State. It is also clearly held that such a policy decision can be expressed in notifications under statutory provisions or even by executive instructions. When- ever the ingredients for invoking the principle of promissory estoppel are established, it could give rise to a cause of action. Not only may it give rise to a cause of action but would also preserve a right. The relevant observations are as under: "121. The doctrine of promissory estoppel would undoubtedly be applicable where an entrepreneur alters his position pursuant to or in furtherance of the promise made by a State to grant inter alia exemption from payment of taxes or charges on the basis of the current tariff. Such a policy decision on the part of the State shall not only be expressed by reason of notifications issued under the statutory provisions but also under the executi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply for judicial review. It is generally agreed that "legitimate expectation" gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightaway from the administrative authorities as no crystallised right as such is involved. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise. In other words, where a person's legitimate expectation is not fulfilled by taking a particular decision then the decision-maker should justify the denial of such expectation by showing some overriding public interest. (See Union of India v. Hindustan Development Corporation AIR 1994 SC 988) While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of article 14 is that a change in policy must be made fairly and should not give the impression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment cannot claim to be exempt from liability to carry out the promise, on some indefinite and undisclosed ground of necessity or expediency. The Government is required to place before the court the entire material on account of which it claims to be exempt from liability. Thereafter, it would be for the court to decide whether those facts and circum tances are such as to render it inequitable to enforce the liability against the Government. Mere claim of change of policy would not be sufficient to exonerate the Government from liability. It is only when the court is satisfied that the court would decline to enforce the promise against the Government. However, the burden would be upon the Government to show that it would be inequitable to hold the Government bound by the promise. The court would insist on a highly rigorous standard of proof in the discharge of this burden. In the present case, the claim of the Government is based on a change in policy advocated in the Chief Ministers' conference. These conferences have taken place before the affidavit is filed on December 5, 2001. Therefore, the High Court concluded that the Government has not been candid in disclosure of the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ival. (v) The apex body shall monitor the progress of the revival package. (vi) A sick unit being revived would be entitled to sales tax exemption/deferment exemption from minimum guarantee, etc., as determined in the revival package. (vii) The State level apex body would besides representatives of Government Department/organisations/financial institutions will also have its members one representative each of Confederation of Indian Industries, Bihar Industries Association and Bihar Chamber of Commerce. The rehabilitation package would be implemented within a fixed time-frame so that the process of revival is not delayed. 22.2 Sickness in large and medium sector (i) A committee with Industrial Development Commissioner as its head will be constituted to evolve suitable measures for potentially viable non-BIFR sick industrial units including PSUs in the large and medium sector. The committee will recommend concessions and facilities including those in this policy statement if considered necessary for revival of the unit; these recommendations would be placed before the Government through State Level Empowered Committee (SLEC) already constituted under the chairmanship o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch were considered necessary for revival of the unit. The company was, therefore, eligible under the aforesaid clause 22(2)(ii). The Industrial Policy, 1995 did not envisage sickness in its strict terms as defined under the Sick Industrial Companies (Special Provisions) Act, 1985. The policy was of a wider application and included industrial sickness not only qua BIFR companies but also in relation to non-BIFR potentially viable sick companies. The clause 6 of the annexure attached to the Policy defines a "sick unit" as under: "Sick unit: Sick unit means an industrial unit declared sick by the Board of Industrial and Financial Reconstruction under the Sick Industrial Companies (Special Provision) Act, 1985 or by the apex body headed by the Director of Industries for SSI or the High Level Empowered Committee headed by the Chief Secretary for large and medium sector." The aforesaid definition makes it abundantly clear that the sickness of the company could also be decided by the SLEC headed by the Chief Secretary. The exemption claim of the company was duly considered by the committee constituted under clause 22.2(i). Its recommendations were duly placed before the SLEC under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. The second reason that the exemption could not be granted to the company as no notification had been issued under clause 24 cannot be accepted as the appellant-State cannot be permitted to take advantage of its own wrong. The third reason given is that the State Level Empowered Committee (SLEC) had not approved the rehabilitation package. This clearly is against the record which has been examined by us in the earlier part of the judgment. Not only was the exemption recommended by the competent committees under the Industrial Policy, 1995, emphatic assurances were given that the notification will be issued within a very short period. The fourth reason with regard to the resolution passed at the Chief Ministers' conference is equally extraneous to the issue. The company had made the application for exemption at a much prior time in 1997. No material has been placed either before the High Court or before this court about the legal enforceability of the resolutions passed at the Chief Ministers' conference. In our opinion the decision making process which culminated in passing of the orders dated January 6, 2001 and March 5, 2001 is seriously flawed, therefore, the same have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed to be taken into consideration by the court, to do justice between the parties. During the interregnum the company has been collecting the amount equivalent to the tax from the consumers. According to Dr. Rajiv Dhawan and Mr. Dwivedi during this period the company has collected more than Rs. 60 crores on the sale of cement by virtue of the directions issued by this court in the order dated November 18, 2002. In view of the law laid down by this court in Amrit Banaspati [1992] 2 SCC 411 [1992] 85 STC 493 (SC). the company cannot be permitted to retain the amount collected from the customers. This would amount to unjust enrichment. Therefore, a direction is required to be issued that the amount deposited by the company with the bank pursuant to the orders of this court be released to the appellant-State. On the other hand, Mr. Parshad has submitted that the delay in issuance of the exemption notification by the State has crippled the company financially. Even then the company is trying to revive itself through financial restructuring. The survival of the company now depends on the approval of the financial restructuring package prepared by respondent No. 2. This package has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
