TMI Blog1994 (4) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... ons to the respondents-State of Bihar and its officials to disburse the various amounts specified in the writ petitions stated to be due by way of interest-free sales tax loan to the petitioners. The earlier resolutions passed by the State of Bihar dated March 20, 1973, June 29, 1975, March 8, 1980 and January 20, 1981, are referred to. They are only relevant to understand the background and the earlier history of the case. By annexure 3, Resolution No. 13730 dated September 1, 1986, the respondent-State of Bihar announced incentives to industries in Bihar and promised to give interest-free sales tax loan to the industrial units which came into production on or after September 1, 1986. The petitioners state that the State made unequivocal promise to provide incentive to the industries for setting up the industry in the State of Bihar by providing interest-free sales tax loan and other incentives. The first petitioner in C.W.J.C. No. 6155 of 1993 came into production from July 6, 1987. They took all steps pursuant to the incentive resolution dated September 1, 1986. An application was made for grant of interestfree sales tax loan. The respondents were pleased to sanction a sum of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government and also directing the respondents to grant interest on the amount of interest-free sales tax loan which has duly been sanctioned and approved. 6.. The State has filed a detailed counter-affidavit dated October 7, 1993. It is stated therein that an application for loan is subject to the condition that the loan would be disbursed on availability of funds and clause 10 of annexure 4 is conclusive of this matter. It is further submitted that the financial position of the State cannot afford to grant the loan by ignoring the compulsory legal and constitutional obligations as a sovereign authority and the grant of loan is a matter of policy decision which cannot prevail upon legal and constitutional obligations. The loan sanctioned can only be granted after the fund is available. It is further submitted that due to financial constraints the Government is not in a position to spare any fund for fulfilling policy obligation in face of necessary and mandatory financial obligation. However, if the fund is available, the Government will disburse to the needy and deserving parties in an equitable manner. It is further submitted that the petition is premature in view of the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into volumes of official documents and also oral evidence. This is an important aspect to be borne in mind in evaluating the rival pleas and in deciding whether the discretionary jurisdiction under article 226 of the Constitution deserves to be pressed into service, in all the circumstances of the case. 8.. The petitioners have filed a reply-affidavit dated March 4, 1994. The petitioners have stated that the plea of the State, that the loan will be given when the financial position of the State becomes sound, cannot stand. It is incorrect. The Government is bound to disburse the amount of loan. The policy decision in annexure 3 is to accelerate the growth of the industries in the State of Bihar which is made in the larger public interest. There is no abnormal situation which has arisen for the State to resile from its promise. The State has given only incentive, as loan to be repaid by industries and it is not a case of refund of sales tax realised from the industries and, so, the decision of the Supreme Court reported in [1992] 85 STC 493 (Amrit Banaspati Co. Ltd. v. State of Punjab) has no application. There is public duty cast upon the State to fulfil their promise and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this proceeding under article 226 of the Constitution but otherwise. We do not propose to deal with the larger questions that were mooted at the Bar, in the above circumstances. 11.. For the purpose of disposing of this batch of cases, we proceed on the basis that the State is bound by its promise made in annexure 3 and that the principle of promissory estoppel will apply. The principle of promissory estoppel is akin to the principle of legitimate expectation. Unless there is overriding reason of public policy or other compelling or overriding consideration of public interest or other extenuating circumstances, proved in the case as laid down by the decisions of courts, in normal circumstances, the State is bound to fulfil its promise contained in annexure 3. The question is, even so, can a writ of mandamus be issued for disbursement of amounts stated to be due as per annexure 3 either in whole or in part? In our opinion, the answer can only be in the negative. 12.. A writ of mandamus will not issue to enforce a contract against the Government, which has not been made in exercise of statutory power. But a writ may issue to enforce the promise made by the State relying on whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. In both, the plea is one for recovery of amounts, said to be due. Normally, a civil suit is the remedy in such a situation. The purpose of article 226 of the Constitution is not to supersede the normal remedy available under law by way of a suit. It may be that in such a suit, the State will be in a position to substantiate, by oral and documentary evidence, the various defences which may absolve itself from the obligation or substantiate the reasons for the delay or postponement. That opportunity cannot be foreclosed. Later, a Bench of four judges of the Supreme Court of India, in the case of Dhanyalakshmi Rice Mills v. Commissioner of Civil Supplies AIR 1976 SC 2243 at page 2249, quoted the above two decisions with approval. 13.. In the light of the above decisions of the Supreme Court of India, we hold that the prayer in this batch of writ petitions for disbursal of the interestfree sales tax loan, either in whole or in part, as per annexure 3, cannot be enforced by issue of a writ of mandamus in a proceeding under article 226 of the Constitution of India. 14.. We note that in the earlier decisions of this Court, in the case of Om Flour Mills (P) Limited v. State of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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