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2016 (2) TMI 1 - PUNJAB AND HARYANA HIGH COURT

2016 (2) TMI 1 - PUNJAB AND HARYANA HIGH COURT - TMI - One Time Settlement Scheme - Notification dated 06.02.2009 whereby the One Time Settlement Scheme (for short, the 'OTS') for equity disinvestment in joint sectors/assisted sector companies, promoted by the respondent-Punjab State Industrial Development Corporation Ltd. (in short, the 'Corporation') and Punjab Agro Industries Corporation, has been amended challenged - Whether the State was permitted to alter the terms of the OTS on the ground .....

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provision? - Held that:- Adverting to the factual matrix herein, as noticed, the petitioner, in pursuance to the OTS floated by the respondent- Corporation, had entered into an agreement with the Corporation on 04.08.2004 (Annexure P8) wherein he had taken the benefit of the low rate of interest and offered to pay within the time frame of the policy. In pursuance of the said agreement, the arbitration proceedings pertaining to the buy-back agreement were also terminated by placing the agreement .....

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o litigate and approached this Court seeking direction for transfer of shares on pro-rata basis, as per the agreement which provided that on the receipt of minimum payment of ₹ 20 lacs transfer would be made as per the OTS value of the shares, as calculated upto the date of transfer of shares. The Corporation had also agreed that in case the amounts were not paid as per the OTS, the Corporation would be entitled to claim the payments, as per the FCA. The resultant amendment, subsequently, .....

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olicy, the State is well within its vested right to review its earlier decision and restrict the benefit of the OTS which was a mere concession to a limited set of eligible persons on a valid criteria as to whether it was a profit making industry or not but not with retrospective effect.

Whether the State and the Corporation are bound by the principle of promissory estoppel and can go back on the terms of the OTS agreement which had been duly acted upon by the petitioner by materially .....

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agreement entered into. Having acted upon the said agreement, the petitioners had paid the amounts and were thus, entitled for the benefits of the lesser interest rate as per the OTS scheme. The said petitioners might not have taken offer of making the payment and the Corporation would have been left with litigation in hand by way of arbitration and for enforcement of the buy back agreements. However, after having given the offer and the petitioners having accepted the same and the Corporation .....

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and the petitioners were also given liberty to challenge the notification. Thus, the Division Bench has not opined on the said issue and it was a policy decision of the State as such. Consequently, issue no. is answered against the State and the Corporation. - CWP No.8338 of 2009 - Dated:- 23-12-2015 - MR. AJAY KUMAR MITTAL AND MR. G.S. SANDHAWALIA, JJ. For The Petitoner : Mr. Ashwani Kumar Chopra, Sr. Advocate with Ms. Rupa Pathania, Advocate, Mr.Sanjeev Sharma, Sr.Advocate, with Mr.Shekhar Ve .....

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ate For The PSIDC : Ms. Madhu Dayal, Advocate, Mr. V.M. Gupta, Advocate, Mr.Sarvesh Malik, Advocate, Mr.Samarth Sagar, Advocate, Mr.Arun Nehra, Advocate G.S. Sandhawalia , J . This judgment shall dispose of bunch of cases, bearing CWP Nos. 8338 of 2009, 13217 of 2010, 8771, 11541, 11692 of 2009, 8603, 9685, 12084, 13175, 17804, 18156, 21031 of 2010, 1485, 2169, 8151, 14852, 15038, 24363, 24416 of 2011, 252, 1500, 9037, 16383 of 2012 with LPA No.1635 of 2010, involving common questions of law and .....

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stries Corporation, has been amended. Clause 9.3.4 of the Punjab Government's Industrial Policy, 2003, has been amended by deleting the words irrespective of the status of the unit and which was to be read as to collaborators/promoters of companies, other than profit making companies . Resultantly, the State Government withdrew the OTS, earlier given to the collaborators/promoters/profit making companies. Challenge has also been raised to the subsequent letter dated 28.04.2009 (Annexure P32) .....

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erest, as per the FCA till the date of payment or the amount based on the market value of the shares of the company held by the respondent-Corporation, as per the FCA, at the earliest but not later than one month from the date of the issuance of the letter. 3. Challenge has, thus, been raised on the ground that the respondent-Corporation had decided to unilaterally withdraw the OTS agreement dated 04.08.2004 (Annexure P8) under which the petitioner had already paid the entire amount due on 18.06 .....

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d be with retrospective effect in the absence of any statutory provision? (iii) Whether the State and the Corporation are bound by the principle of promissory estoppel and can go back on the terms of the OTS agreement which had been duly acted upon by the petitioner by materially altering its position? 5. For deciding the above legal issues, reference to the pleaded facts of the case will be necessary. 6. The plague of terrorism which had struck the State of Punjab in the 1990's had occasion .....

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was set up for setting up the project which had initial capacity of 12,480 spindles, in pursuance of a Memorandum Of Understanding which had earlier been executed on 10.12.1993, for setting up the abovesaid project. The Corporation was to invest a sum of ₹ 3.54 crores in the equity capital in M/s Indian Yarn Ltd. out of the total equity of ₹ 13.26 crores. The petitioner was to contribute ₹ 3.32 crores out of the balance equity of ₹ 9.81 crores and the remaining ₹ 6. .....

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and the petitioner sought to raise more funds from his own resources through the Punjab National Bank. The FCA contained the buy-back clause of the equity after 5 years from the date of the commencement of the commercial production, as per Clause 22. In view of the financial constraints faced, the petitioner was not able to comply with the buy-back arrangement. On account of the heavy tax exemption in the State of Himachal Pradesh in the years 1999 to 2003, all the industries started migrating .....

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the FCA. Resultantly, the Industrial Policy of 2003 was notified on 26.03.2003 (Annexure P3) wherein the OTS policy to facilitate the disinvestment in promoted companies was initiated. As per Clause 9.3.3, the OTS was to come into play for facilitating the equity disinvestment even in those cases where arbitration proceedings had already started. Interest was to be charged @ 10% simple rate of interest irrespective of the status of the unit, subject to various conditions. The policy reads as un .....

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banking • Seed/venture capital funds in specific in sunrise areas. • One window facilitation to industry for all clearances. • Closing down or redefining of divisions which are irrelevant 9.3 Dis-investment in the Joint/Assisted Sector and Direct Subscription companies promoted by various Corporations of Punjab Government. 9.3.1 Punjab State Industrial Development Corporation and Punjab Agro Industries Corporation have been engaged in promoting joint sector/assisted sector compan .....

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ed companies as also in those cases where arbitration proceedings have already started would be implemented to enable the units to settle obligations with PSIDC and PAIC. 9.3.4. The Policy will offer Single Tier carrying 10% simple rate of interest irrespective of the status of the unit. This OTS shall apply only to all the balance shares being held by the respective corporations in Joint Sector/Assisted Sector/Direct Subscription which have yet not been transferred back to the collaborator. 9.3 .....

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ment of balance amount: i) In case, the complete amount is paid within 60 days, then 10% rebate on the interest due up to the actual date of buy back will be given. ii) In case, the complete amount is paid within 120 days, then 5% rebate on the interest due up to the actual date of buy back will be given. iii) In case, the payment is made beyond 120 days and in less than one year, then no rebate is offered. However, further simple interest @ 12.5% p.a. shall be charged on reducing amount till th .....

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y the provisions of the FCA and the amount already received shall be adjusted against the interest. e) The shares shall be transferred only after the entire amount is received and buy back concluded thereof. f) The above scheme shall be in operation till 31st May 2003 for the purpose of exercising an option. g) The rate of interest under One Time Settlement Policy for facilitating equity disinvestments in the companies promoted by Punjab Government Undertakings located in the Border districts wi .....

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e P8) with the respondent-Corporation and started to make payment and paid a sum of ₹ 77,74,096/- on 29.06.2004. It is the case of the petitioner that he had got the amount from the third parties on the assurance that the equity share holdings to be transferred by the respondent-Corporation, would be further transferred to them. As per the terms of the agreement, the petitioner, accordingly, wrote another letter dated 09.08.2004 (Annexure P10) to the Corporation asking for the transfer of .....

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otest was raised against the demand of the respondent- Corporation to submit postdated cheques and the supplementary agreement which was asked to be entered into vide decision dated 24.03.2005. 10. The Corporation vide letter dated 06.05.2005 (Annexure P14) declined to issue the shares on pro-rata basis until the collaborators entered into a supplementary agreement. In spite of the request made by the petitioner on 18.10.2005 the same was declined by the Corporation vide letter dated 08.11.2005 .....

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tioner wrote on 29.11.2006 (Annexure P18) for conveying the amount due so that he could make arrangement for paying the entire dues. Thereafter, he paid by way of cheque, a sum of ₹ 25 lacs vide letter dated 06.04.2007 (Annexure P20) and asked for the transfer of additional one lac shares against the said payment in the name of one M/s Priyamanu Finance & Investment Pvt. Ltd. on the ground that total payment had been made to the tune of ₹ 96,94,096/-. Thereafter, on 18.06.2007 (A .....

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erest Litigation. The plea taken was that the Corporation had entered into OTS where even profit making companies were being granted the said benefit and the amount of ₹ 26.56 crores should be recovered with punitive interest from respondents no. 3 and 4 therein. Accordingly, the petitioner received a letter dated 22/23.06.2007 (Annexure P-23) wherein the pendency of the abovesaid case was referred to. The petitioner was asked to submit an undertaking as per the attached performa that 90% .....

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OTS policy, subject to the draft undertaking upto 30.06.2007 and the amount was quantified on 30.06.2007 at ₹ 9,04,57,238/-. The petitioner, on 04.07.2007 (Annexure P26), wrote back to the Corporation that he had already made the entire payment and the conditions of the letters dated 22/29/30/06.2007 were not applicable to him and that the non-delivering of the shares was putting him in a very difficult financial situation. 12. The petitioner, thereafter, filed CWP No.10322 of 2007, seekin .....

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riate undertaking from the petitioner, who would remain bound by the directions passed in the public interest litigation and that the collaborators would not create third party rights on the transfer of the shares. Relevant portion of the order dated 18.12.2007 reads as under: In view of the above, we find that on the one hand, cheques issued by the collaborators have been encashed and on the other hand in pursuance to the buy back clause, the shares are not being transferred to them. These two .....

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passed on 03.03.2008, directing the Corporation to transfer the equity shares immediately held by the respondent-Corporation of M/s Indian Yarn Ltd. to the petitioner subject to the decision of the writ petition. The said order was challenged by filing Special Leave to Appeal (Civil) No.8630 of 2008 and interim injunction was passed regarding re-transfer of the shares till further orders on 15.04.2008 but liberty was granted to the High Court to dispose of the writ petition. Thereafter, the impu .....

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s Corporation, in Clause 9.3 Industrial Policy 2003, notified vide No. 5/58/2002/1 IB/968 dated 26-3-2003, further amended and approved by the Council of Ministers in its meeting held on 27-5-2004. 2. Accordingly, in clause 9.3.4 the words irrespective of the status of the unit would be read as to collaborators/promoters of companies other than profit making companies. 3. In view of the above, the Governor of Punjab is further pleased to withdraw the OTS offer earlier given to the collaborators/ .....

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the stand that since the OTS stood withdrawn on the ground of change of policy it was not to extend the OTS to profit making companies. Since M/s Indian Yarn Ltd. was a profit making company as on 31.03.2004, as per the audited balance sheet, therefore the amount of ₹ 9,63,42,275/-, paid by the petitioner as a collaborator, stood adjusted against the dues owed in terms of the FCA dated 24.05.1995. A balance amount of ₹ 993.97 lacs (subject to audit) was payable on 30.04.2009 with fur .....

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blic interest required for making the amendment in the OTS of 2003 so that the benefit may not be granted to the profit making companies run by collaborators/promoters. Reference was made to the objections raised by the Comptroller & Auditor General of India that the scheme lacked financial prudence. There was no criteria laid down regarding the performance/working results of the units to judge the genuineness of the default and ignoring the distinction between genuine and wilful defaulters. .....

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had executed an FCA and had to buy-back the shares after the expiry of 5 years which was intentionally not bought back. There was a wilful default and blocking of public money which was to be circulated for the industrial development of the State. The floating of the OTS was admitted but it lacked financial prudence and therefore, the State was justified to amend the same and not offer it to profit making companies. The petitioner had the resources to buy-back the equity but he did not do so in .....

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was made to the report of the Comptroller & Auditor General of India and its observations wherein loss of ₹ 26.58 crores was made by settling the OTS scheme by the respondent-Corporation with two industrial establishments namely, M/s Rana Polycot and M/s Malwa Industries Ltd. That even an application had been filed for permission to allow the respondent-Corporation to withdraw the OTS to the profit making companies but no order had been passed in the public interest litigation. Therea .....

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ns regarding the matter of policy and annul any directive, was defended under Article 135 of the Articles of the Association of the Corporation. The company was in profit on 31.03.2004 when it had exercised the option for the OTS on 29.06.2004. Therefore, being a profit making concern, as per the audited balance sheet/annual report for 2003-04, it was under an obligation to discharge the liability in terms of the mutually agreed terms and conditions, as reduced in writing. The petitioner having .....

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CA. Only when the petitioner was asked to vacate the office of the Managing Director, he availed the OTS. The factum of raising funds from third parties was denied and it was admitted that the OTS was signed on 04.08.2004, though the cut-off date was 30.06.2004. The Board had taken a decision on 24.03.2005, requiring the collaborators to enter into a supplementary agreement as per the OTS policy and the said action had not been challenged. The payments had not been made on account of the dilator .....

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dingly, the action was justified and the earlier agreement was alleged to be void under Section 23 of the Indian Contract Act, 1872. The payment of the amount of ₹ 963.42 lacs was admitted with a caveat that the petitioner was bound to pay much more than what was being paid. He had failed to make payments under the FCA and enjoyed unjust enrichment at the expense of the people of the State of Punjab. The petitioner was a deliberate defaulter who had the resources and funds to buy-back the .....

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that it being a public policy, could be modified? 18. In our opinion, this issue needs to be necessarily answered in favour of the State, regarding the right of the State to frame a policy and revise or rescind or modify the same on the ground of public interest. There is no denying the fact that the benefit of the OTS was being granted to one and all under initial OTS dated 26.03.2003 (Annexure P3) irrespective of the status of the unit and whether it was earning profit or not. There is no deny .....

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ell within its right to alter the terms and conditions of the policy once it was opposed to public policy. The issue of companies squandering public funds funded by public shares and delaying the buy-back and even taking the benefit of their financial indiscipline, is something which cannot be condoned. The modification was, accordingly, done to restrict the said benefit to only those companies who were not profit making. Limiting the applicability of the concession to the promoters/collaborator .....

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der necessary in the matter of broad policy and could vary any directive which was to be given immediate effect. Article 135 reads thus:- Article 135 of the Articles of Association of Punjab State Industrial Development Corporation Limited Notwithstanding anything contained in any of the Articles, the Government may, from time to time, issue such directives as they may consider necessary in matters of broad policy and in like manner may vary and annul any such directive. The company shall give i .....

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ainst the public policy as it was a decision of the Government which could change its policies and was well within its jurisdiction. 21. For the said legal proposition, one can go back for support upon the judgment of the Apex Court in Amrit Banaspati Company Ltd. & another Vs. State of Punjab & another 1992 (2) SCC 411. The issue in the said case was whether the company was entitled to the refund of the sales tax and the interstate sales tax on the assurance held out by the Government w .....

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accordingly, held that taxation was the sovereign power and a promise to refund the tax which was due under the Act, would be a fraud under the Constitution of India and a breach of faith of the people and could not be enforced in law. Relevant portion of the judgment reads as under: 12. But refund of tax is made in consequence of excess payment of it or its realisation illegally or contrary to the provisions of law. A provision or agreement to refund tax due or realised in accordance with law c .....

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rder permitting refund of sales tax which was due shall be contrary to the statute. To illustrate it the appellant claimed refund of sales tax paid by it to the State Government of sale made by it of its finished products. But the tax paid is not an amount spent by the appellant but realised on sale by it. What is deposited under this head is tax which is otherwise due under provisions of the Act. Return of refund of its or its equivalent, irrespective of from is repayment or refund of sales tax .....

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tion and the law. Realisation of tax through State mechanism for sake of paying it to private person directly or indirectly is impermissible under Constitutional scheme. The law does not permit it nor equity can countenance it. The scheme of refund of sales tax was thus incapable of being enforced in a court of law. 12. Fallacy of such constitutionally inhibited policy, sacrificing public interest resulting in illegal private enrichment is exposed by claim of refund for nearly ₹ 2 crores, .....

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ime-bound exemption notification issued under the Customs Act, 1962. The said notification was sought to be withdrawn before the prescribed period and was challenged on the ground that the appellants had placed order for the import of PVC resin on the understanding that it was exempt from Customs duty. The plea was rejected by the High Court, which was the subject matter of challenge before the Apex Court. It was held that the modification and alteration was in supersession of an earlier policy, .....

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al duty etc. under the Act, as already noticed, flows from the provisions of Section 25(1) of the Act. The power to exempt includes the power to modify or withdraw the same. The liability to pay customs duty or additional duty under the Act arises when the taxable event occurs. They are then subject to the payment of duty as prevalent on the date of the entry of the goods. An exemption notification issued under Section 25 of the Act had the effect of suspending the collection of customs duty. It .....

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lic interest" is an exercise of the statutory power of the State under the law itself as is obvious from the language of Section 25 of the Act. Under the General Clauses Act an authority which has the power to issue a notification has the undoubted power to rescind or modify the notification in a like manner. From the very nature of power of exemption granted to the Government under Section 25 of the Act, it follows that the same is with a view to enabling the Government to regulate, contro .....

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not be said to have extended any 'representation' much less a 'promise' to a party getting the benefit of it to enable it to invoke the doctrine of promissory estoppel against the State. It would bear repetition that in order to invoke the doctrine of promissory estoppel, it is necessary that the promise which is sought to be enforced must be shown to be an unequivocal promise to the other party intended to create a legal relationship and that it was acted upon as such by the par .....

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still not withdraw the exemption. 23. In State of Punjab Vs. Ram Lubhaya Bagga 1998 (4) SCC 117, the right of the State to change its policy, from time to time, under changing circumstances, was held not to be illegal. Financial constraints were held to be relevant consideration, which could weigh with the Government. The dispute was regarding the entitlement towards medical expenses of the Punjab Government employees and the pensioners which was admissible to them at the same scale in non-gove .....

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evant facts and circumstances, on expert advise, including financial constraints, the Court would not enter into this arena of public policy. Relevant observations read as under: 20. Now we revert to the last submission, whether the new State policy is justified in not reimbursing an employee, his full medical expenses incurred on such treatment, if incurred in any hospital in India not being a Government hospital in Punjab. Question is whether the new policy which is restricted by the financial .....

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violative of any constitutional, statutory or any other provision of law. When Government forms its policy, it is based on number of circumstances on facts, law including constraints based on its resources. It is also based on expert opinion. it would be dangerous if court is asked to test the utility, beneficial effect of the policy or its appraisal based on facts set out on affidavits. The Court would dissuade itself from entering into this realm which belongs to the executive. It is within t .....

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of natural justice would not come into play. The wisdom of advisability of the economic policies could not be held to be amenable to judicial review, except on the ground that they were constitutionally invalid. The issue in question, in the above-said case, was regarding the disinvestment and the transfer of the 51% shares of M/s Bharat Aluminum Company Ltd., which was a Government of India undertaking. The disinvestment being made in the company was challenged by the employees union which was .....

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ection of Articles 14 & 16, it would not mean that the Government had to give the workers a prior notice of hearing before deciding to disinvest. The Government had the liberty to run the industry departmentally or in any other form, subject to the economic climate. Relevant observations read as under: 51. The aforesaid observations, in our opinion, enunciates the legal position correctly. The policies of the Government ought not to remain static. With the change in economic climate, the wis .....

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a policy decision to start BALCO as a company owned by the Government, it is as a change of policy that disinvestment has now taken place. If the initial decision could not be validly challenged on the same parity of reasoning, the decision to disinvest also cannot be impugned without showing that it is against any law or mala fide. 25. In Howrah Municipal Corporation & others Vs. Ganges Rope Co. Ltd. & others 2004 (1) SCC 663, the grant of sanction for construction of three additional .....

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mmercial Tax Officer & others 2005 (1) SCC 625, the question before the Apex Court was regarding the discontinuance of the purchase tax exemption pertaining to the mills which exceeded the ceiling of ₹ 300 lacs during the period of 5 years and the applicability of the Government's letter which made it operative retrospectively. The High Court of Madras had accepted the plea of the State Government on the ground that subsidy was a concession and the Government had got reasons for mo .....

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cts and recognized principles of administrative law. The public interest being a superior equity could override the individual equity and the Government was free to take a call provided it was necessary to do so, in public interest. Relevant observation reads as under: 17. Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interest of the general public and not from the standpoint of the interests of persons upon whom the restrictions have been im .....

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f the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question. Canalisation of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country. 27. Similarly, in Indian Financial Assn. of Seventh Day Adventists Vs. M.A. Unneerikutty (2006) 6 SCC 351, the Apex Court held that the public policy does not remain sta .....

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port of Pondicherry and the decision of handing over the movable and immovable assets to the privaterespondent, in pursuance of the concession agreement entered into by the Government of Pondicherry. It was, accordingly, held that the said decision was a matter of public policy and even a change in Government could result in shifting focus on change of economic policy which would adversely affect some vested interest. In the absence of any illegality, it was held that the Court could not strike .....

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annot per se be interfered with by the court. It is neither within the domain of the courts nor the scope of judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are the courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical. Wisdom and advisability of economic policy ar .....

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dity to show that it is wanting in reasonableness or is not informed with public interest. This burden is a heavy one and it has to be discharged to the satisfaction of the court by proper and adequate material. The court cannot lightly assume that the action taken by the Government is unreasonable or against public interest because there are large number of considerations, which necessarily weigh with the Government in taking an action. In a case like this where the State is allocating resource .....

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fers to develop the port, the State would not be committing breach of any constitutional obligation if it negotiates with such a party and agrees to provide resources and other facilities for the purpose of development of the port. The State is not obliged to tell the respondent No. 11 "please wait I will first advertise, see whether any other offers are forthcoming and then after considering all offers, decide whether I should get the port developed through you". It would be most unre .....

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s and other facilities for developing the port, the contract cannot be assailed as invalid because the State has acted bona fide, reasonably and in public interest. The terms and conditions of the contract entered into with the respondent No. 11 as well as the surrounding circumstances show that the State has acted bona fide and not out of improper or corrupt motive or in order to promote the private interest of the respondent No. 11 at the cost of the State. Therefore, it is difficult to interf .....

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t is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule, the reasons indicated in this case for the departure are shown to be rational and are not suggestive of discrimination. The Government is entitled to make pragmatic decisions and policy decisions which may be necessary or called for under the prevalent peculiar circumstances. 29. Resultantly, question no. 1 is answered in favour of the State that it has power to alter or .....

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de in the OTS scheme. As per the Black's Law Dictionary-10th Edition- Page no. 98, the word amendment means a change by addition or deletion or correction. It is apparent that the State Government was amending the clause as such but not substituting it from the date it came into effect and thus, was not wiping out the earlier concessions granted. Even otherwise, an amendment order cannot be retrospective in operation so as to create a disability to the person who, in response to the same, ha .....

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as allowed by the Civil Courts. The benefit of the difference between the control price specified in the Control Order, 1963 and the Control Order, 1964 was granted. The High Court allowed the appeals which led to the matter being taken to the Apex Court and the view taken by the High Court was upheld and it was held as under:- 5. Mr. Nariman appearing on behalf of the appellants has laid great emphasis on the word "substituted" occurring in clause 2 of the Rice (Andhra Pradesh) Price .....

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literal meaning of the word "substitute" is "to replace' but the question before us is from which date the substitution or replacement of the new Schedule took effect. There is no deeming clause or some such provision in the Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964 to indicate that it was intended to have a retrospective effect. It is a well recognized rule of interpretation that in the absence of express words or appropriate language from which retro .....

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r, A.P. and others, 1996 (Sup5) SCR 643, negatived the contention wherein, challenge had been raised to the demand of assessment on non-agricultural lands. The claim was based on the ground that there was an exemption notification. It was accordingly held that publication in the gazette is the final confirmation for making such an order or Rule and the version printed in the gazette is final. The relevant portion reads thus:- 13.......The object of publication in the Gazette is not merely to giv .....

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f Gazette publication that is relevant and not the date of publication in a newspaper or in the media (See Pankaj Jain Agencies v. Union of India [1994 (5) S.C.C.198). In other words, the publication of an order or rule is the official irrefutable affirmation that a particular order or rule is made, is made on a particular day (where the order or rule takes effect from the date of its publication) and is made by a particular authority; it is also the official version of the order or rule. It is .....

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if such rule or order is not published in the Official Gazette, it would become necessary to refer to the original itself, involving a good amount of inconvenience, delay and unnecessary controversies. It is for this reason that very often enactments provide that Rules and/or Regulations and certain type of orders made thereunder shall be published in the Official Gazette. To call such a requirement as a dispensable one - directory requirement - is, in our opinion, unacceptable. Section 21 of th .....

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o force and there was no reason to depart from the same. The issue in question was the exemption notification of 02.08.1976 being withdrawn on 04.02.1987 on account of which duty was levied on the goods imported by the respondent in the said case in which the bill of entry was made on 05.02.1987. The Bombay High Court had allowed the writ petition on the ground that the notification was not duly published and was not made available. It was accordingly held that the method and mode provided is by .....

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as noted above, in Pankaj Jain Agencies case, the Court directly dealt with a similar contention and after relying upon the decision in the case of Mayer Hans George (Supra) rejected the same. That decision is followed in I.T.C. Ltd. (Supra) and other matters. Hence, it is difficult to agree that the decision in Pankaj Jain Agencies case was not helpful in deciding the question dealt with by the Court. Section 25 of the Customs Act empowers the Central Government to exempt either absolutely or .....

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ement is that under Section 159 such notification is required to be laid before each House of Parliament for a period of thirty days as prescribed therein. Hence, in our view Mayer Hans George (supra) which is followed in the Pankaj Jain Agencies case represents the correct exposition of law and the Notification under Section 25 of the Customs Act would come into operation as soon as it is published in the Gazette of India i.e. the date of publication of the Gazette. Apart from prescribed requir .....

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the Court to decide, could be changed, with retrospective effect but the vested right could not be taken away. Relevant observation reads as under: 48. The legislative power to make law with retrospective effect is well recognised. It is also well settled that though the legislature has no power to sit over Court's judgment or usurp judicial power, but, it has, subject to the competence to make law, power to remove the basis which led to the Court's decision. The legislature has power to .....

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e away vested rights. The contention urged is that the rights created as a result of issue of writ of mandamus cannot be taken away by enacting laws with retrospective effect. On the other hand, it was contended on behalf of the respondent-State that the power of the legislature to enact law with retrospective effect includes the power to take away vested rights including those which may be created by issue of writs. 34. The Apex Court in Mahabir Vegetable Oils (P) Ltd. & another Vs.State of .....

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ally, tourism had been declared as an industry and no time limit had been fixed on the applicability of the policy decision. Accordingly, it was held that policy decision could be revived from time to time and could be withdrawn in public interest. The Board having acted in pursuance to the decision of the State Government, was bound on the question of policy and that the administrative orders were to be ordinarily prospective in nature. A policy decision could not be given prospective or retroa .....

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operation and not retrospective operation. Relevant observations read as under: 18. Tourism was declared to be an industry. The wide range of concessions as noticed hereinbefore, inter alia, covered electricity and water charges. It is not a case where some exemptions or concessions were to be given for a specific period or as a one time measure. No time limit was fixed for applicability in respect of the policy decisions. Pursuant thereto long term investments might have been made. It is not b .....

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. It is also beyond any doubt that the concessions granted can be withdrawn in public interest. 20. Indisputably, the State is also entitled to change or alter the economic policies. Appellants do not have any vested right to enjoy the concessions granted to them forever, particularly when the Board is constituted and incorporated under the provisions of Electricity (Supply) Act, 1948. Any policy decision adopted by the State would not be binding on the Board, save and except provided for in the .....

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tion in favour of the appellants on the basis of industrial tariff must, therefore, be understood in the context of Section 78A of the 1948 Act. What is binding on the Board is the policy of the State. The direction of the State was to apply a particular category of tariff to the appellants. Such directions could have been withdrawn while making another tariff. The State indisputably has the power to grant subsidy from its own coffer instead of directing the Board to grant concession. 21. It is .....

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on which would be violative of such statutory directions. xxxx xxxx xxxx 36. The law which emerges from the above discussion is that the doctrine of promissory estoppel would not be applicable as no foundational fact therefor has been laid down in a case of this nature. The State, however, would be entitled to alter, amend or rescind its policy decision. Such a policy decision, if taken in public interest, should be given effect to. In certain situations, it may have an impact from a retrospecti .....

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ctive operation only. 37. The State of Kerala in this case did not grant any concession by itself. The Central Government took a larger policy of treating the tourism as an industry. A wide range of concessions were to be granted by way of one time measure; some of them, however, had a recurring effect. So far as grant of benefits which were to be recurring in nature, the State exercises its statutory power in the case of grant of exemption from payment of building tax wherefor it amended the st .....

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f kept the said notification in abeyance by reason of order dated 8.11.1999. 38. The appellants, indisputably, continued to derive the benefits in terms of the original order. They obtained certificates of classification. It is on the aforementioned context, the question as regards construction of the impugned notification dated 26.9.2000 arises. Ex facie, the said policy decision could not be given a retrospective effect or retroactive operation. The State was not exercising the power under any .....

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x 40. We, therefore, are of the opinion that the impugned G.O. dated 26.9.2000 must be held to have a prospective operation and not a retrospective operation. That view would save it from being vulnerable to the challenge of being hit by Article 14 of the Constitution of India. 36. In Southern Petrochemical Industries Co. Ltd. Vs. Electricity Inspector & E.T.I.O. & others 2007 (5) SCC 447, the issue arose as to the modification of the notification and it was held that when the State inte .....

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alteration or modification could not be done by express agreement or by necessary implication and therefore, there could not be any change of tariff in terms of Section 8 of the Indian Contract Act. 38. Adverting to the factual matrix herein, as noticed, the petitioner, in pursuance to the OTS floated by the respondent- Corporation, had entered into an agreement with the Corporation on 04.08.2004 (Annexure P8) wherein he had taken the benefit of the low rate of interest and offered to pay withi .....

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ut was not acted upon. The Corporation cannot be allowed to blow hot and cold at the same time and could not withdraw from the concluded contract. The petitioner had also chosen to litigate and approached this Court seeking direction for transfer of shares on pro-rata basis, as per the agreement which provided that on the receipt of minimum payment of ₹ 20 lacs transfer would be made as per the OTS value of the shares, as calculated upto the date of transfer of shares. The Corporation had .....

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int of time, to the prejudice of the petitioner who had acted upon the offer given. 39. Thus, from the above discussion, it can be safely concluded that under the strength of public policy, the State is well within its vested right to review its earlier decision and restrict the benefit of the OTS which was a mere concession to a limited set of eligible persons on a valid criteria as to whether it was a profit making industry or not but not with retrospective effect. Issue No. (iii): Whether the .....

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of its decision dated 27.05.2004, given the option of the OTS. By a subsequent Cabinet decision dated 02.12.2008, the withdrawal was being done and therefore, the same would necessarily amount to an approval, with retrospective effect. The said substitution would necessarily have to be read from the date of the notification and could not be given retrospective effect from 26.03.2003. 41. The principle of promissory estoppel upon which the petitioner relies, is based upon the backing out by the C .....

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could have been enforced and which was being done by way of arbitration proceedings. He chose to accept the offer held out by the State and pay-back at the lower terms since the money was to be paid in a shorter period of time and he had made the payments after taking the amounts from a finance company who had asked for the transfer of shares in their name and which he has, accordingly, requested the Corporation to do. It is, thus, his categorical case that he has materially altered his position .....

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ent, it was bound to carry out its promise. 43. In Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh 1979 (2) SCC 409, the said principle was further expounded. In the said case, the petitioner's factory had been exempted from payment of sales tax for a period of 3 years from commencement of production and accordingly, it was held that the principle of promissory estoppel would be in all the three fields, whether contractual, administrative or statutory. 44. In State of Punjab .....

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id decision was upheld by the Apex Court by noting that the disagreement note in Jit Ram & others Vs. State of Haryana & another 1981 (1) SCC 11, had been disapproved by a Three Judges Bench of the Apex Court in Union of India & others Vs. Godfrey Philips India Ltd. & others (1985) 4 SCC 369. It was noted that the essential pre-requisites for the operation of the promissory estoppel had been established and it had, accordingly, directed the issuance of the notification. The Gover .....

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r the specified period as it was in their competence and the respondents had acted upon the said representation. Relevant paragraphs read as under: There can therefore be no doubt that the doctrine of promissory estoppel is applicable against the Government in the exercise of its governmental, public or executive functions and the doctrine of executive necessity or freedom of future executive action cannot be invoked to defeat the applicability of the doctrine of promissory estoppel. We must con .....

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invoking the defence of executive necessity, suggesting by necessary implication that the doctrine of executive necessity is available to the Government to escape its obligation under the doctrine of promissory estoppel. We find it difficult to understand how a Bench of two Judges in Jeet Ram's case could possibly overturn or disagree with what was said by another Bench of two Judges in Motilal Sugar Mills Case. If the Bench of two Judges in Jeet Ram's case found themselves unable to agr .....

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t law in regard to the doctrine of promissory estoppel and we express our disagreement with the observations in Jeet Ram's case to the extent that they conflict with the statement of the law in Motilal Sugar Mills case and introduce reservations cutting down the full width and amplitude of the prepositions of law laid down in that case. Of course we must make it clear and that is also laid down in Motilal Sugar Mills case (supra), that there can be no promissory estoppel against the legislat .....

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ssory estoppel being an equitable doctrine it must yield when the equity so requires, if it can be shown by the Government or public authority that having regard to the facts as they have transpired, it would be inequitable to hold the Government or public authority to the promise or representation made by it, the Court would not raise an equity in favour of the person to whom the promise or representation is made and enforce the promise or representation against the Government or public authori .....

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of concession of hill development rebate granted was the subject matter of consideration. It was, accordingly, held that once a person had acted upon the representation, the State Government could not resile from the benefits and it was an act of unfairness and arbitrariness. It was further held that the benefits could only be withdrawn after the U.P. Electricity Reforms could come into force and the entrepreneurs would be adversely affected by involving the principle of promissory estoppel. Re .....

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onable. When the State Government makes a representation and invites the entrepreneurs by showing various benefits for encouraging to make investment by way of industrial development of the backward areas or the hill areas, and thereafter the entrepreneurs on the 13 representations so made bona fide make investment and thereafter if the State Government resiles from such benefits, then it certainly is an act of unfairness and arbitrariness. Consideration of public interest and the fact that ther .....

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22.3 barred exemptions to sick and closed industrial units which had availed such facilities in the past. Various meetings had been held and there were repeated assurances given by the State Government but the notification was not forthcoming. The Industrial Policy provided that an apex body had to be constituted to revive the sick small scale medium industries and the company had made the application for exemption and the package was still pending consideration. Accordingly, the directions give .....

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ment would be bound by the principle of promissory estoppel and therefore, the matter was directed to be reconsidered by the State Level Committee as to whether entitlement was there to the incentives and benefits. Relevant portion of the judgment reads as under: 21. Coming to the facts of the present case, we find that the Scheme definitely promised incentives in the form of Tax holiday of 5-10 years in respect of exemptions from Sales Tax, Turnover Tax, Electricity Duty, Luxury Tax and Enterta .....

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ich invited investment in tourism units promising tax holiday as stated above. Based on such representation, various units including that of the appellants having come forward and altered their position, the State Government would certainly be bound by the principles of Promissory Estoppel. The State Government was thus estopped from going back on the promise so made in the Scheme and could not have curtailed the period and the opportunity specifically made available within which the project cou .....

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and the State was, thus, bound by the OTS agreement entered into. Having acted upon the said agreement, the petitioners had paid the amounts and were thus, entitled for the benefits of the lesser interest rate as per the OTS scheme. The said petitioners might not have taken offer of making the payment and the Corporation would have been left with litigation in hand by way of arbitration and for enforcement of the buy back agreements. However, after having given the offer and the petitioners havi .....

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