VRINDAVAN STUDIOS PRIVATE LIMITED Vs. STATE OF GUJARAT

JUDGEMENT

(1.) The petitioners claim for subsidy is based on the equitable principle of promissory estoppel and is contended that the petitioners had established a film studio in Gujarat State and produced films therein on the basis of the promise of cash incentives as contained in Government Resolution dated 25/07/1975 Annexure B to the petition and clause (b) under the heading (B) Concessions of the said Resolution is relied which provides that the studios will be eligible to a subsidy of Rs. 50 0 per film and such subsidy shall be limited to six films per year per studio and the amount will be released after the commercial release of the film and such concessions will be available for a period of five years from 7/03/1975 or upto five years from the starting of a studio whichever is later provided for a new studio effective steps to set up the studio had been taken within a period of five years from 7/03/1975 Such effective steps have been defied in the resolution According to the petitioners they have established Vrindavan Studio on the basis of this promise and they had produced 16 films and they were released during the period from April 14 197 8/02/1982 and in respect of each of these 16 films they are claiming subsidy at the rate of Rs. 50 0 per film and thus they have made a claim of Rs. 8 lacs. It is further stated that for the first four films as mentioned in Annexure F/1 a subsidy of only Rs. 20 0 per film i. e. Rs. 80 0 has been paid and for seven other films subsidy has been paid at the rate of Rs. 15 0 per film i.e. Rs. 1 5 0 have been paid. Thus in all a subsidy of Rs. 1.85 lacs has been paid and the balance subsidy of Rs. 6.15 lacs has not been paid.

(2.) A strong reliance has been placed on the judgment of this Court in Special Civil Application No. 1527 of 1978 Annexure E to the petition in the matter of Laxmi Studio. The studio was also paid subsidy at the reduced rates of Rs. 20 0 per film. In that case the court came to the conclusion that the petitioner in that case had set up the studio in the State relying on the policy of the State Government to give financial assistance and incentives for setting up film studios in the State as per the policy laid down in Government Resolution dated 25/07/1975 and that the petitioner had changed the position to his detriment and it was not open to the Government to reduce the amount of subsidy so as to commit the breach of promise held out by the Government Resolution. The Court held that since the petitioner had spent a large amount of Rs. 31 lacs relying on the Government policy of financial assistance and incentives it was not permissible to the State Government to back out from the policy and to tell to the petitioner that he was not entitled to the benefit of the policy as set out in the resolution. The court further held that the petitioner had relied on the Government policy and the promise contained in the Government Resolution of 1975 and had changed the position by setting up a studio by investing a large amount and the petitioner would not have made such a large investment had he known that the Government would change the policy of financial assistance to the studio and the Government was estopped from denying the said benefit to the petitioner. In the present case the petitioners have pleaded a similar situation.

(3.) At the hearing of this petition both the parties have produced large number of documents by way of Government Resolutions correspondence and other papers. They are undisputed and with the consent of the parties they are considered.