JAYAKAR FIRE WORKS Vs. UNION OF INDIA

JUDGEMENT

(1.) The doctrine of promissory estoppel was pressed into aid by the appellants to obtain subsidy at 15% in pursuance of the Central Investment Subsidy Scheme by filing Writ Petition Nos. 11221 and 11222 of 1989. Both the writ petitions came to be dismissed by a learned single Judge by a common order dated 30.8.1990. Writ Appeal Nos. 1075 and 1076 of 1990 have been filed and both the writ appeals are being disposed of by this common judgment since it is conceded that identical questions of law and fact arise in both the cases.

(2.) It transpires from a perusal of the records in both the writ petitions that the first respondent published a scheme called Central Investment Subsidy Scheme. The appellants registered themselves with a view to claim the subsidy under the scheme. The appellants filed applications for grant of subsidy after having set up the unit by making huge investments, but the third respondent informed the appellants that they were not eligible for the grant of subsidy and their applications stood rejected. Urging that since the appellants had, on the basis of a promise held out by the respondents, made huge investments, the appellants have submitted that the denial of Central subsidy to them was inequitable and that the respondents were bound by the doctrine of promissory estoppel and were estopped from going back on the promises made by them. This appears to be the entire case that was set up by the appellants both in the writ petitions as well as during the course of the arguments before the learned single Judge. Both the writ petitions were resisted and a common counter came to be filed by the first respondent. It was maintained in the counter that the Central Government had framed a scheme with reference to industrial units to be set up or expanded. It was admitted that the appellants had filed applications for grant of subsidy, but maintained that after the cases of the appellants were examined by the respondents on merits to determine whether the industrial units qualified for the grant of subsidy, it was found that the appellant units were not eligible and accordingly, they were informed. The application of the doctrine of promissory estoppel to the facts and circumstances of the case was seriously contested. Accordingly to the respondents, the mere filing of the application by the appellants to obtain subsidy without anything further could not attract the doctrine of promissory estoppel even if the appellants had got themselves registered under the scheme. It was maintained that at no point of time was any representation held out to the appellants that they would be granted the subsidy and the question of binding the appellants by a promise which was never made did not arise. The learned single Judge, after a detailed discussion, rejected the argument raised on behalf of the appellants that once the appellants had got themselves registered, the right to receive the subsidy had accrued to them. It was held that unless the subsidy had been sanctioned after a decision had been taken on the application, the question of right accruing to the appellants did not arise. The learned single Judge also referred to the revised guidelines issued by the Government of India on 22.9.1988 by which it was decided to discontinue with immediate effect the grant of the Central investment subsidy to a number of units, including Fire Crackers and Printing Industries.

(3.) After considering the pleadings of the parties and the records in the case we are satisfied that the appellants cannot invoke the doctrine of promissory estoppel to bind the respondents by a promise which they never made. It is settled law that for invoking the doctrine of estoppel clear, sound and positive foundations must be laid in the petition seeking its applicability and a held [sic bald?] expression that the doctrine was attracted because the party invoking the doctrine had altered its position relying on the promise of a party would not be sufficient to press into aid the doctrine where to apply it would, otherwise, be inequitable. The doctrine of promissory estoppel is a principle evolved by equity to avoid injustice and the basis of the doctrine i.e., if any party has by his word or conduct made to the other party an unequitable promise or representation by word or conduct, which is intended to create legal relations or affect legal relationship to arise in the future, knowing as well as intending that the representation, assurance or the promise would be acted upon by the other party to whom it has been made and has, in fact, been so acted upon by the other party, the promise, assurance or representation should be binding on the party making it and that party should not be permitted to go back on it, if it would be inequitable to allow it to do so, having regard to the dealings, which have taken place between the parties. In the instant case, it would be seen that at no point of time was any promise made or representation held out to the appellants. Indeed, the appellants had got themselves registered as stipulated by the scheme. A careful reading of the scheme, the guidelines and the other documents and records shows that after registration, the industrial units have to get themselves registered. Such registered units, thereafter have to make an application for grant of subsidy and each of the applications has to be considered on merits by the respondents to decide whether or not, a particular industrial unit qualifies for the grant of subsidy and also the extent of the subsidy admissible to the unit. In the present case, the appellants, on their own showing, had only filed an application and that application was never sanctioned and, as a matter of fact, was rejected, if the appellants chose to set up the units without obtaining the sanction, they do so at their own risk and, certainly, they did not do it pursuant to any promise, representation or sanction accorded by the competent authority. We find that even the basic minimum foundation for invoking the doctrine of promissory estoppel has not been laid in the writ petitions and our attention has not been drawn to any promise or representation clearly held out by the respondents to the appellants that central subsidy shall be granted to them. The mere filing of the application cannot amount to any representation or promise being held out by the respondents. Faced with this fact situation, Mr. S. Govind swaminathan, learned senior counsel appearing for the appellants, raised the plea that the application filed by the appellants was as per the guidelines required to be considered by the State Level Committee and that it had not been so considered by the State Level Committee and therefore, the rejection of the application, as communicated to the appellants, was liable to be set aside. Not only do we find that there is no factual averment made in the affidavits filed in support of the writ petitions that the applications had not been put up to the State Level Committee, or not considered by the State Level Committee, no grievance even has been made in the writ petitions on that aspect. Without any factual basis, we cannot permit the appellants to raise that plea. Even otherwise, we find that the plea which has not been raised by the learned senior counsel does not merit our consideration because we find that in paragraphs 10 and 11 of the grounds of appeal, what has been projected is that the subsidy had not been sanctioned by the State Level Committee. Paragraphs 10 and 11 read thus: