M/S. SUN RE-ROLLING MILLS AND COLD STORAGE PVT. LTD. Vs. THE DISTRICT COLLECTOR, VISAKHAPATNAM, AND OTHERS

JUDGEMENT

(1.) Heard Dr. P.B. Vijaya Kumar, learned counsel for the petitioner and learned Government Pleader for Agriculture for respondents.

(2.) Brief facts of the case are that the petitioner is a private limited company. It has established a cold storage unit and applied for Capital Investment Subsidy under APSAMC Capital Investment Subsidy for Cold Storage Units/Chains. Accordingly, the 4th respondent sanctioned subsidy for a sum of Rs.34,93,000.00 as per G.O.Ms.No.211, dated 2.07.1999 by obtaining agreement dated 12.01.2001 from the petitioner with structured conditions. As per Clause 10 of the said G.O., Cold Storage units set up in the State of Andhra Pradesh will be eligible for Capital Investment subsidy of 25% on power bills (both demand and energy) for a period of 3 years from the date of commencement of commercial production with a maximum total admissible rebate of Rs.30 lakhs. The rebate shall be allowed by the Andhra Pradesh State Electricity Board in their monthly bills (vide G.O.Ms.No.108, Industries and Commerce (P) Department dated 20.05.1996). G.O.Ms.No.211 dated 2.07.1999 was in operation from 1.07.1999 to 31.03.2001 and the petitioner unit became operational on 17.01.2001. Since the Electricity Board started demanding the entire electricity consumption charges without extending any rebate contrary to Clause 10 of G.O.Ms.No.211, the petitioner had to pay Rs.1 lakh every month towards power consumption charges. The petitioner unit carried its business for about 38 months and became unviable and suffered huge losses.

(3.) In the process, the petitioner defaulted in payment of loan instalments to A.P. State Finance Corporation Limited (APSFC). To recover dues A.P. State Finance Corporation Limited initiated distress proceedings. To avoid the consequences, the petitioner sold away the unit to Visakha Cooperative Dairy through negotiated settlement on 18.03.2004, and discharged the liability of Rs.1,36,75,922.00 to APSFC.