VINAY CEMENTS LIMITED Vs. STATE OF ASSAM

JUDGEMENT

(1.) By this writ petition, the petitioners have sought for a writ of mandamus for a direction on the respondents to grant eligibility certificate under the incentive scheme of the Government of Assam, Department of Industries known as 1982 Scheme issued by the Department of Industries on 12th of October, 1982. By the said scheme, the Government of Assam announced a package of incentives on new industries and existing industries for undertaking expansion and or diversification of the existing industries. The said incentives intended to give an impetus to a speedy industrial development and extend assistance to individual entrepreneurs and in particular, encourage local entrepreneurs to take up industrial ventures, the Government of Assam announced an industrial policy vide Notification No. MI. 60/67 dt. the 8th March, 1969. The policy laid down guidelines in respect of fiscal incentives, provision of infrastructure, marketing facilities, suitable power tariffs and extension of financial assistance and tax concessions. Being faced by certain difficulties, the Government revised its 1969 policy and make it more broad based and effective so as to speed up the pace of industrialisation in the State and framed the said 1982 Scheme. The said scheme was made available to private sector/ to co-operative sector / to joint sector/State/public Sector, Central public sector undertakings was not considered eligible for incentives under the said scheme. The basic requirement for the purpose of 1982 Scheme was to take (i) initial effective steps; and (ii) final effective steps. Under the initial effective steps (i) the unit shall be in effective possession of land; (ii) registration of the firm or company or society; (iii) the unit shouldhave obtained provisional SSI Registration or letter of intent from the Government of India; and (iv) cases not covered under the Industries (Development and Regulations) Act, 1951, the unit should have applied for DGTD registration. The final steps were to be taken are as follows : (a) Industrial licence/DGTD registration should have been obtained;(b) Capital goods clearance should have been obtained; (c) The means of finance for the project should have been completed;(d) Other clearance, if any, from the Central/State Government should have been obtained;(e) The unit should have acquired at site fixed assets to the extent of at least 10% of the total fixed assets as envisaged for the project;(f) The unit should have incurred expenditure on the project to the extent of at least 25% of the capital cost envisaged for the project.

(2.) The promoters of the petitioner company being encouraged by the incentives contained in the scheme of 1982 and in order to give impetus to the industrial growth of the State decided to let up a cement factory in the State of Assam though otherwise the same was not conducive nor viable proposition.The promoter of the petitioner company by a letter dated 11-4-84 applied under the Industries (Development and Regulations) Act, 1951 to the Government of India, Ministry of Industries for granting of an industrial licence for the manufacture of Portland Cement falling under the Scheduled Industries No. 35(1). By letter dated 2-7-84, the Under Secretary to the Government of India, Ministry of Industries issued under No. L:561 (1984) to the promoter an industrial licence (letter of intent) for the establishment of a new undertaking in the North Cachar Hills District in the State of Assam for the manufacture of Portland Cement up to the annual capacity of 52,000 tones. Subsequently, by a letter dated 2-11-84, the Joint Secretary to the Government of India, Industries Department informed the said promoter that depending upon the viability of the project, the Government of Assam may take up participation under the assisted sector which would be channelised through the Assam Industrial Development Corporation Ltd. to the extent of 10% of the equity. The promoter Shri N. M. Bawri was requested to forward the project profile to the A.I.D.C. Ltd. On 9-1184, the Principal Secretary (N), North Cachar Hills District Council, Haflong, issued a 'No Objection Certificate' to the said promoter of the company for establishing a cement factory at Umrangshu, N. C. Hills, subject to obtaining requisite licence/lease from the authority concerned. Again by letter dated 9-1-85, the Joint Secretary to the Government of Assam wrote to Sri B. Srikantan, Consultant (Minerals) North Eastern Council Secretariat, Shillong informing, inter alia, that the State Government is encouraging private entrepreneurs to invest in this sector considering the requirement of cement in the North Eastern Region, and such investments may be promoted by the State Government in the assisted sector wherein the State Government may also participate in equity participation to the tune of ten per cent of the total equity and that the A.I.D.C. shall be the agency of the Government in this regard and the release of funds to the AIDC shall be by the State Government. On 15-3-95, the said promoter sent a letter to the Udyog, Vikash, the implementing agency of the AIDC Ltd. along with a duly filled in application in the prescribed form for registration under the scheme of 1982 which was duly received by the Udyog Vikash. On 26-3-85, the Udyog Vikash was pleased to issue a Provisional Registration Certificate being No. VV/55 to the said promoter. It was also certified that the unit was categorised under 35(1) in the list of industries eligible for the incentives under the scheme of 1982. Thereafter, by a letter dated 7-5-85, the Convenor of Udyog Vikash addressed a letter to Late N. M. Bawri, the promoter of the company that the new unit will be covered by the Scheme of 1982 since the firm orders have already been placed by him for substantial part of the plant and machinery and various other effective steps have been taken by him for implementation ofthe project. The Convenor further assured that the eligibility certificate shall be issued in due course. Being eligible under the Scheme of 1982, it was confirmed that he shall be entitled to a capital subsidy of Rs. 20 lakhs for setting up the project in the N.C. Hill District of Assam, under the capital subsidy scheme of the Government of India. The Promoter of the Company by a letter dated 7-6-1985 informed the Managing Director of Assam Industrial Development Corporation Ltd. about the sanctioning of the mining lease by the State of Assam, no objection certificate issued by the District Council and the preparation of the detailed project report. By letter dated 19-8-1985, the Deputy Secretary to the Government of Assam, Power, Mines and Minerals Department informed the Promoter of the Petitioner Company that under the Mineral Concession Rules, 1960, the Governor of Assam was pleased to grant a mining lease for limestone over an area of O.35 sq. km. (approx) near village Umrangshu in N.C. Hills District for a period of 20 years and the promoter was directed to deposit a sum of Rs. 1000/- by way of security which was duly done. On 10th Sept. 1985 the Promoter of the petitioner Company informed the AIDC about the Mining Lease for Limestone and also about the intention of the petitioner Company to start the Unit in 1985 itself and insisting for appointment of Consultants to the said Corporation. By a letter dated 30th Sept. 1985 certain queries were made by the AIDC On 7-11-1985 the Additional Secretary and Settlement Officer, North Cachar Hills District Council, Haflong passed an order allotting 250 bighas of land for the purpose of setting up the Cement Plant. The Promoter by a letter dated 12-11-1985 informed the AIDC about grant of said land and requested them to participate in the project by way of equity participation. The authorities from time to time were informed of the progress being made for implementation of the project. By a letter dated 30-1-1986, the Convenor of Udyog Vikash was pleased to grant permission for engaging Entech Consultancy Bureau for preparation of the detailed project report. The Promoter of the petitioner company supplied as asked for from time to time the required informations. In the meantime, a company was formed with Late N. M. Bawri as its promoter and the name of the Company as Vinay Cements Ltd. was approved by the Registrar of Companies. By 1986 the petitioner has secured all the other clearance from the State Government as well as the Central Government including Pollution Control Board No Objection Certificate.

(3.) Subsequently, by a letter dated 11-71986 the Promoter of the said Company wrote a letter to Udyog Vikash, AIDC informing it of the formation of the Public Limited Company in the name of Vinay Cements Ltd. in the N.C. Hills, Assam and requested Udyog Vikash to transfer the Registration dated 26-3-1985 issued by Udyog Vikash to the name of the petitioner company and also wrote letters to the Govt. of India and others for transferring Industrial licence and letter of intent to the petitioner company accordingly. The same was done by the Government of India by a letter dated 5-1-1987 transferring the letter of intent in the name of the petitioner company from the name of the Promoter and on 4-3-1987 the Industrial licence was issued to the petitioner company by the Government of India. On 5-12-1986 the IDBI had agreed to grant term loan to the petitioner for the Cement Project. The Auditors report dated 3-5-1987 shows that the total financial involvement of petitioner company as on 31-3-1987 was Rupees 2,47,45,245/-. From the said report, it appears that substantial part of the Factory building was constructed before 1-1-1987 on the said 250 Bighas of land. The Unit have incurred expenditure of more than 25% of the capital cost as envisaged in the project. The above facts disclosed that effective steps both initial and final were completed by the petitioner company before 1-1-1987.