EASTERN SYNPACKS LIMITED Vs. STATE OF JHARKHAND

JUDGEMENT

(1.) CHALLENGE in this writ application is to the order dated 4-5-2000 {an-nexure-5) and the order dated 15-6-2007 (Annexure-10) issued by the Industry Department, Government of Bihar (respondent no. 4) declaring thereby that the petitioner company is not entitled to any power subsidy on account of the fact that the petitioner company has been obtaining power supply from the private company namely the TISCO and there is no provision under the Industrial Policy of 1993 for providing power subsidy to consumers who obtain electric supply from private companies. Similar challenge has been made to the order dated 27-9-2007 (Annexure-9) issued by the Director of industries, Government of Jharkhand on the basis of the letter (Annexure-6) issued by the Director of Industries, Government of Bihar, communicating thereby that the petitioner is not entitled to get the power subsidy on power consumption under the industrial Policy of 1993.

(2.) FACTS of the petitioner's case in brief are that the petitioner has a medium scale unit at Jojobera, Jamshedpur carrying on the business of manufacturing HDPE/pp woven bags. Since the location of the petitioner's unit falls within the command area of operation of TISCO Ltd. , which has exclusive right to supply electricity within its command area, the petitioner has been obtaining electric supply from TISCO. The erstwhile unified State of Bihar had declared an Industrial Policy in 1993. One of the incentives offered in the said policy was that Government would pay power subsidy @ 18 paise per unit on power consumption to industrial units making an investment of Rs. 75 lakhs in plant and machinery and @ 15 paise per unit to those units making an investment of more than Rs. 75 lakhs upto Rs. 15 crores. Such subsidy was payable, if the unit comes into production between 1-4-1993 to 31-3-1998. The petitioner establishment had made an investment of more than Rs, 75 lakhs and it commenced production w. e. f. 18-3-95. On the belief that it was entitled to claim subsidy on power consumption under the government's Industrial Policy of 1993 for the period of five years commencing from 18-3-1995, the petitioner had put up its claim, as required, through the BICICO (respondent-6) in the prescribed pro forma. However, in spite of such claim and in spite of furnishing all the requisite documents and bills pertaining to electric consumption, the power subsidy was not released to the petitioner company. Despite the clear stipulations in the State government's Industrial Policy of 1993, the manager, BICICO (respondent-6) sought for a clarification from the Industrial Development Commissioner, Bihar as to whether the petitioner company is entitled to get subsidy in view of the fact that the petitioner company has been obtaining power supply from a private licensee namely the TISCO ltd. While the clarification was being awaited, the State of Jharkhand was created w. e. f. 15-12-2000. Since under the Bihar Re-organisation act, 2000, the policies framed by the erstwhile State of Bihar was binding and applicable in the State of Jharkhand also, the petitioner Company approached the Director of Industries, Government of Jharkhand, ranchi for release of power subsidy under the Industrial Policy of 1993. The Director of Industries, Jharkhand sought information on the issue from the BICICO. In response, the BICICO informed the Director of Industries, Jharkhand by its letter dated 5-1-04 enclosing therewith an earlier letter dated 4-5-2000, that since there was no provision under the State Industrial Policy of 1993 for giving power subsidy to private companies on electric supply, therefore, the power subsidy is riot payable to the petitioner. The petitioner, thereafter, submitted detailed representation before the Secretary, department of Industries, Government of jharkhand demanding power subsidy. On the petitioner's representation, an opinion was sought for from the Advocate General, government of Jharkhand and ultimately by the impugned letter dated 27-9-2007, the petitioner was informed that on the basis of the earlier stand taken by the Department of Industries, Government of Bihar, Patna, the petitioner is not entitled to grant power subsidy.

(3.) ASSAILING the impugned orders, Sri M. S. Mittal, learned counsel for the petitioner would submit that the decision taken by the respondents is on the face of it, illegal, arbitrary and contrary to the Industrial Policy of 1993. Referring to the relevant clauses of the Industrial Policy of 1993 (Annexure-2), learned counsel would explain that in none of the clauses does the policy declare that power subsidy would not be payable to the private company which obtain power supply from private licensees. Learned counsel adds that in fact when a similar issue was raised on a previous occasion, the Director of Industries, Bihar, Patna had by his Office memo dated 29-10-1986 (Annexure-1) had confirmed that the Industrial units obtaining electric supply from private licensees are entitled to the same benefit of power subsidy since the intention of the Industrial policy was to provide incentive by way of power subsidy to the industrial units irrespective of the source of obtaining the electric supply. Learned counsel adds further that by illegally withholding the power subsidy for the period 9-5-1996 to 19-9-2000 to the tune of rs. 9,61,464. 02, the respondents have unjustly subjected the petitioner company to loss and detriment compelling the petitioner to pay interest on the working capital loan obtained from Union Bank of India.