HARYANA FINANCIAL CORPORATION OF CHANDIGARH-/ vs JAMNA DASS COTTON MILLS OF HANSI

WHETHER the grant of subsidy by the Central Government for industrial unit to be set up in selected backward areas is a "service" within the meaning of its definition in Section 2(1) of the Act? This is the threshold question in this set of two appeals. It suffices to notice the facts and merits relevant to this issue, with relative brevity.

FIRST appeals Nos. 315 and 316 of 1992 are directed against the same order of the District Forum, Hisar. Thereby it has been ordered that the Central subsidy to the tune of Rs. 9,600/- be released and paid over the respondent. Learned Counsel for the parties are agreed that this order will govern both these orders. The complainant- Company was set up under the name and style of M/s. Jamna Dass Cotton Mills Private Limited and it availed the facility of a loan, from the Haryana Financial Corporation, Chandigarh (hereinafter referred to as the Corporation). It was its case that at the time of the advancing of the loan, a vague assurance was held out that as an incentive for setting up its industrial unit in a backward areas of the Hisar District, Central subsidy would be provided for its mill. To secure the same, the respondent, therefore, registered his unit with the District-Industries Centre, Hisar under category ''B'' for availing the Central subsidy. It is the case that the State Government of Haryana approved the respondent''s case for the release of Central subsidy to the tune of Rs. 96,000/- and they were so informed by the Haryana Financial Corporation vide their letter dated 11th of May, 1989. The respondent thereafter submitted the requisite documents with the aforesaid Corporation by the 28th of May, 1989. It was the complainant''s case that lured by the incentive of the Central subsidy, they had spent a huge amount for setting up the mill in the desired location. Therefore, it was obligatory on the part of the appellants to release the same forthwith. However, their delay and denial thereof had resulted in substantial financial loss to the respondent. It was alleged that the State Government or the Corporation had with-held the payment of the Central subsidy despite its approval by the Haryana Government.

The primal grievance of the complainant- respondent was that despite the earlier sanction of 28th of March, 1989 and he was later informed on the 28th of March, 1990 that the Central subsidy was not likely to be disbursed to his concern and the judicial stamp paper and the documents submitted by him were returned back. A notice under Section 80 of the Civil Procedure Code was then served, which was responded to with the stand that the Central subsidy could be disbursed to the respondent on the release order of the State Government alone which had not been done. Persistent requests thereafter for the grant and release of the subsidy having not materialised, the complaint was preferred to seek a direction for the payment thereof.

THE Haryana Financial Corporation in stoutly resisting the complaint, first took up the preliminary objection that the District Forum had no jurisdiction to try the lis and further that the same was time barred. On merits, it was admitted that a term loan was advanced to the respondent for setting up the unit, but rest of the allegations were denied. THE express plea was that the amount of Central subsidy was to be released by the State Government which was to be disbursed by the Corporation as the latter''s agent. Since no amount was provided to the Corporation by the State Government, to pay the Central subsidy, hence the said subsidy could not be released by the Corporation. THE firm stand was that due to the non-release of the amount by the State Government the Central subsidy could not be disbursed. The appellant-Director of Industries in a somewhat informal reply to the complaint, took up the plea that the Central investment subsidy amounting to Rs. 96,000/- was recommended by the State Level Committee in its meeting held on the 28th of March, 1989 on the basis of agenda sponsored by the Haryana Financial Corporation as per usual practice. It was however, pleaded that the Ministry of Industry of the Central Government used to extend the period of operation of the central investment subsidy from time to time and this scheme had remained in operation upto the 30th of September, 1988 only. Keeping this in view the respondents and the scheme of a few industrial units were, therefore, placed before the State Level Committee in its meeting. However, the Government of India did not grant extension for the continuation of the scheme beyond the 30th of September, 1988. In view the aforesaid facts and further instructions of the Government of India, dated the 21st of July, 1989 subsidy amount, therefore, could not be released and disbursed to the respondent. The complainant in his replication merely reiterated his earlier stand.

THE parties adduced evidence in support of their respective cases, but primal reliance was on the documents, the authenticity of which was not put under dispute. THE District Forum did not advert at all to the firm preliminary jurisdictional objection raised by the appellant Haryana Financial Corporation that it had no jurisdiction to try the complaint at all. Ignoring the same, it adverted primarily to the factual aspect and seems to have come to the conclusion that the complainant-respondent had come to be denied of the Central subsidy because of some departmental delays. Somewhat summarily after referring to the definition of the ''complaint'', ''complainant'', ''consumer'' and ''service'', it was cryptically observed that the scheme of loans, grants, subsidy, rebates, concessions, prices, gifts are "facilities" for public and is entitled if money is spent for them. Nevertheless, the District Forum seems to have been deeply sceptical itself and it is best to notice its doubts in its own words: "Complainant has claimed the amount of Rs. 96,000/- of subsidy with-held by the respondents since 1989 and he is clearly entitled for the same, but we are not free from doubt in passing such an order. Our scope is to discuss deficiency of facilities and that is quite clear. Accordingly we propose to award Rs. 96,000/- as compensation in pursuance of Section 14(1)(d) of the said Act."

Despite the aforesaid ambivalent finding, the District Forum, however, proceeded to direct the payment of Rs. 96,500/- to the respondents within two months. Learned Counsel for the appellants have inevitably assailed the aforesaid halting conclusion and direction of the District Forum with great vigour. It was rightly contended that the District Forum had failed to advert to the threshold and root question whether the purely concessional grant of Central subsidy as an incentive to industry would be a "service" at all under the Actor that the respondent by any stretch of imagination would come within the ambit of a "consumer". It was the firm stand that on the admitted factual position, the Central subsidy is not at all a "service" nor could the complainant hire such a service or pay any consideration, there- fore, to come within the pale of the consumer jurisdiction. It was the submission that the Central subsidy was a pure bounty and a concession and there arose no legal right to such a subsidy nor can the same be awarded by way of compensation under Section 14(1)(d) of the Act.

THERE is patent merit in the aforesaid submission. However, it is not necessary to get enmeshed in all the various aspects because the threshold issues are whether the Central subsidy can come within the ambit of the definition of "service," or the respondent can claim the status of a "consumer".

IN order to appraise the pristinely legal questions aforesaid it is best to first clear the factual background of any cobwebs. It would appear that way back in 1971, the Government of INdia, Ministry of INdustry, had floated 10 to 15% Central subsidy scheme for industrial units in notified backward districts. The plain object thereof was to provide an incentive for industrialists to set up their units in the backward areas of the country in order to promote the development thereof. That this subsidy was purely in the nature of a concession or an incentive intended to facilitate the developzmental activities in areas which had lagged relatively behind other more advanced ones is somewhat manifest. INevitably the grant of this subsidy was in the discretion of the Central Government and it was disbursed through the concerned State Governments and their industries departments. That there was no inflexible vested right in any one to lay claim thereto is manifest from the fact that the scheme was temporary in nature and was extended from time to time. IN the present case it is not disputed that by notification dated the 3rd of May, 1988, it was merely extended from the 1st of April, 1988 to 3rd of September, 1988. Equally, it is clear from the authoritative communication dated the 21st of July, 1989 that vide the Ministry of INdustry''s letter dated the 22nd of September, 1988 the Central subsidy was discontinued to non-manufacturing activities and the procedures therefor was further changed and streamlined. Only some provision was made for reimbursement of subsidy already disbursed under the orders of the State Governments in cases on or before the 30th of September, 1988. The purely concessional and transitory nature of the Central subsidy is thus more than self-evident. That brings us to the question whether the afore-noted incidents of the Central subsidy can bring it within the ambit of a service under the Act. For facility of reference the definition under Section 2(1)(o) may be quoted: 2(1)(o): "service" means service of any description which is made available to potential users and includes the provision of facilities in connection with banking, finanacing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, entertainment, amusement or the purveying a news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;

Now a plain reading of the above, would show that a "subsidy" is not in terms one of the many services expressly incorporated in the definition. It is surely neither banking, or financing or insurance etc. Nor can one even remotely bring such a central bounty or concession within the concept of a service as such. It is true that the word ''service'' is a wide- ranging one and cannot be easily put in a strait- jacket. However, it needs no great erudition to hold that a Central subsidy intended for the development of the backward areas and granted as an incentive and concession to industry cannot be labelled as the hiring out of a service by either the State or the Central Government. It is somewhat elementary that no one can claim a legal vested right to a subsidy because the same is disbursed through a tortuous process of approval by the respective industries Department of the States and the financial sanction of the Central Government.

IT seems somewhat unnecessary to overly elaborate the matter because to our mind the question appears to be somewhat plain on principle. The learned Counsel for the respondent could cite neither authority nor any cogent reasoning which could bring an incentive or a concession or a bounty within the arena of hired services. IT is true that the matter is res-integra and no judgement could be cited on either side, but this is perhaps so because such a strange claim has never been so far raised to merit authoritative adjudication. In the light of the aforesaid discussion, the answer to the question posed at the out-set is plainly in the negative. It is held that the grant of subsidy by the Central Government for industrial units to be set up in selected backward areas is not a service within the manner of its definition under the Act.

ONCE it is concluded as above, it is plain that the wind is taken entirely out of the sails of the respondent''s case. However, assuming at the highest in their favour it is again necessary for them to show that they had hired any services for a consideration to come within the ambit of the definition of a consumer as laid out in Section 2(1)(d)(ii). Plainly enough little or no question of hiring any subsidy or paying a consideration for such hiring can possibly arise in the fact situation. It is significant that barring a strained attempt made through subsequent corrections, it was not even the specific case in the complaint that the Central subsidy was a service nor is there any pleading worth the name to the effect that there was any hiring of the alleged services of a subsidy or a paid or promised consideration, therefor. The conclusion is inevitable that the respondent cannot, therefore, pretend to come within the ambit of the definition of either being a consumer and equally as already held the Central subsidy is not a service which is capable of being hired stricto-sensu. ONCE that is so, no question of any deficiency in such a service can arise nor can any relief be afforded in the consumer jurisdiction. It remains to advert to the somewhat summary conclusion of the learned District Forum that the schemes of loan, grants, subsidy, rebate, concession, prices, gifts are facilities for public and any one is entitled thereto, if money is spent for them. We find no adequate warrant for such a sweeping conclusion, which is not even remotely inferable either from the definition of the complaint or from the cryptic reasoning on this point in paragraph 6 of the order under appeal. Equally it has to be noticed that the District Forum had itself expressed its doubt about passing the order which did. It is somewhat elementary that substantial relief can only be granted on firm findings in favour of the complainant and not on the basis of ambivalent doubts with regard thereto. In the light of the fore-going discussion, we must conclude that herein both the threshold require ments of the respondent being a consumer or their being any deficiency in services are totally conspicuous by their absence. The District Forum had thus no jurisdiction to entertain the matter far from granting any relief therein. Both these appeals are consequently allowed and we are constrained to set aside the order of the District Forum and dismiss the complaint preferred by the respondent. The parties are however, left to bear their own costs. Appeal allowed. ________________