Jainco Package Industries vs Commercial of Industries, A.P., Hyderabad and others

The petitioner is an Industrial unit and in this writ petition it has sought for Mandamus declaring the action of the Respondents 1 and 2 in not releasing the investment subsidy of Rs.4,12,020/- to the petitioner''s unit as illegal, arbitrary, unjust and unconstitutional and for a consequential direction to the Respondents 1 and 2 to release the investment subsidy amount of Rs.4,12,020/ - with interest at 16.5% from the date of sanction of subsidy i.e., 28-2-1997 till the date of payment.

Let the Court state the undisputed facts that lead to the filing of this Writ Petition in brief as under:

The petitioner''s unit was constructed on 3-12-1994; the unit was registered with the Industries department on 21-1-1995; the plan was approved by the Director of Factories on 18-5-1995; Clearance from the Andhra Pradesh Pollution Control Board was obtained on 20-5-1995; change of the use of the land from agriculture to industry purpose was ordered by the District Collector on 17-6-1995; the electricity was provided to the unit by the erstwhile APSKB on 20-7-1995 and ultimately the unit went into production with effect from 24-7-1995.

The petitioner sought the investment subsidy in terms of G.O. Ms. No.l 17 Industry & Commerce (IFR) Department dated 17-3-1993. There is no controversy between the parties that but for the Government Order in G.O. Ms. No.111 M.A. dated 8-3-1996 Municipal Administration and Urban Development (II) Department., the petitioner is eligible to seek the investment subsidy. On the application made by the petitioner seeking investment subsidy, the General Manager i.e., the 2nd Respondent has passed the proceedings dated 28-2-1997 sanctioning the investment subsidy of Rs.4,12,020/- subject to the condition that the petitioner should furnish the approval of the Director of Town and Country Planning/HUDA and the APSEB permission to install and run the D.G. set. It appears that the petitioner accordingly made an application to the Director of Town and Country Planning for the approval and that application was rejected by the Order dated 5-6-1996. It appears that since the application of the petitioner was rejected by the Director of Town and Country Planning, the subsidy granted by the 2nd Respondent was ultimately not released to the petitioner. From the records placed before the Court, however, it appears that the sanctioned investment subsidy was received by the State Financial Corporation, as could be seen from the letter written by the Senior Branch Manager, A.P. State Financial Corporation, Rangareddy (West) Branch, Hyderabad dated 6-10-1998 to the petitioner.

Assailing the refusal of the Respondents 1 & 2 to release the investment subsidy, the learned Counsel for the petitioner contends that the G.O. Ms. No. 111 Municipal Administration and Urban Development Department dated 8-3-1996 is not applicable to the petitioner''s unit and infact that is the opinion of the Respondent No.2 as reflected in his letter to the 1st Respondent and therefore the refusal to release the investment subsidy is totally irrational and arbitrary.

On the other hand, the learned Government Pleader for Industries and Commerce would maintain that since the 2nd Respondent sanctioned investment subsidy subject to the petitioner producing the approval from the Director of Town and Country Planning and since the petitioner''s application was rejected by the Director of Town and Country Planning, the petitioner is not entitled to seek Mandamus to the Respondents 1 and 2 to release the investment subsidy.

The undisputed facts noted above make it one thing clear that the petitioner''s unit in all respects and content was established in the year 1995 itself after going through all the procedural formalities governing the establishment of the Industry. There is no need to repeat the orders obtained by the petitioner and permissions and approvals obtained by him to establish the industry. The petitioner''s unit went into production on 24-7-1995. The restriction imposed by the administrative instruction i.e., G.O. Ms. No.111 Municipal Administration is dated 8-3-1996. The Industries department and the Government undoubtedly have the power to prevent the establishment of polluting Industries in the prohibited area by virtue of this order. The Court is not called upon to decide whether the petitioner''s Industry is a polluting Industry or whether it should be permitted to continue there in the prohibited area or not. The simple and the only question that falls for consideration is, whether the Respondents 1 and 2 are justified in refusing to release the sanctioned investment subsidy on the ground that the petitioner failed to perform an obligation flowing from the G.O. Ms. No.111 dated 8-3-1996. As rightly opined by the 2nd Respondent in his letter dated 8-12-1997 addressed to the 1st Respondent, the G.O. Ms. No.111 dated 8-3-1996 is not at all applicable to the petitioner''s unit. The petitioner''s unit was an established unit in every respect before G.O. Ms. No. 111 dated 8-3-1996 was issued in the year 1996. In that view of the matter, the Respondents 1 and 2 could perhaps deny the sanctioned investment subsidy only on the ground that the petitioner did not fulfil any of the conditions or formalities in terms of Government order prescribed either by G.O. Ms. No.l 17 dated 17-3-1993 or any other relevant Government orders or relevant statutes holding the field during the years 1994-95 during which years there was initiation and completion of the petitioner''s unit. That is not the case of the Respondents 1 and 2.

The entitlement of the petitioner to receive the investment subsidy except on the ground that he did not produce the clearance from the Director of Town and Country planning is not in dispute. Therefore, the petitioner has made out a case to issue Mandamus to the Respondents 1 and 2 to release the sanctioned investment subsidy.

In the result, the Writ Petition is allowed. A direction shall issue to the Respondents 1 and 2 to release the investment subsidy to the petitioner as sanctioned by the 2nd Respondent vide his letter No.843/B3/ 96 dated 28-2-1997, within a period of one month from the date of receipt of a copy of this Order. Further, the Respondents 1 and 2 are directed to release the bank guarantee furnished by the petitioner for a sum of Rs.4,12,020/- only. No costs.