M/s Shakti Industries vs Union of India & others

Sudhanshu Dhulia, J.

Counter affidavit filed on behalf of the Union of India in the Court today is taken on record.

The petitioner was given land on lease in an industrial area of the State Industrial Development Corporation of Uttarakhand Limited (in short

“SIDCULâ€). The area of the land was 1,800 square meter. The petitioner manufactures LED bulbs in the factory. According to the petitioner, he

was also liable to be given subsidy by Government of India for setting up an industry in the State of Uttarakhand under the terms of the Government

of India. According to the petitioner, subsidy has already been sanctioned but this is not being released by the SIDCUL. Aggrieved, the petitioner has

filed the present writ petition before this Court.

The case of the petitioner is that subsidy is liable to be given under the scheme of the Government of India which stipulated that after going into

production the Unit has to work continuously for five years which would entitle the Unit for a subsidy. Not only this, the Union of India has annexed a

letter dated 22.10.2018 in its counter affidavit of Under Secretary to the Government of India, Ministry of Commerce and Industry Department of

Industrial Policy and Promotion which is a direction to SIDCUL and reads as under:-

“You are therefore requested to immediately release the subsidy amount of M/s Shakti Industries. Compliance of this action may also be given to

Hon’ble High Court of Nainital under intimation to this Department.â€​

In view of this, a statement has also been given by the learned counsel for the Union of India Sri D.C.S. Rawat that Government of India intends to

release the subsidy.

On these set of facts, the subsidy is liable to be released in favour of the petitioner as this subsidy is of Government of India.

Having made the above determination, however, the fact remains that the subsidy was initially withheld by the SIDCUL on ground that when an

inspection of the industrial premises of the petitioner was made, it was found that part of the land which was given to the petitioner on lease has been

sub-let by the petitioner to another person. This sub-letting is also admitted by the petitioner.

Learned counsel for the SIDCUL Sri Rakesh Thapliyal would argue that this is in violation of the conditions of the lease deed itself as the petitioner

could not have sub-let the plot.

The petitioner, on the other hand, relies upon clause 7.2 of the lease deed, which reads as under:-

“7.2. In case, the Lessee in desirous of assigning transferring or sub-leasing any part or the whole of the Demised land, the Lessee shall intimate

the Lessor in writing of such intention to assign, transfer or sub-lease, setting forth the name and description of the parties in whose favour such right

or interest is proposed to be created or assigned. The grant of permission by the Lessor hereof, will be subject to payment of Transfer Fees and

Subject to compliance of the applicable Zoning Plan.â€​

According to the petitioner, there were certain conditions prescribed for sub-letting for which he had to transfer a fee of Rs.10,000/- (Rupees Ten

Thousand Only). However, admittedly there is no order on record, which sanctions this transfer, nor was any permission given by the SIDCUL for the

said transfer, which is also an admitted fact.

Learned counsel for the SIDCUL relies upon clause 10.8 of the lease deed, which reads as under:-

“10.8. The rights granted or obligations assumed hereunder, shall not be assigned or transferred by the Parties, without the prior written consent of

the other Party.â€​

Learned counsel for the petitioner though also pointed out to clause 9.2 of the lease deed, which is regarding the arbitration, which reads as under:-

“9.2. All disputes and differences in relation to the applicability, interpretation, rights and obligations of the parties hereunder and/or arising under

these presents, shall be referred to a Sole Arbitrator, to be nominated by the Managing Director of the Lessor. Writhing thirty (30) days from the date

of receipt of a request for nomination of Sole Arbitrator, the Managing Director of the Lessor shall, nomination of Sole Arbitrator and issue

communication in respect of the same to the parties. In case, the Sole Arbitrator is not nominated within the period stipulated hereinabove, the parties

will be at liberty to invoke the provision of the Arbitration and Conciliation Act, 1996 and any subsequent amendments thereto or enactment(s) in

substitution thereof, for appointment of Sole Arbitrator.â€​

In view of the above, the subsidy is liable to be released and the same shall be released in favour of the petitioner forthwith. However, SIDCUL at

the same time will also be at liberty to reclaim the land which has been given to the petitioner, in case it comes to the conclusion that the petitioner has

violated the terms and conditions of the lease deed. As far as the arbitration clause is concerned, the parties would always be at liberty to invoke the

arbitration clause as referred by the counsel for the petitioner.

The writ petition stands disposed.