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Judgment
B.P. Routray, J
Both the writ petitions have been filed by the same petitioner. The facts and cause of action in both the cases being inter- connected, both the writ petitions are heard analogously and disposed of by this common judgment.
The original petitioner-Prafulla Chandra Sadangi since died during pendency of the writ petition was substituted by the present petitioners as legal representatives.
The case of the petitioner in common is that, in the Industrial Policy Resolution, 1996 (hereinafter stated as "IPR, 1996" in short) certain incentives for new cinema hall as an industrial unit were provided in areas other than urban areas having population of one lakh or more according to 1991 census and subject to other conditions mentioned against each incentive. Accordingly, the petitioner allured by such incentives provided in the IPR, 1996 constructed a new cinema hall at Belaguntha in the district of Ganjam and made an application for registration to the District Industries Centre, Ganjam. Initially provisional registration certificate dated 17.10.1996 was issued in favour of the petitioner and after beginning of the cinema hall which was taken as akin to commencement of production, he was granted permanent registration certificate dated 22.4.1998 under Annexure-3. As such the industrial unit, i.e., the cinema hall was established in the name and style of "Suravi Talkies" at Belaguntha, which is a Motion Pictures Cinema Hall as per the registration certificate. The industrial production, i.e. 'Cinema Hall', commenced before 10.9.1997 as per the stipulation. As no incentives were extended in terms of IPR, 1996 in favour of the petitioner despite fulfilling all conditions and stipulations, he made representations to different authorities. Then the District Industries Centre, Ganjam recommended his case to the Orissa State Financial Corporation (hereinafter stated as "O.S.F.C.") on 28.12.1998 under Annexure-4 for sanction of capital investment subsidy in favour of the petitioner, but no step was taken for grant of other incentives like exemption of electricity duty, entertainment tax, sales tax, etc.
The petitioner thus filed O.J.C. No.1458/1999 with a prayer for a direction to the opposite parties for taking immediate steps for grant of such incentives which he would be entitled to as an industrial unit and also for releasing the subsidy.
The opposite parties filed their counter separately in the said writ petition stating that the petitioner's unit being a cinema hall is entitled to other benefits as per clause-17 of the IPR, 1996 and is not entitled to Capital Investment Subsidy (CIS). It is also intimated in the said counter affidavit that an amount of Rs.1,82,000/- as Capital Investment Subsidy was sanctioned which has been subsequently cancelled and duly communicated to the petitioner.
In the meantime, the petitioner also received order dated 12.07.1999 (Annexure-5) of the OSFC regarding sanction of CIS amount of Rs.1,82,000/- to the Industrial Unit, i.e., Suravi Talkies and subsequent order of cancellation dated 11.07.2000 (Annexure-6) of the same, issued by OSFC.
This order of cancellation of subsidy and incentive dated 11.7.2000 under Annexure-6 is the subject matter of challenge in O.J.C. No.7832 of 2000.
In O.J.C. No.7832 of 2000, the opposite party no.3, who is the State of Orissa, further filed their counter denying the claim of the petitioner. It is averred by the opposite party that the industrial unit of the petitioner is not entitled to any incentive or subsidy as the same is situating within the urban area, i.e., Belaguntha NAC and the population of Belaguntha area as per 1991 census was 8838. The specific averment mentioned in the counter affidavit is reproduced below for better appreciation.
"......The deponent states and submits that in view of the aforesaid clause the petitioner's unit is not eligible for grant of any incentive as mentioned in clause 17.3 under I.P.R. 1996, firstly because the unit i.e. the cinema hall is situated within the urban area i.e. Belaguntha N.A.C. and secondly, the population of Belaguntha area as per 1991 census has been found to be 8838. Thus the petitioner's unit is not entitled to any incentive under the aforesaid clause i.e. 17.3. However, it is admitted that the petitioner's unit being a cinema hall is entitled to get benefit of clause 17.5 of the aforesaid industrial policy resolution as subsidy by way of entertainment tax through Orissa Film Development Corporation Ltd. and not from the present opp. party."
Mr. Mohanty, learned Senior Advocate for the petitioner contended that as per clause 17.3 of the IPR, 1996 it has been stipulated that incentive for new cinema hall will be available to cinema halls in areas other than urban areas having a population of one lakh or more according to 1991 census and subject to other conditions mentioned against each incentive. But the opposite parties have misinterpreted the same to decline the incentive and subsidy for the cinema hall being it is situating in an urban area having population less than one lakh. It is further argued on behalf of the petitioner that, as per the sanction order under Annexure-5, the decision was taken by the State Level Committee of OSFC whereas the decision for cancellation of the sanction was taken by the District Level Committee of OSFC at a subsequent stage under Annexure-6 and as such is against the fundamental principles of law. Therefore, it is urged that the petitioner is legally entitled to the incentive and subsidy under IPR, 1996.
On the other hand, it is argued by Smt. Pattanaik, learned A.G.A. that as per the stipulation in IPR, 1996 incentives are available to those cinema halls other than urban areas having population of one lakh or more according to 1991 census and as the present industrial unit is in an urban area having less than one lakh population is not entitled for any benefit. The cancellation of sanction is justified being strictly based on the terms of IPR, 1996.
On consideration of the fact and the arguments of both parties, the crux of dispute is found lying on interpretation of the clause 17.3 stipulated in the IPR, 1996. Perusal of the said IPR, 1996 in entirety as produced by learned A.G.A. reveals that at Part-II (Incentives) clause 17, the development of the film industry has been stipulated. Clause 17.1 mentions that development of film industry will be supported in such manner and to such extent as the Orissa Film Development Corporation (OFDC) may decide with approval of the Government. Clause 17.2 gives meaning of New Cinema Hall. Clause 17.3 is quoted herein below.
"17.3.-Incentive for new cinema halls will be available to cinema halls in areas other than urban areas having a population of 1 Lakh or more according to 1991 census and subject to other conditions if any mentioned against each incentive".
Clauses 17.4 to 17.10 prescribe different other assistances to be provided to those cinema halls in deserving cases.
The present cinema hall is admittedly situating at Belaguntha Notified Area Council in the district of Ganjam. It is also not disputed that the population of Belaguntha NAC is 8838 as per the 1991 census. It is also the admitted case of the parties that Belaguntha NAC area is an urban area and thus there is no quarrel that the present cinema hall is situating in an urban area.
The case of the petitioner for incentive and subsidy was considered by the District Industries Centre, Ganjam and accordingly recommended and consequently the sanction order dated 12.7.1999 was issued by OSFC for sanction of subsidy for Rs.1,82,000/-. It is mentioned in the cancellation order under Annexure-6 dated 11.7.2000 that the cinema hall is not eligible for the incentive under IPR, 1996 and the reason of such cancellation is explicit in the proceeding of District Level Committee meeting held on 17.6.2000, a copy of which has been annexed as Annexure-B/3 to the counter affidavit. At point no.2 of the recorded proceeding of that meeting, it is mentioned that on scrutiny/review, it is observed that under IPR, 1996, there is no provision for extending capital investment subsidy in favour of cinema halls and that the matter was discussed in detail and the committee decided to request OSFC to cancel CIS sanction order made in favour of the unit earlier as the unit is not eligible for the said incentives.
On examination of the said proceeding of the committee and the counter averments made by the opposite parties, it is not understood how it has interpreted the clauses of IPR, 1996 to decide about non-eligibility of the present cinema hall for availing the subsidy. Bare perusal of different clauses of IPR, 1996 makes it clear that film industry will be supported as would be decided by OFDC. It is seen that the opposite parties had interpreted clause 17.3 to discard eligibility of the petitioner-unit having population less than one lakh. But a careful reading of said clause 17.3, the interpretation as per our opinion is that, there is no bar in respect of those cinema halls in urban areas. Thus the interpretation cannot be restricted in a negative sense that it cannot be applicable to those urban areas having population less than one lakh. Keeping in view the beneficial objects of IPR, 1996, the proper interpretation otherwise would be that it has no restriction for those areas which is an urban area. Belaguntha Notified Area Council undisputedly being an urban area, the petitioner-unit cannot be said as not eligible for the benefits under IPR, 1996.
Moreover, the sanction order under Annexure-5 depicts that the State Level Committee has decided to sanction the subsidy, whereas the cancellation order under Annexure-6 and the proceedings of meeting under Annexure-B/3 reveals that the decision for cancellation of the sanctioned subsidy has been taken by the District Level Committee. So the decision for cancellation appears unfair because the State Level Committee is a superior committee than the District Level Committee and the inferior body lacks the authority to review the decision of a superior body.
In view of above discussion, the writ petitions deserve to succeed and is accordingly allowed. The order of cancellation dated 11.7.2000 under Annexure-6 is quashed and set aside. The opposite parties are directed to grant the subsidy amount and extend other incentives or benefits to the petitioner as per his entitlement as an industrial unit under the IPR, 1996. Compliance of this judgment be made within a period of three months from the date its copy is produced before the opposite parties.
Both the writ petitions are accordingly disposed of. There shall be no order as to costs.