The High Court of Calcutta, while dismissing an appeal filed against a common judgment and order dated 16.10.2023 passed by the learned Single Judge, held that pending investigations against sister concerns or group companies cannot be the grounds for withholding the release of incentives to the respondent company which is a separate juristic entity.
Brief Facts:
The appellant herein floated an Incentive Scheme for acquisition of plants and machinery pertaining to the jute industry and jute diversified products manufacturing units. Respondent no. 1 claims to be eligible for an incentive of 20% of the cost of identified plants and machinery procured by it. Alleging that the appellant has illegally withheld the incentive under the said scheme to the extent of 20% in respect of the first and the second claim, the respondents herein approached the writ court with a prayer for releasing the incentive in their favor. The learned Single Judge allowed the writ petitions. Hence, the present appeal.
Contentions of the Appellant:
The Learned Counsel for the Appellant submitted that the entire funding is made by the Ministry of Textiles, Government of India. He, therefore, contended that the Government of India is a necessary party to the writ petitions and the learned Single Judge ought to have dismissed the writ petitions for non-joinder of necessary party. He further contended that since the respondents/ writ petitioners are the alter egos of other companies that have been involved in the defalcation of public money, the respondents are not entitled to any equitable remedy.
Contentions of the Respondents:
The Learned Counsel for the Appellant submitted that the Union of India is not a necessary party to this writ petition. He argued that the respondents/writ petitioners are separate juristic entities and the appellant cannot deny the benefits of the incentive schemes on the allegation that investigations are going on against certain group companies.
Observations of the court:
The court noted that merely because the Ministry of Textiles shall provide funds to the National Jute Board, because of Clause 11 of the said scheme, the Government of India cannot be said to be a necessary party in these writ petitions. Therefore, the learned Single Judge was right in holding that the writ petitions cannot be said to be bad for non-joinder of the Government of India as a party to the writ petitions.
The Court observed that pending investigations against sister concerns or group companies cannot be the grounds for withholding the release of incentives to the respondent company which is a separate juristic entity. Therefore, the appellant acted in an arbitrary manner by withholding the release of incentives in favor of the respondent companies to which they are entitled as per the present Incentive Scheme.
The decision of the Court:
The Calcutta High Court, dismissing the appeal, held that the Court does not find any reason to interfere with the impugned judgment and order.
Case Title: National Jute Board vs Ambica Jute Mills Limited & Anr.
Coram: Hon’ble Justice T.S. Sivagnanam and Hon’ble Justice Hiranmay Bhattacharyya
Case No.: APOT/130/2024
Advocate for the Appellant: Mr. J.K. Mitra
Advocate for the Respondent: Mr. Suddha Satva Banerjee
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