Bombay High Court
Kolhapur Zilla Sahakari Dudh Utpadak ... vs The State Of Maharashtra Through The ... on 24 February, 2025
Author: G. S. Kulkarni
Bench: G. S. Kulkarni
2025:BHC-AS:9159-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 1818 OF 2025
Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd. ...Petitioner
Versus
The State of Maharashtra
Through Principal Secretary & Ors. ...Respondents
__________
Mr. Bhooshan R. Mandlik, for the Petitioner.
Ms. S.S. Bhende, AGP, for the Respondent - State.
__________
CORAM : G. S. KULKARNI &
ADVAIT M. SETHNA, JJ.
DATE : 24 FEBRUARY 2025
JUDGMENT ( Per Advait M. Sethna J.) :
1. Rule is made returnable forthwith. Respondent waives service. With
the consent of the parties heard finally.
2. The substantive prayer in the petition which read thus:-
"B. [That this Hon'ble Court be pleased to issue writ of mandamus or
any other appropriate writ, order or direction, directing
respondent no. 1 to immediately act upon its order dated 4th of
March 2022 (Exhibit I hereto) read with report dated 26th of
May 2022 (Exhibit J hereto) and report dated 4th April 2019
(Exhibit C hereto) by paying the petitioner an amount of Rs.
4,22,70,000/- to which the petitioner is entitled to under the
Government Resolution dated 31st of July 2018, as confirmed by
order dated 4th of March 2022 and report dated 26th May 2022
and report dated 4th April 2019], along with interest at the rate
of 12% per annum from the date it became due to the petitioner
till its actual realization as demonstrated by the table annexed
hereto and marked as Exhibit R.
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3. The petitioner has approached this court to seek for relief, primarily
for issuance of directions against the respondents for disbursement
amount of export subsidy which the petitioner is entitled to receive for
exporting milk powder under a scheme floated by the respondent state, by
way of a Government Resolution ("GR" for short) dated 31 July 2018.
4. By way of a brief background, the following facts would be relevant
to adjudicate the issues involved in this petition. To begin with, in the year
2018, there was a drastic fall in the price of milk, which resulted in piling
up of stock of milk powder. In lieu thereof the respondent no. 1 floated a
scheme for the grant of export subsidy to clear surplus stock within the
State of Maharashtra, aiming to restart the milk storage chain with the
objective of encouraging the milk producers/farmer. The respondents were
conscious of the fact that since the procurement of milk was reduced
consequently, fresh production of milk also came down. The producers
were accordingly unable to sell their milk resulting in surplus of milk in
the State of Maharashtra.
5. To alleviate such hardship caused to the milk producers/farmers, the
respondent no. 1 floated a scheme for grant of export subsidy to clear the
existing stock of milk powder within the State. The purpose of such
subsidy was twofold, namely to enable the manufacturers of milk powder
to sell their existing stock in the international market and restart the
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manufacture of milk powder. It was in such backdrop on 20 July 2018,
that the respondent no. 1 introduced two schemes namely scheme 'A' and
scheme 'B' respectively. Scheme 'A' provided for a subsidy for Rs. 50 per
metric tones of milk powder and Rs. 15 per liter of milk for export of the
same in three months, namely, August September and October 2018.
Scheme 'B' provided for subsidy of Rs. 5 per liter of milk supplied for
conversion into milk powder to be payable either to the milk supplier or
the milk producer. In this regard, respondent no. 1 introduced a
clarification to the scheme to incorporate an additional clause to clarify
that if the milk manufacturer would take benefit under scheme 'B', then it
would not be entitled to export subsidy in terms of scheme 'A'.
6. Due to several reasons and factors, the schemes (supra) as
contemplated under the GR dated 28 July 2018 were not implemented. In
view thereof, respondent no. 1 amended and issued GR dated 31 July
2018, to release a scheme which was to be in place of the earlier scheme as
noted above. The revised scheme was applicable only to the stock of milk
powder which existed as on 30 June 2018. The respondent no.1 to ensure
compliance of such requirement, inspected the stock of milk powder in
milk dairies /manufacturing units over the state of Maharashtra, which was
quantified at 30,183 metric tones ("MT" for short) on 13 June 2018. Such
revised scheme floated by respondent no. 1 came into force, on 1 August
2018, which was to continue until 19 January 2019.
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7. It is the case of the petitioner that between 1 August 2018 and 19
January 2019, it exported 845.400 MT for milk powder from the existing
stock as on 13 June 2018. Accordingly, under the GR dated 31 July 2018,
petitioner became entitled to receive an amount of Rs. 4,22,70,000 from
respondent no. 1.
8. According to the petitioner, on 4 April 2019, a three member
committee was appointed by respondent no. 1 to inspect the documents in
respect of the export of 8.45.400 MT of milk powder by the petitioner.
After verifying all documents submitted by the petitioner as contemplated
under the scheme (supra) such committee did acknowledge that the
petitioner exported milk powder to the extent of 845.400 MT, as a
consequence of which the petitioner was entitled to an export subsidy
from the respondent. In this view of the matter, the petitioner submitted
his periodic claims with the respondent by way of letter /representation
dated 1 June 2019, 9 July 2020 and 28 October 2020, respectively.
9. According to the petitioner, it was on 28 September 2021, that a
similarly placed entity like the petitioner in the name of Parag Milk Foods
Ltd. approached this Court by way of a writ petition seeking appropriate
reliefs to direct the respondents for payment of export subsidy to the said
petitioner. After examining the matter, the court directed the respondent
no. 1 to take a fresh decision within three months after hearing all
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concerned parties.
10. It was on 4 March 2022, that the milk powder manufacturers
including the petitioner were entitled to receive the export subsidy for
exports between 1 August 2018 to 19 January 2019. Accordingly, the
respondent no.2 was directed to verify, as to whether the exports
undertaken by the manufacturers/producers were from the stock that
existed on 30 June 2018.
11. Then on 26 May 2022, the respondent no. 2 conducted a detailed
survey and prepared a report confirming that the petitioner exported
845.400 MT of milk powder from the stock of milk powder available as
on 30 June 2018. In view thereof the petitioner was entitled to receive
exports subsidy under the GR dated 31 July 2018 quantified at
Rs.4,22,70,000/-.
12. The petitioner on 12 December 2023 accordingly filed its
claim/proposal for disbursement of the amount of export subsidy in terms
of the above.
13. It was on 22 February 2024, that the respondent no. 2
acknowledged the entitlement of the petitioner for an amount of Rs.
4,22,70,000/- for export of 845.400 MT of milk powder under the said
GR dated 20 July 2018, read with the GR of 31 July 2018, respectively.
The petitioner was informed that the disbursement of such amount was
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pending approval of respondent no. 1.
14. The petitioner received a letter dated 11 March 2024 from the
office of respondent no. 2 asking for clarification/details of benefits availed
by the petitioner for a subsidy of Rs. 3 per liter for converting milk into
milk powder. In response to the above, the petitioner addressed a letter on
the same day on 11 March 2024 to the respondent no. 2 clarifying that the
petitioner did not receive any benefits of subsidy of Rs. 3 per liter for
converting milk into milk powder. In this context, the petitioner once
again reminded respondent no. 2 about the submission of its proposal
dated 12 January 2023 with the office of the respondent. Being aggrieved
by denial of the respondent-State to release the export subsidy of Rs.
4,22,70,000/- to the petitioner, this petition was filed on 22 January
2025.
15. In view of the factual matrix as noted above, we have heard learned
counsel for the parties and with their assistance, perused the record.
16. The parties are at idem to the extent that challenge/issue raised in
this petition is the same as that arose in the petitions filed by the Indapur
Dairy and Milk Products Ltd vs. State of Maharashtra & Anr ("Indapur
Dairy" for short), Parag Milk Foods Ltd., Pune vs. The State of
Maharashtra ("Parag Milk Foods" for short), followed by VRS Foods Ltd
vs. The State of Maharashtra & Ors ("VRS Foods" for short).
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17. Mr. Bhooshan Mandlik, learned counsel for the petitioner at the
very outset would submit that orders have been passed in petition from
time to time by the court on 10 February 2025, 7 February 2025, and 24
February 2025. The order dated 24 February 2025 reads thus:-
"On the earlier occasion, we had adjourned the proceedings after
hearing the learned counsel for the parties. The petitioners had
contended that the prayers as made in the petition are squarely
covered by the decision of this Court in Indapur Dairy and Milk
Products Limited vs. State of Maharashtra and Anr., in Parag
Milk Foods Ltd. vs. The State of Maharashtra and Anr. and also
subsequent decision in VRS Foods Limited vs. The State of
Maharashtra & Ors. The decisions were placed for our
consideration.
However, as Ms. Bhende, learned AGP has informed us that the
orders passed by this Court in Parag Milk Foods Limited have
been challenged in the Supreme Court and there is a likelihood
that some interim orders would be passed, we had adjourned the
proceedings for today. However, Ms. Bhende has fairly stated that
as on date, no interim orders were passed. She would also not
dispute that the facts of the case are similar to the facts of the
proceedings which stand adjudicated in the decisions in Indapur
Dairy and Milk Products Limited, Parag Milk Foods Limited and
VRS Foods Limited.
In this view of the matter, we now proceed to pass appropriate
orders following the said decisions. Accordingly, list the
proceedings 'for passing orders' on 26 February 2025."
To place the matter in its proper perspective, the issues, challenges
and grievances raised in the petition being similar to the case of other
entities as noted above, we would gainfully refer to an order passed by a
coordinate bench of this court in the case of Indapur Dairy, dated 20
March 20231. The court after noting the prayer in the said petition
directed the respondent-State to act on the order dated 4 March 2022, that
1. writ petition no. 1819 of 2023
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confirmed the applicability of GR dated 31 July 2018 without delay as far
as the disbursement of the principal amount to the petitioner was
concerned, leaving the question of interest pending, with a specific
direction to implement the orders and disburse the subsidy amount by 24
April 2023.
18. Mr. Mandlik would draw our attention to another order dated 26
April 2023 passed in the Indapur Dairy case in writ petition no. 1819 of
2023 (supra), where on an application made by the respondent- State for
extension of time to implement the order dated 4 March 2022 passed
pursuant to the GR dated 31 July 2018 was rejected. However, the court
directed the respondents to disburse the amount no later than 10 May
2023, failing which the court would initiate contempt action against the
respondents for implementation/enforcement of its orders.
19. Mr. Mandlik, would then refer to the judgment passed by a
coordinate bench of this court, where one of us (Justice G.S Kulkarni) was
a member in Parag Milk Foods2, where the court was confronted with an
identical issue relating to the released of export subsidy to the petitioner.
The court in the said case of Parag Milk Foods after considering the details
of the facts and circumstances as well as the law on the subject matter,
including various decisions cited before it, held thus :-
"30. So far as the judgments of the Supreme Court in the case of
2. writ petition no. 11719 of 2023.
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Vishal Properties Private Limited (supra) and State of Odisha and
another (supra) relied upon by the Respondents in the context of
negative equality are concerned, they lay down the proposition that
Article 14 is not meant to perpetuate an illegality. They further lay
down that Article 14 provides for positive equality and not negative
equality and the Courts are not bound to direct any authority to repeat
any wrong action done by it earlier.
31. In our view, there can be no dispute about the proposition of law
laid down in these judgments. However, these two judgments are
squarely distinguishable on facts in the present case. In the
present case, on identical facts, this Court has directed release of
payment of Export Subsidy to Indapur. This Court has done so
on the basis that Indapur was legally entitled to the same and that
there was no illegality involved in making payment of the said
Export Subsidy to Indapur. Therefore, the question, of any
illegality or negative equality, does not arise in the present case.
Further, in these circumstances, till the said Orders of this Court
hold the field, there is no question of directing any authority to
repeat any wrong action done by it earlier. As held above, this
Court has directed release of payment of export subsidy to
Indapur on the basis that Indapur was legally entitled to the
same.
32. In the light of the aforesaid discussion, and for the aforesaid
reasons, we pass the following orders:
(a) The Respondents are directed to release in favour of the
Petitioner the export subsidy amount of Rs.8,08,50,000/- within
a period of six weeks from the date of this order.
(b) The Rule is made absolute in the aforesaid terms.
(c) In the facts and circumstances of the case, there shall be no
order as to costs."
20. Mr. Mandlik, would next rely on a decision in the case of VRS
Foods Limited3 by a coordinate bench of this court on 4 December 2024,
where the court was adjudicating the issue again related to the entitlement
of export subsidy to the petitioner arising out of the GR dated 31 July
2018. The court was pleased to consider the factual aspect as well as
3. writ petition no. 10540 of 2023
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various judgments and orders passed earlier. The operative part of the said
judgment read thus:-
"34. In our view, there can be no dispute about the
proposition of law laid down in these judgments. However,
these two judgments are squarely distinguishable on facts in
the present case. In the present case, on identical facts, this
Court has directed release of payment of Export Subsidy to
Indapur Dairy. This Court has done so on the basis that
Indapur Dairy was legally entitled to the same and that there
was no illegality involved in making payment of the said
Export Subsidy to Indapur Dairy. Therefore, the question, of
any illegality or negative equality, does not arise in the
present case. Further, till the Orders of this Court dated 20th
March 2023 and 26th April 2023 hold the field, there is no
question of directing any authority to repeat any wrong
action done by it earlier. As held above, this Court has
directed release of payment of Export Subsidy to Indapur
Dairy on the basis that it was legally entitled to the same.
These orders [dated 20th March 2023 and 26*h April 2023]
passed by this Court haven't been challenged and have now
attained finality.
35. The Respondent's submission that if the Petitioner is
granted the Export Subsidy of Rs.4,79,94,000/-, then it
would amount to the Petitioner getting a double benefit
because the Petitioner has also availed of the subsidy of
Rs.3/- per litre of Milk under Government Resolution dated
10* May 2018, cannot be accepted. Firstly, the scheme under
the Government Resolution dated 10** May 2018 and the
scheme under the Government Resolution dated 31" July
2018 are two separate, distinct and independent schemes,
and, on this ground alone, the question, of the Petitioner
getting any double benefit, does not arise at all. Secondly, the
Government Resolution dated 31" July 2018 does not lay
down any condition as sought to be submitted by the
Respondents, and, therefore, for this reason also, the said
argument of the Respondents regarding the Petitioner
getting any double benefit does not arise at all. For these
reasons we also reject the argument of the Respondents in
respect of the Petitioner getting any double benefit. Further,
Respondent No.2, by its order dated 4th March 2022 has also
opined that the Scheme implemented as per the
Government Resolution dated 31 July 2018, was for export
of the stock of Milk Powder which was in existence as on
30th June 2018 and no benefit under any other scheme was
given in respect of stock of Milk Powder as on 30th June
2018. It was observed that there was no question of giving
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double benefit for the export of stock of Milk Powder which
was in existence as on 30* June 2018 and therefore the Milk
Powder manufacturers, including the Petitioner, were held to
be entitled to receive the Export Subsidy for the stock
exported between 1 August 2018 and 19th January 2019.
For all these reasons we are unable to accept the submission
of the Respondents that the Petitioner is receiving any
double benefit as alleged.
36. In the light of the forgoing discussion, and for the
reasons set out earlier, we pass the following order:
(a) The Respondents are directed to release in favour of the
Petitioner the Export Subsidy amount of Rs.4,79,94,000/-
within a period of six weeks from the date of this order.
(b) In so far as the claim of the Petitioner for interest is
concerned, we keep open all contentions of the parties to be
agitated in appropriate proceedings. Needless to observe that
the Petitioner is free to make a representation to the
appropriate authority with regard to the interest amount,
which, if made, shall be appropriately considered in
accordance with law.
37. Rule is made absolute in the aforesaid terms and the Writ
Petition is also disposed of in terms thereof. However, in the
facts and circumstances of the case, there shall be no order as
to costs."
21. Ms. Bhende, learned AGP for the respondent-State would fairly
submit that the pivotal challenge in this petition is covered by the
decisions of this court in the case of Indapur Dairy followed by Parag Milk
Foods and VRS Foods, respectively. She would however urge that the
decision in the case of Parag Milk Food is assailed by the respondent
before the Supreme Court, where a SLP is pending as on date.
22. Mr. Mandlik, on the other hand strongly opposed the above
submission of Ms. Bhende, learned AGP, for reasons more than one.
Firstly, he would place reliance on the report of respondent no. 2 dated 26
May 2022, which clearly approved the sum of Rs. 4,22,70,000 as export
subsidy for export of milk powder of 844.400 MT in favour of the
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petitioner. He also pointed out similar amounts of export subsidy
approved by the respondent in favour of similarly situated entities like
Indapur Dairy and VRS Food. The said report dated 26 May 2022 of
respondent no. 2, which read thus:-
"GOVERNMENT OF MAHARASHTRA,
Dairy Development Department.
Office of the Commissioner, Dairy Development Department,
Maharashtra State, Administrative Building,
Worli Sea Face, Worli, Mumbai - 400 018.
Tele. No. 022-24961552.
E-mail: [email protected].
--------------------------------------------------------
Subject : Regarding Incentive Subsidy of Rs.50 /- per Kg. for
export of milk powder.
Reference : 1) Government Resolution bearing No. MLK-
2018 /M. No.08/A.D.F.-8, dated 20.07.2018.
2) Government Resolution bearing No. MLK-
2018 /M. No.08/A.D.F.-8, dated 31.07.2018.
3) Government Resolution bearing No. MLK-
2018 /M. No. 08/A.D.F.-8, dated 21.08.2018.
4) Government Letter bearing No. MLK-2019/M.
No.41/A.D.F.-8, dated 29.03.2022.
As the rates for the milk-powder and the country made cooking
butter collapsed in the International Market in the year 2018, the
conversion got reduced resulting in even falling of the purchase
price of milk. Therefore, in order to see that the farmers do not
suffer any loss, the Government, by the Government Resolutions
under reference at Sr. No.01 and 02 above, has implemented the
scheme of giving incentive subsidy of Rs.50/- per Kg. for export
of the milk powder and also the scheme of giving a subsidy of
Rs.3/- and Rs.5/- per liter for purchase of milk. Under this
Scheme, the proposals of the Milk Powder Manufacturing
Projects situated within the purview of your divisions, seeking a
subsidy for export of milk powder during the period from the date
01.08.2018 up to 19.01.2019, in view of the provisions of the
Government Resolutions under reference at Sr. Nos. 1, 2 and 3,
have been submitted to the Government through your divisions,
as under:
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Sr. Division Name of the Project Export of Milk Proposed
No. Powder (in subsidy at the
Metric Tonnes) rate of Rs.50 per
Kg.
1 Pune 1) M/s. Indapur Dairy 4975.00 24,87,50,000/-
and Milk Products,
Indapur.
2) Kolhapur District 845.40 4,22,70,000/-
Milk Production
Federation Limited,
Kolhapur (Gokul)
3) Schreiber Dynamix 541.50 2,70,75,000/-
Dairies, Baramati,
District - Pune
4) Govind Milk and 250.00 1,25,00,000/-
Milk Production
Private Limited,
(Phaltan), District -
Satara
5) M/s. Parag Milk Foods 1,617.00 8,08,50,000/-
Limited, Manchar,
District - Pune
Total..... 8,228.90 41,14,45,000/-
2) Nashik 1) M/s. Sunfresh Agro 150.00 75,00,000/-
Private Limited,
Ranjankhor,
Shrirampur
2) M/s. V.R.S. Foods, 959.88 4,79,94,000/-
Nevasa, District -
Ahmednagar
3) M/s. S. R. Thorat 314.488 1,57,24,400/-
Milk and Milk
Products, Sangamner,
District -
Ahmednagar
Total..... 1459.88 7,12,18,400/-
Total (1 + 2) 9688.78 48,26,63,400/-
The proposals from Pune Division have been forwarded to the
Government on the date 24.05.2022.
The proposals from Nashik Division have been forwarded to the
Government on the date 25.05.2022.
An Undertaking on the Stamp Paper of the value of Rs.100/-
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has been submitted to the effect that if any complaint of any
nature is received then, it shall be the responsibility of the Project
to resolve the same.
In the present matter, after verifying the documents/records
submitted together with the clear proofs about the milk powder
exported by the Projects during the period from the date
01.08.2018 to the date 19.01.2019 from out of the stock of milk
powder which was in balance as on the date 30.06.2018 with the
Projects and after the entire inspection/verification carried out by
the Regional Dairy Development Officer, Pune, it is found that
M/s. Indapur Dairy and Milk Product Ltd., Indapur, District Pune
has exported the milk powder, as per the terms and conditions
mentioned in Paragraph No. A of the Government Resolution
dated 31.07.2018 and also as per the directions given on the date
29.03.2022 by the Principal Secretary (A.D.F.). (The
Inspection /Verification report is enclosed herewith). Hence, as
the issue to grant incentive subsidy is a policy decision, it is
requested to take appropriate decision at the Government's level."
Commissioner, Dairy Development
Maharashtra State, Mumbai."
(emphasis supplied)
23. Ms. Bhende, would not controvert the above, neither the fact that
the respondent-State has accepted the judgment in Indapur Dairy in
totality, as a consequence of which the full payment of the export subsidy
amounting to about Rs.24,87,50,000/- was made to Indapur Dairy. She
would not dispute that the said decision in Indapur Dairy was followed by
this Court in Parag Milk Foods and VRS Foods rendered by coordinate
benches of this Court. We are therefore of the considered view that the
respondent-State having fully accepted the judgment in Indapur Dairy
and accordingly made payments of the export subsidy to it, which was
then followed by the Court in Parag Milk Foods and VRS Foods of this
Court, make it abundantly clear that these are all identically placed
entities, who at all material times were treated at par and held entitled to
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subsidies qua the amounts as set out in the reports and the Government
Resolution as relied by us. Thus the petitioner in law ought to be treated
on an equal footing as Indapur Dairy. Needless to state that in such similar
facts and circumstances as in the case of Indapur Dairy, we are bound by
the subsequent decisions in Parag Milk Foods and VRS Foods even as a
matter of judicial prudence and discipline. There is no ground whatsoever
on which the petitioner could be denied the benefit.
24. As noted by us above, the respondent-State having no quarrel with
the decision of this Court in Indapur Dairy and on accepting it in entirety
having paid export subsidy to it, to deny payment of such export subsidy
to the petitioner who is identically situated would be discriminatory in the
teeth of and contrary to Article 14 of the Constitution of India which
cannot be accepted and/or countenanced. Under our constitutional
scheme, the respondent State ought not to infringe the fundamental rights
of the petitioner guaranteed under Article 14 which mandates just, fair
and equal treatment especially to those who are similarly situated, sans
discrimination. Thus, the respondent as a welfare state is obligated to act
in accordance with the Directive Principles of State Policy envisaged under
the Constitution of India.
25. Further, in our view, the submission of Ms. Bhende to oppose
payment of interest to the petitioner, does not appeal to our judicial
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conscience in the given facts and circumstances. However, in light of the
forgoing discussion we pass the following order:-
A. The respondents are directed to release the export subsidy
in favour of the petitioner to the extent of Rs. 4,22,70,000/-,
within a period of six weeks from the date of this order is
made available to the parties.
B. The petition is allowed and rule is made absolute in the
above terms. No order as to costs.
C. In sofar as the claim of the petitioner for interest is
concerned we keep open all contentions of the parties to be
agitated in appropriate proceedings. Needless to observe that
the petitioner is free to make a representation to the
appropriate authority with regard to the interest amount,
which if made, shall be appropriately considered in accordance
with law.
[ADVAIT M. SETHNA, J.] [G. S. KULKARNI, J.]
