New Vikas Cooperative Industrial ... vs Union Of India & Ors.
2010 Latest Caselaw 5837 Del

        IN THE HIGH COURT OF DELHI AT NEW DELHI

                                    W.P. (C) 3564/1991

                                          Reserved on : 8th December 2010
                                          Decision on: 22nd December 2010


        NEW VIKAS COOPERATIVE INDUSTRIAL
        SOCIETY LTD & ANR.                         ..... Petitioners
                      Through: Ms. Mayuri Raghuvanshi, Advocate.


                        versus


        UNION OF INDIA & ORS                         ..... Respondents
                      Through: Mr. Sachin Datta, CGSC with
                      Ms. Gayatri Verma, Advocate for R-1/UOI.
                      Ms. Sujata Kashyap, Advocate for R-2 and R-3
                      with Mr. Babu Lal, Officer from the Office of
                      Commissioner of Industries.

        CORAM: JUSTICE S. MURALIDHAR

                1. Whether Reporters of local papers may be
                      allowed to see the judgment?                      No
                2. To be referred to the Reporter or not?               No
                3. Whether the judgment should be reported in Digest?   No

                                    JUDGMENT

22.12.2010

1. This writ petition filed on 14th November 1991, seeks a mandamus

directing the Commissioner of Industries, Government of National Capital

Territory of Delhi ('GNCTD') to clear the claim of the Petitioner society

relating to grant of rebate on sales of handloom clothes in terms of the

policies dated 17th June 1983 and 21st October 1983.

2. The Petitioner states that it is a society engaged in the manufacture of

handloom cloth. It sells its products through retail outlets by organizing

exhibitions and expositions. The Government of India on 17th June 1983

announced a scheme granting special rebate on the sales of handloom cloth

for the year 1983-84. Among the conditions for the grant of rebate was that

the rebate would be within a ceiling of 20% and will be applicable only to

sales of handloom cloth made at retail outlets of apex expositions of weaver

cooperatives or State Handloom Development Corporations. The Central

Government‟s share of the rebate on retail sales would be limited to Rs. 50/-

or 10% of the value of the retail transaction whichever was less. In order to

enable the Central Government to release its share of the rebate, the State

Governments and Union Territories were to ensure that the rebate claims

were supported by an audit certificate. The claims were to be forwarded to

the Development Commissioner for Handlooms complete in all respects

within six months of the rebate being paid. The rebate claims were to be

accompanied by the orders of the concerned State Government/Union

Territory authorizing the rebate.

3. It is stated that the Government of Uttar Pradesh organised a mini

exposition during May-June, 1983. The Commissioner of Industries,

Respondent No. 2, sponsored the Petitioner for participation in the said

exposition. It is stated that the Petitioner attended the exposition and allowed

a rebate of 20% on the sale price of handloom cloth to all its customers. The

Petitioner states that it was assured by Respondent No. 2 that the said rebate

amount would be reimbursed to it in terms of the scheme. After the

conclusion of the exposition the Petitioner lodged its claim for the rebate

with Respondent No. 2 by a letter dated 6th September 1983. According to

the Petitioner the representatives of Respondent No. 2 visited its premises on

2nd February 1984. The Petitioner claims to have answered all the queries

raised by Respondent No. 2 in respect of the said claim. However, the claim

of the Petitioner as aforesaid was not settled for over three months.

4. The Petitioner received a notice dated 14th March 1984 from the Registrar

of Cooperative Societies („RCS‟), Respondent No. 3, stating that an inquiry

had been initiated against it under Section 55 of the Delhi Cooperative

Societies Act („DCS Act‟) and that Respondent No. 3 had been directed to

examine the functioning of the Petitioner‟s society. The Petitioner was

verbally informed that its payment was not being cleared since the inquiry

under Section 55 of the DCS Act was still pending. Thereafter, in March

1985 the RCS gave its report exonerating the Petitioner. Yet the Petitioner‟s

claim for rebate was not settled. The Petitioner sent a reminder on 27th

March 1986. Again on 19th May 1986, it received a letter from the RCS

stating that an inquiry under Section 59 of the DCS Act was proposed to be

conducted. This led to further in-depth enquiry. The consequential report,

according to the Petitioner, vindicated its stand and completely exonerated

it. After coming to know of the report, the Petitioner sent a letter dated 9th

September 1987 to the RCS asking that a no objection certificate be sent to

Respondent No. 2 for the purpose of release of the rebate claim. It is stated

that despite reminders Respondent No. 2 failed to settle the claim. By a letter

dated 18th May 1990 Respondent No. 2 simply stated that the Petitioner‟s

claim was under examination. In response to a further reminder Respondent

No. 2 by its letter dated 23rd March 1991 stated that the matter was again

being taken up with the Department of Cooperative Societies for a report.

5. There is another claim which the writ petition talks of. It is stated that a

National Exhibition Handloom was held in Kanpur in 1983-84. There was a

scheme for 15% special rebate allowed to the primary Handloom Weaver

Cooperative Societies of Delhi on the wholesale sales of handloom cloth

produced by them. According to the Petitioner, in terms of the said scheme

the stocks of the Petitioner society were inspected by Respondent No. 2. The

Petitioner states that it was given to understand that the rebate would be

allowable on the sale of its products at the National Expo. The Petitioner

participated in the National Expo held at Kanpur and sold its products by

giving 15% rebate to the consumers. In this regard, the Petitioner lodged a

claim with Respondent No. 2 on 27th June 1984. Again this claim too was

not settled.

6. The Petitioner then talks of a mini Expo which was held at Jaipur for a

period of three weeks commencing 15th March 1985. The Petitioner was

given an assurance by Respondent No. 2 that 20% rebate would be allowed

to handloom cooperatives at the mini Expo and on that basis the Petitioner

sold its products there by allowing a 20% rebate on its sales. The Petitioner

lodged a claim with Respondent No. 2 on 31 st March 1986 for

reimbursement of the rebate. It appears that on 5th June 1986, the Director of

Industries, GNCTD informed that there would be no rebate on sales of the

handloom cloth at its mini Expo at Jaipur. The Petitioner contested this and

repeatedly made representations. On 28th June 1989, the Petitioner was

informed by Respondent No. 2 that the Department had already made it clear

on 5th June 1986 that no rebate was admissible for the claim. More

representations followed. The Petitioner later received a communication

dated 7th January 1991 from the Office of Development Commissioner for

Handloom, Government of India stating that the said rebate was indeed

allowable on handloom sales at the Expo at Jaipur from 15th March 1985 to

7th April 1985. Since Respondent No. 2 was refusing to reimburse the rebate

allowed to the Petitioner despite the above clarification, the present petition

was filed.

7. In the counter affidavit filed on behalf of Respondent No. 2, it is stated

that rebate claim of the Petitioner was withheld on account of the pending

inquiry conducted by Respondent No. 3. As far as the scheme for grant of

15% special rebate on the wholesale sales of handloom cloths to primary

Handloom Weaver Cooperative Societies of Delhi, it is pointed out that one

of the conditions was that the Petitioner was required to get the stocks

verified by Respondent No. 2 "before starting sales for availing the above

said special rebate facility." A copy of the letter dated 30th July 1984

rejecting the Petitioner‟s claim for reimbursement of the 15% special rebate

on wholesale sales of handloom for the years 1983-84 has been enclosed

with the counter affidavit. As regards the mini Expo at Jaipur, Respondent

No. 2 denied that there was any directive from the Office of Development

Commissioner (Handloom) for allowing the special rebate of 20%. It is

further pointed out that the inquiry conducted by Respondent No. 3 showed

that production of the goods worth Rs. 6,91,123.86 had taken place and that

this was not possible with three or four working looms. The report further

observed that sale and purchase for the period 1982-83 had been fabricated

in order to claim rebate on sales. It is stated that in view of the said report,

the claims of the Petitioner were not considered. It is pointed out that on 5 th

June 1986 itself the Petitioner was informed that its rebate claims for the

mini Expo at Jaipur could not be entertained.

8. In the counter affidavit filed by Respondent No. 1, Union of India, it is

inter alia stated that handloom cooperatives in Delhi area were not covered

for reimbursement of rebate monies under special rebate scheme prior to

1987-88. Consequently, the question of granting monetary relief by the

Government of India to the Petitioner did not arise.

9. In the rejoinder affidavit, the Petitioner reiterated its claims. It stated that

as regards the rebate for the National Handloom Expo at Kanpur held during

May-June, 1983, Respondent No. 2 was liable to pay the Petitioner Rs.

58,188.50 together with interest @ 20% per annum from the period 15 th June

1983 till the date of payment. As regards the mini Expo held at Jaipur

Respondent No. 2 was liable to pay a sum of Rs. 1,98,597.50 together with

interest @ 24% per annum from 8th April 1985 till the date of payment. As

regards the third item i.e. special rebate of 15% on the wholesale sale of

handloom cloth during the year 1983-84, the Respondent No. 2 was liable to

pay Rs. 91,161.30 with interest 24% per annum with effect from 27 th

December 1983 till the date of actual payment. The Petitioner enclosed with

its rejoinder photocopies of two pages of stock register to show that an

Inspector from the Office of Respondent No. 2 visited Petitioner‟s offices

and verified the stocks.

10. This Court heard the submissions of Ms. Mayuri Raghuvanshi, learned

counsel appearing for the Petitioner and Ms. Sujata Kashyap, learned

counsel appearing for Respondent No. 2.

11. A preliminary objection has been raised by Respondent No. 2 that the

present writ petition is barred by laches. The grievance of the Petitioner

admittedly pertains to grant of rebate for the years 1983, 1984 and 1985 and

the writ petition was filed in 1991. There is no explanation for the delay in

filing the writ petition. It is further submitted on merits that even in respect

of the scheme of the Central Government the administrative powers are

vested with Respondent No. 2 to either grant or withhold the rebate on terms

and conditions decided by Respondent No. 2. As regards the Kanpur Expo, it

is stated that although by a letter dated 30th April 1983 the societies were

informed of the holding of the said Expo, there was no mention of

availability of the rebate. The Central Government had issued a letter dated

17th June 1983 requiring claims to be filed for the grant of rebate through the

State Government within six months from the rebate period. However, there

was a complaint against the Petitioner society for which an inquiry was held

by Respondent No. 3. Since the inquiry was not completed during the period

up to which the rebate claims were entertained, the Petitioner was not

extended the said relief for the Kanpur expo.

12. As regards the 15% special rebate on wholesale sales of handloom cloth,

the condition that the society should get its stocks verified from the Director

of Industries was not fulfilled. Consequently, by a letter dated 30 th July

1984, the Petitioner was informed that its claims for the rebate could not be

considered. As regards the mini Expo at Jaipur, by a letter dated 5 th June

1986, the Petitioner was informed that its claims for the rebate could not

have been entertained. A reference was also made to earlier letter dated 2nd

February 1985 whereby the Petitioner was informed that no rebate would be

allowed for participation in the Mini Expo. Respondent No. 2 denied having

received the copy of the letter dated 7th January 1991 of the Central

Government, which in any event was issued long after the Jaipur mini Expo.

13. This Court finds merit in the preliminary objection raised by the

Respondent No. 2 that each of the three claims made by the Petitioner in the

present writ petition are barred by laches. As is apparent from the rejoinder

affidavit filed by the Petitioner, the date on which each of the claims fell

due, according to the Petitioner, was 15th June 1983 in respect of the

National Expo at Kanpur, 8th April 1985 in respect of the mini Expo at

Jaipur and 27th December 1983 in respect of the grant of special rebate of

15% on wholesale sales of handloom cloth during the year 1983-84.

Admittedly, the Petitioner did not choose to approach this Court till

November 1991. The claims, therefore, are obviously barred by laches.

Repeated making of representations for the said claims will not be a

sufficient explanation for the laches.

14. As regards the mini Expo at Jaipur there was a letter dated 2nd February

1985, even prior to the holding of the said expo between 15 th March 1985

and 7th April 1985, whereby all the concerned authorities were informed that

no rebate on sales will be available. This was communicated by a letter

dated 5th June 1986 addressed by the Director of Industries to the Petitioner.

It was further reiterated on 28th June 1981. This Court finds that with the

rejection of the Petitioner‟s claims as regards the mini Expo at Jaipur having

been communicated to it on 5th June 1986 itself, the Petitioner need not have

waited till November 1991 to file the present petition in respect of the said

claim. Here again, there is no satisfactory explanation for the laches. As

regards the Kanpur Expo, the Petitioner has again chosen to wait for more

than 8 years to file a petition in respect of the said claim.

15. This Court finds that there is no satisfactory explanation in the writ

petition for the delay in approaching this Court. The petition fails on ground

of laches and is dismissed as such.

S. MURALIDHAR, J DECEMBER 22, 2010 ak