Gujarat High Court
M/S Sureshchandra Dhulabhai Patel vs Secretary, Industries And Mines ... on 30 November, 2023
Author: Vaibhavi D. Nanavati
Bench: Vaibhavi D. Nanavati
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C/SCA/13056/2021 CAV JUDGMENT DATED: 30/11/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 13056 of 2021
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FOR APPROVAL AND SIGNATURE:
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HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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M/S SURESHCHANDRA DHULABHAI PATEL
Versus
SECRETARY, INDUSTRIES AND MINES DEPARTMENT, GOVT. OF
GUJARAT
=============================================
Appearance:
AISHWARYA REDDY(9713) for the Petitioner(s) No. 1,2
GUPTA LAW ASSOCIATES(9818) for the Petitioner(s) No. 1,2
PARITOSH R GUPTA(7583) for the Petitioner(s) No. 1,2
GOVERNMENT PLEADER for the Respondent(s) No. 3
MR PREMAL R JOSHI(1327) for the Respondent(s) No. 4,6
NOTICE SERVED for the Respondent(s) No. 1,2,5
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CORAM:HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 30/11/2023
CAV JUDGMENT
1. Since the issues raised in all the captioned petitions are
identical in nature, heard analogously and are being disposed
of by this common order. For the sake of convenience, the
Special Civil Application No.13056 of 2021 be treated as the
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lead matter at the request by learned counsels appearing for
the petitioners in the respective petitions.
2. By way of present petition, the petitioners herein have
invoked Article 226 of the Constitution of India challenging the
legality and validity of the three communications dated
20.07.2021, 02.08.2021 and 05.08.2021 issued by the
concerned respondents along with subsequent addendum
issued by the respondent No.2 dated 8/9.06.2022 adding
Clause - 8 in the Solar Policy, 2019 wherein, the said
addendum clarifies that the beneficiaries under the Solar
Policy, 2019 shall not be eligible for any subsidy from the State
Government under any of the schemes/policies. Being
aggrieved by the same, the petitioners herein have prayed for
the following reliefs:
"(A) Your Lordships may be pleased to issue a writ of Mandamus, or writ
in the nature of Mandamus or any other appropriate writ, order or
direction, quashing and setting aside the impugned communication dated
20.07.2021 issued by the respondent no.2-Department as well as the
impugned communication dated 02.08.2021 issued by the respondent
no.1-Department on the basis of the impugned communication issued by
the respondent no.2 as aforesaid, and so also the impugned
communication dated 05.08.2021 issued from the office of the respondent
no. 3 and addressed to the General Manager, District Industries Centers
(ALL) as regards withdrawal of the subsidy at Annexure-"H" (Colly) of this
petition, by holding and declaring that the same as illegal and unlawful
and violative of the provisions of Article 14 and 19(1) (g) of the
Constitution of India;
(B) Your Lordships may be pleased to issue a writ of Mandamus, or writ
in the nature of Mandamus or any other appropriate writ, or order
directing the respondents to extend the benefit of subsidy provided under
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the "Gujarat Industrial Policy, 2020 (Scheme for assistance to Micro, Small
and Medium Enterprises)" to Small Scale Distributed Solar Projects set up
by the Petitioner under the "Policy for Development of Small Scale
Distributed Solar Projects-2019";
(C) Pending admission, hearing and final disposal of the captioned
petition. Your Lordships may be pleased to stay the operation and
implementation of the impugned communications dated 20.07.2021,
02.08.2021 and 05.08.2021 issued by the respondent authorities;
(D) Your Lordships may be pleased to grant ex-parte ad-interim relief in
terms of Para-8(C) above in the interest of justice;
(E) Any other and further relief, as this Hon'ble Court deems fit and
proper in the interest of justice.
Following prayers are added pursuant to order dated 27.7.2022
passed by this Hon'ble Court in C.A. (Amendment) No.2 of 2022.
(F) Your Lordships may be pleased to issue appropriate writ, order or
direction holding and declaring that the addendum dated 8.6.2022 at
Annexure-JJ to the petition, to the extent of it having been given a
retrospective effect, is bad, illegal and violative of Article 14 of the
Constitution of India;
(G) Your Lordships may be pleased to issue appropriate writ, order or
direction holding and declaring that the addendum dated 8.6.2022 at
Annexure-JJ to the petition is inapplicable in the case of the petitioners;
(H) Your Lordships may be pleased to issue appropriate writ, order or
direction to the Respondent authorities to extend the Scheduled
Commercial Operation Date (SCOD) as provided in the Power Purchase
Agreement;
Following prayers are added pursuant to order dated 8.9.2022
passed by this Hon'ble Court in C.A. (Amendment) No.3 of 2022.
(I) Your Lordships may be pleased to hold and declare the action of
the respondents in encashing the bank guarantee during the pendency of
the petition for recovering the amount of penalty imposed for the
purported delay in commissioning of the project, as bad, illegal, arbitrary
and violative of Article 14 of the Constitution of India;
(J) Your Lordships may be pleased to direct the respondents to refund
the amount recovered by them by encashing the Bank Guarantee or
otherwise with interest @9% from the date of recovery till such refund is
made available;
(K) During the pendency and final hearing of the captioned writ
petition, Your Lordships may be pleased to restrain the respondents herein
from taking any further action against the petitioners including
cancellation of the Power Purchase Agreement (PPA) executed between
the petitioners and MGVCL and / or any such action which is detrimental to
the interest of the petitioners concerning the cause raised in the writ
petition, in the interest of justice;
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(L) Your Lordships may be pleased to hold and declare that the
provisions of Government Resolution dated 5.10.2022 whereby
Aatmanirbhar Gujarat Scheme for Assistance to MSMEs is floated, would
not be applicable to the petitioners in view of the claim raised by the
petitioners in the captioned petition;
(M) Your Lordships may be pleased to declare clauses 7, 21 and 24 of
Government Resolution dated 5.10.2022 as bad, illegal, arbitrary and
violative of Article 14 of the Constitution of India;
(N) Your Lordships may be pleased to struck down clause 7, 21 and 24
of Government Resolution dated 5.10.2022, in the interest of justice."
3. The brief facts leading to the filing of the present petition
read thus:
3.1 The petitioner No.1 - M/s Sureshchandra Dhulabhai Patel
is a Proprietary concern, registered with the government as a
MSME unit holding Udyam Registration Certificate bearing
Registration No. UDYAM-GJ-31-0000458 wherein petitioner No.
1 is classified as a "Micro" enterprise under the manufacturing
sector. The petitioner No. 2 is the sole proprietor of the
petitioner No. 1 Proprietary concern and is joined to the
present proceedings because the petitioner No.2 is materially
and substantially interested in the conduct and business affairs
of the proprietary concern.
3.2 The respondent No.1 amongst other objects in order to
support the development of small and medium enterprises,
value addition on local primary sources and increasing the
share of manufacturing in State gross domestic product,
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introduced an Industrial Policy, 2015 providing for Scheme for
assistance to Micro, Small and Medium Enterprises (MSME)
within the State of Gujarat. The said policy scheme Policy was
introduced by the respondent No.1 on 19.01.2015 with effect
from 01.01.2015 and the same was to remain in operation for
a period of five years. The said Policy, 2015 is duly attached at
Annexure - A, Page 39.
3.3 The Policy for development of Small Scale Distributed
Solar Projects, 2019 (for short 'the Solar Policy, 2019') came to
be issued by the respondent No.2 vide Resolution dated
06.03.2019 which aimed at facilitating development of Small
Scale Solar Project with size of 0.5 MW and above but, up to 4
MW in the distribution network of licensees of Gujarat State in
rapid manner. The operative period for this Solar Policy, 2019
was fixed as 5 years and the Solar Projects that were to be
installed and commissioned during the operative period would
be eligible for the benefits and incentives declared under the
Solar Policy, 2019, for a Power Purchase Agreement (PPA) term
of 25 years. The policy was for development of Small Scale
Solar Projects, which was specifically defined in Clause - 5.13
of the Solar Policy, 2019, to mean solar projects installed at
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single/multiple locations with aggregate capacity of 0.5 MW
and above but, not exceeding 4 MW installed and
commissioned during the operative period of the said Policy.
Thus, the focal point of introduction of the Solar Policy, 2019
was development and incentivization of investment of Small
Scale Solar Projects having an aggregate capacity between 0.5
MW to 4 MW. The said Solar Policy, 2019 is duly attached at
Annexure - B.
3.4 In terms of the said Solar Policy, 2019, the State of
Gujarat intended to promote the generation and sale of energy
to State Discom at tariff determined through competitive
bidding process along with addition of Rs.0.20 per unit. The
said addition of Rs.0.20 per unit was allowed for Rs.0.12 per
unit for saving in transmission loss as power was to be injected
in distribution grid and Rs.0.08 per unit was to compensate for
expensive land cost, higher capital investment and
maintenance cost due to small size of the projects. The Policy
further revealed that capital cost for setting up the projects
was to be borne entirely by the applicant and no financial
support was intended to be provided for setting up such solar
power plant. The guidelines for implementation of the said
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Solar Policy, 2019 dated 15.11.2019 is duly attached at
Annexure - C.
4. It is the case of the petitioners that the petitioners have
applied for setting up Solar Power Project under the Solar
Policy, 2019 and pursuant to the same, the project has been
duly registered with the GEDA. Subsequent to the registration
of the project, a Power Purchase Agreement (PPA) has also
been executed between the petitioners and the respondent
No.6 - Madhya Gujarat Vij Company Limited (MGVCL) on
24.04.2021. As required, an amount of Rs.3,12,500/- has also
been furnished towards the Performance Bank Guarantee in
favour of the respondent No.6 - MGVCL, which is duly produced
at Annexure - M1.
4.1 In terms of the Solar Policy read with the regulations
framed thereunder, the developers are required to declare
'Scheduled Commercial Operation Date' (SCOD) of the project,
being a date within the period of 12 months from the date of
signing of the PPA. In terms of the PPA signed by the
petitioners, the Scheduled Commercial Operation Date was
declared as 19.03.2022 and therefore, the project was required
to be commissioned by the said date. In order to meet with the
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said deadline, the petitioners took necessary steps which are
enumerated in paragraph 4.10 in the petition.
4.2 It is the case of the petitioners that while the project was
in the process of being commissioned, the impugned
communication dated 20.07.2021 came to be issued which
created serious doubt with regard to the economic viability of
the project as the subsidies which were otherwise eligible
under the Gujarat Industrial Policy, 2020 (for short 'the Policy,
2020') were declared not to be available to the projects set up
under the Solar Policy, 2019. Being aggrieved by such action
on part of the concerned authorities, the petitioners preferred
present petition challenging the said communication. It is the
case of the petitioners without the benefit of subsidy as
envisaged under the Policy, 2020, the project would not be
commercially viable. It was therefore, prayed that appropriate
directions be issued to hold and declare that the benefits
envisaged under the Policy, 2020 would also be available to
the projects set up under the Solar Policy, 2019.
4.3 The period within which the project was required to be
commissioned by the petitioners under the Solar Policy, 2019
expired on 19.03.2022. The respondent No.6 vide
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communication dated 17/18.05.2022 informed that though the
SCOD was over on 19.03.2022, the petitioners have not
completed the solar project and therefore, in light of the
Clause - 3.3 of the PPA, the liquidated damages for delay in
commissioning the project at the rate of Rs.3000/- per day per
MW for the capacity delayed beyond SCOD subject to ceiling of
Rs.5 lakhs/MW was required to be recovered and as per the
PPA, the amount payable towards penalty by the petitioners up
to 17.05.2022 comes to Rs.98,412/-. Accordingly, the
petitioners were informed and called upon to deposit the said
amount of penalty immediately. The said communication dated
17/18.05.2022 is duly attached at Annexure - M2.
4.4 The petitioners state that in view of the aforesaid
communication dated 17/18.05.2022, the petitioners
addressed a communication dated 24.05.2022 to the
respondent No.6 and informed that the penalty imposed by the
said communication was not acceptable to the petitioners.
Amongst other submission, the petitioners also additionally
requested for extension of time for execution of the project by
communication dated 24.05.2022, duly attached at Annexure -
M3. The said communication was replied to by the respondent
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No.6 vide reply dated 10.06.2022 whereby, the respondent
No.6 informed the petitioners that the request for extension of
SCOD was placed before the competent authority however, the
same was rejected and therefore, the petitioners should pay
the penalty as imposed by the communication dated
17/18.05.2022. The said reply/communication is duly attached
at Annexure - M4.
4.5 The petitioners wrote a letter dated 15.07.2022 to the
Chief Engineer/Additional Chief Engineer (RA&C), MGVCL,
Vadodara and pointed out necessary facts and thereby,
requested for reviewing the decision for extension of SCOD
keeping in mind the fact concerning the decision taken by the
Government of India with regard to extension of time period.
The said letter dated 15.07.2022 along with the Office
Memorandum dated 12.05.2021 issued by the Government of
India, Ministry of New and Renewable Energy (MNRE), New
Delhi, is duly attached at Annexure - M5.
4.6 Pursuant to the aforesaid letter, the Additional Chief
Engineer (RA&C), MGVCL, Vadodara vide reply dated
27.07.2022 stated that by communication dated 16.07.2022,
the Office has asked for the guidelines from the respondent
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No.5 - GUVNL as regards whether the request for extension of
project under SSDSP Scheme should be granted or not. It was
thus, informed that on receipt of the information received, the
same would be conveyed to the petitioners.
4.7 It is the case of the petitioners that pending the
aforesaid, by communication dated 03.08.2022 addressed by
the respondent No.6 to the Branch Manager, Baroda Gujarat
Gramin Bank, the Performance Bank Guarantee furnished by
the petitioners is encashed in terms of Clause - 4.2.2 of the
PPA. The aforesaid action of recovering the amount from the
petitioners by encashing the bank guarantee is bad, illegal,
arbitrary and violative of Article 14 of the Constitution of India
and the same is questioned and challenged in the present
proceedings.
4.8 It is the case of the petitioners that while the Solar Policy,
2019 introduced on 06.03.2019, the State of Gujarat came out
with another revised policy namely the Gujarat Industrial
Policy, 2020 (for short 'the Policy, 2020'), specifically targeted
for development and promotion of MSME units in the State of
Gujarat. The said Policy would show that it was continuation of
the earlier Policy which was introduced in the year 2015. The
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preamble of the Policy, 2020 also envisaged that its primary
mission includes support for development of MSMEs, focus on
export competitiveness; Vocal for Local to become Global and
thus, strengthen integrated value chains across product
segments. Under the said Policy, various schemes have been
introduced for manufacturing and service sector. For the
present petition, Scheme - 1 and Scheme - 2 which provides
for 'Assistance of Capital Investment Subsidy' and 'Assistance
for Interest Subsidy' respectively are relevant. The Policy on
the whole envisages investment by the applicant - enterprise,
being a MSME unit, in Gross Fixed Capital Investment for
forward integration, backward integration and/or
diversification. In line with the area where such investment is
made and the quantum of investment made, the Policy, 2020
envisages subsidy in the nature of Capital Investment Subsidy
and Interest Subsidy to support such applicant enterprise.
4.8.1 Scheme 1 i.e. the Capital Investment Subsidy, envisages
benefits in the form of certain percentage of Term Loan utilized
by the applicant enterprise for acquisition of 'Gross Fixed
Capital Investment. The term 'Gross Fixed Capital Investment'
has been defined under Clause 1 (v) to the said Policy to mean
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and include investment made in building, plant and machinery,
utilities, tools and equipment, and other assets (excluding
land) required for manufacturing the end product. Moreover,
the said benefit is a one-time benefit ascertained on the basis
of Term Loan disbursed to the applicant enterprise required for
setting up such infrastructure.
4.8.2 Scheme 2 under the said Policy, pertains to Interest
Subsidy and envisages conferment of benefits in the form of
certain percentage of Term Loan utilized by the applicant
enterprise for acquisition of gross fixed capital investment.
Unlike the Capital Subsidy, the Interest Subsidy is calculated
per annum for a period as provided thereunder. Perusal of
clause 3.1.1 (c), 3.3 (g), (h) & (i) clearly shows that in contrast
with the Capital Subsidy, the said Interest Subsidy benefit is
intended not to counteract the initial investment but to reduce
the burden of interest component incurred for availing Term
Loan from Bank/Financial Institution.
Thus, by virtue of the said two schemes under the
Policy,2020, MSME units are not only encouraged but also
supported to set up infrastructure for forward integration,
backward integration and/or diversification for overall
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development of MSMEs and manufacturing competitiveness in
the State of Gujarat. It is stated that the Solar Policy of 2019
was not successful and the projects setup there under were
not economically viable, however, it is only after the Industrial
Policy-2020 is introduced the Solar Projects seem to have
become economically viable on account of the subsidy benefit
extended under the said policy. The said Policy, 2020 is duly
attached at Annexure - D.
4.9 It is further the case of the petitioners that under the
Policy, 2020, endeavor was to give support to all MSMEs
engaged in the manufacturing sector. The petitioners further
state that the generation of power through conventional as
well as non-conventional processes has always been treated as
a manufacturing activity. Reliance is placed by the petitioners
on clarification dated 05.11.2014 on categorization of activities
under manufacturing and service under the MSMED Act, 2006
issued by the Director MSME (Pol.), New Delhi, where power
generation by conventional as well as by non-conventional
processes has been considered as a manufacturing activity.
The said clarification dated 05.11.2014 is duly produced at
Annexure - E.
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4.10 In the aforesaid facts, the Solar Power Projects set up for
generation of power were very much covered under the Policy,
2020. It is the case of the petitioners that the present policy
introduced in September, 2020 is not a new endeavor for the
State of Gujarat but continuation of the earlier Industrial Policy
which was introduced on 19.01.2015 for the period 2015-2020.
Even under the said Policy, such support and encouragement
was given to MSMEs in form of Capital Investment Subsidy and
Interest Subsidy for setting up similar renewable and non-
conventional energy projects. Thus, the scope of the present
Scheme and manufacturing facilities covered under the
present Scheme has remained the same. Reference in the said
regard has also been made to a letter dated 07.03.2020 issued
by the Additional Industries Commissioner from the office of
the respondent No.3 whereby, it was clarified that provisions of
Circular - 19 dated 28.11.2017 prepared during the meeting of
the State Level Implementation Committee on 21.09.2017,
shall also be applicable to all renewable energy projects. It is
further stated that the Circular - 19 was prepared for
extending the assistance to the Windmill Projects set up under
the Industrial Policy of 2009 and 2015. In view thereof, it is
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clear that the assistance in the form of subsidy was also
undoubtedly extended to the renewable energy projects.
Moreover, the clarification is also issued by the Deputy
Commissioner, MSME recently on 27.10.2020 again conveying
that power generation through renewable energy falls under
the manufacturing activity and the same would be entitled to
MSME incentive schemes. Copies of the letter dated
07.03.2020 and 27.10.2020 are duly attached at Annexure - F
colly.
4.11 It is the case of the petitioners that in light of the
aforesaid clarifications, the MSMEs who have set up power
generation projects have also been extended the benefit of
subsidy under the earlier Gujarat Industrial Policy, 2015.
Reference is made with respect to the provisional sanction
letter issued in favour of one M/s Milan Sun Power, duly
attached at Annexure - G.
4.12 It is the case of the petitioners that, there being no
change in the overall scheme of the Policy regarding its
coverage, there is no doubt or dispute that the Solar Projects
set up by the MSMEs were also covered under the Policy, 2020
and were eligible to receive the benefits conferred under
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Scheme 1 and Scheme 2 of the said Policy. There has been no
change in the scheme to warrant such interpretation and
moreover, no clarifications to the contrary has ever been
issued by the respondent No.1 while introducing the Policy,
2020 to justify the same.
4.13 In view of the aforesaid set of facts, the petitioners herein
are constrained to approach this Court for the prayers as
referred above.
5. Heard Mr. Mihir Joshi, learned Senior Counsel assisted by
Mr. Partitosh R. Gupta, learned advocate for Gupta Law
Associates for the petitioners in Special Civil Application No.
13056 of 2021, Mr. Rohan Lavkumar Shah, learned advocate
with Mr. Aaditya P. Dave, learned advocate for Nanavati
Associates in Special Civil Application No. 9167 of 2023 and
Special Civil Application No. 9151 of 2023 and learned
advocates appearing for the respective petitioners, Mr. Kamal
Trivedi, learned Advocate General assisted by Mr. Vinay B.
Vishen, learned Assistant Government Pleader appearing for
the respondent - State and Mr. Prakash Jani, learned Senior
Counsel assisted by Mr. Premal Joshi, learned advocate
appearing for the respondents- Gujarat Urja Vikas Nigam
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Limited and Madhya Gujarat Vij Company Limited.
Submissions on behalf of the petitioners
6. Mr. Mihir Joshi, learned Senior Counsel appearing for the
petitioners, at the outset, submitted that the petitioners herein
are entitled to be extended the benefit of subsidies provided
under the Scheme - 1 and Scheme - 2 of the Policy, 2020; the
petitioners having invested huge amounts in setting up the
Solar Projects. It was further submitted that there is no room
for creating any doubt as regards the applicability of the
Scheme - 1 and Scheme - 2 of the Policy, 2020 to the MSME
units. The aforesaid submission was fortified by Mr. Mihir Joshi,
learned Senior Counsel in view of the fact that the Policy, 2020
in itself endeavors to support the MSMEs engaged in
manufacturing sectors. The generation of power through
conventional and non-conventional process/method has always
been treated as a manufacturing activity. The aforesaid being
the case, the solar power project set up by the petitioners for
generation of powers is very much covered by the Policy, 2020
and there was no occasion for the respondent authorities to
arbitrarily withdraw the benefits conferred under the said
policy by altering the very object with which the Policy, 2020 is
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framed.
6.1 Mr. Joshi, learned Senior Counsel, submitted that the
Policy, 2020 is an extension of the earlier policy of 2015
wherein the identical benefits were envisaged and extended to
the MSME units for setting up the power generation projects. It
was submitted that with the alteration of the said policy, the
benefits conferred therein cannot be withdrawn by mere
issuance of a communication. It was also submitted that the
Policy, 2020 having been brought into existence by way of
Resolution, has an effect of law. In view thereof, the benefits
flowing from such Resolution could not be taken away by
administrative actions. It was submitted that the benefits qua
the petitioners under the Policy, 2020 are sought to be
withdrawn on account of ill-conceived misunderstanding that
over-lapping benefits are availed on the benefits. It was
submitted that there are no over-lapping benefits under the
Policy, 2020 and the Policy for Development of Small Scale
Distributed Solar Projects, 2019.
6.2 Mr. Joshi, learned Senior Counsel, submitted that the
Solar Policy, 2019 does not contemplate conferment of any
financial assistance in setting up the plant. It was submitted
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that the Solar Policy, 2019 is targeted to promote Small Scale
Solar Projects with a size of 0.5 MW to 4 MW amongst all units,
whether by MSME unit or otherwise. Clause - 8 of the Solar
Policy, 2019 provides that the applicable tariff shall include the
tariff contracted in the competitive bidding process along with
addition of Rs.0.20 per unit which shall also form part of the
PPAs signed for setting up the Solar Project. Further, Clause -
16 of the guidelines dated 15.11.2019 provides that capital
cost of the project including the cost of transmission/electrical
line from the plant site to the interface point at the GETCO
Substation etc. shall be entirely at the cost of the applicant. It
was further submitted that Clause - 17 further in no uncertain
terms, clarifies that no financial support shall be provided
towards setting up the solar power plant. Placing reliance on
the aforesaid, it was submitted that clearly the Solar Policy,
2019 does not grant any financial support in setting up the
plant but confers benefits to offset the operational financial
obligations of the entities.
6.3 Placing reliance on Scheme 1 and Scheme 2 of the Policy,
2020, Mr. Joshi, learned Senior Counsel, submitted that the
said Policy provides support towards offsetting financial burden
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in setting up the building, plant, machinery etc. for the
manufacturing process. Placing reliance on the aforesaid, it
was submitted that there is no overlapping of benefits as
erroneously believed by the respondent authorities. It was
submitted that in fact the Solar Policy, 2019 and the Policy,
2020 are mutually exclusive and independent. It was
submitted that Clause - 16 of the Policy, 2020 provides that
the enterprise that has availed assistance under these
schemes will not be entitled to avail benefit under any other
scheme of the department of the State Government for the
same component, unless and otherwise specified under that
scheme. The said clause does not get attracted in the present
case inasmuch as benefits conferred under the Solar Policy,
2019 is not for setting up the infrastructure but to counteract
only operational burden incurred by the applicant therein. The
said clause therefore, does not dis-entitle the benefit of
subsidy extended under the Policy, 2020 to solar projects set
up under the Solar Policy, 2019. In view of the aforesaid
submissions, it was submitted that the impugned
communications as referred to in the prayer clause are
required to be quashed and set aside.
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6.4 Mr. Joshi, learned Senior Counsel, submitted that the
impugned communications at the instance of the respondent
authorities are hit by the principle of 'Promissory Estoppel'. It
was submitted that in view of the Policy, 2020 and the Solar
Policy, 2019, the petitioners have invested hugely towards the
purchase of land, equipments, services etc., for setting up the
solar project. Had there been no promise made by the State
Government for providing subsidy under the Policy, 2020, the
petitioners would not have ventured into setting up of the solar
project but, having promised to extend the benefit of subsidy,
the investments were made and the Solar Project is set-up,
resulting into alteration of the position of the petitioners. It was
submitted that by the impugned communications, the State
Government is estopped from going back on their promises
and assurances. It was submitted that time and again it was
held by the Hon'ble Apex Court that where the promise is
made by the person knowing that it would be acted ypon by
the person on whom it is made and it is in fact so acted upon
by the other party, the promise would be binding on the party
making it and would not be entitled to go back upon it.
To substantiate the aforesaid submission, Mr. Joshi,
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learned Senior Counsel, placed reliance on the ratio as laid
down by the Hon'ble Apex Court in (1979) 2 SCC 409 in case of
M/s Motilal Padampat Sugar Mills Company Limited vs. State of
Uttar Pradesh & Ors., AIR 2008 SC 693 in case of U.P. Power
Coproration Limited & Anr. vs. Sant Steels & Alloys P. Ltd. &
Ors.. Placing reliance on the aforesaid position of law, Mr. Joshi,
learned Senior Counsel, reiterated the contention that the
impugned communications therefore, being hit by the principle
of 'Promissory Estoppel' are required to be quashed and set
aside.
6.5 Mr. Joshi, learned Senior Counsel, submitted that the
petitioners as well as other entities have acted on the promise
made by the Government which is sought to be retracted on
the basis of such promise, the petitioners having invested huge
amounts and having altered their position, the same cannot
now be reversed. With regard to setting up of a solar project,
the scheme under Solar Policy envisages execution and
operation of the plant within strict time frame. The setting up
of the Solar Plant involves prospective planning ranging from
procurement of material as well as the parcel of land on which
the plant is to be erected. Upon declaration of the Policy, the
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petitioners have not only made various investments but also
undertaken various obligations as referred above. It was
submitted that under such circumstances, it is now not open
for the respondent to change its stand on the benefits
available under the Policy to the detriment of the petitioners. It
was submitted that the action on the part of the respondent is
arbitrary, unfair and contrary to the principle of promissory
estoppel.
6.6 Mr. Joshi, learned Senior Counsel, submitted that the
respondent herein is concerned with promotion of generation
of power through conventional and non-conventional sources.
The benefits conferred by the State for promotion of MSMEs
and for development of manufacturing facilities across the
State of Gujarat is not a matter with which the said respondent
is concerned in any manner. That being the case, the
purported decision by the respondent No.2 regarding non-
availability of benefit of subsidy on the face of it, is illegal and
without any authority of law. The Policy, 2020 has been
introduced with a view to accelerate the growth of MSME and
investment in manufacturing sector by such MSME units within
the State of Gujarat. Placing reliance on the aforesaid, it was
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submitted that there is no rationale in excluding the case of
the petitioners from the purview of the benefits conferred
under the Policy, 2020. Ousting of the investment made by
MSME units in setting up Solar Projects would not only be in
violation of the clear letter of the Policy, 2020 but, would also
arbitrary and discriminatory in nature. The petitioners being
MSME unit and having invested amounts for setting up a Solar
Project, which is considered as a manufacturing facility, the
benefits promised under the Policy, 2020 be extended to the
petitioners and on the aforesaid ground alone, the impugned
communications are required to be quashed and set aside.
6.7 Mr. Joshi, learned Senior Counsel, submitted that the
reason for introducing the addendum in question as given in
the preamble to the addendum is that despite giving benefits
under the Solar Policy, 2019, representations were received for
passing of benefits by way of subsidy under MSME scheme and
therefore, to avoid such ambiguities, the addendum is issued.
It was submitted that the aforesaid issue was taken up for
discussion at the relevant point of time at the appropriate level
by the respondent authorities and therefore, it appears that an
amendment was brought on 24.03.2021 in the Solar Policy,
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2019. It was submitted that the said addendum dated
8/9.06.2022 has been issued after completion of pleadings in
the writ proceedings inasmuch as it is clearly contended by the
petitioners in their affidavit-in-rejoinder as to how the bar
contained in Clause - 16 of the Policy, 2020 would be
inapplicable in the case of the petitioners. It was submitted
that the petitioners have clearly contended that the prohibition
contained in Clause - 16 of the Policy, 2020 is qua receiving
benefits in any other schemes of other departments of the
State Government for the 'same component'.
6.8 It was reiterated by Mr. Joshi, learned Senior Counsel,
that if Clause - 8 of the Solar Policy, 2019 is perused in
juxtaposition to Scheme - 1 and Scheme - 2 of the Policy,
2020, the bar as contained in Clause - 16 of the Policy, 2020 is
not attracted and it is only after having realized about the said
fact, the impugned addendum is introduced to Solar Policy,
2019. Placing reliance on the aforesaid submissions, it was
submitted that the addendum is unwarranted and is required
to be struck down. To substantiate the aforesaid contention,
Mr. Mihir Joshi, learned Senior Counsel, placed reliance on
(2015) 1 SCC 1 in case of CIT vs. Vatika Township (P) Limited ,
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and submitted that the action of giving retrospective effect to
the said addendum is also contrary to the rules of
interpretation and the legal position in the said regard. It was
submitted that the addendum could not have been given a
retrospective effect. It was also submitted that it was not a
clarification and in view thereof, the question of giving
retrospective effect does not arise and therefore, the same is
bad in law. It was submitted that the addendum issued on
8/9.06.2022 is against the public interest and is averse to the
cause raised in the present petition. As the addendum takes
away the rights that have accrued in favour of the petitioners
seeking subsidy under Policy, 2020 and the bar under Clause -
16 thereof being not attracted, the addendum is required to be
declared as ultra-vires to the provisions of Article 14 of the
Constitution of India.
6.9 Mr. Joshi, learned Senior Counsel, submitted that the
amendments brought in the Policy, 2020 by virtue of
introducing Aatmanirbhar Gujarat Scheme for assistance to
MSMEs vide Government Resolution dated 05.10.2022 are
illegal. It was submitted that the action of incorporating Clause
- 7, 21 and 24 in the said scheme for assistance to MSMEs in
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itself is bad as the same are incorporated with ill intention so
as to frustrate and eliminate the cause raised in the present
petition. The genesis of the entire dispute is that the
petitioners have been denied the benefits of subsidy provided
under the Policy, 2020 therefore, the developers who are
availing the benefit of the said scheme cannot be heard to say
that they want the benefits of subsidy under the Policy, 2020.
The aforesaid contention is specifically dealt with by the
petitioners in their affidavit in rejoinder more particularly,
paragraphs 5.5 and 5.6 wherein, it is clearly pointed out as to
how there is no overlapping of the Solar Policy, 2019 and the
Policy, 2020. It was submitted that the Aatmanirbhar Gujarat
Scheme for assistance to MSMEs, 2022 (for short 'the Policy,
2022') is also bad and illegal for the reason that it seeks to
deny benefits to the petitioners which they were otherwise
eligible to receive under the Policy, 2020. Such change in
stance by the Government is also ex-facie, arbitrary and
unreasonable inasmuch as it seeks to modulate available
benefits after the recipients have already acted on the promise
extended by way of the earlier policy. In view of the
declaration made under the earlier policy and the petitioners
having acted on it, the respondent State should not be
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permitted to alter its promises by incorporating any change in
the policy which may have an impact on the investments made
prior thereto.
6.10 Mr. Joshi, learned Senior Counsel, submitted that the
contents of Clauses - 7, 21 and 24 of the Policy, 2022 are
applied retrospectively which was not the case during the
subsistence of Clause - 16 of the Policy, 2020. The said clauses
fail to take into consideration the cases where investments
have been made pursuant to the promises made by the
Government to extend the benefit of subsidy under the Policy,
2020 to the MSMEs who have set up their solar projects under
the Solar Policy, 2019. In view thereof, it was submitted that as
the pipeline projects are not protected and the clauses in
question seek to apply restrictions even in cases where
substantial investments have been made, Clause - 21 and 24
are required to be struck down. Placing reliance on the
aforesaid submissions, Mr. Joshi, learned Senior Counsel,
submitted that the petition is required to be allowed and the
impugned communications issued by the respondents are
required to be quashed and set aside.
6.11 Mr. Joshi, learned Senior Counsel, lastly submitted that
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the benefits of both the schemes i.e. Solar Policy, 2019 and the
Policy, 2020 be made available to the petitioners. The
addendum dated 8/9.06.2022 be quashed and set aside.
Clause - 16 wherein the word 'component' is used in the
Policy, 2020, is 'expressly inclusive' and in view thereof, the
petitioners be granted the benefits of the Policy, 2020.
Submissions on behalf of the respondent No.1
7. Mr. Kamal Trivedi, learned Advocate General appearing
for the respondent - State, placed reliance on the affidavit-in-
reply filed by the respondent No.1- State dated 24.02.2022
duly produced at page 113, the additional affidavit of the
respondent No.1 dated 01.07.2022 duly produced at page 173
and the affidavit-in-reply filed by the respondent No.1 in
response to the amendment carried out by the petitioners
dated 11.04.2023 duly produced at page 208.
7.1 Mr. Kamal Trivedi, learned Advocate General, at the
outset, submitted that the petitioners having decided to avail
the benefits of Solar Policy, 2019 by having executed PPAs with
the GUVNL/DISCOMs, the petitioners herein are not entitled to
the benefits of both the worlds. It was submitted that the
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Policy, 2020 prohibits the availment of benefits under any
other scheme of the other department of the State
Government. In view of the same, the petitioners are not
justified in contending that the petitioners were encouraged to
make huge investments solely relying upon the announcement
of the benefits under the Policy, 2020 inasmuch as the
petitioners decided to avail the benefits of Solar Policy, 2019
by having applied under the same.
7.2 Mr. Trivedi, learned Advocate General, submitted that the
decision of the State Government conveyed through the
impugned communications is well thought and the same has
been taken after due deliberations and consultations with the
concerned departments. The aforesaid policies have been
promulgated by the State Government in public interest. It was
submitted that the Solar Policy, 2019 aims to facilitate the
development of small scale solar projects with the size of
0.5MW to 4 MW, inter-alia, providing for signing of PPAs with
Discoms. Under the said policy, the solar projects which have
applied and have entered into PPA and which would be
installed and commissioned during its operative period, shall
become eligible for the benefits and incentives declared under
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the said policy for a PPA term of 25 years. Under the Solar
Policy, 2019, over and above the base tariff contracted, an
addition of Rs.0.20 per unit is allowed to the developers like
the petitioners wherein, Rs.0.12 per unit is available towards
the transmission loss on power and Rs.0.08 per unit is to
compensate for expensive land cost, higher capital investment
and maintenance cost due to small size of projects.
7.3 Mr. Trivedi, learned Advocate General, submitted that the
Policy, 2020 provides for the Scheme for Assistance to Micro,
Small and Medium Enterprise (MSME) in general and confers
the benefit in form of subsidy i.e. Scheme - 1 Capital
Investment Subsidy and Scheme - 2 - Interest Subsidy. Placing
reliance on the aforesaid submission, Mr. Trivedi, learned
Advocate General, submitted that both the policies aim to
cater difference classes and apply differently and in the
particular sets of circumstances; thus, it cannot be inferred
that the developers like the petitioners who have applied
under the Solar Policy, 2019, would also be entitled to the
benefit of the subsidy under the Policy, 2020. Therefore, the
developers who are availing the benefit of the Solar Policy,
2019, cannot be heard to say that they also want the benefit of
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subsidy under the Policy, 2020.
7.4 Mr. Trivedi, learned Advocate General, submitted that the
contention of the petitioners that the benefit of Solar Policy,
2019 and the Policy, 2020 both would be available, the
petitioners having invested huge amounts towards purchase of
lands, equipment, services etc. for setting up the Solar Projects
with an understanding that benefit of subsidy would be made
available to the developers like the petitioners and thus, the
impugned communications are hit by the principle of
'Promissory Estoppel', the said contention would not be
applicable in the facts of the present case more particularly, as
regards the claim being covered under the Policy, 2020. It was
submitted that the petitioners are not justified to claim that
they tried to alter the positions by relying upon the Policy,
2020 because whatever they did to alter their position was
based upon the promise contained in the Solar Policy, 2019. It
was submitted that it is not open for the petitioners to claim
that the petitioners are entitled to simultaneous benefits
though, both the policies aimed to cater different sets of
classes. It was also submitted that the said policies operate for
particular period of time and just because, if one has availed
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some benefit under the previous policy which ceases to exist,
one cannot seek refuge of doctrine of 'Promissory Estoppel'. It
was further submitted that it is settled position of law that the
doctrine of 'Promissory Estoppel' cannot be invoked in abstract
and in such matters, it would be a matter of policy of the State
Government and the same does not bind the Government to
its policy for all time to come. Placing reliance on the aforesaid
contention, it was submitted that both the policies i.e. the
Solar Policy, 2019 and the Policy, 2020 aimed to cater different
sets of classes.
7.5 Mr. Trivedi, learned Advocate General, submitted that the
plea of violation of violation of Article 14 of the Constitution of
India would not be available to the petitioners herein.
7.6 Mr. Trivedi, learned Advocate General, placing reliance on
the additional affidavit filed by the respondent No.1 duly
produced at page 173, submitted that the petitioners and
other similarly situated parties have made representations for
availing the benefit of the subsidies available under the Policy,
2020 in addition to the benefits available to them under the
Solar Policy, 2019. Placing reliance on the aforesaid
submission, it was submitted that the respondent No.1 after
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detailed deliberations and consultations with the concerned
departments, came to the conclusion that originally it was
never contemplated to allow the beneficiaries of the Solar
Policy, 2019 to have dual benefits but, mistakenly such a
provision was omitted to be provided in the said Solar Policy,
2019. Ultimately, the State Government vide communication
dated 20.07.2021 conveyed that no subsidy would be
applicable to the applications received for developing solar
projects under Solar Policy, 2019 and the said communication
is also challenged in the captioned petition.
7.7 Mr. Trivedi, learned Advocate General, submitted that in
order to remove any ambiguity with this regard, the State
Government introduced an addendum to Clause - 8 in the
Solar Policy, 2019 vide Government Resolution dated
8/9.06.2022. As per the addendum, after the last paragraph of
Clause - 8 of the Solar Policy, 2019, the line "Beneficiaries
under this policy shall not be eligible for any subsidy from the
State Government under any other Schemes/Policies" came to
be added. It was submitted that the said addendum dated
8/9.06.2022 further states that the said addendum shall be
effective from the same date when the Solar Policy, 2019 came
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into effect on 06.03.2019. Placing reliance on the aforesaid
submission, it was submitted that the addendum issued vide
GR dated 8/9.06.2022 was clarification by the respondent
No.1 with retrospective effect considering the representations
received from the petitioners and other parties from time to
time.
7.8 Reliance was also placed on further affidavit-in-reply filed
by the respondent No.1 replying to the challenge with respect
to Clauses - 7, 21 and 24 of the "Aatmanirbhar Gujarat
Scheme for assistance to Micro, Small and Medium
Enterprises" (for short 'the Policy, 2022') which came to be
introduced vide Government Resolution dated 05.10.2022 by
making amendments to the "Scheme for Assistance to Micro,
Small and Medium Enterprises" introduced vide Government
Resolution dated 01.09.2020 under the Policy, 2020. It was
submitted that though, the said Policy, 2022 seeks to revise
the benefits available under the Policy, 2020, the same is
independent and separate policy with its operative period from
05.10.2022 till 04.10.2027 with an object to boost the
investments in the State of Gujarat so as to achieve larger goal
of Aatmanirbhar Gujarat for Aatmanirbhar Bharat whereby, the
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quantum of incentives has increased in comparison to what
was available under the previous scheme introduced vide GR
dated 01.09.2020 under the Policy, 2020.
7.9 Mr. Trivedi, learned Advocate General, submitted that as
per Clause - 1.13 of the said Scheme, to become eligible under
the said Policy, the enterprise must have commenced
commercial production/rendering services during the operative
period of the said scheme. It was submitted that as per Clause
- 7, the MSMEs that have applied under the previous scheme
introduced vide GR dated 01.09.2020 and not commenced
commercial production before the date of issuance of the GR
dated 05.10.2022, it shall have an option to either continue
under previous scheme or opt under the said scheme. The said
option is to be exercised within a period of six months from the
date of issuance of the GR. If the enterprise does not exercise
the option within the prescribed time period of six months, it
shall be deemed that the enterprise has opted to continue
under the previous scheme.
7.10 Mr. Trivedi, learned Advocate General, submitted that the
present petition is filed seeking benefits under the Policy, 2020
introduced vide GR dated 01.09.2020 whereas, by virtue of
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amendment, the petitioners seeks to challenge the
Aatmanirbhar Gujarat Scheme (Policy, 2022) which otherwise
in no manner affects the petitioners. It was submitted that on
one hand, the petitioners are seeking benefits of the said
Policy, 2020 and on the other hand, the petitioners seeks to
challenge the Policy, 2022. Placing reliance on the aforesaid, it
was submitted that the same would lead to inconsistencies in
the stand taken by the petitioners with distinct and
independent cause of actions. It was submitted that the said
scheme introduced by the State Government which is
otherwise a policy matter of the State Government, cannot be
challenged by any party which considers the scheme not
suitable to it. Such schemes are prepared taking a holistic view
of the matter and after taking into consideration wide range of
factors including different kinds of industries operating in the
State. Just because the scheme seems not suitable to one
particular industry, the whole scheme cannot be challenged in
the present manner.
7.11 Mr. Trivedi, learned Advocate General, also controverted
to the submissions advanced by the petitioners that the
Government came up with the Aatmanirbhar Scheme (Policy,
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2022) to overcome and defeat the plea of the petitioners. It
was submitted that such allegations are devoid of merits and
are farfetched. It was submitted that the Policy, 2022 has
nothing to do with the developers who have signed PPAs under
the Solar Policy, 2019. It was submitted that it is the
contention of the petitioners that the Clauses -7, 21 and 24
which are subject matter of challenge in Policy, 2022, are
applied retrospectively and the said clauses failed to take into
account substantial investments made by those who have set
up their solar projects under the Solar Policy, 2019. The
operative period of the Policy, 2022 is from 05.10.2022 till
04.10.2027. Under Clause - 7, an option is provided to an
enterprise which has not commenced commercial production
to either continue under the previous scheme or opt under the
Policy, 2022. Thus, the operative period of the scheme coupled
with Clause - 7 leaves no scope of there being any
retrospectivity involved.
7.12 Mr. Trivedi, learned Advocate General, submitted that
when benefits are extended under the policies of the
Government, as a matter of public policy it is always an idea
underlined that if one is availing the benefits under one policy,
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cannot claim benefits under another policy of the State
Government. One cannot, as a matter of right, can claim
benefits under the two policies of the State Government more
particularly, once subscribing to the benefits under one policy.
It was reiterated that one cannot avail the simultaneous
benefits of the State Government Policies when it is clearly
transpired from the aforesaid clauses that if a person is
availing the benefits of similar nature under one particular
policy, cannot claim as a matter of right to the benefits under
another policy of the Government.
7.13 Reliance was placed on the noting by the Hon'ble Finance
Minister and endorsed by the Hon'ble Chief Minister at the time
of introduction of the Solar Policy, 2019. Placing reliance on the
same, it was submitted that the file noting makes it clear that
right from day one, there was a clear intention on the part of
the State Government that if an enterprise avails the benefits
under the Solar Policy, 2019, shall not be entitled to avail the
benefits under any other policy. Ultimately, the benefits which
are extended to the enterprises are from public exchequer and
if the same is not regulated in an above manner, the same
shall result into loss of public exchequer.
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7.14 Summing up the aforesaid submissions, it was submitted
that the underlying policy matter which was very much there
under aforesaid two policies and the same was clarified later
on vide addendum to the Solar Policy, 2019 vide Government
Resolution dated 8/9.06.2022 so as to remove any doubt or
ambiguity in that regards. In view thereof, the same was made
effective from the date when the Solar Policy, 2019 came into
effect i.e. 06.03.2019. It was submitted that in view of the
aforesaid, the present petition is required to be dismissed
being devoid of merits.
Submissions on behalf of respondent Nos.5 and 6
8. Mr. Prakash Jani, learned Senior Counsel appearing for
the respondent Nos.5, submitted that the respondent No.5 has
followed the Solar Policy, 2019 and guidelines for the same
issued by the Government and also provided exit options as
conveyed by the Government. It was submitted that the
Climate Change Department, Government of Gujarat, Gujarat
Energy Development Agency issued guidelines/terms and
conditions for setting up of Small Scale Distributed Solar
Project (SSDSP) wherein, it is specifically stated that the
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registration of SSDSP shall be governed by the provisions of
the policy for Development of Small Scale Distributed Solar
Projects- 2019 of Government of Gujarat, resolution No.
SL/11/2019/51/B1 dated 06.03.2019 and guidelines for the
implementation of policy for Development of Small Scale
Distributed Solar Projects-2019 of Government of Gujarat,
resolution No. SLR/11/2019/51/B1 dated 15.11.2019 and the
terms and conditions mentioned. In the application for
registration under the said project, the applicant has to give
declaration that the applicant has read and understood and
shall abide by the provisions of the Solar Policy, 2019.
8.1 Mr. Jani, learned Senior Counsel, submitted that PPAs
signed between parties and its terms and conditions are
binding on both the parties as per Contract Act, 1872. There is
no provision in PPA for extension of Schedule Commercial
Operation Date (SCOD) except in case of event of Force
Majeure. It was further submitted that the extension of SCOD is
a matter of PPA executed between DISCOM and generator and
the same is governed by the provision of the Electricity Act,
2003 as per which the same falls under the jurisdiction of
Gujarat Electricity Regulatory Commission. It was submitted
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that it is the sole responsibility of the applicant to bear the
capital cost of the project including the cost of
transmission/electrical line from the plant site to the interface
point at the GETCO Substation, providing ABT compliant meter
and RTU at the interface point, all the statutory requirements
including ROW for laying the transmission/ electrical line etc.
Government/ GEDA/ DISCOM/ SLDC shall be absolved of any
such responsibilities that may arise at later date on account of
ownership of the land/ ROW issues etc.
8.2 It was submitted that Power Purchase Agreements have
been signed by Distribution Companies and not by Gujarat Urja
Vikas Nigam Limited.
8.3 Reliance was placed on the PPA dated 24.04.2021
executed with the petitioners and placing reliance on the
same, it was submitted that by communication dated
20.07.2021, the Energy and Petrochemicals Department,
Government of Gujarat has informed the GUVNL that the solar
projects to be installed under the Solar Policy, 2019, shall not
be eligible for any subsidy. In view thereof, the GUVNL has
published a public notice to the said effect on 20.07.2021. It
was submitted that the Energy and Petrochemicals
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Department vide letter dated 07.08.2021 has conveyed their
decision to GUVNL regarding providing one time exit option to
the developers who have signed PPAs with DISCOMs and to
refund charges recovered from them who opt for one time exit
option, accordingly, the GUVNL has published a public notice
dated 09.08.2021 for availing one time exit option on or before
31.08.2021 which was extended vide another public notice
dated 27.08.2021 up to 05.09.2021.
8.4 Mr. Jani, learned Senior Counsel, submitted that one time
exit option was proposed to be given in view of the various
representation received from various project developers who
desired to exit out of the PPA signed on the basis that
establishment of project may not be commercially viable. It
was submitted that the exit option was purely optional and
there was no compulsion whatsoever on any of the project
developer to exit out of the PPA that has been signed. Placing
reliance on the aforesaid submission, it was submitted that the
petition be dismissed.
8.5 Mr. Prakash Jani, learned Senior Counsel appearing for
the respondent Nos.6 - MGVCL, submitted that the petitioners
herein have entered into PPAs with the respondent No.6. It was
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submitted that neither the petitioner commissioned the solar
project before SCOD dated 19.03.2022 as per the PPA
executed with the respondent No.6 nor applied for the first exit
option given by the GUVNL as per public notice issued on
09.08.2021 under the Solar Policy, 2019. It was submitted that
vide letter Nos. (i) Lunawada/o&m/Tech-2/164, dated
07.01.2022, (ii) Lunawada/o&m/Tech-2/2318 dated
01.04.2022; (iii) Lunawada/o&m/Tech-2/2766 dated
16.04.2022; (iv) Lunawada/Tech-2/SSDSP/3512 dated
18.05.2022, the Executive Engineer, (O&M), Lunawada Division
had informed the petitioners for non-commissioning the solar
plant works and the penalty for liquidated damages should be
imposed as per Article 3.3 of the PPA executed with the
respondent No.6 on 24.04.2021.
8.6 Mr. Jani, learned Senior Counsel, submitted that On
22.04.2022, the petitioners submitted an application to Ex.
Engr. (O&M) Lunawada for 4 months time extension upto July,
2022 for completion of solar plant. On 09.05.2022, the request
came to be reiterated by the petitioners be preferring an
application to Executive Engineer (O & M), Lunawada for giving
extension in project completion date. Ex. Engr. (0 & M)
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Lunawada had sent their application to Superintending
Engineer (O&M), Godhra Circle, Office vide Letter no.
Lunawada/o&m/Tech-2/3447 dated 12.05.2022 whether
extension in project completion date should be given or not.
Vide L.no. GDC/o&m/Tech-2/3957 dated 20.05.2022, Godhra
circle office, wrote a letter to Additional chief Engineer (RA&C)
for giving extension in project completion date. It was
submitted that Additional Chief Engineer (RA&C) Corporate
Office, MGVCL vide Letter MGVCL/RA&C/DSM/SSDSP/573
25.05.2022 denied the representation of the petitioners for
giving extension in project completion date as there is no
provision in the Solar Policy, 2019.
8.7 Mr. Jani, learned Senior Counsel, submitted that vide
Letter No. Lunawada/o&m/4234 dated 10.6.2022, Executive
Engineer (O&M), Lunawada informed the petitioner Shri. S D
Patel that their application of giving extension in project
completion date is denied and penalty should be imposed as
per PPA executed with MGVCL. It was submitted that due to
Non Commissioning of Solar plant under Solar Policy, 2019 by
petitioners as per the SCOD 19.03.2022 declared by him
during the execution of PPA with MGVCL, Executive Engineer
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(O&M), Lunawada, encashed the bank guarantee submitted by
the petitioners in favour of MGVCL as per PPA. It was submitted
that the performance bank guarantee of the petitioners of
Rs.3,12,500/- encashed to MGVCL account by Baroda Gujarat
Gramin bank vide cheque no.711 dated 04.08.2022 and the
same was informed to petitioners vide letter No.
BGGB/KIDIA/45/2022-23 dated 04.08.2022 against
development of solar plant under SSDSP. As per PPA "Force
Majeure Event" shall have the meaning set forth under Clause
8.
8.8 Mr. Jani, learned Senior Counsel, submitted that the
MGVCL has followed the Solar policy, 2019 and guidelines for
the same issued by Government and provided Exit options as
conveyed by the Government from time to time. Placing
reliance on the aforesaid submissions, it was submitted that
the present petition be dismissed.
Analysis:-
Though, the issues raised in the present petition are
inter-connected, for the sake of convenience, the said issues
are dealt with independently as under:
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9. The respondent No.1 - State Government in order to
support the development of Small and Medium Enterprises
introduced the Industrial Policy, 2015 on 19.01.2015. The said
Policy envisaged two kinds of subsidy i.e. Scheme - 1 - Capital
Investment Subsidy and Scheme - 2 - Interest Subsidy. The
said Policy was in operation for a period of 5 years from
01.01.2015 to 01.01.2020 which came to be extended twice
and accordingly, remained in operation up to 06.08.2020. The
said policy supported and encouraged the MSMEs in form of
Capital Investment Subsidy and Interest Subsidy for setting up
similar renewable and non-conventional energy projects. By
communication dated 07.03.2020 issued by the Additional
Industries Commissioner from the Office of the respondent
No.3, it was clarified that the provisions made in the Circular -
19 dated 28.11.2017 prepared during the meeting of the State
Level Implementation Committee on 21.09.2017 shall also be
applicable to all renewable energy projects.
10. The petitioner No.1 is a proprietary concern registered
with the Government as a MSME Unit holding Udyam
Registration Certificate bearing Registration No.UDYAM-GJ-31-
0000458. The petitioner No.2 is the sole proprietor of the
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petitioner No.1 and has filed the present proceedings being
materially and substantially interested in the conduct of
business affairs of the proprietary firm.
10.1 The petitioners entered into PPA with the respondent
No.6 on 24.04.2021 under the Solar Policy, 2019.
11. The Government of Gujarat floated the Policy for
development of Small Scale Distributed Solar Projects, 2019
(for short 'the Solar Policy, 2019') on 06.03.2019. The said
Solar Policy, 2019 aims at facilitating development of Small
Scale Solar Project with size of 0.5 MW and above but, up to 4
MW in the distribution network of licensees of Gujarat State in
rapid manner. Under the said Solar Policy, 2019, the Solar
Projects are to be installed and commissioned and the power
so generated is to be sold to the Discom. The said Solar Policy,
2019 envisaged the Power Purchase Agreement (for short
'PPA') to be entered into between the parties concerned and
the Discom for a validity period of 25 years. By way of
incentive to attract investment for setting up Solar Projects,
the said policy envisages the benefit of Rs.0.12 per unit which
are allowed to be added to the determined tariff for sale of
energy to the Discom. The said Solar Policy, 2019 is duly
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produced at page 50 to 57.
11.1 The respondent - State issued guidelines for
implementation of the Solar Policy, 2019 on 15.11.2019, duly
produced at Annexure - C, page 58 to 64.
11.2 As per the said Solar Policy, 2019, the solar projects that
are installed and commissioned during the operative period
shall become eligible for the benefits and incentives declared
under the Policy for a PPA term of 25 years.
11.3 Pursuant to the Solar Policy, 2019 and the guidelines
issued thereon on 15.11.2019, the petitioners having entered
into the PPA with the respondent No.6 on 24.04.2021, failed to
commissioned the solar projects before Scheduled Commercial
Operation Date (for short 'the SCOD') 19.03.2022 as per the
PPA executed with the respondent No.6.
11.4 By communications vide Letter No.(i)
Lunawada/o&m/Tech-2/164, dated 07.01.2022, (ii) Lunawada/
o&m/Tech-2/2318 dated 01.04.2022; (iii) Lunawada/o&m/Tech-
2/2766 dated 16.04.2022; (iv) Lunawada/Tech-2/SSDSP/3512
dated 18.05.2022, the Executive Engineer, (O&M), Lunawada
Division informed the petitioners for non-commissioning the
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solar plant works and the penalty for liquidated damages
should be imposed as per Article 3.3 of the PPA executed with
the respondent No.6 on 24.04.2021. The said communications
are duly produced at Annexure-R/1 colly.
11.5 On 22.04.2022, the petitioners submitted an extension
application seeking 4 months extension up to July, 2022 for
completion of the solar plant. On 09.05.2022, the petitioners
again submitted an application to the Executive Engineer
(O&M), Lunawada for giving extension in project completion
date. The Executive Engineer, Lunawada by communication
vide letter No.Lunawada/o&m/4234 dated 10.06.2022 informed
the petitioners that the application of giving extension in
project completion date came to be declined. Copy of the said
letter/communication is duly produced at Annexure - R/2. The
petitioners were also informed by the said communication that
having failed to comply with the terms of the PPA, penalty was
directed to be imposed.
11.6 Due to non-commissioning of the solar plant under the
Solar Policy, 2019 by the petitioners as per the SCOD
19.03.2022 declared by the petitioners during the execution of
the PPA with the respondent No.6, the Executive Engineer
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(O&M), Lunawada, vide Letter No.(i)
LWD/o&m/Tech-2/SSDSP/2860 dated 21.04.2022; (ii)
LWD/o&m/Tech-2/SSDSP/3423 dated 12.05.2022; (iii)
LWD/o&m/Tech-2/SSDSP/4118 dated 06.06.2022; and (iv)
LWD/o&m/Tech-2/SSDSP/5535 dated 03.08.2022 informed to
the Branch Manager, Baroda Gujarat Gramin Bank, Kidia
Branch, At Po. Kidia, Tal. Lunawada, Dist. Mahisagar, to encash
the bank guarantee submitted by the petitioners in favour of
the respondent No.6 as per the PPA. The performance bank
guarantee of the petitioners of Rs.3,12,500/- came to be
encashed to the respondent No.6 account by Baroda Gujarat
Gramin Bank vide Cheque No.711 dated 04.08.2022 and the
same was informed to the petitioners vide letter
No.BGGB/KIDIA/45/2022-23 dated 04.08.2022 against
development of solar plant under SSDSP. Copy of the said
letter dated 04.08.2022 is duly produced at Annexure - R/3.
12. The respondent No.1 - State Government on 01.09.2020
through its Industries and Mines Department introduced the
Gujarat Industrial Policy - 2020 (for short 'the Policy, 2020') as
a "Scheme for Assistance to Micro, Small and Medium
Enterprises (MSME)". The said scheme is in operation from
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07.08.2020 to 06.08.2025. The said policy envisaged two kinds
of subsidy i.e. Scheme - 1 - Capital Investment Subsidy and
Scheme - 2 - Interest Subsidy.
12.1 Clause - 16 of the said Policy, 2020, stipulates that those
enterprises which have availed assistance under the aforesaid
schemes, will not be entitled to avail benefit under any other
scheme of other department of the State Government for the
same component, unless and otherwise specified under that
scheme.
12.2 In the meantime, several representations were made and
in one of such representations, a request was made to extend
the Capital and Investment Subsidy under the Policy, 2020 to
the Small Scale Distributed Solar Projects envisaged under the
Solar Policy, 2019. The representation dated 22.06.2021 is
duly produced at Annexure -R-III, page 156. On the basis of the
decision taken by the respondent No.1, the respondent No.2 by
communication dated 20.07.2021 conveyed to the Managing
Director, Gujarat Urja Vikas Nigam Limited (GUVNL), that no
subsidy would be applicable to the applications received for
Small Scale Distributed Solar Projects under Solar Policy, 2019.
The said communication is duly produced at page 91-91/A. The
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aforesaid was communicated by the respondent No.1 to the
respondent No.3 by communication dated 02.08.2021 that the
subsidy would not be applicable to the applications received
under the Solar Policy, 2019. On 05.08.2021, the respondent
No.3 addressed the communication to the respondent No.4
with respect to the aforesaid decision taken by the State
Government.
12.3 On 09.08.2021, in view of the aforesaid representations,
the respondent No.5 - GUVNL issued public notice conveying
that a one-time option to exit from PPA is extended to the
developers who have signed PPAs with DISCOMs and charges
recovered from the developers who exercised such option shall
be refunded. The developers who were willing to avail such
one time exit option were required to submit written request
along with prescribed undertaking on or before 31.08.2021.
The petitioners herein chose not to avail the said exit option.
12.4 It is pertinent to note that though, the Policy, 2020 came
into effect from 07.08.2020, the petitioners herein entered into
the PPA on 24.04.2021 with the respondent No.6 after the said
Policy, 2020 came into effect.
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13. The respondent No.1, on 8/9.06.2022, issued an
addendum to the Solar Policy, 2019 wherein it is clarified that
the beneficiaries under the Solar Policy, 2019 shall not be
eligible for any subsidy from the State Government and under
other Schemes/Policies. To avoid such ambiguities, the said
addendum came to be issued after due consideration by the
State Government to remove the difficulties in implementation
of the Solar Policy, 2019.
13.1 It is apposite to refer to Clause 8 of the Solar Policy,
2019, which reads thus:
"8. APPLICABLE TARIFF
Tariff applicable under this Policy shall be as per following mechanism:
The tariff contracted in the competitive bidding process conducted by
GUVNL at which PPAs are signed for procurement of Solar Power from
projects located outside Solar Park prevailing as on 31 March (computed
based on simple average of such tariff discovered and contracted over six
months ending on 31 March) of any given year with an addition of Rs. 0.20
per unit shall be the applicable tariff at which the PPAs shall be signed
during the immediately succeeding period of April to September by
Obligated Entities with these Solar Projects under this policy and similarly
the contracted tariff prevailing as on 30th September of any given year
(computed based on simple average of such tariff discovered and
contracted over six months ending on 30th September) with an addition of
Rs. 0.20 per unit shall be the applicable tariff for PPAS to be signed during
the immediately succeeding period of October to March. However, the
above mechanism of applicable tariff shall be subject to approval of GERC.
The Obligated Entities shall take one time approval of GERC. The Rs. 0.20
per unit addition in tariff is allowed for Rs.0.12 per unit for saving in
transmission loss as power will be injected in distribution grid and Rs.0.08
per unit is to compensate for expensive land cost, higher capital
investment and maintenance cost due to small size of projects.
The above mentioned tariff shall be applicable for a PPA term of 25 years
from Commercial Operation Date of the Projects.
13.2 The addendum issued on 8/9.06.2022 to Clause - 8 reads
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thus:
"READ
(1) Energy & Petrochemicals Dept. G.R. No. SLR/11/2019/51/B1, dated
06/03/2019.
(2) Energy & Petrochemicals Dept. G.R. No. SLR/11/2019/51/B1, dated
24/03/2021.
PREAMBLE
The Government of Gujarat has declared Policy for Development of
Small Scale Distributed Solar Projects - 2019 vide G.R. No.
SLR/11/2019/51/B1, dated 06/03/2019 and its amendment dated
24/03/2021.
The aim of the SSDSP-2019 policy is to promote Small Scale
Distributed Solar Projects in the State. Accordingly, under the said policy,
over and above the tariff contracted, an addition of Rs. 0.20 per unit is
allowed. That is, Rs. 0.12 per unit for saving in transmission loss as power
will be injected in distribution grid and Rs.0.08 per unit is to compensate
for land cost, capital investment and maintenance cost due to small size of
projects.
Further, MSME Scheme of Industries and Mines Department was
declared in the year 2020. Therefore, it could not be mentioned in Energy
& Petro Department's Policy of 2019 that the one having opted for the
Policy for Development of Small Scale Distributed Solar Projects-2019, will
not be entitled to get benefit under any other scheme.
Despite giving benefit under SSDSP, representations are received
for passing of benefit by way of subsidy under MSME Scheme. Therefore,
to avoid such ambiguities, this addendum needs to be issued.
The matter was under active consideration of the State
Government to issue clarification/interpretation to remove difficulties in
implementation of the SSDSP-2019 policy.
RESOLUTION
Accordingly, The State Government has decided to clarify and issue
addendum to the Clause No: 8 of G.R. dated 06/03/2019 as under:-
In Clause 8 of the policy, the following line is added after the last
paragraph:
"Beneficiaries under this policy shall not be eligible for any subsidy
from the State Government under any other Schemes/Policies."
Further, The State Government has also decided that the
aforementioned addendum shall be effective from the date of original G.R.
i.e. 06th March 2019.
Other provisions/ clauses of Policy for development of Small Scale
Distributed Solar Projects - 2019 vide G.R. No. SLR/11/2019/51/B1, dated
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06/03/2019 and its amendment issued vide G.R. dated 24/03/2021
remains same."
(a) Addendum:-
14. Considering the aforesaid addendum dated 8/9.06.2022,
in the opinion of this Court, the same is clarificatory in nature
and clarifies clause - 8 of the Solar Policy, 2019 that the
beneficiaries under the said policy, 2019 shall not be eligible
for any subsidy from the State Government under any other
Schemes/Policies. Further, the State Government has resolved
that the said addendum shall be effective from the date of
original Government Resolution dated 06.03.2019 when the
said Solar Policy, 2019 came to be introduced. The stance of
the respondent No.1 vide impugned communications dated
20.07.2021, 02.08.2021 and 05.08.2021 that the benefit of
subsidy under the Policy, 2020 is not available to the projects
set up under the Solar Policy, 2019 stands further clarified by
issuance of addendum dated 08/9.06.2022. The petitioners
having not applied for the benefit of the Policy, 2020, cannot
be said to be prejudiced by the issuance of addendum dated
8/9.06.2022 as referred above.
14.1 At this stage, it is apposite to refer to the position of law
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wherein, it is held that once any statues/notifications are held
to be clarificatory/explanatory, the earlier enactment is usually
held to be retrospective.
(a) 1993 Suppementary 3 SCC 234 in case of S.S. Grewal vs.
State of Punjab & Ors. Paragraph 9 of the said decision reads
thus:
"9. From a parusal of the letter dated April 8,1980, we find that it gives
clarifications on certain doubts that had been created by some
Departments in the matter of implementation of the instructions contained
in the earlier letter dated May 5,1975. Since the said letter dated April
8,1980 is only clarificatory in nature, there is no question of its having an
operation independent of the instructions contained in the letter dated
May 5, 1975 and the clarifications contained in the letter dated April 8,
1980 have to be read as a part of the instructions contained in the earlier
letter dated May 5, 1975. In this context it may be stated that according to
the principles of statutory construction a statute which is explanatory or
clarificatory of the earlier enactment is usually held to be restrospective.
(See: Craies on Statute Law, 7th Ed., p.58). It must, therefore, be held that
all appointments against vacancies reserved for Scheduled Castes made
after May 5, 1975 (after May 14, 1977 in so far as the Service is
concerned), have to be made in accordance with the instructions as
contained in the letter dated May 5, 1975 as clarified by letter dated April
8, 1980. On that view, the appointment of Shri Balwant Rai in 1979 has to
be treated to be an appointment made under the said instructions and
operation of these instructions cannot be postponed till April 8, 1980. If
the matter is considered in this light then the sub-roster as indicated in
the letter dated April 8, 1980 would have to be applied in respect of the
post on which Shri Balwant Rai was appointed in 1979 and the said
appointment has to be regarded as having been made against the
vacancy at point No 1. in the the roster which was reserved for Balmikis or
Mazhbi Sikhs but since no Balmiki or Mazhbi Sikh was selected for that
post, the said vacancy was assigned to Shri Balwant Rai who belonged to
a scheduled Caste other than a Balmiki or Mazhbi Sikh. The said vacancy
which was reserved for Balmikis or Mazhbi Sikhs could not be carried
forward in view of the directions contained in the letter dated April 8,
1980. The next post reserved for Scheduled Castes at point No. 5 in the
roster was meant for a person belonging to a Scheduled Caste other than
Balmikis and Mazhbi Sikhs. In the selections that were made in 1981 and
1982 no person belonging to a Scheduled Caste was selected and,
therefore, posts at Points nos. 5 and 6 in the Roster became available to
candidates in the general category and the vacancy at Point no.5 reserved
for Scheduled Castes was carried forward to point No.7 In 1986, two
persons belonging to Scheduled Castes, namely Shri G.S. Samra and
respondent No.3 were selected. Shri G.S. Samra belonged to a Scheduled
Caste other than Balmiki and Mazhbi Sikh whereas respondent No. 3 was a
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Mazhbi Sikh. Since the post at point No.5 which had been carried forward
to point No.7 was reserved for a candidate belonging to a Scheduled Caste
other than Balmiki or Mazhbi Sikh it had to be assigned to Shri G.S. Samra
falling in that category and respondent No. 3 who was a azhbi Sikh could
only be appointed against the reserved vacancy at point No.9 in the
Roster. Respondent No. 3 can not claim that the vacancy at Point No.7
should be assigned to him. If respondent No.3 is adjusted against the
vacancy at Point No. 9 in the Roster, he has to be placed in seniority below
the appellant who was appointed against point No. 8 in the Roster.
In the aforesaid decision, the Hon'ble Apex Court held
that the notification being clarificatory/explanatory in nature to
earlier enactment, is usually held to be retrospectively.
(b) (2021) 9 SCC 657 in case of Ghanashyam Mishra & Sons
Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Ltd. ,
wherein the Hon'ble Supreme Court observed and held as
under:
"2. The short but important questions, that arise for consideration in
this batch of matters, are as under:-
(i) As to whether any creditor including the Central Government, State
Government or any local authority is bound by the Resolution Plan once it
is approved by an adjudicating authority under sub-section (1) of Section
31 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to
as 'I&B Code')?
(ii) As to whether the amendment to Section 31 by Section 7 of Act 26 of
2019 is clarificatory/declaratory or substantive in nature?
(iii) As to whether after approval of resolution plan by the Adjudicating
Authority a creditor including the Central Government, State Government
or any local authority is entitled to initiate any proceedings for recovery of
any of the dues from the Corporate Debtor, which are not a part of the
Resolution Plan approved by the adjudicating authority?"
The aforesaid issue No.2(ii) was answered as under:
"73. Vide Section 7 of Act No.26 of 2019 (vide S.O. 2953(E), dated
16.8.2019 w.e.f. 16.8.2019), the following words have been inserted in
Section 31 of the I&B Code:
"including the Central Government, any State Government or any local
authority to whom a debt in respect of the payment of dues arising under
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any law for the time being in force, such as authorities to whom statutory
dues are owed"
74. As such, with respect to the proceedings, which arise after
16.8.2019, there will be no difficulty. After the amendment, any debt in
respect of the payment of dues arising under any law for the time being in
force including the ones owed to the Central Government, any State
Government or any local authority, which does not form a part of the
approved resolution plan, shall stand extinguished.
75. The only question, which remains is, what happens to such dues if
they pertain to a period wherein Section 7 petitions have been admitted
prior to 16.8.2019.
76. To answer the said question, we will have to consider, as to
whether the said amendment is clarificatory/declaratory in nature or a
substantive one. If it is held, that it is declaratory or clarificatory in nature,
it will have to be held, that such an amendment is retrospective in nature
and exists on the statute book since inception. However, if the answer is
otherwise, the amendment will have to be held to be prospective in
nature, having force from the date on which the amendment is effected in
the statute.
77. It will be relevant to refer to the "Statement of Objects and
Reasons" (hereafter referred to as "SOR") of the Insolvency and
Bankruptcy Code (Amendment) Bill, 2019, which read thus:
"The Insolvency and Bankruptcy Code, 2016 (the Code) was
enacted with a view to consolidate and amend the laws relating to
reorganisation and insolvency resolution of corporate persons,
partnership firms and individuals in a time-bound manner for
maximisation of value of assets of such persons, to promote
entrepreneurship, availability of credit and balance the interests of
all the stakeholders including alteration in the order or priority of
payment of Government dues and to establish an Insolvency and
Bankruptcy Board of India.
2. The Preamble to the Code lays down the objects of the Code to
include "the insolvency resolution" in a time bound manner for
maximisation of value of assets in order to balance the interests of
all the stakeholders. Concerns have been raised that in some cases
extensive litigation is causing undue delays, which may hamper
the value maximisation. There is a need to ensure that all creditors
are treated fairly, without unduly burdening the Adjudicating
Authority whose role is to ensure that the resolution plan complies
with the provisions of the Code. Various stakeholders have
suggested that if the creditors were treated on an equal footing,
when they have different pre insolvency entitlements, it would
adversely impact the cost and availability of credit. Further, views
have also been obtained so as to bring clarity on the voting pattern
of financial creditors represented by the authorised representative.
3. In view of the aforesaid difficulties and in order to fill the critical
gaps in the corporate insolvency framework, it has become
necessary to amend certain provisions of the Insolvency and
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Bankruptcy Code.The Insolvency and Bankruptcy Code
(Amendment) Bill, 2019, inter alia, provides for the following,
namely:-
"(a) - (e)
(f) to amend sub - section (1) of section 31 of the Code to clarify
that the resolution plan approved by the Adjudicating Authority
shall also be binding on the Central Government, any State
Government or any local authority to whom a debt in respect of
payment of dues arising under any law for the time being in force,
such as authorities to whom statutory dues are owed, including tax
authorities;
78. Perusal of the SOR would reveal, that one of the prime objects of
I&B Code was to provide for implementation of insolvency resolution
process in a time bound manner for maximisation of value of assets in
order to balance the interests of all stakeholders. However, it was noticed,
that in some cases there was extensive litigation causing undue delays
resultantly hampering the value maximisation. It was also found necessary
to ensure, that all creditors are treated fairly. It was therefore in view of
the various difficulties faced and in order to fill the critical gaps in the
corporate insolvency framework, it was necessary to amend certain
provisions of the I&B Code. Clause (f) of para 3 of the SOR of the
Insolvency and Bankruptcy Code (Amendment) Bill, 2019 would amply
make it clear, that the legislative intent in amending sub-section (1) of
Section 31 of I&B Code was to clarify, that the resolution plan approved by
the Adjudicating Authority shall also be binding on the Central
Government, any State Government or any local authority to whom a debt
is owed in respect of payment of dues arising under any law for the time
being in force, such as authorities to whom statutory dues are owed,
including tax authorities.
84. It is clear, that the mischief, which was noticed prior to amendment
of Section 31 of I&B Code was, that though the legislative intent was to
extinguish all such debts owed to the Central Government, any State
Government or any local authority, including the tax authorities once an
approval was granted to the resolution plan by NCLT; on account of there
being some ambiguity, the State/Central Government authorities
continued with the proceedings in respect of the debts owed to them. In
order to remedy the said mischief, the legislature thought it appropriate to
clarify the position, that once such a resolution plan was approved by the
Adjudicating Authority, all such claims/dues owed to the State/Central
Government or any local authority including tax authorities, which were
not part of the resolution plan shall stand extinguished.
85. In Justice G.P. Singh treatise on "The principles of Statutory
Interpretation", 14th Edition, Revised by Justice A.K. Patnaik, former Judge
of this Court, it is observed thus:
(i) Declaratory Statutes
The presumption against retrospective operation is not applicable
to declaratory statutes. As stated in CRAIES and approved by the
Supreme Court:
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"For modern purposes a declaratory Act may be defined as an Act
to remove doubts existing as to the common law, or the meaning
or effect of any statute. Such Acts are usually held to be
retrospective. The usual reason for passing a declaratory Act is to
set aside what Parliament deems to have been a judicial error,
whether in the statement of the common law or in the
interpretation of statutes. Usually, if not invariably, such an Act
contains a preamble, and also the word 'declared' as well as the
word 'enacted'.
But the use of the words 'it is declared' is not conclusive that the
Act is declaratory for these words may, at times, be used to
introduce new rules of law and the Act in the latter case will only
be amending the law and will not necessarily be retrospective 14.
In determining, therefore, the nature of the Act, regard must be
had to the substance rather than to the form15. If a new Act is 'to
explain' an earlier Act, it would be without object unless construed
retrospective16. An explanatory Act is generally passed to supply
an obvious omission or to clear up doubts as to the meaning of the
previous Act. It is well settled that if a statute is curative or merely
declaratory of the previous law retrospective operation is generally
intended. The language 'shall be deemed always to have meant' or
'shall be deemed never to have included' is declaratory, and is in
plain terms retrospective. In the absence of clear words indicating
that the amending Act is declaratory, it would not be so construed
when the pre-amended provision was clear and unambiguous. An
amending Act may be purely clarificatory to clear a meaning of a
provision of the principal Act which was already implicit. A
clarificatory amendment of this nature will have retrospective
effect and, therefore, if the principal Act was existing law when the
constitution came into force, the amending Act also will be part of
the existing law.
The above statement of the law relating to the nature and effect of
a declaratory statute has been quoted with approval by the
Supreme Court from earlier editions of this book in a number of
cases.
"In Mithilesh Kumari v. Prem Bihari Khare, section 4 of the Benami
Transactions (Prohibition) Act, 1988 was, it is submitted, wrongly
held to be an Act declaratory in nature for it was not passed to
clear any doubt existing as to the common law or the meaning or
effect of any statute. The conclusion, however, that section 4
applied also to past benami transactions may be supportable on
the language used in the section."
These observations and criticism of Mithilesh Kumari's case also
received the approval in R. Rajgopal Reddy v. Padmini
Chandrasekharan, where the Supreme Court after quoting them
(from G.P. Singh: Principles of Statutory Interpretation, 5 th Edn.,
pp.315-16) said:
"No exception can be taken to the above observations"
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A proviso added from 1.4.1988 to section 43 B inserted in the
Income Tax Act, 1961 from 1.4.1984 came up for consideration in
Allied Motors(P.) Ltd. v. Commissioner of Income-tax and it was
given retrospective effect from the inception of the section on the
reasoning that the proviso was added to remedy unintended
consequences and supply an obvious omission so that the section
may be given a reasonable interpretation and that in fact the
amendment to insert the proviso would not serve its object unless
it is construed as retrospective. In Commissioner of Income-Tax,
Bombay v. Podar Cement Pvt. Ltd., the Supreme Court held that
amendments introduced by the Finance Act, 1987 in so far they
related to section 27(iii), (iiia) and (iiib) which redefined the
expression 'owner of house property', in respect of which there
was a sharp divergence of opinion amongst the High Courts, was
clarificatory and declaratory in nature and consequently
retrospective. Similarly, in Brij Mohan Das Laxman Das v.
Commissioner of Income- tax. Explanation 2 added to section 40 of
the Income-tax Act, 1961 from 1.4.1985 on a question on which
there was a divergence of opinion was held to be declaratory in
nature and, therefore, retrospective. And in Zile Singh v. State of
Haryana, substitution of the word 'upto' for the word 'after' in the
proviso to section 13A (added in 1994) in Haryana Municipal Act,
1973 by the Haryana Municipal (Second Amendment) Act, 1994
was held to be correction of an obvious drafting error to bring
about the text in conformity with the legislative intent and,
therefore, retrospective. Even without the amendment of the
proviso, the court in all probability would have read and interpreted
the section as corrected by the amendment.
93. As discussed hereinabove, one of the principal objects of I&B Code
is, providing for revival of the Corporate Debtor and to make it a going
concern. I&B Code is a complete Code in itself. Upon admission of petition
under Section 7, there are various important duties and functions
entrusted to RP and CoC. RP is required to issue a publication inviting
claims from all the stakeholders. He is required to collate the said
information and submit necessary details in the information
memorandum. The resolution applicants submit their plans on the basis of
the details provided in the information memorandum. The resolution plans
undergo deep scrutiny by RP as well as CoC. In the negotiations that may
be held between CoC and the resolution applicant, various modifications
may be made so as to ensure, that while paying part of the dues of
financial creditors as well as operational creditors and other stakeholders,
the Corporate Debtor is revived and is made an ongoing concern. After
CoC approves the plan, the Adjudicating Authority is required to arrive at a
subjective satisfaction, that the plan conforms to the requirements as are
provided in sub-section (2) of Section 30 of the I&B Code. Only thereafter,
the Adjudicating Authority can grant its approval to the plan. It is at this
stage, that the plan becomes binding on Corporate Debtor, its employees,
members, creditors, guarantors and other stakeholders involved in the
resolution Plan. The legislative intent behind this is, to freeze all the claims
so that the resolution applicant starts on a clean slate and is not flung with
any surprise claims. If that is permitted, the very calculations on the basis
of which the resolution applicant submits its plans, would go haywire and
the plan would be unworkable.
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94. We have no hesitation to say, that the word "other stakeholders"
would squarely cover the Central Government, any State Government or
any local authorities. The legislature, noticing that on account of obvious
omission, certain tax authorities were not abiding by the mandate of I&B
Code and continuing with the proceedings, has brought out the 2019
amendment so as to cure the said mischief. We therefore hold, that the
2019 amendment is declaratory and clarificatory in nature and therefore
retrospective in operation."
In the aforesaid decision, the Hon'ble Apex Court held
that the amendment as declaratory and clarificatory in nature
and therefore, retrospective in operation.
14.2 Reliance as placed on (2015) 1 SCC 1 in case of CIT vs.
Vatika Township (P) Limited, by the learned Senior Counsel
appearing for the petitioners wherein, the Hon'ble Apex Court
held that considering the Finance Act, 2002, the surcharge in
respect of block assessment of undisclosed income was made
prospective. By way of an amendment under Section 113 of
the Act, the change in respect of surcharge created for the first
time by insertion of proviso to Section 113 being a substantiate
provision is directed to be construed prospective in operation.
In the aforesaid set of facts, the Hon'ble Supreme Court held
that the amendment could not be said to be merely
clarificatory nor was there any material to suggest that it was
the intention of the parliament.
In the facts of the present case, the addendum issued on
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8/9.06.2022 is a clarification and in view thereof, the said
principle as laid down by the Hon'ble Apex Court in (2015) 1
SCC 1 in case of CIT vs. Vatika Township (P) Limited , would
not be applicable.
14.3 Considering the aforesaid position of law, in the opinion
of this Court, the addendum issued by the respondent No.1
dated 8/9.06.2022 being clarificatory in nature, is
retrospective. The petitioners have failed to show how the
impact of addendum has led to deprivation of any legal or
fundamental right accrued in favour of the petitioners. The
addendum is clarificatory in nature as it clarifies the
applicability of policy. Considering the submissions advanced
by the learned counsels appearing for the respective parties
and the documents produced on record, the stance taken by
the respondent No.1 is being consistent and the petitioners
have altered their position to accrue the benefit of Solar Policy,
2019, is in no way altered by the issuance of the addendum.
14.4 Reliance as placed on 2022 SCC Online SC 1280 in case
of Bharat Sanchar Nigam Ltd. & Ors. vs. TATA Communications
Ltd., by the learned counsel appearing for the petitioners, is
not applicable to the facts of the present case. In the said
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decision, the Hon'ble Supreme Court held that
administrative/executive orders or circulars as the case may
be, in absence of any legislative competence, cannot be made
applicable with effect from retrospective effect and only law
can be made retrospectively if it was expressly provided by the
legislature in the statute.
In the facts of the present case, the addendum dated
8/9.06.2022 issued by the respondent No.1 is a clarification.
14.5 After issuance of the addendum on 8/9.06.2022, the Exit
option dated 25.07.2022 came to be introduced by the
respondent No.5 by way of public notice providing for exercise
of second time exit option on or before 09.08.2022, for the
developers like the petitioners operating under the Solar
Policy, 2019, with a refund of penalty/charges i.e. application
fees, connectivity charges, bank guarantee, provisional line
supervision charges and performance bank guarantee
encashed/liquidated damages amount.
The petitioners chose not to exercise the aforesaid exit
option which was introduced for the second time subsequent
to the addendum issued by the respondent No.1 on
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8/9.06.2022.
(b) Promissory Estoppel:-
15. It is the contention of the petitioners that the impugned
communications dated 20.07.2021, 02.08.2021 and
05.08.2021 are bad and illegal; the same being hit by the
Principle of Estoppel, the petitioners having invested huge
towards purchase of land, equipments, services etc. for setting
up the Solar Project in view of the Solar Policy, 2019 and the
Policy, 2020. Had there been no promise made by the State
Government for providing subsidy under the Policy, 2020, the
petitioners would not have ventured into setting up the Solar
Project but, having promise to extent the benefit of subsidy,
the investments were made and the Solar Project is set up
resulting into the alteration of position of the petitioners. That,
the respondent - State Government is estopped from going
back from their promises and assurances.
15.1 The petitioners have placed reliance on a letter dated
07.03.2020 issued by the Additional Industries Commissioner
wherein, it was clarified that the provisions made in Circular -
19 dated 28.11.2017 prepared during the meeting of State
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Level Implementation Committee on 21.09.2017, shall also be
applicable to all the Renewable Energy Projects. In view
thereof, it is the contention the petitioners that assistance in
form of subsidy would also be extended to the Renewable
Energy Projects. Similar clarification was also issued by the
Deputy Commissioner, MSME on 27.10.2020 conveying that
the power generation through renewable energy falls under
the manufacturing activity and the same would be entitled to
MSME incentive schemes.
At this stage, it is apposite to refer to Clause - 16 of the
Policy, 2020, which reads thus:
"16.0 General conditions
(a) The enterprise that has availed assistance under these schemes will
not be entitled to avail benefit under any other scheme of other
department of State Government for the same component, unless bed
otherwise specified under that scheme, benefit under such schemes of
Government of India, if any. However in any case total assistance shall not
exceed the actual Investment/expenditure.
(b) Enterprise will be eligible for assistance under all the schemes, if it
fulfills all provisions of relevant scheme.
(c) The detailed procedures and implementation guidelines will be issued
by the MSME Commissionerate for all the schemes under this resolution
and it will be final and binding to all."
15.1.1 In the opinion of this Court, the Policy, 2020 being a
revised policy the communications dated 07.03.2020 and
27.10.2020 would not be binding to the respondent No.1 -
State taking into consideration the larger public interest.
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Clause - 16 of the Policy, 2020 clarifies the stance of the
respondent No.1. The impugned communications which are
subject matter of challenge, dated 20.07.2021 issued by the
Managing Director, GUVNL, 02.08.2021 issued by the Under
Secretary, Industries and Mines Department to the
Commissioner, MSME and 05.08.2021 issued to the General
Manager, District Industries Centers by the Deputy
Commissioner, MSME, further clarify the stance of respondent
No.1 that the stake holders are not entitled to the benefits of
both the policies i.e. Solar Policy, 2019 and Policy, 2020. Both
the aforesaid policies cater to separate and distinct classes.
15.1.2 Subsequently, the addendum dated 8/9.06.2022
issued clarifies that the stake holders of the Solar Policy, 2019
are not entitled to the benefits of any other policy.
15.2 The doctrine of promissory estoppel is a doctrine
representing a principle evolved by equity to avoid injustice. It
is not dependent on the pure questions of law but the same
requires an appreciation of facts in each case which is required
to be established by the party claiming the benefit of the said
doctrine. The doctrine can be invoked only when there is a
clear, sound, and positive foundation laid in the petition itself
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by the party invoking the doctrine by the contents of the
petition and supporting material and by demonstrating that the
party has altered its position relying on the assurance of the
other party. The law is well settled on the issue that the
doctrine of promissory estoppel, cannot be invoked in the
abstract and the Courts are bound to consider all aspects as
the doctrine is based on the foundation of the equities. It is
also an essential requirement on the part of the party claiming
the applicability of the said doctrine that the party acted
pursuant to the promise made but for the promise it would not
have so acted which is also not made out in the present case.
15.3 The aforesaid principle is based on a promise expected
to be fulfilled. In Promissory Estoppel, truth is immaterial and
equity prevails over it. To claim the benefit of promissory
estoppel, the petitioners must fulfill (a) A representation or
conduct amounting to representation must have been made;
(b) The other party to whom representation was made must
have acted upon such representation; and (c) He must have
acted to his detriment or suffered as a result of such
representation.
15.4 It is apposite to refer to the observations of Bhagwati J.
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(as he then was) in AIR 1979 SC 621 in case of M/s Motilal
Padampat Sugar Mills Company Limited vs. State of Uttar
Pradesh & Ors..
"It is elementary that in a republic governed by the rule of law, no one,
howsoever high or low, is above the law. Everyone is subject to the law as
fully and completely as any other and the Government is no exception. It
is indeed the pride of constitutional democracy and rule of law that the
Government stands on the same footing as a private individual so far as
the obligation of the law is concerned: the former is equally bound as the
latter. It is indeed difficult to see on what principle can a Government,
committed to the rule of law, claim immunity from the doctrine of
promissory estoppel. Can the Government say that it is under no
obligation to act in a manner that is fair and just or that it is not bound by
considerations of 'honest and good faith'? Why should the Government not
be held to a high standard of rectangular rectitude while dealing with its
citizens'?.... The law cannot acquire legitimacy and gain social acceptance
unless it accords with the moral values of the society and the constant
endeavour of the Courts and the legislature, must, therefore, be to close
the gap between law and morality and bring about as near an
approximation between the two as possible. The doctrine of promissory
estoppel is a significant judicial contribution in that direction."
The ratio as laid down in the aforesaid decision would
apply once there is an explicit promise. In absence of any
promise, the doctrine of promissory estoppel is not applicable.
In the facts of the present case, in absence of any explicit
promise by the respondent No.1 State, the said ratio would not
apply.
15.5 It is also apposite to refer to the position of law, which
are as under:
(a) (1987) 1 SCC 31 in case of Shri Bakul Oil Industries &
Anr. vs. State of Gujarat & Anr..
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"11. For the purposes of this appeal we do not think it necessary to go
into the question whether the earlier Notification had created existing
rights and whether the im- pugned Notification had the effect of only
taking away the existing rights. We are taking this view because we have
already pointed out that the State Government was under no obligation to
grant exemption and that the granting of tax exemption was only by way
of a concession. Having regard to this conclusion there is no need for any
probe to be made to determine whether the Notification had created
vested rights or only existing rights. The exemption granted by the Gov-
ernment, as already stated, was only by way of concession for
encouraging entrepreneurs to start industries in rural and undeveloped
areas and as such it was always open to the State Government to
withdraw or revoke the concession. We must, however, observe that the
power of revocation or withdrawal would be subject to one limitation viz.
the power cannot be exercised in violation of the rule of Promissory
Estoppel. In other words, the Government can withdraw an exemption
granted by it earlier if such withdrawal could be done without offending
the rule of Promissory Estoppel and depriving an industry entitled to claim
exemption from payment of tax under the said rule. If the Government
grants exemption to a new industry and if on the basis of the
representation made by the Government an industry is estab- lished in
order to avail the benefit of exemption. it may then follow that the new
industry can legitimately raise a grievance that the exemption could not
be withdrawn except by means of legislation having regard to the fact that
Promissory Estoppel cannot be claimed against a statute. In the present
case the appellants had not raised the plea of Promissory Estoppel before
the High Court. This is understandable because the principle of Promissory
Estoppel had not found crystalised acceptance by courts of law when the
Special Civil Application came to be heard by the High Court in the year
1972. Be that as it may, we find that the appellants have not made out
any case of Promissory Estoppel either on the basis of the averments
made in their petition or with reference to the facts which have emerged
from the affidavits filed in the case. In order to claim the benefit of
Promissory Estoppel the appellants must establish:--
(i) that a representation was made to grant the exemption for a
particular period to a new industry established in view of the
representation held out by the State Govern- ment; and
(ii) that the appellants had established the new industry acting upon
the representa- tion made by the State Government.
The facts in the present case do not go to establish that the
appellants had put up the new industry in question subsequent to and in
pursuance of the promise held out by Notification dated 29.4.1970
granting exemption. Putting it differently the appellants have not proved
that but for the concession offered in the first Notification, they would not
have established the industry in question and that the entire venture was
attributable only to the inducement offered by the Government. From the
facts set out supra it may be seen that the first Notification was made on
29.4.1970 while the oil mill constructed by the appellants came to be
commissioned on 17.5. 1970 itself. It is not the appellants' case and
indeed it can never be so contended that they launched the project and
commenced the construction of the oil mill only after the Notification of
29.4.1970 was made and that the entire construction was completed in
about two weeks' time so as to enable the appellants to commission the
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plant on 17.5. 1970. What is envisaged under the Notification is that the
project must have been undertaken and construction work itself should
have been started in response to and acting on the Notification. It is not
sufficient to rely on the commissioning of an industry after completion of
construction work which had been commenced long before the Notification
was made by the Government. In respect of such an industry as .the
present one, the issuance of a Notification granting tax exemption would
only constitute a fortuitous circumstance and by no stretch of imagination
can it ever be said that the commissioning of the industry was directly the
outcome of the Government's Notification granting tax exemption. The
con- cession offered by the Government under the first Notifica- tion dated
29.4.70 did not prescribe any period or time limit, and hence the
appellants cannot claim anything more than the benefit of the Notification
for such period the exemption was in force. Once the Government
decided, in exercise of the powers vested in it, to revoke the original
Notification, the benefit of exemption from sales tax en- joyed by the
appellants came to an automatic end. The period of five years mentioned
in the second Notification will have no reference to the appellants' oil mill
commissioned much earlier because the Notification had only prospective
ef- fect. We have, therefore, to affirm the view of the High Court that the
appellants will be entitled to the benefit of tax exemption only for the
limited period during which the concession was offered by the
Government."
(b) (2006) 3 GLH 422 in case of Sarvottam Cement & Anr. vs.
State of Gujarat & Ors.
"2. By this petition under Article 226 of the Constitution of India, the
writ petitioners challenge the Government Resolution dated 9th October,
1984 of the Government of Gujarat, Industries, Mines & Power
Department, whereby it has been directed that the State Cash Subsidy
should be restricted to the amounts to make the total subsidy (the Central
as well as the State) admissible to as the concerned eligible units under
the State Subsidy Scheme in respect of assets created after 1st April,
1983. The petitioners also seek direction against the respondents to pay
the petitioner the balance amount of Rs.22 lakhs as subsidy at 25% of the
fixed assets along with interest till the date of payment as well as to
release the amount of Rs.2,32,193/- recovered from the petitioner No.1
(hereinafter referred to as the "petitioner Company").
28. As regards the retrospective effect of the impugned Government
Resolution, it is apparent that insofar as the facts of the present case are
concerned, subsidy has been sanctioned in favour of the petitioner in May
1985. At the relevant time, the impugned Government Resolution was
already in existence and the petitioner is deemed to have been aware of
the same. It may be that the petitioner 10 may have created assets prior
to the date of the impugned notification, however, nothing has been
brought on record to show that the petitioner has in fact created assets
prior to the said date. Even in case the petitioner may have created assets
prior to the said date of the impugned notification, the petitioner cannot
claim subsidy under both the Schemes dehors the impugned notification
as a matter of right. It is a settled legal position that cash subsidy is a
concession granted by the State Government and no one can claim it as a
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matter of right.
29. As regards the invocation of the doctrine of promissory estoppel,
the same has to be supported by relevant facts. In the present case, no
precise data has been furnished by the petitioner in support of its plea.
Except for bald averments that the petitioner has established the industry
on the basis of the promise held out by the respondents, no specific facts
are stated as to when exactly a was the industry established; or as to
when the fixed assets were created. The petitioner has neither bothered to
place on record the order of registration, nor the order sanctioning
subsidy. The petition is bereft of basic facts necessary for making out a
case to substantiate the plea of promissory estoppel. In the
circumstances, on the basis of the vague averments made in the petition,
the claim of the petitioner cannot be sustained.
30. Besides, as can be seen from a reading of the Scheme as a whole,
the same has been framed by the State Government in public interest and
in the interest of industrial development for disbursement of subsidy for
industrial units which are set up in developing areas. While framing the
Scheme of 1977, the State Government must have considered all relevant
aspects before fixing subsidy at 15% of the fixed assets or Rs.25 lakhs
whichever is less in respect of "C" Grade Growth Centres. At the relevant
time, when the said Scheme was framed, the Central Subsidy Scheme was
not made applicable to "C" Grade Growth Centres, consequently the
amount of subsidy available under the said Scheme could not have been
taken into consideration while determining the rate of subsidy in respect
of "C" Grade Growth Centres. Subsequently, on account of application of
the Central Subsidy Scheme, the total subsidy made available to industrial
units situated in "C" Grade 35 Growth Centres increased to 25%, which
was beyond the limit fixed by the State Government. In the circumstances,
the State authorities in their wisdom have thought it fit to revise the State
Scheme so as to limit the combined subsidy payable to a unit situated in
the "C" Grade Growth Centres to 15%. By virtue of the impugned
Government Resolution dated 9th November, 1984, the State government
has given effect to the aforesaid policy decision and limited the extent of
subsidy to 15% inclusive of both State as well as Central Subsidy. The
impugned Government Resolution, therefore, merely lays down a policy
decision of the State Government, which is entirely within the domain of
the State Government. This being would not interfere case for invoking the
doctrine of promissory estoppel.
31. Insofar as the contention regarding the applicability of the doctrine
of promissory estoppel is concerned, it is settled legal position that
promissory estoppel has not only to be pleaded but also has to be
established. It is only if a plea of promissory estoppel supported by factual
particulars is put forth that the other side has an opportunity to answer
the same. If we look at the aver made in the petition, except for vague
averments to the effect that the petitioner has established the industry on
the basis of the promise held out by the respondents, no factual
particulars to establish s the same are furnished. There are no factual
averments as regards the period during which the fixed assets were
created; nor the break up of the assets created before the Central Subsidy
Scheme was announced and those created thereafter. If it is the case of
the petitioner that it was induced by the Central Subsidy Scheme to create
further assets, the same should be specifically stated with factual
particulars. Nothing is brought on record, to point out with exactitude as to
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when the petitioner became entitled to subsidy under the said Schemes,
whether prior to or after the date of the impugned Government Resolution.
In fact, the petitioners have failed to mentioned even the date of the
orders sanctioning subsidy. In absence of even these basic facts, the plea
of promissory estoppel is misconceived.
33. The Supreme Court in the case of Kasinka Trading v. Union of India,
(1995) 1 SCC 274 wherein the withdrawal of a time-bound Notification for
import of PVC resin issued in exercise of powers conferred by sub-section
(1) of Section 25 of the Customs Act, 1962 was subject-matter of
challenge, has laid down that, to invoke the doctrine of promissory
estoppel, clear, sound and positive foundation must be laid in the petition
itself by the party invoking the doctrine. The doctrine of promissory
estoppel cannot be invoked in the abstract and the Courts are bound to
consider all aspects including the results sought to be achieved and the
public good at large, because while considering the applicability of the
doctrine, the Courts have to do equity and the fundamental principles of
equity must for ever be present in the mind of the Court, while considering
the applicability of the doctrine.
34. The Apex Court held that withdrawal of a concession in public
interest is a matter of policy and the courts would not bind the
Government to its policy for all times to come, irrespective of the
satisfaction of the Government that a change in the policy was necessary
in the "public interest". The Courts, do not interfere with the fiscal policy
where the State Government acts in "public interest" and neither any
fraud or lack of bona fides is alleged much less established. The
Government has to be left free to determine the priorities in the matter of
utilization of finances and to act in public interest while issuing or
modifying or withdrawing an exemption Notification under Section 25(1) of
the Act.
35. Though the aforesaid decision was rendered in the context of
exemption Notification under Section 25(1) of the Customs Act, the
principles stated therein would apply with equal foion. In incentive scheme
framed by the State Government, which is also in the form of a
concession. eri the circumstances, the plea of promissory estoppel, in the
facts of the present case, does not merit acceptance.
36. The Apex Court has, in the case of State of Rajasthan v. J.K.
Udaypur Udyog Ltd., (2004)7 SCC 673, held that, the right to enjoy
benefits of a concession is defeasible and, unless barred by principle of
estoppel, can be withdrawn in exercise of the very power under which it
was granted. It has been held that the recipient of a concession has no
legally enforceable right against the Government to grant of a concession
except to enjoy the benefits of the concession during the period of its
grant. The Court held that, what is granted can be withdrawn unless the
Government is precluded from doing so on the ground of promissory
estoppel, which principle itself is subject to the considerations of equity
and public interest. This Court is of the view that the same principle would
be applicable in the case of grant or non-grant of subsidy, which is also, in
the nature of a concession. Thus, the State Government is empowered to
change its policy in respect of a concessions granted by it, subject to
considerations of equity and public interest. The impugned Government
Resolution having been issued to effectuate the policy decision of the
State Government and no case on the ground of equity having been made
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out, there cannot be said to be any infirmity in the impugned Government
Resolution dated 9th November, 1984.
37. Besides, the petitioner has not been able to make out any case for
applicability of the principles as of promissory estoppel, hence, no infirmity
can be found in the impugned Government Resolution dated 19th
November, 1994 in seeking to merge the amount of Central Subsidy with
the State subsidy, thereby putting a limit to the subsidy admissible to a
unit to the amount admissible under the State Scheme. Hence, the
challenge to the same cannot be sustained."
(c) (2020) 20 SCC 57 in case of Union of India & Anr. vs.
V.V.F. Ltd. & Anr..
"21.1 In the case of Kasinka Trading (supra), in paragraphs 12, 20 and 23,
it is observed and held as follows:
"12. It has been settled by this Court that the doctrine of promissory
estoppel is applicable against the Government also particularly
where it is necessary to prevent fraud or manifest injustice. The
doctrine, however, cannot be pressed into aid to compel the
Government or the public authority "to carry out a representation or
promise which is contrary to law or which was outside the authority
or power of the officer of the Government or of the public authority
to make". There is preponderance of judicial opinion that to invoke
the doctrine of promissory estoppel clear, sound and positive
foundation must be laid in the petition itself by the party invoking
the doctrine and that bald expressions, without any supporting
material, to the effect that the doctrine is attracted because the
party invoking the doctrine has altered its position relying on the
assurance of the Government would not be sufficient to press into
aid the doctrine. In our opinion, the doctrine of promissory estoppel
cannot be invoked in the abstract and the courts are bound to
consider all aspects including the results sought to be achieved and
the public good at large, because while considering the applicability
of the doctrine, the courts have to do equity and the fundamental
principles of equity must for ever be present to the mind of the
court, while considering the applicability of the doctrine. The
doctrine must yield when the equity so demands if it can be shown
having regard to the facts and circumstances of the case that it
would be inequitable to hold the Government or the public authority
to its promise, assurance or representation.
20. The facts of the appeals before us are not analogous to the facts
in Indo-Afghan Agencies or M.P. Sugar Mills. In the first case the
petitioner therein had acted upon the unequivocal promises held out
to it and exported goods on the specific assurance given to it and it
was in that fact situation that it was held that Textile Commissioner
who had enunciated the scheme was bound by the assurance
thereof and obliged to carry out the promise made thereunder. As
already noticed, in the present batch of cases neither the notification
is of an executive character nor does it represent a scheme designed
to achieve a particular purpose. It was a notification issued in public
interest and again withdrawn in public interest. So far as the second
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case (M.P. Sugar Mills case) is concerned the facts were totally
different. In the correspondence exchanged between the State and
the petitioners therein it was held out to the petitioners that the
industry would be exempted from sales tax for a particular number
of initial years but when the State sought to levy the sales tax it was
held by this Court that it was precluded from doing so because of the
categorical representation made by it to the petitioners through
letters in writing, who had relied upon the same and set up the
industry.
23. The appellants appear to be under the impression that even if, in
the altered market conditions the continuance of the exemption may
not have been justified, yet, Government was bound to continue it to
give extra profit to them. That certainly was not the object with
which the notification had been issued. The withdrawal of exemption
"in public interest" is a matter of policy and the courts would not
bind the Government to its policy decisions for all times to come,
irrespective of the satisfaction of the Government that a change in
the policy was necessary in the "public interest". The courts, do not
interfere with the fiscal policy where the Government acts in "public
interest" and neither any fraud or lack of bona fides is alleged much
less established. The Government has to be left free to determine
the priorities in the matter of utilisation of finances and to act in the
public interest while issuing or modifying or withdrawing an
exemption notification under Section 25(1) of the Act."
Thus, it can be seen that this Court has specifically and clearly held
that the doctrine of promissory estoppel cannot be invoked in the abstract
and the courts are bound to consider all aspects including the objective to
be achieved and the public good at large. It has been held that while
considering the applicability of the doctrine, the courts have to do equity
and the fundamental principles of equity must forever be present to the
mind of the court, while considering the applicability of the doctrine. It is
further held that the doctrine must yield when the equity so demands if it
can be shown having regard to the facts and circumstances of the case
that it would be inequitable to hold the Government or the public authority
to its promise, assurance or representation. It is further held that an
exemption notification does not make items which are subject to levy of
customs duty etc. as items not leviable to such duty. It only suspends the
levy and collection of customs duty, etc., wholly or partially and subject to
such conditions as may be laid down in the notification by the Government
in "public interest". Such an exemption by its very nature is susceptible of
being revoked or modified or subjected to other conditions. The
supersession or revocation of an exemption notification in the "public
interest" is an exercise of the statutory power of the State under the law
itself. It has been further held that under the General Clauses Act an
authority which has the power to issue a notification has the undoubted
power to rescind or modify the notification in a like manner. It has been
observed that the withdrawal of exemption "in public interest" is a matter
of policy and the courts would not bind the Government to its policy
decisions for all times to come, irrespective of the satisfaction of the
Government that a change in the policy was necessary in the "public
interest". It has been held that where the Government acts in "public
interest" and neither any fraud or lack of bonafides is alleged, much less
established, it would not be appropriate for the court to interfere with the
same.
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21.2 In the case of Shrijee Sales Corporation (supra), it is observed and
held that the principle of promissory estoppel may be applicable against
the Government. But the determination of applicability of promissory
estoppel against public authority/Government hinges upon balance of
equity or "public interest". In case there is a supervening public interest,
the Government would be allowed to change its stand; it would then be
able to withdraw from representation made by it which induced persons to
take certain steps which may have gone adverse to the interest of such
persons on account of such withdrawal. Once public interest is accepted
as the superior equity which can override individual equity, the aforesaid
principle should be applicable even in cases where a period has been
indicated for operation of the promise.
21.3 In the case of Shree Durga Oil Mills (supra), it has been held that
when the withdrawal of exemption is in public interest, the public interest
must override any consideration of private loss or gain. In the said case,
the change in policy and withdrawal of the exemption on the ground of
severe resource crunch have been found to be a valid ground and to be in
public interest.
21.4 In the case of Mahaveer Oil Industries (supra), after considering the
decision of this Court in the case of Kasinka Trading (supra), a similar view
has been taken and it has been observed that public interest requires that
the State be held bound by the promise held out by it in such a situation.
But this does not preclude the State from withdrawing the benefit
prospectively even during the period of the Scheme, if public interest so
requires. Even in a case where a party has acted on the promise, if there
is any supervening public interest which requires that the benefit be
withdrawn or the scheme be modified, that supervening public interest
would prevail over any promissory estoppel.
21.5 In the case of Shree Sidhbali Steels Ltd. (supra), in paragraphs 32
and 33, it has been observed and held as follows:
"32. The doctrine of promissory estoppel is by now well recognised
and well defined by a catena of decisions of this Court. Where the
Government makes a promise knowing or intending that it would be
acted on by the promisee and, in fact, the promisee, acting in
reliance on it, alters his position, the Government would be held
bound by the promise and the promise would be enforceable against
the Government at the instance of the promisee notwithstanding
that there is no consideration for the promise and the promise is not
recorded in the form of a formal contract as required by Article 229
of the Constitution. The rule of promissory estoppel being an
equitable doctrine has to be moulded to suit the particular situation.
It is not a hard-and-fast rule but an elastic one, the objective of
which is to do justice between the parties and to extend an equitable
treatment to them. This doctrine is a principle evolved by equity, to
avoid injustice and though commonly named promissory estoppel, it
is neither in the realm of contract nor in the realm of estoppel. For
application of the doctrine of promissory estoppel the promisee must
establish that he suffered in detriment or altered his position by
reliance on the promise.
33. Normally, the doctrine of promissory estoppel is being applied
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against the Government and defence based on executive necessity
would not be accepted by the court. However, if it can be shown by
the Government that having regard to the facts as they have
subsequently transpired, it would be inequitable to hold the
Government to the promise made by it, the court would not raise an
equity in favour of the promisee and enforce the promise against the
Government. Where public interest warrants, the principles of
promissory estoppel cannot be invoked. The Government can
change the policy in public interest. However, it is well settled that
taking cue from this doctrine, the authority cannot be compelled to
do something which is not allowed by law or prohibited by law. There
is no promissory estoppel against the settled proposition of law.
Doctrine of promissory estoppel cannot be invoked for enforcement
of a promise made contrary to law, because none can be compelled
to act against the statute. Thus, the Government or public authority
cannot be compelled to make a provision which is contrary to law."
Thus, as held by this Court, when the public interest warrants, the
principles of promissory estoppel cannot be invoked. It is further held that
the rule of promissory estoppel being an equitable doctrine has to be
moulded to suit the particular situation. It is not a hard-and-fast rule but
an elastic one, the objective of which is to do Justice between the parties
and to extend an equitable treatment to them."
15.6 In view of the aforesaid position of law, in the facts of the
present case, the respondent No.1 made an unequivocal
promise on 01.09.2020 by introducing the Policy, 2020
whereby, the respondent No.1 promise to confer capital
subsidy and interest subsidy and the procedure to apply under
Clause - 2.1.2 of the said Policy. Having considered the
pleadings, it appears that the petitioners have chosen not to
apply under Clause - 2.1.2 to avail the benefit of the Policy,
2020. Even otherwise, the benefit under Policy, 2020 would not
be extended to the petitioners herein; the petitioners having
categorically applied under the Solar Policy, 2019. The benefit
of subsidy under the Policy, 2020 would not be available to the
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beneficiaries of Solar Policy, 2019. The stance having been
clarified by the respondent No.1 from time to time and the
petitioners having chosen not to avail any of the options to fall
in line with the existing policies.
15.7 Reliance as placed on (2006) 8 SCC 702 in case of MRF
Ltd., Kottayam Vs. Asst. Commissioner (Assessment) Sales Tax
& Ors., by the learned counsel appearing for the petitioners,
does not apply to the facts of the present case.
15.7.1 In the facts of the said case, the MRF had made
huge investment in the State of Kerala under a promise held to
it that it would be granted exemption from payment of sales
tax for a period of seven years. It was granted eligibility
certificate. Exemption order was also passed. The Hon'ble
Supreme Court held that it was not open for the State
Government to deprive MRF having taken away the benefit of
exemption with effect from 15.1.1998 and thereby, depriving
MRF of the benefit of exemption for more than 5 years out of
the total period of seven years. It was held that the State
Government has no power to make a retrospective
amendment affecting the rights already accrued in favour of
the MRF thereunder.
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In the facts of the present case, there is no promise at
the end of the respondent No.1 by virtue of which, the
petitioners have altered their position and to the determent.
15.8 Further, reliance as placed on 2020 SCC Online SC 968 in
case of State of Jharkhand & Ors. vs. Brahmputra Metallics
Ltd., Ranchi & Anr., by the learned counsel appearing for the
petitioners, is not applicable to the facts of the present case. In
the said decision, the Hon'ble Supreme Court has discussed
the doctrine of promissory estoppel and legitimate
expectations. Further, under the doctrine of promissory
estoppel, there may be a requirement to show a detriment
suffered by a party due to the reliance placed on the promise.
In the facts of the present case, in the opinion of this
Court, in absence of any promise by the respondent No.1, the
doctrine of promissory estoppel is not applicable.
15.9 Reliance as placed on AIR 2008 SC 693 in case of U.P.
Power Corporation Ltd. & Anr. vs. Sant Steels & Alloys (P) Ltd.
& Ors., wherein, pursuant to the representations made by the
State Government that they will be given certain benefits and
pursuant thereto, the same was acted upon. The Corporation
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to withdraw the said benefit before expiry of the stipulated
period by issuing Notification revoking the same to which the
stake holders were legitimately entitled to avail, was held to be
against the settled principle of promissory estoppel.
In the facts of the present case, in absence of any
representation by the State Government, the petitioners herein
could not be said to be suffered to the detriment. In view
thereof, the aforesaid position of law would not be applicable
to the facts of the present case.
15.10 In the opinion of this Court, considering the
aforesaid position of law and the facts of the present case, the
petitioners have failed to make out a case of promissory
estoppel either on the basis of the averments made in the
petition or the documents which are produced on record as
also the affidavits filed in the petition.
15.11 Pursuant to the representations, the respondent No.1
authority has taken a clear stance that the petitioners would
not be entitled to the benefit of subsidy under the Policy, 2020.
The petitioners having altered their position pursuant to the
introduction of the Policy, 2020 is on their own volition; having
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not even applied under the Policy, 2020.
15.12 The stance of the respondent No.1 has been consistent
that the benefit of only one policy can be availed by the stake
holders and the petitioners herein are also required to fall in
line with the same. The conduct of the respondent No.1
expressly and impliedly has been consistent and in view
thereof, the aforesaid principle of promissory estoppel does
not apply in the facts of the present case.
(c) Policy Decision:-
16. The petitioners have entered into the PPA with the
respondent No.1 on 24.04.2021 expressly and the same is
undisputed. The petitioners have availed the benefit under the
Solar Policy, 2019 and are seeking the benefit of the Policy,
2020 on the ground that the Policy, 2020 in itself endeavors to
give support to MSMEs engaged in manufacturing sectors. The
generation of power through conventional and non-
conventional method/process is considered as manufacturing
activity. In view thereof, the Solar projects set up by the
petitioners for generation of power is very much covered under
the Policy, 2020. The Policy, 2020 being in continuation of the
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Policy, 2015 wherein, identical benefits of subsidy are
envisaged and extended to the Small and Medium Enterprises
who have set up power generation projects.
16.1 Considering the preamble to the Policy, 2020, the
respondent No.1 constituted a task force to review the existing
scheme under the Industrial Policy, 2015. On analyzing the
task force recommended modifications to the existing schemes
to further simplify the benefits and expansion of scope of the
existing benefits. On recommendations of the task force and in
consultation with the Industries, the Government decided to
form a new assistance scheme for MSME sector to strengthen
the MSMEs and make them globally competent as a part of the
Policy, 2020. Considering the aforesaid, the Policy, 2020 is
formulated by the respondent No.1 as a new revised Policy and
the same is not a clarification to the Policy, 2015. The Policy,
2015 was in operation up to 06.08.2020 and the Policy, 2020
came into effect on 07.08.2020.
16.2 The contention of the petitioners that the petitioners do
not fall within the ambit of Clause - 16 of the Policy, 2020
which bars the benefit under the Policy, 2020 for the same
component. The petitioners herein have themselves in the
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petition stated that the petitioners herein are in generation of
power through renewable energy/sources and the component
is the same under the Solar Policy, 2019 and the Policy, 2020.
For the aforesaid reasons, the petitioner herein is estopped to
contend that the components are separate and distinct.
16.3 The respondent No.1 categorically replied to the
representations and on deliberation and consultation with the
various departments, took the impugned decision that the
beneficiaries under the Solar Policy, 2019 would not be entitled
to the benefit of the subsidy. Further, both the Policies operate
for a particular period of time and the same would not bind the
State for all time to come. Both the Policies apply to different
sets of classes. The Solar Policy, 2019 applies to the solar
projects having size of 0.5 MW and above but not exceeding 4
MW having applied for the benefits of Solar Policy, 2019
installed and commissioned to the projects during the
operative period of the said Policy which qualifies to be termed
as Small Scale Solar Projects and are eligible for benefits of the
said policy. Whereas, the Policy, 2020 provides Scheme for
Assistance to Micro, Small and Medium Enterprises (MSMEs) in
general and confers the benefit in form of subsidy i.e. Scheme
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- 1 Capital Investment Subsidy and Scheme - 2 Interest
Subsidy.
In view of the aforesaid, the respondent No.1 clarified its
stance from time to time that both the policies cater to
different classes and applied differently in particular set of
circumstances and therefore, the developers like the
petitioners having applied under the Solar Policy, 2019,
pursuant to which having entered into the PPA on 24.04.2021,
would not be entitled for the benefits of subsidy under the
Policy, 2020.
16.4 The respondent No.1 issued exit options from the PPAs
with the Discoms under the Solar Policy, 2019. A Public notice
came to be issued by the GUVNL on 09.08.2021 for availing
one time exit option on or before 31.08.2021 which was
extended vide another Public notice dated 27.08.2021 up to
05.09.2021. After issuance of clarification by way of addendum
to Clause - 8 of the Government Resolution under the Policy,
2020, another exit option came to be issued on 25.07.2022
wherein the public notice was also issued on 25.07.2022 and
the last date for the same was 09.08.2022.
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16.5 In view of the aforesaid, this Court deems it fit to refer to
the status of applications under the Solar Policy, 2019, which is
as under:
Status of Small Scale Distributed Solar Project (SSDSP) as on 31.08.2022
Discom Total No. of PPAs Total No. of Exit Net Total No. of Net Applications Commissioned
Application Executed Applications Applications Exit after Second up to 31.08.2022
Received Received under after first Exit Applications Exit Option
first Exit Received
under Second
Exit
Nos. MW Nos. MW Nos. MW Nos. MW Nos. MW Nos. MW Nos. MW
UGVCL 3540 2502 1227 836.78 789 476.41 438 360.37 271 184.57 167 175.80 49 50.94
DGVCL 252 177 57 33.75 25 16.25 32 17.5 31 17.00 1 0.50 0 0
PGVCL 7953 4899 2483 1496.14 1624 963.25 859 532.89 625 359.40 324 173.49 115 84.55
MGVCL 659 381 235 131.14 171 92.54 64 38.6 50 29.60 14 9.00 4 3.5
Total 12404 7959 4002 2497.81 2609 1548.45 1393 949.36 977 590.57 416 358.79 168 138.99
16.6 Considering the aforesaid table as placed on record by
the respondent No.6, it emerges that (a) approximately 1809
developers availed the benefit of exit options; [(i) first exit
option (ii) second exit option] and; (b) approximately 168 solar
projects are commissioned under the Solar Policy, 2019 up to
31.08.2022 as referred above. The petitioner herein having
chosen not to avail the said exit options or chose to apply
under the Policy, 2020, it is not open for the petitioners herein
to contend that the petitioners are "expressly inclusive" in line
with the Clause - 16 of the Policy, 2020.
17. This Court has also considered Clause - 2.1.2 of the
Policy, 2020 stipulates that the enterprise shall have to apply
at online portal within one year from the date of first
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disbursement of loan, or on or before the date of
commencement of commercial production whichever is later.
The application submitted after one year will not be entitled for
capital subsidy.
In the facts of the present case, the petitioner herein has
neither applied under the Policy, 2020 nor commenced the
commercial production and having failed to comply with the
conditions of the PPA under the Solar Policy, 2019, the bank
guarantee has been invoked/encashed by the respondent
authority.
18. Further, pending the present petition, the petitioner
approached the respondent No.6 seeking extension for
implementation of the PPA by communication 24.05.2022.
Having availed the said Solar Policy, 2019 and knowing fully
well that the petitioner is governed by the terms and
conditions of the PPA and the respondent authorities having
informed thrice i.e. on 20.07.2021, 02.08.2021 and
05.08.2021, that the option of subsidy is not available to the
petitioners under the Policy, 2020.
In the opinion of this Court, the respondent State -
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Government has clarified its stand that the option of subsidy
under the Policy, 2020 is not available to the petitioners having
availed the Solar Policy, 2019. This Court has perused the said
communications duly produced at page 91/A, 92 and 93.
18.1 Considering the aforesaid communications, in the opinion
of this Court, the respondent State Government refused the
extension of subsidy qua the stake holders of the Solar Policy,
2019. It was never considered by the respondent No.1 to
extend the benefit of subsidy under the Policy, 2020 to the
stake holders of the Solar Policy, 2019 however, for the benefit
of stake holders, exit options were extended as referred above.
The petitioners chose not to avail the said Exit options.
19. The respondent - State Government introduced the
Atmanirbhar Gujarat Scheme for Assistance to MSMEs by virtue
of Government Resolution dated 05.10.2022 making
amendments to the Policy, 2020. Clauses 7, 14 and 21 of the
said scheme provides that the MSMEs that have applied under
the previous scheme introduced vide Government Resolution
dated 01.09.2020 and not commenced commercial production
before the issuance of the Government Resolution dated
05.10.2022, shall have the option either to continue with the
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previous scheme or opt under the Atmanirbhar Scheme. The
said option is to be exercised within a period of six months
from the issuance of the GR dated 05.10.2022. If such option
was not exercised within the prescribed period of six months, it
would be deemed that the enterprise has opted to continue
with the previous scheme.
19.1 The petitioner herein having chosen not to avail the
benefit of Aatmanirbhar Scheme within a period of six months
in line with the said GR dated 05.10.2022, the question of
exercising option under the Atmanirbhar Scheme, does not
arise. Even otherwise, the said scheme would not apply to the
petitioners herein having not applied either under the Policy,
2020 as referred above nor having not exercised the option to
Exit the Solar policy, 2019. The petitioners' grievance with
respect to the Atmanirbhar Gujarat Scheme and its
retrospective application, in the opinion of this Court, does not
in any way affect the rights of the petitioners herein.
19.2 The submissions advanced by Mr. Kamal Trivedi, learned
Advocate General, require consideration. The operative period
of Atmanirbhar Scheme is from 01.10.2022 to 04.10.2017.
Clause - 7 of the said Scheme, as referred above, grants the
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aforesaid option. The petitioners has not commenced the
commercial production, either to continue under the previous
scheme or opt under the Atmanirbhar Scheme. Thus, the
operative part of the said Scheme i.e. Clause - 7 leaves no
scope of there being any retrospectivity involved.
20. The policies that are introduced by the State Government
from time to time are in the interest of public and subject to
change considering the benefits of the stake holders. The
stance of respondent No.1 has been consistent that one
availing the benefits under one policy, cannot avail the
benefits under another policy of the State Government. At this
stage, it is apposite to refer to the following position of law:
(a) (1998) 4 SCC 117 in case of State of Punjab & Ors. vs.
Ram Lubhaya Bagga & Ors.. Paragraphs 23 and 25 of the said
decision read thus:
"23. The right of the State to change its policy from time to time, under
the changing circumstances is neither challenged nor could it be. let us
now examine this new policy. learned senior counsel for the appellants
submits that the new policy is more liberal in as much as it gives freedom
of choice to every employee to undertake treatment in any private
hospital of his own choice any where in the country. The only clog is that
the reimbursement would be to the level of expenditure as per rates
which are fixed by the Director, Health and Family Welfare, Punjab for a
similar package treatment or actual expenditure which ever is less. Such
rate for a particular treatment will be included in the advice issued by the
District/State Medical Board for fixing this. Under the said policy a
Committee of Technical Experts is constituted by the Director to finalize
the rates of various treatment packages and such rate list shall be made
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available to the offices of the Civil surgeons of the State. Under this new
policy, it is clear that none has to wait in a queue. One can avail and go to
any private hospital anywhere in India. Hence the objection that, even
under the new policy in emergency one has to wait in a queue as a
argued in Surjit Singh case (supra) does not hold good.
25. Now we revert to the last submission, whether the new State policy
is justified in not reimbursing an employee, his full medical expenses
incurred on such treatment, if incurred in any hospital in India not being a
Government hospital in Punjab. Question is whether the new policy which
is restricted by the financial constraints of the State to the rates in AIIMS
would be in violation of Article 21 of the Constitution of India. so far as
questioning the validity of governmental policy is concerned in our view it
is not normally within the domain of any court, to weigh the pros and cons
of the policy or to scrutinize it and test the degree of its beneficial or
equitable disposition for the purpose of varying modifying or annulling it,
based on however sound and good reasoning, except where it is arbitrary
or violative of any constitutional, statutory or any other provision of law.
When Government forms its policy, it is based on number of
circumstances on facts, law including constraints based on its resources.
It is also based on expert opinion. it would be dangerous if court is asked
to test the utility, beneficial effect of the policy or its appraisal based on
facts set out on affidavits. The Court would dissuade itself from entering
into this realm which belongs to the executive. It is within this matrix that
it is to be seen whether the new policy violates Article 21 When it restricts
reimbursement on account of its financial constraints."
(b) 1998 (1) GLH 653 in case of Ahmedabad Electricity Co.
Ltd. vs. Union of India & Ors. . Paragraph 23 of the said decision
reads thus:
"23. The question, therefore, is as to whether such a decision could have
been taken by Railway Administration. If yes, could it be said to be
arbitrary, unreasnable or violative of rights of the petitioners ? In our
opinion, it is not. If a policy decision is taken by an authority, normally, in
exercise of extraordinary jurisdiction under Art.226 of the Constitution of
India, this court will not interfere with it. The jurisdiction under Art.226 of
the Constitution cannot be invoked to interfere with such decision. The
question of policy is essentially for the authorities to decide. The decision
on policy matters depend upon a number of circumstances and
considerations and it is neither desirable nor advisable for Courts to direct
or sermonize the Government to adopt a particular policy which the Court
deems fit and proper. As observed by the Apex Court, "the court cannot be
propelled into the unchartered ocean of Government policy" (Vide Bennett
Colemman & Co. v. Union of India, AIR 1973 SC 106). The Court has also
no jurisdiction to sit over the judgment or wisdom of a policy evolved by
authorities. It may be right or wrong or it may even be follish. True it is
that if such policy is arbitrary, unreasonable or violative of fundamental or
legal rights of the parties, the Court can interfere with it. But if it is not
violative of any right of a party, the court cannot interfere with it only on
the ground that other policy would have served the interest of general
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public better."
(c) (2021) 8 SCC 511 in case of Small Scale Industrial
Manufactures Association (Registered) vs. Union of India and
Ors., wherein, the Hon'ble Supreme Court has observed and
held as under:
"59. While considering the aforesaid submissions/reliefs sought, the
scope of judicial review on the policy decisions in the field of economy
and/or economic policy decisions and/or the policy decisions having
financial implications which affects the economy of the country are
required to be considered.
60. In catena of decisions and time and again this Court has considered
the limited scope of judicial review in economic policy matters. From
various decisions of this Court, this Court has consistently observed and
held as under:
60.1 The Court will not debate academic matters or concern itself with
intricacies of trade and commerce.
60.2 It is neither within the domain of the courts nor the scope of judicial
review to embark upon an enquiry as to whether a particular public policy
is wise or whether better public policy can be evolved. Nor are the courts
inclined to strike down a policy at the behest of a petitioner merely
because it has been urged that a different policy would have been fairer or
wiser or more scientific or more logical. Wisdom and advisability of
economic policy are ordinarily not amenable to judicial review.
60.3 Economic and fiscal regulatory measures are a field where Judges
should encroach upon very warily as Judges are not experts in these
matters.
61. In R.K. Garg (supra), it has been observed and held that laws
relating to economic activities should be viewed with greater latitude than
laws touching civil rights such as freedom of speech, religion etc. It is
further observed that the legislature should be allowed some play in the
joints, because it has to deal with complex problems which do not admit of
solution through any doctrinaire or strait-jacket formula and this
particularly true in case of legislation dealing with economic matters.
62. In the case of Arun Kumar Agrawal (supra), this Court had an
occasion to consider the following observations made the Supreme Court
of the United States in the case of Metropolis Theatre Co. v. Chicago,
"43....The problems of Government are practical ones and may
justify, if they do not require, rough accommodation, illogical, if may
be, and unscientific. But even such criticism should not be hastily
expressed. What is the best is not always discernible; the wisdom of
any choice may be disputed or condemned. Mere errors of
Government are not subject to our judicial review. It is only its
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palpably arbitrary exercises which can be declared void..."
63. This Court in the case of Nandlal Jaiswal (supra) has observed that
the Government, as laid down in Permian Basin Area Rate Cases, 20 L Ed
(2d) 312, is entitled to make pragmatic adjustments which may be called
for by particular circumstances. The court cannot strike down a policy
decision taken by the State Government merely because it feels that
another policy decision would have been fairer or wiser or more scientific
or logical. The court can interfere only if the policy decision is patently
arbitrary, discriminatory or mala fide.
64. In the case of BALCO Employees' Union (Regd.) (supra), this Court
has observed that Wisdom and advisability of economic policies are
ordinarily not amenable to judicial review unless it can be demonstrated
that the policy is contrary to any statutory provision or the Constitution. In
other words, it is not for the courts to consider relative merits of different
economic policies and consider whether a wiser or better one can be
evolved. It is further observed that in the case of a policy decision on
economic matters, the courts should be very circumspect in conducting an
enquiry or investigation and must be more reluctant to impugn the
judgment of the experts who may have arrived at a conclusion unless the
court is satisfied that there is illegality in the decision itself.
65. In the case of Peerless General Finance and Investment Co. Ltd.
(supra), it is observed and held by this Court that the function of the Court
is to see that lawful authority is not abused but not to appropriate to itself
the task entrusted to that authority. It is further observed that a public
body invested with statutory powers must take care not to exceed or
abuse its power. It must keep within the limits of the authority committed
to it. It must act in good faith and it must act reasonably. Courts are not to
interfere with economic policy which is the function of experts. It is not the
function of the courts to sit in judgment over matters of economic policy
and it must necessarily be left to the expert bodies. In such matters even
experts can seriously and doubtlessly differ. Courts cannot be expected to
decide them without even the aid of experts. It is further observed that it
is not the function of the Court to amend and lay down some other
directions. The function of the court is not to advise in matters relating to
financial and economic policies for which bodies like RBI are fully
competent. The court can only strike down some or entire directions
issued by the RBI in case the court is satisfied that the directions were
wholly unreasonable or in violative of any provisions of the Constitution or
any statute. It would be hazardous and risky for the courts to tread an
unknown path and should leave such task to the expert bodies. This Court
has repeatedly said that matters of economic policy ought to be left to the
government.
66. In the case of Narmada Bachao Andolan (supra), in paras 229 &
233, it is observed and held as under:
"229. It is now well settled that the courts, in the exercise of their
jurisdiction, will not transgress into the field of policy decision.
Whether to have an infrastructural project or not and what is the type
of project to be undertaken and how it has to be executed, are part of
policymaking process and the courts are ill-equipped to adjudicate on
a policy decision so undertaken. The court, no doubt, has a duty to
see that in the undertaking of a decision, no law is violated and
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people's fundamental rights are not transgressed upon except to the
extent permissible under the Constitution.
233. At the same time, in exercise of its enormous power the court
should not be called upon to or undertake governmental duties or
functions. The courts cannot run the Government nor can the
administration indulge in abuse or non-use of power and get away
with it. The essence of judicial review is a constitutional fundamental.
The role of the higher judiciary under the Constitution casts on it a
great obligation as the sentinel to defend the values of the
Constitution and the rights of Indians. The courts must, therefore, act
within their judicial permissible limitations to uphold the rule of law
and harness their power in public interest. It is precisely for this
reason that it has been consistently held by this Court that in matters
of policy the court will not interfere.When there is a valid law
requiring the Government to act in a particular manner the court
ought not to, without striking down the law, give any direction which
is not in accordance with law. In other words, the court itself is not
above the law."
67. In Prag Ice & Oil Mills (supra), this Court observed as under:
"24. We do not think that it is the function of the Court to set in
judgment over such matters of economic policy as must necessarily
be left to the government of the day to decide. Many of them are
matters of prediction of ultimate results on which even experts can
seriously err and doubtlessly differ. Courts can certainly not be
expected to decide them without even the aid of experts."
68. In P.T.R Exports (Madras) P. Ltd. (supra), this Court observed as
under:
"In matters of economic policy, it is settled law that the Court gives a
large leeway to the executive and the legislature Government would
take diverse factors for formulating the policy in the overall larger
interest of the economy of the country. The Court therefore would
prefer to allow free play to the Government to evolve fiscal policy in
the public interest and to act upon the same."
69. What is best in the national economy and in what manner and to
what extent the financial reliefs/packages be formulated, offered and
implemented is ultimately to be decided by the Government and RBI on
the aid and advise of the experts. The same is a matter for decision
exclusively within the province of the Central Government. Such matters
do not ordinarily attract the power of judicial review. Merely because some
class/sector may not be agreeable and/or satisfied with such
packages/policy decisions, the courts, in exercise of the power of judicial
review, do not ordinarily interfere with the policy decisions, unless such
policy could be faulted on the ground of mala fide, arbitrariness,
unfairness etc.
70. There are matters regarding which Judges and the Lawyers of the
courts can hardly be expected to have much knowledge by reasons of
their training and expertise. Economic and fiscal regulatory measures are
a field where Judges should encroach upon very warily as Judges are not
experts in these matters.
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71. The correctness of the reasons which prompted the government in
decision taking one course of action instead of another is not a matter of
concern in judicial review and the court is not the appropriate forum for
such investigation. The policy decision must be left to the government as
it alone can adopt which policy should be adopted after considering of the
points from different angles. In assessing the propriety of the decision of
the Government the court cannot interfere even if a second view is
possible from that of the government.
72. Legality of the policy, and not the wisdom or soundness of the
policy, is the subject of judicial review. The scope of judicial review of the
governmental policy is now well defined. The courts do not and cannot act
as an appellate authority examining the correctness, stability and
appropriateness of a policy, nor are the courts advisers to the executives
on matters of policy which the executives are entitled to formulate.
73. Government has to decide its own priorities and relief to the
different sectors. It cannot be disputed that pandemic affected the entire
country and barring few of the sectors. However, at the same time, the
Government is required to take various measures in different fields/sectors
like public health, employment, providing food and shelter to the common
people/migrants, transportation of migrants etc. and therefore, as such,
the government has announced various financial packages/reliefs. Even
the government also suffered due to lockdown, due to unprecedented
covid-19 pandemic and also even lost the revenue in the form of GST. Still,
the Government seems to have come out with various reliefs/packages.
Government has its own financial constraints. Therefore, as such, no writ
of mandamus can be issued directing the Government/RBI to
announce/declare particular relief packages and/or to declare a particular
policy, more particularly when many complex issues will arise in the field
of economy and what will be the overall effect on the economy of the
country for which the courts do not have any expertise and which shall be
left to the Government and the RBI to announce the relief
packages/economic policy in the form of reliefs on the basis of the advice
of the experts. Therefore, no writ of mandamus can be issued.
74. No State or country can have unlimited resources to spend on any
of its projects. That is why it only announces the financial reliefs/packages
to the extent it is feasible. The court would not interfere with any opinion
formed by the Government if it is based on the relevant facts and
circumstances or based on expert advice. It is not normally within the
domain of any court to weigh the pros and cons of the policy or to
scrutinize it and test the degree of its beneficial or equitable disposition
for the purpose of varying, modifying or annulling it, based on howsoever
sound and good reasoning, only where it is arbitrary and violative of any
Constitutional, statutory or any other provisions of law. When Government
forms its policy, it is based on a number of circumstances on facts, law
including constraints based on its resources. It is also based on expert
opinion. It would be dangerous if court is asked to test the utility,
beneficial effect of the policy or its appraisal based on facts set out on
affidavits.
75. No right could be absolute in a welfare State. Man is a social
animal. He cannot live without the cooperation of a large number of
persons. Every article one uses is the contribution of many. Hence every
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individual right has to give way to the right of the public at large. Not
every fundamental right under Part III of the Constitution is absolute and it
is to be within permissible reasonable restriction. This principal equally
applies when there is any constraint on the health budget on account of
financial stringencies.
76. It is the cardinal principle that it is not within the legitimate domain
of the court to determine whether a particular policy decision can be
served better by adopting any policy different from what has been laid
down and to strike down as unreasonable merely on the ground that the
policy enunciated does not meet with the approval of the court in regard
to its efficaciousness for implementation of the object and purpose of such
policy decision.
77. With the limited scope of judicial review on the policy decisions
affecting the economy and/or it might have financial implications on the
economy of the country, the reliefs and submissions stated hereinabove
are required to be considered. Whether there shall be a waiver of interest
during the moratorium period or whether there shall be sector-wise relief
packages and/or RBI should have issued directions which are sector
specific and addressing such sector specific issues and/or whether the
moratorium period should be extended beyond 31.08.2020 or the last date
for invocation of the resolution mechanism, namely, 31.12.2020 provided
in the 6.8.2020 circular should be extended are all in the realm of the
policy decisions. Not only that, if such reliefs are granted, it would
seriously affect the banking sectors and it would have far reaching
financial implications on the economy of the country."
(d) (2022) 5 SCC 314 in case of Satya Dev Bhagaur and Ors.
vs. State of Rajasthan & Ors.. wherein, the Hon'ble Supreme
Court has observed and held as under:
"15. It is trite that the Courts would be slow in interfering in the policy
matters, unless the policy is found to be palpably discriminatory and
arbitrary. This court would not interfere with the policy decision when a
State is in a position to point out that there is intelligible differentia in
application of policy and that such intelligible differentia has a nexus with
the object sought to be achieved.
16. This Court in the case of Krishnan Kakkanth vs. Government of
Kerala and others has observed thus:
"36. To ascertain unreasonableness and arbitrariness in the context of
Article 14 of the Constitution, it is not necessary to enter upon any
exercise for finding out the wisdom in the policy decision of the State
Government. It is immaterial whether a better or more comprehensive
policy decision could have been taken. It is equally immaterial if it can
be demonstrated that the policy decision is unwise and is likely to
defeat the purpose for which such decision has been taken. Unless the
policy decision is demonstrably capricious or arbitrary and not
informed by any reason whatsoever or it suffers from the vice of
discrimination or infringes any statute or provisions of the
Constitution, the policy decision cannot be struck down. It should be
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borne in mind that except for the limited purpose of testing a public
policy in the context of illegality and unconstitutionality, courts should
avoid "embarking on uncharted ocean of public policy".
17. A three Judge bench of this Court in Sher Singh and Others vs.
Union of India and Others has observed thus:
"As a matter of fact the courts would be slow in interfering with matters of
government policy except where it is shown that the decision is unfair,
mala fide or contrary to any statutory directions."
Considering the aforesaid position of law and the facts of
the present case, in the opinion of this Court, in absence of any
malafide, arbitrariness and discrimination in the Policies
introduced by the State Government i.e. the Solar Policy, 2019
and the Policy, 2020 and the Aatmanirbhar Policy, 2022, the
said Policies are not subject to judicial review. This Court is not
inclined to exercise its extra-ordinary jurisdiction under Article
226 of the Constitution of India and sit in appeal over the
policy decision by the respondent No.1 - State Government on
due deliberations with the experts and having introduced the
policies taking into consideration the interest of public at large.
Considering the position of law, as referred above, a change in
policy can be affected in the interest of public at large even
after making a promise. In the facts of the present case,
though, there is no promise by the respondent No.1 having
been very clear in its stance right from introduction of the
policies and the addendum dated 8/9.06.2022 having been
issued clarifying the stance with respect to the Solar Policy,
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2019.
21. Mr. Rohan Lavkumar Shah, learned advocate with Mr.
Aaditya P. Dave, learned advocate for Nanavati Associates in
Special Civil Application No. 9167 of 2023 and Special Civil
Application No. 9151 of 2023 for the petitioners, adopted the
submissions advanced by Mr. Mihir Joshi, learned Senior
Counsel appearing for the petitioners in Special Civil
Application No.13056 of 2021.
21.1 Mr. Rohan Lavkumar Shah, learned advocate, placed
reliance 2023 SCC Online SC 640 in case of Sree
Sankaracharya University of Sanskrit & Ors. vs. Dr. Manu &
Anr., more particularly, paragraph 56 wherein, the Hon'ble
Supreme Court held that merely because the subsequent
Government Order has been described as a
clarification/explanation or is said to have been issued
following a clarification that was sought in that regard, the
Court is not bound to accept that the said order is only
clarificatory in nature. Further, it was held that the subsequent
order by the State Government, was not clarificatory, but is a
substantial amendment wherein the State sought to withdraw
the benefit of two advance increments in favour of a certain
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category of lecturers. The benefit withdrawn was not
anticipated under the previously existing scheme and in view
thereof, it was held that the amendment could not be given
retrospective effect.
21.2 In the facts of the present case, as stated above, the
State Government having not promised the benefits of both
the policies at any stage either while introducing (i) Solar
Policy, 2019; or (ii) the Policy, 2020. It was only in view of the
representations preferred by some petitioners and others with
respect to the benefit of both the schemes qua the developers/
the stake holders, the State Government clarified its stance by
communications dated 20.07.2021, 02.08.2021 and
05.08.2021 and the addendum to Clause - 8 dated 8/9.06.2022
issued thereunder.
21.3 The aforesaid ratio as laid down in case of Sree
Sankaracharya University of Sanskrit & Ors. (supra), does not
apply to the facts of the present case. This Court has formed
an opinion that the impugned addendum dated 8/9.06.2022 is
clarificatory in nature, the same would assumes retrospective
effect in line with the ratio laid down in the decisions as
referred above.
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22. The contention with respect to the noting raised by
learned advocate appearing for the petitioners in Special Civil
Application No.6823 of 2022 is considered separately by this
Court as under:
22.1 Pending the present petition, the petitioner by filing an
additional affidavit, duly produced on record at page 172 of the
petition, has placed on record certain documents which are
internal communications between the various departments of
the State Government stating that the said documents are
received by the petitioner from one Mr. Vipul M. Solanki (not
known to the petitioner personally). It is stated that the
petitioner preferred an application to get certified copies of the
said documents under the Right to Information Act which came
to be refused by the competent authority and an appeal is
preferred challenging the said decision.
22.1.1 The petitioner herein has relied on documents
received through one Mr. Vipul Solanki and states that
different departments of the State Government were actively
discussing during the period of October, 2020 to February,
2021 the issue of applicability of capital and interest subsidy
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as envisaged under the Policy, 2020 to the Solar Policy
Distributed Projects availing the benefit of the Solar Policy,
2019. Placing reliance on the said notings/communications
between the departments, it is stated that on having clarified
on aspect of availability of capital and interest subsidy under
the Policy, 2020 in favour of the Solar Policy, 2019, the PPAs
were signed by approximately 4000 developers.
22.3 Mr. Kamal Trivedi, learned Advocate General, vehemently
submitted that the file notings are internal communications
between the departments and are nothing but mere
expression of one's opinion and not the ultimate decision of
the State Government. The said communications do not confer
any right upon the petitioners. It was submitted that the said
notings are also incomplete and misleading and it does not
contain several other notings and final decision having taken
at the highest level which do not form a part of the record. It
was submitted that to move on the part of the petitioner to
attempt to produce the aforesaid documents, is mischievous
with ulterior design but, also malafide in nature.
21.4 It is apposite to refer to the position of law:
(a) Kapilbhai Tansukhlal Sameja vs. State of Gujarat reported
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in 2003 (3) GLR 2302 wherein, it has observed and held as
under:
"24. As to what is the efficacy and strength of the notings on the file and
their value in relation to the pending dispute has to be decided in context
of principles laid down by the Supreme Court of India in case of State of
Bihar and Ors. v. Kripalu Shankar and Ors., 1987 (3) SCC 34.
A Government functions by taking decisions on the strength of views and
suggestions expressed by the various officers at different levels.
Ultimately getting finality at the hands of the Minister concerned. Till then,
conflicting opinions; views and suggestions would have emanated from
various officers at the lower level. There should not be any fetter on the
fearless and independent expression of opinions by officers on matters
coming before them through the files xxx xxx
xxx The expression of opinion by the officers in the internal files are for
the use of the department and not for outside exposure or for publicity xxx
xxx xxx The notings in a notes file do not have
behind them the sanction of law as an effective order. It is only an
expression of a feeling by the concerned officer on the subject under
review XXX XXX XXX Business of a State is not done by a single officer. It
involves a complicated process. In a democratic set-up, it is conducted
through the agency of a large number of officers.
"Now, the functioning of Government in a State is governed by Article 166
of the Constitution, which lays down that there shall be a Council of
Ministers with the Chief Minister at the Head, to aid and advise the
Governor in the exercise of his functions except where he is required to
exercise his functions under the Constitution, in his discretion".
"15. Article 166(1) requires that all executive action of the State
Government shall be expressed to be taken in the name of the Governor:
This clause relates to cases where the executive action has to be
expressed in the shape of a formal order or notification. It prescribes the
mode in which an executive action has to be expressed. Noting by an
official in the departmental file will not, therefore, come within this Article
nor even noting by a Minister. Every executive decision need not be as laid
down under Article 166(1) but when it takes the form of an order, it has to
comply with Article 166(1). Article 166(2) states that orders and other
instruments made and executed under Article 166(1), shall be
authenticated in the manner prescribed. While Clause (1) relates to the
mode of expression, Clause (2) lays down the manner in which, the order
is to be authenticated and Clause (3) relates to the making of the rules by
the Governor for the more convenient transaction of the business of the
Government. A study of this Article, therefore, makes it clear that the
notings in a file get culminated into an order affecting right of parties only
when it reaches the head of the department and is expressed in the name
of the Governor, authenticated in the manner provided in Article 166(2).
In the aforesaid decision in case of State of Bihar (supra) the Court finally
concludes :
"18. This Court observed in this judgment that business of State is a
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complicated one and has necessarily to be conducted through the agency
of a large number of officials and authorities. Before action is taken by the
authority concerned in the name of the Rajpramukh which formality is a
constitutional necessity, nothing done would amount to an order creating
rights or casting liabilities on third parties. It is possible, observed this
Court, that after expressing one opinion about a particular matter at a
particular stage a Minister or Council of Ministers may express quite a
different opinion which may be opposed to the earlier opinion. In such
cases, which of the two opinions can be regarded as the order of the State
Government ? It was, held that an opinion becomes a decision of the
Government only when it must be communicated to the person concerned
and that this is the essence of the matter. We seek support from these
observations for our purpose that notings in a notes files, not only of
officers but even that of a Minister will not constitute an order to affect
others unless it is done in accordance with Articles 166(1) and (2) and
communicated to the person concerned."
25. Applying the aforesaid principles to the facts of the case, it is
apparent that right from communication dated 3-9-1997 till the aforesaid
communication dated 4-10-1999 there have been various inter-
departmental communications and notings on the file. One can also go to
the extent of saving that from time to time conflicting tentative decisions
were arrived at. However, as stated by the Apex Court there is a
distinction between the decision recorded on the file and an order made in
accordance with the provisions of Article 166 of the Constitution of India.
The reliance by the petitioners on communication dated 7-10-1997 (or 9-
10-1997) and communication dated 4-10-1999 does not assist the
petitioners inasmuch as there is no order by Government, envisaged by
law, which would give rise to corresponding right in favour of the
petitioners, to seek implementation thereof. A decision communicated by
the Government to the Collector cannot assume form of an order as
required by Article 166 of the Constitution of India, and if that be so, it
would not be open to the petitioners to rely upon such a decision and seek
relief on basis of such decision. In fact, as can be seen from various
communications and nothing on the file the Government recorded
contrary tentative decisions at different points of time. In contradiction to
this tentative decisions one finds that a specific order dated 15-9-2001 in
the name of Governor of Gujarat was issued in favour of respondent No. 5
- Hansadevi. However, even that order did not exist for more than a week
as can be seen from communication dated 22-9-2001 (Annexure-W) and
the said order has also been directed to be kept in suspension, till further
orders.
26. Therefore, in absence of any order, which is valid in law, the
petitioners cannot seek compliance of communication. This is apart from
the fact that as submitted on behalf of the State Government, the
petitioners could not have been officially in possession of the inter-
departmental communication. Apart from the absence of an order as
required in law under Article 166 of the Constitution of India, none of the
documents (communications dated 7/9-10-1997, Annexure 'S' or dated 4-
10-1999, Annexure 'T') was ever communicated to the petitioner. This is
also a necessary requirement so that the petitioner can claim that a right
has accrued in his favour. Therefore, in light of this, settled legal position
the petitioners cannot successfully assail either the earlier decision dated
3-9-1997 or seek relief on the basis of subsequent communication of
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October, 1997 and 4-10-1999."
(b) Sethi Auto Service Station & Anr. vs. Delhi Development
Authority & Ors., reported in (2009) 1 SCC 180 wherein, the
Hon'ble Apex Court has observed and held as under:
"14. It is trite to state that notings in a departmental file do not have the
sanction of law to be an effective order. A noting by an officer is an
expression of his viewpoint on the subject. It is no more than an opinion by
an officer for internal use and consideration of the other officials of the
department and for the benefit of the final decision-making authority.
Needless to add that internal notings are not meant for outside exposure.
Notings in the file culminate into an executable order, affecting the rights
of the parties, only when it reaches the final decision-making authority in
the department; gets his approval and the final order is communicated to
the person concerned.
15. In Bachhittar Singh Vs. The State of Punjab, a Constitution Bench of
this Court had the occasion to consider the effect of an order passed by a
Minister on a file, which order was not communicated to the person
concerned. Referring to the Article 166(1) of the Constitution, the Court
held that order of the Minister could not amount to an order by the State
Government unless it was expressed in the name of the Rajpramukh, as
required by the said Article and was then communicated to the party
concerned. The court observed that business of State is a complicated one
and has necessarily to be conducted through the agency of a large
number of officials and authorities. Before an action is taken by the
authority concerned in the name of the Rajpramukh, which formality is a
constitutional necessity, nothing done would amount to an order creating
rights or casting liabilities to third parties. It is possible, observed the
Court, that after expressing one opinion about a particular matter at a
particular stage a Minister or the Council of Ministers may express quite a
different opinion which may be opposed to the earlier opinion. In such
cases, which of the two opinions can be regarded as the "order" of the
State Government? It was held that opinion becomes a decision of the
Government only when it is communicated to the person concerned.
16. To the like effect are the observations of this Court in
Laxminarayan R. Bhattad & Ors. Vs. State of Maharashtra & Anr.4, wherein
it was said that a right created under an order of a statutory authority
must be communicated to the person concerned so as to confer an
enforceable right.
17. In view of the above legal position and in the light of the factual
scenario as highlighted in the order of the learned Single Judge, we find it
difficult to hold that the recommendation of the Technical Committee of
the DDA fructified into an order conferring legal right upon the appellants.
22. From the afore-extracted notings of the Commissioner and the
order of the Vice Chairman, it is manifest that although there were several
notings which recommended consideration of the appellants' case for
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relocation but finally no official communication was addressed to or
received by the appellants accepting their claim. After the
recommendation of the Technical Committee, the entire matter was kept
pending; in the meanwhile a new policy was formulated and the matter
was considered afresh later in the year 2004, when the proposal was
rejected by the Vice Chairman, the final decision making authority in the
hierarchy. It is, thus, plain that though the proposals had the
recommendations of State Level Co-ordinator (oil industry) and the
Technical Committee but these did not ultimately fructify into an order or
decision of the DDA, conferring any legal rights upon the appellants. Mere
favourable recommendations at some level of the decision making
process, in our view, are of no consequence and shall not bind the DDA.
We are, therefore, in complete agreement with the High Court that the
notings in the file did not confer any right upon the appellants, as long as
they remained as such. We do not find any infirmity in the approach
adopted by the learned Single Judge and affirmed by the Division Bench,
warranting interference."
In the opinion of this Court, considering the documents
which are produced on record and the position of law, as
referred above, notings in the departmental file would not
assume the effect of an order. The noting is merely an opinion
by an Officer for internal communications purposes for the
other officials of the department and for the appraisal of the
final decision making authority. In view thereof, the aforesaid
contention raised by the learned advocate appearing for the
petitioner apart from the other contentions that are adopted
by the petitioners as raised in Special Civil Application
Nos.13056 of 2021 and allied matters, does not weigh with the
Court.
23. For the aforegoing reasons, this Court is not inclined to
exercise extra-ordinary jurisdiction under Article 226 of the
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Constitution of India and is inclined to pass the following order:
(a) The impugned communications dated 20.07.2021,
02.08.2021 and 05.08.2021 issued by the Commissioner of
MSME, the Secretary, Industries and Mines Department and
Commissioner of MSME respectively are pursuant to the
directions from the respondent No.1 after due deliberation with
the concerned departments and in view thereof, the said
communications require no interference.
(b) The petitioners have expressly entered in to PPA with the
respondent No.6 on 24.04.2021 under the Solar Policy, 2019.
After issuance of the addendum dated 8/9.06.2022 to the Solar
Policy, 2019, applied for extension to comply with the PPA
entered into with the respondent No.6 after introduction of
Policy, 2020 and the conditions enumerated in Clause - 16 of
the Said Policy, which is undisputed. The petitioners having
chosen not to apply under Clause 2.1.2 of the Policy, 2020,
impliedly, the benefit of the Policy, 2020 would not be
available to the petitioners.
(c) The policies by the State Government are in the interest
of public and this Court is not inclined to interfere in the said
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policies at the instance of the petitioners considering the fact
that large numbers of stake holders have availed the benefits
of the policies which are prevailing as they are. The petitioners
have subjectively interpreted the policies. The State is best
suited to frame policies and in absence of any arbitrariness,
malafide and discrimination, this Court is not inclined to
interfere in the said decision. It is within the realm of expert
body to decide the same. The stance of the respondent No.1 -
State that both the policies i.e. the Solar Policy, 2019 and the
Policy, 2020 cater to separate classes as discussed above and
the benefit of both the policies would not be available
simultaneously, require no intereference.
(d) The contention of the petitioners that the petitioners
have invested huge amounts pursuant to the issuance of the
Policy, 2020 and have altered their position, is a subjective act
of the petitioner having not even applied for the benefit of
Policy, 2020. The petitioners on their own volition incurred the
expenses which otherwise would not create any right or equity
in favour of the petitioners.
(e) The respondent No.1 - State Government has been clear
right from the beginning having clarifying that the subsidy
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option under the Policy, 2020 would not be available to those
having availed the benefits under the Solar Policy, 2019. In
view thereof, the addendum issued by the respondent
authority on 8/9.06.2022 is clarificatory in nature which
clarifies the stance taken by the State Government and in view
thereof, retrospective, considering the position of law as
referred above which requires no interference.
(f) The facts of the present petition are not hit by the
doctrine of promissory estoppel in absence of explicit promise
made by the respondent No.1 and in absence of any specific
averments in the petition that there is a explicit promise made
by the respondent No.1 pursuant to which the petitioners have
altered their position to avail the benefit of the Solar Policy,
2019. In absence of any promise explicitly by the respondent
No.1 to extend the benefit of the Policy, 2020 to the
petitioners, the submissions of the petitioners with respect to
the doctrine of promissory estoppel fails. The petitioners have
chosen not to invoke Clause 2.1.2 to fall within the realm of the
Policy, 2020.
(g) The petitioners having also known the stance of the State
Government, chose not to avail the exit options issued from
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time to time.
24. For the aforesaid reasons, the captioned petitions fail and
the same are hereby dismissed.
(VAIBHAVI D. NANAVATI,J)
NEHA
