P.N.Balaram vs The Principal Secretary ...
2023 Latest Caselaw 9953 Ker

             IN THE HIGH COURT OF KERALA AT ERNAKULAM
                               PRESENT
          THE HONOURABLE THE CHIEF JUSTICE MR. A.J.DESAI
                                  &
                THE HONOURABLE MR.JUSTICE V.G.ARUN
    MONDAY, THE 18TH DAY OF SEPTEMBER 2023 / 27TH BHADRA, 1945
                        WA NO. 1442 OF 2023
AGAINST THE JUDGMENT IN WP(C) 16066/2012 DATED 25.05.2023 OF HIGH
                           COURT OF KERALA
APPELLANT/PETITIONER:

          P.N.BALARAM
          DIRECTOR, CYBELE HERBAL LABORATORIES (P) LTD, KOOVAPADY
          ROAD, KANJAR P.O., THODUPUZHA, RESIDING AT "NIRMALYAM",
          GREENPARK THIRUVAMBADI. P.O.,TRICHUR, PIN - 680022
          BY ADVS.
          T.M.CHANDRAN
          S.SUJITH


RESPONDENTS/RESPONDENTS:

    1     THE PRINCIPAL SECRETARY (INDUSTRIES),
          SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001
    2     THE GENERAL MANAGER,
          DISTRICT INDUSTRIES CENTRE, IDUKKI, PIN - 685602
    3     VILLAGE OFFICER,
          POONKUNNAM, AYYANTHOLE, NEAR COLLECTORATE TRICHUR, PIN
          - 680003
    4     COLLECTOR/AUTHORISED OFFICER (DT(DR)),
          THODUPUZHA, IDUKKI DISTRICT, PIN - 685584


          SPL.GP.P.N.SANTHOSH KUMAR


     THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 18.09.2023,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WA NO. 1442 OF 2023


                                  -2-

                             JUDGMENT

A.J.DESAI, C.J.

By way of the present writ appeal filed under Section 5 of the

Kerala High Court Act, the original petitioner has challenged the

judgment dated 25.05.2023, by which the writ petition filed by the

present appellant challenging the order dated 11.01.2011 passed the 2 nd

respondent, directing the appellant to refund an amount of Rs.25

lakhs with interest at the rate of 14%, paid to him as subsidy, on the

ground that the petitioner has not abided to the agreement dated

06.10.2019, as he failed to continue the functioning of his unit for a

period of five years. The appellant has also challenged an order dated

03.02.2012, which came to be passed consequent to the direction of

this Court to pass a fresh order after providing opportunity of hearing

to the appellant. Short facts arising out of this appeal are as follows:

2. The appellant, who is the Director of a company registered

under the Companies Act, started commercial production of Ayurvedic

medicines on 31.05.2001 at Thodupuzha. The unit was registered as a

small scale industry and therefore was eligible for State Investment WA NO. 1442 OF 2023

Subsidy. For the purpose of sanctioning the subsidy, the office of the

Assistant District Industries Officer prepared a full-fledged inspection

report on 10.09.2002 and assessed the appellant's entitlement for

subsidy as Rs.66,52,310/- being 25% of the total fixed capital of

Rs.2,66,09,241/-, but was limited to Rs.25 lakhs and paid to the

appellant only in the year 2009. At that time, an agreement dated

06.10.2009 came to be executed by and between the appellant and the

respondent department. In the year 2011, the District Industries

Center found that the appellant had neither continued the production

nor got the license renewed from the Panchayat since 2003-2004

onwards. Therefore, an order dated 11.01.2011 was passed, directing

the appellant to refund the subsidy amount disbursed in the year

2009. The said order was challenged before this Court by way of filing

W.P.(C)No.4948 of 2011, on the ground that the order was passed

without providing an opportunity of hearing to the appellant. Finding

substance in the challenge, the matter was remanded and accordingly

an order dated 03.02.2012 was passed. Both the orders are challenged

in the captioned writ petition. The learned Single Judge, after going

through the documents produced by the appellant and the counter WA NO. 1442 OF 2023

filed by the respondents, dismissed the petition. Hence this writ

appeal.

3. Learned Counsel, Sri. T.M.Chandran, appearing for the

appellant would submit that the authority as well as the learned Single

Judge have committed error in passing the impugned orders and the

judgment. He would submit that, even though the subsidy was

applied for way back in the year 2002, it was disbursed only in the

year 2009 and therefore, it cannot be said that the appellant was at

fault for not continuing the production. He would submit that the

appellant had invested crores of rupees to establish the industry. He

would submit that the installation of machinery for production having

been accepted, the learned Single Judge ought to have passed

appropriate orders. He therefore would submit that the appeal be

allowed and the impugned orders passed by the authority, as well as

the judgment of the learned Single Judge, be quashed and set aside.

He would further submit that the authority also committed error with

regard to the rate of interest mentioned in the impugned order. He

would submit that it is not the case of the authority that the appellant

had committed fraud in getting the subsidy and therefore could not WA NO. 1442 OF 2023

have imposed interest at the rate of 14% per annum. He therefore

would submit that appropriate orders may be passed.

4. On the other hand, learned Counsel appearing for the

respondent authorities has taken us through various documents and

supported the decision of the authority as well as the learned Single

Judge. He would submit that the appellant cannot, at this point of

time, contend that the subsidy was disbursed at a belated stage. He

would submit that, since 2002, the appellant had not filed any petition

for getting the subsidy and ultimately when he got the subsidy in the

year 2009, the authority has agreed for disbursement of the said

amount as per the terms and conditions of the agreement entered into

by and between the parties on 06.10.2009. By taking us through the

agreement, he would submit that the appellant had agreed to continue

commercial production for a period of five years and if there is breach

of the same, to refund the amount. He therefore would submit that

the authority as well as the learned Single Judge have committed no

error in passing the impugned orders. He would further submit that,

as far as the rate of interest is concerned, as per the terms and

conditions of the agreement, the appellant is supposed to pay interest WA NO. 1442 OF 2023

at the rate of 14% per annum.

5. We heard the learned Advocates appearing for respective

parties.

6. It is true that the appellant had applied for subsidy in the year

2002, which was disbursed in the year 2009. At that time the parties

entered into an agreement, evident from Ext.R2(d). As per the said

agreement, the appellant had agreed to continue commercial

production for a period of five years and to refund the amount if the

unit goes out of production within five years from the date of receipt of

subsidy. There is no doubt that no documentary evidence, in

whatsoever manner, was produced by the appellant, either before this

Court or before the authority, in order to establish that the production

work was going on since the past few years. In fact, it appeared that

from the year 2003-2004 onwards, the appellant had not even

renewed his license from the Panchayat. All these aspects have been

elaborately considered by the learned Single Judge. As stated herein

above, as per the agreement dated 06.10.2009, the appellant is

supposed to refund the amount if there is breach of any of the

conditions in the agreement. Hence, we do not find any substance in WA NO. 1442 OF 2023

this appeal.

7. As far as the imposing of interest at the rate of 14% per annum

is concerned, we find substance in the submission made by the learned

Advocate for the appellant. The terms of Ext.R2(d) agreement

empowers the authority to impose 14% interest only in circumstances

like misrepresentation of facts or publishing of false information,

which is not the allegation in the case on hand. Therefore, we are of

the opinion that the authority ought not to have impose additional

penalty of 14% of interest. The respondent would be entitled for

refund of subsidy with interest at the bank rate which was prevailing

in the year 2011.

The writ appeal is disposed of accordingly.

Sd/-

A.J.DESAI CHIEF JUSTICE

Sd/-

V.G.ARUN JUDGE uu 18.09.2023