2025:MHC:1229
W.P.No.12963 of 2024 etc., (batch cases)
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Orders reserved on : 22.04.2025
Orders pronounced on : 02.06.2025
CORAM :
THE HON'BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
W.P.Nos.12963, 12968, 12966, 12979, 12985, 12981, 12988, 13331, 13350,
13345, 13341, 16406, 16427, 16424, 16618, 16693, 16692, 16691, 16661,
18440, 18453, 18450, 18446, 18442, 23403, 23512, 23509 and 23416 of
2024
and W.M.P.Nos.25712 and 25580 of 2024
In W.P.No.12963 of 2024:-
Stanes Amalgamated Estates Limited
(Kotada Estate),
Kotada Group, Kotada Estate P.O. 643 236,
Via Kotagiri,
Represented by its Authorised Signatory,
B.Ambalatharasu .. Petitioner
Versus
1. Tea Board of India
(Ministry of Commerce & Industry,
Dept. of Commerce, Govt of India),
Represented by Deputy Director of
Tea Development,
1/42
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W.P.No.12963 of 2024 etc., (batch cases)
'Shelwood', Club Road, P.O Box No.6,
Conoor - 643 101, Nilgiris.
2. Union of India,
Represented by the Secretary, Ministry of Commerce
& Industry,
Department of Commerce,
Vanijya Bhawan,
New Delhi - 110 001. .. Respondents
Prayer in W.P.No.12963 of 2024 : Writ Petition filed under Article 226 of
the Constitution of India praying for a Writ of Certiorarified Mandamus
calling for records leading up to the passing of the order, dated 05.09.2023
bearing Ref.No.26(81)/OTPS/BG/KTG/Jan-June/2018/521 by the
respondent No.1 and to quash the same and consequently direct the
respondents to forthwith release to the petitioner the subsidy amount
totalling to Rs.45,15,393/- with interest at 18% per annum.
For Petitioner : Mr.Srinath Sridevan, Senior Counsel
(in all W.Ps) for Mr.Roshan Balasubramanian
For Respondent : Mr.AR.L.Sundaresan,
(in all W.Ps) Additional Solicitor General of India,
Asstd. by Mr.Prasad Vijayakumar,
Senior Panel Counsel
COMMON ORDER
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W.P.No.12963 of 2024 etc., (batch cases)
All these Writ Petitions address similar grievances and are therefore
taken up together and disposed of by this common order.
2. The petitioners grow and manufacture tea. By the separate orders
challenged in the individual Writ Petitions, the first respondent, namely the
Tea Board of India, rejected the petitioners' claim of subsidy amount under
the Orthodox Production Subsidy Scheme for the years 2018, 2019, and
2020. The impugned orders state that the scheme itself clearly mentions that
mere submission of applications does not guarantee financial assistance;
eligibility depends on full compliance with the scheme's guidelines and the
availability of financial resources. The scheme ended on 31.03.2021 and
was no longer in existence, along with the budgetary allocations. Therefore,
in the absence of budgetary allocation, as per the General Financial Rules,
2017, specifically Rule 26, the Tea Board of India could not make the
payment of subsidy as claimed by the petitioners, and hence, their claim was
rejected. Challenging such individual impugned orders and consequently
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W.P.No.12963 of 2024 etc., (batch cases)
seeking a mandamus directing the respondents to release the subsidy
amount, these Writ Petitions have been filed.
3. The following table depicts the writ petition number, the name of
the petitioner industry, the subsidy amount they claimed under the orthodox
tea planting and replanting schemes, as well as the status of inspection:
S.No WP No. Petitioner Subsidy Status of scheme
payable process
1. WP 24303/24 Neelamalai Rs.1,37,13,555 Inspections
Agro Industries (OTP) complete for
Ltd Rs.73,99,689/-
vide Inspxn
Reports
dt.01.01.2020.
Inspections
pending for
Rs.63,13,866/-,
vide Applications
dt. 25.01.2020,
24.07.2020 &
28.01.2021.
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W.P.No.12963 of 2024 etc., (batch cases)
Rs.20,42,364 Inspection
(Replanting) complete for
Rs.12,25,358/- vide
Inspxt Report dt.
27.03.2019.
Inspection pending
for Rs.8,16,906/-
vide Application dt.
06.04.2017, NOC
dt. 20.06.2017 &
Completion Report
dt. 24.01.2019.
2. WP 23509/24 Parry Agro Rs.13,71,618 Inspections
Industries Ltd. (OTP) complete for
(Iyerpadi Rs.13,71,618/-,
Factory) vide Inspxn
Reports dt.
28.09.2021.
3. WP 12979/24 Maris Agro Rs.93,81,855 Inspections
Products Pvt. (OTP) complete for
Ltd. Rs.68,29,887/-,
vide Inspxn
Reports dt.
07.02.2020 &
24.11.2020.
Inspections
pending for
Rs.25,51,968/-,
vide Applications
dt. 23.07.2019 &
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W.P.No.12963 of 2024 etc., (batch cases)
26.01.2021.
4. WP 12981/24 Nilgiri Agro Rs.56,23,092/- Inspections
Agencies Pvt. (OTP) complete for
Ltd. Rs.9,61,473/-, vide
Inspxn Report dt.
31.12.2020.
Inspections
pending for
Rs.46,61,619/-
vide Applications
dt. 19.01.2019,
25.07.2019,
22.01.2020,
28.07.2020 &
22.01.2021.
5. WP 16424/24 Matheson Rs.1,13,18,193/- Inspections
Bosanquet complete for
Enterprises Rs.53,99,382/-
Pvt. Ltd. vide Inspxn
(Coonoor Tea Reports dt.
Estate Factory) 23.12.2019 &
30.12.2019.
Inspections
pending for
Rs.59,18,811/-
vide Applications
dt. 30.01.2020,
29.07.2020 &
30.01.2021.
6. WP 16427/24 Glenmorgan Rs.26,52,957/- Inspections
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W.P.No.12963 of 2024 etc., (batch cases)
Tea Estate Co. (OTP) pending for
Ltd. Rs.26,52,956/-
vide Applications
dt. 25.01.2019,
22.01.2020,
18.08.2020 &
10.02.2021.
7. WP 12985/24 Southern Tree Rs.33,77,208/- Inspections
Farms Ltd. (OTP) complete for
Rs.20,10,654/-
vide Inspxn
Reports dt.
14.02.2020 &
26.11.2020.
Inspections
pending for
Rs.13,66,554/-
vide Application dt.
28.01.2021.
8. WP 12988/24 The Nonsuch Rs.22,15,962/- Inspections
Tea Estates (OTP) pending for
Ltd. Rs.22,15,962/-
vide. Applications
dt. 30.07.2018,
28.02.2019,
30.07.2019,
30.01.2020 &
29.07.2020.
9. WP 13331/24 Havukal Tea & Rs.1,89,68,244/- Inspections
Produce Co. (OTP) complete for
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W.P.No.12963 of 2024 etc., (batch cases)
Pvt. Ltd. Rs.1,89,68,244/-
vide Inspxn
Reports dt.
23.01.2019,
07.02.2020 &
24.11.2020.
10. WP 13341/24 Kilkotagiri & Rs.1,07,73,360/- Inspections
Thirumbadi (OTP) complete for
Plantation Ltd. Rs.76,77,867/-
vide Inspxn
Reports dt.
21.12.2018,
27.11.2019 &
14.02.2020.
Inspections
pending for
Rs.30,95,493/-
vide Applications
dt. 29.08.2020 &
11.02.2021.
11. WP 13345/24 Kairbetta Rs.63,21,438/- Inspections
Estates (OTP) complete for
Syndicate Rs.44,78,804/-
vide Inspxn
Reports dt.
22.05.2019,
17.12.2019 &
08.02.2020.
Inspections
pending for
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W.P.No.12963 of 2024 etc., (batch cases)
Rs.18,42,634/-
vide Applications
dt. 22.07.2020 &
28.01.2021.
12. WP 13350/24 Stanes Rs.15,09,390/- Inspections
Amalgamated (OTP) pending for
Estates Limited Rs.15,09,390/-,
(Welbeck vide Applications
Estate Factory) dt. 31.07.2018,
31.01.2019,
26.07.2019,
30.01.2020,
04.08.2020 &
22.01.2021.
13. WP 16406/24 Matheson Rs.1,37,68,017/- Inspections
Bosanquet (OTP) complete for
Enterprises Rs.76,28,556/-
Pvt. Ltd. vide Inspxn
(Parkside Tea Reports dt.
Estate Factory) 31.12.2019.
Inspections
pending for
Rs.61,39,461/-
vide Applications
dt. 30.01.2020,
29.07.2020 &
30.01.2021.
14. WP 16618/24 United Nilgiri Rs.36,62,922/- Inspections
Tea Estates Co. (OTP) pending for
Ltd. (Allada Rs.36,62,922/-
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W.P.No.12963 of 2024 etc., (batch cases)
Valley vide Applications
Factory) dt. 29.01.2019,
16.07.2019,
27.01.2020,
24.07.2020 &
23.01.2021.
15. WP 16661/24 Craigmore Rs.96,30,771/- Inspections
Plantations (OTP) completed for
(India) Pvt. Rs.48,39,462/-
Ltd. vide Inspxn
(Woodland Tea Reports dt.
Factory) 17.12.2019.
Inspections
pending for
Rs.47,91,309/- vide
Applications dt.
16.01.2020,
29.07.2020 &
23.01.2021.
16. WP 16691/24 Kodanad Rs.1,13,76,550/- Inspections
Estate (OTP) completed for
Rs.74,76,468/- vide
Inspxn Reports dt.
14.12.2018,
17.12.2019 &
08.02.2020.
Inspections
pending for
Rs.39,00,082/- vide
Applications dt.
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W.P.No.12963 of 2024 etc., (batch cases)
19.08.2020 &
09.02.2021.
17. WP 16692/24 United Nilgiri Rs.1,18,77,081/- Inspections
Tea Estates Co. (OTP) pending for
Ltd. (Chamraj Rs.1,18,77,081/-
Factory) vide Applications
dt. 29.01.2019,
16.07.2019,
27.01.2020,
29.07.2020 &
25.01.2021.
18. WP 16693/24 Craigmore Rs.56,21,301/- Inspections
Plantations (OTP) complete for
(India) Pvt. Rs.41,53,500/- vide
Ltd. Inspxns dt.
(Craigmore 17.12.2019.
Factory) Inspections
pending for
Rs.14,67,801/-
vide Applications
dt. 16.01.2020,
29.07.2020 &
23.01.2021.
19. WP 18840/24 Bombay Rs.9,00,807/- Inspection
Burmah (OTP) complete for
trading Rs.2,10,618/- vide
Corporation Inspxn Report dt.
Ltd. (Oothu 17.10.2018
Tea Factory) Inspections
pending for
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W.P.No.12963 of 2024 etc., (batch cases)
Rs.6,90,189/- vide
Applications dt.
22.02.2019,
28.08.2019,
23.01.2020,
12.08.2020 &
22.01.2021.
20. WP 18442/24 Bombay Rs.38,10,516/- Inspections
Burmah (OTP) complete for
Trading Rs.38,10,516/- vide
Corporation Inspxn Reports dt.
Ltd. (Anai 29.09.2021
Mudi Tea
factory)
21. WP 18446/24 Bombay Rs.34,85,544/- Inspections
Burmah (OTP) complete for
Trading Rs.22,37,514/-
Corporation vide Inspxn
Ltd. Reports dt.
(Dunsandle 18.03.2021
Tea factory) Inspection pending
for Rs.12,48,030/-
vide Application dt.
26.08.2018.
22. WP 18450/24 Bombay Rs.45,27,930/- Inspection pending
Burmah (OTP) for Rs.45,27,930/-
Trading vide Applications
Corporation dt. 27.08.2018,
Ltd. 22.02.2019,
(Manimuttar 19.08.2019,
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W.P.No.12963 of 2024 etc., (batch cases)
Tea factory) 23.01.2020,
12.08.2020 &
22.01.2021.
23. WP 18453/24 Bombay Rs.4,28,599/- Inspection
Burmah (OTP) complete for
Trading Rs.4,28,599/- vide
Corporation Inspxn Reports dt.
Ltd. (Thai 29.09.2021.
Mudi Tea
Factory)
24. WP 23416/24 United Nilgiri Rs.56,21,352/- Inspection pending
Tea Estates Co. for Rs.56,21,352/-
Ltd. vide Applications
(Korakundah dt. 31.07.2018,
Factory) 06.02.2019,
17.07.2019,
25.01.2020,
24.07.2020 &
30.01.2021.
25. WP 23512/24 Parry Agro Rs.46,42,587/- Inspections
Industries Ltd. complete for
(Carolyn Rs.25,52,952/-
Estate) vide Inspxn
Reports dt.
07.03.2019,
24.12.2019 &
24.06.2020.
Inspections
pending for
Rs.20,89,635/- vide
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W.P.No.12963 of 2024 etc., (batch cases)
Applications dt.
24.07.2020 &
11.02.2021.
26. WP 12966/24 The Nilgiri Tea Rs.30,63,009/- Inspections
Estates Ltd. (OTP) complete for
Rs.16,80,123/-
vide Inspxn
Reports dt.
23.06.2020
Inspections
pending for
Rs.13,82,886/-
vide Applications
dt. 09.01.2020,
23.07.2020 &
22.01.2021.
27. WP 12968/24 Glenworth Rs.1,89,92,471/- Inspections
Estate Ltd. (OTP) pending for
Rs.1,89,92,471/-
vide Applications
dt. 23.07.2018,
04.02.2019,
18.07.2019,
30.01.2020,
25.08.2020 &
27.01.2021.
28. WP 12963/24 Stanes Rs.45,15,393/- Inspections
Amalgamated (OTP) complete for
Estates Ltd. Rs.45,13,393/- vide
(Kotada Tea Inspxn Reports dt.
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W.P.No.12963 of 2024 etc., (batch cases)
Factory) 08.02.2020 &
26.09.2021.
Total Subsidy Due across 28 Writ Petitions = 19,51,94,086/-
Thus, in all 28 writ petitions, the total claimed subsidy amounts to
Rs.19,51,94,086/-.
4. The factual details on which these Writ Petitions arise are that the
Government of India, for the purposes of implementing international
agreements, controlling production and export, and levying excise duty,
enacted the Tea Act, 1953. The first respondent in the Writ Petition, the Tea
Board of India, is a body corporate constituted under the said Act to carry
out its purposes. The Union of India, represented by the Secretary of the
Ministry of Commerce and Industry, Department of Commerce, is the
second respondent in all these Writ Petitions.
5. The facts regarding W.P.No.12963 of 2024 are narrated below.
Under the 15th Finance Commission, for the Medium Term Framework
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W.P.No.12963 of 2024 etc., (batch cases)
from 2017-18 to 2019-20, the scheme known as the Tea Development and
Promotion Scheme During the Medium Term Framework (2017-18 to 2019-
20) was established by the first respondent. The duration of the scheme
spanned from 29.12.2017 to 31.03.2020. It comprises seven major
components, primarily focused on extending subsidies, financial incentives,
and grants-in-aid for various activities conducted by different stakeholders
to improve the production, productivity, and quality of tea in India and to
promote Indian tea in the international market. The relevant portion of the
scheme is extracted below for easy reference:-
"The scheme has the following seven major components
covering the broad areas of Tea Board's operation i.e.
Plantation Development including small growers, Quality
Upgradation and Product Diversification, Market
Promotion, Research and Development, Welfare of Tea
garden workers, Programme for Tea Regulation and
Establishment expenses for overall protection, growth &
sustenance of the Indian Tea Industry.
Component-1: Plantation Development including small
growers
Component-2: Quality Upgradation and Product
Diversification including Orthodox
production.
Component-3: Market Promotion-Domestic and
International
Component-4: Research and Development
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W.P.No.12963 of 2024 etc., (batch cases)
Component-5 : Human Resource Development
Component
Component-6: National Programme for Tea Regulation
Component-7 : Establishment Expenses
The above components primarily comprises extending
subsidy/financial incentives/grant in aid for various
activities carried out by different stakeholders for
improving the Production, Productivity and Quality of Tea
in India and Promotion of Indian Tea in the international
market and Research and Development and also the
expenditure on salary, pension, establishment and
administrative expenses for the human resources of the
Tea Board for implementing the scheme.
The Tea Board of India has finalized the modalities for
implementation of subsidy/financial incentives/grant in aid
under various components, clearly describing the
eligibility norms, unit costs, and extent of support for
various categories of stakeholders. The subsidy/financial
incentives under the various components will be
distributed by various departments of the Board depending
on the types of activities/beneficiaries. The
implementation and monitoring of the subsidies will be
carried out as under:"
6. The modalities and disclaimers were also included in the scheme,
and they are extracted here for easy reference:
"13) Submission of application alone will not guarantee
grant of financial assistance under any of the scheme
components. Grant of financial assistance will depend on
full conformity to scheme guidelines and also on
availability of financial resources. Priority will be given
to workers an their wards and the small growers for
distribution of available financial resources.
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W.P.No.12963 of 2024 etc., (batch cases)
14) The modalities containing the details such as
eligibility criteria, unit cost, scale of subsidy/grant in aid,
release of subsidy/grant in aid, list of documents,
procedure for claiming subsidy/granti-in-aid, processing of
application and claims for the components/sub-
components involving subsidy support/grant-in-aid are
presented in this document. The application forms and
other relevant formats for all the schemes will be available
in all the Offices of the Tea Board and in the Tea Board's
website: www.teaboard.gov.in."
7. Under the scheme, the first respondent is said to have conceded to
projects related to these Writ Petitions. The first is the Orthodox Plucking
Scheme. It is stated that all these petitioners were originally following a
method of Crush-Tear-Curl (CTC), which is a quick and mechanized way of
manufacturing tea. However, if a tea leaf is plucked whole and dried in a
more organic manner, it retains all the essential oils, and this method is
referred to as the orthodox method, which was necessary to adopt
considering the international market and to enhance the reputation of Indian
tea. Similarly, there is another scheme known as the Tea Bush Replanting
Scheme, where a particular method of replanting the tea garden was
proposed. Since, during the replanting period, the growers will not be able
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W.P.No.12963 of 2024 etc., (batch cases)
to pluck and market the leaves, a subsidy was also introduced. Under both
schemes, the tea grower was asked to adopt a slower and more organic
method, which would be economically unfavorable if short-term goals are
considered, but, would align with long-term goals by enhancing quality and
reputation in the market. Thus, to incentivize the tea growers to undertake
these methods, which would be economically unfavorable in the short run,
the scheme was introduced.
8. For the Orthodox Tea Production Scheme, the grower must adopt
orthodox plucking and production for a six-month period and then submit an
application for a subsidy within the time limit. Thereafter, the first
respondent will conduct an inspection, prepare a report, and subsequently,
the amount will be sanctioned and payment will be made. Similarly, for the
Tea Bush Replanting Scheme, the grower must obtain a No Objection
Certificate from the Tea Board, and then proceed to replant the plants. After
completing the replanting, the grower should notify the Board of the
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W.P.No.12963 of 2024 etc., (batch cases)
completion and readiness for inspection. Upon receiving such notice, the
Tea Board will conduct the first inspection. Afterward, the first installment
will be sanctioned. Again, a second inspection will be conducted, and the
second installment will be sanctioned and paid.
9. Regarding the production of orthodox tea, the first half of the year
will conclude on 31st August, while the second half will end on 28th or 29th
February, depending on the case. All the petitioners have admittedly made
their production within the time limit and submitted their applications on
time. Similarly, concerning replanting, applications were also made within
the scheme period. The replanting must be completed within 36 months of
uprooting, followed by an inspection. After the first inspection is
completed, the second inspection must be conducted within another 24
months. In the first instance, the petitioner in W.P.No.12963 of 2024
submitted the application for the period from January 2018 to June 2018 by
30.08.2018; for July 2018 to December 2018 on 26.02.2019; for January
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W.P.No.12963 of 2024 etc., (batch cases)
2019 to June 2019 on 26.07.2019; and for July 2019 to December 2019 on
29.01.2020. The inspection was conducted on 08.02.2020. Reports were
submitted for all four periods. Then, on 05.05.2020, an application was
made for the period from January 2020 to June 2020. For July 2020 to
December 2020, an application was made on 28.01.2021. On 26.09.2021,
inspections were conducted for both periods. By calculating the quantity of
green and orthodox tea produced, the petitioner is claiming a subsidy
amount of Rs.45,15,393/-. This amount has not been paid; therefore,
repeated representations and reminders were made, following which, the
impugned orders were issued. Identical circumstances exist in these 28 Writ
Petitions, and as such, all the petitioners have approached this Court.
10. The contention of the writ petitioners is that while the scheme was
in operation, all the writ petitioners adopted the methods suggested by the
Tea Board and are engaged in Orthodox Tea Production. One of the writ
petitioners, Neelamalai Agro Industries Limited, also undertook replanting.
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W.P.No.12963 of 2024 etc., (batch cases)
The respondents, without any valid reason, did not make the payment,
whereas, several other similarly situated tea growers in select areas were
granted the subsidy. Absolutely no criteria have been followed. Therefore,
the actions of the respondents violate Article 14 of the Constitution of India.
The petitioners argue that the first respondent Board, as an authority of the
State, cannot release subsidies to whomever it desires without any rational
basis. Furthermore, the rejection of applications on the ground of no
budgetary allocation cannot be permitted, and in any event, budgetary
allocation is indeed available.
11. All these Writ Petitions are resisted by filing a counter-affidavit
on behalf of the first respondent. It is their submission that the scheme itself
categorically disclaims any guarantee of financial assistance upon merely
submitting an application. This assistance is a benevolence conferred by the
Board and the Government, and none of these petitioners can claim a
subsidy as a matter of right. Furthermore, the first respondent board
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W.P.No.12963 of 2024 etc., (batch cases)
specifically states that it receives funds under the scheme and disburses them
to all eligible applicants at the earliest possible time, strictly on a seniority
basis without any delay. In fact, the first respondent asserts that seniority is
initially maintained based on the date of receipt of the application, provided
that all submitted documents are in order. Thereafter, if all papers are in
order, the completion of inspection is considered for seniority.
Subsequently, if funds are available, the case is sanctioned, and at this stage,
the sanction date is taken as the basis for seniority.
12. The first respondent states that, as a statutory board, it is strictly
bound by Rule 26 of the GFR Rules. For the MTF period of 2017-2021, the
total budget received for each financial year and the expenditure incurred by
the board are summarized in paragraph No.9, which is extracted hereunder
for ready reference:
MTF Period
Financial Year Receipt (Rs. in Crores) Expenditure (Rs. in
Crores)
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W.P.No.12963 of 2024 etc., (batch cases)
2017-18 189.04 188.47
2018-19 160.20 159.59
2019-20 175.98 175.46
2020-21 209.19 208.67
Total 734.41 732.19
Therefore, when the subsidies are disbursed and the budget has been
exhausted, no further release of subsidies is possible.
13. As a matter of fact, the work undertaken by the petitioners in
adopting the methods is for their own business benefit, and they will not be
prejudiced due to any suitable method of production or planting. In the long
run, they will reap the benefits.
14. Mr.Srinath Sridevan, learned Senior Counsel for the petitioners,
submits that after promising a subsidy and requiring the petitioners to adopt
a different method of production as well as replanting, the first respondent
Tea Board cannot deny the subsidy. By applying the Doctrine of
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Promissory Estoppel, the first respondent is liable to honour its commitment.
He asserts that there are no allegations regarding the application not being
submitted in time or any other flaws whatsoever. Since the applications of
all these petitioners were filed on time, there is absolutely no justification to
deny the subsidy established by a scheme formulated by the first respondent.
15. The learned Senior Counsel would rely on the judgment of the
Hon'ble Supreme Court of India in Motilal Padampat Sugar Mills Co. Ltd.,
Vs. State of Uttar Pradesh and Ors. to contend that if individuals acted on
the promise made by the Government, the Doctrine of Promissory Estoppel
prevents the Government from going back on those promises. For the same
proposition, the judgment of the Hon'ble Supreme Court of India in U.P.
Power Corporation Ltd. and Anr. Vs. Sant Steels & Alloys (P) Ltd. and
Ors. and the order of this Court in Maris Agro Products Private Limited
Vs. Tea Board of India and Anr. in W.P.No.7336 of 2024, dated
1 (1979) 2 SCC 409
2 (2008) 2 SCC 777
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03.10.2024 are cited.
16. The learned Senior Counsel would further submit that although it
is a subsidy that is given, the State formulates the schemes of subsidy for the
benefit of its citizens and, once the scheme is framed and operated, it cannot
be said that it is a bounty that relies solely on luck. On the contrary, it
would be a constitutional guarantee, and the individuals acting on the basis
of such a promise of subsidy have a legitimate expectation for its release.
The judgment of the Hon'ble Supreme Court of India in Sivanandan C.T.
and Ors. Vs. High Court of Kerala and Ors. , particularly paragraph Nos.45
to 47, is relied upon to argue that the Government must act in a predictable
manner and honour its promises. The learned Senior Counsel would also
refer to the judgment of the Hon'ble Supreme Court of India in State of
Jharkhand and Ors. Vs. Brahmputra Metallics Limited, Ranchi and Anr.
to assert that substantive legitimate expectation arises from Article 14 of the
3 (2024) 3 SCC 799
4 (2023) 10 SCC 634
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Constitution of India, and unless there is any overwhelming public interest,
legitimate expectations cannot be denied. Paragraph Nos.38 to 47 and 51 of
the aforementioned judgment are cited. The learned Senior Counsel would
then rely on the judgment of the Hon'ble Supreme Court of India in State of
Bihar and Ors. Vs. Shyama Nandan Mishra to argue that the State cannot
change course to deny substantive legitimate expectation. The learned
Senior Counsel would then reference the judgment of this Court in
M.Paramasivam Vs. The Secretary, Adi Dravidar and Tribal Welfare
Department, Chennai and Ors. in W.P.No.38724 of 2024, wherein the
principle laid down by the Hon'ble Supreme Court of India in Sivanandan
C.T.'s case (cited supra) was applied.
17. The learned Senior Counsel would then submit that when the
petitioners have submitted the application and are entitled to the subsidy, the
non-availability or lack of funds cannot be a defense when the State is liable
to pay based on Promissory Estoppel. In this regard, the judgment of the
5 (2022) 17 SCC 420
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High Court of Punjab and Haryana in Sekhri Milk Products Vs. Union of
India and Ors. is relied upon. The learned Senior Counsel would submit
that the contention is also factually incorrect by pointing to paragraph No.44
of the counter-affidavit, which states that a provision of Rs.298.76 crores
was made towards pending subsidy liabilities (of the 12th plan and MTF
period) and that only an amount of Rs.127.65 crores has been paid during
the financial years 2020-21 and 2021-22. Therefore, the learned Senior
Counsel would submit that the statement made in the impugned order, as
well as before this Court, also seems factually incorrect. Consequently, he
would pray that these Writ Petitions be allowed.
18. Per contra, Mr.AR.L.Sundaresan, learned Additional Solicitor
General of India for the respondents, would submit that in these cases, the
petitioners moved to the Orthodox Tea Plucking Method. It is not that they
put themselves in a disadvantageous situation, but, rather in an advantageous
one. This change was made solely to further their own business. Although
6 2024 SCC OnLine P&H 11898
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the subsidy scheme is proposed, it cannot create any concomitant,
enforceable right, especially, since the scheme itself distinctly states that
merely applying does not guarantee payment of the subsidy. The Doctrine
of Promissory Estoppel can be invoked only when the parties put themselves
in a disadvantageous situation. Given that the scheme is a subsidy program,
a benevolence conferred by the Government, it would be administered only
according to the Rules. Now, the subsidy period is over. The amount that
has been earmarked has been spent solely on subsidy payments. Payments
made to other tea growers cannot now be recovered or redistributed. The
authorities have acted in accordance with the scheme, and once the funds are
exhausted, the Tea Board of India has no resources independently to pay all
subsidy claims. Rule 26 of the GFR Rules, 2017 requires the first
respondent to act within the budgetary allocation. Therefore, there is no
merit in these Writ Petitions. The petitioners do not have any right to
demand subsidy payments for the improvements they make to their own
business and their tea plantations. The judgment of the Hon'ble Supreme
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Court of India in Bakul Cashew Co. and Ors. Vs. Sales Tax Officer,
Quilon and Anr. , particularly paragraph No. 5, was relied upon.
19. I have considered the rival submissions made on both sides and
reviewed the material records of the case.
20. There can be no quarrel over the proposition that the writ
petitioners, or anyone, cannot force the Tea Board or the Union of India to
grant a subsidy for a particular action. Therefore, if no subsidy scheme was
formulated, or if the scheme was scrapped even after the announcement, the
petitioners will not have any rights. However, the instant case does not
relate to the scrapping or non-availability of a scheme. Admittedly, the
scheme was formulated by the respondents, and the relevant portions are
extracted supra. Budgetary allocations were made. The scheme was
operational, and the subsidies were disbursed to similarly situated tea
growers/manufacturers as those of the petitioners. Therefore, the only
7 (1986) 2 SCC 365
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question to be determined in this case is whether any rationale or criteria
were followed while disbursing the funds allocated towards the subsidy
scheme.
21. It would be entirely within the prerogative of the respondents to
establish such criteria. They can assert that smaller players will be preferred
over larger ones. They can choose tea growers from disadvantaged
backgrounds. They can state that the subsidiary will be distributed pro rata
among all claimants, or as a least case of disorder, first come first served can
also be followed. However, in this instance, the procedure being followed
is detailed in paragraph No. 34 of the counter-affidavit, which is extracted
hereunder:-
"34. In reply to Para 19, it is submitted that as and when
the 1st Respondent receives funds under a scheme, it is
disbursed to all the eligible applicants at the earliest
possible time, strictly on seniority basis and without any
delay. In fact, initially the seniority is maintained based
on the date of receipt of application, provided all the
documents are submitted in order. Followed by, if all the
papers are in order the completion of inspection is
considered as seniority. Subsequently, if fund is available
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the case is sanctioned and at this stage sanction date is
taken as seniority. Finally, after the sanction depending
on the receipt of Letter of Undertaking (LOU) from the
applicant the disbursement is made. Even after the receipt
of LOU, if it is noticed that the case is in contravention to
the scheme guideline, the sanction letter may even be
withdrawn. The above stated procedure was followed in
this office during the MTF period."
22. They claimed that the funds were disbursed strictly on a seniority
basis. It is stated that seniority is maintained based on the receipt of the
applications, provided the applications are found to be in order.
Accordingly, if the respondents assert that these petitioners submitted their
applications later than those who were granted the subsidy, then this Court
has nothing to intervene. However, that is not the case. Once the
applications are found to be in order, the first respondent chose to inspect
them. Even if it is asserted that the inspection was undertaken according to
the application seniority, the petitioners' case is bound to fail. However, the
respondents did not follow any criteria during the inspection, and they now
categorically state that the date of inspection is considered the seniority
afterwards, and the funds are sanctioned and paid. Thus, without following
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any criteria, whimsically, whoever they preferred, the first respondent board
inspected and granted the payment.
23. As a matter of fact, during the hearing, this Court specifically
adjourned the matters, enabling the learned Additional Solicitor General of
India to clarify any criteria followed by the first respondent. Nothing was
forthcoming, and the same stance was reiterated. Therefore, this is a case
where the first respondent board treated equals as unequals by arbitrarily
picking and choosing the applicants for inspection and considering their
inspection date as the date of seniority. Not even the seniority of
applications was followed. This case demonstrates a complete lack of
criteria and, as such, is a grave case of nepotism and arbitrariness.
Therefore, the petitioners' claim should be allowed.
24. Once the scheme is floated and the funds are available, after
disbursing them in a nepotistic manner, the argument relating to the no-
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right-for-subsidy cannot be entertained. It is relevant to extract paragraph
Nos.44 and 45 of the judgment of the Hon'ble Supreme Court of India in
Sivanandan C.T's case (cited supra), which reads as hereunder:-
"44. In a constitutional system rooted in the rule of law,
the discretion available with public authorities is confined
within clearly defined limits. The primary principle
underpinning the concept of rule of law is consistency and
predictability in decision-making. A decision of a public
authority taken without any basis in principle or rule is
unpredictable and is, therefore, arbitrary and antithetical to
the rule of law. [S.G. Jaisinghani v. Union of India, 1967
SCC OnLine SC 6] The rule of law promotes fairness by
stabilising the expectations of citizens from public
authorities. This was also considered in a recent decision
of this Court in SEBI v. Sunil Krishna Khaitan [SEBI v.
Sunil Krishna Khaitan, (2023) 2 SCC 643] , wherein it
was observed that regularity and predictability are
hallmarks of good regulation and governance. [SEBI v.
Sunil Krishna Khaitan, (2023) 2 SCC 643] This Court
held that certainty and consistency are important facets of
fairness in action and non-arbitrariness : (Sunil Krishna
Khaitan case [SEBI v. Sunil Krishna Khaitan, (2023) 2
SCC 643] , SCC pp. 678-79, para 59)
“59. … Any good regulatory system must promote
and adhere to principle of certainty and consistency,
providing assurance to the individual as to the
consequence of transactions forming part of his daily
affairs. [Union of India v. Raghubir Singh, (1989)
2 SCC 754. Also see, The Nature of the Judicial
Process, Benjamin N. Cardozo, p. 33:“I am not to
mar the symmetry of the legal structure by the
introduction of inconsistencies and irrelevancies and
artificial exceptions unless for some sufficient
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reason, which will commonly be some consideration
of history or custom or policy or justice. Lacking
such a reason, I must be logical just as I must be
impartial, and upon like grounds. It will not do to
decide the same question one way between one set
of litigants and the opposite way between
another.”(emphasis supplied)] … This does not
mean that the regulator/authorities cannot deviate
from the past practice, albeit any such deviation or
change must be predicated on greater public interest
or harm. This is the mandate of Article 14 of the
Constitution of India which requires fairness in
action by the State, and non-arbitrariness in essence
and substance. Therefore, to examine the question of
inconsistency, the analysis is to ascertain the need
and functional value of the change, as consistency is
a matter of operational effectiveness.”
(emphasis supplied)
45. The underlying basis for the application of the
doctrine of legitimate expectation has expanded and
evolved to include the principles of good administration.
Since citizens repose their trust in the State, the actions
and policies of the State give rise to legitimate
expectations that the State will adhere to its assurance or
past practice by acting in a consistent, transparent, and
predictable manner. The principles of good administration
require that the decisions of public authorities must
withstand the test of consistency, transparency, and
predictability to avoid being regarded as arbitrary and
therefore violative of Article 14."
Thus, if the first respondent board has committed itself to a promise
and acted unlawfully in relation to that commitment, then relief must be
granted to the petitioners.
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25. The second submission made is the non-availability of funds. In
this regard, it is essential to extract Rule 26 of the GFR Rules that is relied
upon by the respondents, which reads as follows:
"Rule 26:- Responsibility of Controlling Officer in respect
of Budget allocation: The duties and responsibilities of a
controlling officer in respect of funds placed at his
disposal are to ensure:
(i) that the expenditure does not exceed the budget
allocation.
(ii) that the expenditure is incurred for the purpose for
which funds have been provided.
(iii) that the expenditure is incurred in public interest.
(iv) that adequate control mechanism is functioning in his
Department for prevention, detection of errors and
irregularities in the financial proceedings of his
subordinate offices and to guard against waste and loss of
public money, and
(v) that mechanism or checks contemplated at (iv) above
are effectively applied."
26. It establishes the responsibility of the first respondent to ensure
that their expenditure does not exceed the budget allocation. Therefore, this
does not in any way authorize the first respondent board to spend money in
violation of the law and then deny the claims of the petitioners based on the
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budget. When a lawful due is not provided due to an unlawful act, the Court
can always grant relief to the parties by directing the state to rectify the
wrong done, and in this regard, the non-availability of budget can never be
used as an excuse. It is well-established that lack of funds cannot serve as a
defense for the State or statutory authorities.
27. Furthermore, in this case, the following assertions are made in
paragraph No.44 of the counter-affidavit:-
"44. ... A provision of Rs.298.76 crore was made in EFC
towards pending subsidy liabilities (of 12th Plan and MTF
period) in the Tea Development and Promotion Scheme
(TDPS) for 2021-22 to 2025-26. The approved
modalities/scheme guidelines for implementation of
TDPS, inter alia' provides "the financial assistance would
be considered under the instant scheme only for those
cases for which a formal sanction order has been issued,
and either one or no instalment has been released, with
priority given to those cases for which one instalment has
been released, with priority given to those cases for which
one instament has been released subject to completion of
such activities in conformity with the erstwhile scheme
guidelines". An amount of Rs.127.65 Crores has been
paid during the financial year 2020-21 and 2021-22. All
eligible cases where subsidy was sanctioned have been
disbursed by the Tea Board."
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28. When the learned Senior Counsel for the petitioners argued that
the remaining funds, after Rs.127.65 crores have been spent, are more than
sufficient to satisfy the total claim in all 28 Writ Petitions, which is only
Rs.19,51,94,086/-, the learned Additional Solicitor General of India for the
respondents submitted that even though the remaining funds are not
disbursed, they are earmarked for various sanctioned subsidies. It may be
so. It is the responsibility of the first respondent to oversee the disbursement
of the amounts. It has committed a grave error. It ought to have presented
all the total claims for each year and followed certain criteria; if the total
amount is insufficient, it should have paid on a pro rata basis or adhered to a
specific standard.
29. Having arbitrarily distributed the same, it is now up to the
respondents to pay the petitioners as is done for similarly situated claimants.
The provision for budgetary allocation is their responsibility. Whether from
available funds, by requesting additional funds from the second respondent,
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or through any other method, the amount must be paid. Therefore, the
argument that there is no right to claim a subsidy and that nothing can be
done once the funds are exhausted cannot be accepted, given the facts and
circumstances of the case.
30. Under these circumstances, these Writ Petitions are allowed on the
following terms:
(i) The respective orders that were passed, rejecting the petitioners'
applications for subsidy claims, stand quashed;
(ii) The respondents are directed to pay the subsidy amounts for
Orthodox Tea Plucking as well as Replanting, as claimed by the petitioners,
within a period of three months from the date of receipt of a web copy of
this order;
(iii) There shall be no order as to costs. Consequently, the connected
miscellaneous petitions are closed.
02.06.2025
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Neutral Citation: yes
grs
To
1. The Deputy Director of Tea Development,
Tea Board of India,
(Ministry of Commerce & Industry,
Dept. of Commerce, Govt of India),
'Shelwood', Club Road, P.O Box No.6,
Conoor - 643 101, Nilgiris.
2. The Secretary, Ministry of Commerce & Industry,
Department of Commerce,
Vanijya Bhawan,
New Delhi - 110 001.
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D.BHARATHA CHAKRAVARTHY, J.
grs
W.P.No.12963 of 2024 etc., (batch cases)
02.06.2025
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