Judgment:
Sujata Manohar, J.
1. In 1971, The Government of India notified a scheme called the 10% Central Outright Grant or Subsidy Scheme, 1971 for Industrial Units to be set up in certain selected backward areas with a view to promoting the growth of Industries there. The scheme was originally for the duration of the Fourth-Five Year plan and for such further period as may be decided by the Government of India.
2. Under the scheme a Central Government subsidy at the rate of 10% was admissible on the fixed capital investment, viz., Land, building, plant and machinery made by the industrial unit so set up, subject to a maximum of Rs. 5 lacks. The scheme was modified from time to time and the amount of subsidy/grant was increased. The scheme was further modified from April 1983, and a new Category of areas was introduced known as Category 'A' areas which are entitled to the highest rate of subsidy. Union Territories of Dadra and Nagar Haveli, and Daman and Diu formed a part of Category 'A' and were eligible for subsidy at the rate of 25% subject to a maximum of Rs. 25 lacks. We are concerned in these writ petitions with industrial units in the Union Territories of Dadra and Nagar Haveli and Daman and Diu.
3. The scheme was extended from time to time as notified in the gazette. The last extension was notified in the gazette on 3rd of May 1988. As a result, the scheme was further extended for a period of six months with effect from 1st of April, 1988 upto 30th September 1988. Thereafter there have been no further extensions of the scheme.
4. The scheme was basically framed to promote growth of industries in certain selected backward districts or areas. The scheme was made applicable to new industrial units set up in such selected areas for which effective steps were not taken prior to 1st of October 1970. The scheme also covered substantial expansion of existing industrial units in such areas. In order to claim the subsidy such industrial units were required to get themselves registered with the State Department concerned prior to taking effective steps for setting up the new units or undertaking substantial expansion of the existing units. The term 'effective steps' has been defined under the scheme as meaning one or more of the following steps--- (i) 60% or more of the capital issued for the industrial unit has been paid up ; (ii) a substantial part of the factory building has been constructed, (iii) a firm order has been placed for a substantial part of the plant or machinery required for the industrial unit. Registration was required prior to taking these steps.
5. Each State Government or Union Territory Administration was required to set up a Committee (hereafter called the State Level Committee) consisting of a representative each of the State or Union Territory Department concerned, the State/Union Territory Finance Department, the Central Ministry of Industrial Development and, if the industrial unit was to be assisted by a financial institution, the financial institution concerned, to go into each case to decide whether it should qualify for the grant of subsidy and also to decide about the quantum of subsidy.
6. In respect of the new industrial units which were set up without assistance from any financial institution or the State Government or the Union Territory Administration concerned, the subsidy was to be distributed to the unit by the State Government/Union Territory Administration concerned, normally at the time when the unit went into production. Reimbursement was thereafter to be claimed by the State Government/Union Territory Administration from the Central Ministry of Industrial Development. The same procedure was to apply to expansion of existing units.
7. Under the circular, however, issued by the Union Government dated 17th of May 1978, the Union Territories, inter alia, of Dadra and Nagar Haveli and Daman and Diu were allowed to first claim the subsidy from the Central Government, and on receipt of such subsidy to disburse it to the concerned industrial units. The procedure under this circular is the relevant procedure in respect of the industrial units before us.
8. A somewhat different procedure for disbursement of subsidy, however, was followed in respect of industrial units which were to be financially assisted by the State Government/Union Territory Administration or any financial institution. In such cases the subsidy was to be disbursed to the unit in as many instalments as the loan was disbursed by the State Government/Union Territory Administration/Financial Institution concerned and was to be simultaneously claimed from the Central Ministry of Industrial Development. In such cases the contract to be drawn up between the State Government/Union Territory Administration/Financial Institution and the unit concerned was required to cover mortgage/Pledge/hypothecation of the assets upto the amount of the loan to be so advanced as well as the subsidy.
9. Therefore, the units which were set up in Union Territories where no financial assistance was available would get their subsidy only after the State Level Committee sanctioned such subsidy and quantified it, claimed the amount of the subsidy from the Central Government and after receipt of the subsidy from the Central Government disbursed it to the unit concerned. This procedure was quite different from the procedure which was followed in the case of those units which were set up with the financial assistance of a State Government, or a Financial Institution, or a Union Territory Administration.
10. Under the scheme, all Industrial units which were so set up, were not allowed to change the location of the whole or any part of the industrial unit or effect any substantial contraction or dispose of a substantial part of its total fixed capital investment, within a period of five years after going into production. In the case of all units to whom such subsidy was disbursed, a certificate of utilisation of the subsidy for the purpose for which it was given was required to be furnished to the Central Ministry of Industrial Development by the Financial Institution/State Government/Union Territory Administration concerned within a period of one year from the date of the receipt of the last installment/full amount.
11. After receiving the grant or subsidy each industrial unit was also required to submit an annual progress report to the Central Ministry of Industrial Development/State Government/Union Territory Administration concerned about its working for a period of five years after going into production.
12. Along with this scheme a Manual was also issued regarding the detailed working of the scheme. The Manual gave a list of industrially backward districts or areas which qualified for the Central Investment Subsidy. It set out in detail the eligibility of industrial units for claiming the subsidy and the procedure for claiming the subsidy. Under Clause 2 dealing with 'eligibility', The Manual provided that new industrial units engaged in the manufacture of items which were specified in Part--B of Annexure II were eligible to claim subsidy under the scheme provided that such industrial units were located in areas specified in Part--A of Annexure II and were also covered by section 1.3. Section 1.3. gave the commencement and duration of the scheme.
13. The scheme required industrial units to get themselves registered with the State Department concerned prior to taking effective steps for setting up the new units or undertakings substantial expansion of the existing units. At the time of registration they were also required to indicate their assessments of the total fixed capital likely to be invested by them.
14. The industrial units were required to file their application for claiming Central Investment subsidy with the disbursing agency as set out in Manual. Along with the application the units were required to submit information, inter alia, regarding a project report wherever it was prepared; details of the fixed assets acquired or to be acquired and so on. The disbursing agency was required to examine the application and determine the eligibility of the Industrial Unit. After due scrutiny all eligible cases were referred to the State Level Committee constituted under the scheme with suitable recommendation for a final decision.
15. The State Level Committee under Clause 4.2 of the Manual was required to go into the merits of each case to decide whether the industrial unit qualified for the grant of Central Investment Subsidy. It was also required to determine the quantum of Central Investment Subsidy admissible to the industrial unit. A sanction letter would then be issued to the industrial unit as per Clause 5.1. A form of sanction letter was also prescribed under the Manual. Along with the sanction letter a legally enforceable agreement was also required to be executed by the eligible industrial unit for the purpose of drawing the Central Investment Subsidy sanctioned by the State Level Committee.
16. Under Clause 4.3 The State Level Committee was required to hold as many meetings as were considered necessary for speedy implementation of the scheme.
17. The scheme came to an end on 30th of September, 1988. Thereafter, however, by a circular dated 20th of July, 1989, the Government of India, Ministry of Industry, Department of Industrial Development stated that the Government of India had received representations from the State Governments, various Chambers of Commerce and entrepreneurs that the projects sanctioned under the Central Government Subsidy Scheme for backward areas during its validity, that is to say before 30th September, 1988 were still under implementation, and it had been requested that in respect of these projects disbursements may be continued beyond 30th September, 1988. Having carefully considered this matter, it had been decided that for the projects sanctioned before 30th of September 1988, all disbursements made by the State Governments or its agencies before 30th of September, 1989 in respect of non-manufacturing activities and before 31st of December 1989 in respect of manufacturing activities, will be eligible for reimbursement by the Government of India. This decision was conveyed to all the States and Union Territories under a letter dated 21st of July, 1989 from the Ministry of Industry, Department of Industrial Development, Government of India. The letter specifically stated that in respect of manufacturing activities the Government of India would reimburse subsidy disbursed by the State Governments provided that the following conditions were satisfied, viz., (1) The project was approved by the Approval Committee (i.e. The State Level Committee) on or before 30th of September, 1988 and (2) The Disbursements were made before 31st of December, 1989.
18. The entire group of writ petition which is before us is filed by various industrial units who have set up their units in the Union Territories of Daman and Diu or Dadra and Nagar Haveli in areas which are notified under the scheme. All these units have registered themselves with the concerned department in the Union Territory Administration. It is an accepted position on all sides that in these Union Territories where no financial assistance was available, the industrial units were required to make an application for sanction of the subsidy to the State level Committee only after the project was complete and went into commercial production. The petitioners, therefore, made an application to the concerned State Level Committee for sanction of subsidy after their industrial units went into production. In the meanwhile, however, while their applications were under consideration by the State Level Committee, the scheme came to an end on 30th of September 1988. In the case of most of the petitioners, the State Level Committee concerned, however, considered the applications for sanction of subsidy even after 30th of September, 1988 and in the case of many of the petitioners, their applications for subsidy were sanctioned and the quantum of subsidy was also determined by the State Level Committee. The State Level Committees/Disbursement Agencies also asked the Central Government to release the amounts so sanctioned for disbursement to the petitioners concerned. The Central Government, however, refused to grant the subsidy on the ground that the scheme had come to an end on 30th of September, 1988 and the approval of the State Level Committee had not been given prior to 30th September, 1988. In view of this decision of the Central Government the petitioners have been informed by the Union Territory concerned that they are not entitled to any subsidy under this scheme. The petitioners have therefore filed these writ petitions challenging the denial of subsidy to them on the ground that the industrial unit was set up by them during the subsistence of the scheme and, hence, they are entitled to subsidy under the scheme.
19. The claim of the petitioners is based on the doctrine of promissory estoppel. In the case of M/s Motilal Padamoat Sugar Mills Co. Ltd. v. The State of Uttar Pradesh and others, reported in 1979 S. C. 621, the Supreme Court has expounded the doctrine of promissory estoppel at some length. The Supreme Court has said that the true principle of promissory estoppel seems to be that where one party has, by his words or conduct, made to the other a clear and unequivocal promise which is intended to create legal relations or effect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise 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 he would not be allowed to go back upon it, if it would be inequitable to allow him to do so. The Supreme Court states, 'Where the Government makes a promise knowing or intending that it would be acted on by the promise and, in fact, the promise, acting in reliance on it, alters his position, the Government would be held bound by the promise would be enforceable against the Government at the instance of the promisee.' The Court has clarified that it is not necessary that the promisee, acting in reliance on the promise, should have suffered any detriment. It is sufficient if he has altered his position in reliance on the promise. As the doctrine of promissory estoppel is an equitable doctrine, it must give way when the equity so requires. Thus, for example, if it would be against public interest to hold the Government bound by the promise, the doctrine of promissory estoppel will not be invoked. Similarly, the doctrine cannot be invoked to prevent the Legislature from exercising its legislative function, nor can it be invoked to enforce a promise which is prohibited by law. However, the doctrine of executive necessity or a mere change in policy cannot be allowed to defeat the doctrine of promissory estoppel. This has been reiterated by the Supreme Court in the case of Union of India v. Godfrey Philips India Ltd., reported in : [1986]158ITR574(SC) . Thus in the case of M/s. Motilal Padampat Sugar Mills Co. Ltd.,the U.P. Government had announced an exemption from Sales Tax for a period of three years to all new industrial units in the State with a view to enabling them to stand on a firm footing in the initial stage of development. On the basis of this announcement the appellant had set up an industrial unit in the State of U.P. the State had confirmed to the appellant that the unit would be entitled to the Sales Tax holiday. The Supreme Court said that the government was bound to carry out the representation and exempt the appellant from Sales Tax for a period of three years from the date of commencement of the production.
20. The doctrine of promissory estoppel was also considered by a Full Bench of this High Court in the case of Tapti Oil Industries and another v. State of Maharashtra, reported in 1984(1) Bom.C.R. at p. 485. The scheme which was before the Full Bench in that case was somewhat similar to the scheme which is before us. Under Maharashtra Government Scheme of 1979 which was before the Court in that case, industrial units were invited to locate themselves in backward areas on a representation that if they did so, they would get certain incentives indicated in the scheme. These included refund of Sales Tax, electricity duty, octroi, etc. Under that scheme, the industrial units which so set up their industry in backwards areas were required to apply for an eligibility certificate effective from the date of commencement of commercial production. The application for eligibility had to be made after initial effective steps were taken. The industrial units were required to complete all effective steps on or before 31st of March 1983. The scheme was subsequently amended by a Government Resolution under which units whose applications for incentives were pending as on 31st of March, 1983 and who had completed all effective steps before 31st of March, 1983 were allowed to avail of only an incentive by way of Sales Tax difference. The Court said that the petitioners had acted on the basis of the promise made under the scheme as it was originally framed, and had taken all effective steps under the scheme, and hence they were entitled to all the incentives under the scheme. The Court also said that the defence of a change in Government policy or of executive necessity could not be invoked in these circumstances.
21. The respondents however, relied upon a decision of The Delhi High Court in the case of R.K Deka v. Union of India, reported in : AIR1992Delhi53 . In that case the scheme was for allotment of residential plots to no-resident Indians living abroad. There was very little initial response and it was decided to drop the scheme. The Court said that the scheme was dropped in public interest, considering the fact that implementation of the scheme would result in unnecessary drain on scarce resources. Further more, there was no firm commitment from the Government as the scheme was on an experimental basis. Hence, the Government could not be directed to implement the scheme by applying the principle of promissory estoppel. In this case, promissory estoppel which is an equitable doctrine was not invoked in public interest. This decision has not application to the present case at all.
22. In the light of this legal position, we have to see whether the doctrine of promissory estoppel can be applied in the present case and, if so, in what manner. In the first place, in the light of the provisions of the scheme as set out above there can be no doubt that the Central Government Subsidy Scheme did hold out a promise to the industrial units availing of the scheme that if they complied with the requirements of the scheme and set up their industrial units of the requisite type in the approved backward areas as notified, they would get the benefit of an investment subsidy /grant under the scheme as prescribed. The scheme, however, was, right from inception, a scheme of limited duration. The industrial units who decided to avail of the scheme, were, throughout, aware of the fact that the scheme was for a limited duration and that , therefore, they would be entitled to a subsidy under the scheme provided the scheme was in force. In the case of the petitioner who set up their industries in the Union Territories of Dadra and Nagar Haveli or Daman and Diu, the subsidy was a one-time payment to be received after the units went into commercial production. Therefore, the petitioners were aware that they had to carry out all their obligations, ensure that their units went into commercial production and apply to the State level Committee in sufficient time for the Central Government to release them the subsidy under the scheme during the subsistence of this scheme. The petitioner were also aware throughout that there was a difference relating to the grant of subsidy between units set up in the States and in the Union Territories. This was because the Union Territories did not have funds from which any loans could be granted to the industrial units in question. In the case of the Union Territories of Daman and Diu and Dadra and Nagar Haveli, the petitioners were fully aware that the subsidy could be given to them only after the subsidy was received by these Union Territories from the Central Government.
23. In this context what was the promise which was held out to the petitioners? The promise was that if they carried out their obligations, they would be given the subsidy by the Central Government provided the scheme was in force at all points of time. This promise was improved by the circular of 21-7-1989. As a result the petitioners were promised subsidy if the steps required under the scheme had reached the stage of sanction by the State Level Committee during the subsistence of the scheme. We have already set out in detail the procedure for obtaining subsidy in these Union Territories. The entire procedure was, therefore, required to be completed during the subsistence of the scheme, only then would the industrial units get subsidy. This was the promise. Therefore, the petitioners were aware that if, in the meanwhile the scheme came to an end they would not get any subsidy.
24. What have the petitioners done under the Scheme? We have to examine their position in the Union Territories of Dadra and Nagar Haveli and Daman and Diu, We are not here concerned with the scheme as it operated in different States, because looking to the different procedure involved there the promise held out there might be somewhat different. We have also to bear in mind the circular of 21st July of 1989, under which the Central Government gave a concession relating to the implementation of the scheme, although it had come to an end on 30th of September 1988. As per the circular, if the project was approved by the State Level Committee prior to 30th of September, 1988, the subsidy would be disbursed provided the disbursement was made by the State Government before 30th of September 1989 for non-manufacturing units and before the 31st of December 1989 for manufacturing units. This latter proviso is strictly relevant only in respect of the scheme as implemented by the different State Governments because the scheme as applied to the State Government required that the initial disbursement should be made by the State Governments and thereafter they would get reimbursement from the Central Government. Therefore, if the State Level Committee in the States had sanctioned the grant before the 30th of September, 1988 and had disbursed it within Government. The latter condition would have no application to the Union Territories, at least, of Daman and Diu and Dadra and Nagar Haveli because they would be in a position to disburse the subsidy only after it was received by them from the Central Government and their date of disbursement would depend upon the date of receipt of the grant from the Centre.
25. The promise, therefore, held out under the scheme would be available only to those petitioners who had set up their units and whose units had gone into commercial production during the subsistence of the scheme. Secondly, these units would have to go into commercial production in good time before the scheme came to an end on 30th of September 1988 because, even after the units went into commercial production they had to apply for sanction of the subsidy to the State Level Committee; which State Level Committee would have to examine the proposal and determine and sanction the quantum of subsidy to which they would be entitled. Thereafter an application would have to be made to the Central Government who would release the subsidy to the Union Territories, who would in turn give the subsidy to the petitioners.
26. Looking to this subsequent procedure involved, in our view, those petitioners who desire to rely upon the promise, must show that they had made an application for subsidy to the State Level Committee at least 5 to 6 months before the scheme came to an end thus allowing sufficient time for the Union Territory and the Central Government to carry out their obligations under the scheme. If the Union Territory and Central Government fail to carry out their obligations during this time for no adequate reason, they can be held to their obligations and compelled to carry them out. In this context, in our view, a reasonable date which can be fixed by which the petitioners ought to have carried out their obligations and applied for sanction to The State Level Committee, is 15th of April 1988. This allows for a reasonable time within which the Union Territory ought to have carried out its obligation of examining the application though the State Level Committee, and sanctioning or not sanctioning the subsidy. No explanation is forthcoming for the failure on the part of the concerned State Level Committee to examine or take a decision on such applications before 30th September, 1988. By their inaction they cannot defeat the rights of the concerned petitioners. Therefore, all those petitioners whose units have gone into commercial production prior to 15th of April, 1988 and who have, in addition, made an application to the State level Committee for sanction of subsidy prior to 15th of April, 1988, would be the units who can avail of the promise. This however, is subject to a further condition. It is also necessary that the application of such petitioners should have been actually considered by the State Level Committee and the State Level Committee should have determined the quantum of such subsidy and sanctioned it. Although this has not been done before 30th September, 1988, there is no explanation for this failure to act. That is why the present writ petitions have been filed. It is pointed out by the petitioners that there was an inordinate delay on the part of the State Level Committee in examining the applications which were pending before them for a long time through no fault of the petitioners. Had the State Level Committee acted with reasonable dispatch, as was contemplated under the scheme itself and the Manual, their applications ought to have considered and sanctioned by the State Level Committee before 30th September, 1988. In the case of some of the petitioners, the State Level Committee, however, considered their applications and sanctioned the applications after 30th of September, 1988.
27. In our view, only those petitioners who made their applications to the State level Committee prior to 15th of April, 1988 and whose applications have been ultimately sanctioned by the State Level Committee although after 30th of September, 1988, Who would be entitled to obtain the subsidy under the scheme to the extent sanctioned by the State Level Committee Those who submitted their applications to the State Level Committee after 15th April, 1988 and/or those whose subsidy claims have been rejected by the State Level Committee or whose claims have not been considered at all by the State Level Committee would not be entitled to any relief. This is because unless the claims of the petitioners are scrutinized by the State Level Committee and the quantum of subsidy is fixed, no right accrues to the petitioners under the scheme to obtain any amount by way of such subsidy. It was contended by the respondents that in respect of some of the applications so submitted the State Level Committee raised certain objections which were required to be answered by the applicants before their claims were finalised. Since this was done after 15th of April 1988, Such applications should not be considered. This contention must be rejected. We have provided a period of 5 months from 15th of April, 1988, during which the State Level Committee could have raised queries which could have been answered by the applicants so that their claims would have been determined by the State Level Committee before the scheme came to an end. Hence, if the State Level Committee chooses to, raise objections after an inordinate delay the applicants cannot be penalised. All applications therefore submitted on or before 15th of April 1988, which have been ultimately sanctioned as aforesaid, are eligible for the grant of subsidy as finally determined by the State Level Committee.
28. It was submitted by the respondents in this connection that it was not open to the State Level Committee to examine the applications for subsidy after 30th of September, 1988 because the State Level Committee became functus officio after 30th of September, 1988. Looking to the scheme as a whole this contention cannot be accepted. Even when the scheme comes to an end the various authorities which have been set up under this scheme do not automatically become functus office on the date when this scheme ends. They are required to carry out certain supervisory functions for a period of five years after the scheme actually comes to an end. They have to ensure, for example, that the industrial unit concerned does not change its location. They have also to submit various progress reports from time to time relating to the industries in question. In fact, the State Level Committees of Dadra and Nagar Haveli and Daman and Diu did, in fact, function after 30th of September, 1988. From the record it appears that all the pending applications before the State Level Committees were scrutinized only after 30th of September, 1988 and the quantum of subsidies were sanctioned in respect of some of them after 30th of September, 1988. The State Level Committees did, in fact, forward their recommendations for grant of subsidies to these units in respect of whom the subsidies were sanctioned to the Central Government after the scheme came to an end. The Central Government, however, declined to release the subsidies on the ground that the sanction was granted by the State level Committee after 30th of September, 1988. In our view, for those industrial units who made their applications to the State Level Committees on or before 15th April, 1988, there was a clear promise held out that their applications would be considered expeditiously by the State Level Committee as stated in the scheme and that they had a legitimate expectation that before the scheme came to an end the sanctioned quantum of subsidy would be released to them by the Central Government through the Union Territories concerned or at least that their claims would be scrutinized and sanctioned by the State Level Committee. Those petitioners, who did not apply for sanction of subsidy to the State Level Committees prior to 15th of April, 1988, shall not be entitled to any relief. Looking to the short time within which the scheme was coming to an end, they cannot have any legitimate expectation that their applications would be scrutinized by the State Level Committees before the scheme came to an end, much less could they have any legitimate expectation that any subsidy would be released to them before the scheme came to an end. The petitions of all those petitioners who have not applied for sanction to the State level Committees before 15th of April, 1988 must therefore fail.
29. It is contended before us by the petitioners that all the petitioners are entitled to succeed because they have been registered under the scheme prior to 30th of September, 1988. Hence, they have become eligible for subsidy before 30th of September 1988. They should not be deprived of this subsidy simply because the scheme has come to an end on 30th of September 1988 and/or because their applications have not been sanctioned by the State Level Committees before 30th of September 1988. This argument has no merit. The promise which was held out is set out in the paragraphs above. There was clearly no promise held out under this scheme to the effect that although the scheme came to an end on 30th of September 1988, all those who were registered under the scheme before 30th of September 1988 would be entitled to subsidy. Mere registration under the scheme does not create any right to obtain a subsidy under the scheme.
30. The petitioners, however, contend that in the case of industrial units set up in the Union Territories of Dadra and Nagar Haveli, registration under the scheme should be considered as equivalent to sanction by the State Level Committee. They contend that they are eligible for subsidy on registration and, hence, they should get this subsidy. This argument also cannot be accepted. The right to get a subsidy is dependent upon the sanction of the State Level Committee even for units in these Union Territories. Registration under the scheme has to be done in these Union Territories also, before any effective steps are taken to set up a new industrial unit/to expand an existing industrial unit. An application for sanction to the State Level Committee on the other hand, can be made only after the unit is actually set up and goes into commercial production. Secondly, registration is before an authority different from the State Level Committee. Hence, registration cannot be considered as equivalent to sanction by the State level Committee. It is also pointed out that registration does not determine the quantum of subsidy which is required to be granted to the unit in question. The quantum of subsidy is determined only by the State Level Committee. It is only after such quantum is determined that the subsidy can be released. Therefore even in Union Territories of Daman and Diu and Dadra and Nagar Haveli registration under the scheme cannot be considered as equivalent to sanction by the State Level Committee.
31. It was argued by the petitioners that the procedure adopted in the Union Territories of Daman and Diu and Dadra and Nagar Haveli is highly discriminatory as compared to the procedure adopted by the States. Because in these Union Territories, the State Level Committee sanctions the subsidy only after the unit goes into commercial production while in the different States where financial assistance is available, the subsidy is disbursed even while the unit is being set up, in various instalments. Therefore, the disbursement of subsidy takes place by instalments even before the unit goes into commercial production. It was submitted that application of the scheme to Union Territories, therefore, is violative of Article 14. This submission also cannot be accepted. The facility of disbursement of subsidy in instalments while the project is being set up is granted only in those States and Union Territories where the State Government concerned or the Union Territory Administration concerned or a financial institution is in a position and has agreed to assist the project financially from its own funds while the project is being implemented. The subsidy amount also initially comes from such funds. It is thereafter reimbursed to the State Government/financial institution by the Central Government. The scheme therefore as applied to such State Governments and Union Territories has been modified looking to the finances available with the State Governments and Union been modified looking to the finances available with the State Governments and Union Territories concerned. For a Union Territory which does not have such finances, the subsidy scheme is a pure and simple scheme for reimbursement. Even so, in view of the representations made by the Union Territory Administrations who presumably did not have sufficient funds even to first grant the subsidy and then obtain reimbursement from the Central Government the Central Government has agreed to release the funds first to the Union territory Administration so that the funds so obtained by the Union Territory Administration can be disbursed to the unit concerned. The distinction and the procedure employed therefore, are based upon relevant intelligible differentia relating to the financial position prevailing in the States and the Union Territories. It does not violate Article 14.
32. Moreover, the petitioners were fully aware of the differences in procedures relating to the release of subsidy prevailing between the State Governments and the Union Territories. They have chosen to set up their industrial units in the Unions Territories of Dadra and Nagar Haveli and Daman and Diu. Therefore, they now cannot complaint of any discriminatory procedure.
33. The respondents also urged that the doctrine of promissory estoppel should not be invoked in the case of the present scheme. They rely in this connection on a decision of the Division Bench of the Madras High Court in the case of M/s. Jayakar Fire Works v. The Union of India, Writ Appeal Nos. 1075 of 1990 and 1076 of 1990 decided by Dr. A. Anand, C.J. (as he then was) and Raju, J., decided on 2nd of November 1990. The Madras High Court, considered the same scheme which is before us. In the case before the Madras High Court, however, the applications filed by the appellants for grant of subsidy were rejected on merit by the State Level Committee which found that the appellants were not eligible for subsidy. The Madras High Court therefore said that as they were not eligible for subsidy under the scheme they could not invoke the doctrine of Promissory Estoppel. They had not satisfied even the minimum qualifying criteria for invoking the doctrine.
34. We entirely agree with the Madras High Court in this respect. In the cases before us, those petitioners whose applications for subsidy have been rejected by the State Level Committee cannot get any relief. Those petitioners whose applications have been so rejected in part, cannot get any relief in respect of the part so rejected. But those petitioners who made their applications for subsidy to the State Level Committee of these two Union territories on or before 15th April, 1988 and in whose cases the State level Committee has ultimately sanctioned. Subsidy, either fully or partly, are entitled to relief to the extent of the amount so sanctioned. The respondents are directed to disburse subsidies to these petitioners to the extent set out above. Rules in such petitions are made absolute accordingly. Rules in the remaining petitions are discharged.
Office to draw up the order accordingly in each petition.
In the circumstances there will be no order as to costs.
Mr. Agarwal for the respondents and Mr. Bulchandani, who appears for some of the petitioners as per the particulars set out hereinabove, applied for leave to appeal to the Supreme Court. In our view, no substantial question of law of general importance which requires determination by the Supreme Court arises in these petitions. Hence, the application for leave dismissed.