D.M. Patnaik, J.
1. In this writ petition the petitioner a private limited company through its Managing Director prays for a direction to the opposite parties to extend the benefits under the 1989 Industrial Policy Resolution (for short, the 'IPR') and to quash Annexure-1, the letter of the General Manager, District Industries Centre. Balasore refusing the said benefit.
2. The case of the petitioner-unit in short is It's a private limited company set for manufacturing of M.S. Rods, M.S. Flats and Angles at Ranital in the district of Bhadrak. The company was duly registered with the District Industries Centre, Balasore. The company was supplied with electricity power on 20-10-1991 and went into commercial production from 25-11-1991 onwards. The land on which the industry is established was purchased for the company on 1-11-1985.
Since the contract demand for electricity power supply was 359 KVA and thus below 500 KVA for which the unit was entitled to exemption of electricity duly under the 1989 1PR. it made an application to that effect for such exemption which was though initially allowed, but subsequently refused under Annexure-1 intimating that the unit came under 1980, I.P.R. Aggrieved by the said action, the petitioner-unit has approached this Court.
3. Opposite parties 1 to 3 have filed a counter affidavit through the Assistant Director. Industries in which they have justified their stand that since the land on which the unit stands was purchased on 1-11-1985 in the form of fixed capital assets, the unit is not entitled to get the benefit under the 1989 policy which came into force from 1-l2-1989.
4. Mr. A.K. Ray, learned senior counsel relying on the case of, Crown Re-Rollers Pvt. Ltd. v. State of Orissa, 1990 (II) OLR 7, strenuously urged that the case of the petitioner is covered by the decisions in the above case wherein, according to Mr. Ray, this Court dealing with a similar case though related to 1986, I.P.R. held that keeping in view the object for which the incentives were offered and the benefits extended, an industry though made investment in fixed capital prior to 1st April 1986 was entitled to get the benefit under the 1986 1PR. Therefore, according to him in the present case the company made substantial investment only after 11th April 1986 and by the date 1-11-1985 when the land was purchased there was no contemplation of having any industry on the said land and, therefore, it could not be said that the purchase of the land on 1-11-1985 was in the form of fixed capital investment merely because the land was purchased on that date.
The learned State counsel while countering the argument of Mr. Ray relied on the case of, Gulab Oil Industries v. Secretary of the Industries Department, Orissa, O.J.C. No. 3512 of 1995 (disposed of on 1-12-1995).
5. It is not disputed that the unit is a small scale industry having a contract demand of less than 500 KVA and it is also not disputed as claimed that power was supplied on 20-10-1991 and the unit went for commercial production from 25-11-1991. The benefit under the 1989 I.P.R. is disallowed on the ground that investment in the form of fixed capital was on 1-11-1985 when the land was purchased. It is the petitioner's case that on 1-11-1985 when the land was purchased there was no contemplation of establishment of the unit over it and it was merely a purchase by the company from one of its Directors which was only in the form of investment towards his share. A denial of this assertion is the corner stone of the State's case.
During the course of argument we observed that there was no bar for a company to acquire any asset either movable or immovable for the purpose of merely owning the property and in all such cases it is not to be presumed that assets are so acquired for the purpose of investment in any particular industry. But, if it is a matter of capital investment in any industry, for the purpose of availing the benefit under the IPR it has to be shown that the asset was so acquired for the particular industry. We required both the sides to produce materials particularly to the petitioner, to produce the sale-deed and/or the proceedings of the company to satisfy that there was no contemplation of having any industry on the land in question purchased on 1-11-1985. The supporting documents to show this, could be only available with the petitioner-company. This having not been done and further admittedly since the unit stands on the land purchased, we are of the view that the land was purchased for establishment of the unit on it and, therefore, it was an investment in the form of fixed capital.
6. The next point is whether the petitioner is entitled to benefit of 1989 I.P.R. For the purpose of better appreciation various clauses of that I.P.R. those are relevant for our purpose are quoted below:
'2. Definition:
2.1. 'Effective Date' means the date of issue of this Policy on and from which, the provisions thereof shall be operative.
2.2. Expansion/Modernisation/Diversification of an existing industrial unit means additional investment of more than 25% of the undepreciated book value of fixed capital investment of an existing unit...
2.3. 'Fixed Capital Investment' meansinvestment on land, building, plant and machineryand other equipments of permanent nature.
xx x 2.7. 'New Industrial Unit' means an industrialunit where fixed capital investment has beenmade only on or after the effective date.
xx x 2.16. '1986 Policy' and '1980 Policy' (respectively mean the incentive schemes announced in Industrial Policy Resolution No. 13195, dated the 13th May 1986 and Industrial Policy Resolution No. 20783, dated the 31st July 1980.
217. 'Continuing Units of 1986 Policy' means any industrial unit where fixed capital investment commenced on or after the 1st April, 1986 and prior to the effective date and, the unit has gone or goes into commercial production after the 1st April, 1986.
XX X 11. Power :
11.1. Exemption of Electricity duty.
11.1.1. No minimum charge will be levied in respect of existing and new industrial units with a contract demand upto 500 KVA. In other words, the energy bill will be made on the basis of actual monthly consumption of energy. New Industrial units with contract demand upto 500 KVA will also he exempted from payment of electricityduty for a period of 5 years from the date of powersupply.'
7. The effective date of 1989 I.P.R. is 1st December, 1989 which remained in force for five years i.e. 30-11-1993. The object of all the 'Industrial Policy Resolutions of the State so far announced amply manifested in the preamble of the resolutions and they are with the sole purpose of giving a filip to the industrial growth in the State by instilling vitality for their continued existence, be it an existing industrial unit or new industry under the relevant policy. With this end in view, as preamble of the 1989 I.P.R. shows, the State framed the policy to 'further liberalise package of incentive announced in 1986 policy with twin objectives of encouraging new industries and providing support to the industries which have come up in the State during the last few, years.'
Going by the strict definition of Clause 2.3 of the 1989 I.P.R. quoted above, it is certain that in the case at hand, fixed capital investment having been made on 1-11-1985 admittedly this could not come under the definition of a 'new industry.' For the same reason the present case cannot come under the definition of a continuing unit under the 1986 I.P.R. since according to the definition under Clause 2.17 quoted above, fixed capital investment has not been made after 1st April 1986 nor prior to the effective date of the 1989 I.P.R. i.e. 1-12-1989. Therefore, question remains, whether the 1989 I.P,R. could be made available to the petitioner-industry, and if so how?
8. It is settled law that the I.P.Rs by the Government arc a set of promises which the Government is bound to honour if ah industry fulfils various criteria laid down under the clauses. In case of denial of these benefits, action may lie in Courts of law in appropriate cases. In that view of the matter, there is every justification for the Government to extend the benefit under a particular policy, if the industrial unit has come into existence or set up or goes for commercial production any time during the period when that particular policy is in force. In the present case, the I.P.R. being of 1989, the period of Five years would be from 1-12-1989 to 30-11-1993. Since the object of the policy is to grant various incentives enumerated under the policy to an eligible unit the same should not be denied merely by interpreting the clause of the policy in such a way that such interpretation instead of furthering the objects for which the policy is framed would create bottle-neck and deprive the particular industrial unit from availing the incentives to which it is otherwise entitled, but for the mere fact that capital investment either in small or big scale has been made prior to the effective date. In other words, if any time after the date of coming into force of any particular policy (in the present case 1-12-1989) an industrial unit is set up and goes into commercial production during the period in which the policy is in force, there is no justification for the Government to deny the benefits under the police even though capital investment might have made prior to the effective date.
9. No doubt, neither the 1986 I.P.R. nor the 1989 I.P.R. defines as to what is an existing industrial unit. But Clause 2.2 relating to exemption etc. which has been quoted above speaks of an existing industrial unit. Clause 11.1.1 which relates to the exemption of electricity duty with which we are presently concerned, as quoted above, does not speak of any continuing industry but speaks of exemption of minimum charges in respect of 'existing' and 'new industrial' unit and therefore, this clause which is relevant for our present purpose makes the incentive available to an existing industrial unit. In the absence of a defining clause in the 1989 I.P.R, taking into account the two clauses mentioned above, it would be legitimate to hold that the intention of the Government could not have been to deprive an existing industrial unit from availing the benefits under the policy. Therefore, we persuade ourselves to give a definition to an existing unit being fully conscious of the spirit and language of the 1989 I.P.R.
10. Realising the deficiency to be a material one, Government of late thought it rather appropriate in the 1992 I.P.R. providing a defining clause for an existing industrial unit under Clause 2.2 meaning, an industrial unit which has gone into production before the effective date. This definition in the 1992 I.P.R. is not imported for the purpose of the case at hand nor we propose to interpret the same to gain support for the present case since the implication of the 1992 I.P.R. is not for our present consideration. This is mentioned only for the purpose of pointing out that Government of late thought of giving a definition to an existing industrial unit which was not earlier in the 1989 I.P.R. Therefore, taking into account that the petitioner-industrial unit got a permanent registration certificate on 16-1-1992 vide Annexure-2 and it got the power supply on 20-10-1991 from the erstwhile OSEB and went into commercial production on 25-11-1991, we have thought it appropriate to hold that for the purpose of the 1989 I.P.R. the petitioner-unit was an existing unit having already been set up as on the date of its application for exemption, i.e. dated 24-7-93. We have held that the factory had already been set up by the date of application for exemption following the meaning given to the words 'set up' by the Supreme Court in the case of Commissioner of Wealth Tax Madras v. Ramaraju Surgical Cotton Mills Ltd., AIR 1967 SC 509 followed by this Court in the case of Crown Re-Roller (supra). Thus there is no reason for the Government to refuse the benefit/incentive by interpreting the clauses of the 1986 I.P.R. the benefit under which admittedly the petitioner-unit did not try to avail.
11. Mr. Ray has relied on the decision in the case of Crown Re-Roller (supra) to support his contention. The points raised in that case being similar to the present case, we accept the conclusion drawn in that case, though ours is for different reasons.
The learned counsel for the State has relied on the case of Gulab Oil Industries (supra) in which the Bench has taken a contrary view to the case in Crown Re-Roller and held that the unit could not come under the definition of a new industrial unit since capital investment was made prior to the effective date i.e. 1-12-1989 for the purpose of the 1989 I.P.R. But in the present case we have proceeded with a completely different reasoning and held that the petitioner-unit is entitled to the benefit/incentive because it is an existing unit and therefore the decision in Gulab Oil Industries case is of no assistance to the State counsel.
We however make it clear that such benefit should be made available only from the date of application and not retrospectively from any earlier date whatsoever.
12. In the result, the writ petition is allowed. The petitioner-unit is entitled to the exemption of the electricity duty as per the 1989 I.P.R. from the date of application. The letter of opposite party No. 4 under Annexure-1 is quashed. The opposite party No. 4 is hereby directed to recalculate the bill under Annexure-7 and accordingly demand the same on the petitioner-unit. Needless to point out that any amount of electricity duty paid in excess after 24-7-1993 shall be adjusted towards the future demand against the petitioner-unit. No cost.
P.K. Mlshra, J.
13. The subsequent Division Bench decision in Gulab Oil Industries case did not follow the ratio of the decision in Crown Re-Rollers case (supra) mainly on the ground that appeal was pending before the Supreme Court against the decision of this Court in the said Crown Re-Rollers case. As a matter of fact, as admitted at the Bar, though Special Leave Petition had been filed against the decision of this Court in the Crown Re-Rollers case, the said petition had been dismissed by the Supreme Court on the ground of limitation as delay in filing the Special Leave Petition had not been condoned. Subsequently, however, appeals had been filed by the State against subsequent decisions of this Court which were based on the decision in Crown Re-Rollers case and operation of those decisions had been stayed by the Supreme Court. Law is well-settled that mere filing of an appeal against the decision of the High Court does not take away the precedent value of such decision unless there is a clear direction to that effect by the appellate Court while granting stay of operation of the decision. Besides, merely because stay had been granted in respect of decisions passed subsequently by the High Court by relying upon the principle contained in the Crown Re-Roller case it cannot be taken that the operation of the decision in Crown Re-Roller's case itself had been stayed. Since earlier decision was and is still holding the field, the law of precedents requires that the same should be followed unless the matter is referred to a larger Bench and a contrary decision is taken. Subject to these observations, I concur with the views expressed in the judgment of my learned brother D.M. Patnaik, J.