Summary
Ultratech’s Kotputli unit was entitled to investment subsidy capped at 50%, rather than the 75% erroneously sanctioned by the screening committee. BIDI had neither approved the higher limit under the applicable proviso nor granted a customised package. Revision and recovery of the excess were upheld. Interest was reduced from 18% to 12% annually: there was no breach or misrepresentation attracting the scheme’s 18% clause, but the company had expressly undertaken to repay excess benefits with 12% interest.
Issues
- Whether BIDI’s decision entitled the unit to 75% subsidy notwithstanding deletion of the special cement provisions.
- Whether contemporaneous administrative interpretation, promissory estoppel or completion of the subsidy period barred revision and recovery.
- What interest was recoverable on excess subsidy.
Provisions considered
- Clauses 6, 6A and 7, Rajasthan Investment Promotion Scheme, 2003The screening committee could not assume BIDI approval to exceed the ordinary 50% cap; neither a higher-limit decision nor a customised package was established. (¶¶ 5.3, 5.4, 5.4.1, 19, 20, 21, 23)
- Clause 13, Rajasthan Investment Promotion Scheme, 2003Revision required an erroneous order prejudicial to State revenue and was available within five years after benefits were fully availed. Both conditions and the time limit were satisfied. (¶¶ 5.6, 27, 28, 29)
- Clause 10, Rajasthan Investment Promotion Scheme, 2003The 18% interest consequence required breach of a stipulated condition; excess payment caused by the committee’s error did not establish such breach. (¶¶ 5.6, 33, 33.1, 33.3)
Held
- BIDI’s direction concerned the then-existing cement package and applicable scheme. The special cement clauses were deleted before sanction, and BIDI had not separately approved an enhanced cap or customised package. The screening committee’s contrary decision was perverse rather than a permissible alternative view. (¶¶ 19.1, 20, 20.1, 20.2, 21, 23, 24.1)
- Eligibility for these fiscal incentives required strict construction. Contemporaneous administrative construction could not protect a clearly erroneous decision, and promissory estoppel could not enforce an unauthorised benefit; no qualifying representation by the State was established. (¶¶ 24.2, 24.3, 25.3, 25.4, 26.1, 26.2, 26.3)
- The erroneous excess subsidy prejudiced State revenue. Revision within five years after the company had fully availed benefits was valid, notwithstanding completion of the seven-year benefit period. (¶¶ 27.2, 28, 29, 30.1)
- Neither breach of scheme conditions nor misrepresentation justified 18% interest. The company’s undertaking to repay excess benefits with 12% interest bound the parties; that rate applied from availing excess subsidy until payment or recovery. (¶¶ 33, 33.1, 33.2, 33.3, 33.4, 33.5, 34)
Result
Appeal partly allowed only as to interest, reduced to 12% per annum from availing excess subsidy until payment or recovery. Recovery and the 50% entitlement upheld. Parties to bear their own costs.