UNION OF INDIA versus KRIMPEX SYNTHETICS LTD.

Citation: [2005] SUPP. 2 S.C.R. 886 · Decided: 24-08-2005 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Dismissed

Judgment (excerpt)

A 
B 
UNION OF INDIA 
v. 
KRIMPEX SYNTHETICS LTD. 
AUGUST 24, 2005 
[ASHOK BHAN AND S.B. SINHA, JJ.] 
Government Grants-Central Outright Grant or Subsidy Scheme 1971 
and Manual para. 2. 3-Claim for Central Investment Subsidy--Eligibility 
and Procedure-Respondent's claim rejected-Writ petition to High Court 
C dismissed-This Courts direction to make representation to the Joint 
Secretary-Order that all applications filed up to 30.9.1988 should be 
considered for grant of Subsidy provided the said applications were complete 
in terms of the scheme-Respondent was held entitled to subsidy of 25% on 
the sum of Rs. 50, 72, 2581 by the High Court-Claimed subsidy of Rs. 25 
lacs on the basis of material placed/or the first time before the High Court-
D Held, the High Court was right in rejecting the claim. 
Government Grants-Claim for Central Investment Subsidy--The 
High Court held the respondent entitled to subsidy of 25% on the sum of 
Rs. 50, 72, 258-Appeal filed by Union of India alleging that premises of 
E respondent company were closed and that the company seems to have gone 
in liquidation-No evidence on record to reveal that the company had gone 
into liquidation or had closed down-Held, respondent's claim cannot be 
rejected. 
With a view to promote growth of industries in certain selected less 
F developed districts and areas, the Government of India introduced the 
Central Outright Grant or Subsidy Scheme 1971 for the industrial units. 
Respondent's claim for the subsidy was rejected by the Government. A 
writ petition filed in the High Court was disposed of. On appeal, this Court 
directed several industries including respondent to make representations 
to the Joint Secretary, Ministry of Industry. Joint Secretary took the 
G stand that all applications filed up to 30.9. 1998 should be considered for 
grant of subsidy provided they were complete in terms of the scheme. 
Respondent's claim was rejected by the Joint Secretary. Case was remanded 
to the High court for fresh decision. 
H 
During the course of hearing before the High Court respondent filed 
886 
U.O.l. v. KRIMPEX SYNTHETICS LTD. 
887 
an additional affidavit showing that he had expended more than Rs. 100 A 
lacs in fixed assets before the cut off date and therefore was entitled to 
the maximum subsidy of Rs. 25 lacs. This contention had been rejected 
by the High Court by observing that material which had not been placed 
before Joint Secretary could not be taken into consideration because as 
per remand order the High Court was to keep in view the order passed B 
by the Joint Secretary, though the High Court could take its own decision 
on merit of the case. The only material which could be taken into 
consideration was the material which had been placed before the Joint 
Secretary. The High Court held that the respondent was entitled to subsidy 
of 25% on the sum of Rs. 50,72,258. 
Hence the present appeal and cross appeal. 
Respondent pleaded that he was entitled to the maximum subsidy 
available under the scheme to the tune of Rs. 25 lacs. Appellant alleged 
c 
that as premises of the respondent-Company were closed and the company D 
seems to have gone into liquidation, it was not entitled to any subsidy. 
Dismissing the appeals, the Court 
HELD: l. The High Cou;t was right in holding that the only material 
which could be taken into consideration was the one which was produced E 
before the Joint Secretary as this Court had remanded the case to the 
High Court to take the final decision keeping in view the order passed by 
the Joint Secretary. From the remand order it can be deciphered that the 
High Court was not supposed to entertain any fresh material, though the 
High Court could take its own decision on merit of the case. An opportunity F 
was given to the claimants to file their representation to the Joint Secretary 
along with the material on the basis of which decision was taken by the 
Joint Secretary regarding the eligibility of the claimant to get the subsidy. 
The material which was sought to be produced before the High Court 
should have been produced before the Joint Secretary and it was for the 
Joint Secretary to take the decision on it. [893-C, D] 
G 
2. As per the scheme a company which went out of production within 
5 years of tile start of production was not entitled to the subsidy. Apart 
from the averment that company seems to have gone into liquidation, no 
other material was placed before the court to show that in fac

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