w w w . L a w y e r S e r v i c e s . i n



Tripura Fibre Glass Industries v/s State of Tripura


Company & Directors' Information:- K S GLASS INDUSTRIES PRIVATE LIMITED [Active] CIN = U26100GJ2010PTC062375

Company & Directors' Information:- S S S FIBRE LIMITED [Active] CIN = U17110PB2005PLC027818

Company & Directors' Information:- F M GLASS INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1991PTC045350

Company & Directors' Information:- J K S FIBRE GLASS PVT LTD [Strike Off] CIN = U26109WB1993PTC059966

Company & Directors' Information:- K J GLASS INDUSTRIES PRIVATE LIMITED [Active] CIN = U26960MH2011PTC212552

Company & Directors' Information:- M S GLASS INDUSTRIES LIMITED [Under Liquidation] CIN = U27203WB2008PLC125907

Company & Directors' Information:- TRIPURA INDUSTRIES LIMITED [Strike Off] CIN = U15137TR2009PLC008265

Company & Directors' Information:- B D J GLASS INDUSTRIES PVT LTD [Active] CIN = U26101WB1991PTC052005

Company & Directors' Information:- J G GLASS INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U99999MH1963PTC012627

Company & Directors' Information:- O K GLASS FIBRE PRIVATE LIMITED [Active] CIN = U26102MH1995PTC095571

Company & Directors' Information:- G L FIBRE PRIVATE LIMITED [Strike Off] CIN = U17112PB2010PTC033873

Company & Directors' Information:- S K GLASS INDUSTRIES PRIVATE LTD [Strike Off] CIN = U26101DL1981PTC012407

Company & Directors' Information:- INDIA FIBRE PVT LTD [Active] CIN = U17232WB1968PTC027401

Company & Directors' Information:- S M GLASS INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U74900PN2013PTC146888

    Civil Rule 260 Of 1990

    Decided On, 19 June 1997

    At, High Court of Assam

    By, THE HONOURABLE MR. JUSTICE N.G. DAS

    For the Appearing Parties: T. Banerji, S. Deb, B. Debnath, A. Chakraborty, A.M. Lodh, M.K. Dutta, A. Ghosh, Advocates.



Judgment Text

(1) The petitioner No. 1 which is a Proprietor-ship concerned named "Tripura Fibre Glass Industries" and petitioner No. 2 who is the owner of the aforesaid Proprietorship concern have prayed for the issue of a writ of mandamus directing the respondents to disburse all the amounts that fell due to the petitioner in accordance with the assurance and promises made by the respondents in connection with the Tripura Fibre Glass Industries including the balance amount of the term loan to the petitioners and the amounts sanctioned to the petitioners by way of capital investment subsidy.

(2) The case of the petitioners is that in order to set up a Fibre Glass manufacturing unit in the State of Tripura, the petitioner No. 2 after obtaining necessary registration applied to the respondent Nos. 2 and 3 for allotment of land to set up the aforesaid industry. The respondent Nos. 2 and 3 made the provisional allotment of a plot measuring O'135 acres in the D-Block of the industrial Estate located at Dukli-Madhuban, Agartala. This provisional allotment of the land was made subject to the payment of premium at the rate of Rs. 10,000/- per acre in four instalments upon final allotment besides annual rent at the rate of Rs. 12,000/- per acre.

(3) On receipt of the provisional allotment order dated 11-2-1987 the petitioners complied with all necessary stipulations contained therein and thereafter a deed of lease was executed on 8-7-88 by and between the respondent No. 2 and the petitioner No. 2 whereby a plot measuring D'30 acres was leased to the petitioners for a period of 30 years with effect from 13-3-1987 on payment of a total premium of Rs. 3,000/- and annual rent of Rs. 300/- subject to other conditions mentioned in the lease deed.

(4) After getting thisa provisional allotment of the land the petitioner No. 2 on behalf of petitioner No. 1 submitted an application on 6-7-1987 along with all necessary documents for sanctioning a sum of Rs. 49,50,000/- to set up the aforesaid industrial unit. On the basis of this application dated 6-7-1987 respondent No. 3 in his turn informed the petitioner No. 2 by his letter dated 27-1-1988 that the Tripura Industrial Development Corporation (for short TIDC) agreed on principle to grant to the petitioners a term-loan for an amount of Rs. 3'75 lakhs subject to the conditions mentioned therein. The petitioners complied with all the terms and conditions and accordingly the loan agreement dated 17-2-1988 was signed by and between the respondent No. 3 and petitioner No. 2, for a term-loan of Rs. 3'75 lakhs.

(5) It is stated that the loan agreement dated 17-2-1988 contained various terms and conditions including the condition that all fixed assets (present and future) would have to be fully insured by the petitioners and that the insurance policy would have to be taken up in the joint names of respondent No. 3 and petitioners and policy of insurance so taken has to be lodged with the respondent No. 3.

(6) As the petitioners applied for a total loan of Rs. 49,50,000/- they pursued the matter and in response to their representation the respondent No. 3 by a communication dated 12-1-1988 informed the petitioners that the TIDC agreed to sanction an additional term-loan of Rs. 19 lakhs to the petitioners subject to the conditions mentioned in the letter of sanction sated 12-1-1988 (Annexure-2/A). The petitioners accepted all conditions and accordingly a loan agreement dated 30-9-1988 was executed and in pursuance thereof the TIDC agreed to sanction a term loan of Rs. 19 lakhs for expansion of the project. This loan agreement dated 30-9-1988 also contained comprehensive terms.

(7) It is stated that two term loans totalling Rs. 22.75 lakhs were sanctioned by respondent Nos. 2 and 3 on the basis of the appraisals made by the officers of the respondents. As per this appraisal made by the officers of the respondents a sum of Rs. 39.71 lakhs was worked out as the total project cost. The means of finance which was approved by the respondent Nos. 2 and 3 consisted, in addition to the term-loan of Rs. 22.75 lakhs, an amount of Rs. 8.11 lakhs as promoters contribution and Rs. 8.85 lakhs as capital investment subsidy. However, as per the terms and conditions of the agreement dated 17-2-1988 and 30-9- 88 the petitioners were required to apply for such subsidy. The project cost as worked out at the first stage was calculated at Rs. 6.26 lakhs and at the second stage which was worked out at Rs. 33.45 lakhs totalling a sum of Rs. 39.71 lakhs. (8) As per the terms and conditions of the loan agreement the petitioners claimed for grant of capital investment subsidy to the extent of Rs. 1.42 lakhs being the 25% of the total investment. The petitioners were, however, granted subsidy of Rs. 1,38,154.00 being 25% of the project cost of Rs. 5,52,617.41 paise and thereafter an agreement bond dated 7-7-88 was signed. But it is stated that the term-loan sanctioned on 27-1-1988 and 12-7-88 against the term-loan agreement dated 17-2-1988 and 30-9-1988 respectively, the petitioners received only a total sum of Rs. 11,66,537.00, the last payment being made on 6-10-1988. Against the grant of capital investment subsidy to the extent of Rs. 1,38,154.00 thepetitioners received a sum a little over Rs. 1.03 lakhs. An amount of Rs. 14,387/- was sought to be adjusted from the subsidy amount against recovery of interest up to 30-6-1988.

(9) However, by communication dated 28-10-88 the respondent No. 3 informed the petitioner that TIDC sanctioned a bridge loan amounting to Rs. 6 lakhs in favour of the petitioner's unit against capital investment subsidy to be granted by the Director of Industries. Thereafter a loan agreement dated 28-10-1988 was executed for the bridge loan of Rs. 6 lakhs to be adjusted along with interest at the time of sanction of capital investment subsidy by the Director of Industries (Annexures-5 and 6).

(10) Thereafter, on 6-2-1989 the petitioner No. 2 submitted an application to the Director of Industries to the Government of India for payment of capital investment subsidy to the extent of Rs. 7,18,475.50 paise against the total capital investment of Rs. 28,73,905/- up to the period of 25-1-1989. By the said application dated 6-2-1989 the petitioners also claimed a sum of Rs. 32,958/- on account of refund of money spent on stamp duty and registeration fee for the loan agreement etc. which is fully refundable under the Scheme known as "State Pakage" incentives over the Director of Industries.

(11) It is stated that the claim made by the letter dated 6-2-1989 were duly enquired and the respondent No. 4 by an order dated 5-12-1989 sanctioned an amount of Rs. 7,41,182/- in the name of petitioner No. 1 whereafter an agreement bond dated 28-10-1989 was signed. The amount of Rs. 7,41,182/- was sanctioned vide Annexure-8 and the loan agreement in pursuance thereof dated 28-10-1989 is Annexure-9.

(12) But it has been alleged that notwithstanding the sanction of an amount of Rs. 7,41,182/- by the respondent No. 4 on account of the second instalment of capital investment subsidy and execution of the agreement bond dated 28-12-1989 thereto, the respondent Nos. 4 and 5 did not disburse the said amount to the petitioners. It is stated that due to the failure of the respondent Nos. 4 and 5 to disbuse the amount of capital investment subsidy sanctioned to the petitioners, the latter are now required to pay heavy amount by way of interest on the bridge loan without any fault on their part even though respondent Nos. 2 and 3 received the money receipt of Rupees 7,41,182/- from the petitioner No. 2.

(13) It is further stated that even though the petitioners were informed by a communication dated 30-11-1989 issued to the Corporation for payment of an amount of Rs. 28,786/- to the petitioners on account of his subsidy the said amount remained unpaid (Annexure-10).

(14) It is further stated that against the total sanction amount of Rs. 22.5 lakhs an amount of Rs. 11,08,463/- remained unpaid. The last payment which was received in this regard was made on 6-10-1988 when an amount of Rs. 8 lakhs was paid. The petitioners, thus received a total sum of Rs. 11,66,537/-. The petitioner, therefore, submitted a series of representation for disbursement of the balance amount (Annexure-11). So, to avoid total collapse of the project the petitioner had to resort to a short term borrowing at heavy reate of interest from private sources. Therefore, respondent No. 3 by his letter dated 29-1-1990 asked the petitioners to furnish further information including the names of the persons from whom the petitioners borrowed money. The petitioner sent the reply.

(15) Thereafter, the petitioner No. 2 by his letter dated 31-10-19089 requested the respondent No. 3 to extend the period of repayment of the term loan together with interest. The said letter was followed by another representation dated 2-1-1990. The respondent No. 3, however, by his communication dated 14-3-1990 rejected the prayer. (Annexure-12). Not only that the respondents bent upon reiterating their demand for documents, certificates etc. although those were already submitted by the petitioners. It is stated that subsequent to the issue of letter dated 14-3-1990 (Annexure-12) the petitioners were informed of the constitution of a purported enquiry Committee to make certain enquiries with regard to the working of the project of the petitioners. The petitioners have stated that they took a bridge-loan of Rs. 6 lakhs at 12.5% interest in anticipation of being granted capital investment subsidy which in fact was granted on 6-2-1989. This bridge loan according to the terms of the loan agreement dated 28-10-1988 (Annexure-6) is to be liquidated against the amount granted by way of subsidy. But that was not liquidated. As a result of those inaction on the part of the respondents the petitioner No. 2 has now no alternative other than to dispose of the fixed assets of petitioner No. 1 to liquidatethe private borrowings.

(16) It is stated that the petitioners could not have taken such a huge project had there been no promise on the part of the respondent Nos. 2 and 3 to make available the term-loan. The petitioners have stated that due to assurance received from the respondents the petitioners invested huge amount and as such on the basis of the doctrine of Promisory Estoppel the respondent Nos. 2 and 3 are estopped from taking any course of action contrary to the promise made and to refuse to pay the term loan sanctioned to the petitioners. It has been alleged that to avoid their promises and commitments the respondents have taken various pretext and appointed an Enquiry Committee. It is stated further that holding back the part of the term loan and a part of the first instalment subsidy besides the amount of subsidy under the pakage Scheme are arbitrary and hence this Court in exercise of its writ jurisdiction can very well direct the respondents to disburse of the amounts that fell due to the petitioners in accordance with the assurance and promises made by the respondents in connection with the Tripura Fibre Glass Industries.

(17) The respondent Nos. 2 and 3, namely, TIDC and its Managing Director resisted the writ petition by filing an affidavit-in-opposition wherein it has been contended, inter alia, that the writ petition is not maintainable as the petitioners have not exhausted alternative remedy. It is contended that the Government of Tripura as well as TIDC provided financial assistance to the persons who are genuinely interested in setting up industrial units in the State and in every case loans are disbursed in a phased manner after taking into consideration of the progress made by such industrial units. This being the object of the respondents, the respondents Nos. 2 and 3 made allotment of land to the petitioners provisionally by an order dated 30-7-1987 and on the basis of that a lease deed dated 8-7-1988 was also executed. But the petitioners defaulted in making payment of the premium as well as the rent for the year 1989-90 as per the terms and conditions agreed to by the parties. The answering respondents thus denied all the material averments of the writ petition. It is stated that as per general terms and conditions for financial assistance and specially as per term No. 7 the loan or any part thereof cannot be disbursed unless all the terms and conditions of sanctioned loan are fully complied with by the petitioners. But the petitioners failed to submit the vouchers of promotors contribution as per terms and conditions stipulated in the Memo dated 27-1-1988 contained in Annexure-A.

(18) The answering respondents dispute about the date in respect of receipt of the last payment. It is stated that last payment was received by the petitioners on 29-10-1988 and not on 6-10-1988. It is further contended that the amount of Rs. 32,958/- as subsidy on stamp duty and registration fees was placed at the disposal of the answering respondents vide release order dated 3-11-1989. It is further stated that the State Level Committee recommended an amount of Rs. 7,41,182/- in the meeting held on 18-12-1989 and 20-12-1989 but the petitioners did not submit all necessary vouchers, money receipts of purchase in respect of which subsidy was claimed and as such payment was not made.

(19) It is stated that the Government of Tripura constituted a Committee for enquiry into the utilisation of the fund and the creation of assets by the petitioners and accordingly a letter was issued to the petitioner No. 2 on 28-2-1990 asking him to be present before the Enquiry Committee on 30-3-1990 at 4.30 p.m. But the petitioner failed to comply with and they did not submit the original vouchers, money receipts etc.

(20) As regards the contention of "Pakage incentives" it is contended that the amount sanctioned against Pakage incentives was adjusted against the outstanding arrears of the petitioners as per the norms and as such the question of payment of the same did not arise at all. In this context it has been further contended that on 25-1-1989 the petitioners were requested to remit an amount of Rs. 72,759/- towards payment of quarterly interest and the first half yearly instalment on principal amount. But the petitioners failed to pay the same. Thereafter on 1-4-1989 the petitioner No. 2 was again informed that on physical inspection by the technical officer it was found that the petitioner incurred an expenditure of Rs. 1,20,300/- against the total disbursement of Rs. 11 lakhs and that the plant and machinery was not found at the site. The petitioners were, therefore, asked to submit account of utilisation of the loan already disbursed to them. Subsequent to that on 18-4-1989 another demand was madetowards quarterly interest on principal amount of Rs. 1,29,509/- including the earlier arrear. On 8-8-1989 another letter was issued to the petitioners demanding quarterly interest along with principal including arrears amounting to Rs. 2,01,767/-. Similarly on 18-9-1989 another demand was issued for an amount of Rs. 2,64,520/-. But in spite of all these communications the petitioners did not pay any amount (Annexures-F, G, H., I and J).

(21) As regards the contentions set-forth in paragraphs 14, 15, 16 and 17 the answering respondents denied all the material averments and stated further that the petitioners failed to comply with the necessary requirements. It has been stated that as per the terms and conditions the petitioners were to maintain separate books of Accounts and to submit the same to the respondents in respect of the progress of the project. But the petitioners failed to submit the books of Accounts with all original vouchers, documents etc. They also failed to submit the original vouchers justifying the expenditure of Rs. 8.11 lakhs. It has been further stated that the petitioners not only failed to submit the documents, vouchers etc., but they also failed to fulfil the requirement of the terms and conditions of the agreement (Annexures-2 and 3 of the writ petition).

(22) It has been further contended that as per the writ petition the petitioners already invested an amount of Rs. 41.97 lakhs against the total project cost of Rs. 39.71 lakhs. This being the admitted position it was not made clear why they failed to run the industry. Therefore, in view of the aforesaid circumstances, the Government of Tripura in its wisdom thought it fit to make an enquiry into the functioning of the petitioners industries in the interest of general public. But it is not understandable why the petitioner No. 2 is avoiding to face the enquiry. It is averred that as per terms the payment of loan instalments was to commence 12 months after the first disbursement which was over long back. There is no provision of contingent repayment in Clause 5(a) of the Agreement. It is contended that the petitioners having failed to fulfil the conditions they are not entitled to get balance amount of term loan.

(23) It is further contended that all the transaction being contractual in nature, the rights and liabilities of the parties having been clearly mentioned in the agreement and the answering respondents having not refused to perform its duty whereas the corresponding duties were not performed by the petitioners the doctrine of Promissory Estoppel is not applicable in the present case. It is stated that this writ petition has been filed with some ulterior motives. Therefore, it is liable to be dismissed.

(24) In their rejoinder-affidavit the petitioners denied that the financial assistance offered to them were based on agreement which created contractual obligation. It has been stated that the petitioners were not defaulter in making payment for the year 1989-90 as per the terms and conditions. It is stated that the rent was fully paid for the year ending 31-3-1989 and that the rent for the year ending on 31-3-1990 could not be paid as the authority who was entrusted with the responsibility refused to receive the payment. It has also been denied that the petitioners failed to submit vouchers of promotors. It has been alleged that the Enquiry Committee was constituted just to defer the payment. There was no stipulation in the deed of agreement that the petitioners were to maintain the books of accounts. However, petitioners maintained the books of accounts and those were also duly authenticated and certified by the approved Chartered Accountants. (25) The respondent No. 2 on the other hand alleged in his rejoinder affidavit that the petitioners did not submit the original money receipt. Moreover, they failed to furnish any material of their income and source of investment of Rs. 6.85 lakhs (Annexure-5). It was alleged that investment of Rs. 29,64,728/- was nothing but a bogua claim as "Mass International, 9 Gulf Club Road, Calcutta" has no existence at all. It was alleged further that it was the creation of the petitioners only to cheat the parties.

(26) An affidavit-in-opposition has also been filed by one Deputy Secretary to the Government of Tripura on behalf of the respondents. It has not been specifically stated whether this affidavit has been filed on behalf of the respondents Nos. 1, 4 and 5. However, it has been stated, inter alia, that the Government decided that the subsidy would be entertained not on the project cost but on the value of the plant, machinaries and civil construction assessed by the Committee. It is stated that as per the terms of the enquiry, an Enquiry Committee was constituted and found in the original project report submitted to the respondent No. 2 by the petitioner No. 1 that there was a provision of Rs. 10.30 lakhs for constructionof factory-shed, site development, boundary wall with gate, sanitary installation etc. It has been contended that there was also a provision in the project report that the agency charge would be at the rate of Rs. 10%. The cost of construction as envisaged without the agency charge was Rs. 9.3 lakhs. But as per the assessment made by the Enquiry Committee the actual value of the civil construction is found to be Rs. 8,17,970/- including the supervision charge at the rate of Rs. 5%. It has been stated that the petitioner No. 1 is entitled to get central investment subsidy at the rate of Rs. 25% on Rs. 8,17,970/- only which comes to Rs. 2,04,492/-. Thus a sum of Rs. 1,38,154/- would be deducted out of Rs. 2,04,492/-. This amount was sanctioned and was also drawn and placed with TIDC for adjustment. The petitioner No. 1 is finally entitled to get a sum of Rs. 66,338/- only as Central Government subsidy on civil construction.

(27) It has been further stated that as per the original project submitted by the petitioner No. 1 there was a provision of Rs. 25,15,000/- only for machinery and equipment. But as per the report of the Enquiry Committee the actual value of investment made on machinery and equipment was Rs. 13,16,418/- as against investment of Rs. 23,94,719/-. The petitioner No. 1 is accordingly entitled to get Central investment subsidy on machinery and equipment at the rate of Rs. 25% on Rs. 13,16,418/- which comes to Rupees 3,29,104/- only. Therefore, the total subsidy to be borne by the Government comes to Rupees 3,29,104/- plus Rs. 66,338/- i.e. Rs. 3,95,442/-.

(28) The petitioner No. 2 filed a rejoinder-affidavit against this affidavit filed by the State wherein it has been stated that out of total term loan of Rs. 22.75 lakhs sanctioned by the respondents, the petitioners were only paid a total sum of Rs. 11,66,537/-. A detailed narration of the facts of this rejoinder affidavit is not necessary as the points referred to in this affidavit will be discussed later on.

(29) It would now be quite apparent from the facts stated above that while the contention of the petitioners is that principle of promissory estoppel estop the respondents from backing out of its obligation arisen from the agreement entered into by the parties for setting up the industrial unit, namely, Tripura Fibre Glass Industries, the contention of the respondents in the first place is that such an application under Article 226 of the Constitution of India is not maintainable as there are so many disputed facts which require assessment of evidence, the correctness of which can only be decided satisfactorily by taking detailed evidence by involving examination and cross-examination of evidence and in the second place it has been contended that the agreement entered into by the parties do not contain any statutory term or obligation attracting Article 14 of the Constitution of India. It is stated that contract entered into by the parties is non-statutory and purely contractual and as such the relations are no longer governed by the constitutional provision, but by the legally valid contract which determines the rights and obligations of the parties inter se.

(30) Mr. Banerjee, the learned counsel appearing on behalf of the petitioners has, however, contended that this case is very much covered by the principle of promissory estoppel as the respondents committed breach of solemn undertakings. In support of his contention Mr. Banerjee has placed reliance upon a number of decisions of the Supreme Court. One of those is the decision rendered in the case of Gujarat State Financial Corporation v. M/s. Lotus Hotels Pvt. Ltd., AIR 1983 SC 848. The learned counsel for the respondents in their reply have submitted that this decision is not applicable to the present case mainly on the ground as already stated.

(31) What happened in this case was that M/s. Lotus Hotel Pvt. Ltd. (Company for short) which was incorporated mainly to carry on the business of hotel, restaurant etc. processed to set up a 4-Star Hotel under the name and style of Lotus Hotel. After acquiring the land where the proposed 4-Star Hotel would be set up at Baroda the Company approached the appellant-corporation, namely, Gujarat State Financial Corporation (for short Corporation) for a loan of Rs. 30 lakhs. The Corporation by a letter sanctioned a loan of Rs. 29.93 lakhs on certain terms and conditions. The Company accepted the terms and conditions and as a part of deal executed an equitable mortgage in favour of the Corporation for securing the loan. But the trouble erupted due to receipt of two pseudonymous letters addressed to the Chief Minister, Gujarat where some allegations were made against the promotor Shri Jaiswal about his character and credit-worthiness and also pointingout that he was facing several prosecution in various Courts on account of his nefarious activities. Some enquiry was started and ultimately by its letter dated 13-2-1979 Industrial Development Bank of India (IDBI) informed the Corporation that in view of the pending police enquiry against the promotor Shri Jaiswal the application for refinancing is treated as closed. But by that time all necessary documents required to be executed by Company in favour of the Corporation enabling it to receive the loan were executed. Considering these documents and the rate of interest etc. their Lordships made the observation that because of the solemn promise by the Corporation the Company undertook such a huge project and as such the Corporation was under a statutory duty to perform its such statutory duty. Therefore, the principle of promissory estoppel would estop the Corporation from backing out of its obligation arising from a solemn promise.

(32) But in the present case as already pointed out above the petitioners executed an agreement on 17-2-1988 which contains so many terms and conditions. Annexure-1 letter dated 27-1-1988 addressed to the petitioner No. 1 by the Managing Director, TIDC shows that the loan of Rs. 3.75 lakhs is subject to special terms and conditions as well as general terms and conditions of TIDC. It was clearly mentioned in the letter that the amount has to be utilized for the project and all assets created out of those loans are to be insured, the policy being assigned in favour of TIDC and the cost of which is to be debited to the loanee's account. The loan agreement executed on 17-2-1988 shows, inter alia, that in case the second party i.e. the petitioners fail to comply with any of the terms and conditions then the outstanding amount along with interest shall immediately become due and payable to the TIDC. Para 16 of the Agreement further shows that the petitioners are to maintain separate books of accounts and submit it to TIDC at intervals.

(33) The respondent No. 2 contended that the petitioners failed to submit the books of accounts to the respondents. The petitioners in their additional-affidavit stated that there was no such stipulation in the agreement. But Clause 16(a) of the agreement dated 17-2-1989 clearly shows that such a condition was there. The relevant portion may be extracted as follows :-

"16(a). The second party shall keep and maintain separte books of accounts in respect of the second parti's aforesaid project and submit to the first party progress report on the physical and financial progress of the probject. . . . . . . . . . . . . . .at stipulated intervals."

(34) In this context it has been further argued by the learned counsel for the respondents that there was a specific stipulation in the agreement that as and when required the officers of TIDC would inspect the progress of industrial unit and the original vouchers, money receipts in respect of purchase of machineries etc. have to be produced. It was alleged that the petitioners not only failed to produce those original vouchers but they also remained absent before the Enquiry Committee on 30-3-1990. The reply of the petitioners as would be evident from para 8 of the rejoinder-affidavit dated 10-9-1990 is that without necessary vouchers, money receipts etc. claim of subsidy made by the petitioners could not have been processed and could not have been sanctioned in favour of the petitioners. There is, however, no specific averment to the effect that the petitioners actually produced the original money receipts, vouchers etc. in respect of purchase of machineries. Therefore, to determine the question as to whether petitioners actually produced the vouchers, money receipts etc. or not, evidence is necessary as this is nothing short of a disputed fact.

(35) It has been next argued by the learned counsel for the respondents that respondent No. 2 specifically alleged that the petitioners claim that they invested a sum of Rs. 29,64,728/- was nothing but a bogus claim. It is contended that the payment for purchase of materials from Mass International, 9 Golf Club Road, Calcutta is absolutely false as such a factory under the name Mass International has no existence at all. It has been argued by the learned counsel for the respondents that "Mass International" is nothing but a creation of the petitioners only to cheat the TIDC. The petitioners in their additional affidavit have claimed that Mass International is very much in existence and the respondent No. 2 never raised any question as to its existence. It is for the first time that respondent No. 2 raised the question as to the existence of Mass International in their counter-affidavit. But the record viz. Annexure-R letter dated 20-4-91 from the Directorate of Cottage and Small Industries, Govt. of West Bengal shows that theDirector made a surprise inspection on 19-4-91 when he found that no such factory in the name of Mass International on 9 Golf Club Road or Asha Road was in existence. Not only this it was also contended that the Calcutta Telephone Directory, 1989 will show that the Telephone No. 463101 was actually recorded against the name of petitioner No. 2 even though the same number was shown against Mass International, 9 Golf Club Road.

(36) The report of the Enquiry Committee also shows that it actually did not make any endeavour to ascertain as to whether Mass International was in existence at the time of purchase of the machineries. The report of the Enquiry Committee on the other hand, shows that petitioner No. 2 himself stated that he was not quite sure as to whether all the items were actually manufactured by them or not. It is not in dispute that loan was processed by the TIDC on the basis of the quotation of the Mass International. But when the question as to its existence arose it ought to have been enquired into by the Enquiry Committee. But that was actually not done. Moreover, the Enquiry Committee made the finding that the value of assessment made by the Enquiry Committee for plants and machineries is Rs. 13,16,418/- against the investment of Rs. 23,94,719/-. The Committee, however, opined that this assessed amount might not indicate actual investment made by the T.F.I. on plants and machineries. The Enquiry Committee also made the finding that the flooring was not complete.

(37) It was also alleged by the respondent No. 2 that during physical inspection it was found that the petitioners incurred expenditure of Rs. 1,20,300/- against the total disbursement of Rs. 11 lakhs and that no plants and machineries were seen at the site. The petitioners in their additional-affidavit disputed and categorically denied this statement.

(38) It was next alleged by the respondents that the petitioners defaulted in payment of premium and also rent of 1989-90. The petitioners in their additional affidavit denied and stated that rent and premium for the land leased out to them were fully paid for the year ending on 31-3-1989. But no acceptable proof in support of this contention has been placed before this Court. Moreover, there is no acceptable proof to show in support of the assertion of the petitioners that they made several attempts to make payment of the rent and premium for the year 1989-90 and those attempts were frustrated as the authority under one or other pretext expressed their inability to accept.

(39) These are some of the disputed facts which in my opinion cannot be resolved without taking evidence, the correctness of which can be decided satisfactorily by taking detailed evidence involving examination and cross-examination of witnesses.

(40) A brief reference may, however, be made in respect of some of the decisions which Mr. Banerjee referred to in course of his arguments. One of those is the decision of the Supreme Court rendered in the case of Kumari Shrilekha Vidyarthi v. State of U. P., reported in AIR 1991 SC 537. By this decision their Lordships disposed of a bunch of similar matters comprising of some writ petitions under Article 32 of the Constitution of India and Special Leave Petition under Article 136 of the Constitution of India. The two questions which arose before their Lordships for decision were whether the impugned circular was amenable to judicial review and if so; was it liable to be quashed as violative of Article 14 of the Constitution of India being arbitrary? The subject was renewal of tenure of existing Government Counsel, calling of new panels for new appointment. It is clear that their Lordships were called upon to test the validity of the impugned circular on the anvil of Article 14 of the Constitution of India. I am, therefore, of opinion that on facts this decision is not applicable to the present case.

(41) In M/s. Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh, reported in AIR 1979 SC 621 the matter related to a news item dated 10th October, 1968 where it was stated that the State of Uttar Pradesh had decided to give exemption from sales tax for a period of three years under Section 4-A of the U. P. Sales Tax Act to all industrial units in the State with a view to enabling them to come on firm footing in developing stage. On the basis of this announcement the appellant in that case wrote a letter to the Director of Industries that he intends to set up a Hydrogenation Plant for manufacture of Vanaspati. The Director also informed that there would be no sales tax for 3 years. Thereupon the appellant started taking steps to contact various financiers for financing the probject and also initiated negotiation with manufacturer forpurchase of machineries for setting up the Vanaspati factory. In the meantime, the appellant also entered into some agreement with some private companies and submitted an application for formal order granting exemption. But that letter was not considered sufficient by the financial institutions as the State Government did not convey its decision till then. The brief reference of the facts will clearly show that the facts of that case are quite distinguishable from the present one. Moreover, it was also observed by their Lordships that when the Government is able to show that in view of the facts which have transpired since the making of the promise, public interest would be prejudiced if the Government were required to carry out the promise, the Court would have to balance the public interest in the Government carrying out a promise made to a citizen which has induced the citizen to act upon it and alter his position and the public interest likely to suffer if the promise were required to be carried out by the Government and determine which way the equity lies. In the case in hand, I have already mentioned some of the facts which clearly indicate that the petitioners failed to fulfil the conditions of the agreement.

(42) In the case of Century Spinning and Manufacturing Co. Ltd. v. Ulhasnagar Municipal Council, reported in AIR 1971 SC 1021, this case related to payment of levy of octroi duty which was exempted in respect of factories and industrial units for a period of 7 years by the District Municipality. On getting the assurance of concession the Company expanded its activities. But subsequently the Ulhasnagar Municipality which came into existence due to the enactment of Maharashtra Municipalities Act and it sought to levy octroi duty and to recover from the Company. In view of this fact the Supreme Court set aside the order of the High Court which was without reasons and allowed the appeal i.e. the relief sought for in the writ petition was allowed. This decision is not applicable to the present case as it would be quite apparent that there was virtually no disputed fact as in the present case.

(43) Coming now to the agreement it has been quite vehemently argued by Mr. Lodh that Annexure-A/1 letter dated 27-1-1988 and the loan agreement dated 17-2-1988 (Annexure-A/2) would clearly show that the petitioners entered into a contract with certain conditions to set up the industrial unit, namely, the Tripura Fibre Glass Industry and it is on those terms and conditions TIDC agreed to extend financial assistance. On going through those documents I find that the contract came into existence between the parties.

(44) The Supreme Court in the case of Bareilly Development Authority v. Ajoy Pal Singh, respondents reported in AIR 1989 SC 1076 held that "when the contract entered into by th

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e State is non-statutory and purely contractual the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines the rights and obligations of the parties inter se. In this sphere, the parties can only claim rights conferred upon them by the contract in the absence of any statutory obligations on the part of the authority in the said contractual field. It is also settled that no writ or order can be issued under Art. 226 of the Constitution of India so as to compel the authorities to remedy a breach of contract pure and simple." (45) Similarly, in Har Sankar v. Deputy Excise and Taxation Commr., reported in AIR 1975 SC 1121 it was held that a writ petition was not an appropriate remedy for impeaching validity of contractual obligations. (46) Mr. Banerjee, the learned counsel for the petitioners has, however, argued that it has been held in several cases that for breach of contractual obligations writ does lie. In support of his contention Mr. Banerjee has at first placed reliance upon a decision of the Supreme Court rendered in the case of the Gujarat State Financial Corporation v. M/s. Lotus Hotels Pvt. Ltd. (AIR 1983 SC 848) (supra). I have already discussed the facts of this decision and showed why this decision is not applicable in the present case. (47) It is not disputed that as per the terms and conditions (Clause 13 of the loan agreement) the petitioners were required to insure all the fixed assets and other assets with an Insurance Company and the Insurance Policies were to be taken out by the petitioners jointly in their own name and in the name of TIDC. But admittedly that was not done. In this regard the petitioners have stated that there was no time limit within which the insurance was to be effected. But the records do not show that the petitioners made any sort of endeavour to obtain the insurance policy. (48) There is a specific condition under Clause 18(b) that petitioners would have to appoint one Technical Officer but no such officer was appointed. Clause 16(b) envisages that TIDC will have the right to carry out periodical technical and financial inspection of the factory during construction. Accordingly a Technical Officer was sent and he after inspection reported that construction was not as per approved design. (49) As regards the allegation of non-payment of loan amount it has been conducted by the petitioners in their additional affidavit that repayment schedule cannot be resorted to until full amount is sanctioned and disbursed. But Clause (i) of the special terms and conditions reads :- "Repayment of the loan instalments to commence twelve months after first disbursement and to complete in a period of 7 (seven) years by 14 (fourteen) half yearly instalments . . . . . . . . . . . . " (50) In view of all these facts and my findings made above I am of the view that the respondents have not over-stepped the limit of Article 14 requiring correctness by an appropriate constitutional action. The writ Court does not enter into disputed facts. That is why the writ Court does not grant relief, in situations created by disputes which are essentially of contractual nature. The writ Court cannot enquire into such disputed facts as already pointed out, but leaves the parties to go to the ordinary Courts, competent to adjudicate upon contractual rights. (51) The application is therefore, dismissed. The rule is discharged. The writ petitioners will however, be at liberty to ventilate their grievances by way of a suit or any other appropriate action. The respondents shall equally be at liberty to initiate any action against the writ petitioners in any form if they are so advised and are so entitled to in law. (52) Mr. Lodh has at last argued that in view of the facts that the petitioners not only cheated the respondent No. 2 but also forged the documents and as such an order should be issued for starting criminal case against them. I have already made my observation in the penaltimate paragraph. No cost.Petition dismissed.
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