2017 (11) TMI 1888 - HC - Indian Laws

Benefit of Industrial Policy issued by the Government of Bihar - whether the relief, which has been mentioned in the policy, will come to an end with the life of the policy or the person will be entitled for the benefit of five years irrespective of the termination of the life of the policy? HELD THAT - In the present case, the issue has been raised of aims and object of Policy, 2011 reflects clearly that the policy was/is meant for attracting the domestic and foreign investors as well as local investors to establish the industry. From time to time, the industrial policy has been framed and brought into force with certain changes to make it more attractive. Industrial Policy has basic approach and purpose of inviting investors to set up the industry so that the financial conditions of the people of the State will improve and also generate opportunity of employment, the industrial policy should be read in such a manner that it would subserve its purpose, advance justice and suppress mischief. It requires a purposive construction while interpreting the policy, it has to be read strictly with respect to applicability of the policy, once the policy is found applicable the industrial establishment is covered under that policy then benefit arising from that policy has to be given its full effect - The statute or the policy or any document should not be read in such a manner which should not lead to absurdity. It should not be interpreted to defeat the purpose, aims and object for bringing the legislation or the policy. The interpretation which led to its destructiveness must be avoided. If any policy comes forward with promise in the shape of grant of certain benefit and, on the basis of commitment, any party or industrial (sic--industry?) taking to be a solemn declaration, acts on the basis of promise, the State cannot be allowed to resile and refuse to give benefit which has been extended by framing the statute or the policy or by declaration. Thus, the interpretation of the policy should be normal and plain so that real purpose should be derived - On giving a plain reading it is completely clear the facility of exemption from monthly minimum charges has been stipulated for five years and there is no dispute that these industries (petitioners) were granted the benefit of incentive provided under the industrial policy. There is no dispute that the petitioners are not covered by the industrial policy of 2011 of the State of Bihar but, the question has to be seen in what manner the incentive, which has been given in different way, will be interpreted. This Court issue a mandamus to grant benefit of concession of exemption for Monthly Minimum Charge/Minimum Base Energy Charge/Demand/Billing Demand in terms of Clause (vi) of the Clause 2 of the Bihar Industrial Incentive. Policy, 2011 - Application allowed.

Summary

Issues Involved:
1. Entitlement of benefits under the 2011 Industrial Policy of Bihar.
2. Duration of benefits relative to the policy's lifespan.
3. Interpretation of policy terms and their legal implications.
4. Application of the doctrine of promissory estoppel.

Detailed Analysis:

1. Entitlement of benefits under the 2011 Industrial Policy of Bihar:
The petitioner, a registered company, sought benefits under the Bihar Industrial Incentive Policy of 2011, which aimed to attract investments and promote industrial growth by offering various incentives, including exemptions from certain charges. The policy provided that benefits would be available to industries established and commencing production within five years from July 1, 2011.

2. Duration of benefits relative to the policy's lifespan:
A key issue was whether the benefits would cease with the policy's expiration on June 30, 2016, or if industries would continue to enjoy the benefits for five years from their date of commercial production. The petitioner's flour mill commenced production on October 25, 2014, and sought remission of electric bills under the policy. The State Government's Finance Department opined that benefits ceased with the policy's expiration, while the Industry and Law Departments believed benefits should continue for the full five years.

3. Interpretation of policy terms and their legal implications:
The court emphasized that the policy should be interpreted to fulfill its purpose of attracting investments and promoting industrial growth. The policy's terms, such as "exemption from Monthly Minimum Charges/Minimum Base Energy Charge/Demand/Billing Demand," were meant to provide benefits for five years, irrespective of the policy's expiration. The court referenced various judgments to support a purposive interpretation of policy terms, ensuring that the policy's objectives were met.

4. Application of the doctrine of promissory estoppel:
The petitioner argued that the State could not retract its promise of benefits, as industries had been established based on the policy's incentives. The court agreed, citing the doctrine of promissory estoppel, which prevents the State from reneging on its commitments if industries had relied on them to make significant investments. The court referenced several Supreme Court judgments affirming that once a government extends benefits to attract investments, it cannot withdraw them arbitrarily.

Conclusion:
The court ruled in favor of the petitioner, stating that the benefits under the 2011 Industrial Policy should continue for the full five years from the date of commercial production, irrespective of the policy's expiration. The court quashed the Finance Department's contrary interpretation and directed the State to grant the petitioner the benefits as stipulated in the policy.

Mandamus Issued:
The court issued a mandamus to the State to provide the petitioner with the exemption from Monthly Minimum Charges/Minimum Base Energy Charge/Demand/Billing Demand as per Clause (vi) of Clause 2 of the Bihar Industrial Incentive Policy, 2011. The writ applications were allowed accordingly.