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The interpretation of doctrine of contemporanea expositio in eProcurement

M/S. ULTRATECH CEMENT LTD. & ANR. v.STATE OF RAJASTHAN & ORS.CIVIL APPEAL NO. 2773 OF 2020(Arising out of SLP(Civil) No. 2252 of 2019)

The respondent-RRVUNL invited tender no. (TN-26/2019-20/SE/(Fuel)/Jaipur) dated 26.08.2019 for e-procurement for sale/collection of ESP dry fly ash from its various coal-based TPPs located at KSTPS (Kota), SSTPS (Suratgarh), CTPP (Chhabra), KaTPP (Jhalawar) and the last date for submission of the bid was 23.09.2019 which was time to time extended vide respective corrigendums up to 23.10.2019. The appellant as well as other companies submitted their tenders and participated in the process.

Looking to the respective rates received from the various companies, the petitioner company was requested to depute its fully authorized representative to attend the meeting which was scheduled to be held on 16.12.2019 for techno-commercial discussions regarding the sale of dry fly ash. On 16.12.2019 the authorized representative of the petitioner company participated in the aforesaid meeting where discussions were held for techno-commercial and on 17.12.2019 the petitioner company was requested by the respondent RRVUNL to offer their best price for sale/collection of ESP dry fly ash from KaTPP unit 1 & 2 and vide letter dated 20.12.2019 the petitioner company intimated to the respondent RRVUNL that they have already offered their best price. After discussion, the respondent detailed work order was issued in favour of M/s. J.K. Cement Limited @ Rs.502/- per MT for KSTP Kota, Unit 7.

Subsequent to the offer submitted by the petitioner on 20.12.2019 a meeting was conducted by the Wholetime Directors of the respondent RRVUNL on 03.01.2020 and after detailed discussions it was decided to drop the NIT for sale collection of ESP dry fly ash from various coal-based thermal power plants of RVUN against TN-26 2019-20/SE(Fuel-1)/Jaipur except for KSTP Unit no.7-for which order has been placed on M/s. J.K. Cement Ltd. @ Rs.502 PMT and accordingly final decision to cancel the NIT was taken on 03.01.2020 and it was decided to publish fresh NIT with modified PQR specification for better participation and communicated to the petitioner company vide office order dated 06.01.2020.

This appeal is directed against the judgment and order dated 11.01.2019 passed in D.B. Civil Writ Petition No. 9090 of 2018, whereby the High Court of Judicature for Rajasthan, Bench at Jaipur, dismissed the writ petition filed by the appellants while upholding the order of revision dated 12.03.2018 as passed by the Additional Chief Secretary, Finance, Government of Rajasthan, Jaipur1 in revision proceedings under Clause 13 of the Rajasthan Investment Promotion Scheme-20032

The learned senior counsel would submit that the company had applied to BIDI for a customized package of incentives for the proposed cement plant at Kotputli; and this application was disposed of by BIDI on 01.04.2006, where it was directed that the recently announced package be granted to the company and also the RIPS-2003 benefits. While pointing out that this package, providing for 75% Sales Tax subsidy to newly established or substantially expanded cement undertaking, was introduced on 02.12.2005 with the insertion of sub-clauses (vi) and (vii) to Clause 7 of RIPS-2003 and these sub-clauses were deleted on 28.04.2006, the learned senior counsel has argued that BIDI had the authority to grant subsidy to the extent of 75%, of the tax payable and deposited, to any industrial undertaking with an investment of over Rs. 400 crores under the proviso to Clauses 7(i)(a) and 7(i)(b) of the Scheme, and such a decision of BIDI in relation to the appellant company had rightly been implemented by SLSC.

The learned counsel would also submit that subsidy under Clauses 7(vi) and 7(vii) consisted of 45% upfront subsidy, which was payable straightaway without being dependant on the wages and interest amounts spent by the undertaking; and the balance 30% subsidy consisted of wage and interest subsidy but, in contrast, the subsidy granted to the appellant did not include any upfront subsidy; rather it only consisted of 75% wage and interest subsidy and hence, it remains beyond the cavil that the subsidy so granted to the appellant had been under the proviso to Clauses 7(i)(a) and 7(i)(b) of RIPS-2003, particularly when it did not include any upfront subsidy and only consisted of 75% wage and interest subsidy. According to the learned counsel, the Minutes of SLSC meeting dated 17.03.2011 make it crystal clear that the decision to grant 75% subsidy was the decision of BIDI and not that of SLSC.

The learned senior counsel has also invoked the principles of Contemporanea Expositio with the submissions that in all the exchanges at the relevant time, it was plainly and clearly understood by the authorities concerned that the appellant company was entitled to subsidy to the extent of 75% in the true interpretation of the provisions of the Scheme and on their correct application to the facts of the case; and, therefore, the respondents are not entitled to alter their stand at the later stage.

The learned senior counsel has further submitted that though it was expressly admitted in the Show Cause Notice dated 10.07.2017 that BIDI did take a decision on 01.04.2006, but it was alleged that BIDI did not expressly grant 75% subsidy; and the same view is reflected in the revisional order, which has been approved by the High Court. However, according to the learned counsel, this view would render the words ‘recently announced cement package’ in BIDI’s decision dated 01.04.2006 completely meaningless; and this view is also contrary to the contemporaneous understanding of the SLSC, as set out in the Minutes of its meeting dated 17.03.2011. The learned counsel would maintain that the words of BIDI, giving ‘recently announced cement package’ to the company, could only mean granting of 75% subsidy, though it was not under or in terms of Clauses 7(vi) or 7(vii) but, was relatable to the proviso to Clauses 7(i)(a) and 7(i)(b) of RIPS-2003. 15.3. It has also been submitted by the learned counsel that the appellant made its entire investment of over Rs.1,600 crores on its Kotputli plant only after the decision of BIDI dated 01.04.2006 and after entering into the MoU dated 30.11.2007 in Resurgent Rajasthan Summit under which, the respondent State Government gave a commitment to extend all concessions and benefits which were available under RIPS-2003. The learned counsel would argue that the decision of BIDI dated 01.04.2006 and commitment of the State Government dated 30.112007 clearly attracted the doctrine of promissory estoppel against the respondents but the High Court has rejected this contention only on the ground that promissory estoppel is of no avail against a statute, which is a patent error on part of the High Court because RIPS-2003 has been a totally non-statutory Scheme.

The learned Additional Advocate General, appearing for the respondents, has vehemently countered the submissions made on behalf of the appellants while maintaining that the appellant company was entitled to subsidy only to the extent of 50% of Sales Tax/VAT payable and deposited;and the appellant is bound to refund the excess subsidy to the tune of 25% that had been wrongfully obtained under the erroneous decisions of SLSC.

In an equally detailed reference to the chronicle of facts, the learned AAG has submitted that the special cement package announced on 02.12.2005 came to be incorporated in RIPS-2003 by insertion of sub-clauses (vi) and (vii) to Clause 7; and this was the position obtainable on 01.04.2006 when BIDI took the decision on the prayer made by the company.

Thus, according to the learned AAG, the appellants herein could have sought, if at all, the relief flowing from the said sub-clauses (vi) and (vii) of Clause 7 but, those sub-clauses were consciously deleted by the State Government on 28.04.2006; and being aware of this position, the appellants have abandoned their plea of claiming relief under those sub-clauses (vi) and (vii) and have started relying on the proviso to Clauses 7(i)(a) and 7(i)(b) of the Scheme.

While refuting the claim of the appellant, as based on the proviso to Clauses 7(i)(a) and 7(i)(b) of RIPS-2003, the learned AAG has contended that the general powers under the said proviso could not have been exercised by BIDI on 01.04.2006, because on that date, the said sub-clauses (vi) and (vii) of Clause 7 were in existence and they co-related with cement units alone.

While countering other parts of submissions, the learned AAG has submitted that the doctrine of Contemporaneous Expositio applies to ancient statutes and has no application to the present case. The learned AAG would further submit that even if this doctrine is held applicable to current statutes, it would only apply if one particular view has been taken by the executive and there is ambiguity in the construction of the clauses in question but, in the present case, there is no ambiguity with regard to construction of the Scheme. The learned AAG would yet further argue that this doctrine would not apply when an administrative body had granted exemption on an erroneous view of the matter because the competent administrative body is entitled to revoke such a decision after being apprised of the correct facts.

The learned AAG has further submitted that the MoU signed on 30.11.2007 clearly stated about the grant of the incentives under RIPS-2003 as available from time to time and, for the said sub-clauses (vi) and (vii) of Clause 7 having been withdrawn, the understanding could not have gone beyond allowing 50% subsidy, as available under the Scheme on that date. Thus, according to the learned AAG, even the principles of promissory estoppel are not applicable to the present case inasmuch as 75% subsidy under the proviso to Clauses 7(i)(a) and 7(i)(b) was neither stipulated in the MoU nor was granted in the BIDI meeting dated 01.04.2006.

The discussion foregoing leads to the clear answers that BIDI, in its decision dated 01.04.2006 never directed for grant of 75% subsidy to the appellant company in terms of proviso to Clauses 7(i)(a) and 7(i)(b) of RIPS-2003 nor allowed any customized package to the company. The position of record is crystal clear that BIDI’s decision dated 01.04.2006 had only been for allowing ‘recently announced cement package’38 to the company and that was also coupled with the requirement of applicability of RIPS-2003. The initial part of this decision of BIDI dated 01.04.2006 and the company’s prayer dated 26.04.2006 for registration in terms of sub-clause (vii) of Clause 7 of RIPS-2003 became redundant on 28.04.2006 with the amendment of Clause 7 of RIPS-2003 and deletion of sub-clauses (vi) and (vii) thereof because no decision had been taken by SLSC to grant subsidy to the company in terms of the said sub-clauses (vi) and (vii) of Clause 7 by that date i.e., 28.04.2006.

It is clear that the doctrine of Contemporanea Expositio neither applies to this case nor inures to the benefit of appellant. The principles of promissory estopple are equally inapplicable and the State Government has rightly exercised the powers of revision under Clause 13 of RIPS-2003 to interfere with the erroneous decisions of SLSC whereby the 38 As noticed repeatedly, the said expression ‘recently announced cement package’ is only referable to sub-clauses (vi) and (vii) of Clause 7 of RIPS-2003. appellant was allowed 25% extra subsidy and which was, obviously, prejudicial to the interest of revenue; and mere availing of the benefits by the appellant under the erroneous decisions of SLSC is of no effect, particularly when the State Government has exercised the powers of revision within the time stipulated in Clause 13 of RIPS-2003.

Accordingly, this appeal is partly allowed. The impugned order of the High Court dated 11.01.2019, upholding the order dated 12.03.2018 passed by the Additional Chief Secretary, Finance Department, Government of Rajasthan, Jaipur is affirmed but with the modification that the respondents shall be entitled to recover interest at the rate of 12% per annum from the date of availing of excessive subsidy (25%) by the appellants until payment/recovery. In the circumstances of the case, the parties are left to bear their own costs.

~Karthik K.P

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