1 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 738 of 2014 Order Reserved on: 05.12.2024 Order Delivered on: 07.02.2025 • M/s Krishna Iron Strips And Tubes Pvt. Ltd. Through Pramod Sharma Director, 821 - A, Urla Industrial Area, Post Sarora, P.S. Urla, Raipur Civil And Revenue Distt. Raipur C.G. , Chhattisgarh. ... Petitioner(s) versus 1. State of Chhattisgarh through The Secretary Industry Department Mantralaya Post And P.S. Rakhi Raipur Civil And Revenue Distt. Raipur C.G. , Chhattisgarh. 2. C.G. State Industrial Development Corporation Ltd. Through The Managing Director, Lic Commercial Complex Pandri, Post And Ps Pandri, Civil And Revenue Distt. Raipur C.G. 3. Union of India through The Secretary, Ministary Of Commerce And Industries, Department Of Industrial Policy And Promotion, Udyog Bhawan Delhi. ... Respondent(s) For Petitioner : Mr. Harshal Chouhan, Advocate. Digitally signed by RAGHVENDRA JAT 2 For Respondent/State : Mr. S. S. Baghel, Deputy G.A. For Respondent No. 2 : Mr. Ayaz Naved, Advocate. Hon’ble Mr. Justice Amitendra Kishore Prasad C A V Order 1. The petitioner is challenging the order dated 29.03.2014 passed by respondent No. 2 i.e. C.G. State Industrial Development Corporation Ltd by which the application for the petitioner for considering the petitioner’s unit as small scale industry as per Central Government Notification dated 10.12.1997 in exercise of Section 11B and Section 29B of the Industries (Development and Regulation) Act 1951 whereby conditions were defined on the basis of which any industrial undertaking can be regarded as small scale industry. On the basis of said notification the petitioner applied before the District Industries Centre for conversion of unit from medium scale to small scale industry which was accordingly allowed. However, subsequently when the petitioner required lease deed to be rectified on the basis of Central Government Notification dated 10.12.1997 it was rejected by the impugned order for review of lease rent. 2. This petition has been filed by the petitioner for the following reliefs:- “10.1 To call for the records of the case for the kind perusal of this Hon'ble Court. 3 10.2 To issue an appropriate writ or order and direct the res.no.2 to recategorize the petitioner unit as a small scale industry. 10.3 To issue an appropriate writ or order and quash the order dated 29.03.14 passed by res.no.2. 10.4 To issue an appropriate writ or order and direct res.no.2 that the premium and other residuary dues be calculated treating the petitioner as a small scale industry. 10.5 Any other relief deemed fit in the facts and circumstances of the case may also be granted”. 3. Brief facts of the case, is that, the petitioner is a private limited company which is duly incorporated under the provisions of Companies Act. It is engaged in Iron Strips Tubes and M.S.Ingot. The petitioner entered into a lease deed agreement 22.07.1996 with the Managing Director of erstwhile M.P. Audyogik Kendra Vikas Nigam (Raipur) limited for land in industrial area Urla which got amended on 09.05.2006. On the basis of said lease deed, the petitioner constructed his unit and started production there. AS per lease deed the petitioner has to pay lease rent, maintenance, street light fees as per schedule of medium scale industry. The Central Government issued a notification dated 10.12.1997 according to which some specified factors were given 4 on the basis of which an any industry can be regarded as small scale industry before ancillary industry undertaking. According to the same if the investment and the machinery does not exist Rs. 3 crores then it would be deemed to be a small scale industry. Since the investment in fixed asset and machinery of the petitioner unit is only 1.02 crores, the petitioner made an application before the Director Industries to register the petitioner as a small scale industry. Accordingly on 11.08.1998, the directorate industries (Government of M.P.) passed an order and the petitioner was registered as a small scale industry. On the basis of aforesaid registration petitioner has filed an application dated 17.10.1998 before the Managing Director M.P. Industrial Development Corporation Limited, Bhopal with a prayer that since his unit has been registered as small scale industry, therefore, the amount of premium be reassessed according to small scale industry and the rest of the amount be refunded. In reply dated 26.11.1998 it has been informed to the petitioner that earlier the unit of the petitioner was registered as medium scale industry and thereafter on the basis of same premium was recovered from the petitioner and as such it cannot be refunded. Since the petitioner was small scale industry as per circular of the Central Government. He started paying premium and other dues on the basis of small scale industry. In the month of February, 5 2013, the petitioner made a request to Bank of India, Raipur for surrendering of credit facility of the account of the petitioner. Later on the petitioner switched of his loan accounts with HDFC Bank, Devendra Nagar, Raipur. For this purpose the petitioner has to surrender his lease deed which was mortgaged with Bank of India. The petitioner made an application dated 05.03.2014 to issue a no objection on the mortgage of the property of petitioner unit for taking CC facility from HDFC Bank, Raipur. Upon this, the respondent No. 2 issued a letter and directed the petitioner to deposit the premium, maintenance and street light charges according to the schedule of medium scale industry. The respondent No. 2 directed the petitioner to clear the dues in respect of premium, maintenance and street light charges as per medium scale industry schedule of the medium scale industry. The petitioner objected the said letter issued by the respondent No. 2 stating that the amount calculated by respondent is on the basis of medium scale industry whereby subsequently the petitioner’s unit has been declared as small scale industry as such he is not required to pay premium, maintenance and street light charges on the basis of medium scale industry since he has been registered by the D.I.C as small scale industry and has been shown as medium scale industry in the lease deed also. The calculation be made on the basis of small scale industry. 6 However, nothing was done thereafter the petitioner has again made an application dated 20.03.2014 to consider the petitioner industry as small scale industry and to calculate the premium and other dues on the basis of small scale industry. However, vide impugned order dated 29.03.2014, the respondent No. 2 has rejected the application of the petitioner for considering its unit as small scale industry and to re calculate the premium and all other dues holding the petitioner to be a small scale industry. It has been stated by respondent No. 2 that since the petitioner unit has been got registered as medium scale industry as such now he cannot be regarded as small scale industry and he has to pay the premium and other dues in accordance with. His earlier registration as medium scale industry his subsequent conversion as small scale industry could not be considered. The amount of premium and other dues paid by the petitioner on the basis of small scale industry has been returned by the respondent No. 2 directing the petitioner to pay premium and other dues in accordance with medium scale industry. Hence, this petition. 4. Learned counsel for the petitioner has submitted that though the petitioner was earlier registered as medium scale industry however subsequently on the basis of his investment and assets which is below Rs. 3 crores his industry was considered as small scale industry and as such for all purposes including premium 7 and other dues the industry has to be considered as small scale industry and accordingly the respondent No. 2 is required to take premium and other charges from the industry on the basis of small scale industry. The respondent No. 2 has committed illegality while considering the petitioner’s unit as medium scale industry inspite of circular issued by Government of India dated 10.12.1997. The respondent No. 2 ought to have considered that subsequent registration dated 11.08.1998 the petitioner’s unit has been recognized as small scale industry by the then directorate industries (Government of M.P.). As such the impugned order dated 29.03.2014 is perse illegal on the teeth of the registration dated 11.08.1998 when the petitioners limit has been considered as Small Scale Industries on the basis of circular of the Union Government and further it was registered as Small Scale Industries then there is no question for not considering the same for the purposes of premium and other dues by respondent No. 2 . Hence, this petition. 5. The respondent No. 2 submitted its reply stating that since the order impugned has been passed by the respondent No. 2 as such the respondent No. 2 could be the contesting party. The respondent No. 2 while filing its reply and further making submission has categorically said that earlier the contention of the petitioner was rejected vide letter dated 24.11.1998 then 8 State of Madhya Pradesh, however, the said order has never been challenged by the petitioner and after expiring of 16 years the petitioner cannot be allowed to challenge the same. Since the petitioner has been considered to be a Medium Scale Industry and it was registered as Medium Scale Industry. The petitioner was alloted land holding it to be a Medium Scale Industry as such he has to pay premium and other dues in respect of Medium Scale Industry. It has been submitted by respondent No. 2 that since the unit was Medium Scale Industry at the time of allotment of the land and the premium and other dues were also fixed on the basis of Medium Scale Industry, therefore, now after lapse of so many period the amount deposited by the petitioner as Medium Scale Industry cannot be refunded on the basis of subsequent development by which the petitioner has been re- registered as Small Scale Industry on the basis of circular Indian Government. The circular cannot be taken into consideration circular and registration of the industry cannot be taken into consideration with retrospect effect unless and until it is specifically mentioned in the circular. The petitioner cannot claim refund of the amount on the basis of its letter registration as Small Scale Industry. The petition is sans merit and the same is liable to be dismissed. 9 6. I have heard learned counsel for the parties and also perused the material available on record. 7. It is not in dispute that at the time of granting of lease the registration of the petitioner unit was Medium Scale Industry and accordingly the petitioner unit has been granted lease on the basis of it registration as Medium Scale Industry. The premium and other dues were received and formulated on the basis of Medium Scale Industry as such the petitioner has paid the amount of lease and other dues on the basis of it being Medium Scale Industry. Now, on the basis of subsequent notification dated 10.12.1997 by which on the basis of investment and assets not exceeding Rs. 3 crore. The petitioner is claiming for considering benefits of Small Scale Industries. The petitioner was earlier registered as Medium Scale Industry as such the premium which was paid on the basis of Medium Scale Industry. Due to subsequent charge of industry the benefit cannot be extended with retrospective effect, everything would be on prospective basis. However, on subsequent change of industries as Small Scale Industries benefit can not be given with retrospective effect treating the industry to be Small Scale Industry. It can only be prospective as such the claim of the petitioner is without any basis and accordingly the relief sought by the petitioner cannot be granted. 10 8. The petition being devoid of merits is liable to be dismissed and accordingly the same is dismissed. 9. No order as to cost(s). Sd/- (Amitendra Kishore Prasad) Judge Raghu Jat