IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA RSA No.63/2023 Date of Decision: 15th July, 2025 State of H.P. and others .....Appellants. Versus M/s Samson Extrusion …..Respondent. Coram The Hon’ble Mr. Justice Bipin Chander Negi, Judge. Whether approved for reporting?1 For the Appellants : Mr. Diwakar Dev Sharma, Additional Advocate General. For the Respondent : Mr. Surav Rattan, Advocate. Bipin Chander Negi, Judge (oral). The Appellants, by filing this appeal under section 100 of the Code of Civil Procedure (for short, CPC), has assailed the judgment and decree dated 15.09.2022 passed by Learned District Judge, Sirmaur, in Civil Appeal No. 31-CA/13 affirming the Judgment and Decree dated 15.05.2020 passed by the Learned Senior Civil Judge, Nahan, District Sirmaur, in Civil Suit No 44/1 of 2016. 2. The parties shall hereinafter be referred to in the same manner as they were arrayed before the Trial Court. 3. The facts giving rise to the present second appeal are that the plaintiff filed a suit for recovery of Rs. 12,28,122/- being the capital investment subsidy which the defendants had allegedly withheld illegally and arbitrarily, along with interest at 15% per 1 Whether reporters of Local Papers may be allowed to see the judgment? YES 2 annum and costs of the suit. The plaintiff’s case is that he runs an industrial unit in village Shambuwala, Nahan, District Sirmaur, H.P., manufacturing collapsible aluminium tubes. The unit was provisionally registered on 08.02.2008 and permanently registered on 24.09.2012, with commercial production commencing on 01.09.2008. Shri Ravi Kumar Gupta, a partner of the firm, handles its day-to-day operations and is conversant with the facts. The plaintiff’s unit purchased plant and machinery worth Rs. 96,65,000/- and installed them in the industrial unit, with SBI, Kala Amb as its financial institution. The Ministry of Commerce and Industry, Government of India (Department of Industrial Policy and Promotion), introduced the Central Capital Investment Subsidy Scheme, 2003, to accelerate industrial development in Uttaranchal and Himachal Pradesh. The plaintiff applied for the subsidy with defendant No. 4, submitting all required documents. After an inspection on 26.03.2013, defendant No. 4 recommended a subsidy of Rs. 14,39,000/-, but only Rs. 2,10,878/- was sanctioned. Despite repeated requests, the remaining amount was not released, prompting the plaintiff to issue a notice under Section 80 CPC, which was also not complied with, leading to the filing of the suit. 4. The defendants contested the suit, raising preliminary objections regarding maintainability, valuation, and mala fides. They contended that the plaintiff had no right to file the suit as Sh. Pawan Kumar and Naresh Kumar had taken over the firm as partners. On 3 merits, they argued that as per new guidelines issued by the Government of India, only machinery procured after filing Entrepreneurs Memorandum (EM Part-I) and within the value mentioned in EM Part-II was eligible for subsidy. 5. Further, instructions dated 19.08.2014 clarified that only machinery procured within one year from the commencement of production (COP) or the date of claim submission, whichever was earlier, would be considered, though relaxation was granted up to 31.03.2013. Since the plaintiff’s commercial production began on 01.09.2008, as per EM Part-II dated 05.10.2012, he was eligible for investment subsidy only up to 31.08.2009. The defendants asserted that the plaintiff had invested Rs. 14,05,856/- by that date, entitling him to a subsidy of Rs. 2,10,878/-, which was already paid. They prayed for the suit’s dismissal. 6. The plaintiff filed a replication, denying the defendants’ averments and reaffirming the plaint’s contents. On 28.02.2017, the Trial Court framed the following issues: 1. Whether the plaintiff is entitled to a decree for recovery of Rs. 12,28,122/- alongwith interest and cost, as claimed? ..(OPP); 2. Whether the suit is not maintainable, as alleged? ….(OPD); 3. Whether the suit is undervalued, as alleged? (OPD); 4 4. Whether the suit of the plaintiff is malafide, as alleged? (OPD); 5. Whether the plaintiff alone has no right to file the present suit as the unit M/s. Samson Extrusion have Sh. Pawan Kumar and Naresh Kumar partners of the firm, as alleged? (OPD); 6. Relief. 7. During evidence, the plaintiff examined three witnesses: PW1 Sh. Hitesh Kumar, Clerk, Directorate of Industries, Shimla, who produced documents Ext. PW1/A to PW1/E; PW2 Sh. Mahinder Kumar, Extension Officer, Industrial GMDIC, Nahan, who produced Ext. PW2/A to PW2/T; and PW3 Sh. Ravi Gupta, partner of the plaintiff firm, who tendered the partnership deed Ext. PW3/A and his affidavit Ext. PW3/B, reiterating the plaint’s averments. The plaintiff closed evidence on 04.07.2018. The defendants examined DW1 Sh. Rachit Sharma, Manager, DIC Nahan, who produced authority letter Ext. DW1/A, affidavit Ext. DW1/B, and documents Ext. DW1/C to DW1/H, closing evidence on 13.05.2019. 8. After hearing the parties, the learned Senior Civil Judge, Sirmaur District at Nahan, partly decreed the suit, deciding Issue No. 1 in favour of the plaintiff and Issues No. 2 to 5 against the defendants. Aggrieved, the defendants filed the first appeal, where the appellants contended that the Trial Court’s judgment was based on conjectures and surmises and is liable to be set aside. They argued that the Court failed to consider Section 69(1) of the Indian 5 Partnership Act and wrongly held the suit was filed by a competent person, relying solely on the partnership deed. 9. They further alleged that the Trial Court did not frame any issue regarding the plaintiff’s entitlement and decreed the suit without proper adjudication. The appellants asserted that the plaintiff’s admissions show he was not entitled to the claimed amount and that the subsidy was correctly calculated and released as per Government guidelines, which restrict eligibility to machinery procured within one year of commercial production. The First Appellate Court dismissed the appeal therefore the present second appeal was filed by the appellants. 10. Heard learned counsels for the parties and perused the impugned judgments. 11. The plaintiff, M/s Samson Extrusions, applied for a 15% capital investment subsidy under the Central Government's industrial package for Himachal Pradesh and Uttarakhand. The General Manager, District Industries Centre, Nahan, after inspecting the unit on 26.09.2013, recommended a subsidy of Rs. 14,39,000/-. However, the State sanctioned only Rs. 2,10,878/-, leading to the present suit for recovery of the balance amount. 12. The appellants' primary defense rests on three grounds: (1) that the subsidy was correctly calculated based on investments made only within one year of commencement of production (01.09.2008) as per subsequent clarifications issued in 2013 (2) that 6 Ravi Kumar Gupta, the litigating partner, was not a registered partner of the firm, rendering the suit non-maintainable under Section 69(1) of the Partnership Act; and (3) that the plaintiff's claim for subsidy on investments made beyond the initial year of production was inadmissible under the revised guidelines. 13. The Trial Court, after careful consideration of the evidence, rejected these contentions. It noted that DW1, the appellants' own witness, categorically admitted that the General Manager, DIC had recommended a subsidy of Rs. 14,39,000/-. This admission assumes significance in light of the settled legal position that an admission by a party is the best evidence against them, unless successfully rebutted (Rani Chanda Kunwar v. Choudhary Narpat Singh, ILR 29 All. 184 (PC); Thimmappa Rai v. Ramanna Rai, (2007) 7 SCALE 19). The appellants failed to discharge the burden of proving that this admission was erroneous or inapplicable (Avadh Kishore v. Ram Gopal, AIR 1971 SC 861). 14. On the substantive issue of subsidy entitlement, the Trial Court rightly held that the plaintiff's claim was governed by the original 2003 scheme, under which the eligibility period extended up to ten years from commencement of production. The subsequent 2013 notification, which sought to restrict the subsidy window to one year, could not be applied retrospectively to defeat the plaintiff's vested rights. This conclusion finds support in the doctrine of promissory estoppel, as crystallized in Motilal Padampat Sugar 7 Mills v. State of U.P. (AIR 1979 SC 621), where the Supreme Court held that the government is bound by its promises when parties have acted upon them to their detriment. While the State retains the power to modify or withdraw incentives prospectively in public interest (State of Rajasthan v. Mahaveer Oil Industries, (1999) 4 SCC 357), it cannot arbitrarily resile from its commitments in individual cases without proper justification. 15. Significantly, the appellants failed to produce any contemporaneous records or calculations to substantiate their reduction of the subsidy amount. Their reliance on selective portions of the 2013 notification, without demonstrating how it invalidated the plaintiff's claim under the original scheme, was rightly held to be an afterthought. The absence of any material showing that the plaintiff was ever informed about the alleged ineligibility of its investments further weakens the appellants' case. 16. On the question of maintainability, the Trial Court correctly held that the partnership deed (Ext. PW3/A) established Ravi Kumar Gupta's authority to institute the suit. The appellants' belated challenge to his locus, without any evidence of dissolution or reconstitution of the firm, was clearly an attempt to create a technical defense where none existed. 17. In light of the comprehensive analysis of facts and law, this Court finds no legal infirmity or perversity in the concurrent findings recorded by both the Courts below. The appellants have failed to 8 demonstrate any perversity in the findings or any error in the application of law. In the aforesaid facts and attending circumstances, there arises no question of law, much-less a substantial question of law for consideration of the Court, therefore, the appeal is dismissed being devoid of any merit. Pending miscellaneous applications, if any, also stand disposed of. (Bipin Chander Negi) Judge 15th July, 2025 (Tarun/T.B)