Sandesh D. Patil, J.

1. Rule. Rule made returnable forthwith. By consent of the parties, the matter is taken up for final hearing.

2. The Petitioner is a sugar factory engaged in the manufacturing of sugar and allied by-products by crushing sugarcane. It is the case of the Petitioner that, in the year 2007, the Sugar Development Fund Rules, 1983 were amended by introducing Rule 20-A. The said Rule provides that sugar factories which export sugar manufactured by them shall be entitled to reimbursement of expenditure incurred towards internal transportation and freight charges on export shipments of sugar, including ocean freight, handling charges, and marketing charges on the export of domestically manufactured sugar. The subsidy was fixed at ₹1,350 per metric tonne of exported sugar for sugar factories located in the coastal states in India. The object of granting the said subsidy was to enable sugar factories to pay the Statutory Minimum Price to agriculturists supplying sugarcane to them.

3. The Petitioner claims to have exported sugar during the year 2007–2008. Pursuant to the said Rule, the Petitioner submitted its claims in the prescribed form. In all, the Petitioner submitted thirteen claims. Out of these thirteen claims, eleven claims were settled to the extent of ₹7,42,75,265/-. However, two claims pertaining to May 2008 and July 2008, aggregating to ₹2,21,56,997/-, were not settled by the Respondents. The Petitioner, therefore, addressed a letter dated 7th February 2009 to the Senior Accounts Officer, SPF Section, Sugar Division, Department of Food and Public Distribution, New Delhi.

4. It is the contention of the Petitioner that despite repeated follow-ups with the Respondent Authorities, the said claims were not processed and paid. Hence, the present Petition has been filed.

5. Mr. Chetan Patil, learned Counsel for the Petitioner, submitted that the Petitioner acted upon the representation made by the Respondents. According to him, the Petitioner was induced by the policy formulated by the Respondents to export sugar. He further submitted that although all other claims had been cleared, there was no justification for withholding the two claims which form the subject matter of the present Petition.

6. Learned Counsel further submitted that the action of the Respondents is wholly arbitrary and illegal. He invoked the doctrine of promissory estoppel and contended that the Respondents had made a clear and unequivocal promise intended to create legal relations, knowing fully well that it would be acted upon by the Petitioner. According to him, the Respondents failed to honour the said promise, and therefore the representation made by them is binding upon the Respondents.

7. In support of his submissions, he relied upon the judgment of the Apex Court in the case of Motilal Padampat Sugar Mills Co. Ltd Vs. State of U.P. and Others((1979) 2 SCC 409). He also relied upon the judgment of the Division Bench of the Bombay High Court in the case of Shailaja R. Khanvilkar and Others Vs. Union of India through the Ministry of Petroleum, and Natural Gas and Others(2019 SCC OnLine Bom 2289).

8. He submitted that although certain queries had been raised by the Respondents, the same were duly answered and the requisite information was furnished by letter dated 10th October 2011. Despite several reminders, the Respondents failed to release the subsidy amount. He, therefore, submitted that, the Petition deserves to be allowed.

9. Mr. Vijay Killedar, learned Counsel appearing for the Union of India, opposed the Petition. He submitted that there was no discrimination in the settlement of claims of sugar mills and that the scheme in question was merely a welfare measure intended to reimburse the internal transportation costs involved in the export of sugar. He contended that the Petitioner had not submitted composite claims for May 2008 and July 2008 in the prescribed manner and that the claims suffered from inherent deficiencies. He further submitted that the Petitioner failed to take corrective measures before the assistance limit of 60 lakh tonnes was exhausted. According to him, the funds earmarked for the scheme had already been exhausted and, therefore, no relief could be granted to the Petitioner.

10. Learned Counsel further submitted that the scheme was intended to encourage the export of sugar up to 30 lakh tonnes by defraying internal transportation costs, freight charges, and ocean freight at a flat rate of ₹1,350 per tonne for sugar factories situated in coastal States. He contended that the doctrine of promissory estoppel has no application to the present case and that the Petitioner is not entitled to any relief.

11. He invited our attention to the Gist of the Note dated 17th October, 2008 for Cabinet Committee on Economic Affairs (CCEA) on “Intimation of closure of the scheme of export assistance to sugar mills, on export of domestically manufactured sugar on 30th September, 2008.” He stated that the Cabinet Committee in its meeting dated 4th September, 2008 has decided that the concession available for export of sugar till 30th September, 2008 shall cease with effect from 1st October 2008. He further submitted that for this reason the Petitioner is not entitled to any relief.

12. We have heard the learned Counsel appearing for the parties.

13. Against the backdrop of rising sugar stocks, depressed sugar prices, and the consequent accumulation of sugarcane arrears payable to farmers, the Union of India through the concerned Department and with the approval of the Central Government, decided on 24th March 2007 to encourage the export of sugar up to 30 lakh tonnes by defraying internal transportation costs, freight charges, and ocean freight at a flat rate of ₹1,350 per tonne for sugar factories located in coastal areas. Consequently, the Sugar Development Fund Rules, 1983 were amended by incorporating Rule 20-A. The relevant portion of Rule 20-A is reproduced below:

                   "20 A. Defraying Expenditure on Internal Transport and Freight Charges on Export Shipment of Sugar - (1) Notwithstanding anything contained in these rules, the Central Government may, from time to time, decide to defray expenditure for the purposes of internal transport and freight charges which would include ocean freight, handling and marketing charges on exports of domestically manufactured sugar.

                   (2) Any sugar factory, which has exported its manufactured sugar under Open General Licence but not under 'advance licence' either itself or through an exporter or through any third party exporter within the time period announced by the Central Government, shall be eligible for payment from the Central Government, the amounts as specified hereunder-

                   (a) for the sugar manufactured by the sugar mills located in the coastal states in India, the payment shall be rupees 1350 per tonne of sugar exported; and

                   (b) for the sugar manufactured by the sugar mills located in other than the coastal States of India, the payment shall be at a rate of rupees 1450 per tonne of sugar exported:

                   Provided that the payment for the exports made to neighboring countries solely by road or rail or by both, not involving movement by sea or ocean, shall be the actual expenditure incurred on the charges referred to in sub - rule (1) calculated as per Appendix annexed hereto or shall be as referred to in clause (a) or clause (b) of sub-rule (2) whichever is less ”

14. The Petitioner acted in accordance with the representation made by the Respondents and submitted thirteen claims in total. The details of the said claims are as under: