- (1.) M. Katju, J. Heard the learned Counsel for the parties.
(2.) BY means of this writ petition the petitioner is challenging the action of the respondents withholding the payment of subsidy alleged to be due and payable to the petitioner in respect of single super phosphate (SSP) which is a fertilizer. The basic raw material for manufacturing of single super phosphate is rock phosphate. Sulphuric Acid and spent acid are also used for this manufacture of SSP. Initially SSP was a controlled commodity and the price was fixed by the Central Government. In 1994 the distribution was decontrolled by the Central Government and the Central Government directed the State Government to fix the price of SSP. Accordingly the State Government is now fixing the price of SSP. It is alleged in paragraph 11 of the writ petition that the price of SSP so fixed by the State Government is much lower that the actual cost of production and this was done to benefit the farmers. To cover the cost of production and to give a small profit margin to the manufacturers the Central Government initiated a scheme known as Concession Scheme in June 1994. Under the scheme, a subsidy was paid to the manufactures of SSP who sold their product to the farmers. True copy of the scheme is Annexure-1 to the writ petition. Under the scheme to avail the concession and subsidy the manufacturers were required to submit the details of the sales and claims of subsidy in proforma-A to the State Government. On receipt of this proforma the State Government was to verify the correctness of the sale made by the petitioner to the distributors appointed by the Department of Agriculture, U. P. Lucknow and after verifying the correctness of the same the State Government had to submit a report in proforma-B to the Ministry of Agriculture, Government of India. Upon the receipt of proforma-B the Central Government releases the subsidy directly in favour of the manufacturer. The Central Government issued a circular dated 28-3-1997 with regard to payment of subsidy, copy of which is Annexure-2 to the writ petition. It is stated that pending verification the Ministry of Agriculture, Government of India would release on account payment of 80% of the claims submitted to the manufacturers. In pursuance of this Concession Scheme the petitioner was also file required to an undertaking to the President of India indicating that if the fertilizer sold by the petitioner was not upto the requisite standard prescribed under the Fertilizer Control Order, such inadmissible claim will be deducted from the bill of the petitioner and the amount will be adjusted or the petitioner would be asked to refund. Photocopy of the undertaking dated 28- 7- 1999 given by the petitioner is Annexure-3 to the writ petition. The petitioner also gave an undertaking that the sale price of SSP will not exceed Rs. 2,890/- per M. T. vide Annexure-4 to the writ petition. It is stated in paragraph 19 of the writ petition that under the Fertilizer Control Order, the petitioner can sell SSP only to the distributor appointed by the State Government and no one else. It is alleged in paragraph 20 of the writ petition that quality of the produced by the petitioner is subject to quality control and supervision of the Inspector appointed under the Fertilizer Control Order, 1985. The Inspectors inspect the premises from time to time and take samples of the products which is tested in a Government Laboratory. It is alleged in paragraph 21 of the writ petition that all the samples taken by the Inspectors in the last 15 years were found upto the prescribed standard. The dispute in this case relates to bills for payment of subsidy submitted by the petitioner for the period January, 1999 to September 2000 which has not been paid by the Central Government. It is alleged in paragraph 23 of the writ petition that on account of non-payment of the bills the petitioner was forced to stop the production from January, 2002 and its electricity was disconnected for non- payment and it had to retrench its workers. The details of the bills submitted by the petitioner is given in paragraph 24 of the writ petition and it is alleged that the Central Government is to pay subsidy to the petitioner of Rs. 49,49,550/- for the bills from January 1999 to August 1999 and Rs. 43,50,390/- for the period September 99 to September 2000 under the Concession Scheme but the same has not been paid.
(3.) IN paragraph 26 of the writ petition it is stated that some newspaper published a news item that there is a scam in the Ministry of Agriculture wherein Rs. 1,200 Crores has been paid as subsidy to the manufacturers of fertilizers without the supply of fertilizer by the manufacturer to the distributors. The Central Government requested the State Government to verify this news. It is alleged in paragraph 26 of the writ petition that the State Government vide letter dated 23-6-2000 informed the Central Government that Rs. 162. 13 crores has been paid as subsidy since 1994 and therefore, the question of bungling of Rs. 1200 Crores does not arise. True copy of the letter dated 23-6- 2000 is Annexure-8 to the writ petition. Subsequently, the State Government by order dated 23-8-2000 directed the Special INvestigating Branch, Agriculture to conduct an enquiry. However, it is alleged in paragraph 27 of the writ petition that the enquiry was deliberately prolonged to harm the small-scale manufacturers including the petitioner and the State Government did not forward the bills to the Central Government for vested reasons. IN paragraph 28 of the writ petition it is stated that an enquiry report was submitted on 31-5-2001 by the S. I. B. , Agriculture to the State Government. It is alleged in paragraph 29 of the writ petition that the officers of the S. I. B. came and inspected the books of accounts, production details and sales etc. and verified the same and they also verified the purchases of raw material and they found everything in order. Hence, it is alleged that there was no material against the petitioner for withholding the subsidy. IN paragraph 32 of the writ petition it is alleged that thereafter the petitioner wrote various letters to the State Government requesting to forward the bills in proforma-B to the Central Government so that the subsidy payment is released. True copies of the letters are Annexure-9 to the writ petition. IN paragraph 33 of the writ petition it is stated that the Finance and Accounts Officer, Krishi Bhawan, Lucknow vide letter dated 24-10-2001 infarmed the petitioner that his bills have been forwarded to the Ministry of Agriculture. The petitioner has also been writing letters and meeting personally the officers in the Ministry of Agriculture vide Annexure-11 to the writ petition but to no avail. It is alleged in paragraph 37 of the writ petition that a lot of discrepancies were found against the big manufacturers in the enquiry conducted by the SIB (Agriculture) but these big manufacturers have already been paid 80% subsidy in advance on the bills submitted by them whereas the petitioner has not been paid a single paise. IN paragraph 38 of the writ petition it is alleged that the State Government has forwarded the bills of the petitioner for the period January 1999 to August 1999 to the Central Government but has not forwarded the bills from September 1999 to September 2000 even though the said bills are verified. It is alleged in paragraph 30 of the writ petition that due to non-payment of petitioner's bill the petitioner was forced to close the production since January, 2000 and it has become sick unit and losses are mounting day by day. The Punjab National Bank is threatening to take legal action against the petitioner vide Annexure-12 to the writ petition. The petitioner has also to pay other dues to the dealers and statutory dues, copy of which is Annexure-13 to the writ petition. A counter-affidavit has been filed by the Central Government and we have perused the same. It is alleged in paragraph 4 of the same that in certain newspapers there was a news item of a scam regarding fertilizer. It is alleged that according to the investigation made by the office of the Commissioner of Income Tax, Agra a total of 23 firms/factories mostly located in U. P. were involved in fake purchase of rock phosphate and thereby fraudulently claiming subsidy. The alleged modus operandi was that these units were making false purchases of rock phosphate without actually purchasing the same. In other words, the concession (subsidy) was being claimed fraudulently through showing manufacture and sale only on paper. On 9-2-2000 the office of the Deputy Director of Investigation, Intelligence Unit wrote to the Department of Agriculture and Co-operation (DAC) that the Director of Income Tax (Investigation), Delhi desired information on payment of subsidy claimed by the various manufacturers of SSP of U. P. from 1995. This information was sent by the DAC on 14-3-2000. In view of the serious allegation of defrauding of Government exchequer, the DAC in February, 2000 decided to temporarily hold back payment of subsidy to all SSP units of U. P. The DAC on 9-3-2000 wrote to the Agriculture Production Commissioner, U. P. seeking factual position and he also wrote a letter on 14-3- 2000 to the Commissioner of Income Tax, Agra seeking a list of the involved fertilizer manufacturers, details regarding the alleged fraud, quantities of fertilizer etc. The petitioner company also figured in the list of 23 such units furnished by the office of the Income Tax Commissioner, Agra. In the letter dated 15-3-2000 names of all the suppliers who were alleged to have issued false bills for supply of non- existent companies are mentioned.;