University of Patanjali v. Department for Promotion of Industry and Internal Trade

1. This hearing has been done through hybrid mode.

2. The Petitioner in the present petition has approached the Court challenging the rejection of its application for consideration under the Industrial Development Scheme for Himachal Pradesh & Uttarakhand, 2017 as notified vide notification bearing F. No. 2(2)/2018-SPS dated 23.04.2018 issued by the Department for Promotion of Industry and Internal Trade (hereinafter ‘the Scheme’). According to the Petitioner, it is engaged in the education sector and has set up a University in Haridwar, Uttrakhand. The Petitioner claims that it fully satisfies the requirements of the said Scheme and is eligible for consideration under the above-mentioned scheme.

3. The case of the Petitioner is that when it filed an application for registration under the said scheme, it received a rejection in the following terms:- “DOES NOT COVER UNITS WHICH ARE ENGAGED IN EDUCATION SECTOR, SO APPLICATION IS REJECTED.”

4. In the present writ petition, the Petitioner prays that it be considered for receiving incentives, under the Scheme, including Central Capital Investment Incentive for Access to Credit (CCIIAC), to the extent of Rs. 5 crores under the Industrial Development Scheme for Himachal Pradesh & Uttarakhand, 2017.

5. Ld. Counsel for the Petitioner relies upon various definitions under the scheme and submits that the Petitioner satisfies the requirements under Clause 5F of the Scheme which merely requires significant capital expenditure and significant employment generation potential. According to the Petitioner, sufficient capital expenditure has been made and more than 135 persons have been given employment by the Petitioner.

6. Ld. Counsel appearing for the Respondents have pointed out firstly that the Petitioner has impleaded the wrong Ministry as the Respondent. It is his submission that the Ministry of Education would be the correct Respondent in this case.

7. On behalf of Respondent No. 3- Directorate of Industries, Dehradun, Uttarakhand is concerned, ld. Counsel for the said Respondent submits that insofar as the negative list of admissible activities are concerned, the Empowered Committee has been given the final discretion.

8. The Court has heard ld. Counsel for the parties. Vide order dated 12th November, 2021, the Court had directed the Petitioner to file certain documents to show how it would be covered by ambit of `industry’. The said order reads as:

9. Thereafter, vide order dated 21st March, 2022, the Court had prima facie expressed doubt on the eligibility of the Petitioner for registration under the Scheme. The said order reads as: “Prima facie, the Court finds no justification to interfere with the order impugned which holds against the petitioner asserting that an educational institution would not fall within the ambit of the notification of 23 April 2018. As this Court reads the provisions made in the policy, it is manifest that it was restricted in its application to new and existing “industrial units”. Merely because education may have been recognised to be an “industry” under the provisions of Industrial Disputes Act, 1947, that, prima facie, would not justify interference with the order impugned or to hold in favour of the petitioner insofar as the question of its eligibility under the policy is concerned. Learned counsel for the petitioner prays for time to study the matter further.

10. A perusal of the Clause 4.[1] of the Scheme defining the `Eligibility’ for consideration under the scheme shows that industrial units, both existing and new would be eligible. The definition of `Industrial unit’ is as under:- “4.[1] Unless otherwise specified, all new industrial units and existing industrial units undertaking substantial expansion in manufacturing sector and services sector including Bio-technology and Hydel Power Generation Units upto 10 MW located in the states of H.P. & Uttarakhand will be eligible for incentives under the Scheme. 5(d) 'Industrial Unit' means any industrial undertaking or eligible service sector unit, other than that run departmentally by Government, which is a registered business enterprise under Goods & Services Tax. 5 (f) 'Eligible Service Sector Unit' is an enterprise in the services sector that requires significant capital expenditure and has significant employment generation potential.”

11. A perusal of the above shows that in Clause 4.[1] of the Scheme, the only eligibility criteria specified is that all new Industrial units and existing industrial units undertaking expansion would be considered eligible for incentives under the Scheme. In addition, while defining industrial unit even service sector units have been included and the eligibility of the said service sector units is to be considered on the basis of capital expenditure and employment generation, both on a significant basis. Thus, from the clauses, it is not clear or directly inferable that education is not included or excluded inasmuch as education is not even included in the negative list in Ann-I.

12. It has been observed that the rejection of the application for consideration for the Scheme is through the e-portal and not by the Empowered Committee constituted to consider applications under the said Scheme. As per the minutes of meetings which have been held on 30th January, 2019 to consider the applications for units under the scheme, the Empowered Committee has been given the discretion to decide upon the applications on a case-to-case basis. Point 7 of the said Minutes reads as under: - “7) Regarding negative list on admissible activities for service sector industry, it was mentioned that the service sector definition has been kept somewhat open and EC has been given the discretion to decide upon case to case basis. The investment proposed and employment generation are two main determinants.”

13. In the overall circumstances of this case, the Petitioner is accordingly permitted to approach the Empowered Committee by way of a representation under the scheme for clarification on the question as to whether the Petitioner would qualify as an industrial unit for consideration under the scheme. The representation on behalf of the Petitioner be filed within a period of 30 days from today. The Empowered Committee shall take a decision within four months.

14. It is made clear that this Court has not given a view on the question as to whether the Petitioner is covered in the definition of Industrial Unit or not.