The Bombay High Court has issued an order releasing the export subsidy of ₹75 Lakhs to the manufacturer

The court noted that non-payment of the subsidy to the manufacturer would mean different treatment of identically placed parties, which is contrary to the principles of atf fairness and non-discrimination in accordance with Article 14.

Division bench Judge B. P. Kolabawalla and Justice Firdosh P. Pooniwalla heard the plea of ​​Sunfresh Agro Industries Pvt. Ltd., a milk powder manufacturer.

In 2018, the state launched an export subsidy scheme for powder manufacturers. This was because milk powder prices had fallen dramatically and producers were unable to sell milk powder at a price that would cover their costs. As a result, producers’ stocks of dry milk increased.

In order to clear existing milk powder stocks in the state and resume production of milk powder, the state government issued GR dated 31st July, 2018 where it introduced a subsidy scheme for milk powder stock producers at a certain rate.

The petitioner claimed that the State Government had verified and counted the stock of milk powder and claimed that it was entitled to Rs. 75 lakhs as per GR.

In an order dated March 4, 2022, the Principal Secretary, Dairy Development, stated that milk powder producers, including the petitioner, are eligible for export subsidy under the GR. After conducting an enquiry, the Chief Secretary submitted a report dated 26th May, 2022, wherein it was stated that the petitioner had found that the petitioner was entitled to a sum of Rs. 75 lakhs.

After this notification, the applicant repeatedly appealed to the state authorities to release the subsidy amount, but they refused to do so.

Meanwhile, an entity similar to the petitioner approached the High Court seeking release of the export subsidy amount by the government in the Indapur Dairy case. On March 20, 2023, the court ruled that milk powder producers were eligible for export subsidies under the July 31, 2018 GR.

Following this order, the state government paid the entire amount of export subsidy to one of the producers, Indapur Dairy.

However, he did not provide any amount of subsidy to the petitioner despite his repeated requests.

The petitioner alleged that despite his entitlement to the subsidy amount being decided by the Principal Secretary, Dairy Development, the State authorities have not paid the amount. He further submitted that due to the orders of the Court dated 20th March, 2023 in the case of Indapur Dairy, which is also the petitioner, the authorities have failed to release the amount of export subsidy without any good and valid reason.

Here the Court observed that if the same protection is not granted to the plaintiff who is identical to Indapur Dairy, it will “means doubting the solemn orders passed by this Court and executed by the Defendants, which is an inadmissible law.”

It also states that if the same subsidy is not paid to the applicant who is located in the same place, it will be a violation of Article 14 of the Constitution.

“..if Indapur Dairy, co-located with the Petitioner, received export subsidy, it would be violative of Article 14 of the Constitution of India if the Petitioner, being identically situated, was not paid the same subsidy as it would mean different treatment of persons who are in the same situation, which contradicts the very principles of Article 14 of the Constitution.”

The court noted that treating the claimant differently would violate the principles of reasonableness, fairness and non-discrimination under Article 14.

“We may observe that once a party like Indapur Dairy, who was similarly placed as the plaintiff, was in receipt of such a subsidy, which is certainly a public bounty, all the marks of reasonableness and fairness follow from Article 14 of the Convention. The Constitution of India would stare down the Defendants in a similar manner to a person like the Plaintiff who was in the same place. A different attitude towards the plaintiff would lead to a violation of the plaintiff’s fundamental rights to non-discrimination, guaranteed to him by Article 14 of the Constitution.”

Noting that the subsidy scheme was a welfare scheme which was fully implemented on Indapur Dairy, the court said it recognized the rights of the petitioner as provided by the constitution and the scheme.

Thus, the court directed the government authorities to release the export subsidy amount of Rs. 75 lakhs to the plaintiff.

Case Name: Sunfresh Agro Industries Pvt. Ltd v. State of Maharashtra and anr. (Claim No. 199 of 2024)