In M/s Responce Renewable Energy Limited vs. The State of Bihar through the Principal Secretary, Department of Industry, Government of Bihar & Ors. (2026), Justice Anil Kumar Sinha of Patna High Court delivered a-19-page long judgement dated February 9, wherein, he concluded:"51. The rejection of the claim of the petitioners on the ground that the 2014 Amendment Policy/resolution applies rrospectively is not tenable in the facts of the case, particularly when the petitioners’ units fulfilled the criteria of Board’s approval as well as commencement of the commercial production, dates of which are after coming into force of the 2014 Amendment Policy. 52. The respondents have erred in treating the dates of Board’s approval as the disqualifying factor when the condition of approval itself was that the approval would be considered from the date of power purchase agreement and the power purchase agreement is subsequent to the coming into force of the 2014 Amendment Policy. 53. Accordingly, this Court comes to the conclusion that the petitioners fulfilled all the criteria as mentioned in the resolution, dated 11.06.2015 for applying the 2014 Amendment Policy for grant of interest subsidy. 54. Considering the aforesaid discussion, this Court holds that the petitioners have fulfilled eligibility conditions including
valid project approval and are entitled for grant of 2 per cent interest subsidy on the amount of term loan from the date of commencement of the commercial production, i.e. 30.03.2017 and 28.02.2017, respectively for a period of seven years. 55. Accordingly, the impugned orders, dated 12.09.2022 and 26.09.2022, are set aside. The respondents are directed to calculate the amount of subsidy on interest as per the claim raised by petitioners in their respective applications within a period of one month from today and pay the said amount within a maximum period of four months from today."
Justice Sinha examined the question as to whether the petitioners companies were entitled for grant of 2 per cent interest subsidy under the Bihar Industrial Incentive Policy, 2011, and Industrial Incentive (Amendment) Policy, 2014.
The other four Respondents were: Principal Secretary, Department of Industry, Government of Bihar, Director of Industries, Department of Industry, Government of Bihar, Deputy Director (Technical), Department of Industries, Government of Bihar and General Manager, District Industry Centre, Patna. Thwe writ was heard along with Civil Writ Jurisdiction Case No. 16335 of 2022 M/s. Glatt Solution (P) Limited. The petitioners were the companies engaged in the generation of solar power who had filed the writ applications for quashing of the orders, dated September 12, 2022 and September 26, 2022, respectively, by the respondent-Director of Industries, Bihar and for a direction to the respondents to reimburse the interest subsidy of 2 per cent on the term loan of rupees 49.92 crores and 16.50 crores, respectively.
The petitioners had prayed for a declaration that the companies are entitled for the interest subsidy from the date of commercial production, i.e. March 30, 2017 and February 28, 2017 respectively till seven years, as provided under the Industrial Incentive (Amendment) Policy, 2014. I. A. No. 1 of 2025 was filed in both the writ applications for amendment in the prayer for a direction to the respondent-State to disburse the amount of Rs. 5,57,84,700/- and Rs. 1,90,66,231/- respectively towards the interest subsidy for a period of 7 years from April 1, 2017 to March 31, 2024 and March 1, 2017 to March 1, 2024 respectively, and also to pay interest at the rate of 2 per cent upon the entire calculated amount. With a view to promote industrial development within the State of Bihar, the Government of Bihar formulated and notified the Bihar Industrial Incentive Policy, 2011, promising various fiscal and non-fiscal incentives to attract industrial investment. The 2011 Policy was approved by the State Cabinet and notified in the Official Gazetteon June 9, 2011, issued by the Department of Industries and published on June 10, 2011.
Upon mid-term review of the 2011 Policy, the State Government decided to introduce certain amendments in the 2011 Policy. Accordingly, the Department of Industries issued the Industrial Incentive (Amendment) Policy, 2014 (2014 Amendment Policy) dated January 5, 2015, which was made effective from the date of its notification. The 2014 Amendment Policy was framed by introducing specific amendments to the 2011 Policy, and Clause 8 thereof inserted sub-paragraph (vi) in Paragraph 4 of the 2011 Policy, thereby providing for grant of interest subsidy at the rate of 2 per cent on the interest charged on term loans availed from the banks or financial institutions, payable for a maximum period of seven years from the date of commencement of commercial production. In furtherance of the promises made under the 2014 Amendment Policy, the Department of Industries, Government of Bihar, issued a notification dated June 11, 2015, laying down the procedure for grant of interest subsidy and specifying the date from which the amendment would take effect. The petitioner company had applied for approval of the proposal for establishment of 25 MW power generation solar unit, initially proposed to be set up at Madhubani, Buxar, or Chapra. However, due to certain practical difficulties, the proposed location of the unit was subsequently changed to Nawada, which was approved by the State Investment Promotion Board (SIPB) in its meeting held on March 26, 2012 from the date of power purchase agreement. Thereafter, the proposal of the petitioner company for establishment of the solar power generation unit at Nawada was approved by the State Cabinet on July 2, 2013 and the said approval was duly communicated to the petitioner company July 11, 2013. For the purpose of implementation of the project, the petitioner applied for a term loan, amounting to Rs. 49.92 crores, from the State Bank of India for its 10 MW power generation project at Nawada, and the Bank sanctioned the term loan dated February 7, 2017. The petitioner company commenced its commercial production with effect from March 30, 2017 and obtained the commissioning certificate dated July 14, 2017. After commencement of commercial production, the petitioner company applied for and was granted incentive under the 2011 Policy, and the Department of Industries issued sanction order, dated October 16, 2017, sanctioning capital subsidy of Rs. 5,00,00,000/- in favour of the petitioner. Thereafter, the petitioner, vide application, dated September 14, 2018, applied before the General Manager, District Industries Centre, Nawada, seeking grant of interest subsidy at the rate of 2 per cent on the term loan availed by it, in terms of the 2014 Amendment Policy. Pursuant to the said application, the General Manager, District Industries Centre, Nawada, conducted site inspections of the industrial unit of the petitioner on November 16, 2018 and November 22, 2018, and found the unit to be functional and operational and recommended for grant of interest subsidy to the Department of Industries dated November 28, 2018.
Despite the the recommendation, no decision was taken by the respondents on the petitioner’s claim for interest subsidy, compelling the petitioner to approach the High Court by filing CWJC No. 3578 of 2020, which was disposed of by the High Court, vide order, dated Juy 12, 2021, with a direction to the respondents to consider and dispose the representation of the petitioner. The petitioner communicated the High Court's order, dated July 12, 2021, to the respondents by way of representations, dated July 16, 2021 and March 14, 2022; however, when the respondents failed to comply with the directions of this Court within the stipulated reasonable time, the petitioner was constrained to file contempt petition, bearing MJC No. 1188 of 2022, and the High Court, vide order, dated August 31, 2022, directed the respondents to comply with the earlier order passed in CWJC No. 5932 of 2020. Thereafter, the respondents passed the impugned order, vide Memo dated September 12, 2022.
The petitioner company established 3 MW solar power generation unit at Nawada by availing a term loan of Rs. 16.50 crores from the State Bank of India. The proposal of the petitioner company for establishment of the solar power generation unit at Nawada was approved by the SIPB from the date of power purchase agreement, in its meeting, dated May 24, 2013. The petitioner entered into the Power Purchase Agreement with BSPHCL on September 14, 2016. The petitioner submitted the proposal for extension of the date of the commercial production, which was taken up by the SIPB and approved it in the meeting held on January 13, 2017, which was communicated to the petitioner, vide letter dated February 3, 2017. The petitioner, vide application, dated September 14, 2018, applied before the General Manager, District Industries Centre, Nawada, seeking grant of interest subsidy at the rate of 2 per cent on the term loan availed by it, in terms of the 2014 Amendment Policy.
It was pointed out by the petitioners' counsel that in a Division Bench decision of the High Court, in the case of M/s Sunny Stars Hotels Pvt. Ltd. vs. State of Bihar, reported in 2020 (2) PLJR 327, dated July 29, 2019, wherein the Division Bench, while interpreting the 2011 Policy, held that it is exhaustive in itself and contains all requirement while no dependence on any other document and also that the denial of the benefit under the 2011 Policy on the ground of non-approval by the Chief Minister was held to be bad.
On the point of prospective and/or retrospective application of the 2014 Amendment Act, Justice Sinha quoted paragraphs 189 and 190 of the decision of the Supreme Court, in M. Rajendran and others vs. M/s KPK Oils and Proteins India Pvt. Ltd. and Others, reported in 2025 SCC ONLINE 2036. It reads: “189. A legislation, be it a statutory Act or a statutory Rule or a statutory Notification, may physically consist of words printed on papers but conceptually, it would be a great deal more than ordinary prose. Of the various rules guiding how a legislation should be interpreted, the one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have retrospective operation and the idea behind the rule is that a current law should govern current activities. 190. If legislation confers a benefit on some persons without inflicting a corresponding detriment on some other person or on the public generally, and such conferment appears to have been the legislators object, then the presumption would be that such legislation, giving it a purposive construction, would warrant a retrospective effect.”
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