Patna, Dec. 14: The high court today held that firms which made investments in the food processing sector between May 2007 and December 2008 are eligible for getting 35 per cent subsidy on account of reimbursement under the policy laid down by the government.

A bench of Justice Jayanandan Singh delivered the judgment on a petition filed by Shakti Sudha Industries, seeking direction to the government for reimbursement of 35 per cent subsidy as promised under the food processing policy.

The order overrules the state government’s decision not to make subsidy payments to these industries. Chief minister Nitish Kumar had last year rejected the opinion of the industries and finance department and also that of the advocate-general, who had said that subsidy should be given to these firms.

Shakti Sudha set up a makhana (fox nut) unit at Patliputra Industrial Area in 2007, following the government’s assurance but it hasn’t received a single penny from the government on account of subsidy.

The bench directed the government to make payments of subsidy to 13 firms within four months, the petitioner’s lawyer, Sangeet Deokuliar, told The Telegraph.

The court passed the judgment in the light of the decision taken on July 13, 2010, by the empowered committee — headed by the development commissioner — that firms, which were set up after May 30, 2007, were eligible for 35 per cent subsidy, Deokuliar said.

Satyajit Kumar, owner of Shakti Sudha Industries, said the judgment showed the government in poor light. “The judgment not only vindicates our stand that our demands were right but also speaks of the sorry state of affairs and the negative and hostile environment in which local investors have been forced to work in the state. Entrepreneurs are being harassed and they have no option but to approach courts to get justice.”

Kumar, whose claim of Rs 1.5 crore is pending with the industries department, approached the high court for a direction to the government to clear his dues.

Kumar, who is also a key functionary of the Confederation of Indian Industry, said that the decision of the empowered committee that had been set up under the State Investment Promotion Board Act was final and binding on all. He wondered how the government could take such a decision leading to non-payment.

The state cabinet announced in April 2007 that any entrepreneur wishing to invest in the food processing sector up to Rs 5 crore would be given 35 per cent subsidy that would be reimbursed later. But till date 13 units — which have made investments totalling Rs 20 crore — have not been reimbursed their Rs 7 crore (35 per cent of the project cost) even after five years.

Kumar, while referring to an RTI reply, said the government had claimed that since the rules were framed and also came into effect in December 2008, these 13 units, which came up between April 2007 and December 2008, would not get reimbursement of 35 per cent.

As per the RTI reply, the chief minister was advised that grant should be given to these entrepreneurs as the scheme had been announced and publicised much earlier.