Messers. Ancorp Electricals And Ors vs. The Union Of INDIA Through Secretary Ministry Of Finance And Ors

Facts

The petitioners, M/s. Ancorp Electricals and its partners, along with Larsen and Toubro Limited (co-noticee), filed writ petitions challenging the rejection of 29 declarations made under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme). The primary grounds for rejection included non-payment of redemption fine by the firm, and consequently, the partners not being entitled to the scheme's benefits. For Larsen and Toubro Limited, the rejection was based on the premise that a co-noticee cannot receive waiver of penalty unless the main noticee settles dues. The petitioners argued that the rejection was unjustified as the duty amount was settled and the main noticee had paid under the scheme.

Held

The Court held that the rejection of the firm's application under the SVLDR Scheme on the ground that the redemption fine was not paid, despite the duty amount being settled, was unjustified. The Court reasoned that the Scheme aimed for a comprehensive resolution of legacy disputes, and such a rejection would defeat its purpose. Consequently, the rejection of the firm's application was quashed and set aside, with directions to issue Form SVLDRS-4. Regarding the partners' applications, the Court noted that since the firm's application was now to be accepted, the basis for rejecting the partners' applications did not survive. Therefore, the rejection of the 20 applications made by the partners was also set aside, with directions for them to make payments and for the Respondents to issue final certificates. For Larsen and Toubro Limited, the Court found that since the main noticee (Petitioner No.1) had settled their issue and paid the amount under the SVLDR Scheme, the basis for rejecting the co-noticee's application did not survive. The rejection was quashed and set aside, with directions for intimation of payment, subsequent payment by the petitioner, and issuance of Form SVLDRS-4.

Key Issues

1. Whether the rejection of the firm's application under the SVLDR Scheme for non-payment of redemption fine, despite settlement of the duty amount, is justified under the Scheme? (Question of law) 2. Whether the partners' applications under the SVLDR Scheme are liable for rejection solely because the firm's application was rejected? 3. Whether the rejection of the co-noticee's (Larsen and Toubro Limited) application under the SVLDR Scheme for penalty waiver is justified when the main noticee has settled their dues under the Scheme? Petitioners' arguments: The petitioners contended that the SVLDR Scheme intended to provide a comprehensive resolution for legacy disputes, including redemption fines and penalties. They argued that the rejection of the firm's application based on the redemption fine was contrary to the spirit of the Scheme, especially when the duty amount was settled. For the partners, they argued that their applications were intrinsically linked to the firm's and should be treated accordingly. For the co-noticee, they argued that once the main noticee settled their dues, the co-noticee should also be eligible for the scheme's benefits, as the Respondents did not rebut this contention. They relied on the principle that the Scheme aims for finality. Respondents' arguments: The Respondents' primary contention, as reflected in the rejection orders, was that the redemption fine was not paid by the firm, and the co-noticee could not receive penalty waiver without the main noticee settling their dues. The Respondents' reply affidavit conceded that the reasons initially given for rejecting Larsen and Toubro's application were erroneous, and the actual reason was the non-settlement of dues by the main noticee.