Govt must stick to its promise, abide by it: HC

Asks admin to release interest subsidy to hoteliers as per Centre’s notification

Srinagar, Sept 19: Observing that its jurisdiction is not restricted to the review of the administrative actions but also extends to the applicability of the “doctrine of promissory estoppels”, the High Court of J&K and Ladakh on Tuesday directed authorities to release the entire amount of interest subsidy in favour of the hoteliers for revival of Hotel and Guest-Houses in terms of a notification issued by Government of India, Department of Tourism, in 2003.
“The jurisdiction of the High Court while exercising the powers under Article 226 of the Constitution of India is not restricted only to the review of the administrative actions and executive decisions of the State but also extends to the applicability of the “doctrine of promissory estoppels” of which the whole object is to see that the Government sticks to its promise and abides by it,” said a bench of Justice Wasim Sadiq Nargal while disposing of a petition by “owners of various hotels and guest-houses” in Jammu and Kashmir. The court also directed the government to do the needful within two months.
The court was hearing a joint petition by petitioners, who claim to be the owners of various hotels/guest-houses in J&k and according to them their hotels are duly registered with the competent authority i.e., Directorate of Tourism, Government of Jammu and Kashmir, under the provisions of J&K Registration of Tourist Trade Act. They submitted that the tourism constitutes backbone of the hotel industry of J&K in general and Valley of Kashmir in particular.
The hotel industry, they said, was exposed and subjected to fatal setback due to the eruption of “unprecedented state of turmoil in the Valley of Kashmir since 1990.”
To combat the consequences of prolonged turmoil, they said, Government of India promulgated several schemes for revival of various infrastructural projects and with a view to achieve the object to create employment for revival of tourism in the Valley of Kashmir, a special package was sanctioned by the Ministry of Tourism vide Notification bearing No. 13(18)/2003-MRD dated 08.09.2003. Through the medium of the notification, they said, various guidelines were laid down and the package was made effective from the date.
They submitted that the package for rehabilitation by way of soft loan of Rs.50,000 per room, for renovation and refurbishing 50% of the rooms of A, B, C and D category hotels (except Five Star Hotels) was prescribed. The policy and guidelines further provided that the Banks would provide loans to the hotels and Guest Houses and the Ministry of Tourism, Government of India, would provide subsidy so that the hotel and guest-house owners get the loan at 4% interest, they said.
The guidelines further explicitly provide that the benefit would be available at the rate of Rs.50,000 loan amount per room for upto 50% of the capacity of the hotels and guest-houses and the subsidy would be limited to difference between the principal loan released at 4%.
“On the careful analysis of the record and the stand taken by the parties, and in light of the law laid down by the Apex Court ….on the subject, it could safely be concluded that the respondents (authorities) are liable to settle down the issues regarding release of entire amount of interest subsidy in favour of the petitioners (hoteliers), which has resulted in financial liability of the petitioners, exposing them to recovery measure of the Banks,” the court said, adding, “Admittedly, respondents ….have not disputed the entitlement of the petitioners for the benefit as envisaged under the said scheme.”
Accordingly, the court said directed the authorities to release the entire amount of interest subsidy in favour of the petitioners through their respective Soft Loan Accounts maintained with their respective Banks, strictly in accordance with the terms of the Scheme, for revival of Hotel/Guest-Houses, issued vide notification dated 8th September 2003 by the Government of India, Department of Tourism, within a period of two months.

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