Case Background
The case arose from an investment proposal submitted by a private company engaged in the food processing sector. The proposal was placed before the Department of Industries, Government of Bihar, under the “Scheme for Integrated Development of Food Processing Sector”.
On 08.05.2017, by Letter No. 313, the State authorities informed Darashaw & Company Private Limited, the Project Management Agency (PMA), that no further action could be taken on the investment proposal of the petitioner company. The reason given in that letter was that the competent authority had not approved the petitioners’ proposal under the concerned scheme.
Feeling aggrieved, the petitioners approached the Patna High Court by filing Civil Writ Jurisdiction Case No. 21298 of 2021. They challenged the said letter and claimed that financial assistance had been promised to them by the State Government under the BIHAR INDUSTRIAL INCENTIVE POLICY 2011, and later under the BIHAR INDUSTRIAL PROMOTION POLICY 2016, both read with the Scheme for Integrated Development of Food Processing Sector.
The case was heard by a Division Bench comprising Hon’ble the Chief Justice and Hon’ble Mr. Justice Vikash Jain. The hearing took place through video conferencing due to the Covid-19 pandemic. Counsel for both sides appeared virtually from their respective locations.
What the Court Examined and Decided
At the outset, the Court noted the specific reliefs sought. The first prayer was for a writ of certiorari to quash and set aside Letter No. 313 dated 08.05.2017, through which the authorities had informed the PMA that the petitioners’ investment proposal would not be processed further because it had not been approved by the competent authority under the Scheme for Integrated Development of Food Processing Sector.
The second prayer was for a writ of mandamus. By this the petitioners sought a direction commanding the State authorities to grant incentives to the petitioner company, by way of financial assistance, as allegedly promised under the BIHAR INDUSTRIAL INCENTIVE POLICY 2011, followed by the BIHAR INDUSTRIAL PROMOTION POLICY 2016. In other words, the petitioners wanted the Court to order the authorities to extend benefits under these policies.
The Court heard learned counsel for the parties. During the course of hearing, it became evident that the Bench was not inclined to accept the submissions being advanced on behalf of the petitioners for direct grant of the reliefs sought. Sensing that the Court was not in favour of the case as argued, counsel for the petitioners, on instructions, modified the stand.
Counsel for the petitioners stated that they would be satisfied if the Court simply directed the competent authority to consider and decide a detailed representation which the petitioners would file within four weeks from the date of the order. This representation would be for redressal of all their grievances about denial of incentives and non-processing of their proposal.
On the other hand, counsel for the respondents fairly stated before the Bench that if such a representation was filed, the authority concerned would consider and dispose of it expeditiously and preferably within three months from the date of its filing, provided a copy of the Court’s order was annexed with that representation.
The Court accepted and recorded these statements. The Bench then proceeded to frame an order that would guide how the grievance should be taken up by the executive authority in future, rather than itself pronouncing on entitlement to incentives.
While disposing of the petition, the Court referred at length to the judgment of the Hon’ble Supreme Court in D. N. Jeevaraj v. Chief Secretary, Government of Karnataka & Ors., (2016) 2 SCC 653. Paragraphs 34 to 38 of that decision were reproduced. Those paragraphs, although arising from a public interest litigation, deal with important principles regarding writs, especially writs of mandamus, and when courts should or should not directly interfere.
From that Supreme Court decision, the Patna High Court highlighted several points:
First, procedural technicalities should generally take a back seat in matters of genuine public interest, particularly where questions of good governance are raised. However, not every dispute qualifies as public interest litigation. Litigations focused essentially on an individual or a single organisation, where other remedies are available, should not ordinarily be entertained as PILs.
Second, the Court reproduced the Supreme Court’s observations from Union of India v. S.B. Vohra, (2004) 2 SCC 150, explaining the nature of a writ of mandamus. A writ of mandamus is essentially a command to perform a public legal duty. It can be issued only in favour of a person who shows that he has a legal right, and against a person or authority that has a legal duty to act but has failed or neglected to do so.
This duty must arise either from a public obligation or directly by law. Mandamus is a wide remedial writ, meant to prevent failure of justice in cases where no specific statutory remedy is otherwise provided and where justice has been denied despite a specific demand.
Third, referring to Saraswati Industrial Syndicate Ltd. v. Union of India, (1974) 2 SCC 630, the Supreme Court had laid down an important rule. Before a writ of mandamus is issued, there must usually be a clear demand by the aggrieved party for performance of a duty, and a refusal by the authority concerned. The party against whom mandamus is sought must have been told what exactly is required, so that it has a fair opportunity to comply. If there is no such demand or refusal, courts ordinarily do not issue mandamus.
These quotations, though lengthy, were incorporated by the Patna High Court to underline that a writ court does not lightly direct an authority to perform a duty—particularly where the basic step of making a representation and seeking relief from that authority has not been exhausted, or where other remedies exist.
Applying these broad principles, the Court opted not to examine the merits of the petitioners’ claim for incentives under the Bihar policies. Instead, it fashioned a practical way forward.
The Court disposed of the writ petition on specific terms. It granted liberty to the petitioners to approach the competent authority, identified as Respondent No. 5, the Director, Directorate of Food Processing, Department of Industries, Government of Bihar, Patna. The petitioners were allowed four weeks from the date of the judgment to file a detailed representation for redressal of their grievances.
In turn, the Court directed that this authority must consider and dispose of the representation expeditiously. A “reasoned and speaking order” is to be passed, preferably within three months from the date of filing of the representation, provided the petitioners enclose a copy of the High Court’s order.
The Bench made it clear that the order passed by the authority must be communicated to the petitioners. Importantly, the authority is required to follow the principles of natural justice while deciding. That means providing due opportunity of hearing to all parties concerned, and permitting them to place all relevant material and documents on record before any decision is taken.
The Court also preserved the petitioners’ right to pursue any other legal remedies that may be available to them in accordance with law. Should the need arise, they are free to approach the appropriate forum or court again, on the same or subsequent cause of action, depending on how the authority decides their representation.
The Division Bench took care to record that it was not expressing any opinion on the merits of the case. All substantive issues, including whether the petitioners are actually entitled to incentives under the BIHAR INDUSTRIAL INCENTIVE POLICY 2011, the BIHAR INDUSTRIAL PROMOTION POLICY 2016 or under the Scheme for Integrated Development of Food Processing Sector, were left completely open.
The Court further noted that, in view of the ongoing Covid-19 pandemic, proceedings would continue to be conducted through digital mode unless parties mutually agree to physical hearings.
Finally, the writ petition, along with any interlocutory applications, stood disposed of in these terms.
Why This Judgment Matters
This decision is significant for businesses and entrepreneurs seeking government incentives in Bihar, especially in the food processing sector. The Patna High Court emphasised that before rushing to court, parties must first present a clear representation to the competent authority and wait for a decision.
The judgment shows that the Court will not immediately order release of subsidies or financial assistance under industrial policies. Instead, it expects the executive to consider such claims in the first instance, through a reasoned and speaking order, after hearing the parties and examining the documents.
For investors, this means that if their project is stalled or rejected by a letter or communication, they should first file a formal representation, clearly demanding the relief they seek. Only if that representation is rejected, unreasonably delayed, or decided in violation of law, will a stronger case arise for approaching the High Court.
The judgment also offers some protection to applicants. By directing the authority to follow principles of natural justice and to give a reasoned order, the Court ensures that decisions on incentives cannot be arbitrary or secretive. Applicants get the right to be heard and the reasons for acceptance or refusal are to be put in writing.
Legal Issues and Answers
- Issue: Should the Patna High Court quash Letter No. 313 dated 08.05.2017 and directly order the State to grant incentives under Bihar industrial policies and the food processing scheme?
Answer: No. The Court declined to examine entitlement on merits and instead directed the petitioners to file a representation before the Director, Directorate of Food Processing, who must decide the claim by a reasoned, speaking order. - Issue: What is the proper course when a party seeks a writ of mandamus for financial benefits without first making a focused demand to the authority concerned?
Answer: The Court, relying on Supreme Court precedent, held that a prior demand and opportunity for the authority to respond are essential. It therefore required the petitioners to approach the authority first, reserving their rights to pursue further remedies later.
Cases Cited by the Court
- D. N. Jeevaraj v. Chief Secretary, Government of Karnataka & Ors., (2016) 2 SCC 653 (paragraphs 34–38, including references to Rural Litigation and Entitlement Kendra v. State of U.P., R&M Trust v. Koramangala Residents Vigilance Group, Union of India v. S.B. Vohra, and Saraswati Industrial Syndicate Ltd. v. Union of India).
Case Details
Case Number: Civil Writ Jurisdiction Case No. 21298 of 2021
Case Title: Avyn Enterprises Private Limited & Anr. v. The State of Bihar & Ors.
Coram: Hon’ble the Chief Justice; Hon’ble Mr. Justice Vikash Jain
Date of Judgment: 17.02.2022
Citation: 2022 (1) PLJR 692
Advocates: Mr. Rajesh Kumar Singh, Advocate for the petitioners; Mr. Kinkar Kumar, SC-9 for the respondents
Nature of the Case: Writ petition (Civil) seeking certiorari to quash departmental communication and mandamus for grant of industrial incentives/financial assistance.
Link to Judgment: Click here to read the full judgment of the Patna High Court
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