Maris Spinners Limited has achieved a significant legal victory with the Madras High Court directing the Ministry of Textiles to pay Rs 19,73,65,57 as interest subsidy under the Technology Upgradation Fund Scheme (TUFs). The court order, pronounced on 05.01.2026, mandates payment within two months from receipt of the order.

Court Ruling Details

The High Court of Madras, presided over by Justice N. Sathish Kumar, quashed the Ministry of Textiles' order dated 31.10.2018 that had rejected the company's subsidy claim. The ministry had categorized Maris Spinners' case as a "left out case" and refused to extend TUFs benefits on grounds that the nodal bank uploaded loan details only on 10.01.2014, well after the stipulated timeframe.

Background of the Dispute

Maris Spinners, engaged in manufacturing 100% cotton yarn with 49,536 spindles capacity across Tamil Nadu and Karnataka, had availed a term loan of Rs 10 crores from Indian Overseas Bank on 15.06.2010. The loan was confirmed as eligible for 4% interest subsidy under the TUFs scheme through the bank's letter dated 31.07.2010.

Despite the company's compliance with all prescribed conditions and regular filing of Quarterly Interest Subsidy Claims (QISC), the subsidy amounts remained undisbursed. The company's total interest payment on the term loan amounted to Rs 6,09,60,644, of which Rs 1,97,36,557 represented the eligible 4% quarterly interest subsidy.

Key Legal Arguments

The court established a principal-agent relationship between the Ministry of Textiles and Indian Overseas Bank as the nodal agency. Justice Kumar ruled that once eligibility for subsidy is acquired, beneficiaries cannot be denied accrued rights due to negligent acts by the nodal agency.

Court's Key Findings:

• The petitioner's eligibility for 4% interest subsidy was undisputed
• Delays in documentation submission were attributable to the nodal bank, not the company
• The doctrine of promissory estoppel applies when government schemes create legitimate expectations
• Administrative lapses by implementing agencies cannot prejudice eligible beneficiaries

Government and Bank Positions

The Ministry of Textiles argued that claims should have been submitted within six months of loan sanction (by 14.12.2010) as per circular guidelines. The ministry maintained its policy decision not to extend benefits to "left out cases" where documentation was submitted beyond prescribed timelines.

Indian Overseas Bank contended that the first loan disbursement on 27.09.2010 fell within a "blackout period" when the TUFs scheme was non-operational due to fund constraints. However, the court noted contradictions between the ministry's and bank's positions regarding the nature of the case.

Legal Precedents Cited

The judgment referenced several Supreme Court cases establishing the doctrine of promissory estoppel against government actions, including:

• Pournami Oil Mills vs. State of Kerala (1987): Established rights under earlier government orders
• Pine Chemicals vs. Assessing Authority (1992): Confirmed exemption benefits for entire specified periods
• Manglore Chemicals vs. Deputy Commissioner (1992): Applied promissory estoppel doctrine to government executive functions

Financial Impact

The court rejected the company's claim for additional interest on the delayed payment, considering the nature of the subsidy claim. However, the principal amount of Rs 19,73,65,57 must be paid within the stipulated two-month period.

Industry Implications

This judgment sets an important precedent for textile industry participants who may have faced similar issues with TUFs scheme implementation. The ruling reinforces that government scheme benefits, once eligibility is established, cannot be arbitrarily denied due to procedural delays by implementing agencies. The decision strengthens the position of textile manufacturers seeking legitimate subsidy claims under various government modernization schemes.

Maris Spinners Limited has received a partial interest subsidy of ₹8.54 crores from the Commissioner of Textiles and Director, Bangalore, as announced in a regulatory filing to the Bombay Stock Exchange on January 21, 2026.

Subsidy Details and Financial Impact

The textile manufacturer disclosed that this payment represents a partial release against the total claimed amount. The subsidy breakdown shows significant financial support for the company's operations:

The interest subsidy scheme is designed to support textile manufacturers by reducing their financial burden and enhancing operational efficiency. This partial disbursement indicates ongoing government support for the textile sector.

Company Operations and Manufacturing Presence

Maris Spinners Limited operates through a multi-location manufacturing setup across South India. The company maintains two primary production facilities:

• Unit I: Located at Kattemalalavadi Village, Hunsur Taluk, Mysore District, Karnataka
• Unit II: Situated on Kulithalai Road, Manapparai, Trichy District, Tamil Nadu

Both units are strategically positioned to serve the textile manufacturing requirements and benefit from regional industrial advantages. The company's corporate office is based in Chennai, facilitating administrative and financial operations.

Regulatory Compliance and Market Communication

The announcement was made through Chief Financial Officer C Srinivasan's communication to the Bombay Stock Exchange, ensuring compliance with disclosure requirements. The company trades under scrip code 531503 on the exchange, maintaining transparency with stakeholders regarding significant financial developments.

This subsidy receipt strengthens the company's financial position and demonstrates the effectiveness of government support schemes for the textile industry. The remaining claimed amount of ₹11.81 crores indicates potential for additional subsidy receipts in future periods, subject to regulatory approvals and compliance requirements.