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NU Vista moves court against West Bengal's incentive scheme rollback

NU Vista, a wholly owned subsidiary of Nuvoco Vistas Corporation, has filed a writ petition before the Calcutta High Court, challenging the constitutional validity of the Revocation of West Bengal Incentive Schemes and Obligations in the Nature of Grants and Incentives Act, 2025 (the Revocation Act). In a stock exchange filing, Nuvoco mentioned that the Revocation Act rescinds, revokes and discontinues the incentive schemes enlisted in the Schedule (including the West Bengal Incentive Scheme, 2004 and the West Bengal State Support for Industries Scheme, 2013). Under the schemes, Nuvoco and NU Vista Limited were entitled to incentives, retrospectively from the date of implementation of the respective incentive schemes, overriding any judgment, order, decree of any court, direction of any authority, or any other law to the contrary. On account of the Revocation Act, the incentives of ₹427.14 crore and ₹300.44 crore to be received by the company and NU Vista Limited, respectively, are likely to be impacted, Nuvoco mentioned. However, the company and NU Vista Limited carry provisions for expected credit loss of ₹238.22 crore and ₹167.58 crore, respectively, it further added. Based on legal opinion, Nuvoco believes that there are sufficient legal grounds to challenge the Revocation Act by way of a writ petition under Article 226 of the Constitution of India 'on the grounds including unconstitutionality, arbitrariness and unreasonableness'. While Nuvoco is in the process of filing a writ petition, NU Vista has already filed one before the Calcutta High Court. On April 2, 2025, the West Bengal government had notified the Revocation of the West Bengal Incentive Schemes and Obligations in the Nature of Grants and Incentives Act, 2025, with the aim of 'subserving larger public interest.' The notification also mentioned that the object of the Act was to make state finances available for various social welfare schemes formulated and under operation in the state of West Bengal, intended for utilisation by the socio-economically disadvantaged and marginalised sections, and not to expend such finances to provide special assistance, financial incentives, state support, benefits, concessions or special privileges at the cost of the marginalised. It is widely expected that the Act may be challenged by other companies. In an exchange filing on June 6, Dalmia Bharat said that it came to know about the notification of the Revocation Act on June 5, 2025, through its lawyers representing the company. The company said that the order of the Calcutta High Court directing release of incentives amounting to ₹236.32 crore along with interest to Dalmia Cement (Bharat) Limited, a wholly owned subsidiary of the company, was likely to be adversely affected. It was examining the Revocation Act and considering all legal options, including challenging its legal validity and retrospective applicability. MP Birla group flagship Birla Corporation also said on June 7 in an exchange filing that it was examining the Revocation Act and considering all legal options, including challenging the legal validity and retrospective applicability of the Revocation Act. The company was entitled to receive incentives of ₹55.66 crore in the form of Industrial Promotion Assistance, according to an order of the Calcutta High Court. This release, along with the receipt of the remaining balance of the company's outstanding claim of ₹138.58 crore, may be adversely affected by the implementation of the Revocation Act, Birla Corporation had mentioned in the filing.