Himachal Pradesh High Court
Sudhir Khimta vs Union Of India & Others on 9 March, 2023
Author: Vivek Singh Thakur
Bench: Vivek Singh Thakur
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CWP No. 2671 of 2018 alongwith CWP
Nos. 2672 and 2673 of 2018
.
Date of decision: 9.3.2023
1. CWP No. 2671 of 2018
Sudhir Khimta. ...Petitioner.
Versus
Union of India & others. ...Respondents.
2. CWP No. 2672 of 2018
Jyoti Lal Mehta ...Petitioner.
Versus
Union of India & others.
r ...Respondents
3. CWP No. 2673 of 2018
Rajinder Singh. ...Petitioner.
Versus
Union of India & others. ...Respondents
Coram
The Hon'ble Mr. Justice Vivek Singh Thakur, Judge.
Whether approved for reporting?1 Yes
For the Petitioner(s). Mr.Ram Murti Bisht, Advocate.
For the Respondents: Mr.Shashi Shirshoo, Central Government
Counsel, for respondent No. 1 in all petitions.
Mr.I.N. Mehta and Mr.Sarthak Mehta, Advocates,
for respondents No. 2 to 4 in all petitions.
Mr.J.S. Bagga, Advocate, for respondent No. 5
in CWP No. 2672 of 2018.
Mr.Narender Singh Thakur, Advocate, for
respondent No. 5 in CWP Nos. 2671 and 2673 of
2018.
Vivek Singh Thakur, Judge (oral)
These petitions, involving common question of fact and law required to be appreciated for adjudication of these petitions, are being decided by this common judgment.
Whether the reporters of the local papers may be allowed to see the Judgment? Yes ::: Downloaded on - 09/03/2023 20:34:51 :::CIS 2 CWP No. 2671 of 2018 alongwith CWP Nos. 2672 & 2673 of 2018
2. Respondent No. 2 National Horticulture Board (herein after referred to NHB) has been set up by the Government of India in 1984 as an autonomous society under the Societies Registration Act 1860, which .
implements programmes as sub-scheme of Mission for Integrated Development of Horticulture (MIDH) and has formulated various schemes with aims and objectives of development and promotion of horticulture, popularization of new technologies/tools/techniques in horticulture, assistance to the horticulture, transfer of technology and carrying out studies and surveys to identify constraints and develop short and long term strategies for systematic development of horticulture and providing technical services including advisory and consultancy services in order to propagate commercial horticulture.
3. Pattern of assistance provided by NHB is credit linked back- ended subsidy @ 35% of the total project cost limited to 50.75 lakh per project in general area and @ 50% of project cost limited to 72.50 lakh per project in NE, region Hilly and Scheduled areas.
4. As per scheme of NHB, Harish Chander father of Sudhir Khimta (petitioner in CWP No. 2671 of 2018) as well as Jyoti Lal Mehta and Rajinder Singh (respective petitioners in CWP Nos. 2672 and 2673 of 2018) had submitted applications on prescribed format for setting up respective projects of 'apple packing and grading unit' by raising loan from respective banks, arrayed as party as respondent No. 5 in each petition, with purpose for availing back-ended subsidy of 50% on project cost under the Scheme.
::: Downloaded on - 09/03/2023 20:34:51 :::CIS 3 CWP No. 2671 of 2018 alongwith
CWP Nos. 2672 & 2673 of 2018
5. After death of Harish Chander, his son Sudhir Khimta (petitioner in CWP No. 2671 of 2018) pursued and carried on the process of availing subsidy by setting up the unit as proposed by his father.
.
6. After purchase and setting up the machinery and completing the work of unit and making it operational, petitioners, after inspection conducted by authorized officer of the Bank, through Bank, had requested for release of subsidy alongwith request for joint inspection of the unit. Whereafter correspondence took place between the Bank and NHB for submission of documents for completing the file and thereafter joint inspection was conducted by respective Joint Inspection Committees on various dates and in their Joint Inspection Reports, Joint Inspection Team/Committee recommended release of subsidy to the petitioners subject to completion of certain civil works in CWP Nos. 2671 and 2673 of 2018 and subject to consideration of fact in CWP No.2672 of 2018 that one installment of term loan as well as completion of unit was reported after 18/24 months from the date of sanction and release of NHB subsidy.
7. Joint Inspection Reports were placed before State Committee for approval and release of subsidy, however cases were deferred with observation of non-completion of projects within time limit. The said fact was intimated by the Bankers to the petitioners. Petitioners, through respective Banks had explained that there is no non-completion but completion of civil work was within time period prescribed by the NHB, but cases for subsidy submitted by respective Banks on behalf of petitioners were rejected with following reasons:-
"The unit was not completed within the stipulated time i.e. 18 months + 3 months grace period from the 1st disbursement of term loan as per Scheme Guideline of the Board."::: Downloaded on - 09/03/2023 20:34:51 :::CIS 4 CWP No. 2671 of 2018 alongwith
CWP Nos. 2672 & 2673 of 2018
8. Against aforesaid rejection, petitioners have approached this Court by filing these Writ Petitions on the ground that majority of work required for setting up units was complete within the prescribed time and .
it was reported to the Banks and Banks had requested NHB for carrying out joint inspection, but before conducting inspection, correspondence took place between the Banks and NHB for completing the formalities including furnishing certain information and documents as sought by NHB from the Banks which caused delay in joint inspection and further that the work reported to be incomplete in Joint Inspection Report is insignificant as it is not a work related to installation of machinery and making of the unit operational and the work, ornamental in nature, like ceiling of roof, which was also almost complete, except small portion of roof of the ground floor. In Jyoti Lal Mehta (CWP No. 2672 of 2018) even no civil works was found incomplete, but case has been rejected only on the ground of delay in reporting the completion and conducting the inspection.
9. NHB has opposed the petitions mainly on the ground that conditions prescribed in the Scheme, which are to be considered to be part of Letters of Intent issued to the petitioners, are mandatory in nature and time is essence of the Scheme formulated by the Board and, therefore, petitioners had to complete the entire work of the unit within 18 months or at least within further extended period of 3 months and, therefore, petitioners, for incomplete work, are not entitled for any subsidy and, thus, cases for approval and release of subsidy have been rightly rejected by the NHB.
10. It has been further stated on behalf of NHB that no justification for delay was given by the lending banks and projects were ::: Downloaded on - 09/03/2023 20:34:51 :::CIS 5 CWP No. 2671 of 2018 alongwith CWP Nos. 2672 & 2673 of 2018 not found complete even after expiry of prescribed period, at the time of conducting joint inspection and, therefore, projects were not eligible for subsidy even after extended period.
.
11. Referring pronouncement of the Supreme Court in Indian Oil Corporation Limited Vs. Kerala State Road Trading Corporation, (2017) 14 Scale 30: (1018) 12 SCC 518, it has been contended that subsidy is a matter of privilege and cannot be enforced as a right and it can be withdrawn at any time and further petitioners, for failure in setting up their respective units within stipulated period, are not entitled to claim subsidy and thus have no enforceable right in their favour to maintain present Writ Petitions for release of subsidy in their favour.
12. A. In Sudhir Khimta (CWP No. 2671 of 2018), first installment of term loan was released on 23.3.2014. 18 months thereafter were completed on 23.9.2015 and extended period of 3 months expired on 23.12.2015. Request for joint inspection was made by the Bank to the NHB on 3.6.2015, reporting the completion of unit by forwarding documents related to the claim of subsidy and joint inspection. Thereafter, banker and NHB had correspondences with each other and ultimately joint inspection was carried on 25.4.2017, wherein in column No. 22, it has been reported by the Joint Inspection Team as under:-
"The unit has been commissioned as per scheme guideline."
B. Column No. 24 of report contains recommendation of the Joint Inspection Team, wherein release of subsidy to the petitioner has been recommended, which read as under:-
"The Joint Inspection Team recommends an amount of NHB subsidy of Rs.886430/- @ 50% & 50% of eligible project cost of Rs.1635556/- for phm category of the project in hilly areas as per ::: Downloaded on - 09/03/2023 20:34:51 :::CIS 6 CWP No. 2671 of 2018 alongwith CWP Nos. 2672 & 2673 of 2018 applicable cost norms under the scheme guideline of the board for apple grading & packing unit type 1 subject to following:-
(i) promoter may please complete the civil work (ceiling ½ portion .
at GF of Apple G/P Hut) within one month.
(ii) State Committee may also be considered the extension of period for project completion in most hard hilly areas." C. When case of the petitioner was deferred, vide communication dated 21.5.2018, banker of the petitioner had communicated four reasons causing delay in the matter with further submission that unit can be inspected at any time, which has been constructed and made operational as per guidelines and rules of the NHB and keeping in the view the hilly and difficult terrain of the area located in snow bound area, having plenty of rains during rainy season leading to disruption in transport and continuation of civil work and non-availability of labour for a considerable long period during the year on account of bad weather, it was recommended by the Bank to reconsider the case of the petitioner for providing financial assistance. D. Thereafter, Horticulture Officer vide communication dated 22.5.2018 had requested NHB for reconsideration of deferred cases by the State Committee with request to extend the period for completion of projects by the petitioners for releasing the subsidy in the circumstances explained in his communication Annexure P-12. However case, of the petitioner was rejected by the NHB (Board) and was communicated vide letter dated 17.8.2018 (Annexure P-13).
13. A. In Jyoti Lal Mehta (CWP No. 2672 of 2018), first installment of loan was released on 12.6.2015 and 18 month of prescribed period completed on 12.12.2016 and extended 3 months period expired on 12.3.2017. Joint inspection was conducted on 29.7.2017 in furtherance to ::: Downloaded on - 09/03/2023 20:34:51 :::CIS 7 CWP No. 2671 of 2018 alongwith CWP Nos. 2672 & 2673 of 2018 communications dated 12.5.2017, 6.6.2017 and 7.6.2017 sent by banker of the petitioner to the Incharge of NHB.
B. Joint Inspection Team in Joint Inspection Report in column .
No. 22 has reported as under:-
"The unit is reported complete in all the aspect as per NHB scheme."
C. Column No. 24 contains recommendation of the Joint Inspection Team, wherein release of subsidy to the petitioner has been recommended, which reads as under:-
"The Joint Inspection Team recommends an amount of NHB subsidy of Rs.552282/- @ 50% of eligible project cost of Rs.1104566/- for PHM category of the project in hilly area for apple grading & packing unit type-1 under the scheme guideline of the Board effective from 01/04/2014 onwards subject to consideration that on installment of TL as well as completion of this unit reported after 18/24 months from the date of sanction & release of NHB subsidy."
D. When case of the petitioner was deferred, the same was communicated to the banker of the petitioner by NHB, vide communication dated 31.3.2018, by asserting that case of the petitioner was deferred for the reason that project was not complete as per time limit prescribed in the Scheme guidelines by the Board. E. Thereafter, Horticulture Officer vide communication dated 22.5.2018 had requested NHB for reconsideration of deferred cases by the State Committee with request to extend the period for completion of projects by the petitioners for releasing the subsidy in the circumstances explained in his communication Annexure P-12. However, case of the petitioner was rejected by the NHB (Board) and was communicated vide letter dated 17.8.2018 (Annexure P-13).
::: Downloaded on - 09/03/2023 20:34:51 :::CIS 8 CWP No. 2671 of 2018 alongwith
CWP Nos. 2672 & 2673 of 2018
14. A. In Rajender Singh (CWP No. 2673 of 2018), first installment of loan was released on 10.2.2015 and 18 month of prescribed period completed on 10.8.2016 and extended 3 months period expired on .
10.11.2016. Claim for release of subsidy was submitted on 28.1.2016 and thereafter correspondences took place between the bank and Board vide communications dated 3.6.2016, 8.12.2016 and 24.3.2017 etc. Joint inspection was conducted on 15.6.2017 B. Joint Inspection Team in Joint Inspection Report in column No. 22 has reported as under:-
"The unit is completed in all the aspect and likely to come in to operation in the upcoming apple season."
C. Column No. 24 contains recommendation of the Joint Inspection Team, wherein release of subsidy to the petitioner has been recommended, which reads as under:-
"The Joint Inspection Team recommends an amount of NHB subsidy of Rs.931250/- @ 50% of eligible project cost of Rs.1862500/- for PHM category of the project i.e. apple grading & packing unit type-3 in hilly area as per applicable cost norm under the scheme guideline of the Board subject to completion of the civil work/wooden work & document as found in complete as per guideline."
D. When case of the petitioner was deferred, the same was communicated to the banker of the petitioner by NHB vide communication dated 31.3.2018 by asserting that case of the petitioner was deferred for the reason that the project was not completed as per time limit period prescribed in the Scheme Guideline of the Board (NHB). E.. Thereafter, Horticulture Officer vide communication dated 22.5.2018 had requested NHB for reconsideration of deferred cases by ::: Downloaded on - 09/03/2023 20:34:51 :::CIS 9 CWP No. 2671 of 2018 alongwith CWP Nos. 2672 & 2673 of 2018 the State Committee with request to extend the period for completion of projects by the petitioners for releasing the subsidy in the circumstances explained in his communication Annexure P-12. However, case of the .
petitioner was rejected by the Board (NHB) and it was communicated vide letter dated 17.8.2018 (Annexure P-13).
15. After receiving the proposal of the petitioners under NHB Scheme 'Development of Commercial Horticulture through Production 2.5.2015 and 15.1.2015 r to and Post-harvest Management', Letters of Intent dated 4.3.2014, were issued to respective petitioners, communicating grant of Letters of Intent regarding proposed units with observation that Letter of Intent is limited to merely being an approval for the activity proposed in the application, but no endorsement/approval of project cost indicated in the application, and is also subject to terms and conditions enumerated in the Letters of Intent.
16. Aforesaid Letters of Intent contained as many as 13 conditions, but none of them speaks about prescribed time period of 18 months with further extension of 3 months as provided in general guidelines for all schemes published by NHB. Therefore, it has been contended on behalf of petitioners that requirement of completion of projects within 18+3 months (extended period) was never communicated to them and, therefore, it cannot be made a ground for rejection of claims for subsidy set up by the petitioners by genuinely establishing, installing and making operational the units as proposed, in accordance with the Scheme of NHB. Whereas, claim of the respondent is that release of subsidy is subject to general condition contained in general guidelines published and issued for all Schemes by the NHB.
::: Downloaded on - 09/03/2023 20:34:51 :::CIS 10 CWP No. 2671 of 2018 alongwith
CWP Nos. 2672 & 2673 of 2018
17. NHB has formulated schemes and has published general guidelines for all schemes and in Chapter-II containing 'Guidelines for making subsidy claims and release of subsidy under the commercial .
horticulture scheme etc.' time limit for completion of project has been prescribed in para 1.1.3, which reads as under:-
"1.1.3 Time limit of Completion of project i. Time limit for completion of the project would be maximum of
18 months period from the date of disbursement of the 1st installment of term loan, which may be extended by a further period of 3 months, if reasons for delay are considered, justified by the financial institution concerned and agreed to by NHB.
ii. If the project is not completed within stipulated period, benefit of subsidy shall not be available and advanced subsidy placed with the participating bank, if any, will have to be refunded to NHB forthwith or not later than 30 days after such period."
18. Condition No. V of Letter of Intent provides that grant of subsidy to the beneficiary would be subject to Guidelines of the scheme, which reads as under:-
"V. Mere issuance of LOI will not guarantee the grant of subsidy to the beneficiary unless the proposal is implemented in accordance with the information given in the application of LOI/Detailed Project Report (DPR) and within guidelines of the scheme. Any deviation in implementation of project will lead to rejection of proposal for which promoter will be sole responsible."
19. Condition No. V of Letter of Intent unambiguously provides that grant of subsidy shall be subject to implementation of proposal according to guidelines of the Scheme and any deviation in the implementation of project will lead to rejection of proposal. Therefore, plea of petitioners, that term and conditions prescribing time limit for ::: Downloaded on - 09/03/2023 20:34:51 :::CIS 11 CWP No. 2671 of 2018 alongwith CWP Nos. 2672 & 2673 of 2018 completion of project is not part of Letter of Intent and as such is not mandatory, is not tenable and thus liable to be rejected. However, the time limit for completion of project provided under the Scheme does not .
contain any clause that time period prescribed for completion of project cannot be extended by the Board (NHB). But in absence of any specific provision for extension of time for more than 3 months, such extension cannot be claimed as a matter of right.
20. In Sudhir Khimta's case (CWP No.2671 of 2016), vide communication dated 3.6.2015, it was communicated by the Bank to NHB that petitioner had completed all codal formalities related to his unit and thereby making a request to NHB to release the subsidy and to conduct joint inspection and documents related to the claim of the petitioner were also submitted alongwith this communication. In response thereto, vide communication dated 5.6.2015, NHB sought further information from the Bank including certain documents. In response thereto Bank had furnished complete details to NHB and thereafter joint inspection was conducted on 25.4.2017, wherein in column No. 8, it was reported that project was not yet complete, whereas in its communication by the Bank to the NHB it was reported that project/unit was complete as per terms and conditions of the Scheme. Joint Inspection Team has contradicted its own version reported in column No. 8 by its observation in column No. 22, wherein it has been reported that unit has been commissioned as per scheme guideline and in column No. 24 also it has recommended for release of subsidy amount by observing that the claim of the petitioner is within the norms under the scheme and guidelines of the Board. However, in the last, it has been observed that promoter may please ::: Downloaded on - 09/03/2023 20:34:51 :::CIS 12 CWP No. 2671 of 2018 alongwith CWP Nos. 2672 & 2673 of 2018 complete the civil work (ceiling ½ portion at GF of Apple G/P Hut) within one month and also recommended that State Committee may also consider the extension of period for project completion for the reason that .
project was in the most hard hilly area.
21. In Jyoti Lal Mehta's case (CWP No. 2672 of 2018) in communication dated 12.5.2017 (Annexure P-5), it was reported by the Bank to NHB that loan of 9.62 lakhs for completion of project during period from 12.6.2015 to 6.6.2017 was disbursed and unit was complete in all respect and was running significantly as per NHB scheme guidelines and was in operational condition. This fact has not been controverted by NHB or any other respondent at any point of time by placing on record any material contrary thereto. As per Joint Inspection Report, project was complete in June 2017, but the said observation has been contradicted by the Joint Inspection Team in Colum No. 22, wherein it has been reported that unit was reported to be complete in all respect as per NHB scheme. In column No. 24 Joint Inspection Team has recommended release of subsidy with observation that unit was commenced as per guidelines of the NHB, however, by subjecting it to the consideration that one installment of term loan was released and unit was completed after 18/24 months from the date of sanction and release of NHB subsidy.
22. In Rajinder Singh's case (CWP No. 2673 of 2018) request for release of subsidy and joint inspection was made on 24.5.2016, i.e. prior to expiry of time period prescribed under the Scheme and vide communication dated 8.12.2016, in response to communication received from NHB, Bank had reported that unit was complete in all respect as per NHB Scheme guideline and was in operational condition as per ::: Downloaded on - 09/03/2023 20:34:51 :::CIS 13 CWP No. 2671 of 2018 alongwith CWP Nos. 2672 & 2673 of 2018 knowledge of the bank. This information/averment has not been controverted by the NHB or any other respondent.
23. In Joint Inspection Report in column No. 8, it has been .
reported by the Joint Inspection Team that project was yet to be completed. But, at the same time, in column No. 22, it has been reported by the Team that unit was complete in all respect and was likely to come in operation in coming apple season. In column No. 24, Joint Inspection Team has recommended release of subsidy to the petitioner subject to completion of civil work/wooden work and documents have been found incomplete as per guidelines without specifying anything about civil work/wooden work in the inspection report specifically.
24. From the aforesaid facts and circumstances, it has been established on record that concerned Banks had reported to the NHB within the prescribed time limit for conducting joint inspection for release of subsidy with unequivocal and unambiguous statement that projects were complete as per guidelines of the NHB, which includes the time limit prescribed for completion of project and in response thereto, issue with respect to expiry of time period prescribed under the Scheme was never raised by or on behalf of NHB and further Joint Inspection was not conducted immediately on receiving the information from the Bank about completion of the project, but was conducted after a considerable long period and in Joint Inspection Reports, contradictory reporting was made by the Inspecting Teams as referred and observed supra, but with recommendation to release the subsidy to the petitioner by observing that units were completed in all respects as per guideline and Schemes of ::: Downloaded on - 09/03/2023 20:34:51 :::CIS 14 CWP No. 2671 of 2018 alongwith CWP Nos. 2672 & 2673 of 2018 NHB and, therefore, rejection of the claims of the petitioners, for release subsidy in their favour, is not sustainable.
25. By taking into consideration the entire Joint Inspection .
Reports, it may also be construed that though projects/units were complete in all respects, subject to completion of trivial civil work/wooden work which appears to be ornamental in nature and for such trivial and insignificant, incomplete civil work, it cannot be said that petitioners had failed to establish the unit within time prescribed under the scheme, particularly for observation of Joint Inspection Team that units were complete in all respect as per NHB scheme. NHB/Board/State Committee cannot pick up one line of the Joint Inspection Reports to conclude that projects/units were not complete, only for observation with respect to incomplete civil/wooden work which was insignificant or immaterial for establishing and making operational the unit in reference.
26. Be that as it may, after deferring the cases by the State Committee for consideration of the matters with respect to delay in establishing the units, explanation was rendered by the petitioners through Horticulture Officer as well as Banks about the reasons causing the delay in completion of civil/wooden works in the units. However, thereafter, State Committee/NHB has rejected the claims of the petitioners for subsidy without adverting to or responding to the reasons assigned on behalf of petitioners for incomplete civil/wooden works and claims of the petitioners have been rejected by observing that units were not complete within the stipulated time. But, the State Committee of the Board (NHB) has failed to take into consideration the Joint Inspection Reports in right perspective, but was swayed by the observations of the ::: Downloaded on - 09/03/2023 20:34:51 :::CIS 15 CWP No. 2671 of 2018 alongwith CWP Nos. 2672 & 2673 of 2018 Joint Inspection Team, which were not only with respect to trivial and insignificant work in nature, but also contrary to the main reports of Joint Inspection Teams, wherein units have been reported to be established as .
per claims and guidelines of NHB and cases of the petitioners have been recommended for release of subsidy.
27. From above discussion it is apparent that rejection of claim of petitioners by NHB is arbitrary, unreasonable, irrational and contrary to
28. to Norms and Rules applicable in field. It deserves to be interfered with.
In view of above observations, petitions are allowed and communication dated 17.8.2018 (Annexure P-13 in all the petitions), rejecting the claims of the petitioners, is quashed and set aside and petitioners are held entitled for grant of subsidy in terms of relevant scheme/guidelines of NHB applicable in present cases as recommended by Joint Inspection Teams of NHB and consequently respondent-Board (NHB) is directed to release the subsidy to the petitioners on or before 13th April, 2023.
Petitions are allowed and disposed of in aforesaid terms alongwith pending application(s).
(Vivek Singh Thakur), th 9 March, 2023 Judge.
(Keshav) ::: Downloaded on - 09/03/2023 20:34:51 :::CIS