Himalay International Ltd. vs Union Of India & Anr.
2019 Latest Caselaw 2129 Del

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*       IN THE HIGH COURT OF DELHI AT NEW DELHI
+       W.P.(C) 6666/2017 & CM No. 27757/2017

        HIMALAY INTERNATIONAL LTD.        ..... Petitioner
                     Through: Mr Ankit Parhar, Mr Aviral
                              Dhirendra, Advocates.
                     versus

        UNION OF INDIA & ANR.                    ..... Respondents
                      Through:        Mr Vivek Goyal, CGSC, Mr
                                      Roshan Lal Goel and Ms Anju
                                      Gupta, Advocates for UOI.
        CORAM:
        HON'BLE MR. JUSTICE VIBHU BAKHRU
                     ORDER

        %            23.04.2019

VIBHU BAKHRU, J

1. The petitioner has filed the present petition, inter alia, impugning a order/letter dated 30.11.2016 (hereafter „the impugned order‟) cancelling the approval for grant-in-aid, under the Government Scheme of Cold Chain Value Addition and Preservation Infrastructure (for non-horticulture product) during the remainder of 12th plan (2013-

17)(hereafter „the scheme‟).

2. The petitioner‟s project was approved by the Ministry of Food Processing Industries Government of India on 27.09.2013 for financial assistance to the extent of extent of ₹10 crores. The said approval was for setting up plant at Tehsil Vadnagar (District) Mehsana, Gujarat. Admittedly, the first and the second instalments of the grant-in-aid

amounting to ₹2.5 crores and ₹5 crores were disbursed to the petitioner on 16.04.2014 and 12.08.2014, respectively. However, it was subsequently alleged that the petitioner had not implemented the project as per the approval. Consequently, a show cause notice dated 08.09.2015 was issued to the petitioner calling upon the petitioner to show cause why the approval granted to the petitioner should not be cancelled.

3. In substance, the allegation against the petitioner is that it has not executed the three components as initially envisaged.

4. A perusal of the Revised Operational Guidelines of the Scheme for Cold Chain, Value Addition and Preservation Infrastructure during the 11th 5 year plan, (hereafter „the revised operational guidelines‟), indicate that the Scheme envisaged three principal components of a Cold Chain Project apart from irradiation facilities. The salient features of the scheme as indicated in the revised operational guidelines issued on 18.03.2010 are set out below:-

"3. Salient features:

 The scope of components of Integrated Cold Chain, Value Added Centre, Packaging Centre and Irradiation Facilities has been broadened to allow flexibility in project planning. The Scheme will have the following components:

a. Minimal Processing Centre at the farm level and this centre is to have facility for weighing, sorting, grading waxing, packing, pre-

cooling, Controlled Atmosphere (CA)/Modified Atmosphere (MA) cold storage, normal storage and IQF.

                          b.     Mobile pre-cooling vans and reefer
                                 trucks.
                          c.     Distribution hubs with multi product
                                 and multi CA/MA chambers cold
                                 storage/Variable            Humidity
                                 Chambers, Packing facility, CIP Fog
                                 treatment, IQF and blast freezing.
                          d.     Irradiation facility.

To avail financial assistance, any two of the components, from (a), (b) or (c) above will have to be set-up by the units. Considering the functional nature of the facility, Irradiation facility can be treated as a stand alone one for the purpose of availing  To provide integrated and complete cold chain facilities without any break from the farm gate to the consumer, Pre-cooling facilities at production sites, reefer vans, and mobile cooling units has been covered under the Integrated Cold Chain facilities projects, Stand alone facilities, except irradiation facility will not be considered for assistance.  Horticulture products has also been included for support under Integrated Cold Chain Facilities.

 Irradiation facilities may also cover warehousing, cold storage facilities etc. for storage of raw material and finished products for efficient utilization of the facility."

5. Admittedly, the Detailed Project Report (DPR) submitted by the

petitioner indicated that the project proposed by the petitioner would have the following facilities:-

(i) Frozen Mushroom & Vegetable Processing and Canning Unit with IQF (9000 MT/Annum);

        (ii)     Appetizers (15000 MT/Annum);
        (iii)    Stirred Yoghurt Plant (30 KLPD/9000 MT per annum);
        (iv)     Cheese Manufacturing Plant (20 KLPD/5940 MT per
                 annum);
        (v)      12 reefer trucks; and
        (vi)     Milk Collection and Chilling Equipment.

6. A plain reading of the scheme indicates that the three constituent components of a Cold Chain Project were (a) Minimal Processing Centre at farm level; (b) Mobile Pre-cooling vans and Reefer Trucks; and (c) a Distribution hub

7. There is no dispute that the petitioner has set up a Distribution hub and, thus, has complied with the setting up one of the three components of a Cold Chain Project. The controversy, essentially, relates to (a) setting up of the Minimal Processing Centre at farm level and (b) Mobile cooling vans and Reefer Trucks.

8. The petitioner had, initially, claimed that it had set up both the said components, and therefore was entitled to the disbursal of the grant-in-aid under the Scheme. However, it was subsequently conceded that the Reefer Trucks mentioned by the petitioner could not be considered, as those trucks were financed by other sources, and

were purchased in respect of another project not connected with the approved project.

9. In view of the above, the dispute boils down to whether the petitioner has set up a Minimal Processing Centre at the farm level. Whereas, the petitioner claims that it has spent ₹1293.78 lakhs for setting up the Centre at farm level as against the investment of ₹948.44 lakhs as envisaged earlier, the respondent disputes that a farm level centre has been set up in conformity with the approved project. The impugned order indicates that the petitioner had not set up bulk milk chilling centres (20 in number).

10. The petitioner claims that it had not set up the milk chilling centres since the same were found to be unviable. However, notwithstanding that the said milk centres were not set up, the petitioner had made more than the requisite investment in the business relating mushroom, and had set up the necessary processing facilities at farm level.

11. The learned counsel appearing for the petitioner has also referred to the letter dated 05.09.2016 wherein the petitioner sent a response to the show cause notice issued to it, which indicates that the petitioner had spent ₹7790.14 lakhs as investment for setting up the Centre at farm level. It is earnestly contended on behalf of the petitioner that not setting up of bulk milk chilling centres - which entailed an investment of only ₹140 lacs - is not material. He submits that even if the said milk chilling facility is excluded, the processing

facilities set up at farm level qualify as a "Minimal Processing Centre at farm level".

12. The petitioner claims that the Centre established at farm level is complete in all respects, and the investment made thereunder exceeds the threshold level of investment required for securing the grant-in-aid under the Scheme. It is also submitted that the requisite quantum of the investment required to be made is twice the amount of subsidy. It is stated that in the present case, the petitioner is claiming a subsidy of only ₹10 crores, which would otherwise have been available on an investment of ₹20 crores. It is contended that in the present case, the petitioner has already invested a sum of 1293.78 lakhs for setting up the Farm level Centre and, therefore, the impugned decision rejecting the petitioner‟s claim for the balance subsidy and cancelling the project approval is wholly arbitrary and unreasonable.

13. Mr Goyal, the learned counsel appearing for the respondent countered the aforesaid submissions. He submits that the petitioner had submitted false information regarding the purchase of Reefer Trucks and the petitioner‟s approval under the Scheme was rightly cancelled. He submitted that although the petitioner now claims that it has spent ₹1293.78 lakhs for setting up a Centre at farm level, the breakup of the said figure was not provided to the respondent at the material time, and in any event, the facilities justifying the said investment were not existing on the ground. He further stated that inspections were carried out twice and the same revealed that the petitioner had not established the farm level Centre, as envisaged in

the initial DPR.

14. He also submitted that the milk chilling facilities were an integral part of the DPR (detailed project report) submitted by the petitioner and the approval was granted to the petitioner on the basis of the said DPR. He submitted that it is not open for the petitioner to now abandon setting up of the said facilities, without prior approval of the concerned authority.

15. I have heard the learned counsel appearing for the parties.

16. A plain reading of the impugned order indicates that it is premised on the basis that the petitioner had not set up milk chilling centres; had not purchased Reefer Vans from the funds earmarked for the project; and the petitioner had set up only a Distribution hub and, thus, not completed the Cold Chain Project.

17. As noticed above, there is no dispute regarding the purchase of Reefer Vans; the petitioner concedes that it had not purchased the same from the funds invested in the project. The said Reefer Vans relate to another project and, therefore, were not be eligible for being considered for grant of the subsidy. However, the essential controversy remains regarding the setting up of the Minimal Processing Centre at farm level. The petitioner claims that that the bulk milk chilling centres were not an integral part of the component and even if the same were excluded, the petitioner‟s project would qualify for subsidy under the Scheme. It is apparent from a plain reading of the impugned order that this contention has not been

considered.

18. It is apparent from the contentions advanced on behalf of the respondent, that the extent of investment made by the petitioner has also not been examined by the concerned authority.

19. In view of the above, this court considers it apposite to set aside the impugned order and remand the matter for consideration, afresh. The concerned authority shall examine whether the investments claimed to have been made by the petitioner, have been made and whether the facilities set up by the petitioner - without considering the bulk milk chilling centres - is complete in all respects and would qualify to be considered as a Minimal Processing Centre at farm level, eligible for the grant of subsidy.

20. The petition is disposed of in the aforesaid terms. The parties are left to bear their own costs. The pending application is disposed of.

VIBHU BAKHRU, J APRIL 23, 2019 MK