Sudhir Khimta vs Union Of India & Others
2023 Latest Caselaw 2010 HP

     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

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.

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."

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

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

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

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).

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

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.

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

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

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

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

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

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)