Allowed

Agricultural Produce Market Committee v. National Bank for Agriculture and Rural Development

Gujarat HC9 Jun 2014SCA/11114/2012

Case brief

AI extract

What is this about?

The High Court of Gujarat allowed the petitioner's challenge to the government's rejection of its subsidy claim under the AMIGS scheme. The Court quashed the impugned decision, holding it unsustainable and contrary to the scheme's objectives.

What did the court decide?

The impugned rejection letter and consequential communications from NABARD and Bank of India were quashed; the petitioner was directed to be paid the subsidy within six months.

Agricultural Produce Market Committee Vs National Bank… — Company and Corporate | Gujarat HC (2014)

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C/SCA/11114/2012 CAV JUDGMENT

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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SPECIAL CIVIL APPLICATION NO. 11114 of 2012

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============================================================== AGRICULTURAL PRODUCE MARKET COMMITTEE, UNJHA ....Petitioner Versus NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT & ORS. ...Respondents

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==============================================================

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Appearance:

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MR MIHIR THAKORE, SR ADVOCATE WITH MR SALIL M THAKORE, ADVOCATE for the Petitioner

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MS ARCHANA U AMIN, ADVOCATE for the Respondent No. 1

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MR I. H. SYED, ASST. SOLICITOR GENERAL for the Respondent No. 2

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MR BHARAT JANI, ADVOCATE for the Respondent No. 3

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===========================================================

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CORAM: HONOURABLE MR.JUSTICE PARESH UPADHYAY

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Date : 09/06/2014

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CAV JUDGMENT

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The Agriculture Produce Market Committee, Unjha has challenged the decision, of the authorities of the Government of India in the Ministry of Agriculture, Department of Agriculture and Co-operation, as contained in the letter dated 26.03.2012 of rejecting its claim for subsidy under the Agricultural Marketing Infrastructure, Grading and Standardization Scheme (‘AMIGS’, for short). The said decision

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is communicated to the petitioner by its Banker - the Bank of India vide its letter dated 16.04.2012, annexing therewith the communication of the National Bank for Agriculture and Rural Development, (‘NABARD’, for short) dated 05.04.2012.

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The relevant facts, as emerging from record, are as under.

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2.1 The Government of India introduced a scheme called the Agricultural Marketing Infrastructure, Grading and Standardization Scheme. The said scheme is on record as Annexure-A.

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2.2 The objectives of the said scheme included providing infrastructure facilities for grading, standardization and quality certification of agricultural produce so as to ensure price to the farmers commensurate with the quality of the produce, infrastructure development in agriculture marketing so as to cater to post-harvest requirement of production of various farm products etc. The scheme also stipulated that it will be implemented in those States which amend the APMC Act, wherever required to allow direct marketing and contract farming and to permit setting up of markets in private and cooperative sectors. It is not in dispute that, necessary amendment is carried out by the State of Gujarat in this regard vide Notification dated 13.08.2007.

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2.3 As per the scheme, the beneficiary is eligible to get 25% of the cost of the project as back-ended subsidy. As per procedure, the said subsidy is to be rooted through the concerned Bank, which in this case is Respondent No.3 – the Bank of India. 50% of the subsidy amount is sanctioned and

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paid in advance, which in this case, was calculated to be Rs.268.35 lacs. The said amount is credited in the bank account of the petitioner. The concerned banker gets reimbursement thereof from NABARD. Remaining amount is to be paid after due verification and inspection by the authorities.

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2.4 The petitioner applied for loan from Bank of India, along with appropriate project report with all details with the specific mention of the claim of subsidy under the scheme. NABARD asked the Bank of India to discuss the matter with the petitioner for necessary modification in the project etc. vide its letter dated 13.03.2008, which the petitioner agreed, and with a view to avoid any communication gap, the officers of NABARD and Bank of India visited the site of the petitioner and made suggestions on 03.05.2008, as borne out from the letter dated 02.06.2008. Considering the suggestions made by the authorities at that time, the revised project report was submitted by the petitioner to the Bank of India on 11.08.2008 which in turn was forwarded by the Bank of India to NABARD on 13.08.2008. At some stage, NABARD also asked for certain clarifications vide letter dated 26.03.2009. Thereafter, an amount of Rs.268.35 lacs is credited in the account of the petitioner as evident from the letter dated 12.05.2009 of the Bank of India (Annexure Q). For final subsidy claim also, necessary proposal is made by the Bank of India to NABARD as evident from letters dated 04.02.2010 and 31.03.2010. After prolonged correspondence the final claim is rejected by the authorities, which is under challenge in this petition. The basis for rejection of the claim of the petitioner, as borne out from the decision of the Government of India, Ministry of Agriculture, Department of Agriculture and Co-operation,

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Directorate of Marketing and Inspection, as contained in communication dated 26.03.2012 [Annexure-R6 with the affidavit-in-reply of NABARD at page-710] is that since 60% of floating of tenders, 60% of issue of work orders was already done, before the State Government amended the APMC Act, therefore, the project of the petitioner is not considered eligible for subsidy under the scheme. It is this decision which is under challenge in this petition.

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Mr.Mihir Thakore, learned senior advocate for the petitioner has submitted that, though the Courts are not free to direct the making of legislation, Courts are bound to evolve, affirm and adopt principles of interpretation which will further and not hinder the goals set out in the Directive Principles of State Policy. Reference is made to the decision of Honourable the Supreme Court of India in the case of the U.P. State Electricity Board and another vs. Hari Shankar Jain reported in (1978) 4 SCC 16. Attention of this Court is invited to various correspondence to submit that the objects and the requirement of the scheme in question was kept in view by the petitioner but even the queries and guidance from the Bank of India as well as NABARD both were also in tune with the object and requirement of the scheme, which the petitioner has fulfilled as suggested and expected by those Banks. Learned advocate for the petitioner has taken this Court through the the detailed correspondence in this regard, which is on record, with specific reference to chronology thereof. It is the case of the petitioner that, all details were given in project report, there was no suppression of any fact nor was there any misrepresentation about any fact at any stage to any authority by the petitioner. Further, even there was spot inspection by

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the authorities and suggestions were made by them which were duly accepted by the petitioner and those suggestions were carried out, and considering the totality loan was sanctioned and even first installment of subsidy was also passed on to the petitioner, which is kept in the separate bank account. It is submitted that, the impugned decision of the authorities of the Government is illegal, arbitrary and contrary to the spirit and object of the scheme and therefore the same be interfered with and the authorities be directed to do needful considering the project in question to be eligible under the scheme. Learned advocate for the petitioner has relied on following decisions in support of his submissions.

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Ms.Archna Amin, learned advocate for NABARD has drawn the attention of this Court to the salient features of the scheme and has contended that the State of Gujarat had brought in necessary amendment in the Agricultural Produce Market Act on 13.08.2007, however, the work had started in May,2006 and therefore, the petitioner was not eligible to be included in the scheme at all. It is also submitted that the Regional Co-ordination Committee had met on 06.10.10 and the committee had taken the decision which rendered the petitioner ineligible. It is this decision which is ultimately approved and conveyed to the petitioner and this Court may not interfere. It is submitted that the petition be dismissed.

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Mr.Saiyed, learned Assistant Solicitor General of India for Respondent No.2 – the Central Government Authority has submitted that the State of Gujarat has brought in necessary amendment in APMC Act vide Notification dated 13.08.2007. It is submitted that, the impugned communication of the

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authorities of the Government dated 26.03.2012 [Page-710] refers to the decision of the Regional Co-ordination Committee which had considered the petitioner ineligible for the scheme, which is not inconsistent with the scheme in question. It is submitted that denying benefits to be extended to ineligible person cannot be termed as illegality and there is no arbitrariness in the decision of the Government which may call for any interference by this Court. It is submitted that this petition be dismissed.

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Mr.Bharat Jani, learned advocate for the Respondent No.3 – the Bank of India has submitted that it is an implementing agency and in the event the Court does not accept the say of the respondents No.1 and 2, no pecuniary liability be imposed on the respondent No.3 – Bank in any manner.

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Having heard learned advocates for the respective parties and having gone through the material on record, this Court finds as under.

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7.1 The correspondence of hundreds of pages, which is on record, is considered by this Court in due chronology. Having considered it, it transpires that, not only the work done by the petitioner is in consonance with the object of the scheme in question, but even the respondent authorities had made suggestions to the petitioner by exchanging correspondence with it, from time to time, for furtherance of the objects of the scheme. At no stage, the eligibility of the petitioner was questioned by any of the authorities. Though there may not be any estoppel in that regard, but due application of mind by the authorities at more than one stages, including consideration and modification of the project report on the lines of the

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scheme, makes the impugned decision very shaky.

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7.2 The acceptance of the claim of the petitioner, in the facts of this case, would in no way be in conflict with the scheme in question and it would only be in furtherance of the objects mentioned in the scheme. On the other hand, rejection thereof would be counter productive if the objects of the scheme are kept in view in right perspective.

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7.3 Further, learned senior advocate for the petitioner is right in his submission that though the Courts are not free to direct the making of legislation, Courts are bound to evolve, affirm and adopt principles of interpretation which will further and not hinder the goals set out in the directive principles of the State Policy. The ratio of the decision of Honourable the Supreme Court of India in the case of the U.P. State Electricity Board (supra) (para-5, in particular) will apply with full force, in favour of the petitioner, in the facts of this case.

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7.4 Further, there was no suppression of any fact, nor was there any misrepresentation about any fact, at any stage, to any authority by the petitioner. Further, even there was spot inspection by the respondent authorities and suggestions were made by them which were duly accepted by the petitioner and those suggestions were carried out, and considering the totality, loan was sanctioned and even first installment of subsidy was also passed on to the petitioner.

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7.5 Considering the totality, a picture has emerged where the impugned decision of the authorities of the Government is not found to be sustainable. It is contrary to the object and spirit of the scheme and therefore the same needs to be quashed and

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set aside.

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For the reasons recorded above, the following order is passed.

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8.1 This petition is allowed.

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8.2 The impugned decision of the authorities of the Government of India in the Ministry of Agriculture, Department of Agriculture and Co-operation, as contained in the letter dated 26.03.2012, of rejecting the claim of the petitioner for subsidy under the Agricultural Marketing Infrastructure, Grading and Standardization Scheme is quashed and set aside. The consequential communication by the NABARD dated 05.04.2012, and by the Bank of India dated 16.04.2012 to the petitioner are also quashed and set aside.

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8.3 The petitioner is held to be eligible to claim subsidy under the Agricultural Marketing Infrastructure, Grading and Standardization Scheme. Consequential benefits, after due scrutiny in the prescribed procedure be paid to the petitioner. It is directed that necessary payment shall be made to the petitioner, within a period of six months from today.

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8.4 Rule made absolute to the above extent. No order as to costs.

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(PARESH UPADHYAY, J.)

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Amit

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Agricultural Produce Market Committee v. National Bank for Agriculture and Rural Development

Case brief

What is this about?

What did the court decide?

Agricultural Produce Market Committee v. National Bank for Agriculture and Rural Development

Case brief

What is this about?

What did the court decide?

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