Administrative authorities must provide substantiated reasons for withdrawing subsidies, especially when an applicant's eligibility is uncontested.

JUDGMENT :

SANJAY KAROL, J.

Leave Granted.

2. The short question on which the present appeal turns is whether the appellant herein i.e., Agricultural Produce Market Committee, Deesa¹[APMCD] is entitled to the subsidy given by the National Horticulture Board²[NHB] and operated by the National Bank for Agriculture and Rural Development³[NABARD] titled as “Capital Investment Subsidy For Construction/Expansion/Modernization of Cold Storages/Storage of Horticultural Produce”. NABARD⁴[NB.Guj/ICD-GSS/2/NHM-191/2011-12 dated 18th May 2012 and ARDB 221 dated 8th June 2012] took a decision to withdraw from APMCD the subsidy granted and recover the amount already paid. NHB⁵[NHB/HO/NABARD/APMC DEESA CS//2018-19 dated 8th April 2019] found this decision to be justified. This determination was challenged before the learned Single Judge⁶[R/Special Civil Application 15592 of 2019 dated 19th January 2023] under Article 226 of the Constitution of India, whereby these decisions were set aside holding the appellant to be entitled to the entire amount of subsidy. The Division Bench⁷[R/Letters Patent Appeal No.614 of 2024 dated 1st July 2024] in appeal disagreed and restored the findings of the lower authorities. As such, the appeal is before us.

3. The APMCD constituted under the Agricultural Produce Market Committee Act 1963 applied for constructing a cold storage facility and, to that end, a loan of Rs.1 crore was obtained from Gujarat State Co-operative Agriculture and Rural Development Bank Ltd.⁸[Respondent no.4/GSCARDB]. The application for subsidy was made before the NABARD alongwith a certificate of expenditure for Rs.4,25,26,829/-. A request for 50% advance subsidy was also made and accordingly Rs.25 lakhs was credited to the appellant’s bank account. Respondent no.4 informed the appellant that officials of respondent no.1 to 3 i.e., officials of the Gujarat State Horticulture Mission and NABARD would visit the facility on 19th November 2008. On such a visit they found the facility to be at ‘minimum capacity utilization’ and as such the release of remaining subsidy was kept pending. The relevant portion of the Joint Monitoring Visit Report is as under:

“Management of cold storage : Managed and maintained by APMC Deesa Observation of the monitoring committee.

1. The structure designed for earthquake or seismic landing and illegible of EPS panels and mildstand mambers.

2. DG Set has not been provided.

3. Capacity utilisation on the day of JMV was about 20 % only.

Recommendations of Monitoring Committee:

The unit is completed and compassioned, it may be considered for the final subsidy as per NHB, NABARD guidelines and the parameters mentioned above.

4. At the time of joint inspection capacity utilisation was minimum i.e., less than 20% of the capacity.

5. The measurements are also required to ascertain the volume of the cold storage.

6. Some administrative dispute has been observed while joint inspection.

7. In view of above, re-inspection and re-confirmations of documents are required. This has been illegible.

Sd/-

Illegible”

4. GSCARDB vide letter dated 10th June 2009 wrote to the appellant informing them that further decision on subsidy has been kept pending since they found it to be ‘in closed condition’ as such clarification was sought about its status as follows: