The main legal point established in the judgment is that the rejection of a subsidy claim must adhere to the terms and provisions of the applicable scheme, and must not be arbitrary or contrary to constitutional principles.

JUDGMENT

M.S. Ramachandra Rao, J. - The Background facts

1. The National Horticulture Board [NHB] (respondent No.3) initiated various certain Credit Linked Capital Investment Subsidy Schemes to encourage private investment in specified activities, areas and technology in relation to horticulture activities, and one such scheme framed by it is 'Scheme-I: Development of Commercial Horticulture through Production and Post Harvest Management of Horticulture Crops'.

2. Annexure P-1 contains the General Guidelines for availing the subsidy under the said Scheme by farmers and other interested in horticulture.

3. Petitioner, who is a farmer, came to know about the said Scheme and decided to set up a project of 'Rose Cultivation under Poly/net house' on his land admeasuring 8000 sq. mtrs. under the said Scheme.

4. As required by the operational guidelines of the NHB under the above Scheme, he availed a term loan from respondent No.4-Bank for his project at Village Korwa Khurd, Distt. Ambala, Haryana.

5. According to the petitioner, the loan was disbursed from 2016 onwards and petitioner completed the construction/erection of the shade net house on 27.03.2017 and started Rose cultivation at the project site.

6. Petitioner contends that he submitted a financial subsidy claim under a direct category without LOI through respondent No.4-Bank for the said project, after completion of the project and disbursement of term loan for cultivation of roses in his land under the Scheme referred to above, and whatever information was sought by NHB was also submitted.

7. The NHB constituted a Joint Inspection Team comprising of it's representatives and those of the State Department of Horticulture, Govt. of Haryana and the lending bank to inspect and submit a report, and make appropriate recommendations as per prescribed guidelines of the NHB.

8. Such inspection was done by the Joint Inspection Team on 22.08.2017 and a report was submitted.

9. Vide Joint Inspection Report (P2), a recommendation was made by the said Committee stating as under: -

'No subsidy either from NHB or NHM has been availed earlier for the same project as per record', and 'project was found completed, all the infrastructure as proposed as available. Bank has released its full term loan. EPC has been assessed as 93.80 lakh, accordingly, 50% back ended subsidy works out to 46.90 lakh, as recommended by Joint Inspection Team."

10. Thereafter, in the agenda for a Project Approved Committee [PAC] meeting of NHB (P3-C) to be held on 26.02.2018, the Joint Director and the Deputy Director of the NHB, relying on the above said recommendation of the Joint Inspection Team, recommended the PAC to consider and approve the back-ended subsidy of 46.90 lakh to the petitioner but, the PAC, however, 'deferred' its decision on 26.2.2018 for a revisit for confirming technical specification of shade net house by a committee of NHB. It also mentioned 'lacking documents/documentation will be examined by the concerned Division.'

11. Thereafter a revisit was done on 21.05.2018 and the technical expert, as per Annexure P-5 (Agenda for PAC Meeting to be held on 21.6.2018), confirmed the technical specification of shade net house as per NHB standards and found rose crop also. He stated that the project is viable and recommended for approval of subsidy as per NHB guidelines.

12. The Joint Director and Dy. Director of the NHB who prepared the Annexure P-5 also recommended to the PAC to approve the back-ended subsidy of 46.90 lakh 'subject to furnishing detailed financial appraisal note of the project'.

13. But strangely the PAC of NHB in it's meeting held on 22.06.2018, rejected the petitioner's application for final subsidy giving the following reasons:-

'Rejected

Committee discussed the proposal in detail and rejected due to selected variety is not suitable for Cultivation of Rose for cut flower.

Committee also observed that photographs taken at the time of revisit, rose crop condition found poor. Appraisal of the project wa