Agricultural Produce Market vs National Bank For Agriculture on 9 June, 2014

Gujarat High Court

Agricultural Produce Market vs National Bank For Agriculture on 9 June, 2014
C/SCA/11114/2012 CAV JUDGMENT

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

SPECIAL CIVIL APPLICATION NO. 11114 of 2012

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AGRICULTURAL PRODUCE MARKET COMMITTEE, UNJHA Petitioner Versus NATIONAL

BANK FOR A G RI C U LT UR E AND RURAL DE VE LO PM E N T & ORS. R es p on de n t s
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Appearance:

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

Petitioner MS ARCHANA U AMIN, ADVOCATE for the Respondent No. 1 MR I. H. SYED, ASST.
SOLICITOR GENERAL for the Respondent No. 2 MR BHARAT JANI, ADVOCATE for the
R e s p o n d e n t N o . 3
=========================================================== CORAM:
HONOURABLE MR.JUSTICE PARESH UPADHYAY Date : 09/06/2014 CAV JUDGMENT

1. 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 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.

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

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.

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 co- operative 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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 Agricultural Produce Market vs National Bank For Agriculture on 9 June, 2014

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 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.

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 (Anne Xure 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, 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.

3. 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 e Xpected
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 the authorities and suggestions were made by
them which were duly accepted by the petitioner and those suggestions were carried out, and

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 Agricultural Produce Market vs National Bank For Agriculture on 9 June, 2014

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.

4. 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.

5. 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 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.

6. 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.

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

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 e X changing 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 scheme, makes the impugned decision very shaky.

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 Agricultural Produce Market vs National Bank For Agriculture on 9 June, 2014

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.

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.

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.

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 set aside.

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

8.1 This petition is allowed.

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.

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.

8.4 Rule made absolute to the above eXtent. No order as to

costs. (PARESH UPADHYAY, J.) Amit

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