HC fines National Horticulture Board for rejecting farmer’s subsidy claim

CHANDIGARH: The Punjab and Haryana high court has imposed a penalty of Rs 25,000 on the National Horticulture Board (NHB) for rejecting the subsidy claim of a Ambala farmer.

It said farmer can claim any additional compensation in an appropriate forum as due to the NHB, he defaulted on loans repayments, etc availed from banks.

The plea was from Ambala farmer Jaswinder Singh, who under the Development of Commercial Horticulture through Production and Post Harvest Management of Horticulture Crops scheme applied for a project of rose cultivation under poly/net house on his land measuring 8,000sq-m.

He availed loan from a bank in 2016 to the tune of Rs 46.9 lakh, half the amount of the project. The remaining amount was to be paid by the NHB.

A NHB-constituted team inspected the site in 2017 and cleared his project. But strangely, the NHB, in a July 2018 meeting, rejected the petitioner’s application for final subsidy claiming that “selected variety is not suitable for cultivation of rose for cut flower”.

In 2019, the petitioner had approached the HC, seeking direction to release subsidy amount and pay compensation for losses suffered by him.

NHB claimed that the plea was not maintainable and that any assistance by way of subsidy from the public exchequer can only be given in strict compliance and literal interpretation of the guidelines enumerated in the policy; and that the petitioner was erroneously interpreting the policy. No citizen has a right to claim any subsidy, it contended.

The court found that horticulture projects under the scheme are not prohibited for roses and are, in fact, permitted subject to the project having an area over 2,500sq-m. The scheme nowhere mentions what particular varieties of rose flowers or other flowers can be grown to claim subsidy under it, the bench observed adding that when NHB during the hearing was quizzed, it had no answer, and could not point to any provision.

The court observed that NHB’s claims were arbitrary, perverse, contrary to the record and the norms mentioned in the scheme framed by the NHB and also violative of Articles 14 and 300A of the Constitution of India.

“NHB would undoubtedly fall within the ambit of the term State used in Article 12 of the Constitution of India, and if it had laid down certain standards or norms of eligibility for a benefit such as a subsidy, it cannot arbitrarily apply new norms to reject a claim for subsidy or ignore the norms laid by it in the scheme framed by it,” the court observed, adding that the principle of promissory estoppels (reliance by the party to whom the promise is made) is also attracted in the instant case.

The court quashed the 2018 decision of NHB and directed that NHB would pay Rs 46.9 lakh to the petitioner within four weeks with interest at the rate of 9% per annum since he submitted the application and gave liberty to him to file for additional compensation. NHB is also to pay the penalty within four weeks.