The High Court of Punjab and Haryana imposed a sentence of ₹25,000 to the National Horticultural Board (NHB) for rejecting a grant application from an Ambala farmer.
He said the farmer can claim any further compensation in proper forum because due to NHB he defaulted on repayment of loans etc obtained from banks.
The call was made by Ambala farmer Jaswinder Singh, who under the Commercial Horticulture Development through Horticulture Crop Production and Post-harvest Management program applied for a cultivation project of roses under a poly/mesh house on his 8,000 sq m lot.
He received a loan from a bank in 2016 to the tune of ₹46.9 lakh, half of the project amount. The remaining amount was to be paid by the NHB.
A team formed by NHB inspected the site in 2017 and authorized its project. But strangely, the NHB, at a meeting in July 2018, rejected the petitioner’s final grant application saying that “the selected variety is not suitable for growing roses for cut flowers”.
In 2019, the petitioner had approached the HC, asking for an order to release the grant amount and pay compensation for the losses he had suffered.
NHB argued that the plea was not admissible and that any assistance in the form of a grant from the public treasury can only be granted in strict compliance with and literal interpretation of the guidelines listed in the policy; and that the petitioner was misinterpreting the policy. No citizen has the right to claim a subsidy, he argued.
The court concluded that horticulture projects under the scheme are not prohibited for roses and are, in fact, permitted provided the project is larger than 2,500 m². The scheme does not mention anywhere which 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 questioned, he had no answer and could not indicate any disposition.
The court observed that the demands of NHB were arbitrary, perverse, contrary to the record and standards mentioned in the curriculum developed by NHB and also contrary to Articles 14 and 300A of the Constitution of India.
“NHB would undoubtedly fall within the scope of the term State used in Article 12 of the Constitution of India, and if it had established certain standards or norms of eligibility for a benefit such as a grant , it cannot arbitrarily apply new standards to reject a grant application or ignore the standards it establishes in the scheme it has developed,” the court observed, adding that the principle of promissory estoppels (dependency of the party to whom the promise is made) is also attracted in this case.
The court reversed NHB’s 2018 decision and ordered NHB to pay ₹46.9 lakh to the claimant within four weeks with interest at the rate of 9% per annum since he submitted the claim and gave him freedom to seek further compensation. NHB must also pay the penalty within four weeks.