JUDGMENT : K.M. Thaker, J. Heard Mr. Vaghela, learned advocate for the petitioner, Mr. Satish Kumar, learned advocate, for Mr. P.M. Dave, learned advocate for respondent No.1 National Horticulture Board and Ms. Amin, learned advocate for respondent No.3 National Bank for Agriculture & Rural Development. 2. In this petition, the petitioner has prayed, inter alia, that:- "7-B. Your Lordships may be pleased to issue writ of mandamus or writ in the nature of mandamus or writ certiorari or writ in the nature of certiorari or any other writ order or direction to recall the action of the respondent no.1 of withdrawing the subsidy granted to the petitioner market committee as being illegal and further be pleased to direct the respondents to immediately released the whole amount of subsidy which was sanctioned to the petitioner market committee for the construction of the cold storage and further be pleased to quash and set aside the order dated 24th January, 2014 communicated by respondent no.3 the decision of respondent no.1;" 3. The petitioner is Agriculture Produce Market Committee ["APMC" for short] and is aggrieved by action of the respondents of cancelling/withdrawing the subsidy granted to the petitioner as well as the action of recalling the amount already paid/released towards part-payment amount of the subsidy granted/approved to the petitioner. 3.1 From the material on record and facts of the case, it has emerged that the communication which triggered present proceedings and gave rise to this petition is the communication dated 24.1.2014 by respondent No.3 to respondent No.4 whereby the respondent No.3 informed respondent No.4 that the respondent No.1 has issued instruction to recall the subsidy and the amount paid in advance to the petitioner under the subsidy and that therefore, the part-payment towards subsidy which is released should be returned to respondent No.3. 3.2 The petitioner has challenged the said communication. 4. For determination of the relief prayed for by the petitioner and the objection by respondent Nos.1 and 3, it is necessary to consider factual backdrop. 4.1 The petitioner APMC is constituted under Agriculture Produce Market Committee Act, 1963. It appears that the APMC intended to construct cold storage as part of its activities and in aid to its activities, which according to the petitioner APMC would help the agriculturists in Deesa region. It appears that a plan for storage was approved and necessary permission were granted. It appears that the APMC intended to construct cold storage as part of its activities and in aid to its activities, which according to the petitioner APMC would help the agriculturists in Deesa region. It appears that a plan for storage was approved and necessary permission were granted. Thereafter, the petitioner applied for loan to the tune of Rs. 1 Crore from respondent No.4 Bank. The respondent No.4 bank, on completion of all formalities, sanctioned the loan. The respondent No.4 Bank granted the loan under agreement dated 24.3.2006. Said agreement was executed between the petitioner and respondent No.4 Bank. 4.2 Under a scheme to provide subsidy, a proposal was prepared by the petitioner and submitted to the respondent No.3 for providing subsidy. 4.3 According to the petitioner, after completion of all formalities for approval of subsidy, the respondent No.1 approved and sanctioned subsidy to the tune of Rs. 50 Lakhs and 50% of the amount of the total subsidy came to be released by respondent No.1 through respondent No.3. 4.4 The respondent No.3 credited Rs. 25 Lakhs in petitioner's loan account with the respondent No.4 Bank. Differently put, the amount was paid directly to the respondent No.4 (and not to the petitioner APMC) by respondent No.3. 4.5 On release of said amount (Rs.25 Lakhs), the petitioner's obligation to repay loan reduced to that extent of Rs. 25 Lakhs. 4.6 The petitioner, however, claims that for the project, it incurred cost to the tune of about Rs. 4 Crores included price of land and cost of construction. 4.7 From the details mentioned in the petition and from the submissions by the respondents, it appears that somewhere in November 2008, the respondent No.1 and respondent No.3 conducted site visit and inspection of the cold storage. The committee prepared and submitted report of its inspection. 4.8 According to the joint monitoring visit report dated 19.11.2008, certain defects/ shortfall were noticed by the committee. 4.9 It further appears that the respondent No.1 informed the respondent No.3 that the petitioner had abandoned the project, the subsidy stands cancelled/withdrawn. 4.10 The respondent No.1 also instructed the respondent No.3 to recall the amount which was already released towards part-payment of the subsidy i.e. Rs. 25 Lakhs. 4.9 It further appears that the respondent No.1 informed the respondent No.3 that the petitioner had abandoned the project, the subsidy stands cancelled/withdrawn. 4.10 The respondent No.1 also instructed the respondent No.3 to recall the amount which was already released towards part-payment of the subsidy i.e. Rs. 25 Lakhs. 4.11 On receipt of such communication from respondent No.1, the respondent No.3 addressed the communication dated 24.1.2014 to respondent No.4 and informed the respondent No.4 that the respondent No.1 Board has taken decision to recall the advance subsidy and that therefore, the amount released earlier should be refunded. 4.12 The said communication triggered present proceedings. 4.13 During pendency of the petition, the petitioner filed Civil Application and prayed for permission to amend the petition to add additional prayer so as to challenge the communications dated 6.3.2014 and 31.1.2014. The said application came to be allowed vide order dated 9.7.2018. In pursuance of the said permission, the petitioner has amended the petition by adding paragraph No.7-BB, which reads thus:- "7-BB Your Lordship may be pleased to issue a writ of mandamus or writ of certiorari or writ in the nature of certiorari or any other writ order or direction for quashing and setting aside the communications dated 06/03/2014 and also the communication dated 31/01/2014 issued by Respondent No.4 pursuant to the communication dated 24/01/2014 issued by Respondent No.1 to Respondent No.4 as being illegal and be pleased to direct the Respondents to immediately release the whole amount of subsidy which was sanctioned to the applicant committee for the construction of the cold storage." 4.14 The respondents herein were granted opportunity to file reply in pursuance of the amendment, however, the respondents have declared that they do not want to file reply in pursuance of the amendment. 5. Mr. Vaghela, learned advocate for the petitioner assailed the communication dated 24.1.2014 as well as communications dated 31.1.2014 and 6.3.2014 on the ground that the said communications have been issued without granting opportunity of hearing to the petitioner. 5. Mr. Vaghela, learned advocate for the petitioner assailed the communication dated 24.1.2014 as well as communications dated 31.1.2014 and 6.3.2014 on the ground that the said communications have been issued without granting opportunity of hearing to the petitioner. He also submitted that on account of impugned communications, the petitioner is visited with severe civil consequences, inasmuch as the subsidy granted for cold storage is cancelled and even amount which was paid towards subsidy and was directly credited towards loan account also withdrawn and consequently, the petitioner is obliged to pay entire loan amount to respondent No.4 bank and the petitioner is deprived of the subsidy without being informed about the reason and/or without opportunity of hearing. He submitted that from the reply filed by the respondents, it has emerged that the committee had visited the site and the cold storage. Learned advocate for the petitioner submitted that the petitioner was not made party to the said committee and even any intimation about the visit of the committee was also not given. He submitted that besides violation of principles of natural justice, the impugned communications are also bad in law because the action is contrary to the terms of loan availed by the petitioner as well as contrary to the terms of subsidy (subsidy agreement). On this count, he submitted that the petitioner actually constructed cold storage. The cold storage was in operation and the committee, at the back of the petitioner and without calling for any details or material from the petitioner, on its own, formed an opinion that the capacity utilization of the plant (cold storage) was less than 20% of the capacity. On the basis of a copy of the Joint Monitoring Visit Report dated 19.11.2008, learned advocate for the petitioner submitted that before preparing the said report, the petitioner was not heard. Even after the said report was submitted, copy thereof was never given to the petitioner, any opportunity for explaining the details about the operations of the plant and to offer any explanation with regard to remarks made in the report was also not provided. He further submitted that in 2011, fire occurred at the cold storage and said fire gutted entire cold storage. He further submitted that in 2011, fire occurred at the cold storage and said fire gutted entire cold storage. However, since balance 50% of the subsidy was not realized and the petitioner had already incurred liability of loan and constructed cold storage, it was not possible for the petitioner to re-construct/restore the cold storage after the incident of fire. The petitioner submitted that according to the conditions of the subsidy agreement, the cold storage was constructed and it was in operation and that therefore, there was no justification to withdraw the subsidy on extraneous grounds not found in the agreement. On such grounds and contentions, the petitioner assailed the said communications. 6. Learned advocate for the respondent No.1 reiterated the details mentioned in two affidavits by the respondent No.1. He submitted that the petitioner does not make out any case of infringement of any fundamental or legal right. He further submitted that the grounds of subsidy and withdrawal thereof is a matter of guidelines issued by the government and the conditions of the subsidy are matter of policy and that therefore, the petition should not be entertained against policy decision. The respondent No.1 also claimed that the petitioner has suppressed facts. Learned advocate for the respondent No.1 heavily relied on the report dated 19.11.2008 and the remarks in the report. He also reiterated the remark in the report that according to the report, re-measurements are required to ascertain the volume of the cold storage. He submitted that the project of the company was abandoned and therefore, the respondent Nos.3 and 4 were instructed to not advance further subsidy and to recall the subsidy which was already released. Learned advocate for the respondent No.1 submitted that the petitioner had not submitted commissioning certificate. Learned advocate for the respondent No.1 emphasized the averments and statement in the affidavit viz. "It is absolutely wrong and denied that decision of the respondents to withdraw the subsidy is ex-parte, against the principles of natural justice, against the agreement and against the provisions of law". Learned advocate for the respondent No.1 emphasized the averments and statement in the affidavit viz. "It is absolutely wrong and denied that decision of the respondents to withdraw the subsidy is ex-parte, against the principles of natural justice, against the agreement and against the provisions of law". He also emphasized the averment that "It is absolutely wrong and denied that the action of the respondent No.3 in withdrawing the subsidy without hearing the petitioner or without giving any reason is incorrect and illegal." However, learned advocate for the respondent No.1 could not demonstrate that at any point of time or at any stage opportunity of hearing was granted to the petitioner. The learned advocate for the respondent No.1 also relied on the terms of subsidy, particularly the condition which prescribe "in case the unit has not submitted the commissioning certificate, the NABARD would refund the subsidy to NHB". Learned advocate for the respondent No.1 also relied on the statement in the affidavit viz. "... subsequently, it was found that the project of the petitioner company was abandoned and thereafter, NABARD requested the respondent No.4 bank to apprise why not the advance subsidy released to the Bank is recalled". Learned advocate for the respondent No.1 submitted that since the project was abandoned, the subsidy came to be withdrawn. However, learned advocate for the respondent No.1 could not explain that when the cold storage was constructed and completed and was in operation, then, how could it be said that the project was abandoned. He also could not respond to the fact that even in the report dated 19.11.2008, the committee mentioned that utilization was minimal @ 20% and the said remark atleast conveyed that the utilization of capacity though @ 20% - was in operation, however, in face of that remark how could the presumption that the project was abandoned can stand and survive and said two statements remarks amount to contradiction in terms. Learned advocate for the respondent No.1 further raised allegation against the respondent No.4 bank and he reiterated the statement in the affidavit that the respondent No.4 seems to be in collusion with the petitioner. Learned advocate for the respondent No.1 also alleged that the petitioner has committed fraud. He submitted that the petition should be dismissed. 6.1 Ms. Amin, learned advocate for the respondent No.3 NABARD reiterated the statements and submissions in reply affidavit filed by respondent No.3. Learned advocate for the respondent No.1 also alleged that the petitioner has committed fraud. He submitted that the petition should be dismissed. 6.1 Ms. Amin, learned advocate for the respondent No.3 NABARD reiterated the statements and submissions in reply affidavit filed by respondent No.3. She reiterated the submissions in paragraph Nos.7 to 9 and 11 and paragraph A, B, D and G. The said statements read thus:- "7. That this Respondent, based on the instruction of Gol further issued circular No.2 dated 09.06.2000 clarifying/amending the scheme dated 05.01.2000 which inter alia includes release of subsidy. A copy of this circular No.2 dated 09.06.2000 is being annexed herewith and marked as Annexure II to this Reply. The subsidy is to be released in two installments, i.e. 50% of eligible subsidy as advance subsidy on submission of claim by the financing bank to NABARD after sanction of loan and disbursement of first installment by them and the balance 50% subsidy is sanctioned on submission of final subsidy claim by the financing bank after completion of the project to the satisfaction of a Joint Monitoring Inspection Team. 8. That as per the scheme, the advance subsidy is sanctioned based upon the subsidy claim application submitted by the financing bank. No subsidy calculation is done by this respondent so far as advance subsidy is concerned, with a presumption of genuineness and correctness about the claim on the part of the financing bank. It may be mentioned here that NHB will place with NABARD a lump sum (50% of subsidy) amount for the sanction of subsidy. The advance subsidy so released by NABARD to the financing bank shall be kept in a separate 'Subsidy Reserve Account' of the concerned borrower maintained with the financing bank, and shall be adjusted finally against the loan amount on completion of the project. Since, subsidy under the scheme is backended; the amount of subsidy is not directly disbursed to the account of the concerned borrower. 9. The balance 50% subsidy (final subsidy) is sanctioned on submission of final subsidy claim by the financing bank after completion of the project to the satisfaction of a Joint Monitoring Inspection Team, consisting of the officer of the concerned financing bank, NABARD and the concerned department of Gol, viz National Horticulture Board. The financing bank requests for Joint Monitoring Visit (JMV) and arrange for conducting JMV. The financing bank requests for Joint Monitoring Visit (JMV) and arrange for conducting JMV. The team conducts a JMV of the project to ascertain whether the project has been completed as per Gol's guidelines. The concerned financing bank submits final subsidy claim along with compliance report on JMV observations. The balance 50% of the subsidy is released on the recommendation of the joint monitoring team, subject to compliance of all the terms and conditions of the scheme and guidelines by the borrower. 11. That pursuant to the formation of National Horticulture Mission (NHM) in 2005-06, and NHM becoming a centrally sponsored scheme w.e.f. 01 July 2007, the changes for procedure of release was under discussion with NHB and subsidy of cold storage projects was being disbursed under the scheme through four head of accounts, viz. National Horticulture Mission, Technology Mission for hilly and tribal areas and Technology Mission for North East Region and National Horticulture Board. On getting clarification from Gol, on procedure to be followed for the pending as well as fresh subsidy claims NABARD vide Circular dated 29/6/2009 advised banks that, cases where bank loan had been sanctioned after the launch of NHM i.e. after 19/5/2005, even if advance subsidy was released by NABARD under NHM, final subsidy would be released through the respective State Directorates of Horticulture Mission. A copy of this circular No.100A dated 29.06.2009 issued by this Respondent is being annexed herewith and marked as Annexure III to this Affidavit in reply. A. The Respondent No.3 received in the year 2007, an advance subsidy claim through the financing Bank Gujarat State Co-operative Agriculture and Rural Development Bank (Respondent No. 4) for a loan sanctioned to Deesa APMC unit (the petitioner herein). The petitioner was sanctioned a loan of Rs. 100 lakhs by the Respondent No. 4 on 29.12.2005. The advance subsidy of Rs. 25 lakh was released by NABARD on 27.02.2007 to Respondent N04 to be kept in a separate 'Subsidy Reserve Account' of the petitioner maintained with Respondent No.4. As per the scheme, the advance subsidy shall be adjusted finally against the loan amount on completion of the project. Since, subsidy under the scheme is back-ended; the amount of subsidy is not directly disbursed to the account of the concerned borrower and the financing bank only can make claim for subsidy to NABARD. As per the scheme, the advance subsidy shall be adjusted finally against the loan amount on completion of the project. Since, subsidy under the scheme is back-ended; the amount of subsidy is not directly disbursed to the account of the concerned borrower and the financing bank only can make claim for subsidy to NABARD. Hence the contention of the petitioner on oath at para 2.2 of the petition that he had made an application to the Respondent No. 3 bank for granting subsidy for construction of cold storage along with a copy of the certificate and the format for claiming 50% advance subsidy is false, and baseless. On this count the present petition is required to be dismissed for making false statement on oath before the highest Court of the State. B. That after release of the advance subsidy on 27.02.2007 to Respondent No.4, this answering respondent requested Respondent No.4 for conduct of Joint Monitoring Visit vide letter dated 10/3/2007. This answering respondent further vide letter dated 9/4/2007 advised the financing bank i.e. the Respondent No.4 to coordinate with the officials of NHB for conduct of JMV but there was no response from the Respondent No.2. In order to facilitate early conduct of JMV, this answering respondent had vide letter dated 22/11/2007 requested NHB to undertake visit on 29th or 30th November 2007 and sought their confirmation. D. That in terms of instructions contained in Circular dated 29/6/2009 supra, as the bank loan of the petitioner was sanctioned on 29/12/2005 and also that no JMV was conducted, the proposal for release of final subsidy was/returned by this Respondent vide letter dated 20/7/2009 to Respondent No.4 bank advising them to submit it to the State Horticulture Mission. G. That the Respondent No.4 vide their letter dated 6/6/2011 informed that a fire accident has occurred on 3/5/2011 at Cold Storage unit of APMC Deesa and reported that the unit was damaged and became completely unused. That this Respondent vide letter dated 4/8/2011 reported the matter to the Managing Director, NHB, Gurgaon for further course of action on the eligibility of project." She further submitted that on receipt of project profile, the advance subsidy was released in 2007 whereas completion certificate, which is placed on record of the petition by the petitioner, is issued in 2006. That this Respondent vide letter dated 4/8/2011 reported the matter to the Managing Director, NHB, Gurgaon for further course of action on the eligibility of project." She further submitted that on receipt of project profile, the advance subsidy was released in 2007 whereas completion certificate, which is placed on record of the petition by the petitioner, is issued in 2006. According to learned advocate for the respondent No.3, said fact demonstrates that the petitioner has committed fraud, inasmuch as according to the completion certificate, the project was completed in 2003 whereas the project profile was submitted to the bank in 2007. According to the respondent No.3, either the completion certificate is of some other project or the project profile was submitted and subsidy was availed after the project was completed, i.e. when there was no need or justification for availing subsidy. 6.2 Learned advocate for the respondent No.4 reiterated the submissions in the reply affidavit and submitted that the respondent No.4 bank acted only at the instance of respondent Nos.1 and 3 and it has not taken any action on its own. He submitted that the respondent No.4 bank had, after verification of the document and after complying all formalities, released the loan. The matter related to subsidy, i.e. approval of subsidy and cancellation/withdrawal of subsidy are matter between the petitioner on one hand and respondent Nos.1 and 3 on the other hand and the respondent No.4 bank has nothing to do with the matter of subsidy or its cancellation/ withdrawal except that it has debited the amount of subsidy and returned the amount to respondent No.3 upon receipt of the communication impugned in present petition. He submitted that so far as the communications by respondent No.4 bank are concerned, they are mere reiteration of the instructions received by respondent No.4 bank from respondent No.3. 7. I have considered rival submissions and material available on record. 8. He submitted that so far as the communications by respondent No.4 bank are concerned, they are mere reiteration of the instructions received by respondent No.4 bank from respondent No.3. 7. I have considered rival submissions and material available on record. 8. In light of the facts and circumstances of present case, more particularly in light of petitioner's contention that entire action, including the inspection/visit by the committee, preparation and submission of the Inspection Committee's report and issuance of directions have been taken in violation of principles of natural justice and without granting any opportunity of hearing to the petitioner and in light of the fact that the respondent No.1 and/or respondent No.3 have not placed copy of the decision/order by the competent authority, either by respondent No.1 or by respondent No.3, it appears that present petition can be disposed of, at this stage, on the said limited ground without entering into scrutiny and examination of any allegation/s by the respondent No.1 and/or the respondent No.3 against the petitioner and/or other contentions and objections raised by the petitioner against the action of respondent Nos.1 and 3 or against impugned communications. 9. From above mentioned facts, it has emerged that the petitioner APMC applied for loan for its project of cold storage. The petitioner also applied for subsidy. 9.1 The petitioner availed loan from respondent No.4 bank and the subsidy from respondent No.1, through respondent No.3. 9.2 It has also emerged that the subsidy came to be approved and sanctioned by respondent No.1 and it was released through respondent No.3 and an agreement which prescribed the terms and conditions for sanctioned loan was executed between petitioner and respondent No.1. 9.3 It has also emerged that according to the terms and policy of subsidy scheme part of the subsidy (about 50% of the subsidy amount) is released when subsidy is sanctioned, whereas balance 50% of the subsidy amount would be released on completion of the project and after submission of completion certificate. Further, the subsidy amount are not paid directly to the applicant (petitioner herein) but the amounts are paid to the bank which sanctioned and granted the loan. Further, the subsidy amount are not paid directly to the applicant (petitioner herein) but the amounts are paid to the bank which sanctioned and granted the loan. 9.4 It has also emerged that the respondent No.1 who sanctions and grants subsidy retains the power of inspection and in pursuance of such authority, the respondent No.1 had, somewhere in October/November 2008, constituted a committee to carry out the inspection at the project site. The said committee comprised one representative of respondent No.3, one representative of respondent No.4 bank and one representative of respondent No.1 board. 9.5 It has also emerged that the said committee had conducted inspection/visit on 19.11.2008 and the said committee prepared a report dated 19.11.2008. 10. In this background, the question about principles of violation of natural justice has arisen. 11. However. Before taking up said contention, it is relevant to note that the respondent has alleged that on receipt of project profile, the advance subsidy was released in 2007 whereas completion certificate, which is placed on record of the petition by the petitioner, is issued in 2006. However, from the said report dated 19.11.2008, it comes out that the loan was sanctioned as back as in December 2005. The learned advocate for the petitioner would submit that the total cost of the project was about Rs. 5 Crores whereas the loan availed from respondent No.4 bank was only to the tune of Rs. 1 Crore and the subsidy was sanctioned to the extent of only Rs. 50 Lakhs whereas the balance fund was procured and used by the petitioner from its own fund and resources and that the petitioner had approached the respondent No.1 for subsidy, after availing loan, and that therefore, the submission by the respondent No.3 raising doubt with regard to completion certificate issued in 2006 are baseless and unjustified. 11.1 As mentioned above, in light of facts of present case, it is not necessary to enter into said or other controversy. 11.2 The said submission and counter submission are recorded only with a view to taking note of rival submissions. 11.3 Further, the said allegation by the respondent and the petitioner's reply raise disputed questions which would necessitate inquiry and examination of evidence and without inquiry and without proper examination verification of facts and evidence any conclusion could not have been reached. 11.3 Further, the said allegation by the respondent and the petitioner's reply raise disputed questions which would necessitate inquiry and examination of evidence and without inquiry and without proper examination verification of facts and evidence any conclusion could not have been reached. When such disputed facts are involved in the case, then, there was no justification on the part of the respondent No.1 and respondent No.3 to take decision about cancelling the subsidy and also to recall the subsidy without even calling for explanation from the petitioner and without granting opportunity of hearing to the petitioner, more particularly when the respondents took action on the basis of above mentioned allegations including allegations about fraud and that the petitioner abandoned the project. 12. It is also relevant to note that in the affidavit, respondents have denied the petitioner's submission about violation of principles of natural justice. They have averred that "It is absolutely wrong and denied that decision of the respondents to withdraw the subsidy is ex-parte, against the principles of natural justice, against the agreement and against the provisions of law" and it is further averred and stated that "It is absolutely wrong and denied that the action of the respondent No.3 in withdrawing the subsidy without hearing the petitioner or without giving any reason is incorrect and illegal." However, learned advocate for the respondent No.1 could not demonstrate that at any point of time or at any stage opportunity of hearing was granted to the petitioner. 13. Another important aspect emerges from the report dated 19.11.2008 submitted by the committee. From the said report, following observations and remark emerge:- "1. The structure designed for earthquake ceramic loads and made of EPS panels and mild steel members. 2. D.G. set has not been provided. 3. Capacity utilization on the day of JMV was about 20% only. 4. At the time of Joint Inspection capacity utilization was minimal i.e. less than 20% of the capacity. Re-measurements are also required to ascertain the volume of the cold storage. Some administrative dispute has been observed while Joint Visit. In view of above, re-inspection and re-confirmation of documents are required. This has been discussed with Sh. V.K. Ramana, Mgr. NABARD." 14. At the time of Joint Inspection capacity utilization was minimal i.e. less than 20% of the capacity. Re-measurements are also required to ascertain the volume of the cold storage. Some administrative dispute has been observed while Joint Visit. In view of above, re-inspection and re-confirmation of documents are required. This has been discussed with Sh. V.K. Ramana, Mgr. NABARD." 14. From above remarks, which are found from the report dated 19.11.2008 (Page 66 to 68 of the petition), it comes out that the report contained reference about the structure (of cold storage), EPS panels, etc. (i.e. remark No.1). When the said remark No.1 is read with remark Nos.3 and 4 then it would emerge that the plant (cold storage) was not only constructed but it was operational, though at very low capacity or @ minimum level. In this view of the matter, the respondents could not have assumed without even calling petitioner's explanation that project was abandoned. Further, learned advocate for the respondent No.1 could not explain that when the cold storage was constructed and completed and was in operation, then, how could it be said that the project was abandoned. He also could not respond to the fact that even in the report dated 19.11.2008, the committee mentioned that utilization was minimal @ 20% and the said remark atleast conveyed that the utilization of capacity though @ 20% - was in operation, however, in face of that remark how could the presumption that the project was abandoned can stand and survive and said two statements remarks amount to contradiction in terms. 14.1 Besides this, other remark viz. remeasurements to ascertain volume of cold storage and re-inspection and re-confirmation of documents are required go to show that the remark in the said report were tentative or preliminary and further verification was necessary. 15. Under the circumstances, any final decision on the basis of said report could not and ought not have been taken and in any case, final decision should not and could not have been taken without granting opportunity of hearing to the petitioner and/or without atleast calling for petitioner's explanation with regard to said remarks. As mentioned earlier, the cold storage was constructed and it was operational. The committee's report also mentioned that capacity utilization was @ minimum level. As mentioned earlier, the cold storage was constructed and it was operational. The committee's report also mentioned that capacity utilization was @ minimum level. The said remark also gives out that the cold storage was operational, though at very less or at minimal level. Further, the learned counsel for petitioner submitted that the petitioner had informed the respondents that in 2011 the cold storage caught fire in 2011 and the fire gutted entire cold storage. In this view of the matter, before forming the opinion that project was abandoned and before taking action based on such opinion, petitioner's explanation should have been called for and such explanation should have been considered. This little formality was the least that should have been completed and followed to comply the principles of natural justice. Likewise, the remarks in the committee's report particularly the remarks at Sr. No.4 mentioned that "re-inspection and re-confirmation of documents are required." In that view of the matter, before carrying out re-inspection and reconfirmation and without calling for petitioner's explanation final opinion should not have been formed and final action could not have been taken. Moreover, so far as "completion certificate" is concerned, a copy thereof is placed on record and it is claimed that the certificate was submitted to the respondents. The said submission and rival contention also give out that there are several disputed issues involved in this case, any action despite such disputed issues could not have been taken without addressing and deciding the said issues after granting opportunity to offer explanation. Further, the submissions by learned advocate for the respondents No.1 and 3 viz. the allegations and doubts about completion certificate, commissioning certificate, the project profile (the date of submission vis-a-vis completion certificate, alleged abandonment of project, capacity utilization, etc. are such issues which cannot and should not be decided unilaterally by said respondents without calling for reply explanation and without granting opportunity of hearing. In present case, it has emerged that such opportunity was, undisputedly, not granted to the petitioner. 16. In this backdrop, the petitioner's allegation about violation of principles of natural justice are justified and cannot be ignored or rejected. The respondents' action is hit by vice of violation of principles of natural justice. 17. In present case, it has emerged that such opportunity was, undisputedly, not granted to the petitioner. 16. In this backdrop, the petitioner's allegation about violation of principles of natural justice are justified and cannot be ignored or rejected. The respondents' action is hit by vice of violation of principles of natural justice. 17. It has emerged from the record as well as submissions by learned counsel for the respondent Nos.1 and 2 that the petitioner was not even informed about the date and time of visit. 17.1 Even if it is assumed that surprise visit and surprise checking are necessary and that should not be held against respondent Nos.1 and 3, then also, it cannot be ignored that the committee prepared a report and recorded their own remarks and views, but a copy of the said report was not supplied to the petitioner. 18. Thus, visit was undertaken without intimation to and in absence of the petitioner or at the back of and by keeping the petitioner in dark and thereafter without calling for petitioner's reply or without calling for petitioner's explanation, the committee recorded the remarks and prepared the report. On top of this, the committee or the respondents did not supply copy of the report. 19. It is claimed that the respondent No.1 and the respondent No.3 considered the said report and also relied on report. However, before relying on and before acting on the report, the respondents did not call for petitioner's explanation with regard to said remarks. 19.1 Further, before issuing impugned communications, neither respondent No.1 nor respondent No.3 granted opportunity of hearing to the petitioner. 20. It is needless to mention that the impugned communications have resulted into severe civil consequences to the petitioner, inasmuch as the subsidy which was sanctioned and approved is cancelled/withdrawn and part of the subsidy which was to be released upon submission of completion certificate has not been released and the subsidy amount which was released at initial stage is withdrawn. 20.1 The respondent bank was directed to return the subsidy amount and the respondent No.4 bank therefore, returned the amount to respondent No.3 and thereafter called upon the petitioner to pay the said amount because after subsidy amount came to be returned to respondent No.3, the petitioner's loan again remained unpaid. 20.1 The respondent bank was directed to return the subsidy amount and the respondent No.4 bank therefore, returned the amount to respondent No.3 and thereafter called upon the petitioner to pay the said amount because after subsidy amount came to be returned to respondent No.3, the petitioner's loan again remained unpaid. 20.2 It is pertinent that before cancelling/withdrawing the sanctioned loan (a) notice was not given; (b) hearing was not granted; (c) explanation was not called for; (d) grounds for cancelling/withdrawing the loan were not informed; and (e) before directing the respondent No.4 bank to return the subsidy amount, the petitioner was neither heard nor informed. 20.3 The said respondents have not disputed these facts. It is not disputed that none of said steps were taken any opportunity at any stage was not given. The said facts are undisputed. The Court repeatedly asked learned advocates for the respondent No.1 and respondent No.3 as to whether any notice was issued to the petitioner before the impugned communications came to be issued, whether copy of said report was provided to the petitioner and his explanation with regard to remark of the committee in the said report were called for, whether the committee had conducted subsequent visit and conducted further re-verification in light of its remark in the report dated 19.11.2008 and even at that stage, whether any opportunity of hearing or offering explanation was granted to the petitioner and whether the competent authority of the respondent No.1 had, before issuing impugned instructions, granted any opportunity to the petitioner. In reply to the said and such other queries, the reply of learned advocates for the respondent Nos.1 and respondent No.3 is in negative. Learned advocates have conceded and accepted that such opportunity have not been granted to the petitioner. Thus, it is undisputed that before the impugned communications came to be issued, the report of the committee was not given to the petitioner. The petitioner's explanation with regard to the remarks by the committee in the report were not called for. Before issuing the said communications, any notice was not issued to the petitioner to explain as to why the subsidy should not be cancelled and the amount released should not be recalled. 21. It follows that the report by the committee and impugned actions are hit by violation of principles of natural justice. 22. Before issuing the said communications, any notice was not issued to the petitioner to explain as to why the subsidy should not be cancelled and the amount released should not be recalled. 21. It follows that the report by the committee and impugned actions are hit by violation of principles of natural justice. 22. Now, the petitioner is called upon by the respondent No.4 bank to return the said amount. 22.1 Thus, the petitioner is not only visited with severe civil consequences but certain inference has been drawn against it and conclusion have been reached and actions have been taken in breach of principles of natural justice. 23. In this view of the matter, more particularly in light of the remarks in the report, it cannot be denied that this was a fit case where opportunity of hearing or at least opportunity to file explanation after informing reasons for proposed action should have been granted to the petitioner or atleast opportunity to submit explanation with regard to remark in the report should have been granted to the petitioner after providing a copy of the report or his reply/submission or representation with regard to proposed action i.e. cancelling the subsidy and recalling the amount already released, should have been granted. 24. There is another perspective to the said contention viz. violation of principles of natural justice. 24.1 It has emerged from the record and submissions by learned advocates for the respondent Nos.1 and 3 that the said respondents have failed to place on record any decision/order by the competent authority. 24.2 There is nothing on record to demonstrate that the competent authority, be it the Board of Directors or the Chairman or Managing Director or any CEO or any other authorized officer has, after recording reasons, taken and recorded decision and order, atleast on file, to withdraw the subsidy and to recall the amount. The only material which is placed on record even by respondent Nos.1 and 3 is the communication dated 23.8.2011 by Managing Director to the respondent No.3 wherein it is mentioned that :- "Sir, Please refer to your letter No.NB.ICD.-GSS/1263/CS-2 (Gujarat)/2011-12 dated 04.08.2011 wherein you have mentioned that APMC, Deesa (District Banaskantha, Gujarat) was financed by Gujarat State Co-operative Agricultural & Rural Development Bank Ltd. and an advance subsidy of Rs. 25.00 lakhs was released on 25.02.2007 as per NHB guidelines. 25.00 lakhs was released on 25.02.2007 as per NHB guidelines. In the meantime, before conduct of Joint Monitoring Visit, it was reported by the bank that a fire occurred and damaged the cold storage and hence JMC visit has not been conducted and requested for advice for further course of action on the eligibility of project to avail subsidy under the scheme. As the project is abandoned, you are advised to recall the subsidy amounting to Rs. 25.00 lakhs. Yours faithfully" 25. From the said communication, it emerges that the Managing Director instructed the respondent No.3 to recall the subsidy amount even before the Joint Monitoring Committee conducted visit and submits the report. The said communication, however, does not explain or give out details of the procedure followed or whether any procedure was followed or not before issuing said direction. 25.1 Besides the said communication, other communication is found at Annexure A, i.e. communication dated 24.1.2014 the said communication reads thus:- "This has a reference to the discussions you had with our Chief General Manager on the subject during your visit to our Regional Office on 20 January 2014, wherein you had shared the developments that took place in the last meeting of the Board of Directors of your bank on the captioned subject. As explained during our discussions, the decision to recall the advance subsidy has been taken by National Horticulture Board, Government of India, after being apprised of all the developments in the matter. In fact, based on your Bank's request, the matter had been put forth to NHB for reconsideration who have reiterated that the subsidy released earlier should be refunded forthwith. We, therefore, advise you to make arrangements to refund the subsidy amount of Rs. 25 lakh, without any further delay. A copy of this letter is being marked to the Registrar of Cooperatives and Principal Secretary, Agriculture, Government of Gujarat as well as to the Secretary, Ministry of Agriculture, Government of India." 25.2 One more communication is dated 23.12.2013 by respondent No.2, which reads thus:- "As advised by National Horticulture Board (NHB), Gol, vide their letter No.NHB/Cold Storage/NABARD/2011-12/10404 dated 23 August 2011, to us, your Bank has been advised to refund advance subsidy of Rs. 25 lakh released on 25 February 2007 on behalf of APMC Deesa, Banaskantha district, vide our letter No.NB.Guj./UCD-GSS/6761/NHM-191/2011-12 dated 10 October 2011. 25 lakh released on 25 February 2007 on behalf of APMC Deesa, Banaskantha district, vide our letter No.NB.Guj./UCD-GSS/6761/NHM-191/2011-12 dated 10 October 2011. It has been observed that despite several reminders from us (dated 11 November 2011, 23 December 2011, 03 February 2012, 18 May 2012, 23 November 2012, 02 January 2013 and 18 February 2013) your Bank is yet to refund the advance subsidy of Rs. 25 lakh. 2. In this connection, I would like to bring to your kind notice that NHB has been time and again reiterating for recall of advance subsidy released to your Bank and apprise them of the position in this regard. Since considerable time has lapsed and NHB, Gol is required to be informed about the position of receipt of subsidy, I request you to kindly arrange to refund the advance subsidy of Rs. 25 lakh released to your Bank immediately, without further delay. 3. The above amount may please be remitted thorough RTGS forthwith as per the details given below: Purpose : Please indicate the purpose for which the refund is made while communicating the deposit details. 4. In case of non-refund of advance subsidy by your Bank by 27 December 2013, NABARD would be constrained to report the matter to Government of India for further necessary action at their end. 25.3 Further, in response to the query by the Court as to whether any order, except the communication mentioned above, has been passed by the competent authority to act under the subsidy agreement, learned counsel for respondent Nos.1 and 3 submitted that said communication by respondent No.1 itself is the order and any other order is not placed on record. 26. Above mentioned facts establish that present proceedings and impugned actions/communications are vitiated by violation of principles of natural justice. Therefore, the impugned action and impugned communications deserve to be quashed and set aside only on that limited ground and without entering into other contentions and allegations by respondent Nos.1 and 3 against the petitioner and/or the petitioner's objection against impugned action and/or against the respondent No.1, respondent No.3 and respondent No.4. 27. In this view of the matter, impugned communications are quashed on said limited ground and without entering into and without deciding other rival contentions and objections. 27. In this view of the matter, impugned communications are quashed on said limited ground and without entering into and without deciding other rival contentions and objections. The matter stands remanded to said respondent Nos.1 to 3 for appropriate action in accordance with law and in accordance with/after complying principles of natural justice. 28. It is clarified that it is open and permissible to the respondent No.1 and/or respondent No.3 to take such actions as is considered necessary in light of the facts of the case against the petitioner and in connection with the subsidy, however, in accordance with principles of natural justice and after issuing notice and after informing grounds for proposed action and after granting opportunity of hearing to the petitioner and by passing reasoned and speaking order with appropriate, sufficient and cogent reasons. 28.1 It is clarified that the direction to grant opportunity of hearing shall not be construed to mean personal hearing and even an opportunity by respondent Nos.1 and/or respondent No.3 of issuing notice and asking petitioner to offer explanation/response with regard to proposed action (after supplying the material on which the authority intends to rely) would be sufficient compliance. 28.2 It is further clarified that present order will not stand in way of respondent No.1 and/or respondent No.3 to take appropriate action which it considers necessary in light of facts of the case. With aforesaid observations and clarifications, present petition stands disposed of. Rule is made absolute to aforesaid extent. Orders accordingly.