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Agriculture Produce Market Committee, Deesa v. National Horticulture Board & Ors.

Civil Appeal · 2026 INSC 385Decided 17 Apr 2026
C.A. No.-004562-004562 - 2026
Justice Sanjay Karol · Justice Augustine George Masih · Justice Nongmeikapam Kotiswar Singh

Background

The Agriculture Produce Market Committee, Deesa (APMCD) built a cold storage facility with a bank loan and applied for a government capital investment subsidy administered by the National Horticulture Board (NHB) and NABARD, receiving a 50% advance of Rs. 25 lakh. A 2008 joint inspection found the facility at only about 20% capacity utilisation (conducted in the off-season) and the release of the remaining subsidy was kept pending, even though the inspection report itself recommended the unit be considered for the final subsidy. Despite APMCD and its bank sending numerous follow-up letters over several years requesting release of the balance or a fresh inspection, NABARD eventually withdrew the subsidy altogether and demanded a refund of what had already been paid, a decision the NHB upheld. A Single Judge of the High Court set aside that withdrawal and held APMCD entitled to the full subsidy, but a Division Bench on appeal reversed and restored the authorities' decision, prompting APMCD's appeal to the Supreme Court.

Decision Breakdown

The Supreme Court examined the documentary record and found that APMCD, through its bank, had made repeated, genuine efforts over roughly three years to get the facility re-inspected and the subsidy released, none of which NABARD or NHB acted upon. It found NHB's claim that APMCD had "miserably failed" to make such efforts contradicted by the record and by the inspection report's own recommendation that the unit be considered for final subsidy. Since the delay and consequent non-release were attributable to the authorities' inaction rather than any real fault of APMCD, the Court held the withdrawal of subsidy and demand for refund unjustified. It set aside the Division Bench's judgment and restored the Single Judge's order, directing that the balance subsidy be released (or, if APMCD had already refunded amounts paid, that the entire subsidy be released to it).

Lesson Learnt

A government body cannot penalize a beneficiary for delay or shortfalls in a scheme's conditions when the record shows the beneficiary made persistent, documented efforts to comply and it was the authorities' own inaction, not any default by the applicant, that caused the delay.

Official source (sci.gov.in)View Judgment (PDF)

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