AMIGS subsidy eligibility cannot be denied solely for pre-amendment project commencement.

The Agriculture Produce Market Committee, Unjha (“APMC”) applied through the Bank of India for a loan and subsidy under the Agricultural Marketing Infrastructure, Grading and Standardization (“AMIGS”) Scheme for its agricultural-market infrastructure project, expressly claiming the benefit of the scheme.

The Government of Gujarat amended the Gujarat Agricultural Produce Markets Act, 1963 by notification dated 13 August 2007 to facilitate implementation of the scheme.

Although the project had substantially progressed before that notification, the project was subsequently examined by NABARD and the Bank of India.

NABARD suggested modifications after a site inspection, the project report was revised, and 50% of the subsidy was credited to APMC’s account.

The Bank of India later submitted the final subsidy claim, which was rejected by the Ministry of Agriculture on the ground that the project had progressed before the 13 August 2007 notification.

The Single Judge quashed the rejection, finding that the project furthered the object of the scheme and had been repeatedly scrutinised and modified by the authorities.

The Directorate of Marketing and Inspection and NABARD challenged that decision in the present appeals.

Whether APMC’s project was ineligible for subsidy under the AMIGS Scheme merely because the project had commenced, and substantial work had been completed, before the Gujarat Government’s notification dated 13 August 2007.

Whether the AMIGS Scheme contained any cut-off date requiring projects to be initiated only after the State’s amendment of the APMC legislation.

Whether the Ministry’s rejection of the final subsidy claim was contrary to the object and operational requirements of the scheme, in view of the authorities’ subsequent processing, inspection, modification and partial release of subsidy.

The Court applied Clause 3 of the AMIGS operational guidelines, under which the scheme was to be implemented in States that amended their APMC legislation, wherever necessary, to permit direct marketing, contract farming and establishment of markets in the private and cooperative sectors; the scheme provided credit-linked back-ended subsidy for agricultural marketing infrastructure and allowed State marketing bodies to obtain loans or invest their own funds.

The Court held that Clause 3 did not prescribe a cut-off date restricting eligibility to projects initiated after the State’s amendment.

It also applied the purposive principle that statutory and executive schemes should be interpreted to advance, rather than frustrate, their objects and the goals reflected in the Directive Principles of State Policy, relying on the Supreme Court decision in U.P. State Electricity Board.

The Court further recognised that, although there could be no estoppel against the authorities on eligibility, their repeated consideration of the project, suggestions for modification, site inspection and release of the first subsidy instalment were relevant to assessing the sustainability of the rejection decision.

The Court rejected the Directorate’s argument that only projects floated after 13 August 2007 could qualify for AMIGS subsidy.

Clause 3 linked implementation to the State’s amendment of the APMC law but contained no express cut-off date.

Although APMC’s project had substantially progressed earlier, the competent authorities processed it after the amendment, required modifications, inspected the site, accepted the revised project report and released 50% of the subsidy.

In those circumstances, rejection solely because the project had commenced before the notification was inconsistent with the scheme’s object and rendered the authorities’ own subsequent conduct inexplicable.

The Court therefore agreed with the Single Judge that acceptance of the claim would advance, and not conflict with, the AMIGS Scheme, whereas rejection would be counterproductive.

The appellants’ challenge disclosed no error of law in the Single Judge’s reasoning.

LPA No. 844 of 2014 filed by the Directorate of Marketing and Inspection was dismissed as meritless, with no order as to costs.

The connected LPA No. 45 of 2015 filed by NABARD was also dismissed as misconceived, and the cross-objection and pending applications were disposed of.