State Authorities Cannot Retrospectively Discontinue Grant-in-Aid if Consistent Practice Created Legitimate Expectation of Reimbursement for Expenses Incurred.

The Petitioner, a registered Public Trust engaged in social welfare, was sanctioned Grant-in-Aid by the Central Social Welfare Board (CSWB) to run a Family Counseling Centre (FCC) from 2012 to 2016.

Historically, the Respondents issued sanction orders near the end or in the middle of the financial year for which the grant was intended.

On 30.01.2017, the Respondents issued a communication discontinuing the grant with retrospective effect from 01.04.2016, citing unfavorable inspection reports.

During proceedings, it was noted that the CSWB had been dissolved and its operations closed effective 30.11.2023.

The Petitioner sought reimbursement for expenses incurred in 2016-2017 prior to the rejection notice.

1. Whether the Petitioner is entitled to reimbursement for actual expenses incurred during a period where a "bona fide belief" of sanction existed due to the Respondents' consistent administrative practice.

2. Whether the Respondents should be directed to consider minimum wage standards and behavioral training in future NGO-related policies.

The Court applied the principle of legitimate expectation and fairness in administrative action, specifically regarding the retrospective withdrawal of grants.

the doctrine of "Bona Fide Belief" arising from consistent past practice of the State in granting ex-post facto sanctions.

Principles of Natural Justice (specifically Audi Alteram Partem)

The Court observed a consistent pattern from 2012 to 2016 where the Respondents issued sanction letters only after the commencement of the relevant financial year, sometimes as late as the final day of the term.

Consequently, the Court reasoned that the Petitioner performed its obligations under a bona fide belief that a sanction for 2016-2017 would be granted.

The Court determined that denying reimbursement for actual expenses incurred before the formal rejection on 30.01.2017 would be unjustified, as the Petitioner had already performed services in anticipation of the grant based on the Respondents’ established conduct.

Regarding the closure of the CSWB, the Court noted the scheme no longer exists but held fiscal liabilities for past performance remain evaluable.

The Court directed the Respondents to evaluate the Petitioner's records and reimburse verified expenses within six weeks of receiving a representation.

The petition was disposed of with liberty to the Petitioner to seek further grievance redressal if necessary.