[Land Revenue Act] Recovery Was Initiated Without Any Order Recalling Subsidy For Being Wrongly Granted: Rajasthan HC Sets Aside Proceedings

Rajasthan High Court set aside a recovery notice issued by the State Government under the Land Revenue Act to the petitioner for recovering the amount of wrongly issued subsidy observing that the recovery proceedings were initiated directly without there being any order passed for recalling the subsidy, solely based on the objection raised by the auditors towards granting of the subsidy.

The bench of Justice Avneesh Jhingan was hearing a petition filed by a company that had set up a unit of small-scale industry in Jaipur. In 1997, an application for subsidy was submitted by the petitioner to the State Government which was accepted and the petitioner was sanctioned a particular amount towards that subsidy.

However, in 1999, a letter was received by the Petitioner stating that as per the auditors, the subsidy was wrongly paid to the Petitioner and the same should be refunded with interest. The petitioner responded to the letter justifying the grant of subsidy under the scheme. But again in 2003, a letter was sent to the petitioner asking for a refund of the amount with interest within 3 months failing which recovery proceedings to be initiated under the Land Revenue Act.

Consequently, a notice for recovery under the Land Revenue Act was issued to the Petitioner against which the petition was filed before the Court.

It was the case of the petitioner that the recovery notice was issued without passing any order for recalling the subsidy, solely on the basis of the objection raised by the auditors. Hence, it was liable to be set aside.

The Court agreed with the argument put forth by the counsel of the petitioner and observed that the sole basis for issuing the recovery notice under the Land Revenue Act was the audit objection. The recovery proceedings were initiated without considering the response submitted by the petitioner to the show cause notice, or passing an order for recalling the subsidies granted to the petitioner.

The Court reiterated that it was settled law that a Quasi-Judicial officer had to pass a reasoned order and in the present case no order for recalling the subsidy was passed and recovery proceedings were initiated.

In this light, the Court set aside the recovery proceedings initiated under the Land Revenue Act and remitted the matter to the general manager for proceeding according to law.

Title: India Image v State of Rajasthan & Ors.

Citation: 2024 LiveLaw (Raj) 272

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