SHARMA, J. - (1.) ON account of the prevalent power shortage in Rajasthan it was felt necessary to encourage Small Scale Industries to install their own Diesel Generating Sets for generating power to meet their requirements. The State Government therefore made the Rajasthan Grant of Subsidy for Purchase of Diesel Generating Sets Regulation, 1982 (for short `the Regulations) which came into force w. e. f. January 1, 1982. Pursuant to Regulations the petitioner was granted sum of 59,750/- as subsidy by Rajasthan Financial Corporation (RFC) on August 20, 1982. But after 11 years i. e. on August 26, 1993 the RFC served a notice to the petitioner asking the petitioner to deposit Rs. 1,91,972/- on or before September 15, 1993. The petitioner in its reply dated September 6, 1993 informed RFC that subsidy was granted to the petitioner as assistance and not as a loan therefore it was not recoverable. The RFC did not pay any heed to the reply and forwarded the matter to Collector (Recovery) Jaipur, who in turn proceeded against the petitioner under Section 229 of the Rajasthan Land Revenue Act, 1956 and issued notice to the petitioner on August 3, 1995 asking the petitioner to deposit a sum of Rs. 2,14,359/ -. The petitioner in the instant writ petition seeks to quash the aforesaid notices issued by RFC and Collector (Recovery) Jaipur.
(2.) THE RFC filed return with the averments that the petitioner committed breach of conditions of subsidy rules therefore Subsidy Committee in its meeting held on September 4, 1987 withdrew the benefits of subsidy and thus the amount paid to the petitioner was recoverable. It was further pleaded that the petitioner by purchasing old DG Set committed breach of condition No. 6 of the sanction letter. I have heard the rival submissions advanced by learned counsel for the parties. Procedure for granting subsidy has been incorporated in Regulation 5, which reads as under- (i) The applicant unit shall claim subsidy in respect of Diesel Generating Sets in the prescribed form as per Annexure-1. (ii) The application should be accompanied with a copy of licence issued by. The Rajasthan State Electricity Board for setting up of the Diesel Generating Set as also a certificate of an Engineer of the Rajasthan State Electricity Board in respect of the date on which it started functioning. (iii) An Affidavit of the applicant to the effect that the claims made by him are correct and genuine and that in case the same are found otherwise he would be liable to refund the full amount of subsidy to the Government alongwith interest @ 12% per annum. (iv) The claims shall be submitted to the District Level Officer giving complete details of investment on the Diesel Generating Set and other equipment and electrical accessories purchased alongwith the bills, receipts of payment etc. (v) The District Level Officer shall, on receipt of claim, inspect the premises and verify the correctness of the claim of subsidy and satisfy himself about the genuineness of the claim. (vi) He will then submit the case to the competent authority for sanction of the subsidy. Regulation 7 provides for the conditions for grant of subsidy. The four conditions are:- " (i) The unit will have to give a declaration in the prescribed proforma along with the application that Diesel Generating Set so purchased and installed, for which subsidy in claimed from the Government, shall not be transferred from the premises of the unit to any other place or person within a period of 5 years from the date of its purchase without the permission of the Director. (ii) That the power so generated will be used for its own manufacturing or lighting purposes. (iii) The unit availing subsidy assistance under these Regulations shall allow the Director or the Accountant General. Rajasthan or any persons authorised be the Government or the Director Accountant General to inspect the working and accounts of the industry at all reasonable time and for that purpose shall grant all reasonable facilities. (iv) The unit will execute a Bond as per Annexure-II with the Department before disbursement of the Subsidy. " Having carefully scanned the scheme of the Regulations. I find that monetary aid was granted by the State Government to the petitioner (a small scale industry) for installing its own Diesel Generating Set. It also appears that on receipt of claim the District Level Officer under Regulation 5 (v) inspected the premises and verified the correctness of the claim of subsidy and satisfied himself about the genuineness of the claim. The DG Set was again inspected after 11 years on its purchase and it was opined that the DG Set was old any impugned notices were issued to the petitioner for recovery of money. I do not see breach of any of the conditions. The impugned notice appear to have been issued without properly considering the scheme of Regulations and without observing the principles of natural justice. The observance of the principles of natural justice is fundamental to the discharge of any quasi-judicial function. Fair hearing is a postulate of decision making by a statutory authority exercising its powers. Even if the statute is silent with regard to grant of hearing to the person affected consequences, at least a minimal hearing is essential and non observance of the principles of natural justice under the circumstances would be a nullity. In the instant matter the RFC acted in utter disregard of the principles of natural justice and acted arbitrarily. The act of RFC in not providing fair hearing to the petitioner and proceeding to recover the amount of subsidy which was granted to encourage small scale industry at the time when power shortage prevailed in Rajasthan, is violative of Article 14 of the Constitution.
(3.) FOR these reasons, I allow the writ petition and set aside impugned notices dated August 20, 1982 and August 3, 1995. I restrain the respondents from effecting recovery of subsidy granted to the petitioner in terms of Regulation. There shall be no order as to costs. .;