Settlement scheme applications must be returned for rectification, not rejected outright, when wrongly classified or procedurally defective.

A settlement application under the statutory scheme had to be classified by the dealer under the correct clause at the outset, with the corresponding amount remitted. Where the authority found that the application fell under a different clause, the proper course was to return it for rectification and compliance rather than reject it outright. The rejection was also defective because no prior notice had been given before the earlier rejection, and the authority later maintained the same result without curing that procedural defect. The settlement application was therefore treated as improperly rejected and required reconsideration after affording a personal hearing.

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Issues: Whether the application filed under the settlement scheme was wrongly rejected instead of being returned for rectification and reconsidered in accordance with the correct classification under the statutory scheme.

Analysis: The settlement mechanism required the dealer to classify the claim at the first instance under the relevant clause of the scheme and remit the corresponding amount. If the authority found that the application belonged to a different clause, the proper course was to return the application for compliance rather than reject it outright. The rejection was also flawed because the petitioner had not been given prior notice before the earlier rejection and the authority later persisted with the same result without curing the procedural defect. In comparable circumstances, a defective application was required to be returned for rectification.

Conclusion: The rejection of the settlement application was illegal and incorrect, and the matter was required to be reconsidered after affording the petitioner an opportunity of personal hearing.

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