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Friday, August 14, 2020

Farmers cannot sow seeds resulting in barren lands without timely disbursal of crop loan, observes Bombay HC

Bombay HC directed Aurangabad District Central Cooperative Bank to disburse fresh crop-loans to farmers to enable sowing in ongoing Kharif season without insisting on past recovery of interest.

Written by Omkar Gokhale | Mumbai | Updated: July 11, 2020 2:35:47 pm
Maharashtra Farmers, Agricultural Produce Market Committee, marketing reforms, Maharashtra news, Indian express news Earlier this year, the state had rolled out its flagship scheme – writing off arrears up to Rs 2 lakh for loans availed between April 2015 and March 2019. (Representational)

In a relief to thousands of farmers deprived of resources for sowing during ongoing Kharif season, the Bombay High Court Aurangabad bench on Thursday directed a Bank to immediately disburse crop-loan to the eligible farmers under Mahatma Jyotirao Phule Karjmukti Yojna, without insisting for payment of interest on the past loan amount which was waived by the state government from October 1, last year.

The Court said that if the crop loan is not given to farmers on time, they would not be able to sow seeds resulting in barren lands. However, it said that the question as to whether the Banks were entitled to recover past interest would be decided at the later stage of the hearings.

Earlier this year, the state had rolled out its flagship scheme – writing off arrears up to Rs 2 lakh for loans availed between April 2015 and March 2019.

A division bench of Justices S V Gangapurwala and R G Avachat was hearing a public interest litigation (PIL) filed by RTI Activist and agriculturist Kishore Tangade filed through advocate Satish B Talekar, who sought from the Aurangabad District Central Cooperative Bank not to charge interest from October 1, last year till the actual benefit was given to the eligible farmers.

Petitioner claimed that the Bank had not disbursed loan amounts due to non-payment of interest from October 1, last year by farmers. Talekar said, “Fortunately, this year, the agriculturists are benefited by the timely rains. Sowing season has commenced from the month of June. However, because of non-disbursement of the loan by the Bank, many of them are not in a position to sow the seeds.”

The PIL said that the bank did not implement the scheme in true spirit despite being bound by it. It said that loans have been disbursed to 49.62% of the agriculturists and that too, to those agriculturists, who have paid interest amount calculated October 1, 2019 by selling their gold ornaments and other articles.

Government Pleader D R Kale for the state supported the petitioner’s stand and said that January 17 order, under section 79 A of the Maharashtra Co-operative Societies Act, which empowers state government to give directions in public interest, has been passed considering the precarious condition of the agriculturists and bank was bound by it. He submitted that the bank government had transferred the amount of loan waiver to the bank.

Advocate R S Deshmukh for the Bank however said that it was considering challenging the January 17 order of the government. He said that the conscious decision not to disburse fresh crop-loan was taken by the Board of Directors and if the interest was not recovered and loans were disbursed, it would affect the financial condition of the bank.

After hearing submissions, the bench led by Justice Gangapurwala said that as per authorities, the Bank was bound by the Government order and observed,
“It appears that the sowing season is in full swing. The January 17 order is operative as on date and respondent Bank is bound to comply with the said order so long it is in force. If timely crop loan is not given to the agriculturists, the agriculturists would not be in a position to sow the seeds resulting in barren lands.”

The bench held that the bank had the right to challenge the order, but till it was in force, the bank would have to comply. Moreover, it said the question of the Bank being entitled to recover the interest can be decided at the later stage. Seeking from authorities a compliance on disbursal of fresh loans as per its interim order, the bench posted further hearing on July 20.

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