The Bombay high court directed co-operative banks to disburse fresh loans to farmers ahead of the Kharif season without insisting on payment of interest on loans and further ordered the banks to refund the already collected interest under orders of the state government which provided for major loan waiver for farmers.
The counsel for the petitioner submitted that all agriculturists were entitled to get benefit of the state government resolution which provided for crop loan waiver up to Rs. 2,00,000 and further directed banks to not to levy any interest on the loans till the actual benefit of the waiver scheme is given, but banks were not distributing fresh loans on the ground of non payment of interest which was against the government resolution.
The petitioner’s counsel further contended that the bank was demanding no-dues certificate from the farmers for passing of fresh loans which was against the RBI circular under which banks were only to ask for no-objection certificate. The counsel argued that due to policy of demanding no dues certificate many farmers were denied of loans and were not granted benefit of the government scheme. The petitioner relied on statistical data showing that multiple farmer were deprived for loan for Kharip season which was already coming to an end. The petitioner thus requested the court to pass an interim order directing the banks to disburse loans immediately without asking for payment of interest.
The counsel for respondent submitted that the bank had started refunding Rs. 5 crore to the farmers which they had earlier recovered as interest. The respondent’s counsel further submitted that he had instructed the banks to not to demand no dues certificate but to ask for no objection certificate further contending that chronic defaulters were not entitled for the benefit of the scheme and finally submitted that the bank had already taken steps to disburse the loan and presented statistical data showing that multiple farmers were already getting the benefit of the loan waiver scheme.
The bench consisting of justices Shrikant D. Kulkarni and Justice S.V Gangapurwala after considering the submissions of both sides in the PIL firstly addressed the poor state of farmers in Maharashtra and need of loan waiver and stated “The State of Maharashtra has promulgated Mahatma Jyotirao Fule Shetkari Debt Waiver Scheme 2019 to ameliorate the precarious economic condition of 1,53,00,000 agriculturists in the State of Maharashtra. The State noticed that from 2015-2016 to 2018-2019 continuously drought-like situation was prevailing through out the State and in some places witnessed unseasonal rains. Due to a drought-like situations for four continuous years and unseasonal rains the agriculturist faced losses. The State Government in the fitness of things took a conscious decision to grant loan waiver to the extent of Rs.2,00,000/- to the agriculturists having obtained short term crop loan from 01.05.2015 to 31.03.2019 under the Government Resolution dated 27.12.2019”. the court being with the same mind as state government was of opinion that the farmers were entitled for the grant of loan without insisting of payment of interest under the loan waiver scheme further saying “The year 2020 is a tumultuous year. The entire country is affected by pandemic of Covid-19. Fortunately, this year the State witnessed timely rains and it is necessary that the agriculturists get financial assistance for the kharip sowing season.”
The court directed banks in previous order that they must not insist on payment of interest and further directed banks in present order to refund the amount recovered by them as interest to the farmers immediately.
The court accepted the respondent’s counsel’s admission that he already instructed bank to not to demand no dues certificate but only to ask no objection certificate from eligible beneficiaries. The court stated that banks must take steps to implement the government’s scheme in its true letter and spirit without any delay and said “We hope and trust that Banks would be alive to the problems of the agriculturists.”
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