The Kerala High Court recently directed 'Supplyco' to expedite payments to the aggrieved farmers who supplied paddy under the Kerala Civil Supplies Corporation's Procurement Scheme.
Brief Facts:
The issue in these cases revolves around the delayed payment of farmers who supplied paddy to the Kerala Civil Supplies Corporation ('Supplyco') under the Paddy Procurement Scheme.
According to the agreed terms of the Procurement Scheme, all amounts owed to the farmers, up to Rs. 50,000, were to be paid immediately, while amounts exceeding this limit would be paid in two parts: 28% initially, directly into their accounts, and the remainder once 'Supplyco' obtained a loan from a designated bank, as per government instructions.
Contentions of the Petitioners:
The petitioners argue that the payments have not been made promptly, as per the agreed terms, and they are being asked to approach a bank for disbursement, raising concerns about potential loan obligations. To this, Supplyco's counsel acknowledged that substantial amounts were still due to the petitioners and that this was due to administrative issues faced by the bank financing the scheme under a tripartite agreement.
Observations of the Court:
The High Court emphasized the significance of acknowledging that the petitioners, who are farmers, played a pivotal role in enabling the successful implementation of the Procurement Scheme. They supplied the produce that has been integrated into the public distribution system by 'Supplyco.' However, the petitioners did not receive the full payments they were entitled to. 'Supplyco' had clarified that within the scheme, 28% of the owed amount has already been directly credited to each petitioner's account. Nevertheless, the outstanding balance was expected to be disbursed through a tripartite loan agreement involving the petitioners, the government, and the Bank. Despite this explanation, it remains undisputed that substantial amounts were still outstanding and owed to the petitioners.
The High Court also pointed out that this was an unfortunate event because as per the Procurement Scheme, the unpaid amounts should have been deposited into the petitioners' accounts within 60 days of procurement.
The Decision of the Court:
The court recognized that it was 'Supplyco's' contractual obligation to pay the farmers promptly under the Paddy Procurement Scheme. The delay in payments cannot be shifted onto the farmers, nor should they be made to bear any potential loan obligations. The court granted the Writ Petitions and directed 'Supplyco' to ensure that eligible amounts are disbursed to the petitioners within one month. Additionally, the court ordered that compliance with these directions should be verified and 'Supplyco' should file an Action Taken Report.
Case Title: K Sivanandhan vs. State of Kerala and Ors
Coram: Hon’ble Justice Devan Ramachandran
Case No.: WP(C) NO. 23267 OF 2023, WP(C) NO. 24835 OF 2023, WP(C) NO. 25152 OF 2023, WP(C) NO. 25410 OF 2023, and WP(C) NO. 25575 OF 2023
Advocate for the Applicant: Millu Dandapani
Advocate for the Respondents: Santhosh Peter
Read Judgment @LatestLaws.com
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