Disburse Crop Loan To Farmers Immediately Without Insisting On Payment Of Interest; Bombay HC Directs District Central Co-operative Bank [Read Order]

The Bombay High Court on Thursday directed the Aurangabad District Central Co-operative Bank to disburse crop loans to farmers immediately without insisting on payment of interest which has been waived off by the government.

Division bench of Justice SV Gangapurwala and Justice RG Avachat of the Aurangabad bench was hearing a public interest litigation filed by RTI activist Kishor Tangade wherein he sought disbursement of loans as per government order dated January 17, 2020 was issued directing DCC bank not to charge interest from October 1, 2019, till the actual benefit is given to the persons who are entitled for the benefit under the scheme namely, `Mahatma Jotirao Phule Shetkari Debt Waiver Scheme, 2019'.

Appearing on behalf of the petitioner, Advocate SB Talekar submitted that 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 DCC Bank, many agriculturists are not in a position to sow the seeds. Loans have been disbursed to 49.62% of the agriculturists and that too, those agriculturists, who have paid interest amount calculated from October 1, 2019 onward. Such agriculturists have paid the interest amount by selling their gold ornaments and other articles. Thus, the beneficial scheme of the Government under the is not implemented by the Bank in its true letter and spirit, Talekar argued.

Government Pleader DR Kale said that the State supports the stand of the petitioner and contended that the Government has issued the said dated January 17 exercising its powers under Section 79A of the Maharashtra Co-operative Societies Act. Said Government Order has been passed considering the precarious condition of the agriculturists and for the benefit of the agriculturists. The Government has transferred the amount of loan waiver to the bank. The bank has to comply with the directions issued by the Government of Maharashtra, GP Kale submitted.

Appearing on behalf of the respondent bank, Advocate RS Deshmukh argued that considering the financial position of the bank, a conscious decision has been taken by the Board of, not to grant waiver of interest from October 1, 2019. After taking instructions from the Bank, Deshmukh stated the Bank is intending to challenge the Government Order purportedly issued under Section 79A of the Maharashtra Co-operative Societies Act. The bank would lose the interest amount, if the loan is disbursed without recovering the amount of interest from October 2019 and it will affect the financial condition of the bank, said Deshmukh.

The bench observed-

"We have considered the submissions canvassed by learned Counsel for the respective parties. To challenge the Government Order dated 17.01.2020, is a right of a litigant. It is for the litigant to take appropriate steps. The authorities have made clear that the Government Order dated 17.01.2020 is passed under Section 79A of the Maharashtra Co-operative Societies Act. Respondent no.6 – Bank is bound by the said order.

It also appears that sowing season is in full swing. The Government Order dated 17.01.2020 is operative as on date and respondent no.6 – 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."

Thus, Court noted that the Government Order dated January 17, 2020 issued under Section 79A of the Maharashtra Co-operative Societies Act is in force, by way of an interim arrangement. Therefore, the respondent bank was directed to disburse the crop-loan to the eligible agriculturists immediately, without insisting for payment of interest on the loan amount from October 1, 2019 till the actual benefit is given to the persons who are entitled under the scheme namely, `Mahatma Jotirao Phule Shetkari Debt Waiver Scheme, 2019'.

The next date of hearing is July 20, 2020.

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