Bombay HC asks banks to disburse crop loans and repay rupee 5 crore interest to farmers


The AURANGABAD bench of the Bombay High Court ordered the banks to immediately disburse a crop loan to eligible farmers under Mahatma Jyotirao Phule Karjmukti Yojana without requiring payment of interest on the past loan to which the state government gave up as of October 1 of last year. The court further stated that if the banks have already recovered the interest amount, it should be immediately returned to the farmers.

The order comes as a major relief for nearly a lakh of weather-stricken farmers last year who are still denied the benefit of a new crop loan for the current Kharif season.

A division bench of Judges SV Gangapurwala and Shrikant D Kulkarni adopted on October 9 a decision on a public interest dispute (PIL) filed by RTI activist and farmer Kishore Tangade, filed through the lawyer Satish B Talekar, who asked banks not to charge interest from October 1 of last year until the actual benefit is given to eligible farmers.

In January of this year, the state rolled out its flagship program – cancel arrears up to Rs 2 lakh for loans taken between April 2015 and March 2019. The state proposed the program after noticing that between 2015 and In 2019, a drought-like situation prevailed across Maharashtra as some places witnessed out-of-season rains leaving farmers at risk.

Lawyer Talekar argued that despite instructions from the state government, banks were holding farmers hostage by telling them that new loans would only be released if farmers paid interest accrued after October 1 of the last year on previous loans. He said the release of crop loans to nearly a lakh from beneficiaries has stalled.

After hearing the observations, the judiciary observed: “The year 2020 is a tumultuous year. The whole country is affected by the pandemic of Covid-19. Fortunately, this year the state has experienced timely rains and there is a need for farmers to receive financial assistance for the kharif planting season.

He added: “We hope and hope that the banks will be sensitive to the problems of the farmers. The precarious condition of farmers has been taken into account by the state government as part of the loan exemption program. Although the loan is canceled, beneficiaries cannot be deprived of the 2020 Kharif crop loan for technical reasons. “

The court also ordered the banks not only to disburse loans to the remaining beneficiaries of the program at the earliest, but also to repay the interest, to the tune of 5 crore rupees, collected by them immediately from the farmers and eliminated from the PIL.


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