IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN TUESDAY, THE 8TH DAY OF NOVEMBER 2011/17TH KARTHIKA 1933 WA.No. 1595 of 2011 ( ) ----------------------- AGAINST THE ORDER/JUDGMENT IN WPC.8007/2011 DATED 27/05/2011 APPELLANT(S)/WRIT PETITIONER: ---------------------------- K.J.EMMANUEL, S/O.JOSEPH, AGED 43 YEARS, KARIKULATHEL, SREEKRISHNAPURAM, OTTAPPALAM TALUK PALAKKAD DISTRICT. BY ADVS.SRI.V.C.JAMES RESPONDENT(S)/RESPONDENTS: -------------------------- 1. THE REGIONAL MANAGER, STATE BANK OF INDIA, REGIONAL BUSINESS OFFICE 3H AVENUE, WEST FORT ROAD, PALAKKAD PIN - 678001 2. THE GRIEVANCE REDRESSAL OFFICER, AGRICULTURE DEBT WAIVER AND DEBT RELIEF SCHEME 2008, STATE BANK OF INDIA, REGIONAL BUSINESS OFFICE, PALAKKAD, PIN - 678001 3. THE BRANCH MANAGER, STATE BANK OF INDIA, KANJIRAPUZHA, THACHAMPARA P.O., PALAKKAD DISTRICT PIN - 678 593. BY MR.P.V.SURENDRANATH,SC FOR RESPONDENTS THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 08-11- 2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.R. C.N.RAMACHANDRAN NAIR & K.VINOD CHANDRAN, JJ. .................................................................... W.A. No.1595 of 2011 .................................................................... Dated this the 8th day of November, 2011. J U D G M E N T Ramachandran Nair, J. The appellant availed loan from State Bank of India totaling Rs.5.50 lakhs out of which Rs.2 lakhs was sanctioned for construction of compound wall and fencing, and balance Rs.3.5 lakhs sanctioned was for purchase of agricultural land. Loan sanction was under the Kissan Gold Card Scheme in the form of agricultural term loan. Under the loan agreement, the appellant was bound to repay the loan with interest at 11.75% in 14 half yearly instalments i.e. during the course of 7 years from the date of availing the loan. The appellant committed default which led to initiation of proceedings for recovery by the Bank. The appellant took the defence by claiming before the Bank that the loan and the interest are to be waived under the Debt Waiver and Debt Relief Scheme, 2008 (hereinafter W.A.No.1595/2011 -2- referred to as the Scheme for short) introduced by the Central Government, but the Bank declined waiver stating that the loan availed by the appellant is not covered by the Scheme. The appellant challenged the decision of the Bank in Writ Petition before this Court. The learned Single Judge after examining the nature of the loan held that the same is not covered by the Scheme, against which this Writ Appeal is filed. 2. We have heard learned counsel for the appellant and also learned Standing Counsel for the Bank. 3. The short question to be considered is whether the loan availed by the appellant for the two purposes stated above are agricultural loan eligible for waiver in terms of clause 4 of the Scheme. The appellant with less than two hectors of land is a small / marginal farmer eligible for deduction, if the loan falls within the category covered by the Scheme. 4. Since there is no controversy of appellant's eligibility, the remaining question to be considered is whether the learned Single Judge was justified in holding that the loan W.A.No.1595/2011 -3- availed is not of the category that falls under the Scheme disentitling the appellant for the benefit. As already stated, the loan availed by the appellant is partly for construction of compound wall/fencing and partly for purchase of agricultural land. The agricultural loans availed both for short term production purposes and also for investment qualify for waiver and incentives under the Scheme. Admittedly and obviously the appellant does not have a case that the loan is a short term agricultural production loan, which is the loan given for raising of crops, duration of which is only 18 months. The loan taken by the appellant is admittedly a term loan for a period of 7 years for development purposes and for investment in land. Therefore, the loan qualifies for exemption only if it falls within the definition of “investment loan” covered by clause 3.3 of the Scheme, which is extracted hereunder for easy reference:- “3.3 Investment Loan means (a) investment credit for direct agricultural activities extended for meeting outlays relating to the replacement and maintenance of wasting assets and for capital investment designed to W.A.No.1595/2011 -4- increase the output from the land, e.g. deepening of wells, sinking of new wells, installation of pump sets, purchase of tractor / pair of bullocks, land development and term loan for traditional and non-traditional plantations and horticulture; and (b) investment credit for allied activities extended for acquiring assets in respect of activities allied to agricultural e.g. dairy, poultry, farming, goatery, sheep rearing, piggery, fisheries, bee-keeping, green houses and biogas.” 5. From the above, what is clear is that the investments contemplated are in the nature of capital investment in the agricultural land like sinking of new wells, deepening or widening of existing wells to source water for irrigation etc. Similar investments in capital goods like tractor, live stock like bullocks used for ploughing and expenditure of nature also qualify for the benefit. However, there is nothing to indicate that loan availed for acquiring agricultural land is covered by investment loan. In other words, loans availed for capital investments in agricultural land only are covered. So far as clause (b) above are concerned, what we notice is that the loans covered thereunder are investment in the form of capital for development of dairy farming, poultry farming, goatery, W.A.No.1595/2011 -5- piggery, fisheries etc. Probably, capital investment in the form of construction of building for housing of animals and birds, capital investment for health care of animals, factory for protection of yield and all such other activities allied with various industries referred to in clause (b) only fall within the scheme of investment loan in that category. The appellant's specific case is that the loan availed is for acquisition of agricultural land and also for construction of compound wall, fencing etc. The nature of loan is such that it neither falls as a “short term production loan” nor as an “investment loan”, which are specifically defined and enumerated in the Scheme. So much so, in our view, the learned Single Judge rightly upheld Bank's decision to deny waiver claimed by the appellant under the Scheme. Consequently, we dismiss this Writ Appeal. (C.N.RAMACHANDRAN NAIR, JUDGE) (K.VINOD CHANDRAN, JUDGE) jg