SCA/101/9208 1/19 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 10192 of 2008 With SPECIAL CIVIL APPLICATION No. 10202 of 2008 To SPECIAL CIVIL APPLICATION No. 10204 of 2008 With SPECIAL CIVIL APPLICATION No. 10726 of 2008 To SPECIAL CIVIL APPLICATION No. 10730 of 2008 With SPECIAL CIVIL APPLICATION No. 10193 of 2008 To SPECIAL CIVIL APPLICATION No. 10201 of 2008 With SPECIAL CIVIL APPLICATION No. 10224 of 2008 To SPECIAL CIVIL APPLICATION No. 10229 of 2008 With SPECIAL CIVIL APPLICATION No. 10661 of 2008 To SPECIAL CIVIL APPLICATION No. 10664 of 2008 With SPECIAL CIVIL APPLICATION No. 11062 of 2008 To SPECIAL CIVIL APPLICATION No. 11064 of 2008 With SPECIAL CIVIL APPLICATION No. 11066 of 2008 With SPECIAL CIVIL APPLICATION No. 11470 of 2008 To SPECIAL CIVIL APPLICATION No. 11471 of 2008 With SPECIAL CIVIL APPLICATION No. 11474 of 2008 For Approval and Signature: HONOURABLE MR.JUSTICE JAYANT PATEL ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? SCA/101/9208 2/19 JUDGMENT 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= KANTIBHAI CHHOTUBHAI PATEL - Petitioner(s) Versus UNION OF INDIA & 2 - Respondent(s) ========================================================= Appearance : MR BJ TRIVEDI for Petitioner(s) : 1,MR JT TRIVEDI for Petitioner(s) : 1,MS JIGNASA B TRIVEDI for Petitioner(s) : 1, DS AFF.NOT FILED (N) for Respondent(s) : 1, MR HARIN P RAVAL for Respondent(s) : 1, NOTICE SERVED BY DS for Respondent(s) : 2 - 3. MR BS PATEL for Respondent(s) : 3, MRS RANJAN B PATEL for Respondent(s) : 3, MR PS CHAPANERI FOR RESPONDENT NO.1 IN SCAs 10192 TO 10198 OF 2008 AND NO.10224 TO 10229 OF 2008 MS SUMAN KHARE FOR RESPONDENT NO.1 IN SCA NOS.10202 AND 10203 OF 2008 MR SA QURESHI FOR RESPONDENT NO.1 IN SCA NOS.11064 AND 11066 OF 2008 MS NAYNA GADHVI FOR RESPONDENT NO.1 IN SCA NOS.11474, 11470, AND 11471 OF 2008 ========================================================= CORAM : HONOURABLE MR.JUSTICE JAYANT PATEL Date : 15/09/2008 ORAL JUDGMENT 1. Notice in Special Civil Application No.11470 of 2008, Special Civil Application No.11471 of 2008 and Special Civil Application No.11474 of 2008. The learned Counsel appearing for the respective SCA/101/9208 3/19 JUDGMENT respondents waives service of notice. 2. The present group is heard for final disposal. As common facts and questions arise for consideration, common judgement. 3. The short facts of the case appear to be that all the petitioners are the agriculturists, who had taken loans for their agricultural work of land development, traditional and non- traditional plantation, etc., from the respondent No.3 Bank. It is an admitted position that the concerned petitioners, as could not pay the amount of loan fully, the respective suits were filed by the respondent No.3 Bank against the petitioners and as per the respondent No.3 Bank, in some of the cases, the suits are still pending and in some cases, the award/decree are passed against the concerned petitioners. As per the petitioners, as the loan remained unpaid and they are agriculturists, their cases are required to be considered in the Scheme floated by Government of India knows as Agricultural Debt Waiver and Debt Relief Scheme 2008 (hereinafter referred to SCA/101/9208 4/19 JUDGMENT as the “Scheme”). The cases of the petitioners concerned, as per the respondent No.3 Bank, were considered and ultimately, it was the case of the respondent No.3 Bank that the debts could not be considered in the Scheme and, therefore, the petitioners were communicated accordingly. Under these circumstances, the petitioners have approached this Court by the present petition. 4. This Court, in its judgement dated 10.9.2008 in Special Civil Application No.6513 of 2008 and allied matters had an occasion to consider the question as to whether the Scheme would apply to the agriculturists therein for the waiver of the outstanding amount thereof or not. It was observed inter alia by this Court as under:- “6. It appears from the scheme read with the affidavit-in-reply filed on behalf of NABARD – respondent No.5 herein that the scheme applies to all agricultural debts, which remained unpaid as on 28.2.2008. The definition speaks for various loans namely; Direct Agricultural Loans, Short Term SCA/101/9208 5/19 JUDGMENT Production Loan, Investment Loan, etc. The scheme is available to marginal and small farmers and other farmers. The definition of the marginal farmers provide for holding of the land up to 1 hectare (2.5 acres), for small farmers, it provides for holding of the land more than 1 hectare, but up to 2 hectares (5 acres) and for other farmers, it has been provided for holding of the land more than 2 hectares (more than 5 acres), which may include all the farmers irrespective of their holding in the category of other farmers. It is true that as per the scheme different treatment is to be given for disbursement and set off of the debts by extending relief through Central Government in respect of the marginal farmers or small farmers or other farmers, but in view of the scope provided under the Scheme, it is difficult to accept the contention of the learned Counsel for the respondent No.1 Bank that the scheme is not applicable to the debts of the petitioners, SCA/101/9208 6/19 JUDGMENT who are admittedly agriculturists and the transaction of the loan pertains to the category of the direct agricultural loans or short term production loan or the investment loan, as covered in the scheme. The aforesaid is apparent from the scope of the scheme, which, inter alia, provides at 2.1 as under:- “2.1 The scheme will cover direct agricultural loans extended to 'marginal and small farmers' and 'other farmers' by Scheduled Commercial Banks, Regional Rural Banks, Cooperative Credit Institutions (including Urban Cooperative Banks) and Local Area Banks (hereinafter referred to compendiously as 'lending institutions') as indicated in the Guidelines.” 7. As observed earlier if all the categories of the farmers are considered, it would also include the farmers holding the agricultural SCA/101/9208 7/19 JUDGMENT lands exceeding 2 hectares, which would mean all the farmers since the upper limit of holding of the agricultural lands has not been provided to exclude certain farmers in the category of other farmers”. It is not the case of the respondent Bank that the loans were not pertaining to the agricultural loans or short term production loans or investment loans. It is also an admitted position that the loans were granted by the bank, which is a cooperative credit institution. Under these circumstances, it cannot be said that the scheme is not applicable to the petitioners, who are farmers and who obtained agricultural loans from the respondent No.1 Bank and, therefore, the said contention of the learned Counsel for the respondent No.1 Bank deserves to be rejected and hence, rejected. 8. As per the scheme, various modalities have been provided for implementation of the SCA/101/9208 8/19 JUDGMENT scheme. The cut-off date for calculating the eligibility amount can be gathered from paragraph 4.1(A) as well as (B), which speak for amounts remaining unpaid or over due until February 29, 2008. It is also an admitted position that the amounts in respect to the loans of the petitioners, may be by way of the award or by way of recovery certificate of the competent authority, were unpaid or they were over due. Therefore, if the scheme is to apply and the debts of the petitioners are to be covered in the scheme, it will be required by the respondent No.1 Bank to give the same treatment to all its agriculturist debtors and the petitioners would fall in the same category of agriculturists' status so as to claim the benefits of the scheme as floated by the Central Government. Therefore, the consequence would be that the petitioners would be entitled for the benefits of the scheme pertaining to the debts in question, which are subject matter of the present SCA/101/9208 9/19 JUDGMENT petition. 9 xxx 10. xxx 11. xxx 12. xxx 13. xxx 14. xxx 15.As observed earlier, since the petitioners are found as covered by the Scheme and the debt which is subject matter of the petition is also covered by the Scheme, it will be required for the respondent Bank to intimate the respective petitioners about the actual amount to be paid by the concerned petitioners for entitling the benefits of the scheme and also the interest at the rate of 8% per annum, as observed earlier, on the amount deposited by the auction purchaser for participating at the auction or at the later stage by complying with the conditions of the auction. The bank may give reasonable time to the petitioners to deposit the SCA/101/9208 10/19 JUDGMENT amount and it will also be required to the bank to undergo the necessary formalities for getting the undertaking etc., as per the scheme and such formalities may be completed, in any case, before 30th September, 2008.” 5. Mr.Patel, learned Counsel appearing for respondent No.3 Bank contended that though in the plaint it was mentioned as agricultural loan, considering the purpose, it is doubtful to whether such cases can be considered in the Scheme or not. He further submitted that in the Scheme if the cases of the petitioners are considered and forwarded and ultimately not approved by the Reserve Bank of India or by the competent authority, the Bank may have to suffer. It was, therefore, submitted that the direction may not be issued by this Court. It was also submitted that the respondent No.3 Bank is not a 'State' within the meaning of Article 12 of the Constitution of India. Therefore, the mandamus or a writ may not be issued by this SCA/101/9208 11/19 JUDGMENT Court against the respondent No.3 Bank. 6. It appears that in the Scheme, the definition provides for direct agricultural loan, short term production loan and investment loan. The same reads as under:- “3. Definitions 3.1 'Direct Agricultural Loans' means short Term Production Loans and Investment Loans provided directly to farmers for agricultural purposes. This would also include such loans provided directly to groups of individual farmers (for example Self Help Groups and Joint Liability Groups) provided banks maintain disaggregated data of the loan extended to each farmer belonging to that group. 3.2 'Short Term Production Loan' means a loan given in connection with the raising of crops which is to be repaid within 18 months. It will include working capital loan, not exceeding Rs.1 lakh, for traditional and non-traditional plantations and horticulture. SCA/101/9208 12/19 JUDGMENT 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 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 plantation and horticulture; (b) Investment credit for allied activities extended for acquiring assets in respect of activities allied to agriculture e.g. Dairy, poultry farming, goatery, sheep rearing, piggery, fisheries, beekeeping, green houses and biogas.” (Emphasis supplied) 7. The aforesaid shows that practically all categories of loans given to the persons, who are in the agricultural activities are included. It also specifically provides for the investment credit for meeting outlays relating to the SCA/101/9208 13/19 JUDGMENT replacement and maintenance of wasting assets and for capital investment designed to 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 plantation and horticulture and Investment credit for allied activities). The loans for acquiring assets in respect of activities allied to agriculture e.g. Dairy, poultry farming, goatery, sheep rearing, piggery, fisheries, beekeeping, green houses and biogas etc., are also included. The aforesaid definition practically covers various types of agricultural loans being given by the banks to the agriculturists. 8. If the averment made in the respective suit filed by the bank, which is produced in the respective petitions are considered, the learned Counsel for the respondent No.3 Bank is not in a position to dispute that fact that in all the suits respondent No.3 Bank had mentioned as loan for agricultural purposes. Therefore, the Bank SCA/101/9208 14/19 JUDGMENT now cannot contend that the loan was for the purpose other than the agriculture. 9. Apart from the above, as per the Scheme, when any debt is outstanding on the cut-off date, it would be required for the concerned agriculturists to deposit the requisite amount as per the scheme and it would be required for the concerned Bank to forward the proposal as per the scheme for debt waiver to the extent available in the scheme. No prejudice will be caused to respondent No.3 Bank if the willingness is shown on the part of the petitioners concerned to deposit the requisite amount and the Bank forwards the proposal for waiver of the admissible debts as per the scheme. In the event the nodal agency of the final agency thereafter finds that the requisite amount for debt waiver is available, respondent No.3 Bank is to receive the amount and for remaining amount the recovery in accordance with law read with the scheme can be undertaken. In any case, if ultimately the proposal is not accepted, then in that case also respondent No.3 SCA/101/9208 15/19 JUDGMENT Bank can take the action in accordance with law for recovery of the amount. Therefore, in either case, no prejudice is to be caused to the respondent No.3 Bank. Hence, the resistance shown on behalf of respondent No.3 Bank cannot be countenanced. 10.Apart from the above, it deserves to be recorded that the scheme is floated by Government of India by way of extending the debt waiver and debt relief benefits to all the agriculturists, who are covered by the scheme. It does apply to the Cooperative Banks, rural or urban who have extended the loans as well as to urban coop. banks, who have also extended loans to concerned agriculturists. The perusal of the inbuilt mechanism of the scheme puts an obligation upon the concerned Cooperative Banks or the Urban Banks, as the case may be, to act upon the scheme in the matter of recovery of the debts against the agriculturists, if such exists on the cut-off date of 29.2.2008. The proposal is required to be forwarded through the nodal agency and not only that but a mechanism is also SCA/101/9208 16/19 JUDGMENT provided for monitoring the scheme as per the Clause – 14 of the Scheme. Therefore, it does not lie in the mouth of the respondent No.3 Bank, which is a Cooperative Bank and it is also covered under the Scheme, to contend that no obligation arises on it for which a mandamus may not be issued by this Court. The Scheme creates an obligation upon all concerned banks to submit the proposal through the nodal agency and the recovery proceedings are also to be undertaken accordingly. It simultaneously creates an obligation upon the concerned agriculturists also to deposit the requisite amount as per the Scheme for entitlement under the Scheme. Therefore, considering the peculiar facts and circumstances that the scheme is for all the agriculturists of the country and there is an obligation created upon the banks as well as the concerned agriculturists, it would not be a case to decline the writ to the petitioners on the ground that the respondent No.3 Bank is a Cooperative Bank and not a 'State' within the meaning of Article 12 of the Constitution of SCA/101/9208 17/19 JUDGMENT India. As such for the implementation of the Scheme, respondent No.3 Bank being a Cooperative Bank, a public duty can also be said as created upon the Bank for giving effect to the Scheme floated by the Government of India, which is for the benefits of the agriculturists concerned of the area, who are members of the Bank as well as for the recovery to be made from the funds of the Government of India as per the scheme. Therefore, the contention raised by the learned Counsel for respondent No.3 cannot be accepted. 11.No other circumstances are brought to the notice of this Court to show that the petitioners concerned or the debts, which are sought as to be recovered in the respective suits by respondent No.3 Bank are not covered under the Scheme. 12.In view of the above, the following directions deserve to be issued :- (a) The debts shown in the respective suits, which are subject matter of the concerned petitions, can be said as covered by the SCA/101/9208 18/19 JUDGMENT Agricultural Debt Waiver and Debt Relief Scheme 2008. (b) Consequently, obligation as per the scheme would stand created upon the petitioners to deposit the requisite amount and upon the respondent No.3 Bank to forward the proposal as per the Scheme through nodal banks/agencies. (c) The respondent No.3 Bank, within one week, shall intimate to the petitioners concerned, the requisite amount, if any, to be deposited for claiming the benefits under the Scheme. (d) If the concerned petitioners comply with the formalities as required under the Scheme, including the requisite amount to be deposited, the proposal shall be forwarded as per the Scheme by respondent No.3 Bank to the concerned authorities/nodal banks, who shall consider the matter in accordance with law. SCA/101/9208 19/19 JUDGMENT (e) It is clarified that in the event the debts waiver or the debts relief is not made admissible by the competent authority in respect to the debts of the concerned petitioners, it would be open to the concerned petitioners to challenge the decision in accordance with law and the respondent No.3 Bank shall also be at liberty to take action in accordance with law for recovery of the outstanding amount, which is the subject matter of the suits, if otherwise not prohibited by any forum known to law. 13.The petitions are disposed of in terms of the aforesaid directions. Rule made absolute accordingly. Direct service is permitted for respondent No.3. 15.9.2008 (Jayant Patel, J.) vinod