IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY THURSDAY, THE 26TH MAY 2011 / 5TH JYAISHTA 1933 WA.No. 2067 of 2010() --------------------- AGAINST THE JUDGEMENT/ORDER IN WPC.4519/2009 Dated 01/06/2009 .................... APPELLANT(S): PETITIONER ------------------------ N.SIVARAMAKURUP,S/O.NARAYANAKURUP, THULASISADANAM, M.N.P.O., CHERTHALA. BY ADV. SRI.J.OM PRAKASH RESPONDENT(S): RESPONDENTS -------------------------- 1. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, ALAPPUZHA, PIN - 688 001. 2. THE ALAPPUZHA DISTRICT CO-OPERATIVE BANK ,REP.BY ITS GENERAL MANAGER,ALAPPUZHA, PIN - 688 001. 3. THE NODAL OFFICER, ALAPPU ZHA DISRICT CO-OPERATIVE BANK, CHERTHALA BRANCH,CHERTHALA, PIN - 688 524. 4. THE S.L.PURAM SERVICE CO-OPERATIVE BANK LTD., NO.A 64, S.L.PURAM PO, CHERTHALA, PIN - 688 581. ADV. SRI.S.P.ARAVINDAKSHAN PILLAY FOR R4 SMT.N.SANTHA FOR R4 SRI.PETER JOSE CHRISTO FOR R4 SRI.S.A.ANAND FOR R4 GOVERNMENT PLEADER FOR R1 SRI.P.K.VIJAYAMOHANAN FOR R2,3 THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 26/05/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.R. C.N.RAMACHANDRAN NAIR & BHABANI PRASAD RAY, JJ. ---------------------------------- W.A. No.2067 of 2010 --------------------------------- Dated, this the 26th day of May, 2011 J U D G M E N T Ramachandran Nair, J. The Writ Appeal is filed against the judgment of the learned Single Judge upholding the decision of respondents 2 to 4 to limit the entitlement of waiver of loan to the appellant under the Agricultural Debt Waiver and Debt Relief Scheme, 2008, up to Rs.1.25 lakhs. 2. We have heard learned counsel appearing for the appellant and separate standing counsel appearing for the 2nd respondent and the 4th respondent. 3. The appellant availed an agricultural loan from the 4th respondent Bank in the year 2005. The loan granted is a running credit facility by issuing Kissan Credit Card to the appellant. The credit facility granted was, admittedly, Rs.2 lakhs. When Ext.P2 Agricultural Debt Waiver and Debt Relief W.A.No.2067/2010 -2- Scheme, 2008, was introduced, the appellant claimed the debt waiver facility entitled to him under the Scheme. Even though the appellant claimed that the entire debt is liable to be written off under the Scheme, the 4th respondent based on an advice of the 2nd respondent limited the entitlement for waiver up to Rs.1.25 lakhs and declined waiver of the balance amount in the running loan account with the Bank. The reason for limiting the benefit of the Scheme is that the appellant the holder of one hectare of land being a “marginal farmer” under the definition clause was entitled to credit facility of only Rs.1.25 lakhs as against Rs.2 lakhs allowed by the Bank. When the appellant challenged denial of full waiver before the learned Single Judge, the learned Judge upheld the decision of the respondents, against which this Writ Appeal is filed. 4. After hearing both sides and after going through the relevant clause of the Agricultural Debt Relief and Debt Waiver Scheme, 2008, we are of the view that the appellant is entitled to waiver to the extent provided in clause 4.1 of the Scheme, W.A.No.2067/2010 -3- which defines eligibility for waiver as follows:- “4.1 The amount eligible for debt waiver or debt relief, as the case may be (hereinafter referred to as the 'eligible amount') shall comprise of; (a) in the case of a short term production loan, the amount of such loan (together with applicable interest): (i) disbursed up to March 31, 2007 and overdue as on December 31, 2007 and remaining unpaid until February 29, 2008.” Admittedly, the appellant being a “marginal farmer” holding less than 1 hectare (2.5 acres) of land falls under clause 3.5 of the Scheme. The respondents also have no case that the appellant is not eligible for the benefit of the Scheme because they have already granted partial relief, and the Writ Petition was filed for further relief in terms of the Scheme. The granting of loan under the Kissan Credit Card is nothing but a cash credit facility entitling the borrower to periodically borrow amounts for agricultural purposes and repay in running account. It is therefore a short term loan to be utilised for agricultural production squarely falling under clause 4.1 (a) above referred. The amount eligible for relief W.A.No.2067/2010 -4- under clause 4.1(a)(i) is the amount disbursed up to 31/03/2007 and over due as on 31/12/2007 and remains unpaid until 29/02/2008. The eligible amount for waiver under the Scheme is not related to the loan eligible to the borrower. On the other hand, the eligible amount is the actual loan granted irrespective of whether the borrower farmer / agriculturist was eligible to the extent of loan granted in accordance with the norms of the Bank or not. However, the loan disbursed after 31/03/2007 is not eligible for waiver under the Scheme. Obviously, interest on borrowings after such date i.e. from 31/03/2007 also is not eligible for waiver. The other condition for granting relief is that the amount should be overdue as on 31/03/2007 and should have remained unpaid until 29/02/2008. There is no dispute that these conditions are not satisfied in as much as the amount remains unpaid as on 29/02/2008 and substantial amount of loan is attributable to withdrawals made before 31/03/2007 and interest accrued thereon as on 31/12/2007. In fact, W.A.No.2067/2010 -5- under the Scheme, if any eligible amount is repaid before 29/02/2008, the debtor is not entitled to waiver in respect of such amount. 5. In view of the above findings, we allow the Writ Appeal by modifying the judgment of the learned Single Judge and by directing respondents 2 & 4 to grant waiver of the loan availed by the appellant up to 31/03/2007 and interest accrued thereon. However, the 4th respondent is entitled to recover from the appellant the withdrawals made by the appellant from the loan amount from 01/04/2007 onwards and interest thereon. There will be also a direction to the respondents to reverse the interest debits made after the date of submission of application for waiver by the appellant. We clarify that the entitlement of the 4th respondent for recovery from the appellant will be limited to the advances made from 01/04/2007 onwards and the interest accrued on such amounts till the date of recovery, and all other amounts and interest debited in the loan account should be waived. W.A.No.2067/2010 -6- Learned counsel for both respondents 2 & 4 brought to our notice that reimbursement has to be obtained from the NABARD to cover the waiver granted by the Bank to the borrowers. We do not think there is any scope for our deciding this issue, which is between the Bank and the NABARD. However, we make it clear that the NABARD will strictly go by the Government Scheme and make reimbursement to the Banks, which has implemented the Debt Waiver and Debt Relief Scheme by granting waiver to the farmers. This Writ Appeal is allowed as above. (C.N.RAMACHANDRAN NAIR, JUDGE) (BHABANI PRASAD RAY, JUDGE) jg