Case: Satpal and Anr Vs. Bank of India and Ors

4. The appellants are brothers. They took a loan of Rupees three lacs from the first respondent in 2008 for purchasing a tractor for their agricultural land. The loan remained outstanding after some installments were paid.5 tabindex = 1>5In the Union Budget of 2008-2009, an Agricultural Debt Waiver and Debt Relief Scheme were notified. Guidelines were issued by the Ministry of Finance on 18 June 2009. Farmers were categorised into three categories: (i) marginal farmers; (ii) small farmers; and (iii) other farmers. The appellants claim to fall under the definition of ‘small farmers?. They claimed a waiver of the loan under clause. of the Scheme. The Bank of India which had sanctioned the loan declined to accede to the claim for waiver. The appellants instituted a complaint before the District Consumer Disputes Redressal Forum (District Forum) , Faridabad. In response to the complaint, the first respondent filed a written statement submitting that the appellants are not small farmers and since their joint holding is more than five acres, they fall within the category of ‘other farmers? and were hence entitled only to a waiver of twenty-five per cent of the loan amount

Reasoning: 14. For the purpose of the present case, clause 3.6, which defines the expression ‘small farmer? is relevant. A small farmer is a farmer cultivating agricultural land of more than 1 hectare and up to 2 hectaresacres). The expression ‘other farmer? covers those farmers whose holding is in excess of five acres. Where a borrowing is by more than one farmer all of whom have pooled their land, explanation 2 provides that the largest landholding in the pool shall be the basis for the classification of all farmers in that pool as marginal, small or other farmers. This explanation indicates that where both the appellants have pooled their landholding for the purpose of loan, the largest landholding amongst them would be taken into consideration for classifying them in the appropriate category. The District Forum carefully evaluated this aspect and came to the conclusion that the largest of the landholdings of the two appellants was four acres six kanals and eleven marlas and, hence both the appellants would fall in the category of ‘small farmer? and not in the category of ‘other farmer?. This finding is in terms of the provisions which we have referred to above and is correct. The State Commission has also entered a similar finding17. The appellants claimed a debt waiver on the ground that they were small farmers. The entire eligible amount was liable to be waived in terms of clause. The National Commission proceeded on the basis that the Scheme was applicable only to certain districts in the State of Haryana and since Faridabad is not a district listed in Annexure-I, the appellants were not entitled to any relief. This finding is erroneous. The relief provided in clause 6 is in the form of a one time settlement where a farmer is given a rebate of twenty-five per cent of the loan amount. However, under the proviso, in the case of revenue districts listed in Annexure-I, the OTS rebate is to be twenty-five per cent of the eligible amount or Rs 20, 000, whichever is higher. The issue as to whether the landholding of the claimant falls in one of the listed districts of Annexure-I, is relevant for the purpose of clause 6 of the Scheme. The appellants did not make any claim under clause 6. Their claim was under clause. The National Commission was in error in holding the appellants to be ineligible on the basis that the district of Faridabad has not been listed in Annexure-I18. That leaves the Court withthe submission of the learned counsel appearing on behalf of the respondent based on explanation 3 to the definitions.Explanation 3 applies to a farmer who has obtained investment credit for allied activities. Clause 3.1 contains a definition of direct agricultural loans and covers short term production loans and investment loans provided directly to farmers for agricultural purposes. Clause 3.3(a) brings within the purview of an investment loan, investment credit for direct agricultural activities including the purchase of a tractor. The loan which was extended to the appellants was for the purchase of a tractor. It was a loan for allied activities and hence, explanation 3 has no application.