Punjab: Revenue department cautions as govt plans deletion of ‘kurki’ clause in Act | punjab | Hindustan Times
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Punjab: Revenue department cautions as govt plans deletion of ‘kurki’ clause in Act

Banks may oppose this move and go slow on lending for state-sponsored schemes, says the revenue department

punjab Updated: May 17, 2017 11:05 IST
Gurpreet Singh Nibber
Farmers coming out of the Central Cooperative Bank in Patiala.
Farmers coming out of the Central Cooperative Bank in Patiala.(HT File Photo)

There’s a word of caution from the revenue department on the state government’s proposal to delete a clause in the Punjab Cooperative Societies Act, which provides for ‘kurki’ (auction of mortgaged property) of a farmer who defaults in paying back crop loan.

The move is considered as a follow-up action to the ruling Congress’ pre-poll promise of ‘karza kurki khatam’ (end to debt and auction of mortgaged property).

A four-page note sent by the revenue department to the chief secretary Punjab Karan A Singh says, “The (nationalised) banks may oppose this move and go slow on lending in respect of state-sponsored schemes in case the provisions pertaining to recovery provisions are diluted. On the other hand, the bank may request the state government to furnish government guarantee against such schemes in the event the coercive recovery process is done away with.”

The communiqué also said the provisions of law should not be diluted against any person against whom the recovery proceedings have been initiated.

In the cabinet meeting scheduled in the last week of May, the issue of amendment in the cooperative act might come up for discussion.

Sources said that in a meeting of senior officials of the state held around ten day ago, it was felt that the Punjab State Cooperative Bank, which functions under the Act proposed to be amended, might invite rebuff from the Reserve Bank of India, as state banks are the licensees of the apex bank.

‘Issue concerns many departments, stakeholders’

“The issue concerns multiple departments and multiple stakeholders. Sometimes taking a one step forward on one issue may lead to unintentional overlapping on the other,” said financial commissioner (revenue) KBS Sidhu, while talking to HT.

Sidhu in his note flagged all the issues that could face a cascading effect of amendment in the Act.

The state cooperation department has already forwarded a proposal for an amendment in Section 67A of the Punjab Cooperative Societies Act, 1961, which says, “a cooperative society may apply to the registrar for recovery of arrears of any loan advanced by it to any member (farmer) with interest. The registrar… grants a certificate in the prescribed form for the recovery of amount due from such (defaulting farmer) member”. In near future the state government proposes to delete the clause from the Act.

The note also mentioned another state law in the Punjab Public Moneys (Recovery of Dues) Act, 1983 by which the banks are recovering the dues. “A view needs to be taken whether this state act, which is being handled by the state finance department, is to be amended to dilute the provisions of attachment of immovable property/agricultural land”. It also referred to yet another law, ‘The Punjab Settlement of Agricultural Indebtedness Act ,2016’, which also deals with the issue.

‘Can’t dilute decrees of civil courts’

Pointing out the role of civil courts which issue orders for attachment and sale of agricultural land for recovery of debt, Sidhu also brought on record that, “it is neither feasible nor advisable for the state to try and tinker with the powers of the civil courts as it will have larger ramifications”.