An Aurangabad division bench of the Bombay high court (HC) has directed the Aurangabad District Central Co-operative Bank to disburse loans to farmers with immediate effect.
Earlier, the bank authorities had refused to disburse fresh loans, as they were seeking to recover interests accrued on loans, which were waived off by the Maharashtra government under the Mahatma Phule Karj Mukti Yojana.
The move has come as a major relief for thousands of farmers in Maharashtra, who were fearing of being deprived of the fresh loan benefits amid the Kharif season that started from June.
The bank had disbursed the loans between January 1 and October 1, 2019.
The two-member HC division bench, comprising Justices SV Gangapurwala and RG Avachat, while hearing a public interest litigation (PIL) filed by Kishore Tangade, a farmer, through senior advocate SB Talekar, was informed that the Kharif season has started amid the raging coronavirus disease (Covid-19) outbreak that has battered the economy, including the agriculture sector.
Talekar submitted before the court that many farmers were eligible for a loan, but only 49.62% got the money after they paid interests on their outstanding dues.
The bench was informed that the bank was insistent on recovering interests on loans after October 1, 2019, and only those, who have settled their outstanding dues by selling their gold ornaments are eligible for a fresh loan.
{{/usCountry}}The bench was informed that the bank was insistent on recovering interests on loans after October 1, 2019, and only those, who have settled their outstanding dues by selling their gold ornaments are eligible for a fresh loan.
{{/usCountry}}Talekar submitted that though the state government under Section 79A of the Maharashtra Co-operative Societies Act, 1960, had directed the bank to disburse loans to eligible farmers on January 17, the lending institution did not comply with the order.
The bank’s move has denied many farmers sowing activities for the Kharif season and they are staring at massive financial losses amid the viral outbreak.
Government pleader DR Kale reiterated the petitioners’ submissions and reminded the court that the bank is bound to comply with the state government’s January 17 order.
However, RS Deshmukh, who represented the bank, stated that compliance of the government order would lead to acute financial losses.
The court observed that the bank must comply with the state government’s order and sought a compliance report.
The court will hear the PIL next on July 20.