A bench in the Aurangabad Division of the Bombay High Court (HC) ordered the Aurangabad District Cooperative Central Bank to make loans to farmers with immediate effect.
Previously, the banking authorities had refused to disburse new loans, as they sought to recover the accrued interest on the loans, which the government of Maharashtra waived under Mahatma Phule Karj Mukti Yojana.
The move was a major relief for thousands of farmers in Maharashtra, who feared they would be deprived of the new loan benefits in the middle of the Kharif season which started from June.
The bank disbursed the loans between January 1 and October 1, 2019.
The two-member HC division bench, including Judges SV Gangapurwala and RG Avachat, at the hearing of a public interest dispute (PIL) filed by Kishore Tangade, a farmer, through the Senior lawyer SB Talekar, has been informed that the Kharif season has started amid the raging epidemic of coronavirus disease (Covid-19) that has hit the economy, including the agricultural sector.
Talekar argued in court that many farmers were eligible for a loan, but only 49.62% got the money after paying interest on their unpaid dues.
The judiciary was told that the bank was insisting on recovering interest on loans after October 1, 2019, and only those who settled their arrears by selling their gold ornaments are eligible for a new loan.
Talekar argued that although the state government, under section 79A of the Maharashtra Cooperative Societies Act, 1960, ordered the bank to make loans to eligible farmers on January 17, l The credit institution did not comply with the order.
The bank’s decision has prevented many farmers from planting activities for the Kharif season and they face massive financial losses amid the viral outbreak.
Government litigator DR Kale reiterated the petitioners’ arguments and reminded the court that the bank is required to comply with the state government order of January 17.
However, RS Deshmukh, who represented the bank, said compliance with the government decree would lead to serious financial losses.
The court observed that the bank must comply with the state government order and requested a compliance report.
The tribunal will hear the PIL on July 20.