Despite tight finances amid drought, HC asks Tamil Nadu to waive farm loans

Says Centre cannot be mere spectator and suggested it share the burden

In a significant order, the Madras High Court on Tuesday directed the Tamil Nadu government to waive loans of all drought-hit farmers and restrained cooperative societies and banks from recovering their dues.

It noted that the state's financial situation was grim and it was single-handedly shouldering the debt burden in a drought year in which farmers were committing suicide and suggested that the Centre come forward to extend financial help to Tamil Nadu "during this difficult situation."

A division bench comprising Justices S Nagamuthu and M V Muralidaran gave the order of waiving the loans while allowing a petition by National South Indian River Interlinking Agriculturists Association.

"We are aware that the state's financial situation is grim. The Chief Secretary in her letter to the Advocate General also reiterated the same. The government is already single-handedly shouldering the burden of Rs 5,780 crore and it will be an additional burden to bear Rs 1,980.33 crore."

In this difficult situation, the central government cannot be a silent spectator and should come forward to extend help to the state government to share the burden, the court said.

It directed the cooperation, food and consumer protection department and registrar of cooperative societies to extend the crop loan waiver scheme under two Government Orders of 2016, to all farmers, including those whose landholding was more than five acres.

"We further direct the department to issue necessary consequential order extending the impugned scheme to all farmers. The order shall be issued within three months from today," the bench said.

The Association alleged that government has shown discrimination in classifying farmers as small and medium and sought a direction to quash the GOs as illegal and to direct authorities to give relief to all farmers for loans taken from cooperative societies, irrespective of extent of land owned.

The court, which had heard the petition in Madurai Bench, delivered its judgement on Tuesday at the principal seat in Chennai.

"In view of the foregoing discussions and conclusions arrived therein, we are of the view that the denial of benefit of crop loan to the farmers who had cultivated lands exceeding five acres is a clear discrimination, violative of Article 14 of the Constitution. Consequently, we restrain the respondents from initiating action against the farmers for recovery of crop loans and outstanding dues to cooperative societies/banks, as on March 31, 2016," it said.