Upset with the harassment of a farmer who had paid double the loan amount as interest payment, the Nagpur division of the Bombay High Court issued notices to top officials of the Maharashtra cooperative society and land development bank against forcible debt recovery from Vidarbha farmers.
The court converted the writ petition of a debt-stricken Vidarbha farmer into a public interest litigation (PIL) and issued notices to the Maharshtra government secretary (Cooperation), the Commissioner of Cooperative Societies and the administrator of Maharashtra State Land Development Bank (LDB).
The division bench of Justice Vijay Daga and Justice Arun Choudhri has observed on the writ petition of Prashant Ingale, a farmer from Tigaon in Wardha district, that farmers pay interest on loans that exceeds the loan amount itself.
“I had quoted, in my writ petition, the Supreme Court’s earlier reported judgment barring banks from charging interest more than the loan amount,” said Ingale.
“Moreover, this is illegal as per the Cooperative Societies Act, 1960. There is a provision in the act against Damduppat (interest amount double than the basic loan amount) that says all recoveries should be stopped with immediate effect,” he explained.
After the hearing on the PIL, the division bench has asked all official parties to submit a reply within two weeks.
“What shocked the judges was that the state-owned LDB did not follow the rules laid down in the Cooperative Societies Act and charged more than 17 percent interest,” said Kishor Tiwari, president of Vidarbha Jan Andolan Samiti, an NGO that is spearheading a campaign against the Land Development Bank’s forcible recovery drive.
Ingale’s affidavit said that his father Purshottam had taken a loan of Rs.290,000 in 2001 from the LDB by pledging his 22-acre farm land.
“As per the latest recovery notices served to his son Prashant, an amount of Rs.609,891 has already been paid to the bank,” Tiwari said.
“Yet, the bank has sent him a notice for the recovery of Rs.291,387. The bank has also arranged for the auction of all movable and immovable property belonging to Ingale,” Tiwari added.
A distressed Ingale also complained of the LDB’s ‘Gandhigiri’ campaign, where the employees of the bank humiliate the debt-stricken farmers by announcing their debt amounts to the beating of a drum outside their residences.
“Several farmers face such social humiliation because of the bank’s tactics to recover money,” he said.
Ingale hoped that the high court’s intervention will give relief to more than three lakh ‘defaulting’ cotton farmer-debtors of the Land Development Bank (LDB).
Vidarbha has witnessed over 7,000 farmland suicides in the past five years, prompting the announcement of four developmental packages worth over Rs.10,000 crore, including one by the prime minister.