Recovery charge from defaulting farmers like flogging dying man: HC
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Last Updated: Tuesday, November 09, 2010, 21:43
Allahabad: The Allahabad High Court today strongly disapproved of Uttar Pradesh government's policy of realising 10 per cent recovery charges from farmers who defaulted on agriculture loans saying it goes against the principle of social justice and is like "flogging a dying man".

Passing the order, Justice S U Khan said such a policy, even if it were "perfectly in accordance with law", was against the principle of social justice and to defend such a measure, "the government will have to shed its facade of being a welfare state".

The order came while disposing of a petition filed by Jagdish Kumar Singh, a farmer based in Moradabad, who had taken agriculture loan from the State Bank of India in September 2007 for agricultural purposes.

Following his inability to pay the debt, the bank informed the district administration which initiated proceedings towards recovery of the loan amount along with interest payable to the bank and an additional sum, equivalent to 10 per cent of the loan amount, towards "recovery charges".

The recovery proceedings were challenged by the petitioner.

"It is shocking to the conscience, though it may be legal. It is like flogging a dying man", the court remarked adding that imposing 10 per cent recovery charges on a debtor who has not been able to pay the loan and the interest thereof, was tantamount to "unabashed and uncontrolled capitalism".

"If in the name of social justice, loans are advanced to farmers on lower interest rates and are recoverable in small instalments over a long period of time, then the same philosophy demands that no recovery charges shall be realised from them", the court added.

However, the court said it was leaving it for the state government to take a "conscientious decision" in the matter and directed that the court's views be made known to the state's Chief Secretary and Cabinet Secretary.


First Published: Tuesday, November 09, 2010, 21:43

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