Nilgiris farmers move HC for settling loans availed in 2006-08

Nilgiris farmers move HC for settling loans availed in 2006-08
A floriculture farm in the Nilgiris. File photo
A floriculture farm in the Nilgiris. File photo
Legal Correspondent
UPDATED: 23 OCTOBER 2020 00:46 IST

They want nationalised banks to come up with one-time settlement scheme
A public interest litigation petition has been filed in the Madras High Court seeking a direction to the State government to issue necessary orders requesting all nationalised banks to come up with a one-time settlement scheme for the benefit of farmers who had taken loans between 2006 and 2008 for shifting from tea to flower cultivation but ended up suffering huge losses.

The petition filed by Nilgiris District Floriculture Small Farmers’ Association was listed for admission before a vacation bench of Justices V. Parthiban and G.R. Swaminathan on Thursday. The judges directed the Registry to list it before a regular Division Bench led by Justice M. Sathyanarayanan on October 28 when the court would reopen after the Dussehra holidays.


In an affidavit, filed through advocate Srinath Sridevan, the association president N. Vishwanathan said Nilgiris tea market was once the second largest in the country. Tea was cultivated over 45,974 hectares which amounted to 70% of cultivable land in the district. Vast majority of the cultivation was done by small farmers who owned less than one acre of land each.

Around 65,000 families were dependant on tea cultivation for their livelihood. However, in 2003, there was a great recession in the global market. Hence, the government encouraged farmers to take up cultivation of exotic flowers and provided all necessary support including subsidies. Accordingly, several farmers availed huge amount of loans for the transformation.

However, they could not succeed in cultivating the flowers due to multiple reasons including the July 2008 squalls which destroyed the green houses constructed at huge costs. Since then, the farmers had been resorting to various forms of protest urging the government to come to their rescue and prevent the banks from taking coercive steps to recover the loans.

In 2015, the association filed a writ petition seeking a direction to the government to frame a debt alleviation scheme. On July 22, 2016, the then Chief Justice Sanjay Kishan Kaul and Justice R. Mahadevan directed the government to examine the plea. Accordingly, the Collector constituted a committee comprising government officials and farmers to assess the losses.

On the basis of the committee’s report, the Collector on August 17, 2018 recommended implementation of a one-time settlement scheme by which the farmers could be asked to repay only 50% of the principal amount after waiving off interest and penal interest. Though many banks implemented the recommendation without waiting for government’s nod, a couple of them had not done so, the association complained.

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