SHASHI KUMAR SINHA Vs. STATE OF BIHAR

JUDGEMENT

(1.) In the year 1971 the Government of India in the Ministry of Food, Agricultural, Community Development and Co-operation propounded a Scheme through its Directorate of Extension for the creation of Agro-Service Centers in rural areas. The scheme envisaged not only providing technical services to the agriculturists but also to provide employment to unemployed engineers and technically trained personnel. the object of the scheme and its particulars are stated elaborately in this Courts order dated September 30, 1985. Suffice it to mention that the scheme contemplated establishment of Agro Service Centers all over the country, for which purpose the engineers and other technically trained persons were to be provided with finance ranging from Rs. 50,000/- to Rs. 2 lakhs. Banks and other financial institutions were to provide the funds. The loan was repayable in prescribed instalments. The scheme also contemplated a subsidy in the matter of payment of interest of such loans so that the borrowers may be liable to pay interest not exceeding 5% for a initial period of three years. The scheme was launched with all good intentions, but within a few years, it was found, most of the Agro-Service Centers failed. The reasons for failure are manifold. While the petitioners (the engineers and other technical personnel who established the Agro-Service Centers) blame the banks for their un-co-operative and unsympathetic policy, the banks in turn blame the petitioners. Certain independent studies have also been made into the reasons for such failure. They found that the reasons are the sudden hike in the prices of diesel soon after the launching of the scheme, the inexperience of the persons incharge of these centers, lack of finance, inability to compete with other tractor-owners, high interest rates and so on and so forth. In some cases, the funds lent were not used for the purpose intended or misused. Be that as it may, most of the borrowers did not pay the instalments as stipulated, whereupon the banks initiated proceedings for recovery of the loan. In some cases the tractors and other implements purchased with the loan amount were attached and in some cases sold. In other cases, suits were instituted for recovery of the loan amount due. In this state of affairs a writ petition was filed in the High Court of Patna by some of the entrepreneurs to declare the Agro-Service Centers in Bihar as sick industries and to secure for them the finances envisaged by the original scheme with an extension of the period of repayment to a longer term. The writ petition was dismissed by the High Court where-upon the petitioners approached this Court by way of SLP 5142 of 1979. A number of entrepreneurs from all parts of the country then approached this Court by way of writ petitions seeking various reliefs, all of which writ petitions were directed to be tagged on to C. A. 4426/85.

(2.) The matters came up before a Bench comprising R. S. Pathak and A. N. Sen, JJ. The learned Judges were of the opinion that such an excellent scheme evolved with a laudable object should not be allowed to fail and that the Central Government, State Governments, Financing Banks and the petitioners should all combine and work towards resuscitating the scheme. For this purpose the Court directed a revised scheme to be evolved by the Government of India in consultation with the State Governments, Banks and other concerned authorities and to place it before the Court for appropriate orders (Order dated September 30, 1985).

(3.) In accordance with the aforesaid orders, the Union of India placed before this Court a revised scheme enclosed to its affidavit dated 15th September, 1989. The scheme was called "Rehabilitation of Sick Agro-Service Centres (ASCs)." The objective of the Scheme is stated to be "rehabilitation/revival of the identified sick Agro-Service Centers set up under the Centrally Sponsored Agro-Service Centers Scheme which was operated through Agro Industries Corporations at the State Level during the period 1971 to 1979 and later transferred to State sector on 1-4-79 as per decision of National Development Council". The eligibility criteria was stated under para 3 in the following words: