SHASHI KUMAR Vs. STATE OF BIHAR

JUDGEMENT

(1.) Special leave granted.

(2.) This appeal by special leave is directed against the judgment and order dated 28/03/1979 of the Patna High court dismissing a writ petition filed by the appellants. The history of this case records how an ambitious plan devised by the central government for accelerating and modernising agricultural development in the villages of India and simultaneously providing employment opportunities to engineers and technically trained personnel has come to grief because of an incomplete perception of the conditions necessary torits success and what seems to be an unfortunate want of determination at governmental level in the States, besides an attitude of banking institutions which, the petitioners say, is frustratingly clinical and wholly unsympathetic to the cause of the project. It is a tragedy in which an entire range of promises and assurances has been poured, but which seems defeated by the circumstance that an appropriate infrastructure has failed to develop. Those who are affected directly, a large number of individual entrepreneurs who involved themselves in the implementation of the scheme, found an inadequate response to the aspirations with which they had started out and as disillusionment set in they find themselves not only deep in the mire of vocational distress but also heavily burdened with increasing financial obligation.

(3.) Several years ago, in 1971 the government of India in the Ministry of Food, Agriculture, Community Development and Cooperation propounded a scheme through its Directorate of Extension for the creation of Agro Service Centres in rural areas which would provide technical services essential for accelerated rural development by harnessing the energies of, and thus providing employment to, engineers and technically trained personnel. The scheme was intended to provide in-service training, liberalised loans, subsidised interest rates and assistance in establishing and running of Agro Service Centres. The benefit envisaged for the agricultural community lay in providing for farmers the means to adopt intensive farming through the use of high yielding varieties and multiple cropping by mechanising some of the agricultural operations. It was realised that the period between the harvesting of one crop and the sowing of the next was so brief that the use of equipment could alone ensure three crops even in irrigated areas. The small and medium farmers, who form the bulk of the farming community, had not taken to the modernisation of agricultural methods and had yet to realise the full advantage of new technological perspectives. Their means did not allow the possession and operation of cosily equipment and it was thought that a range of machinery servicing and hiring facilities would prove of great assistance to them. The problem was a vast one, extending over the entire State and permeating substantially the entire agricultural economy of the country. The solution was seen in an extensive organisation provide ing technical services of machinery on hire, of machinery repairs and ofinput supplies. It was also a solution for alleviating the growing unemployment among technical personnel. Under the scheme, engineers and entrepreneurs would be assisted in the establishment of workshops in the rural areas for repair, maintenance and hiring of agricultural machinery such as tractors, drilling rigs, plant protection and irrigation equipment and for taking up allied activities as the sale of spare parts and inputs which would provide added income and work. Necessarily financial assistance had to be provided for creating an appropriate infrastructure, and an investment ranging from Rs. 50,000. 00 to Rs. 2,00,000. 00 was considered suitable depending upon the type and size of activities to be met by the entrepreneurs out of loans taken from the State Bank of India, nationalised banks and other financial institutions. It was also envisaged that appropriate assistance in this regard would be rendered by the State governments and Agro Industries Corporations. It was pointed out that the Ministry of Agriculture had earmarked imported tractors and other agricultural machinery for priority allotment to Agro Service Centres, and had also requested the State Governments and Agro Industries Corporations to assist entrepreneurs in formulating viable schemes and in securing loans from financial institutions. A scheme was already under implementation by the Ministry of Industrial Development of the government of India for the training of, and assistance to, engineers and entrepreneurs, and was being executed by the government of' India in cooperation with the State governments. The government of India financed the trainee, the training covering a period of three months and the trainees were provided free board and lodging. The government of India would subsidise the payment of interest on loans advanced by the banks to the entrepreneurs to the extent of the excess over five per cent, (the maximum rate payable by the borrower) for a period of three years, except in backward areas where the period would be five years. It was Stipulated that the subsidy would not exceed Rs. 20,000. 00 per year in individual cases. The entrepreneurs eligible for the benefits of the scheme were unemployed graduates and diploma holders in mechanical, agricultural and electrical engineering and allied fields, as well as graduates in agriculture and science with experience in indurtry or agriculture. Under the scheme they would provide on the farm maintenance and repair facilities for agricultural machinery and implements, and ensure an easily accessible source of supply for spare pans, fuel, oils, lubricants and other engineering stores. Besides a supply would be forthcoming of agricultural inputs such as fertilisers and pesticides depending on the needs of the area and related services. Financial assistance, which formed a vital constituent of the scheme, was to be found through loans from the banks and financial institutions. One of the features of the scheme was that the Agro Industries Corporations in different States would appoint the Agro Service Centres as their agents for the sale of argicultural machinery and implements and also for servicing agricultural machinery, and assistance would also be offered in the fabrication of implements through the allotmentof steel and other engineering stores. Another feature required the State governments to make available accommodation in the industrial estates, common facility workshops, block development offices, and tehsil headquarters at nominal hire charges. The State governments and Agro Industries Corporations were requested to take urgent steps to set up as many service centres as possible on a priority basis. The scheme had many attractive features, but an essential condition to its success lay in the need for cooperation by the credit institutions. To those institutions the Reserve Bank of India issued a circular dated 7/07/1971 drawing their attention to the basic features of the scheme formulated by the government of India and mentioning that it was decided to treat the Agro Service Centres as an "eligible industry" in terms of clause 2 (f) of the Credit Guarantee Scheme for small-scale industries, and therefore credit facilities would be granted to such unit sharing investment in plant and machinery of a value not exceeding Rs. 7.50 lacs including items maintained for letting out on hire.