EMMANUEL Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) The appellant availed loan from State Bank of India totaling Rs. 5.50 lakhs out of which Rs. 2 lakhs was sanctioned for construction of compound wall and fencing, and balance Rs. 3.5 lakhs sanctioned was for purchase of agricultural land. Loan sanction was under the Kissan Gold Card Scheme in the form of agricultural term loan. Under the loan agreement, the appellant was bound to repay the loan with interest at 11.75% in 14 half yearly instalments i.e. during the course of 7 years from the date of availing the loan. The appellant committed default which led to initiation of proceedings for recovery by the Bank. The appellant took the defence by claiming before the Bank that the loan and the interest are to be waived under the Debt Waiver and Debt Relief Scheme, 2008 (hereinafter referred to as the Scheme for short) introduced by the Central Government, but the Bank declined waiver stating that the loan availed by the appellant is not covered by the Scheme. The appellant challenged the decision of the Bank in Writ Petition before this Court. The learned Single Judge after examining the nature of the loan held that the same is not covered by the Scheme, against which this Writ Appeal is filed. We have heard learned counsel for the appellant and also learned Standing Counsel for the Bank.

(2.) The short question to be considered is whether the loan availed by the appellant for the two purposes stated above are agricultural loan eligible for waiver in terms of clause 4 of the Scheme. The appellant with less than two hectors of land is a small/marginal farmer eligible for deduction, if the loan falls within the category covered by the Scheme.

(3.) Since there is no controversy of appellant's eligibility, the remaining question to be considered is whether the learned Single Judge was justified in holding that the loan availed is not of the category that falls under the Scheme disentitling the appellant for the benefit. As already stated, the loan availed by the appellant is partly for construction of compound wall/fencing and partly for purchase of agricultural land. The agricultural loans availed both for short term production purposes and also for investment qualify for waiver and incentives under the Scheme. Admittedly and obviously the appellant does not have a case that the loan is a short term agricultural production loan, which is the loan given for raising of crops, duration of which is only 18 months. The loan taken by the appellant is admittedly a term loan for a period of 7 years for development purposes and for investment in land. Therefore, the loan qualifies for exemption only if it falls within the definition of "investment loan" covered by clause 3.3 of the Scheme, which is extracted hereunder for easy reference: -