Andhra Pradesh High Court: States can’t waive farmer loans ;Chief Justice: Court won’t hear case now

By S A Ishaqui

Hyderabad, July 1 : The Hyderabad High Court on Monday made it clear that neither the AP nor the Telangana state governments had the power to waive the loans that farmers had borrowed from banks.

The court, however, said that it would not intervene in the issue at this stage as it was premature. A division bench comprising Chief Justice Kalyan Jyoti Sengupta and Justice P.V. Sanjay Kumar was dealing with a plea by Mr Adusumilli Jayaprakash, former TD MLA of Vijayawada, seeking a direction to the Telangana and AP governments not to proceed further with the waiver of agricultural loans availed from banks.

Mr M.V. Durga Prasad, counsel for the petitioner, submitted that in AP, the TD had promised total waiver of loans not only to farmers, but also loans to self-help women’s groups.
The TRS, has promised waiver of farmer loans of up to Rs 1 lakh. He said after coming to power, AP issued GO Ms. No. 31, on June 10 to appoint an expert committee, stating that it desired to waive agricultural crop loans given to farmers, women’s self help groups and hand loom and power loom weavers.

Chief Justice: Court won’t hear case now

Petitioner Adusumilli Jayaprakash, former TD MLA of Vijayawada, submitted in the Hyderabad High Court that the Chief Minister of Telangana had announced on the floor of the Assembly that his government would waive all crop loans up to Rs 1 lakh including those secured by pledging gold.

Reacting to the submissions, the Chief Justice said that the state governments had no role in waiver of the loans as it was a transaction between the bank and the borrower; however the court was not inclined to intervene in the matter as the Chief Minister of Telangana had made an announcement on the floor of the Assembly and as a matter of discipline, the courts did not intervene in matters when they were related to announcements either in Parliament or in the Assembly.

As far as the AP issue is concerned, it had issued a GO to work out the modalities for the loan waiver scheme and it is yet to take a final decision. Only when both the states come to a final decision can the court look into the matter, the Chief Justice added.

Counsel for the petitioner said that the impact of the loan waiver scheme was estimated at Rs 54,000 crore in AP and Rs 20,000 crore in Telangana. He contended that the state government did have the power to waive bank loans and it purely rested with the Union of India as per the Seventh Schedule of the Constitution.

The Chief Justice said that all these aspects would be looked into when the promises of both the governments would transform into a final decision. He added that the court would not hear the case at this stage and if the petitioner could argue on the maintainability of the plea, the court would give him an opportunity to do so. Following this the petitioner sought adjournment of the case to next Monday.