PRS Farmers Not Borrowers, Credit Ratings Safe: Kerala High Court Addresses Concerns Post Farmer's Suicide

Justice Devan Ramachandran said that an earlier judgement of the high court had explicitly made it clear that a farmer under the PRS scheme cannot be construed as a borrower in any manner whether the loan has been availed prior to its issue or after.

The court said that as the government requires time to make payment for the paddy procured, the farmers were forced to avail such a facility and therefore, it cannot affect their credit rating either.

"... the fact remains that there appears to be a doubt whether the consortium of bankers is still construing them so, thus creating an impact on their credit rating," the court said.

It also said that the banks cannot insist on any security document being executed by the farmers nor can they impose upon them any condition akin to a borrower.

The observations came on a plea by some farmers who claimed that in spite of the judgment of the high court, most of them, as also various others, who have availed loans under the PRS scheme, were still being treated as borrowers and their credit ratings are also affected.

The Court's observations also assume significance as a farmer recently ended his life in the Kuttanad region of Alappuzha district due to allegedly not being paid for the paddy procured by the government.

The visuals of a video call, which the deceased man -- Prasad -- allegedly made just before taking the extreme step, was also aired by TV channels.

The video showed an emotional Prasad saying he was a failed man in life and the banks were denying him loan over low CIBIL score.

He also alleged that he received the paddy procurement price for the last season as post-harvest credit under the Paddy Receipt Sheet (PRS) scheme and the government's failure in repaying it was the reason for the banks to deny him loan this time.

The incident had led to severe criticism of the ruling Left in the state by the Congress-led opposition over alleged delay or failure in paying farmers for paddy procured from them.

The petitioners in the case before the high court said they were also apprehensive on account of the recent suicide by the farmer.

They have moved the court seeking payment from the Food and Civil Supplies Department and the Kerala State Civil Supplies Corporation (SupplyCo) for paddy procured by them.

The Court, during the hearing of the matter on November 15, asked SupplyCo whether it was willing to inform the consortium of bankers that the farmers were not the borrowers and that their credit rating cannot be affected by the PRS loans.

The SupplyCo's Advocate Santhosh Peter told the court that under the PRS scheme, the borrower was the SupplyCo and not the farmers and therefore, the petitioners need not be concerned.

The lawyer, however, sought time to obtain formal instructions.

The Court, thereafter, listed the matter for further hearing on November 22.

Cause Title: Nenmeni Padasekhara Nellulpadaka Samithi & Ors. v. The State Of Kerala & Ors.

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With PTI Inputs