Don't turn paddy farmers into borrowers: High Court

KOCHI: The High Court said that when the money for paddy procurement is paid through SupplyCo banks, it should be ensured that the farmers do not become borrowers and the CIBIL score of the farmers should not go down.

Justice Devan Ramachandran's interim order is on petitions filed by Palakkad Kollangode resident Sivanandan, Chittoor resident CK Ramesh, Palakkad Nenmeni Padasekhara Nellulpadaka Samithi, Haripad Nangiarkulangara resident Pappachan etc.

Supplyco's lawyer Santhosh Peter explained that it is Supplyco that takes the loan and pays the farmers and the farmers will not be liable for the loan. The High Court noted this and directed the consortium of banks to be informed about this. Otherwise, the banks will have to be summoned with a notice, the court said.

While hearing the petition, the High Court verbally asked how the farmers become borrowers when the money for the paddy procured by Supplyco is paid to them through banks. The court also inquired as to how the CIBIL score would be reduced due to the payment of paddy to the farmers. Supplyco explained that the CIBIL score of the farmers will not decrease. The court asked if there was any order in this.

Supplyco is responsible for the payment to the farmers for the paddy purchased. The high court also asked isn't the current situation of giving loans to farmers against the money of paddy that was sold is like saying that car manufacturers should pay the money if someone buys a car. Supplyco informed that the liability of the money given to the farmers through the banks is settled within six months. The High Court asked if this is not an overdraft. Following this, the Single Bench clarified that the liability of the loan should not be imposed on the farmers.