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Which services are covered under ‘Agricultural Extension Services’? Karnataka Authority for Advance Ruling explains

Authority for Advance Ruling (Karnataka): In a case relating to whether the services, including education and training to farmers with regard to agro forestry through scientific research and knowledge are covered under ‘Agricultural extension Services’, and whether the applicant can avail tax exemption on such services, the two-member bench of M.P Ravi Prasad (State) and T. Kiran Reddy (Central) observed that the services being provided by the applicant are covered under ‘agricultural extension services’, thus, exempted from tax.

The Authority noted that the applicant provides services by appointing Mara Mitras- the Agriculture Extension Workers (AEW), to educate and train farmers regarding agro forestry by applying scientific research and knowledge. Further, the applicant’s activity includes promotion of tree-based agriculture, farmer enrolment, conducting proof of plant surveys and survival surveys, and inventory tracking at nurseries etc. Moreover, the applicant allocates the Mara Mitras to the talukas or gram panchayat, where they visit the farmers to enroll them in agroforestry schemes, register demand for saplings and document the data etc.

The Authority observed that, from the scope of work it is seen that the applicant through their Mara Mitras not only educate and train farmers regarding agro forestry through scientific research and knowledge but are also involved in hand holding the farmers from recording demand for saplings, picking up the saplings from the nurseries to their plantation, and also, monitor post plantation survival.

The Authority further noted that the term ‘agricultural extension’ is defined as “application of scientific research and knowledge to agricultural practices through farmer education or training”, and observed that the applicant through Mara Mitras also provides services such as selection of saplings, assistance in transportation, monitoring the survival of plants etc that are related to agricultural extension activity, hence, it ruled that the services being provided by the applicant are covered under agricultural extension services, thus, exempted from tax as per Entry No.57 of Notification No. 9/2017 of the Integrated Tax Rate.

[Avani Infosft Private Ltd., In Re, 2022 SCC OnLine Kar AAR-GST 13, decided on 12-08-2022]

Advocates who appeared in this case :

Mallikarjun Patil, Advocate, Present for the applicant.

Case Briefs Supreme Court

Unless there is forfeiture of performance guarantee, Industrial Entrepreneur Memorandum cannot be deemed to be de-recognised: SC

Supreme Court: While reversing the impugned decision of the Bombay High Court, the Division Bench of Hemant Gupta* and V. Ramasubramanian, JJ., held that unless there is forfeiture of performance guarantee and opportunity of being heard is granted to an entrepreneur, the Industrial Entrepreneur Memorandum cannot be deemed to be de-recognised automatically, only on account of lapsing of time.

Background

The respondent-Loknete Marutrao Ghule Patil Dnyaneshwar Sahakari Sakhar Karkhana Ltd. had approached the Bombay High Court seeking directions that the Industrial Entrepreneur Memorandum (IEM) dated 08-09-2010, which allowed the appellant to set up a Sugar factory, be de-recognised in view of the provisions of Clause 6C of the Sugarcane (Control) Order, 1966 on the following grounds:

(i) The time limit for a new factory to be set up was 2 years and to commence production was within 4 years (2+4), but the appellant failed to take any effective steps to set up and commence production within such time frame contemplated by the Control Order.

(ii) On 03-12-2011, the State of Maharashtra had issued a circular under Clause 6A of the Control Order that no sugar factory shall be set up within the radius of 25 kms of any existing sugar factory or any other new factory substituting the provisions that the minimum distance was for 15 kms existing on the date of grant of IEM, therefore, the proposed sugar factory did not meet the norm of 25 km.

(iii) The grant of extensions to set up the sugar factory issued on 14-11-2018 followed by another extension of time and to change the location on 17-10-2019 by the Central Government was contrary to the Control Order, 1966.

Noticeably, the appellant had applied for IEM on 08-09-2010, the same was acknowledged by the Central Government after the Commissioner of Sugar, Maharashtra issued a certificate regarding aerial distance between the existing sugar factory and the nearby proposed sugar factory was more than 15 km, as required at that time.

First Round of Litigation

The IEM was challenged before the Bombay High Court on the ground that the proposed factory did not meet the required aerial distance from the existing sugar factory and that it violated the provisions of the Environmental Protection Act, 1986 as the location fell within the radius of 500 meters from the bank of a river. Therefore, it was falling within no development zone.

By the decision dated 27-01-2014, the High Court directed that if the respondent (appellant herein) wants to carry out construction and development, it will have to comply with all laws including the anti-pollution, environmental protection, and ecology. However, with regard to the issue of aerial distance, the High Court held that since when the IEM was approved the required distance was 15 km, IEM was in compliance with the requirement in Clause 6-A of the Control Order, 1966. The Court added that the issue of the aerial distance certificate cannot be reopened at the instance of the petitioner or any other party again.

Second Round of Litigation and the Impugned Decision

In order to comply with the directions of the High Court, the appellant applied for extension of time and change of location due to earlier location being no development zone. On 14-11-2018, the Central Government allowed the extension after considering the comments of the State Government. Further extensions were also granted in the similar background on 15-11-2018, 12-04-2019 and 09-05-2019. Finally, the request for extension of time and for change of location was accepted on 17-10-2019 and one-year further extension was granted up to 07-09-2020 to implement the IEM dated 08-09-2010.

The second round of litigation began when the respondent approached the High Court against the aforesaid orders of the of the State Government and the Central Government granting extension of time and change of location.

The High Court, in the impugned decision, observed that the minimum aerial distance between the new sugar factory and the existing sugar factory is 25 kms as per the amended Control Order dated 03-12-2011. Therefore, the High Court held that cluster of sugar factories near each other would not be a viable proposition and may affect the survival of the existing sugar factory and allowing a new sugar factory to be established on the terms of the IEM issued in the year 2010, would render the existing sugar factory unviable and both sugar factories may not be in a position to survive.

It was further held that the respondent-appellant had not taken any effective steps within the period of two years from the date of acknowledgment of IEM, he had neither purchased the land for four years in the name of the factory nor placed orders for plant and machinery and even the civil work had not commenced. The High Court found that the IEM stood derecognized on 08-09-2014 as the four years for commercial production had lapsed and the maximum one-year extension also lapsed on 08-09-2015.

Issues before the Court

In the above backdrop, the appellant initiated the instant appeal and the followings issues arrived before the Court:

(i) Whether in the absence of any interim order in the first round of litigation, the State/ Central Government was justified in excluding the period during which the petition was pending while granting extension of IEM.

(ii) Whether the amended Control Order dated 03-12-2011 would be applicable when the High Court in the earlier writ petition has held that the issue of Aerial Distance Certificate cannot be reopened?

(iii) Whether the IEM stands lapsed on the failure on the part of the appellant to set up the sugar factory and start production within the time specified in Clause 6C or such lapsing would be only after an order in terms of Clause 6D of the Control Order is passed?

Validity of Multiple Extensions of Time

Relying on the latin maxim ‘Actus Curiae Neminem Gravabit', the Court stated that the act of the Court will not prejudice anyone. The Court noted that during the whole litigation history, the appellant was at the receiving end of the writ petitions, therefore the period spent in such lis cannot be used against him. The Court said,

“Though there was no interim order passed in the writ petitions, such petitions created a cloud on the right of the appellant to set up a sugar factory at the location earmarked and to commence commercial production.”

Noting that the writ petitions remained pending for a period of four years, the Court held that the period spent in defending such writ petitions was validly taken into consideration by the State/Central Government to grant extension of time limit fixed in the Control Order.

Further, the language of the Control Order had been amended time and again with a view to enable the competent authority to grant extension of time due to “unforeseen circumstances”. The Control Order amended on 12-08-2018 contemplates more than one unforeseen circumstance beyond the control of the person concerned including where the delay is due to any court case relating to land use, environment or “such other reason”.

The Court noted that the Central government had granted the extension on 14-11-2018 when the amended Control Order was operative and effective. Another argument by the respondent was that the IEM was extended several times, i.e., on 15-11-2018, 12-04-2019, 09-05-2019, 17-10-2019 and 18-02-2021 and such frequent extensions show that the extensions were given at the asking without satisfying the pre-requisite conditions to seek extensions.

Rejecting the aforementioned contention, the Court held that the extensions were given when the second round of litigation was pending before the High Court due to which the appellant was not able to take effective steps. Hence, the decision of the competent authority to grant extensions of time was a proper exercise of the powers and could not be said to be illegal, irrational or suffering from procedural impropriety.

Aerial Distance Certificate

Regarding the contention that the proposed factory did not meet the amended norm requiring that no sugar factory shall be set up within a radius of 25 kms of any existing sugar factory or any other new factory, the Court observed that the appellant had applied for IEM on 08-09-2010 (when the existing provision required the said distance to be 15 km) the same was acknowledged by the State Government and the Central Government and an aerial distance certificate was also issued in favour of the appellant.

On the basis of the aerial distance certificate, the IEM was acknowledged after the appellant furnished a bank guarantee of the sum of Rs. 1 crore which was to remain in force up to 04-04-2016. Further, the scheme of the Control Order shows that once IEM is granted, the timeline has to be determined keeping in view the date of the issuance of the IEM. Therefore, the Court held that the subsequent amendment in the Control Order would not have any application towards the IEM already issued.

Whether the IEM stood de-recognised?

The respondent argued that Clause 6C of the Control Order contemplates that if the steps are not taken within the timeline stipulated under the IEM, it shall stand de-recognized and the performance guarantee shall be forfeited. However, the Court noted,

“In the present case, the appellant was not the writ petitioner before the High Court. Rather, he was defending the permissions granted by the State and the Central Government. It was not prudent for the appellant to proceed with the heavy investment required for installation of a sugar factory and then to suffer the consequences depending on the outcome of the litigation.”

The Court also observed,

“The litigation initiated in public interest or by the rival sugar factory cannot be used against the appellant when the writ petition was disposed of with the condition that there cannot be any development within 500 meters of river which necessitated the change of location.”

Further, the Court held that the performance guarantee is liable to forfeiture after giving the concerned person a reasonable opportunity of being heard and the use of the word ‘shall' in Clause 6C does not make the provision mandatory but enables the competent authority to forfeit bank guarantee on failure to comply with the timeline. The Court observed that there are twin conditions to be fulfilled before formally de-recognizing the IEM:

(i) failure to set up plant and to commence production and then

(ii) the forfeiture of the performance guarantee.

The Court held that second will not arise unless the first is satisfied and the second step cannot be undertaken, without complying with an opportunity of personal hearing in terms of Clause 6D of the Control Order.

Thus, unless the necessary consequences of derecognition of IEM are undertaken, there is no automatic lapsing of IEM. The appellant had furnished a performance guarantee of Rs. 1 crore, however, no steps were taken either by the State Government or by the Central Government to forfeit such performance guarantee inasmuch as not even a show cause notice was issued. Hence, the Court observed that a conclusion cannot be drawn that the IEM is deemed to be lapsed automatically only on account of lapsing of time.

Need for Healthy Competition

Considering that sugarcane area restrictions (zoning) are removed in Maharashtra since the year 1997, and the sugarcane growers are at liberty to provide sugarcane to any sugar mills as per their choice, the Court opined that the appellant cannot be denied the benefit of setting up of a sugar mill only on the basis of resistance from the competitor, who had only financial interest in mind. The Court expressed,

“In case of a competition, it is the consumer (farmer) who is the beneficiary. In the present case, the farmers are not getting the advantage of competition which could fetch them timely payment and better services.”

Conclusion

Consequently, the Court held that the order of the High Court allowing the writ petition filed by the competitors was liable to be set aside and in the absence of any finding by the High Court to the effect that the decision of the Central Government was arbitrary, irrational or unjust, the High Court had gravely erred in taking into consideration that appellant was remiss in not implementing IEM during the pendency of the writ petitions in the first round of litigation.

Additionally, the Court directed that the period spent in the second round of litigation shall also be excluded while determining the period during which the plant had to be set up and to commence commercial production.

[Swami Samarth Sugars & Agro Industries Ltd. v. Loknete Marutrao Ghule Patil Dnyaneshwar Sahakari Sakhar Karkhana Ltd., 2022 SCC OnLine SC 871, decided on 13-07-2022]

*Judgment by: Justice Hemant Gupta

Advocates who appeared in this case :

Chidambaram, Senior Advocate, for the Respondent.

*Kamini Sharma, Editorial Assistant has put this report together

Case Briefs Supreme Court

Here’s why Supreme Court upheld Tamil Nadu’s loan waiver Scheme for small and marginal farmers

Supreme Court: The bench of Dr. DY Chandrachud* and AS Bopanna, JJ has upheld the constitutionality of the Scheme formulated by the State of Tamil Nadu granting loan waiver to small and marginal farmers as these farmers suffer a greater degree of harm because of their limited capacity and aid.

Factual Background

A Government Scheme which granted loan waiver to small and marginal farmers was under challenge before the Court for being discriminatory against other farmers. The Madras High Court held the grant of loan waivers only to small and marginal farmers to be arbitrary and directed the appellant to grant the same benefit to all farmers irrespective of the extent of landholding. The High Court in the impugned judgment has observed that the scheme is both under-inclusive and over-inclusive since the total extent of land held by a person is calculated based on the information in the landholding register which permits discrepancies. It also held the scheme to be under-inclusive for not extending the benefit to ‘other farmers’ or the ‘large farmers’.

Reasons for the formulation of this scheme

(i) The small and marginal farmers have faced greater harm due to the erratic climate conditions in view of the limited technology and capital that they possess; and

(ii) The state seeks to provide maximum benefits with the minimum fund.

State’s submissions

by waiving Rs. 5780 Crore worth of crop loans, the number of small and marginal farmers who would be benefitted would be 16,94,145. On the other hand, waiving the crop loan of Rs 1980 Crore that the other farmers held would only benefit 3,01,926 of them. Hence, providing the benefit of the scheme only to marginal and small farmers leads to maximum utility for minimum investment.
classification was required since the small and marginal farmers suffer a greater degree of harm because of their limited capacity and aid. It is judicially recognized that the legislature is free to recognize degrees of harm and may confine its restrictions or benefits to those cases where the need is the clearest
the consumption expenditure of marginal and small farmers exceeds their estimated income by a substantial margin, and the deficits are covered by borrowings. The fact that 16,94,145 small and marginal farmers have availed of agricultural loans as compared to 3,01,926 farmers belonging to the ‘other category’ testifies that the small and marginal farmers have a significant capital deficit when compared to the rest of the farmers. A huge capital deficit, combined with a reduction in the agricultural income due to water scarcity and crop inundation due to floods has led to financial distress. Small and marginal farmers are resource deficient; they do not have borewells to overcome the drought. These farmers are usually dependent on large farms to access land, water, inputs, credit, technology, and markets. It was found that almost 40% of the irrigated land of large farmers was from canals, while less than 25% of the land of small and marginal farmers was irrigated by canals or borewells and they often resort to renting water from larger landholdings.
the percentage distribution of the indebted agricultural households depicts that 27% of the households that hold between 0.01- .040 hectares of land; 34% of those who hold between 0.40-1 hectares and 20% of those who hold between 1-2 acres, are indebted. On the other hand, only 4.5% of those who hold 4-10 hectares and 0.6% of those who hold 10 plus hectares are indebted.

Analysis

Introduction of Scheme in pursuance of electoral promise – Effect

The High Court had taken the view that because the scheme was in pursuance of an electoral promise, it is constitutionally suspect. This view was made on an assumption that no study must have been conducted before the electoral promise was made.

The Supreme Court, however, noticed that it is settled law that a scheme cannot be held to be constitutionally suspect merely because it was based on an electoral promise. A scheme can be held suspect only within the contours of the Constitution, irrespective of the intent with which the scheme was introduced.

Why is the application of the impugned scheme to only the small and the marginal farmers justified?

The Court noticed that the purpose of providing a waiver of agricultural loans for farmers is to uplift the distressed farmers, who have been facing the brunt of the erratic weather conditions, low produce, and fall in the prices because of the market conditions. The objective of promoting the welfare of the farmers as a class to secure economic and social justice is well recognized by Article 38.

The percentage distribution of the indebted agricultural households also depicts the poverty that envelops the class of small and marginal farmers.

Hence, the scheme propounded by the State of Tamil Nadu passed muster against the constitutional challenge for the following reasons:

A climate crisis such as drought and flood causes large scale damages to small holdings as compared to the large holdings due to the absence of capital and technology; and
The small and marginal farmers belong to the economically weaker section of society. Therefore, the loan waiver scheme in effect targets the economically weaker section of the rural population. The scheme is introduced with an endeavor to bring substantive equality in society by using affirmative action to uplift the socially and economically weaker sections. Due to the distinct degree of harm suffered by the small and marginal farmers as compared to other farmers, it is justifiable that the benefit of the scheme is only provided to a specified class as small and marginal farmers constitute a class in themselves. Therefore, the Percentage Distribution of Indebted Agricultural Households < 0.01 0.40 – 1.00 1.01 – 2.00 2.01 – 4.00 4.01 – 10.00 10.00 + classification based on the extent of landholding is not arbitrary since owing to the inherent disadvantaged status of the small and marginal farmers, the impact of climate change or other external forces is unequal.

[State of Tamil Nadu v. National South Indian River Interlinking Agriculturist Association, 2021 SCC OnLine SC 1114, decided on 23.11.2021]

*Judgment by: Justice Dr. DY Chandrachud

Know Thy Judge| Justice Dr. DY Chandrachud

Case Briefs High Courts

Ker HC | Declare wild boars as vermin; HC allows farmers to hunt wild boars to prevent destruction of agricultural lands

Kerala High Court: P.B.Suresh Kumar, J., directed the Chief Wildlife Warden to permit the farmers to hunt wild boars to prevent destruction of crops.

The instant petition was initiated by the agriculturists holding lands in Malappuram and Kozhikode districts. The grievance voiced by the petitioners was with regard to the destruction of the crops in their agricultural lands on account of the large scale intrusion of wild boars from the nearby forest. The case set out by the petitioners was that various steps taken by the respondents to avert the menace posed by wild boars under Section 11(1)(b) of the Wild Life (Protection) Act, 1972 (the Act) did not yield any result and the petitioners were consequently put to irreparable injury and loss.

The petitioners, therefore, seek directions to the Central Government to declare wild boars as vermin in the affected areas in the State, invoking the power under Section 62 of the Act.

Noticeably, having been convinced of the grievance voiced by persons similarly placed like the petitioners, during November 2020, the State Government had requested the Ministry of Environment, Forest and Climate Change, Government of India to declare wild boars as vermin in the problematic areas of the State. In terms of the provisions of the Act, if wild boars are declared as vermin, it can be hunted by the persons concerned to prevent damage to their life and property.

The proposal of the State Government aforesaid was returned by the Ministry suggesting to make use of the provisions contained in Section 11(1)(b) of the Act for the purpose of averting the menace, utilizing the services of Panchayat Raj Institutions. Again, on 17-06-2021, the State Government had taken up the matter again with the Union government to declare wild boars as vermin in the problematic areas in the State, pointing out that the various steps taken by the State Government since 2011 did not yield any result. The Central Government is yet to take any final decision on the request made by the State Government.

Under Section 11(1)(b) of the Act, the Chief Wildlife Warden is empowered, if he is satisfied that any wild animal specified in Schedule II, Schedule III or Schedule IV, has become dangerous to human life or to property including standing crops on any land, to permit by order in writing any person to hunt such animal or group of animals in that specified area.

Considering that the properties of the petitioners were under threat of the attack of the wild boars and insofar as the stand of the State Government was that the steps taken under Section 11(1)(b) of the Act to avert the said menace did not yield any result and that the only alternative to protect the interests of the farmers was to declare wild boars as vermin in specified areas in the State, the Bench passed an interim order directing the Chief Wildlife Warden to permit the petitioners to hunt wild boars in the areas where their agricultural lands were situated, as provided for in Section 11(1)(b) of the Act.[K.V.Sebastian v. State of Kerala, 2021 SCC OnLine Ker 2863, decided on 23-07-2021]

Kamini Sharma, Editorial Assistant has reported this brief.

Appearance by:

For the Petitioners: Advocate M.S.Amal Dharsan

For the Respondents: Sudhinkumar K.,

Case Briefs COVID 19 Tribunals/Commissions/Regulatory Bodies

Complaint filed alleging flouting of Covid appropriate behaviour norms by protesting farmers as potential risk to themselves and others: NHRC issues notice to Delhi, Haryana & UP Governments

The National Human Rights Commission, India has taken cognizance of a complainant that the mass gatherings of protesting farmers, flouting Covid appropriate behaviour, are against the very rules/norms laid down by the Central Government and the advisory of the Commission itself as safeguards against the pandemic. Allegedly, the situation is likely to worsen day by day due to the increased inflow of the farmers at the sites of protests: they are not only putting their lives at risk but also posing a risk, as the potential carriers of the virus, to the others in the rural areas.

Accordingly, the Commission has issued notices to the Chief Secretaries of NCT of Delhi, Haryana and Uttar Pradesh to submit action taken reports regarding the steps taken to control the spread of Covid-19 infection at the protest sites of the farmers. The report is to be submitted within four weeks.

Issuing the notices, the Commission has observed that the country is passing through an unprecedented and scary second wave of Covid-19, which has already claimed more than three lakh human lives and is still raging virulently in different parts of the country.

It has further observed that the Central and State Governments are struggling against all odds to save lives in the face of inadequate health facilities. Measures like lockdowns, containment zones and Covid protocols are employed to somehow overpower the deadly Covid, which is now leading to other serious diseases like black fungus, white fungus etc. In these extraordinary circumstances, our sole aim has to be saving human lives.

The complainant has also stated that more than 300 farmers have died during this ongoing protests due to several reasons including Covid infections. The Cases of black fungus etc are also rising. He has sought intervention of the Commission apprehending that situation may become more worrisome as the farmers, in large numbers, are planning for observing 26th May, 2021 as the Black Day.

National Human Rights Commission

[Press Release dt. 25-05-2021]

National Consumer Disputes Redressal Commission

Case Briefs Tribunals/Commissions/Regulatory Bodies

NCDRC | If a farmer suffers crop loss due to the usage of herbicides bought from a dealer or manufacturer of agri-inputs, can he claim a loss for crop damage? Read Commission’s reasoning

National Consumer Disputes Redressal Commission (NCDRC): Anup K. Thakur (Presiding Member) dismissed the revision petition while upholding the State Commission’s order.

Respondent/Complainant had sown sugarcane. He purchased herbicides from petitioner 1/OP 1. It was submitted that after the usage of the said herbicide the crop started to suffer severe damage.

In view of the above occurrence, Sub Divisional Agriculture Officer was informed, after which inspection of the affected crop was carried out and a report was submitted.

Consumer complaint seeking compensation of Rs 1,60,000 on account of crop damage was filed.

What was District Commission’s decision?

Circular of Deputy Director of Agriculture was not complied with while constituting the inspection team was a mere inadvertence and did not suggest any malafide intention. In any case, it was an irregularity and on this ground, equity and natural justice could not be denied to the complainant. So reasoning, it allowed the complaint to the extent of Rs.72,850/-, this being the loss on account of 235 quintals of sugarcane in one acre land @ Rs.310/- per quintal, with interest of 9% from the date of filing of the complaint.

The above reasoning was upheld by the State Commission.

Analysis and Decision

On perusal of the facts and circumstances of the case, Bench opined that no ground for revision of the State Commission’s order was required.

Bench observed that an internal circular of Deputy Director of Agriculture was circulated regarding the composition of the inspection team for the purpose of smooth functioning of the Department of Agriculture in its subordinate filed offices for fulfilling its role of assisting the farmers, including taking prompt action on any complaint as is in the present matter.

On noting the above, the Commission stated that:

To not have included a representative of the OPs was, at worst, an irregularity.

The fact in the present matter was that there was a crop loss and the complainant farmer did therefore had to suffer loss and the inspecting team found the loss to be largely due to the use of herbicides.

Commission added to its reasoning that the business entities viz. dealers, manufacturers of agri-inputs (seeds, herbicides) carry a special responsibility. They are expected to properly inform the farmer and follow up after sale, to ensure that the farmer has understood and is following all the instructions.

In the present case, dealer ought to not have waited for an invitation to join the inspection team if it was already aware of the complaint through information furnished by the complainant. He should have been proactive rather than reactive.

The same goes for the manufacturers of agri-inputs: their dealers should be properly trained to ensure that they see their job as not merely one selling but as providing after-sale service through regular follow up.

With regard to the revisionary jurisdiction, Bench referred to the decision of the Supreme Court in Rubi (Chandra) Dutta v. United India Insurance Co. Ltd., (2011) 11 SCC 269.

Hence, in view of the above discussion, Bench dismissed the revision petitions. [Adama Agan Ltd. v. Ramesh, 2021 SCC OnLine NCDRC 3, decided on 18-01-2021]

Case Briefs Supreme Court

Farmer Protests| Shashi Tharoor and 6 journalists not to be arrested for now over tweets on protester’s death during Republic Day Tractor Rally

Supreme Court: The 3-judge bench of SA Bobde, CJI and AS Bopanna and V. Ramasubramanian, JJ has stayed the arrest of congress MP Shashi Tharoor and Journalists Rajdeep Sardesai, Mrinal Pande, Zafar Agha, Paresh Nath, Anant Nath and Vinod Jose, in multiple FIRs filed against them over tweets on the death of a protester n during the January 26 tractor rally in the Capital.

The bench has issued notice in the matter and had listed the matter after 2 weeks.

The order reads,

“Issue notice returnable in two weeks. In the meantime, there shall be stay of arrest of the petitioners.”

As reported in Hindustan Times[1], the petitioners have sought quashing of the criminal cases against them and protection of their fundamental right to free speech and expression guaranteed under Article 19(1)(a) of the Constitution.

[Shashi Tharoor v. Union of India, 2021 SCC OnLine SC 73, order dated 09.02.2021]

[1] Supreme Court stays arrest of Shashi Tharoor, Rajdeep Sardesai and 5 other journalists, Hindustan Times, Published on Feb 09, 2021 12:30 PM IST

Legal RoundUp Supreme Court Roundups

Supreme Court Monthly Roundup – January 2021

P&H HC | “Middlemen cannot be allowed to usurp hard-earned money of the Farmers”; Courts required to do substantial justice and not to let offenders go scot-free

Punjab and Haryana High Court: H.S. Madaan, J., while hearing the instant petition seeking pre-arrest bail, expressed concern regarding plight of farmers, “If some middle man successfully usurps the price of crops and is allowed to go scot-free, that shall result in perversity of the justice and would amount to great injustice to the affected complainant/farmers.”

In the instant case both the petitioners were husband and wife and stakeholders in the commission agency business. An FIR was lodged against them under Ss. 420, 120-B, 406 IPC, alleging that they purchased Kharif (rice crop) and in spite of receiving the amount from the Government, the same had not been paid to the farmers concerned according to J forms. It was alleged in the complaint that the petitioner-accused had used the money for their own purposes and had paid only Rs. 28 lakhs out of total amount of Rs.70 lakhs, whereas remaining amount was misappropriated by the petitioner-accused by committing fraud of about 87 lakhs, which included payments for earlier crops as well as for Kharif crop. It was also alleged that the petitioner-accused own big properties which had been created with the money belonging to innocent farmers. Further, it was alleged that the petitioner-accused had also committed fraud at Khanna about 30 years ago and a criminal case was registered against him at that time.

Noticing grave and serious allegations against both the petitioner-accused of having misappropriated the money payable to the complainants, the Bench expressed that there was no plausible and satisfactory explanation as to why the petitioner-accused had not made payment to the complainants after receiving the price of crops sold by them to the Government through commission agency. The Bench exclaimed, “The Court cannot lose sight of the fact that hard earned money running into lakhs of rupees belonging to the complaint/farmers has been usurped by the petitioners, who are stated to have created huge properties by use of this money.” While relying on the judgment of the Supreme Court in the State v. Anil Sharma, (1997) 7 SCC 187, the Bench said, “Custodial interrogation of the petitioners is definitely required to find the necessary details of the criminal acts committed by them and for the purpose of recovery of money. In case custodial interrogation of the petitioners is denied to the investigating agency that would leave many loose ends and gaps in the investigation affecting the investigation being carried out adversely.”

It was held that both the petitioner-accused were liable to pay dues of the farmers, as leniency and misplaced sympathy could not be shown to the petitioner-accused by granting concession of pre-arrest bail to them and ignoring the plight of the farmers, who had worked hard and had put in a lot of efforts in the agricultural operation hoping to get reward by having good crops and then to earn their livelihood by sale of such crops. Therefore, the petition was dismissed and request for pre-arrest bail was rejected. [Darshna Rani v. State of Punjab, 2021 SCC OnLine P&H 189, decided on 25-01-2021]

Kamini Sharma, Editorial Assistant has put this story together

Case Briefs Supreme Court

Farm Laws | “Court cannot be said to be completely powerless to grant stay of any executive action under a statutory enactment”; Supreme Court stays implementation of Farm Laws

Supreme Court: The 3-Judge Bench of S.A. Bobde, CJ and A.S. Bopanna and V. Ramasubramanian, JJ., stays the implementation of farms laws until further orders.

Three categories of petitions have been filed before the Court, all revolving around the validity or otherwise of three Farm Laws namely:

Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020
Essential Commodities (Amendment) Act, 2020
Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020

Categories of Petitions

The first category of petitions challenges the constitutional validity of the farm laws. A petition under Article 32 challenging the validity of the Constitution (Third Amendment) Act, 1954 enabling the Central Government also to legislate on a subject which was otherwise in the State List has also been included within this category of petitions.

Another Category of petitions included the ones which support the farm laws on the ground that they are constitutionally valid and beneficial to the farmers.

The third category included the ones filed by individuals who are residents of the National Capital Territory of Delhi as well as the neighbouring States, claiming that the agitation by farmers in the peripheries of Delhi and the consequent blockade of roads/highway leading to Delhi, infringes the fundamental rights of other citizens to move freely throughout the territories of India and their right to carry on trade and business.

Negotiations

Further, the Bench noted that several rounds of negotiations took place, yet no solution seemed to be in sight and the on-ground situation is as follows:

Senior citizens, women and children are at the site, exposing themselves to serious health hazards posed by cold and COVID
A few deaths have taken place, though not out of any violence, but either out of illness or by way of suicide.

While applauding the Farmers for their peaceful protest, Court noted that it was pointed out that a few persons who did not belong to the farmer’s community also joined, with a view to show solidarity with the farmers.

A specific averment was made in an intervention application that an organization by name “Sikhs for Justice”, which has been banned for anti-India secessionist movement is financing the agitation. The said contention was also supported by the Attorney General.

Constitution of a Committee of Experts

Bench noticed that the negotiations between the farmers’ bodies and the government did not yield any results so far, therefore the constitution of a committee of experts in the field of agriculture to negotiate between the farmers’ bodies and Government of India may create a congenial atmosphere and improve the trust and confidence of the farmers.

Stay on implementation of Farm Laws

Court also opined that a stay of implementation of all the three farm laws may assuage the hurt feelings of the farmers and encourage them to come to the negotiating table with confidence and good faith.

Attorney General argued that none of the petitioners who have attacked the farm laws has pointed out any single provision which is detrimental to the farmers and that the laws enacted by Parliament cannot be stayed by this Court, especially when there is a presumption in favour of the constitutionality of legislation.

“…this Court cannot be said to be completely powerless to grant stay of any executive action under a statutory enactment.”

Senior Counsel, P. Wilson representing one section of farmers from Tamil Nadu welcomed the proposal to stay the implementation of the Laws and the constitution of the Committee and stated that his client would go before the Committee.

Similarly, A.P. Singh Counsel appearing for the Bhartiya Kisan Union also submitted that the representatives of the Union will participate in the negotiations.

Insofar as the apprehension regarding MSP [Minimum Support Price] being done away with, it is submitted across the Bar that the same may not be dismantled. The learned Solicitor General also confirmed that there are inherent safeguards, in-built in the Farm Laws, for the protection of the land of the farmers and that it will be ensured that no farmer will lose his land.

Interim Order

(i) The implementation of the three farm laws 1) Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020; (2) Essential Commodities (Amendment) Act, 2020; and (3) Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, shall stand stayed until further orders;

(ii) As a consequence, the Minimum Support Price System in existence before the enactment of the Farm Laws shall be maintained until further orders. In addition, the farmers’ landholdings shall be protected, i.e., no farmer shall be dispossessed or deprived of his title as a result of any action taken under the Farm Laws.

(iii) A Committee comprising of (1) Shri Bhupinder Singh Mann, National President, Bhartiya Kisan Union and All India Kisan Coordination Committee; (2) Dr. Parmod Kumar Joshi, Agricultural Economist, Director for South Asia, International Food Policy Research Institute; (3) Shri Ashok Gulati, Agricultural Economist and Former Chairman of the Commission for Agricultural Costs and Prices; and (4) Shri Anil Ghanwat, President, Shetkari Sanghatana, is constituted for the purpose of listening to the grievances of the farmers relating to the farm laws and the views of the Government and to make recommendations. This Committee shall be provided a place as well as Secretarial assistance at Delhi by the Government. All expenses for the Committee to hold sittings at Delhi or anywhere else shall be borne by the Central Government. The representatives of all the farmers’ bodies, whether they are holding a protest or not and whether they support or oppose the laws shall participate in the deliberations of the Committee and put forth their view points. The Committee shall, upon hearing the Government as well as the representatives of the farmers’ bodies, and other stakeholders, submit a report before this Court containing its recommendations. This shall be done within two months from the date of its first sitting. The first sitting shall be held within ten days from today.

While parting with the decision, the Court expressed that:

“While we may not stifle a peaceful protest, we think that this extraordinary order of stay of implementation of the farm laws will be perceived as an achievement of the purpose of such protest at least for the present and will encourage the farmer’s bodies to convince their members to get back to their livelihood, both in order to protect their own lives and health and in order to protect the lives and properties of others.”

Matter to be listed in 8 weeks. [Rakesh Vaishanv v. Union of India, 2021 SCC OnLine SC 18, decided on 12-01-2021]

Case Briefs Supreme Court

Farmers’ protest can continue peacefully without impediment. Supreme Court calls for constitution of a committee to resolve the issue

Supreme Court: Refusing to interfere with the ongoing Farmers’ protest, the 3-judge bench of SA Bobde, CJ and AS Bopanna and V. Ramasubramanian, JJ has said that the farmers’ protest should be allowed to continue without impediment and without any breach of peace either by the protesters or the police.

“Indeed the right to protest is part of a fundamental right and can as a matter of fact, be exercised subject to public order. There can certainly be no impediment in the exercise of such rights as long as it is non-violent and does not result in damage to the life and properties of other citizens and is in accordance with law.”

In order to bring about an effective solution to the present stalemate between the protesters and the Government of India, the Court suggested the constitution of a Committee comprising of independent and impartial persons including experts in the field of Agriculture but said that it would do so only after hearing all the necessary parties. The Court has, however, made clear that the pendency of the matters will not prevent the parties from resolving the issue amicably.

The Court is hearing the case wherein the residents of NCT of Delhi/Haryana, having a population of more than two million people, have claimed that the manner in which the protest is being carried on is seriously inhibiting the supply of essential goods to the city because of restrictions on the free movement of goods vehicles. According to the petitioners, this will result in a sharp increase in the prices of goods which would be difficult for people to bear in these times of Pandemic. They say,

“… no fundamental right is absolute and it would be necessary for the Court to determine the contours of the right of free speech and expression involved in the farmers’ protest and the extent to which this right can be exercised consistently with the rights of other citizens.”

The respondents, on the other hand, claim that the roads are blocked by the police in order to prevent the entries of the protesters/farmers to the city of Delhi.

Yesterday, the petitioners were allowed to serve copies of these petitions upon the impleaded farmers’ Associations and today the Court was to hear the farmers who are agitating at the Borders of National Capital Region of Delhi. However, none of the impleaded respondents-farmers’ associations have appeared today though the petitioners claim to have informed them over their respective mobile/whatsapp numbers.

The Court will now take up the matter after winter vacation. The parties, however, liberty to move the Vacation Bench if necessary. On the next date of hearing, the parties have been asked to submit suggestions about the constitution of the Committee.

The farmers’ protest is mainly directed against the three laws:

(1) Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020,

(2) Essential Commodities (Amendment) Act, 2020 and

(3) Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020.

Aforesaid laws are also under challenge before the Supreme Court.

[Rakesh Vaishnav v. Union of India, 2020 SCC OnLine SC 1032, order dated 17.12.2020]

For Petitioners: K.Parameshwar, AOR

For Union of India: Attorney General K.K. Venugopal

For Punjab: Senior Advocate P. Chidambaram

For U.P.: Advocate Garima Prashad

For Bharatiya Kisan Union: Advocate A.P. Singh.

Cabinet Decisions COVID 19 Legislation Updates

Breaking | Ordinance to promote barrier-free inter-state & intra-state trade in agriculture produce approved; Historic Amendment to Essential Commodities Act

One India, One Agriculture Market

The Union Cabinet chaired by Prime Minister Shri Narendra Modi met on 3^rd June, 2020. Several landmark and historic decisions were taken in the meeting, which will go a long way in helping India’s farmers while also transforming the agriculture sector.

Historic Amendment to Essential Commodities Act

The Cabinet today approved historic amendment to the Essential Commodities Act. This is a visionary step towards transformation of agriculture and raising farmers’ income.

Background

While India has become surplus in most agri-commodities, farmers have been unable to get better prices due to lack of investment in cold storage, warehouses, processing and export as the entrepreneurial spirit gets dampened due to hanging sword of Essential Commodities Act. Farmers suffer huge losses when there are bumper harvests, especially of perishable commodities. With adequate processing facilities, much of this wastage can be reduced.

Benefits

With the amendment to Essential Commodities Act, commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes will be removed from list of essential commodities. This will remove fears of private investors of excessive regulatory interference in their business operations.

The freedom to produce, hold, move, distribute and supply will lead to harnessing of economies of scale and attract private sector/foreign direct investment into agriculture sector. It will help drive up investment in cold storages and modernization of food supply chain.

Safeguarding interest of consumers

The Government, while liberalizing the regulatory environment, has also ensured that interests of consumers are safeguarded. It has been provided in the Amendment, that in situations such as war, famine, extraordinary price rise and natural calamity, such agricultural foodstuff can be regulated. However, the installed capacity of a value chain participant and the export demand of an exporter will remain exempted from such stock limit imposition so as to ensure that investments in agriculture are not discouraged.

The amendment announced will help both farmers and consumers while bringing in price stability. It will create competitive market environment and also prevent wastage of agri-produce that happens due to lack of storage facilities.

Barrier-free trade in agriculture produce

Cabinet approved ‘The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020’.

Background

Farmers in India today suffer from various restrictions in marketing their produce. There are restrictions for farmers in selling agri-produce outside the notified APMC market yards. The farmers are also restricted to sell the produce only to registered licensees of the State Governments.Further, Barriers exist in free flow of agriculture produce between various States owing to the prevalence of various APMC legislations enacted by the State Governments.

Benefits

The Ordinance will create an ecosystem where the farmers and traders will enjoy freedom of choice of sale and purchase of agri-produce. It will also promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations. This is a historic-step in unlocking the vastly regulated agriculture markets in the country.

It will open more choices for the farmer, reduce marketing costs for the farmers and help them in getting better prices. It will also help farmers of regions with surplus produce to get better prices and consumers of regions with shortages, lower prices. The ordinance also proposes an electronic trading in transaction platform for ensuring a seamless trade electronically.

The farmers will not be charged any cess or levy for sale of their produce under this Act. Further there will be a separate dispute resolution mechanism for the farmers.

One India, One Agriculture Market

The ordinance basically aims at creating additional trading opportunities outside the APMC market yards to help farmers get remunerative prices due to additional competition. This will supplement the existing MSP procurement system which is providing stable income to farmers.

It will certainly pave the way for creating One India, One Agriculture Market and will lay the foundation for ensuring golden harvests for our hard working farmers.

Farmers empowered to engage with processors, aggregators, wholesalers, large retailers, exporters

Cabinet approved ‘The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020’.

Background

Indian Agriculture is characterized by fragmentation due to small holding sizes and has certain weaknesses such as weather dependence, production uncertainties and market unpredictability. This makes agriculture risky and inefficient in respect of both input & output management.

Benefits

The ordinance will empower farmers for engaging with processors, wholesalers, aggregators,wholesalers, large retailers, exporters etc., on a level playing field without any fear of exploitation. It will transfer the risk of market unpredictability from the farmer to the sponsor and also enable the farmer to access modern technology and better inputs. It will reduce cost of marketing and improve income of farmers.

This Ordinance will act as a catalyst to attract private sector investment for building supply chains for supply of Indian farm produce to global markets. Farmers will get access to technology and advice for high value agriculture and get ready market for such produce.

Farmers will engage in direct marketing thereby eliminating intermediaries resulting in full realization of price. Farmers have been provided adequate protection. Sale, lease or mortgage of farmers’ land is totally prohibited and farmers’ land is also protected against any recovery. Effective dispute resolution mechanism has been provided for with clear time lines for redressal.

Government committed to the cause of farmer welfare

A series of steps were announced as part of the Atmanirbhar Bharat Abhiyaan to provide a boost to those engaged in agriculture and allied activities. These include provision of concessional credit through Kisan Credit Cards, financing facility for agri-infra projects, Pradhan Mantri Matsya Sampada Yojana and other measures to strengthen fisheries, vaccination against Foot & Mouth Disease and Brucellosis, Herbal Cultivation promotion, boost to beekeeping, Operation Green etc.

Through PM KISAN, over 9.54 crore farmer families(as on first June 2020) have benefited and an amount of Rs. 19,515 crore has been disbursed so far during the lockdown period. An Amount of Rs. 8090 crore has been paid during lockdown period under PMFBY.

These steps are only the latest in a series of measures taken by the government, which shows its continuous commitment to championing the cause of welfare of the hardworking farmers of India.

Ministry of Agriculture & Farmers Welfare

[Press Release dt. 03-06-2020]

[Source: PIB]

Image Credits: News Indian Express

COVID 19 Hot Off The Press News

Breaking| [DAY-3] Third Tranche of Economic Relief unfolded by Finance Minister; Govt. to amend Essential Commodities Act to enable better price realisation for farmers

Live Updates to Follow

Focal Point: Agriculture
One lakh Crore for — Strengthening Farming Infrastructure; Cold Storage, Grain Storage, etc.; Funding Agriculture Infrastructure Projects at farm-gate & aggregate points.
Rs 10, 000 Crore for boosting local products for Global sale;Vocal for Local with Global outreach; Formalisation of Micro Food Enterprises
Rs 20,000 crores for Fishermen through Pradhan Mantri Sampada Yojana
100% vaccination of livestock;National Animal Disease Control Programme launched
Animal Husbandry infrastructure fund — Rs, 15,000 Crores
Rs 4000 Crores to promote herbal cultivation in India that aims to cover 10 lakh hectare under herbal cultivation in 2 years; Corridor of medical plants to come up across banks of Ganga
Rs 500 Crores for Beekeeping initiatives
500 crore for improving supply chain of fruits, vegetables, etc.;Govt. extends Operation Greens from Tomatoes, Onion and Potatoes to all fruits and vegetables
Amendment to Essential Commodities Act
Farmers & Farmers getting adequate choice to sell their produce at attractive price: Central Law to be introduced;
Law to implement agriculture marketing reforms to provide marketing choices to farmers; law will provide adequate choices to farmer to sell produce attractive price

Refer to the past two days live updates below:

Read below the reliefs offered by the Finance Minister, with the focus being MSMEs:

LIVE UPDATES [14-05-2020]

Focal point: Liquidity, Labour, Law and Land.
6 Major steps for MSMEs
Collateral free Automatic Loans upto Rs 3 lakh Crores
100 % credit guarantee
Additional Funds for MSME revival
Loans to be given till October 31st
Rupees 20 Crore for stressed MSMEs
50,000 Crore equity to be infused for viable and potential MSMEs
New Definition of MSMEs — Investment can be upto 1 Cr and turnover upto 5 Crore
Global tender to be allowed upto Rs 20 Crores
Other interventions for MSMEs
Rs 2500 crores EPF support for businesses and Workers for 3 months
EPF contribution reduced for Business and Workers for 3 months — Rs 6750 Crores
Rs 30,000 crores liquidity facility for NBFC/HCs/MFIs
Rs 45,000 Crores Partial Credit Guarantee Scheme 2.0 for NBFC
Rs 90,000 CR liquidity injection for DISCOMs
Relief to contractors
Extension of registration and completion date of real estate projects under RERA; No individual applications needed; Suo Moto be done; Registered projects expiring on or after 25th March
Rs 50,000 crores Liquidity through TDS/TCS reductions till March 2021
Tax filing due date extended to 30th November, 2020
Pending refunds to charitable trusts and non-corporate businesses & professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately.
Due date of all income tax return for FY2019-20 extended from 31st July, 2020 & 31st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31st October, 2020.
Date of Assessments getting barred on 30th September, 2020 extended to 31st December, 2020 and those getting barred on 31st March, 2021 will be extended to 30th September, 2021.
Period of Vivad se Vishwas Scheme for making payment without additional amount will be extended to 31st December, 2020

LIVE UPDATES [15-05-2020]:

FOCUS: Migrant Workers, Street vendors, Small Farmer, Self Employed, Traders, etc.
9 Steps will be announced.
14.62 crore person-days of work generated till 13th May 2020
10,000 crore actual expenditure till date
National Floor Wage to be introduced
Re-skilling of workers
Universal minimum wages

Reliefs

Free food grain supply to all migrants for next 2 months [For non-card holders: 5 kgs of wheat or rice or 1 kg of chana]; State Governments to implement, Centre to borne costs
One Nation One Ration card to be implemented within 3 months
Affordable rented accommodation for migrants; Rental Housing Scheme;Migrant Workers / Urban Poor to have Affordable Rental Housing Complexes (ARHC): Government will launch a scheme under
Mudra Shishu Loans: Government of India will provide Interest subvention of 2% for prompt MUDRA– Shishu Loans payees for a period of 12 months; Relief of Rs 1500 cr to MUDRA-Shishu loanees
Special Credit facility for Street Vendors: Easy access to credit; Rs 5000 cr Special Credit Facility
Middle Income Group with upto 6 to 18 lakh income group: Credit link subsidy scheme for housing to be extended till March 2021; 2.5 lakhs middle income families to benefit during 2020-21
To create job opportunities for Tribals /Adivasis-Plans worth Rs 6000 crores to be approved shortly under Compensatory Afforestation Management & Planning Authority (CAMPA) Funds
Rs 30,000 Crore additional emergency working capital fund through NABARD
Kisan Credit Card: 2 lakh Crore concessional credit for farmers; 2 lakh crore Concessional credit boost to 2.5 crore farmers through KisanCreditCards; Fishermen and Animal Husbandry farmers will also be included in this drive

Case Briefs Supreme Court

SC fumes over the growing trend of Seed companies engaging in frivolous litigations with farmers

Supreme Court: Alarmed by the growing trend amongst seed companies of engaging in frivolous litigation with farmers, virtually defeating the purpose of speedy redressal envisaged the Consumer Protection Act, 1986, the bench of MM Shantanagoudar and R. Subhash Reddy, JJ has said that the summary redressal available to the farmer under the 1986 Act may go a small but crucial way to provide instant relief in a sector which is already facing stress on several counts.

The Court was hearing a case where a Seed Company was contesting the farmers’ claims before consumer fora on the preliminary point of maintainability right up to the Supreme Court, compelling small agriculturists such as the Respondents to spend unnecessarily on litigation in order to secure relief for themselves, amounting to a sum which probably exceeds even the quantum of relief claimed. Rebuking the company, the Court said,

“This tendency to resist even the smallest of claims on any ground possible, by exploiting the relatively greater capacity of seed companies to litigate for long periods of time, amounts to little more than harassment of agriculturists.”

Discussing the serious issue of Farmer suicides, the Court observed that most Indian farmers own only small landholdings, which require expensive inputs such as irrigation, electricity, seeds, fertilizer, and pesticide, but do not generate sufficient output to cover the costs of the same. It further said that when agriculturists with such small landholdings do enter into agreements to grow crops on terms dictated by seed companies, it is in the hope of earning some profit that would offset the cost of their inputs and generate some income for the household.

“the success or failure of the crop would make or break the income of the farmer for the entire season. This can result in situations where small and medium scale farmers find themselves trapped in contracts where they buy expensive seeds which turn out to be defective, resulting in a failed season and severe financial hardship. The problem of indebtedness further worsens the plight of the farmer, and, all too often, manifests in the tragedy of suicide.”

The Court, hence, said that though the farmers faced with grievances against seed companies, may, in suitable cases, opt for other remedies such as a civil suit, relief under the Seeds Act, 1966, but excluding such farmers from the purview of the 1986 Act would be a complete mockery of the object and purpose of the statute. The Court, hence, held that the respondent Farmer in the case at hand was a “consumer” under the 1986 Act.

[Nandan Biomatrix Ltd. S. Ambika Devi, 2020 SCC OnLine SC 309, decided on 06.03.2020]

Case Briefs Tribunals/Commissions/Regulatory Bodies

NCDRC | IFFCO directed to pay enhanced compensation to farmers who suffered loss of crop due to defective seeds bought from it

National Consumer Disputes Redressal Commission (NCDRC): V.K Jain (Presiding Member), J. allowed a revision petition filed by a farmer seeking enhancement of compensation provided for loss of his crops.

Petitioners herein were farmers who had bought seeds from the respondent society. The resultant crops were not up to the mark even though the petitioners had followed proper instructions and procedures and had taken due care and precautions required for the said crop. Aggrieved from the financial loss incurred, the petitioners approached the District Forum but their complaints were dismissed by the forum. Consequently, they approached the State Commission which allowed their appeals and directed the respondents to pay compensation to the petitioners. However, since the petitioners were not satisfied with the quantum of the compensation awarded to them by the State Commission, they approached the Commission by way of these revision petitions. The petitioners also submitted applications seeking condonation of delay in filing the revision petitions.

The Court condoned the delay considering the fact that the petitioners were poor farmers who were not awarded even the minimum price of the crop while assessing the compensation for the loss of the crop.

The Court, calculating the compensation for the loss of the crop at Rs 17,000 per quintal, awarded the petitioner, Vinod Kumar, Rs 3,40,000 and the petitioner, Vijay Kumar, Rs 1,02,000 in addition to compensation for the mental harassment and the cost of litigation awarded by the State Commission. The balance payment to the complainants was to be made within eight weeks from the date of the judgment, failing which it would carry interest at 9 per cent per annum from the date of institution of the complaint.[Vijay Kumar v. IFFCO, 2019 SCC OnLine NCDRC 78, decided on 17-05-2019]

Cabinet Decisions Legislation Updates

Landmark decision taken in the first Cabinet meeting of the NDA Government offers pension coverage to crores of farmers

The Union Cabinet, chaired by the Prime Minister Narendra Modi approved a new Central Sector Scheme, a historic decision that will empower farmers across India. This is a path-breaking scheme that will provide pension cover to our industrious farmers who toil day and night to keep our nation fed. It is also for the first time since independence that such a pension coverage has been envisioned for farmers.

It is estimated that 5 crore small and marginal farmers will benefit in the first three years itself. The Central Government would spend Rs. 10774.50 crore for a period of 3 years towards its contribution (matching share) for providing social security cover as envisaged under the scheme.

The salient features of this scheme are:

A voluntary and contributory pension scheme for all Small and Marginal Farmers (SMF) across the country.

Entry age of 18 to 40 years with a provision of minimum fixed pension of Rs 3,000 on attaining the age of 60 years.

For example, a beneficiary farmer is required to contribute Rs 100/ – per month at median entry age of 29 years. The Central Government shall also contribute to the Pension Fund an equal amount as contributed by the eligible farmer.

After the subscriber’s death, while receiving pension, the spouse of the SMF beneficiary shall be entitled to receive 50% of the pension received by the beneficiary as family pension, provided he/she is not already an SMF beneficiary of the Scheme. If, the death of the subscriber happens during the period of contribution, the spouse shall have the option of continuing the Scheme by paying regular contribution.

Synergy between schemes, prosperity for farmers:

An interesting feature of the Scheme is that the farmers can opt to allow his/her monthly contribution to the Scheme to be made from the benefits drawn from the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) Scheme directly. Alternatively, a farmer can pay his monthly contribution by registering through Common Service Centres (CSCs) under MeitY.

Fulfilling core promises, empowering the agriculture sector:

For seventy years after Independence, such coverage for farmers was never thought. It was in the run-up to the 2019 Parliamentary elections that PM Narendra Modi first mooted such an idea, which gradually found resonance across the length and breadth of India. Such a plan was mentioned in the BJP manifesto and in the first Cabinet meeting after the formation of a new Government, it has become a reality.

[Dated: 31-05-2019]

Cabinet

Case Briefs High Courts

Patna High Court to Kisan Sabha: “No Mandamus – State is making efforts to convert agrarian operations to organic farming”

Patna High Court: A Division Bench comprising of Mukesh R. Shah, CJ. and Ashutosh Kumar, J. while hearing a petition seeking mandamus against State for implementing organic farming policy, observed that efforts on the same were underway and dismissed the petition holding that the nature of petitioner’s prayers were that of a roving enquiry.

The instant public interest petition had been filed seeking a mandamus directing the respondent to encourage farmers of the State to opt for organic farming in order to save productivity of the earth and environment. Further, the petitioner also sought the details of the expenditure incurred for encouraging organic farming in the State as well as of the allocated subsidy amount for organic farming disbursed in various financial years since 2007-08.

The court noted that the averments in writ petition admitted that the State Government had taken a policy decision of encouraging farmers for undertaking organic farming, and for the aforesaid purpose, budgetary limits had been fixed and subsidies had been offered. The petitioners had not raised any allegation of siphoning of funds or embezzlement of public money. Thus, the prayers made in the writ petition were more in the nature of fishing and roving enquiry from the respondents, which is impermissible in public interest litigation.

The respondent’s submission before the court was that even though organic farming, being a labour-intensive exercise, is much more expensive owing to production cost being higher and less yield being produced per hectare; but still the State was using budgetary allocation to make the farmers aware of the advantages of using/ manufacturing vermi-compost and green manure. Setting up of gobar gas units was being encouraged by providing subsidy to the entrepreneurs for the said purpose.

Further, the State also submitted list programmes which had been initiated and the budgetary allocation as well as expenses incurred on “Organic Corridor Scheme” project launched in the year 2017-18. As a part of first phase, organic corridors had been developed in villages adjoining National/State highways running by the side of Ganga river. The process for certification of fields after elimination of chemical residue was afoot. Lastly, the State submitted that it was planning to implement the scheme at a larger scale by 2022; and the entire process of converting agricultural operations to organic method being a long drawn process, it would take a while before the results are visible.

Having regard to the detailed submissions made by the State and vague prayers in the petition, the High Court observed that the State was making efforts to achieve the objective of organic farming by 2022 and expecting results in such a short time would be chimerical. On that observation, the writ petition was dismissed. [Bihar Rajya Kishan Sabha v State of Bihar,2018 SCC OnLine Pat 1808, decided on 09-10-2018]

Case Briefs Tribunals/Commissions/Regulatory Bodies

Manufacturers, and not farmers, have the onus to prove the quality of seeds under Consumer Protection Act, 1986

National Consumer Disputes Redressal Commission (NCDRC): A Division Bench comprising of R.K. Agrawal, J. and M. Shreesha, Member dismissed the revision petition filed against the order of Maharashtra State Consumer Disputes Redressal Commission confirming payment of compensation to the respondent/complainant – farmers for supply of inferior quality of seeds by the petitioner manufacturing company.

The respondent had purchased onion seeds from the petitioners and sown the same in their fields. When even after due care, the growth of crop was unsatisfactory, they informed about the same to the petitioner and lodged a formal complaint. An enquiry committee visited the fields of the respondent and made a detailed inspection report observing that the crop failure was on account of inferior quality of seeds. Despite sending a notice to the petitioner, the respondent received no response, constraining him to approach the District Forum seeking direction to for payment of expenses incurred towards the failure of crop along with compensation and costs. After appreciating the evidence on record, District Forum ordered payment of expenses along with compensation and costs. The said order was challenged by the petitioner in State Commission, which confirmed the order of District Forum. It is in this factual background, that the instant revision petition was filed by the petitioner.

Primary contention of revision petitioners was that the State Commission had erred in not appreciating that germination of seeds depends upon environmental factors and crop management practices such as climate, moisture content, temperature, usage of fertilizers and water supply; and that no samples of seeds were sent by the respondent for analysis as mandated by Section 13(1)(c) of the Consumer Protection Act, 1986.

The Commission relied on judgment of the Apex Court in National Seeds Cooperation Ltd. v M. Madhusudhan Reddy, (2012) 2 SCC 506 and Maharashtra Hybrid Seeds Co. Ltd. v Alavalapati Chandra Reddy, (1998) 6 SCC 738, to state that the onus to prove that the seeds manufactured are of good quality lies on the manufacturer as the farmers are not expected to store some of the seeds for future testing. Moreover, as per the Seeds Act, 1966 manufacturer is required to keep a small sample of each batch of seeds for a minimum period of time depending upon the nature of the seeds. Therefore, there was no reason for the petitioner to not have sent the seeds to a laboratory for testing as per Section 13(1)(c) of the Consumer Protection Act.

Apart from being devoid of merits, the revision petition was also held to be barred by limitation as the same was filed with a delay of 188 days and there was no explanation as to the reason for such delay. As such, the petition was dismissed on both delay as well as merits. [National Horticulture Research & Development Foundation v. Sahebrao Jibhau Deware, Revision Petition No. 279 of 2018, decided on 28-09-2018]

Case Briefs Tribunals/Commissions/Regulatory Bodies

NHRC: Notice issued to Centre and Maharashtra Govt over suicide of 639 farmers in Maharashtra between March to May, 2018

National Human Rights Commission: NHRC has taken suo motu cognizance of media reports that the Government of Maharashtra in the State Assembly has informed that 639 farmers committed suicide in the State between March and May, 2018. The reported reasons were crop failure, debt and inability to repay bank loans.

The Commission has issued notices to the Secretary, Union Ministry of Agriculture and the Chief Secretary, Government of Maharashtra calling for the detailed reports in the matter, specifically mentioning the status of implementation of the schemes for the farmers and relief to the aggrieved families. The response is expected within four weeks. The Union Government is expected to inform the Commission, if they have any specific plan or mechanism in their mind to effectively address the situation.

The Commission has observed that it is not for the first time that such news has come to its notice. It has been receiving complaints regarding the deaths of farmers across the country, including the State of Maharashtra. It has also taken suo motu cognizance of such matters. Committing suicide by the farmers in such a large number is a serious matter as it involves the right to life of the victims. Their families also come under tremendous pressure due to sudden demise of an earning member.

It has further observed that in spite of announcement of several schemes including crop insurance and loan waiver by the Central and State Governments, the forlorn story of poor farmers generally remains the same. The farmers are still choosing to end their lives, understandably, if not being able to cope up with the stress, financial crunch and social stigma due to crop failure. There is a need for the Central and State Governments to see that the schemes announced by them are implemented in true spirit, to achieve the target so that such tragic deaths of the farmers could be averted.

According to the media report, carried on 15th July, 2018, a total 639 farmers had committed suicide in Maharashtra between March 1 and May 31, 2018. The information had been provided by the State Revenue Minister in the State Assembly in response to the questions of the opposition members. They had, reportedly, alleged that all the schemes of the government, including the loan waiver, compensation to farmers in case of loss of crops and minimum support price (MSP) for agricultural goods, had failed, due to which the cases of suicide by the farmers have increased.

The news reports further say that as claimed by the opposition, in the last four years, as many as 13,000 farmers had ended life, of which 1500 committed suicide in the last one year alone. The Revenue Minister had reportedly stated that according to the parameters set by the State Government in October last year for declaration of drought, 8 talukas of Yavatmal, Washim and Jalgaon Districts were declared affected by medium intensity drought in April this year and the compensation along with other assistance has been provided to the affected farmers, accordingly.

It is further mentioned that on 29th May, 2018, the Union Government made amendments in the rules for declaration of drought-hit areas, based on the suggestions made by the states and accordingly the state revenue and forest departments have made the changes on 28.6.2018. The Chief Minister of the State has reportedly stated that appropriate action will be taken to recover the mortgaged lands of the farmers from the respective lenders.

National Human Rights Commission

Case Briefs Tribunals/Commissions/Regulatory Bodies

A consumer farmer shall not suffer for failure of Seed Inspector or District Level Enquiry Committee to follow the procedure, if complainant is otherwise able to prove his case

National Consumer Disputes Redressal Commission (NCDRC): A Single Member Bench of NCDRC presided by V.K. Jain, J. upheld the order of State Commission of Haryana granting relief of about Rs two lakh from the Indian Farmers Fertilizers Cooperative Limited (IFFCO, the petitioner) for selling “adulterated” seeds to two farmers who suffered financial losses due to poor yield.

According to the complainant farmers, they were assured by the petitioner that the seeds would give proper yield of 8 to10 quintals per acre. On poor yield, they made complainants to the Agriculture Department which carried out an inspection and found the plants to be of different variety and about 60-70% of the plants with high growth without any fruits. The complainants approached the District Forum concerned. Their claims were denied by the District Forum but were upheld by the State Commission on appeal. Aggrieved petitioner approached NCRDC.

The emphasis of the petitioner’s arguments was that that despite circular dated 03.01.2002, the Agriculture Department did not associate representative of the Seed Agency and the Scientists of KGK/KVK, HAU in the inspection and the report was prepared at the back of the petitioner without any notice to it.

Commission relied on its own decision in Reliance Life Sciences Pvt. Ltd. v. Umesh Singh Chandan Singh Saddiwal, 2016 SCC OnLine NCDRC 78 and Apex’s Court judgment in Maharashtra Hybrid Seeds Co. Ltd. v. Alavalapati Chandra Reddy, (1998) 6 SCC 738. The Commission held that the failure of the Seed Inspector or for that matter District Level Enquiry Committee to follow the procedure under Seed Act or Rules thereunder cannot be fatal to a complaint, filed under the provisions of the Consumer Protection Act. Hence, such failure cannot lead to dismissal of a Consumer Complaint, if the complainant is otherwise able to prove his case. Commission also noted that there is no way by which a farmer can compel the seed inspector or the committee to follow the said procedure. [IFFCO v. Vijay Kumar, Revision Petition No. 912 of 2018, order dated 14-06-2018]

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