Keyword(s):
Agriculture, Agricultural Labourer, Creditor, Debt, District, Distress Affected Area, Distress Affected Crop, Fair Rate of Interest, Farmer, Financial Institution, Penal Interest, Principal Amount
Amendment appended: 30 of 2008, 4 of 2013
ACT 1 OF 2007
THE KERALA FARMERS’ DEBT RELIEF COMMISSION ACT, 2006
An Act to provide relief to those farmers who are in distress due to
indebtedness, by constituting a Commission with power to pass awards after adjudication
and to recommend appropriate measures for the redressal of the grievances of such
farmers through conciliation and negotiation and for matters connected therewith or
incidental thereto.
Preamble-WHEREAS, the benefits conferred by the Kerala Agricultural Debtors’
(Temporary Relief) Act, 2001 (Act 19 of 2001) are available only in respect of debts
incurred by farmers before the 29th December 2001, on which date the said Act came
into force;
AND WHEREAS, even after the said date the farmer indebtedness in the State
continued to be on the increase due to various factors;
AND WHEREAS, certain districts in the State are afflicted by severe distress due
to the agrarian crisis, and it ruined many farmers financially and in some cases led to
suicide;
AND WHEREAS, several suits and other proceedings have been filed in courts,
tribunals and other authorities for the recovery of debts accrued from farmers;
AND WHEREAS, it is expedient to provide relief to the farmers who are in
distress due to indebtedness, by constituting a Commission with power to pass awards
after adjudication and recommend appropriate measures for the redressal of the
grievances of such farmers through conciliation and negotiation and for matters
connected there with or incidental thereto;
BE it enacted in the Fifty-seventh year of the Republic of India as follows:–
- Short title and commencement – (1) This Act may be called the Kerala Farmers’
Debt Relief Commission Act, 2006.
(2) It shall come into force at once. - Definitions.- In this Act, unless the context otherwise requires, –
(i) “agriculture” includes horticulture, farming and growing of medicinal
plants, crops and intercrops, fruits, vegetables, flowers, grass, fodder grass and trees or
any kind of cultivation of soil, conducting nursery, breeding and keeping of live stock
including fish mussel, bees, silkworm, poultry, duck, cattle or pig and the use of land for
agriculture allied activities or any other agricultural purposes;
(ii) “agricultural labourer” means a person who, in consideration of the wages
payable to him by a landowner, works on the agricultural land of such land owner or does
any other agricultural operation;
(iii) “appropriate level of debt” means the amount determined by the
Commission as repayable by the debtor under clause (b) of sub-section (1) of section 5;
(iv) “Commission” means the Kerala State Farmers’ Debt Relief Commission
constituted under section 3;
(v) “Co-operative Society” means a society registered or deemed to have
been registered under the Kerala Co-operative Societies Act, 1969 (21 of 1969);
(vi) “creditor” means any person engaged in money lending, whether under
a licence or not and includes his heirs, legal representatives, assignees, co-operative
society and any other person as may be notified by the Government;
(vii) “debt” means any liability, whether secured or unsecured due from a
farmer on or before the commencement of this Act whether payable under a contract, or
under a decree or order of any Court or tribunal or otherwise and includes,
- any sum payable to,-
o an institutional creditor;
o a co-operative society; - any sum borrowed by a farmer from the creditor;
But does not include any loan amount taken by the farmer for commercial
purposes or luxury other than agricultural allied commercial purposes, to augment his
income and the amount payable to Central or State Governments or other State
Government or Governments of Union Territories and the amount due to Local Self
Government Institutions, Statutory Bodies, Central or State Public Sector Undertakings
and other Institutions as may be specified by the Government by notification;
(viii) “district” means a revenue district;
(ix) “distress affected area” means revenue district or districts or part thereof
in the State, declared by the Government as per Section 6, for the purpose of this Act, on
the recommendations of the Commission;
(x) “distress affected crop” means any crop or crops of the State declared by
the Government as per section 6 on the recommendation of the Commission, for the
purpose of this Act;
(xi) “distress affected farmer” means a farmer declared as such by the
Commission and includes agricultural labourer for the purpose of this Act;
(xii) “fair rate of interest” means the rate of interest determined by the
Commission under clause (b) of sub-section 1 of section 5 of this Act;
(xiii) “farmer” means a person who holds whether as owner, licensee or
mortgagee in possession oral lease, Government land lease “Kuthakapattam” or partly in
one capacity and partly in another with possession of an extent of land not exceeding
four hectares and whose principal means of livelihood is agriculture and whose annual
income does not exceed rupees two lakhs and includes an agricultural labourer,
Kudumbasree and self help group units doing cultivation by taking over agricultural land
on lease agreement condition;
(xiv) “financial institution” means any financial institution constituted by or
under any Central Act, State Act for the time being in force and owned and controlled by
the Government;
(xv) “Government” means the Government of Kerala;
(xvi) “institutional creditor” means the State Bank of India or any
Subsidiary Bank within the meaning of clause (k) of section 2 of the State Bank of India
(Subsidiary Bank) Act, 1959 or any Scheduled Bank;
(xvii) “interest” means any amount payable in excess of the principal
amount borrowed or pecuniary obligation incurred, by whatsoever name, such amount
may be called, whether the same is expressly mentioned or not in the document or
contract, if any;
(xviii) “member” means a member of the Commission and includes the Chairman;
(xix)“penal interest” means any amount payable in excess of interest on a
debt;
(xx) “prescribed” means prescribed by rules under this Act;
(xxi) “principal amount” means the amount originally advanced together
with the amount, if any, as has been subsequently advanced, notwithstanding any
stipulation to treat any interest as capital and notwithstanding that the debt has been
renewed, whether by the same farmer or by his heirs, assignees, or legal representatives
or by any other person acting on his behalf or on his interest, and whether in favour of the
same creditor or his heirs, assignees or legal representatives or of any other person acting
on his behalf or in his interest;
(xxii) “Secretary” means the Secretary to the Commission appointed
under sub-section (4) of section 3.
(xxiii) “State” means the State of Kerala.
- Constitution of the Commission.- (1) The Government shall, as soon as may
be after the commencement of this Act, by notification in the Gazette, constitute a
Commission by the name, “the Kerala State Farmers’ Debt Relief Commission”, for the
purpose of exercising the powers and performing the functions under this Act.
(2) The Commission shall consist of five members, namely:–
(i) a retired High Court Judge : Chairman
(ii) an agricultural expert : Member
(iii) two representatives of farmers : Members
(iv) a person working in connection
with economic/co-operative sector : Member
(3) The Chairman and Members shall be nominated by the Government.
(4) The Government may, appoint a Secretary and other staff as may be
necessary, to assist the Commission in such manner as may be prescribed.
(5) In the discharge of their duties, the Secretary and other staff referred in subsection (5) shall be subject to the administrative control of the Chairman. - Term of the Commission and conditions of service of the members. – (1)
The term of the Commission shall be 3 years:
Provided that, the Government may extend such period, if deem necessary.
(2) A member may, by writing under his hand and address to the
Government, resign his office at any time.
(3) A vacancy arising by reason of resignation of any member of the
Commission under sub-section (2) or otherwise shall be filled up in accordance with the
provisions contained in section 3 of this Act:
Provided that the person so appointed shall hold office only for the
remaining period of term of the person, in whose place he is appointed.
(4) Government may remove any member, if he,–
(a) is declared as undischarged insolvent:
(b) becomes incapable of continuing as such, due to physical or mental
disability:
(c) becomes unsound mind and stands so declared by a court of
competent jurisdiction;
(d) has been convicted for an offence, which in the opinion of the
Government involves moral turpitude or financial irregularities:
(e) has, in the opinion of the Government, abused his official position so
as to render his continuance in office prejudicial to public interest:
Provided that the person may be given an opportunity of being heard, before
proceeding as such.
(5) The Commission shall regulate its own procedure for the conduct of its
business.
(6) The salary and allowances, and the other conditions of service of the
Chairman and members shall be, as may be prescribed. - Powers and Functions of the Commission.- (1) The Commission shall
have all such powers as are necessary for achieving the objects of this Act, and in
particular.-
(a) to recommend to the Government either suo motu or on application,
after such enquiry as it may deem fit and subject to such general guidelines as may be
prescribed by Government to declare a district or districts or part thereof or a crop or
crops as distress affected area, or distress affected corp, as the case may be, and on
application to declare a farmer as distress affected farmer subject to such enquiry and
norms;
(b) to fix, in the case of creditors other than institutional creditors, a fair
rate of interest and an appropriate level of debt, to be payable as the Commission may
consider just and reasonable by a farmer declared as distress affected or related to an area
or crop declared as distress affected area or distress affected crop as per section 6 as the
case may be;
(c) to undertake conciliation for settlement of disputes between indebted
farmers and creditors, other than institutional creditors, on the basis of the fair rate of
interest and appropriate level of debt fixed under clause (b);
(d) to adjudicate disputes between farmers described in clause (b) and
creditors other than institutional creditors, and to pass awards which shall be binding on
both parties:
Provided that before passing an award as per this clause a creditor shall be
given a reasonable opportunity of being heard.
(e) to enter into negotiations with the creditors for loan waiver, interest
rate relief, loan rescheduling or loan moratorium to farmers described in clause (b);
(f) to recommend to the Government regarding the extent and the manner
in which the debt relief to be granted to the farmers;
(g) to recommend to the Government to take over the entire or partial
debt and exonerate the farmers, from the effects of the debt;
(h) to recommend to the Government to do such acts as may be
necessary to ensure that future credit requirements of the farmers are met through such
agencies, as may be prescribed;
(i) to make periodical reports to the Government generally on any matter
pertaining to farmer indebtedness; and
(j) to perform such other functions and exercise such other powers, as
may be prescribed.
(2) Issue orders keeping in abeyance the repayment of all debts of
farmers described in clause (b) of sub-section (1) to the creditors, other than institutional
creditors, considering the nature of crops and crop loss, for a period not less than one year
but not more than 3 years:
Provided that such orders shall be subject to the awards and directions
under sub-section (1).
(3) Notwithstanding anything contained in any other provisions of this
Act, any debt relief granted to a farmer by way of waiver of principal, interest and penal
interest, if any, shall not exceed seventy five per cent if such debt is fifty thousand
rupees or less and fifty per cent, if such debt exceeds fifty thousand rupees, arrived at
after settlement or rupees one lakh which ever is less
(4) An award passed by the Commission under clause (d) of sub section
(1) shall be final and shall not be called in question in any court.
(5) The awards of Commission under clause (d) of sub-section (1) shall
be executed under the provisions of the Code of Civil Procedure, 1908 (Central Act 5 of
1908) as if it is decree of a Civil Court.
(6) The Commission shall, for the purpose of exercising the powers
conferred by or under this Act, have all the powers of a Civil Court while trying a suit
under the Code of Civil Procedure, 1908 (Central Act 5 of 1908), in respect of the
following matters, namely: –
(a) summoning and enforcing the attendance of any person and examining him
on oath;
(b) requiring the discovery and production of any documents;
(c) receiving evidence on affidavit;
(d) issuing commission for the examination of witnesses or for local
investigation;
(e) inspecting any property or thing concerning which any decision has to be
taken;
(f) requisitioning of any public record or copy thereof from any court,
authority or office; and
(g) any other matter which may be prescribed. - To declare as distress affected area or distress affected crop.- As soon as may
be, after the receipt of a recommendation under clause (a) of sub-section (1) of section 5
the Government shall declare, as the case may be, as a distress affected area or a distress
affected crop. - Application for debt relief.- A farmer claiming any debt relief under this Act shall
file an application before the Commission in manner and in the form as may be
prescribed. - Sittings of the Commission.- (1) The Commission shall hold its sittings at such
places and at such times as may be determined by it :
Provided that the Commission shall hold its sittings in the respective
district/districts declared as distress affected areas to consider matters relating to the
distress affected areas.
(2) The quorum for the sitting of the Commission shall be three
(3) The Commission may in appropriate cases it deems fit, hold sittings in districts
by constituting a Bench consisting of two or more members:
Provided that a member representing the farmer in the Commission shall be
included in the bench so constituted:
Provided further that in case of the Bench constituted by the Commission, the
quorum for the meeting of the Bench shall be the total number of members of that Bench
or two which ever is less. - Special provisions in respect of settlement of certain loans taken by farmer.-
(1) Notwithstanding anything contained in this Act or in any other law or contract or
decree or order of any Court or Tribunal, a member authorised by the Commission may
initiate negotiation to, –
(a) reschedule short-term loans into medium term loans and medium term loans into
long term loans, in respect of the debts availed of by a farmers described in clause (b) of
sub-section (1) of section 5 from commercial banks or other scheduled banks, or
(b) provide necessary facilities for one time settlement of agriculture loans falling
under the category of non-performing assets, as per the guidelines issued by the Reserve
Bank of India, or
(c) waive penal interest as per the norms fixed by the Reserve Bank of India, with
the concurrence of the Reserve Bank of India and the National Bank for Agriculture and
Rural Development.
(2) Where any settlement of loan is made under sub-section (1), the said farmer
shall be bound to repay such loan to the bank concerned, within the period allowed by
such bank. - Re-scheduling of loans taken by a farmer from financial institutions.- (1)
Notwithstanding anything contained in this Act or in any other law or contract or decree
or order of any Court or Tribunal, the Commission may reschedule the recovery of loans
availed by a farmer described in clause (b) of sub-section (1) of section 5 on or before the
date of declaration as a distress affected area, distress affected crop under section 6 or a
distress affected farmer from any financial institution notified by the Government for this
purpose.
(2) Where the rescheduling of the loan is made under sub-section (1), the farmer
shall be bound to repay such loan with interest to the financial institution concerned
within the period allowed by Commission:
Provided that the Commission may, on application by the farmer, exempt him, by
order, from the repayment of the same for the period so rescheduled, for the reasons to be
recorded:
Provided further that the farmer shall be bound to repay the same on such later
dates, so fixed by the Commission. - Bar of suits, applications and other proceedings.- No suit for recovery of debt
shall be instituted, or application for execution of a decree in respect of a debt shall be
made against a farmer described in clause (b) of sub-section (1) of section 5 and no
appeal, revision petition or application for review against any decree or order in any such
suit or application shall be presented or made against such a farmer in any Civil Court, or
Tribunal or other authority, and such suits, applications, appeals and petitions instituted
or made against such a farmer before the date of declaration of a district or part thereof as
a distress affected area and pending on such date shall stand stayed, for such period as
the Commission may recommend in that behalf. - Payment of debt in instalments.- (1) Notwithstanding anything contained in any
law or contract or in any decree or order of any Court or Tribunal, a farmer described in
clause (b) of sub-section (1) of section 5 may discharge his debts in suitable instalments
together with fair rate of interest as recommended by the Commission on the principal
amount outstanding at the time of each payment, in the manner as may be directed by the
Commission and on payment of the same in the manner directed by the Commission,
the whole debt shall be deemed to be discharged.
(2) Where any instalment of a debt is not paid on the due date as directed by the
Commission, the creditor shall be entitled to recover the same in the manner as may be
determined by the Commission:
Provided that, before taking decision by the Commission under this section, the
farmer shall be given an opportunity of being heard. - The debt shall be deemed as fully repaid.-Notwithstanding anything contained
in this Act or in any other law or contract or in any decree or order of any Court or
Tribunal, if a farmer has repaid the principal amount taken as loan by him and an amount
equal to it to a creditor other than institutional creditor, the debt shall be deemed to be
fully discharged by the said farmer. - Annual Report to be laid before the Legislative Assembly.-(1) The Commission
shall prepare a report of its function of that year under this Act and the same shall be
submitted to Government in such form on or before such date as may be prescribed.
(2) The Annual Report submitted to the Government by the Commission under
sub-section (1) shall be laid before the Legislative Assembly, as soon as may be, after
the same is received by the Government. - Accounts and Audit.- (1) The Commission shall maintain proper accounts and
other relevant records and prepare an annual statement of accounts, in such form as may
be prescribed.
(2) The accounts of the Commission shall be audited annually and the audited report
shall be placed before the Legislative Assembly. - Overriding effect of Act.- The provisions of this Act or any rule or order made
thereunder shall have effect notwithstanding anything inconsistent therewith contained in
any law, other than this Act, or any instrument having effect by virtue of any law other
than this Act. - Bar of jurisdiction of Civil Court.- No civil court shall have jurisdiction to
settle, decide or deal with any question or to determine any matter which is by or under
the Act or the rule made thereunder are required to be settled, decided or dealt with or to
be determined by the Commission or the Government:
Provided that nothing in this section shall be applicable to the execution
proceedings under sub-section (5) of section 5. - Members of the Commission shall be public servants.—Every member of the
Commission nominated under sub-section (1) of section 3 and the Secretary and other
staff appointed under sub-section (4) shall be deemed to be a public servant within the
meaning of section 21 of the Indian Penal Code 1860 (Central Act 45 of 1860). - Protection of action taken in good faith.—No suit or legal proceeding shall lie
against any member of the Commission or Secretary or other officers for anything which
is done or purported to be done in good faith under this Act. - Power to remove difficulties.- (1) If any difficulty arises in giving effect to the
provisions of this Act, the Government may, by order, as occasion requires, do anything
not inconsistent with the provisions of this Act, which appears to them to be necessary for
the purpose of removing the difficulty:
Provided that no such order shall be made after the expiry of two years from the
date of commencement of this Act.
(2) Every order made under this section shall be laid before the Legislative
Assembly. - Power to make rules.- (1) The Government may, by notification in the Gazette,
make rules for the purpose of carrying in to effect the provisions of this Act.
(2) Every rule made under this section, shall be laid, as soon as may be after it is
made, before the Legislative assembly while it is in session for a total period of fourteen
days which may be comprised in one session or in two successive sessions and if before
the expiry of the session in which it is so laid or the session immediately following, the
Legislative Assembly makes any modification in the rule or decides that the rules should
not be made, the rule shall thereafter have effect only in such modified form or be of no
effect, as the case may be; so however that any such modification or annulment shall be
without prejudice to the validity of anything previously done under that rule.
ACT 30 OF 2008
THE KERALA FARMERS’ DEBT RELIEF COMMISSION
(AMENDMENT) ACT, 2008
AN
ACT
to amend the Kerala Farmers’ Debt Relief Commission Act, 2006.
Preamble.- WHEREAS, the Government of Kerala consider it necessary to
enhance the representation of farmers in the Kerala Farmers’ Debt Relief Commission so
as to make its functioning more efficient and to complete within specified period;
BE it enacted in the Fifty-ninth Year of the Republic of India as follows:-
- Short title and commencement. – (1) This Act may be called the Kerala
Farmers’ Debt Relief Commission (Amendment) Act, 2008.
(2) It shall be deemed to have come into force on the 22nd day of May, 2007. - Amendment of section 3.- In sub-section (2) of section 3 of the Kerala Farmers’
Debt Relief Commission Act, 2006(1 of 2007)(hereinafter referred to as the principal
Act),-
(1) for the words “five members”, the words “seven members” shall be
substituted;
(2) in item (iii), for the words “two representatives of farmers”, the words “four
representatives of farmers” shall be substituted. - Repeal and Saving.- (1) The Kerala Farmers’ Debt Relief Commission
(Amendment) Ordinance, 2008 (35 of 2008) is hereby repealed.
(2) Notwithstanding such repeal, anything done or deemed to have been done
or any action taken or deemed to have been taken under the principal Act as amended by
the said Ordinance shall be deemed to have been done or taken under the provisions of
the principal Act as amended by this Act.