Delays In Payment To Farmers In Full For Paddy Procurement: Kerala High Court Pulled Up Supplyco

K Sivanandhan V/S State Of Kerala [WP(C) NO. 23267 OF 2023]

The Kerala High Court has pulled up Supplyco for delays in payment to farmers in full for paddy procurement.

The single bench of Justice Devan Ramachandran has observed that the farmers cannot be put to any further prejudice, solely because the ‘Supplyco’ has not been able to garner resources to comply with their contractual commitments; nor can anything be attributed to them if the financing Bank causes any delay in grant of loan to the ‘Supplyco’ under the tripartite agreement between two of them and the Government. The shifting of any such responsibility onto the shoulders of the farmers is uncharitable and, in any case, wholly impermissible.

The petitioners are farmers, from whom the Kerala Civil Supplies Corporation, ‘Supplyco’, had procured paddy, on certain specified conditions.

The ‘Supplyco’, as per the agreed terms between the parties relating to the procurement of paddy, all amounts due to the farmers, up to the extent of Rs.50,000/-, were to be paid immediately. While those exceeding the said figure, would be paid in two tranches namely, initially 28%, which will be credited directly into their accounts; and the balance, on the ‘Supplyco’ obtaining a loan, as per the instructions of the Government, from a designated Bank, under a tripartite agreement between them for such purpose.

The farmers complain that even though procurement of paddy from them took place in April–May of this year, full amounts under the Procurement Scheme have not been yet disbursed to them. They are now being asked to go to various Banks to sign loan applications and security documents, before their claims are honoured. They say that this is unfortunate and uncharitable because they offered to supply paddy to ‘Supplyco’ on the specific assurances as afore given to them, and under the bonafide hope that the eligible amounts will be paid under the Procurement Scheme without delay.

But that all this has been now belied by the subsequent conduct of the ‘Supplyco’ and the other stakeholders. They thus pray that ‘Supplyco’ be directed to pay them the eligible amounts within a time frame to be fixed by the Court.

There is a corollary question as to if the petitioners should be burdened to go to the Bank and seek that the amounts be released to them, instead of the ‘Supplyco’ doing it, particularly because many of them, perhaps, are not used to the methods of the banking system fully.

The court directed that directing the ‘Supplyco’ to ensure that all eligible amounts to the petitioners, after deducting the payments made to them earlier, are disbursed to them as expeditiously as is possible, but not later than one month from the date of receipt of a copy of this judgement.

“If the ‘Supplyco’ is to opine that it will be more convenient for the petitioners to go to the Bank at their instruction and receive money through direct credit to their account, on the strength of only a receipt for such, I leave them liberty to request the petitioners to do so. But if any of them finds it difficult or unable to do so – for any reason whatsoever – the ‘Supplyco’ will make sure that the payment is effected to them in terms of the afore directions,” the court clarified.