Kovar Kolli Indresh
New Delhi, Dec. 9: The Central Government has clarified that if banks, financial institutions and cooperative societies are going to auction the plantations of defaulting coffee growers under the SARFAESI (Seçhiu Diiniis Chinioti Chitija Khechiotis Nadiu Chinioti oji Eitichiti Chiti The court had ruled that horticultural crops such as coffee, tea, rubber, pepper and cardamom do not fall under the definition of agricultural land for the purpose of protection from the auction process under the Act.
Based on this, the central government has clarified that coffee plantations cannot be considered as agricultural land under the SARFAESI Act and that the affected borrowers can only seek relief through debt recovery tribunals. Due to this stand of the central government, the owners of thousands of plantations in the state have expressed their fear of losing their property.
Replying to a formal question from Udupi-Chikkamagaluru MP Kota Srinivas Poojary in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary said that recovery action under the Security and Restructuring of Economic Assets and Enforcement of Security Measures (SREISI) Act is a commercial decision of banks and financial institutions and the Centre will not interfere in such matters. The government has also considered the fact that the State High Court had rejected the petition filed by the farmers seeking a stay on the loan recovery process initiated by the banks in this regard in 2021. Two more cases in this regard are pending in the High Court and the banks have continued the auction process.
The Centre has said that it will not interfere in the loan recovery cases of the plantations in response to the demands of the farmers to stop the online auctions due to the delay in repayment due to market fluctuations and increasing maintenance costs of the plantations. Responding to allegations that traders in Dubai are abusing the law by trying to buy some coffee plantations in Chikkamagaluru and Hassan districts that have been put up for auction by banks through online auctions, the Central Government has said that the Coffee Board has not received any such information. The Centre has pointed out that the only remedy for the distressed growers is to approach the Debt Recovery Tribunal under Section 17 of the SCEAESI Act.
Speaking to reporters in this regard, Karnataka Farmers’ Federation President H. Shivanna said that this stance of the Centre has disappointed the growers. He said that Union Commerce and Industry Minister Piyush Goyal is touring Chikkamagaluru district later this month and coffee growers will meet him to convince him of the seriousness of the problem. He said that in this critical situation, the Central Government must come to the rescue of the growers and protect their interests.
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