On Tuesday, the Supreme Court upheld a scheme by the then-ruling AIADMK government in Tamil Nadu to waive outstanding crop loans, medium-term (agriculture) loans, and long-term (agricultural) loans to small and marginalized farmers.
The higher court said it was a well-established law that a scheme could not be considered constitutionally suspicious just because it was based on an election promise.
The panel of judges D.Ya. Chandrahud and A.S. Bopanna overturned the Madrasi Collegium ruling of the Madras High Court of 4 April 2017, stating that it was mistaken in its opinion that, since the scheme was carried out in fulfillment of an election promise, it suspicious of the constitution.
“The scheme in question was introduced in fulfillment of an election promise made by the then ruling party in Tamil Nadu. It appears that the High Court was of the opinion that because the scheme was carried out in pursuance of an election promise, it was constitutionally suspicious. This view was made on the assumption that no research should have been done before the campaign promise was made. It is a well-established law that a scheme cannot be considered suspicious from a constitutional point of view just because it was based on an election promise, ”the court said.
It stated that the scheme can only be considered suspicious within the framework of the Constitution, regardless of the intent with which the scheme was introduced.
“The scheme, proposed by the state of Tamil Nadu, is being polled against the constitutional protest. The High Court was wrong to think otherwise. During the consideration of the case, the state provided broader coverage based on its assessment of the situation, ”the statement reads.
In May 2016, the Tamil Nadu government issued a scheme to waive outstanding crop loans, medium-term (agriculture) loans, and long-term loans (agricultural sector) to small and marginalized farmers.
Consideration should be given to the scheme guidelines provided for classifying farmers as small and marginal, as well as the degree of land ownership indicated in the land register and loan register at the time of the agricultural loan approval.
“Regarding the definition of ‘smallholder’ and ‘marginal farmer’, it stipulates that ‘smallholder’ means a farmer who owns land between 2.5 and 5 acres, and ‘marginal farmer’ means a farmer who owns up to 2 acres of land. 5 acres. …
Subsequently, on July 1, 2016, the Registrar of Cooperative Societies issued a circular containing further instructions for the implementation of the scheme, the bench noted.
The state government has issued a preliminary statement that the Court cannot revise the scheme as it is a decision on the state’s fiscal policy.
The court stated that the judicially developed two-sided test to determine the validity of the law compared to Article 14 of the Constitution is related to the purpose of the law, because the “policy” underlying the law is never completely isolated from the attention of the court. …
“However, it is a well-established law that the court cannot interfere with the soundness and wisdom of politics. The policy is subject to judicial review on limited grounds of compliance with fundamental rights and other constitutional provisions, ”the statement said, adding that it also found that courts would show more respect for issues related to economic policy than other issues of civil and political rights.
The Court stated that economic policy as a whole includes taxation, expenditure and distribution policies, and the state and its agencies often seek to make economically sound decisions.
“The implementation of any state policy requires costs. Just because politics involves spending money, it cannot be called economic policy. It is necessary to define the main characteristic of the policy and the target area in order to determine the nature of the policy, ”the message says.
The Court stated that the contested loan waiver scheme is, in fact, a social policy in accordance with the Directive Principles of Public Policy, introduced with the aim of eliminating inequalities in status, income and opportunity.
“The loan waiver scheme is also in line with the Directive Principles of Public Policy. In view of the remarks contained in the scheme, it cannot be considered that it violates Article 14, since it does not impose a burden, but provides a benefit, ”the message says.
The higher court stated that the equality code in article 14 of the Constitution prescribes substantive rather than formal equality, and that classification is reasonable when double tests based on clear differentiation are performed.
“The reasons that appear to have guided Tamil Nadu in developing this scheme are therefore twofold: (i) Smallholders and marginalized farmers have faced great damage from volatile climatic conditions due to the limited technology and capital they can afford. possess; and (ii) the State is committed to providing maximum benefits with a minimum fund, ”the statement reads.
The Court stated that the courts should therefore show greater respect for cases where the criterion of rational relationship is applied.
“Since the classification in the contested scheme is not based on either the grounds contained in Article 15, or on the ‘kinship and basic traits’ of the person, it cannot be excluded on the basis of the alleged grounds of insufficient and excessive inclusion,” Bench said.