The Kerala Farmers' Debt Relief Commission Act 2006

[Translation in English of “2006- ലലെ കകേരള കേര്‍ഷകേ കേടടാശശടാസ കേമമ്മീഷന
ആകക” published under the authority of the Governor.]
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  (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 W HEREAS, 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 W HEREAS, 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  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; 
BE it enacted in the Fifty-seventh year of the Republic of India as follows:—
1. Short title and commencement. —(1) This Act may be called the Kerala
Farmers' Debt Relief Commission Act, 2006.
*Received the assent of the Governor on the 18 th day of January, 2007 and published in the
Kerala Extraordinary Gazette No. 106 dated 18th January, 2007.
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(2) It shall come into force at once.
2. 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 livestock 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
landowner 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 1[on or before the date of commencement of this Act or, in respect of
any particular distress affected area in the State, on or before such date as the
Government  may, by  notification  in  the  Gazette,  specify,]  whether  payable
under a contract,  or  under a  decree  or order  of any  Court or Tribunal,  or
otherwise, and includes, 
(a) any sum payable to,—
(i)  an institutional creditor;
1. Substituted by Act 4 of 2013 (w.e.f. 26.05.2012).
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(ii) a co-operative society;
(b)  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  Governments  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,
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;
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(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.
3. 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 1[seven members], namely:—
(i) a retired High Court Judge : Chairman
(ii) an agricultural expert : Member
1. Substituted by Act 30 of 2008 (w.e.f. 22.05.2007).
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(iii) 1[four 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 sub-section (4) shall be subject to the administrative control of the Chairman.
4.  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:
1. Substituted by Act 30 of 2008 (w.e.f. 22.05.2007).
6
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.
5. 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  1[by  Government  to  declare  a  district  or
districts or part thereof or a crop or crops as distress affected area, or distress
affected crop, 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);
1. vide Erratum No.20688/Leg.A1/06/Law  dated 09th February, 2007 published in the Kerala Gazette 
Extraordinary No. 255 dated 09th February, 2007.
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(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 1[rupees two lakh] whichever 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: —
1. Substituted by Act 20 of 2019 (w.e.f. 05.03.2019).
8
(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.
6. 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.
7.  Application for debt relief .—A farmer claiming any debt relief under
this Act shall file an application before the Commission in the manner and in
the form, as may be prescribed.
8. 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  or  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 whichever is less.
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9.  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 farmer
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.
10. 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.
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11.  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.
12.  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.
13. 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.
14. 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.
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15.  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.
16.  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.
17.  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.
18. 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).
19. 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.
20.  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.
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21. Power to make rules. —(1) The Government may, by notification in
the Gazette, make rules for the purpose of carrying into 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.

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