Applicability to agricultural loans
For agricultural lending, the law relating to insolvency as given in the Provincial
Insolvency Act, will be applicable. The important provisions of the said Act areas under:
-U/S 3 of the Act, the District Court has jurisdiction under the Act. However, a State
Govt. by notification, can invest powers to the Courts, subordinate to district court.
-U/S 6 of the Act, it provides for the actions and omissions, which can be treated as a committal of insolvency by the person.
Unlike industry, agriculture has no easy recourse to bankruptcy laws in our country.
Consequently, farmers with substantial exposure in agriculture facing serious crop income failure, are severely vulnerable, often quitting the profession, or taking the extreme step, of committing suicide. In order to save the farmer from such hopelessness and facilitate a turnaround, the Working Group recommends an examination of the bankruptcy law with a view to introducing suitable amendments, to provide succour to the farmers, in extreme situations.
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