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Farmers at the centre of political debate once again: Looking at farm bills from competition lens

Prof (Dr) Vijay Kumar Singh

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It is surprising for many that ‘Kisan’ (the Farmer) is at the center of political debate and legislative action but for an election season. Generally, farmers in India are at the center of debate during Lok Sabha elections, as every political party has to make assurances in their manifestos for the farmers. Mostly these promises relate to ‘waiver of debt’ (karz mafi’), easy credit or some financial allowances. No one thinks to empower the farmer as a businessman himself to negotiate and be part of the competitive market regarding his produce. NITI Aayog in it policy paper in March 2017 proposed strategy and action plan for ‘doubling farmers’ income’. The present debate is going around the three legislations (Farm Bills) passed by the Parliament in a stormy monsoon session. While the proposal is awaiting final signatures of the Hon’ble President of India to become law with effect from 5th June 2020 (date on which the Ordinance was brought), let us have a look at the main features of the following legislation from competition perspective.

 • The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 (Freedom of Choice to Sell Farmers’ Produce) 

• The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill 2020 (Framework for farming agreements) 

• Essential Commodities (Amendment) Act, 2020 (decontrolling supply of farm produce) An analysis of the aforesaid three Bills from the competition reforms perspective is a welcome step for the following reasons: 

FREEDOM OF CHOICE

 One of the greatest problems which have been highlighted across the governments in the past years was that of Agricultural Produce Market Committees (APMC) and its higher commission rates and exploitation of poor farmers. As the state APMC laws had restrictions, Competition Commission of India (CCI) had on several occasions said that “APMC laws and the pricing policy needs to be reviewed to remove competitive bottlenecks for the benefit of the farmers”. The new law takes away the exclusive rights of the APMC to trade in agricultural produce in an area. A farmer is free to choose competitive alternative trading channels for price discovery. While a trader would require mandatory PAN card, the farmer producer organizations or agricultural cooperative society are exempted. The freedom extends to the interstate as well as intra-state trade of farmer’s produce. No market fee by any name whatsoever can be charged under any state APMC Laws.

 Timely Payment to Farmer:

 Law requires the farmer to be given a receipt on the same day as an evidence of the trade and payment not later than 3 working days of the trade.

 Electronic Trading and Transaction Platform: Any person other than an individual may establish the ETTP for facilitating inter-State or intra-State trade and commerce of scheduled farmers’ produce in a trade area. This would be greatly helpful to the farmer to sell their produce online. This would be another open market, where competitors of ETTP would ensure advocacy, quality, and efficiency of their platforms. Though a government portal e-NAM exists, regulated privatization in this space would bring healthy competition. This is also forwardlooking keeping in view the focus on dynamically changing agri-economy, ecommerce and agri-exports.

 Price Information and Market Intelligence System (PIMIS): 

It is said that information and data is the ‘new oil’. Information is a double edged sword, while information asymmetry dissuades competition, information sharing sometimes may lead to anticompetitive practices like cartelization. Law enables the Central Government to develop a PIMIS for dissemination of information and would be a great tool at the hands of the farmers to know the demand and supply information for getting best for their farm produce. From competition perspective, the only challenge would be to monitor cartelisation in this space. 

CONTRACT FARMING:

 Fragmented small landholdings is one of the major challenges in India agricultural sector’s growth to which contract farming may be one solution. The second proposed legislation provides for empowerment and protection of farmers while entering into contract farming agreements if they wish to. The agreement would be in relation to the (a) the terms and conditions for supply of such produce, including the time of supply, quality, grade, standards, price and such other matters; and (b) the terms related to supply of farm services. Responsibility of the legal compliance part shall be on the sponsor. Rights of the sharecropper (bataidar) cannot be compromised through this agreement. Minimum period for this agreement would be one crop/livestock cycle and maximum 5 years, unless mutually decided more by the farmer and the sponsor wherein the production cycle of the crop is longer. 

Protection to Farmers: There shall be clarity on prices and would not depend on contingency. Farm produce under contract farming shall be exempted from the applicability of State Acts. Sponsor is prohibited from acquiring ownership rights or making permanent modifications on farmer’s land or premises. Farming agreement may also be linked to the insurance or credit instrument under any scheme of Central/State Government. A registration authority is contemplated to provide facilitative framework for registration of farming agreements. One of the provision clearly mentions that “no action for recovery of any amount due in pursuance of an order passed under this law, shall be initiated against the agricultural land of the farmer.” 

Minimum Support Price (MSP): This has been the most contentious issue in agriculture sector. While competition does not suggest prescribing any pricing, or MSP or subsidy, as this may be considered as market distorting. India being member of WTO has to also comply with the requirements on Agreement on Agriculture. A competitive market provides for price discovery based on demand and supply. Farm Bills does not provide any statutory backing to MSP. Otherwise, MSPs are announced by the government on the recommendations of the the Commission for Agricultural Costs and Prices (CACP) under the Ministry of Food and Agriculture for the enlisted crops (14 kharif, 6 rabi and 2 commercial crops). For sugarcane, Fair and Remunerable Prices (FRP) is declared. This topic requires a separate deliberation. 

Aggregators and Farm Service Providers: Small farmers may take services of “aggregator” who acts as an intermediary between a farmer or a group of farmers and a Sponsor and provides aggregation related services to both farmers and Sponsor as well as that of farm service providers like pesticide control, harvesting services, etc. 

Producer companies have now been proposed to be made part of the Companies Act 2013 under the 2020 Amendment (chapter XXIA-378A-ZU). ‘Producer companies include companies which are engaged in the production, marketing and sale of agricultural produce, and sale of produce from cottage industries.’

 DE-REGULATION:

Regulation of the supply of such foodstuffs, including cereals, pulses, potato, onions, edible oilseeds and oils may now only be done under extraordinary circumstances which may include war, famine, extraordinary price rise and natural calamity of grave nature by notification of the Central Government. An order regulating stock limit (hoarding) of agricultural produce may be issued in the following circumstances: (i) hundred per cent increase in the retail price of horticultural produce; or (ii) fifty per cent increase in the retail price of non-perishable agricultural foodstuffs, over the price prevailing immediately preceding twelve months, or average retail price of last five years, whichever is lower. Public Distribution System (PDS) or the Targeted Public Distribution System orders are exempted from application of this deregulation, which means that procurement for PDS will not be hit by this order. Some concession is also available to a processor or ‘value chain participant’ of agricultural produce. VCP includes a set of participants, from production of any agricultural produce in the field to final consumption, involving processing, packaging, storage, transport and distribution, where at each stage value is added to the product. 

What would need serious attention by the Government? 

State Governments on Board: Agriculture is a State subject (Entry 14); however, the aforesaid legislation are likely framed under the concurrent powers vested with the Central Government (Entry 33) as opening up the whole agricultural produce market would require interstate facilitation, which in turn would need intervention of Central Government. Integrating the agricultural markets as one common market for the whole country offers several opportunities but also challenges which needs to be addressed.

 Advocacy: Prime Minister has said that people are spreading rumors about the farm Bill’s disutility for the farmers. Hence it is necessary to educate the poor and gullible farmers about the benefits of the legislation and how they can avail it.

 Dispute Resolution System: Conciliation Board has been provided as the mechanism of resolution and SDM is made the owner of this process. While this is a welcome step, if Mediation mechanism could have also been included it would have been better. Further the SDMs handling this profile would require special training and an orientation towards service (‘sevak’) and support to farmers. MS Swaminathan National Commission of Farmers in 2006 recommended that “the “net take home income” of farmers should be comparable to those of civil servants”. Farmers need to be treated as equal partners in economic development of this country. Let it not become another license raj bureaucratic system.

 Paralegal Volunteers: The modern day farmer cannot be at the mercy of the traders. Farmers have to take assistance from legal professionals when entering into the legal contract. There is a huge opportunity to create para-legal professionals in each village who can help the farmers with their legal issues of farming contract and other disputes with traders. While the government shall provide for facilitation in terms of guidelines, some support through the existing village community information and service centers.

 Competitiveness of Farmers: It is important to raise the agricultural competitiveness of farmers with small land holdings. However, at the same time, age old sensitivities to subsidies and MSP needs to be taken care of by the government, once the farmer gets hang of the new system, things would improve. Any change meets with some resistance, and this is a huge change rather a transformation of its kind. The visualization of farmers have mostly been dictated in movies and Indian literature as poor down-trodden person being exploited by traders (sahukars); however, the present requirement is that we look at the brighter side, that is ‘mere desh ki dharti sona ugle, ugle hire moti’ (my country’s land produces gold and pearls – lyrics from movie Upkar). If the farmer’s son looks at farming as an entrepreneurship opportunity, a lot can change the way we look at farming and its potential. This will cure several ills like migration, job scarcity and rapid urbanization. Need is to suggest positive changes in the laws and support implementation to the core. 

Dr. Vijay Kumar Singh is Dean, School of Law at UPES Dehradun. Views are personal

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Legally Speaking

SUPREME COURT CRITICISES HIGH COURT: POSTING ANTICIPATORY BAIL PLEA AFTER TWO MONTHS CAN’T BE APPRECIATED

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The Supreme Court in the case Sanjay versus The State (NCT of Delhi) & ANR observed and stated that in the case where personal liberty is involved, the court is expected to pass orders at the earliest while taking into account the merits of the matter in one way or other. Further, the top court observed that posting of an application for anticipatory bail after a couple of months cannot be appreciated by the court.

The bench comprising of Justice C. T. Ravikumar and the Justice Sudhanshu Dhulia was hearing a June 2 SLP against the Delhi High Court in a petition filed under section 420, 467, 468, 471, 120-B, 34 of the Indian Penal Code, 1860 for seeking anticipatory bail in a 2022 FIR, a notice is issued. It was stated that the learned APP for the state is present and accepts the notice and seeks time to file status report. The High Court in the impugned order stated that Let the status report be filed by the state prior to the next date with an advance copy to the learned counsel for the petitioner. The matter is to be list on 31.08.2022.

It was noted by the bench comprising of Justice Ravikumar and the Justice Dhulia that in the captioned Special Leave Petition, the grievance of the petitioner is that the application for anticipatory bail moved by the petitioner, being Crl. M.A. No. 11480 of 2022 in Bail Application No. 1751 of 2022 without granting any interim protection, was posted to 31.08.2022. on 24.05.2022, the bail application was moved on.

However, the bench asserted that the bench is of the considered view that in a matter involving personal liberty, the Court is expected to to pass orders at the earliest while taking into account the merits of the matter in one way or other.

It was declared by the bench that at any rate posting an application for anticipatory bail after a couple of months cannot be appreciated by the court.

Further, the bench requested to the High Court to dispose off the application for anticipatory bail on its own merits and in accordance with law expeditiously, preferably within a period of three weeks after reopening of the Court. Adding to it, the bench stated that if the main application could not be disposed off, for any reason, within the stipulated time, relief sought for in the interlocutory and on and on its own merits, the application shall be considered.

While disposing of the SLP, the bench directed in its order that we grant interim protection from arrest to the petitioner herein, Till such time.

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Legally Speaking

IN THE CIRP OF BOMBAY RAYON FASHIONS LTD, NATIONAL COMPANY APPELLATE TRIBUNAL (NCLT) STAYS THE CONSTITUTION OF COC

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The National Company Appellate Tribunal (NCLT) in the case National Company Appellate Tribunal (NCLT), comprising of the bench of Justice M. Venugopal (Judicial Member) and the technical member, Shri Kanthi Narahari observed while adjudicating an appeal filed in Prashant Agarwal v Vikash Parasprampuria, has stayed in the Corporate Insolvency Resolution Process (CIRP) the constitution of the Committee of Creditors (COC) of Bombay Rayon Fashions Ltd. on 15.06.2022, the order was passed.

FACTS OF THE CASE:

The Operational Creditor or the Respondent, Vikash Parasprampuria is the sole Proprietor of Chiranjilal Yarn Traders and the respondent had supplied goods to a public listed company i.e., Bombay Rayon Fashions Limited (“Corporate Debtor”). The Operational Creditor raised nine invoices which was accepted by the Corporate Debtor without any demur and it was noted that the dispute, protest and part payments were also made towards certain invoices.

The reminder letter was sent by the Operational Creditor when the Corporate Debtor failed to release balance payments letters followed by a Demand Notice under Section 8 of the IBC dated 05.11.2020, which was delivered to the Corporate Debtor but no response was received from the Corporate Debtor.

MUMBAI NCLT PROCEEDINGS

An application under section 9 of the Insolvency & Bankruptcy Code, 2016 was filled by the Operational Creditor before the NCLT Mumbai Bench, seeking to initiation of CIRP against the Corporate Debtor, for defaulting in payment of Rs.1,60,87,838/-, wherein the principal amount was Rs. 97,87,220/- and remaining was interest. 01.11.2020, was the default date.

the Operational Creditor placed reliance so as to justify the compliance of Rs. 1 Crore threshold for initiating CIRP of the NCLT judgement in the case Pavan Enterprises v. Gammon India, it was held in the case that interest is payable to the Operational of Financial Creditor then the debt will include interest, in terms of any agreement. However, by including the interest component the threshold of Rs. 1 Crore was being me and no reply has been filled by the Corporate Debtor.

NCLT DECISION:

An order dated 07.06.2022, the NCLT Mumbai Bench observed that the Corporate Debtor had time and again by its letter, invoices and by making part payment acknowledged its liability.

It was stated by the bench that the application under Section 9 was complete in all respects as required by law and there was a default in the payment of debt amount by the Corporate Debtor. The bench accepted the application and the CIRP was initiated against the Corporate Debtor, Mr. Santanu T Ray, Interim Resolution Professional was appointed.

NCLT PROCEEDINGS:

An application was filled by the appellant, Prashant Agarwal before the NCLT against the order dated 07.06.2022.

The settlement was proposed by the Respondent by submitting that if it would be satisfied if the Appellant pays the principal amount along with the CIRP cost towards settlement and on the settlement proposal, the appellant is yet to seek instructions.

Accordingly, the bench in the CIRP of the Corporate Debtor stayed the constitution of CoC and the CIRP process would otherwise continue.

The Appellant to accept or reject the settlement proposal of the Respondent, the bench listed the matter on 07.07.2022.

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ESTOPPEL CANNOT OVERRIDE LAW: SUPREME COURT ACCEPTS UNSUCCESSFUL CANDIDATES’ CHALLENGES TO SELECTION PROCESS HELD AGAINST REGULATIONS

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The Supreme Court in the case Krishna Rai (Dead) Through LRs versus The Benarus Hindu University & Others observed and held that the principle of estoppel or acquiescence would not be applied in a selection process when the principle of estoppel is held contrary to the relevant rules.

The bench comprising of Justices Dinesh Maheshwari and Justice Vikram Nath observed and reiterated that that the procedure in the relevant service manual will prevail over the principle of estoppel and the principle of estoppel cannot override in the eye of law.

An appeal was considered by bench relating to the filling up of 14 posts in Class III (Junior Clerk) in the Benarus Hindu University by way of promotion. However, the notification inviting the applications from Class IV employees for promotion to Class III had not prescribed that interview will be conducted in addition to the typing test. It was also stated that the The service rules also did not mention interview for promotion to Class III. However, it finalized 14 candidates, the Board of Examiners conducted an interview as well.

Before the Allahabad High Court, some of the candidates challenged the selection process by some candidates, who did not get selected. The candidates alleging that through the manual did not prescribe an interview and the Board of Examiners conducted the interview by “changing the rules of the game”. The Selection process was set aside by the Single bench of the High Court by holding that a grave error was committed by preparing the merit list on the basis of the interview as well.

on appeal by the BHU, the division bench of the High Court set aside the judgement of the Single bench on the ground that the petitioners without protest after having participated in the interview, the petitioners are estopped from challenging the selection process after becoming unsuccessful. The appellants approached the Supreme Court challenging the order of division bench.

The Court noted that the Supreme Court held that the division bench fell in error by applying the principle of estoppel. the Manual duly approved by the Executive Council, According to para 6.4, all Class-IV employees who had put in five years’ service and passed matriculation examination or equivalent, those employees were eligible for the promotion to the post of Junior Clerk Grade.

the departmental written test of simple English, Hindi, and Arithmetic, but could not pass the typing test, was passed by the eligible candidates and still the candidates would be eligible for promotion.

It was observed by the Court that the Board on their own changed the criteria and by introducing an interview it made it purely merit based and the merit list was also prepared on the basis of marks awarded in the type test, the written test and interview.

The Top Court said that it is settled principle that the principle of estoppel cannot override the law and the manual duly approved by the Executive Council will prevail over any such principle of estoppel or acquiescence.

The Court remarked, while referring to the precents that If the law requires something to be done in a particular manner, there can be no estoppel against law, then it must be done in that particular manner, and if it is not done in that particular manner, then in the eye of the law, it would have no existence.

It was stated that the case laws relied upon by the Division bench had no application in the facts of the present case as none of those judgments laid down states that the principle of estoppel would be above in the eye of law.

Accordingly, The judgement of the Single bench was restored and the appeal was allowed, the judgement of the division bench was set aside.

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PRIMARY TEACHER RECRUITMENT SCAM: CALCUTTA HIGH COURT ORDERS REMOVAL OF CHAIRMAN OF WB BOARD OF PRIMARY EDUCATION

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On Monday, the Calcutta High Court removed Trinamool MLA Manik Bhattacharya from the post of Chairman of the Board of Primary Education, in connection with the alleging irregularities in the recruitment of the teachers in the State government-sponsored and aided primary schools.

Earlier, the bench comprising of Justice Abhijit Gangopadhyay observed and ordered that a court-monitored probe by a special investigation team of the CBI into the alleged illegal appointments of at least 269 primary teachers.

It was contended that such a direction was passed on the basis of the recommendation put forward by the CBI additional director Upendranath Biswas.

The additional director Upendranath Biswas headed the probe into the Bihar fodder scam that led to the conviction of that state’s former chief minister Lalu Prasad Yadav.

From 2011 to 2016, A minister in the first Mamata Banerjee government. additional director Upendranath Biswas had named one Chandan Mondal of Bagda, North 24 Parganas for allegedly giving jobs of primary school teachers in lieu of money.

The Court ordered that the Secretary of the Board, Ratna Chakraborty Bagchi, would remain in the charge till the new appointment is made to the Chairman of the Board. Thereafter, it was intstructed to Bhattacharya to appear in person before the court for further investigation.

It was further ordered by Justice Gangopadhyay that the CBI Joint Director N. Venugopal shall head the SIT and supervise the whole investigation as the counsel appearing for the Court about the constitution of the SIT in accordance with his earlier order.

Six SIT members name have been submitted by the CBI, who will be investigating the cases under the supervision of its anti-corruption branch’s superintendent of police, and its joint director.

Appearing for the petitioner, senior counsel Bikash Ranjan Bhattacharya had requested requested CBI counsel Billwadal Bhattacharyya to reconsider the name of K.C. Risinamol for replacing her by some other officer of similar rank, during the course of proceedings.

Accordingly, It was stated that the Counsel for the CBI had averred that he would talk to senior counsel Bikash Ranjan Bhattacharya as well as his client in this regard and apprise the Court about the appropriate decision taken in this regard.

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Legally Speaking

‘PUBLIC EMPLOYMENT CANNOT BE OBTAINED BY PAYING BRIBE’: MADRAS HC REJECTS PETITION OF ACCUSED FOR INTERIM CUSTODY OF RS 10 LAKH SEIZED DURING JOB RACKET CASE PROBE

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The Madras High Court in the case K.Sadagopan v. State Rep.by, Inspector of Police and ors observed and dismissed a petition seeking to provide an interim custody of Rs 10 lakh, which is seized in a job racketing case. The Madras High Court bench comprising of Justice D Bharatha Chakravarthy expressed his displeasure at the way people of how they were willing to pay huge amount of money for getting a job. The bench enunciated those public appointments were made through a selection procedure and it cannot be obtained by paying bribes. The bench further highlighted that such persons does not realise that it took years of work to earn such salaries and gave no though to the plight of persons who scored more marks than them.

The Court in its order stated:

Through all the concerns it is to be understood that the public appointments is only done through selection process and no job can be obtained by giving bribe. But the present case, it is it is seen that the petitioner with his full knowledge has given a huge amount of Rs.78 Lakhs for the purpose of securing job under Class -I and without any thought about that how many years a person has to work and earn that much of salary and the accused without any guilt as to what will happen to the person, who has scored much more marks. However, the court inclined to pass any order expediting the trial and hence, the Court concluded that the petition is liable to be dismissed.

Facts of the Case:

The petitioner was a victim of Job racketing and the police in the course of investigation has seized some amounts and had frozen the accounts of the accused. An application was filled by the petitioner under section 451 and section 457 for a return of Rs. 10 lakh as interim custody of Code of Criminal Procedure, 1973. Therefore, the application was rejected by the Magistrate who held that the investigation was at the nascent stage and that the matter could be decided only during trial. However, the petitioner approached the high court seeking to quash this impugned order and to direct interim custody of Rs. 10 lakhs, the return of money in the account of the accused.

The Court remarked while dismissing the petition that the petitioner appeared to be a greedy person who paid a sum of Rs.78 lakh for getting a Class-I job. Furthermore, the petitioner approached the court for the return of money without even waiting for the trial to be completed as only then a clear finding could be arrived at.

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Plea in Supreme Court to direct Centre to reconsider Agnipath recruitment scheme for Armed forces

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In the case Harsh Ajay Singh v Union of India, a writ petition is filed before the Supreme Court seeking issuance of directions to the Centre to reconsider its “Agnipath” recruitment scheme for armed forces.

The Writ petition is filled by Advocate Harsh Singh, It is stated in the writ petition that the announcement of scheme had caused nation-wide protest in Haryana, Uttarakhand, Telangana, Uttar Pradesh, Bihar, West Bengal and various other states due to the short- term duration of the scheme in the Indian Army for Four years coupled with future uncertainties of the trained “Agniveers”.

It was further contended by Advocate Harsh Singh in his petition that the Agniveers, would not be matured so as to retain self-discipline with the realization to become a better version of himself or herself both professionally as also personally, on completion of the four-year tenure in the prime of their youth.

Against the Scheme backdrop, Advocate Harsh Singh has also sought for implementation of scheme from June 24, 2022.

It was contended in the petition filled that there is a great possibility for the Agniveers trained under the scheme to go stray. The petition filled by Advocate Kumud Lata Das stated that making up the fighting sinews of its armed forces, the nation should never compromise with the army personnel’s. They shouldn’t be looked upon as a burden to the exchequer, but as rough diamonds, to be cut and polished to their maximum capabilities and then deployed in the defence of the nation

The petitioner has also served the petition to the Union, as a result of caveat filed by the Centre.

A plea has already been filled in the Supreme Court challenging the Centre’s “Agnipath” recruitment scheme for armed forces.

It may be noted that another Public Interest Litigation has been filled in the Supreme Court for setting up a Special Investigation Team (SIT) to enquire into the mass violence and the damage to the public properties which include that of railways, during the widespread protests against the Centre’s “Agnipath” recruitment scheme.

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