Assembly Amends Recovery Act

The Assembly on Tuesday amended section 14 of the Odisha Public Demand Recovery Act, 1962 to provide relief to weaker sections of the society, unemployed educated youth and members of self help groups (SHGs) from paying penal interest on loan availed under Government sponsored schemes.

Published: 04th December 2013 09:09 AM  |   Last Updated: 04th December 2013 09:09 AM   |  A+A-

The Assembly on Tuesday amended section 14 of the Odisha Public Demand Recovery Act, 1962 to provide relief to weaker sections of the society, unemployed educated youth and members of self help groups (SHGs) from paying penal interest on loan availed under Government sponsored schemes.

As per the amended law, a debtor belonging to Scheduled Caste, Scheduled Tribe, socially and educationally backward classes (SEBC), unemployed educated youth and any member SHGs who is facing certificate cases for recovery of loan taken from commercial banks under Government sponsored schemes will pay interest at the rate as specified in the agreement executed while availing loan.

Under the existing law, loanees who have defaulted in repayment and facing certificate cases for recovery of loan are required to pay 12.5 per cent interest per annum from the date of signing the certificate till the date of realisation. In certain cases, penal interest upto 15 per cent is charged during recovery of public demands when the certificate officer is satisfied that the debtor is a wilful defaulter, Revenue and Disaster Management Minister SN Patro said while moving the Odisha Public Demands Recovery (Amendment) Bill, 2013. However, members crossing across party lines demanded that the rate of interest be fixed at 10 per cent and the relief should be extended to general category people as well.Chakradhar Paik of Congress said the amended Act will not stand in the court of law as the benefit is extended to certain categories of people. Similar amendment made by Rajasthan Government was struck down by the Rajasthan High Court, he said. Ruling party member and former minister Prafulla Samal urged the Minister to make suitable amendment to write off the interest if the Government wants to provide relief to defaulters as they belong to weaker sections of the society.

Stating that neighbouring States like West Bengal and Chhattisgarh are charging only 6.5 per cent during public demand recovery, Congress chief whip Prasad Harichandan suggested the Government to bring down the penal interest to that level through subvention.

Demanding the interest rate be fixed at 10 per cent, Ananta Das of the ruling BJD said that there is no mention of SHG in the original Act. This may create problem as many people will claim to be member of SHGs.

Responding to the members who participated on the Bill, the Minister said that the decision to charge interest as mentioned in the agreement with the banks was taken after consultation with the Centre, Reserve Bank of India and bankers.

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