BEFORE

THE DISTRICT COURT

IN THE MATTER OF

SBI

(PLAINTIFARMERS’ FRIEND

(“FF”),)

FARMERS’ FRIEND

(RESPONDENT)

MEMORANDUM ON BEHALF OF THE RESPONDENT COUNSELS

FOR THE RESPONDENT

1
Table of Contents

-INDEX OF AUTHORITIES-............................................................................................................3
-STATEMENT OF JURISDICTION-................................................................................................4
-STATEMENT OF FACTS-................................................................................................................5
-SUMMARY OF ISSUES-..................................................................................................................6
-SUMMARY OF ARGUMENTS-.......................................................................................................7
-ARGUMENTS ADVANCED-............................................................................................................8
-PRAYER-..........................................................................................................................................14

2
 -INDEX OF AUTHORITIES-

SATUTES:

1. THE INDIAN CONTRACT ACT, 1872

BOOKS:

1. DR. AVTAR SINGH, CONTRACT & SPECIFIC RELIEF (EBC, 12TH

EDITION,
2020)

2. ANSON’S LAW OF CONTRACT (OXFORD, 29TH EDITION, 2020)

3. POLLOCK & MULLA. THE INDIAN CONTRACT ACT (LEXIS NEXIS,

16TH EDITION, 2019)

3
 -STATEMENT OF JURISDICTION-

The counsels on behalf of the Respondent humbly submit before the jurisdiction of District
Court, Patna in response to the suit filed by plaintiFarmers’ Friend (“FF”),. The jurisdiction is
of the Civil Courts Act, 1977.
The Respondent humbly submits to the jurisdiction of this Hon’ble Court.

4
 -STATEMENT OF FACTS-

BACKGROUND
1. Pataliputra Peasants Cooperative Society (“Society”) was registered on 15th August,
1948, to mark the commemoration of an independent India true to its agrarian roots.
The Society consisted of farmers from the Gangetic plains in Bihar who were engaged
in cultivation of paddy. The objective was to prioritize farmers’ interests in law and
policy, and make sure that the ‘rice basket’ of the eastern region remain unscathed
during natural calamities.

2. In the monsoon of 2022, Bihar experienced severe floods which led to submergence
of more than 50,000 hectares of land where paddy was being cultivated. The
Department of Agriculture, Bihar, estimated that the natural calamity had caused a
loss in the stock of paddy worth Rs. 25 crores, however the department was working
on finalizing this estimate, and contemplating whether a similar kind of loss had been
occasioned to other cereals grown in the region as well.

3. The state legislature enacted Bihar (Flood Emergency) Act, 2023, where all loans
taken in cultivation of the paddy by the farmers were waived subject to their financial
condition. The relevant waiver rule under Section 6 of the Act is reproduced below:
“…The Act hereby waives all existing primary loan obligations of cultivators for amounts
borrowed exclusively for the production of paddy. The waiver can only be availed by farmers
whose annual income falls below the ‘below poverty line’ threshold set by the state
government. Whether the waiver can be extended to the remaining classes of farmers will be
notified from time to time through regulations promulgated under the Act.”
The Society challenged this provision under a Writ Petition before the Patna High Court on
the ground of arbitrary discrimination between diFarmers’ Friend (“FF”),erent classes of
farmers. As on date, the proceedings are in pendency before the Patna High Court.

4. Pritam Singh, a farmer, and a member of the Society, had taken a loan predominantly
for cultivating paddy, and a minor portion for growing wheat and bajra, from State
Bank of India (“SBI”). He had also signed the petition before the High Court as he
was interested in claiming the waiver for losses suFarmers’ Friend (“FF”),ered in
cultivation of wheat and bajra as well. Mr. Singh happened to be above the BPL
threshold in terms of his annual income. The loan had been secured through a
guarantee provided by Farmers’ Friend (“FARMERS’ FRIEND (“FF”),”), an NGO in
Patna.

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5. . When Mr. Singh suFarmers’ Friend (“FF”),ered huge losses in his crop production
and could not repay the loan, SBI approached FARMERS’ FRIEND (“FF”), for
repayment. But FARMERS’ FRIEND (“FF”), sought a coextensive discharge from
repayment under Section 128 as Mr. Singh had a legitimate expectation of being
discharged from his obligation through operation of law. SBI filed a suit against
FARMERS’ FRIEND (“FF”), before District Court, Patna, claiming specific
performance. FARMERS’ FRIEND (“FF”), contended that till the proceedings before
the High Court were pending, and further notifications are not released pursuant to
Section 6 of the Act, the civil suit brought by SBI must be stayed.

-SUMMARY OF ISSUES-
ISSUE 1: Whether or not FARMERS’ FRIEND (“FF”), is coextensively discharged
from repayment under Section 128 of The Indian Contract Act, 1872?

ISSUE 2: Whether or not FARMERS’ FRIEND (“FF”), will be liable for specific
performance?

6
 -SUMMARY OF ARGUMENTS-
ISSUE 1: WHETHER OR NOT FARMERS’ FRIEND (“FF”), IS
COEXTENSIVELY DISCHARGED FROM REPAYMENT UNDER SECTION
128 OF THE INDIAN CONTRACT ACT, 1872?

Under the current issue that is presented before the Hon’ble court FARMERS’
FRIEND (“FF”), is coextensively discharged from repayment under Section 128 of
The Indian Contract Act, 1872 as it clearly states that “the liability of the surety is co-
extensive with that of the principle debtor, unless it is otherwise provided by the
contract.”

ISSUE 2: WHETHER OR NOT FARMERS’ FRIEND (“FF”), WILL BE

LIABLE FOR SPECIFIC PERFOMANCE ?
Hardship on the defendant: Specific performance may result in hardship on the
defendant, especially if the performance of the contract requires the defendant to do
something that is diFarmers’ Friend (“FF”),icult or expensive.
The act lacks the basic ides of the term “intelligible diFarmers’ Friend
(“FF”),erentia1” means diFarmers’ Friend (“FF”),erence capable of being understood.
The law is required to treat all individuals similarly placed in a similar manner. Since
in light of the land holding of the farmers in the state of Bihar it is correct to say that
even if a farmer does not come under the ambit of BPL he still does not have much
scope of being relatively well to do.
a court may halt a lawsuit's progress if another lawsuit or action is ongoing between
the same parties or concerning the same issue at a court with appropriate jurisdiction.

1
Article 14 of the Indian Constitution.

7
 -ARGUMENTS ADVANCED-

ISSUE 1: WHETHER OR NOT FARMERS’ FRIEND (“FF”), IS

COEXTENSIVELY DISCHARGED FROM REPAYMENT UNDER SECTION
128 OF THE INDIAN CONTRACT ACT, 1872?

It is most humbly submitted before the Hon’ble district court that FARMERS’
FRIEND (“FF”), is coextensively discharged from repayment under Section 128 of
The Indian Contract Act, 1872 as it clearly states that “the liability of the surety is co-
extensive with that of the principle debtor, unless it is otherwise provided by the
contract2.”
1. It should be noted that FARMERS’ FRIEND (“FF”), had a legitimate
expectation of being discharged from its obligation to repay the loan under
Section 6 of the Bihar (Flood Emergency) Act, 2023, which waived all
existing primary loan obligations of cultivators for amounts borrowed
exclusively for the production of paddy.
According to T.S. Swaminathaudayar V. The OFarmers’ Friend (“FF”),icial
Receiver of West Tanjore (1957)3: The Supreme Court held that a legitimate
2
Rajesh Kapoor, Law of Contract and Specific Relief 608 (2022).
3
T.S. Swaminathaudayar V. The OFarmers’ Friend (“FF”),icial Receiver of West Tanjore,
1957 AIR 577, 1957 SCR 775.

8
 expectation must be founded on a representation or promise made by the party
seeking to enforce it. Therefore, Pritam Singh would be discharged from his
loan obligation because of the Bihar (Flood Emergency) Act, 2023.

2. Since the proceedings before the Patna High Court challenging the provision
of the Bihar (Flood Emergency) Act, 2023, are pending, and further
notifications are not released pursuant to Section 6 of the Act, therefore the
civil suit brought by SBI must be stayed until a final decision is reached in the
High Court. It should be noted that SBI's act of demanding repayment is
inconsistent with FARMERS’ FRIEND (“FF”),'s rights and should be
discharged from its obligation to repay the loan.

3. Following Sections of Civil Procedure Code, 1908 are to be noted-

Section 10 - Stay of suit: “No Court shall proceed with the trial of any suit in
which the matter in issue is also directly and substantially in issue in a
previously instituted suit between the same parties, or between parties under
whom they or any of them claim litigating under the same title where such suit
is pending in the same or any other Court in 1[India] having jurisdiction to
grant the relief claimed, or in any Court beyond the limits of 1[India]
established or continued by 2[the Central Government] 3[***] and having like
jurisdiction, or before 4[the Supreme Court]4.”

This section allows a court to stay the proceedings of a suit if there is another
suit or proceeding pending between the same parties or with respect to the
same matter in a court having jurisdiction to decide the same. Therefore, since
the proceedings before the High Court are still pending, and further
notifications are not released pursuant to Section 6 of the Act, the civil suit
brought by SBI must be stayed.

4. Section 128 - Discharge from liability:

(1) “Such rules shall be not inconsistent with the provisions in the body of this
Code, but, subject thereto, may provide for any matters relating to the
procedure of Civil Courts.

(2) In particular, and without prejudice to the generality of the powers

conferred by sub-section (1), such rules may provide for all or any of the
following matters, namely :-

(a) the service of summons, notices and other processes by post or in any
other manner either generally or in any specified areas, and the proof of
such service;

(b) the maintenance and custody, while under attachment, of live-stock and

4
LatestLaws.com, https://www.latestlaws.com/bare-acts/central-acts-rules/cpc-section-10-stay-of-suit- ( 9th
may, 2023).

9
other movable property, the fees payable for such maintenance and
custody, the sale of such live-stock and property and the proceeds of such
sale;

(c) procedure in suits by way of counterclaim and the valuation of such

suits for the purposes of jurisdiction;

(d) procedure in garnishee and charging Order either in addition to, or in

substitution for, the attachment and sale of debts;

(e) procedure where the defendant claims to be entitled to contribution or

indemnity over against any person whether a party to the suit or not;

(f) summary procedure-

(i) in suits in which the plaintiFarmers’ Friend (“FF”), seeks only to

recover a debt or liquidated demand in money payable by the defendant,
with or without interest, arising-

on a contract express or implied; or

on an enactment where the sum sought to be recovered is a fixed sum of

money or in the nature of a debt other than a penalty; or

on a guarantee, where the claim against the principal is in respect of a debt

or a liquidated demand only; or

on trust; or

(ii) in suits for the recovery of immovable property, with or without claim
for rent or mesne profits, by a landlord against a tenant whose term has
expired or has been duly determined by notice to quit, or has become liable
to forfeiture for non-payment of rent, or against persons claiming under
such tenant;

(g) procedure by way of originating summons;

(h) consolidation of suits, appeals and other proceedings;

(i) delegation to any Registrar, Prothonotary or Master or other oFarmers’

Friend (“FF”),icial of

the Court of any judicial, quasi-judicial and non-judicial duties; and

10
 (j) all forms, registers, books, entries and accounts which may be
necessary or desirable for the transaction of the business of Civil Courts5.”

This section provides for the discharge of a person from liability in certain
circumstances, such as when the person has a legitimate expectation of being
discharged from the obligation through the operation of law. Here since Mr.
Singh had a legitimate expectation of being discharged from his loan
obligation through the operation of law under Section 6 of the Bihar (Flood
Emergency) Act, 2023, therefore they are entitled to a coextensive discharge
from repayment under this section.

Section 151 - Inherent powers of the Court: “Nothing in this Code shall be
deemed to limit or otherwise aFarmers’ Friend (“FF”),ect the inherent power
of the Court to make such Orders as may be necessary for the ends of justice
or to prevent abuse of the process of the Court6.”

This section grants inherent powers to a court to make orders necessary for the
ends of justice. Therefore, the court has inherent powers to stay the
proceedings of the suit till the outcome of the proceedings before the High
Court, and further notifications under Section 6 of the Act are released.

5. It should be noted that the provision of the Bihar (Flood Emergency) Act,
2023, which only extends the waiver to farmers whose annual income falls
below the 'below poverty line' threshold, is discriminatory and violative of
Article 14 of the Constitution of India, as it arbitrarily discriminates between
diFarmers’ Friend (“FF”),erent classes of farmers. This discrimination also
impacts Mr. Singh's ability to repay the loan.

6. The civil suit brought by SBI must be stayed till the proceedings before the
High Court are concluded, and further notifications under Section 6 of the Act
are released. Also, according to the provisions of Section 128 there should be a
coextensive discharge from repayment of the loan.

ISSUE 2: WHETHER OR NOT FARMERS’ FRIEND (“FF”), WILL BE

LIABLE FOR SPECIFIC PERFOMANCE ?

5
LawRato, https://lawrato.com/indian-kanoon/cpc/section-128 (9th May, 2023).
6
LawRato, https://lawrato.com/indian-kanoon/cpc/section-151 (9th May, 2023).

11
1. Hardship on the defendant: Specific performance may result in hardship on the
defendant, especially if the performance of the contract requires the defendant
to do something that is diFarmers’ Friend (“FF”),icult or expensive. In such
cases, the court may consider whether the hardship caused to the defendant is
disproportionate to the benefit gained by the plaintiFarmers’ Friend (“FF”),.
The impossibility of performance can be either subjective or objective.
Objective impossibility means that the performance of the contract is
impossible for anyone and not just for a particular party. Subjective
impossibility means that the performance of the contract is impossible for a
particular party due to their personal incapacity.

2. The idea of personal incapacity of Mr. Singh can be made out of the fact that
Mr. Singh had signed the petition in High court for the waiver for losses
suFarmers’ Friend (“FF”),ered in cultivation of paddy. Keeping that in mind
Farmers’ Friend (“FARMERS’ FRIEND (“FF”),”), an organisation wouldn’t
be helping farmers take loans by acting as a guarantee to those which can get a
loan on their own meaning, a bank doesn’t have any issue or scepticism about
the repayment of the loan being asked by them. Now some facts about the land
holding of the state of Bihar, The percentage of net irrigated sown area is
62.5%. The total number of land holdings are 104.32 lakhs out of which 86.46
lakh (82.9%) are marginal farmers, 10.06 lakh (9.6%) small farmers and
7.81lakh (7.5%) farmers hold land above 2 hectare. According to these facts it
does not take much time for a reasonable man who does not know Mr. Singh
to figure out that the chances for Mr. Singh to be a marginal farmer is very
high in the state of Bihar, and by reasonable expectation an organisation such
as Farmers’ Friend (“FARMERS’ FRIEND (“FF”),”), would be helping by
being a guarantee to marginal farmers for the major portion of its operation.

3. According to the authors, who use data from the NABARD’s All India Rural
Financial Inclusion Survey 2016-17 (NAFIS), incomes per hectare in kerala
Bihar and Punjab were Rs 34,910, Rs 4,236 and Rs 3,448, respectively.
However, the average monthly incomes per household in Kerala, Bihar and
Punjab were Rs 6,284, Rs 1,652 and Rs 12,481, respectively.
Look at the numbers of Bihar and the counsel states that it cannot be even
remotely reasonable for SBI to ask for specific performance of the contract
with the arguments presented earlier.

4. In contract law, the theory of reasonable expectation is a well-established idea.

In certain situations, the parties to a contract could have a reasonable
expectation of a specific result that is not covered by the contract's express
provisions. In such circumstances, the court may consider the reasonable
expectations of the parties while determining whether to impose particular
performance.

12
 The Supreme Court determined that a genuine expectation must be based on a
representation or promise made by the party seeking to enforce it, according to
T.S. Swaminathaudayar V. The OFarmers’ Friend (“FF”),icial Receiver of
West Tanjore (1957). As a result, Pritam Singh would no longer be responsible
for paying back his loan according to the Bihar (Flood Emergency) Act of
2023.
P. V. Somasundaram v. T. V. Chandra Sekaran7 In this case, the respondent had
agreed to sell certain property to the appellant. The contract provided for the
delivery of possession of the property within a specified time frame. However,
the respondent was unable to deliver possession of the property within the
agreed time frame due to certain legal impediments. The appellant sued for
specific performance.

Since this suit shall conclude with an interim stay order for as long as the
learned court considers it to be, a lawsuit should only be considered to begin
with if it has any merit. The Supreme Court determined that a genuine
expectation must be based on a representation or promise made by the party
seeking to enforce it, according to T.S. Swaminathaudayar V. The OFarmers’
Friend (“FF”),icial Receiver of West Tanjore (1957). As a result, Pritam Singh
would no longer be responsible for paying back his loan according to the
Bihar (Flood Emergency) Act of 2023 created or continued before 4[the
Supreme Court] by 2[the Central Government] 3[***] and having similar
jurisdiction.

If there is another lawsuit or proceeding ongoing between the parties, the court
may do so under this clause. According to this clause, a court may halt a
lawsuit's progress if another lawsuit or action is ongoing between the same
parties or concerning the same issue at a court with appropriate jurisdiction.
Therefore, the civil lawsuit filed by SBI must be delayed because the High
Court proceedings are still ongoing and no additional notifications have been
made in accordance with Section 6 of the Act.
6. Furthermore the act, The state legislature enacted Bihar (Flood Emergency) Act,
2023, where all loans taken in cultivation of the paddy by the farmers were waived
subject to their financial condition. The relevant waiver rule under Section 6 of the
Act is reproduced below:
5. “…The Act hereby waives all existing primary loan obligations of cultivators
for amounts borrowed exclusively for the production of paddy. The waiver can
only be availed by farmers whose annual income falls below the ‘below
poverty line’ threshold set by the state government. Whether the waiver can be
extended to the remaining classes of farmers will be notified from time to time
through regulations promulgated under the Act.”
Lacks the basic ides of the term “intelligible diFarmers’ Friend
(“FF”),erentia8” means diFarmers’ Friend (“FF”),erence capable of being understood.
7
AIR 1984 261
8
Article 14 of the Indian Constitution.

13
 The law is required to treat all individuals similarly placed in a similar manner.
Council of Civil Service Unions and Others v. Minister for the Civil Service.9 Since in
light of the land holding of the farmers in the state of Bihar it is correct to say that
even if a farmer does not come under the ambit of BPL he still does not have much
scope of being relatively well to do.

-PRAYER-

For the above-mentioned reasons, the RESPONDENT respectfully requests that this
Court DECLARE:

That, FARMERS’ FRIEND (“FF”), is coextensively discharged from his liability of

repayment under sec 128 of Indian Contract Act, 1870.

That, FARMERS’ FRIEND (“FF”), isn’t liable for any specific performance.

And provide any other order and/or declaration that the learned court may deem fit in
light of justice, equity and good conscience. And pass the aforementioned orders or
direction in favor of the RESPONDENT which the court deems fit and appropriate.
For this act of kindness, the RESPONDENT will always remain obliged.

Date: 09/05/2023
Place: District Court, Patna Counsel on behalf of the RESPONDENT.

9
[1985] AC 374

14