Post-Facto Payment of Farmers' Dues No Ground to Quash Criminal Prosecution Under K.A.P.M. Act: Karnataka High Court

Justice for Farmers: Karnataka High Court Denies Quashing of Criminal Cases Against APMC Traders

The Karnataka High Court has delivered a stern message regarding the accountability of commission agents in agricultural market yards. Justice M. Nagaprasanna, in a common order, dismissed criminal petitions filed by traders seeking to quash proceedings initiated against them for failure to pay farmers for their produce, emphasizing that delayed payments do not absolve traders of criminal liability under the Karnataka Agricultural Produce Marketing (Regulation & Development) Act, 1966 .

The Crisis of Unpaid Produce

In 2017, commission agents established businesses in the APMC yards of Bengaluru. By late 2018, citing a business downturn purportedly exacerbated by a lockdown, several traders defaulted on payments due to farmers who had supplied onions and ginger. Following complaints from the affected farmers, the APMC issued notices and subsequently filed criminal complaints against the delinquent traders under Sections 75, 78, and 78A of the K.A.P.M. Act for their failure to comply with statutory payment obligations.

The Defense of 'Late Payment'

The petitioners argued that since they had eventually cleared the farmers' dues in May 2020—nearly two years after the sale—the criminal cases should be quashed. Counsel for the traders further suggested that the onset of COVID-19 contributed to the payment delays and that, as the license had already been cancelled and later restored by a coordinate bench, the criminal proceedings were redundant.

The APMC, however, maintained a firm stance: the amounts involved were the lifeblood of the farmers. They argued that the delay caused "grave injustice" and that the trial must proceed to ensure deterrents are in place for such financial negligence in the agricultural sector.

Court’s Legal Analysis: A Shield Against Exploitation

Justice M. Nagaprasanna found no merit in the petitioners' pleas. The court scrutinized the statutory framework, noting that Section 75 and 78 mandatorily require immediate payment upon the sale of produce. The court rejected the attempt to blame the pandemic for delays that originated in 2018.

"The commission agents who would dodge the farmers in not paying the amounts immediately after its sale in terms of the Act cannot be left off the hook, merely because they have made the payment during the pendency of criminal proceedings," the Court observed.

Key Observations

• On the sanctity of farmers' payments: "It is ununderstandable as to how a farmer could survive without payment of close to ₹5 lakhs for over two years."
• On the nature of the offence: "The commission agents who would dodge the farmers in not paying the amounts immediately after its sale in terms of the Act cannot be left of the hook, merely because they have made the payment during the pendency of criminal proceedings."
• On the rejection of the COVID-19 narrative: "The onset of COVID-19 was from March 2020 but the payment was due since 2018. Therefore, the bogey of COVID-19 cannot be accepted."

The Verdict and Its Ripple Effect

The High Court ordered the dismissal of the petitions, allowing the trial in the magistrate’s court to proceed. By clarifying that retroactive payment does not grant immunity from prosecution, the court has set a significant precedent: the legal duties of commission agents to farmers are stringent, and failure to honor them in a timely manner invites criminal consequences that cannot be simply 'bought' away after the fact. This ruling serves as a vital safeguard for the financial security of farmers operating within the state's agricultural market committees.