The Supreme Court on Tuesday upheld an order of the Tamil Nadu government that waived loans of small and marginal farmers, Bar and Bench reported.

In May 2016, the Tamil Nadu government had granted loan waivers to farmers with landholdings less than five acres.

A year later, the decision was challenged before the Madras High Court by a farmers’ body, National South Indian River Interlinking Agriculturist Association. The High Court had set aside the government’s decision and asked it to waive all farmers’ loans since the state was affected by drought at that time.

On Tuesday, a bench of Justices DY Chandrachud and AS Bopanna was hearing the Tamil Nadu government’s appeal against the High Court order.

“The scheme propounded by the state of Tamil Nadu passes muster against the constitutional challenge,” the Supreme Court said, according to the Hindustan Times. “The High Court has erred in holding otherwise.”

The Madras High Court, in 2017, had said that loan waivers for small and marginal farmers violated Article 14 of the Constitution, which guarantees the right to equality, Bar and Bench reported.

It had also said that the Tamil Nadu government had been unable to prove that the small and marginal farmers constituted a class that was affected more than the big farmers by the drought.

The Supreme Court on Tuesday said that Article 14 forbids class legislation and allows reasonable classification.

“It is now a settled position that classification per se is not discriminatory and violative of Article 14,” the court said.

The two-judge bench also said that the purpose of waiving agricultural loans was to help farmers who had suffered losses due to weather, generated low produce, and were affected by the fall in prices due to market conditions.

Thus, the court said, Tamil Nadu’s government classification of small and marginal farmers as the “more affected class” was rational.

An affidavit by the state government, accessed by the Hindustan Times, claims that 16,94,145 small and marginal farmers will be benefited when loans worth Rs 5,780 crore are waived.