Banks start issuing notices invoking Act; business community aghast; FM says only state subject can buy mortgaged assets
In contravention to its earlier statements, the Jammu and Kashmir Government has ‘silently’ given its go ahead to implementation of ‘controversial’ SARFAESI Act in the state, as the banks operating here have started issuing notices to the defaulters invoking the said Act.
The ‘surreptitious’ implementation of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act-2002, which allows banks to auction mortgaged properties of defaulters to anyone, has been termed as an “attempt to further weaken Article 370” by the business community and civil society members here.
Sources say that the enforcement of the Act, has come after state government did not file any review petition against the Supreme Court judgment upholding applicability of SARFAESI Act-2002 to Jammu and Kashmir.
However, as per the official sources, without filing a review or framing its “own Act”, the state government “in tacit understanding has given nod to the implementation of SARFAESI Act-2002”.
Following which state’s leading J&K bank- having majority of government shares- has served notices to defaulters invoking SARFAESI Act 2002.
The “clandestine” move of the government has come as shocker to the civil society and business fraternity who fear that “silence of the government over it is a direct attempt to dilute State’s special powers.”
Interestingly, as per officials, the SARFAESI Act enacted in 2002 allows financial institutions to auction properties in case borrowers fail to repay their loans. It was however challenged in the State High Court earlier on the grounds that the Parliament had no powers to make laws on immovable property in J&K owing to state’s special status.
“The Judgment of the Division Bench of High Court of JK was later challenged before the Supreme Court of India by way of an appeal in case titled State Bank of India v. Santosh Gupta. The Supreme Court while hearing the appeal against the aforesaid DB judgment of J&K High Court, set aside the HC judgment in toto on 16.12 2016,” official state adding that this direction paved way for the implementation of the Act, as state failed to or did not file the review petition.
Finance Minister Haseeb Drabu said: “I have reiterated it number of times, that the mortgaged property can be purchased only by State subjects, there is no question of dilution of special status.”
Chairman, Jammu and Kashmir Bank didn’t respond to calls and text messages of this Newspaper.
However, a senior executive of J&K Bank told Greater Kashmir that the bank has issued notices invoking SARFAESI Act, after Supreme Court direction extended the Act to JK.
He, however, claimed that under this Act only state subjects can buy mortgaged property of the defaulter. “There is Rule 8 which mentions that property can be sold to state subjects only under Transfer of property Act,” he said.
However the business community and civil society of Kashmir does not agree with the state government’s argument and say that implementing such an law which will allow the auction of the state subjects property by bank will prove detrimental to JK’s special status guaranteed under Article 370 of Indian constitution.
“The implementation of the Act despite assurances by the government is a direct attempt to dilute special status of JK and harm interests of Kashmir,” said Chairman, KEA, Muhammad Yaseen Khan adding that other financial institutions didn’t victimize people of Kashmir through this Act our very own bank the J&K Bank has opened these gateways by volunteering to file first such case.
“This seems to be trailer of how some hidden forces want to gag Kashmir and encroach upon their legitimate rights and resources. The move seems to be on the behest of the RSS to meet the interests of Nagpur,” he said.