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| SARFAESI Act cannot be extended to J&K: HC | | | Early Times Report
SRINAGAR, July 16: In a historical judgment, the state high court today said that the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act cannot be extended to state.
Disposing of a bunch of petitions challenging issuance of notice to them by various banks, a high court division bench of Justice M H Attar and A M Magrey held that the union parliament does not have legislative competence to make laws contained in section 13, section 17(A), section 18(B) section 34, 35 and section 36, so far as they relate to the State of J&K. "It is further held that the provisions of the Act can be availed of by the banks, which originate from the State of J&K for securing the money which is due to them and which has been advanced to the borrowers, who are not State subjects and residents of the State of J&K and who are non State subjects/non citizens of the State of J&K and residents of any other State of India excepting the State of J&K," the bench said.
The bench also quashed the notices issued by the banks in terms of section 13 or any other coercive method taken under section 13 of SARFAESI Act.
"The respondents Banks/Institutions are restrained from proceeding further in terms of action initiated on the basis of provisions of Act against the State Subjects/ citizens of State of Jammu and Kashmir," the bench said.
The banks, the division bench said, are at liberty to recover the money due to them from the borrowers by having recourse to the appropriate laws and by approaching the appropriate forums.
"The State of J&K would be at liberty to enact law similar to that of SARFAESI Act for securing the interests of the banks and financial Institutions."
However, the court said the State, in the event of framing such a law, has to ensure that interests of State subjects and citizens of J&K qua their immoveable properties are not affected by transferring the same to non State subjects.
In the 76-page judgment, the bench said that any law made by the Parliament which affects the laws made by State legislature cannot be extended and applied to J&K.
The bench said that the laws made by Maharaja to define the State subjects and the laws made by him in respect of prohibition on alienation of immoveable property in favour of non State subjects have been protected by the constitutional laws including Section 76 of Act of 1939 AD and other statutory laws including that of section 140 of the Transfer of Property Act, 1882. The J&K State, the bench said, is not only unique in view of having its own Constitution but has other special features.
"Article 35(A) of the Constitution of India, which has been applied to the State of J&K clarifies the already existing constitutional and legal position and does not extend something new to state of J&K," the bench said, observing that Article 35-A was only a clarificatory provision to clear the issue of constitutional position obtaining in rest of country in contrast to J&K.
"This provision clears the constitutional relationship between people of rest of country with people of J&K. It is in essence an information to the citizens of rest of country that on constitutional and legal plank they in all respects do not constitute a class with citizens of J&K," the court said and held that the J&K citizens have their own constitution, and their sovereign character which cannot be challenged, altered or abridged.
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