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| SC issues notice as union Govt challenges SARFAESI Act | | | Early Times Report
Srinagar, Feb 20: The Supreme of India has issued a notice to respondents on a petition filed by union of India challenging the high court's judgment that Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act can't be extended to Jammu and Kashmir.
The notice was issued by a division bench of apex court comprising Justices Kurian Joseph and Rohinton Fali Nariman after condoned the delay in filing the SLP by the union of India.
The Supreme Court also directed the registry to tag the SLP with a similar petition filed by the state bank of India last year. The state government has already put on notice in the case by SBI. In a landmark judgment on 16 July 2015, the state high court said that the SARFAESI Act cannot be extended to state.
Disposing of a bunch of petitions challenging issuance of notice to them by various banks, a division bench of the court held that 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 monies which are due to them and which have 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 division bench had said.
The division 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 had said.
The banks, the division bench had 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 had 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. |
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