Ravinder Jalali
Recent SC judgement on the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (also known as the SARFAESI Act) is landmark decision not only in terms its legal implication related to the recovery of loan amount from defaulters but from the point of view of State’s position with rest of India with reference to the so called mainstream political parties and the separatists who, time and again raise the issue that has a bad odour of separatism or who challenge the total integration of the State with the rest of India on the basis of Article 370 which has become redundant and obsolete by now.
“J&K has not an iota of sovereignty outside the Indian Constitution and its own”, observed the Supreme Court while dealing with the SARFAESI Act 2002. The Supreme Court said that its own Constitution (State Constitution) is subordinate to the Constitution of India,” It is therefore wholly incorrect to describe it as being sovereign in the sense of its residents constituting a separate and distinct class in themselves. The Supreme Court observed and reminded High Court of J and K that the residents of State are first and foremost citizens of India. The Apex Court said this while holding that provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 are within the competence of Parliament and can be enforced in J and K. The Bench set aside the verdict of J and K High Court that had held that any law made by Parliament, which affects the laws made by State Legislature, cannot be extended to J and K. “The High Court judgment begins from the wrong end and therefore reaches the wrong conclusion. It states that in terms of Section 5 of the Constitution of Jammu and Kashmir, the State has absolute sovereign power to legislate in respect of laws touching the rights of its permanent residents qua their immovable properties,” the Supreme Court said. It further said, “We may also add that permanent residents of J and K are citizens of India, and there is no dual citizenship as is contemplated by some other federal Constitutions in other parts of the world”. The Apex Court judgement came on the appeal by State Bank of India against the High Court verdict which had held that the SARFAESI Act would collide with the Transfer of Property Act of Jammu and Kashmir, 1920.
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is an Indian law. It allows banks and other financial institution to auction residential or commercial properties to recover loans and I don’t see any reason why it should not be invoked in the interests of the country and also as a measure of better financial prudence. Only the defaulters and dishonest will cry on the SC judgment while the honest and good paymasters will welcome it. If it is a genuine borrower there is no reason why he will default in the payment of instalments. After all he or she has taken money from the bank and there is no reason why they should not pay, merely on the pretext of non-applicable of SARFAECE Act. Does it mean the defaulter who has taken loan from bank or any financial institution should not pay by taking an undue advantage of loopholes in the legal recovery system. It is necessary to adhere to banks financial discipline in the interests of the bank which ultimately is in the interests of the nation as well as depositor because ultimately it is the public money belonging to depositors which is being lent to those who are in need of money at a little bit of higher rate of interest say about 3 to 4 per cent which becomes the margin for Financial Institutions to sustain and grow as well as pay interest to the depositors for the amount deposited in the bank.
Under this Act, banks or financial institutions have right for enforcement of security interest under section 13 of SARFAESI Act, 2002. If borrower makes any default in repayment of loan or any instalment, without intervention of any Court or Tribunal.
Secured creditor may take possession (including sale, lease, assignment) of secured asset, or takeover management of business of borrower or appoint manager for secured asset.
Now the point here I want to discuss is not the recovery of bank’s dues because there are other ways and means for banks and financial institutions to recover but its relevance vis-à-vis Article 370. There are many selfish politicians and political parties who are misusing the Supreme Cour judgement as a means of separatism and alienation of people of Kashmir from rest of India. I do not understand why only the people of Kashmir as projected by NC and other separatists are feeling alienated while the entire Centre and State Govt. is concentrating and appeasing the people of Kashmir despite their banner of revolt and joining separatists.
Former CM Omar Abdullah is misusing Supreme Court judgement on SARFAECI Act by linking it with much abused Article 370 and blaming the BJP and PDP for erosion of it, which is ridiculous and immature. It shows how ill informed is Omar Abdullah and is ignorant of the facts. The fact of the matter is that it is National Conference and Congress who have ruled the State as well as Centre for major portion, post independence and how BJP and PDP could erode within a period of less than two years in power. Omar Abdullah must remember that it was in 1975 when the Article was completely eroded rather stripped off when his grandfather and founder of NC Sheikh Mohd. Abdullah accepted the Chief Ministership of J and K on the strength of Congress MLAs. All his promise of protection of Article 370 proved wrong. The fact of the matter is that this Article 370 has been wriggled and misused so much that it has dried and no juice is left inside it and by squeezing it further it does not yield any results now. People have understood that how it has been misused and abused just for the lust of power by these power hungry politicians. Separatists as well as pseudo nationals and so called mainstream parties including PDP and NC have used this as a sacrosanct and talking and debating Article 370 has become an act of blasphemy.
Among the causes of Kashmir problem Article 370 has played no less a part in preventing J and K from becoming an integral part of the Indian Union. Article 370 was a temporary provision and has been the biggest impediment to integration of J and K State into Indian Union and should go as early as possible. Article 370, included in the Constitution on a temporary provision should have been gradually abrogated. This has not happened in sixty nine years. In fact whenever someone mentions this, vested interests raise an outcry that legitimate rights of Kashmiris are being trampled upon.