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Court cannot enter into realm of policy decision of Govt: DB


Islamic Banking in J&K; PIL closed


JAMMU: In a Public Interest Litigation (PIL) seeking the introduction of Islamic Banking in Jammu and Kashmir, A Division Bench of J&K High court, comprising Chief Justice Pankaj Mithal and Justice Javed Iqbal Wani, held that the Court cannot enter into the realm of policy decision of the Government.
The PIL, filed by an NGO J&K Peoples Forum in 2018, had sought directions upon the Union Finance Ministry for issuing necessary notification for the introduction of Sharia compliant windows (Islamic banking) as recommended by Deepak Mohanty Committee as well as in the light of a report of the inter-departmental group of RBI.
The Forum had also sought direction to RBI for taking immediate steps in the constituent banks including the J&K Bank so as to facilitate Shariah compliant windows. The Forum wants J&K Bank Limited to place before the court entire details of Non Performing Accounts (NPAs) and the steps taken for recovery of the outstanding amount in NPAs, saying the same is public money which cannot be allowed to be misappropriated either by the account holders or by the management of the bank. The Forum also seeks direction to J&K Bank to take immediate steps for opening of Shariah compliant windows to accomplish the object of mass level participation in Shariah Banking. “Chairman J&K Bank, after his take over, publically made announcements one after the other setting agenda for the bank to introduce Islamic Banking,” said the Forum. The Forum said since the respondents have failed to adhere to the reports of their own committees and expert groups in materialising the recommendations for creation of Shariah Compliant windows, it was left with no other option but to seek intervention of the court. The petitioner submits that “majority of the citizens in Jammu and Kashmir are Muslims by faith and thus have a constitutional right to enjoy all avenues of development provided the same do not contravene the article of their faith”. The petitioner has cited the Holy Quran as well as commandments of Prophet Muhammad (SAW) prohibiting interest. “It is of common knowledge that receiving and giving of interest (Riba in Quranic parlance) besides being prohibited for Muslims is widely disliked by other faiths as well,” the Forum said. “In Hinduism it is said that Brahmana and a Kshatriya shall not lend anything at interest.” The Forum submits that even the United Nations has acknowledged the role of Zakat in supporting the Sustainable Development Goals (SDG). “The United Nations Organization set up an Millennium Development Goals in 2000 and laid down the new Sustainable Development Goals (SDG) blueprint and the successor to the Millennium Development Goals (MDGs) expiring at the end of the year 2015- are composed of 17 goals and 169 targets. The said programme was renewed for another 15 years in 2015. Among other goals to achieve the sustainable development, United Nations Development programme has identified that Zakat as main factor for achieving the goal”, reads the PIL. On March 19, 2018, the High Court had asked Union Finance Ministry, Reserve Bank of India, Jammu and Kashmir Government and Jammu and Kashmir Bank to respond to the PIL.
The DB, after hearing both the sides observed that 4. A counter affidavit has been filed on behalf of the Reserve Bank of India and it has been stated that in the year 2013, Ministry of Finance, Government of India had requested the Reserve Bank of India to give its opinion on introduction of Islamic Banking in India. An inter-departmental group was constituted under the Chairmanship and one Rajesh Verma to examine the feasibility of introducing Islamic Banking in India. The said committee vide its report declined to introduce Islamic Banking, however, the Government appointed another committee headed by Deepak Mohanty in the year 2015 to look into the above aspect. The said committee vide its report submitted to the Reserve Bank of India on December 28, 2015 made certain recommendations permitting interest free banking in certain respects but the said report was not accepted by the Government. The Government vide its letter dated March 21, 2017 specifically conveyed its decision that Islamic Banking is not feasible and Shariah Banking Window cannot be opened. The said communication of the Government, is on record as Annexure-I, to the counter affidavit of the Reserve Bank of India.
While closing the Public Interest Litigation, the DB further observed that the above decision of the Government is a policy decision which is beyond the purview of judicial review more particularly in a public interest petition. DB holds that the Court cannot enter into the realm of policy decision of the Government. In case petitioner or any person is aggrieved by the above policy decision it may take appropriate steps to challenge it before the proper forum, if advised and disposed of the PIL.

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