Srinagar, July 2: Jammu and Kashmir High Court On Thursday issued notice to Union and J&K Government Besides JKB, the lead bank in the J&K, on a Public Interest Litigation, challenging charging of interest on loan during the period of moratorium.
The PIL filed by local businessmen Sheikh Feroz Ahmad Sidiq— President, Restaurant and Cafe Association, Kashmir, and Mohammad Muzamil Bacha –President, Industrial Revival and Development Forum, Kashmir) also seeking directions for waiving of interest charged by the banks on the term loans during the period when moratorium was granted by the banks on account of special rehabilitation and revival package for the persons affected by natural calamity-floods in the erstwhile State; rehabilitation package to borrowers hit by the disturbances that occurred in 2016 and 2019.
Issuing the notice, a division bench of Justices Ali Mohammad Magrey and Rajnesh Oswal issued notice to the central Finance and Home Ministry besides the J&K government, the Reserve Bank of India and the J&K Bank Ltd.
“Notice shall be issued to respondent Nos. 1 to 3 (union ministries and RBI) by ordinary as well as virtual mode, returnable by or before the next date of hearing,” the court said and posted the matter on July 20. The notice to J&K government and JKB was waived by senior AAG B A Dar and senior advocate Z A Shah respectively.
The petitioners through senior advocate Jahangir Iqbal Ganai along with advocate Sheikh Umar Farooq pleaded that the relief sought for in the instant petition is for the benefit of the persons who have suffered on account of natural calamity, disturbances of 2016 and 2019 and of the present COVID-19 pandemic. “They are not been in a position to strictly comply with the conditions of the term loan agreements,” the petitioners said.
The sought directions to declare the notification dated 27.03.2020, Circular No.40-619 dated January 3, 2020, circular No.62-528 dated December 15, 2016 and circular bearing No.55-398 dated October 24, 2014, as “ultra vires the Constitution of India to the extent same directs charging of interest of loan amounts during the period of moratorium.”
They have also sought directions to the authorities to waive of the interest component on the loan amounts for the period of moratorium was declared.
“In the petition, it is contended that the same is being filed for the benefit of persons belonging to Jammu and Kashmir and Ladakh, who have availed loan facilities from different banks, but, on account of the prevailing lockdown announced by the Government in view of outbreak of COVID-19 pandemic, are not in a position to pay the due instalments, including the interest charged on the loan amounts,” the court observed.
