GH HASSAN SOFI Vs. STATE
LAWS(J&K)-2006-3-37
HIGH COURT OF JAMMU AND KASHMIR
Decided on March 08,2006

Gh Hassan Sofi Appellant
VERSUS
STATE Respondents

JUDGEMENT

- (1.) THE petitioners are in arrears to respondent/Financial Corporation (State Financial Corporation) on account of loan borrowed by them in 1990 for purchase of Tourist vehicles repayment whereof allegedly suffered due to lack of sufficient income, attributable to the disturbed public order prevalent then, and claiming that said corporation was denying issuance of no objection certificate required for renewal of their permits by the concerned RTOs, they have instituted a writ petition being No. 608 of 2005 for certain directions to enable renewal of their route permits after which only they can ply their vehicles and liquidate the due outstanding etc.
(2.) DURING pendency of aforementioned petition, the respondent/State Financial Corporation appears to have decided to seize the mortgaged properties of defaulters besides taking legal action against them. In addition, they have also decided to send teams of officials alongwith drum beaters to residences of defaulters who would beat the drums before their residential and official premises, as reflected in a news item carried by daily "Alsafa" in its issue of 15. 02. 2006, a photocopy whereof has been furnished for record, and aggrieved thereby, the petitioners have, instituted this petition for prohibiting the proposed action of respondent/Corporation. During course of his brief submissions the petitioners counsel has contended that for liquidation of loan in case of petitioners, the Central Government has under a package relief scheme provided necessary funds to State Government, for helping failed loanees, benefit whereof is due to them also and under consideration at the appropriate level and accordingly the action proposed by respondents was not warranted.
(3.) I have heard learned counsel and considered the matter. In so far as the question of taking recourse to legal remedy available for recovery of amounts due from petitioners is concerned, the respondent/Corporation would no doubt be within its rights for doing the same as much as the petitioners would be to project all defenses available to them alongwith whatever benefits the Central or State Government may extend. So, that part of the matter cannot perhaps be considered at this stage when the proposed legal action is yet to be taken, what presently attracts attention is the unusual idea of respondent/Financial Corporation to send drum beating officials to residential and official premises of defaulters albeit as a measure of recovery proceedings. In this behalf it would be appropriate to observe that advancement of loan by financial institutions and recoveries in cases of default are all matters very well covered by different statutes and terms of the loan, so, ordinarily all measures of recoveries should flow therefrom only. Ay method outside their orbit can or be incidental thereto. With specific reference to the matter in hand it would be appropriate to notice that the "State Financial Corporation Act" which governs advancement and recovery of loans contains extremely effective provisions under Sections 30 and 31 thereof including attachment of the properties even before issuance of formal notices at the threshold, for realizing outstanding amounts, which does not leave any room for shrill measures like drum beating to harass the defaulters. It is ridiculous the instead of taking resort to legally provided for and commercially acknowledged modes, or the contractual terms, the mandarins of respondent/Corporation have conceived an extremely cheap and undignified mode of seeking repayment of loans which currently does not look civilized society. There is absolutely no doubt that the respondent/Corporation or for that matter any other financial institution is certainly within its rights to seek repayments of debts but that has to be within the bounds of law and procedure provided therefor. By beating drums on doorsteps of defaulters, they would only be indulging in ugly and unethical road shows unworthy of right thinking and serious minded people that they are supposed to be. Besides that this sort of an extra systemic arrangement may also amount to a tacit expression of no confidence in the system; which in addition of having adverse social implications may even breed similar reactions. What requires to be understood, especially in view of all that this society has gone through in the recent past, and the resultant inertia in commercial activity [that all debtors would certainly not be defaulters by choice which should ordinarily convince money managers that they would be acting more wisely by behaving as welfare functionaries rather than indecent money lenders, even while doing the unpleasant jobs of demanding, which would perhaps help in better discharge of the serious and sacred duty of social and economical uplift of society that they are charged with.;


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