J and K Bank vs Mohd Sultan Dar

Permod Kohli, J.—This revision is directed against the order dated 4th April 2002, passed by the executing court (District Judge, Budgam)

in execution proceedings initiated against the respondent herein. The order impugned in the petition reads as under:

I have heard the learned counsel for the parties and gone through the file. The suit in hand squarely falls within the ambit of Debt Relief Scheme.

Accordingly all the applications are dismissed in terms of the said scheme alongwith the execution petition. Let all the applications be consigned to

records and the file received from the record room be sent back forthwith.

Learned counsel for the petitioner submits that the order impugned is illegal and without jurisdiction, in as much as the court below has failed to

exercise the jurisdiction vested in it under law and otherwise also, the jurisdiction has been Exercised illegally and with material irregularity. The

case of the respondent is not covered by the Debt Relief Scheme for the borrowers in the State of J&K. He has referred to the copy of the

scheme as circulated by the Government of India, Ministry of Finance vide its communication dated 26.5.1997. The relevant portion of the scheme

is reproduced as under:

(a) The Scheme shall be called ""Debt Relief Scheme for the borrowers in the State of Jammu and Kashmir.

(b) It shall come into force with immediate effect.

(c)

(d) It shall apply to all eligible loans granted to borrowers in the State of Jammu and Kashmir only by banks/financial institutions as defined

hereunder.

In this scheme, unless the context otherwise Requires:

(a) ""Borrowers"" means an individual, proprietary concern, partnership firm, Hindu Undivided family or any other legal entity identified by the State

Government of Jammu and Kashmir for providing relief/rehabilitation assistance from a bank/financial institution and/or such borrowers of the

banks/financial institutions.

(b) ""Bank"" means a commercial bank, Regional Rural Bank, State Co-operative Bank, Central Co-operative Bank, Primary Co-operative

Society, State Land Development Bank, Primary Land Development Bank or Urban Co-operative Bank, or a financial institution, Khadi & Village

Industries Commission (KVIC) and Khadi & Village Industries Board (KVIB).

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(c) Effective Date"" means 30th June, 1996 which shall cover all eligible loans disbursed up to and outstanding as on 30th June '96.

(d) ""Eligible loans"" means:

(i) Fresh loans/credit limits up to and inclusive of Rs. 50,000 as principal granted by banks/financial institutions and disbursed up to and outstanding

as on the effective date i.e. 30th June '96 to the borrowers in the State of Jammu and Kashmir for the purpose of their business activity for

example tourism, transport, small scale industry, trade sector, hotel, house boat business, retail trade etc.

(ii) Short term loans/credit limits which were converted into term loans up to and inclusive of Rs. 50,000 granted to the borrowers in the State of

Jammu and Kashmir as the short term loans/credit limits become irregular as a result of loss of stocks/assets due to militancy in the State.

(iii) Eligible loans mentioned at (i) and (ii) above should be outstanding in books of accounts of banks/financial institutions as on the effective date

i.e. 30th June, 1996.

(iv) In other words the accounts which already stand closed on or before 30th June, 1996 would not qualify for any relief under the Scheme.

(v) A borrower will be eligible for relief under the Scheme only if the aggregate of the eligible loans mentioned at 2(d)(i) and 2(d)(ii) from all

banks/financial institutions (even if availed by same borrower from more than one bank/financial institution) is Rs. 50,000 or less.

(vi) Cases where the amount due under an eligible loan has already been repaid and the accounts stand closed on or before 30th June, 1996 or

cases where a compromise has been arrived at between the bank/financial institution and the borrower or cases in respect of which consent

decrees have been passed in a court of law or before the effective date shall not be reopened.

(vii) ............

(viii) Eligible loans shall also include credit facilities granted under Differential Rate of Interest (DRI) Scheme to the borrowers.

(ix) ..............

3.(a) The lending bank/financial institution shall write off the eligible loans together with the outstanding interest, other expenses, if any charged at

the rate (s) applicable to such loans as per the Reserve Bank of India guidelines issued from time to time or the interest rate (s) charged by the

concerned financial institution, as the case may be, till 30th June, 1996. This amount of write off will be reimbursed to the concerned

banks/financial institutions by the Department of Jammu and Kashmir Affairs. Government of India on recommendation of the Committee to be set

up at the State level.

(b) The outstanding interest, other expenses, if any charged/debited in such borrower accounts beyond 30th June, 1996 till date of actual

liquidation of the account shall also be written off by the lending bank/financial institution which, however, will not be reimbursed by the

Government of India under the Scheme.

(c) After providing the relief as mentioned at 3(a) and 3(b) above, in eligible loan accounts, the recovery proceedings, if any initiated earlier against

such borrowers may be withdrawn/dropped by lending bank/financial institution.

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Learned counsel for the petitioner submits that the nature of business activities as indicated in the scheme alone are entitled for the relief and the

respondent who had taken loan for business of Hob cultivation is not entitled to the benefit under the scheme.

I have examined the scheme.

From the perusal of the aforesaid Scheme, it is apparent that the respondent herein fall within the definition of ""borrower"" as defined under the

scheme. The loan in question in respect to which the impugned order has been passed is also included within the definition of eligible loans as

defined under para 2(d) of the Scheme. The contention of the petitioner that only loans relating to tourism, transport, small scale industries, trade

sector, hotel, house boat business and retail trade etc. are covered under the scheme and since the loan in question is for the Hob cultivation, same

is not included as eligible loan under the scheme.

A perusal of para d(1)(ii) would reveal that the eligible loans for grant of benefit under the scheme are loans and credit limits for the purpose of

business activity in general. The activities indicated in para (d) are only by way of example. Said activities are only illustrative and not exhaustive.

Therefore, the loan advanced to the respondent for Hobs cultivation cannot be said to be outside the purview of the scheme.

Mr. Javid Iqbal has referred to a judgment of this court reported in 2001 SLJ 41. This court was examining the Debt Relief Scheme of 1996

and considering the said scheme, this court was of the view that the decrees passed by a competent court cannot be said to be wiped out because

of operation of the scheme.

As far as present scheme is concerned, para 3(c) is very clear. In view of this paragraph, all recovery proceedings against borrowers who are

eligible under the scheme are to be withdrawn. This obviously means that if the bank fails to withdraw the recovery proceedings, the court can,

taking into consideration the object and purport of the scheme and order dropping of proceedings. It is not disputed by the petitioner that the loans

subject matter of present revision was prior to the dated 30.6.1996. Therefore, I am of the considered opinion that the respondents are entitled to

the benefit of the Debt Relief Scheme as circulated vide letter No. F.11 (08)/96-CP dated 26.5.1997. There is thus no infirmity in the order

impugned. The revision petition is accordingly dismissed.