Reacting over the Supreme Court Judgment over the applicability of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) in Jammu and Kashmir, for High Court Justice Hasnain Masoodi Saturday said that the judgment copy of the court amply makes it clear that the Counsel who represented the State Government has conceded that there is no problem in implementing the said Act in the State.“The State Counsel has restricted his arguments and objections to Section 13(4) and Rule 8(5) only. The Para 7 of the judgment copy reveals that the State Counsel has maintained in the court of law that State of Jammu and Kashmir would have no objection to SARFAESI Act applied in the State,” Masoodi told news agency CNS adding that the latest Supreme Court Judgment will have serious implications.Pertinently, the Supreme Court has said that Jammu and Kashmir has "no vestige of sovereignty outside the constitution of India" and rejected the J&K High Court’s view that the J&K Constitution was equal to the Constitution of India.
The court said this while deciding a legal question on whether the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) will be applicable to J&K or the law was outside the legislative competence of Parliament since its provisions would collide with Section 140 of the Transfer of Property Act of J&K.The SC judgment is a blow to the concept of autonomy in Jammu and Kashmir. It has in a way undermined and ended the authority of Judges of Jammu and Kashmir High Court,” Masoodi said. He however added that despite the Supreme Court ruling the banks in Jammu and Kashmir in order to recover debts from defaulters can’t sell the property to the outsiders. “It is very important to know how the State Counsel handled and pleaded the case,” he said.Meanwhile, Kashmir Economic Alliance – an amalgam of traders, hoteliers and transporters, said the introduction of this Act will act harshly against the business fraternity of Kashmir, which according to them were already facing a number of problems.“If the Act is passed in the state, it will pave way for the non-state subjects to take over and own the properties in the state,” Chairman KEA Muhammad Yasin Khan said, adding that “that way it would be a direct infringement of constitutional safeguards guaranteed to the citizens of Jammu and Kashmir.
”Khan said: “The SARFAESI Act is not presently in force in Jammu and Kashmir due to the special status the state enjoys by virtue of Article 370,” he said adding that if the government went ahead with this Act “we will launch strong agitation and come on roads.”Pertinently, Division Bench of the J&K High Court had struck down the applicability of Securitization and Reconstruction of Assets [SARFEASI] Act of 2002 within the territories of the J&K State. In a landmark decision the Hon’ble High Court had ruled that the Union Parliament’s right to legislate on matters pertaining to the State of Jammu and Kashmir was circumscribed by constitutional limitations and procedures.Upholding the supremacy of the State Constitution and the State Laws, the Division Bench has held that Section 13(4) of the SARFAESI Act was not consistent with the State Laws on immovable properties held by State Subjects. It accordingly disposed of a number of writ petitions challenging the Constitutional validity of the SARFAESI Act within the territories of J&K restraining the banks and financial institutions from proceeding against such loan defaulters under the SARFAESI Act, however, allowing the State to proceed against them under other laws in force in the State.The Division Bench had also held that the amendment in the Security Interest Rules 2002 was inconsequential so long as the ultra vires nature of Section 13(4) remained. This was because of supremacy of the provision of the Act over that of the Rules. (CNS)