LexJAMMU RURAL BANK versus MOHD. DIN AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2008] 12 S.C.R. 1035
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JAMMU RURAL BANK
A
v.
MOHD. DIN AND ORS.
(Civil Appeal Nos. 4817-4851 of 2002)
AUGUST 29, 2008
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8,
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[P. SATHASIVAM AND AFTAB ALAM, JJ.]
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Bank/Banking - Loan waiver scheme - Indebtedness
and inability of Respondent-borrowers in the State of Jammu
and Kashmir to repay loan amount due to continuous militant c
activities in the State - Amounts borrowed less than Rs.
10, 0001- - Debt Relief Scheme floated by Government for
borrowers in the State - Scheme provided for waiver of bank
Joans upto Rs.50,0001- - Liberal interpretation of the scheme
by Courts below and consequent dismissal of suits filed by D
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Appellant-banks against Respondent-borrowers - Justification
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of -
Held: Justified, considering the peculiar facts and
circumstances of the case and in light of the vari0us clauses
in the Scheme itself and also in view of the fact that sub-
clause (a) of Section 3 of the scheme provided for E
reimbursement of waived Joan to the concerned banks.
Respondents belong to the State of Jammu &
Kashmir~ They obtained loans upto Rs.10,000/- from
Appellant-Banks for rearing of sheep and buffaloes and
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for establishing dairy units. The loans remained unpaid F
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on which, the Appellant-baR=ks filed suits against the
Respondents. During pendency of the s_aid suits, the
Government framed a Debt Relief Scheme for bo.rrowers
in the State of Jammu & Kashmir to give them r~lief
considering the continued militancy and other difficulties G
in the State during the relevanttime. The scheme provi~ed
for waiver of bank loans taken by borrowers in the State
upto Rs.50,000/- for purpose of their business activities.
Taking suo motu notice of the said Scheme, the
1035
H
1036
SUPREME COURT REPORTS
[2008) 12 S.C.R.
A Courts below held that the loans obtained by
Respondents could be presumed to be for trade purpose
and after applying the said scheme, dismissed the suits
filed by Respondents.
The questions which arose for consideration in the
B present appeals were as to i) whether the loan obtained
by Respondents for purchasing sheep and buffalos and
for establishing dairy units was covered by the said
Scheme and ii) whether, in absence of a specific plea by
the Respondents, the High Court was justified in granting
C relief in terms of the said Scheme.
Dismissing the appeal, the Court
HELb:1.1. The Debt Relief Scheme in question
applies to borrowers in the State of Jammu & Kashmir
D who borrowed loan amount for the purpose of their
business activities. Business activities have not been
specifically defined in the scheme. Sub-clause (i) of clause
2(d) of the Scheme refers certain examples viz., tourism,
transport, small scale industry, trade sector, hotel, house-
E boat business, retail trade, etc .. Though purchase of
buffalos and sheep relates to agriculture and allied
activities, it cannot be denied that from the buffalos, the
borrower can establish a dairy unit and earn from the
said business. In view of clause 2(d)(i), the word "etc." in
F
the definition of "eligible loans" connotes that besides
the activities cited as example for business activity there
are other business activities which could be included
under the Scheme. The s~id liberal interpretation cannot
l:>e ruled out particularly, when the Debt Relief Scheme
G was introduced mainly as a relief to the borrowers in the
militant dominated State during the relevant time.
Following the very reason for introduction of the said
.Scheme i.e. to offer financial help to the poor and ir.debted
borrowers of militancy hit Jammu & Kashmir, the Courts
H below rightly concluded that the agricultural and allied
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JAMMU RURAL BANK v. MOHD. DIN AND ORS.
1037
business activities viz., the types of trade/business which A
are substantially or partially depending on agriculture and/
or agricultural produce as a business activity under the
said Scheme. Further, the Reserve Bank of India
Guidelines cannot be strictly followed as it has not been
mentioned to be followed in the Scheme and, therefore,
8 ,
the term 'business activity' cannot be interpreted under
the strict rule of interpretation. [Paras 9, 10, 13] [1045,C-
D; 1045,E-G; 1047,D-E]
1.2. Besides, sub-clause (a) of Section 3 of the
Scheme makes it clear that the amount waived off will be c
reimbursed to the concerned Bank/Financial Institution
by the Department of Jammu & Kashmir Affairs,
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