State

Opposition bench takes on govt over SARFAESI Act; CM clarifies

Correspondent KOHIMA, FEB 13 (NPN) | Publish Date: 2/13/2020 1:06:23 PM IST

The opposition slammed the State government over the speaker’s rejection of its demand for a discussion on Securitisation and Reconstruction of Financial Assets and Enforcement Interest (SARFAESI) Act, 2002 during the fifth session of 13th Nagaland Legislative Assembly (NLA) on Thursday.

Speaker Sharingain Longkumer informed the House that discussion on SARFAESI Act was not required and asked the members to seek clarification from his chamber, if necessary, while directing Leader of the House (LoH) Neiphiu Rio to give a statement.

Annoyed by the speaker’s decision, opposition legislator Dr. Chotisuh Sazo said it was decided during the Business Advisory Committee (BAC) to discuss Citizenship Amendment Act (CAA) and SARFAESI and thereby listed in the business list. He asked why the treasury bench insisted on denying discussion on the matters of urgent public interest.

Opposition members Imkong L Imchen, Kuzholuzo Nienu and Dr Imtiwapang Aier then asserted that that NLA was a people’s house and wanted to know why it was admitted at the first place, if it had to be rejected. Rio explained that as per rules, it was the speaker’s prerogative either to reject or admit an issue, and backed Longkumer saying he was following the rules.  

However, leader of opposition TR Zeliang countered that a notice admitted for discussion under rule 50 could not be rejected by referring rule 55 as the two rules dealt with two different subject matters under the Rules of Procedure and Conduct of Business in NLA adopted by the Assembly on August 17, 1964.

Amidst heated arguments, the speaker reiterated his offer to the members to seek clarification from his chamber, if required, and asked LoH to make a statement. Rio clarified that the cabinet had examined SARFAESI Act on October 18, 2019 and decided that the Act could be adopted in Nagaland only after it was ensured that transfer of properties attached by banks was made to indigenous inhabitants.

He said being a Central Act, the requisite amendment had to be carried out by the Central government, adding that the State finance department had on November 22, 2019 requested the department of financial services of Government of India to modify the Act by restricting the transfer of properties to indigenous inhabitants of Nagaland, adding the reply was awaited.

The chief minister explained that SARFAESI Act could not be implemented in Nagaland in its present from as it came into direct conflict with land holding systems and restrictions on transfer of land under Article 371(A) like special provisions on transfer of land and its resources, the Nagaland Land & Revenue Regulation (Amendment) Act 1978, Land & Revenue Regulation (Amendment) Act, 2002 etc.

He maintained that law & justice department had on July 19, 2019 in its advice to finance department clearly stated that SARFAESI Act could not be enforced in Nagaland as its provisions were in conflict with all existing protective laws (Article 371A/ BEFR 1873 and the Nagaland Land & Revenue Regulation (Amendment) Act 1978).

Rio said the banks had been requesting for implementation of SARFAESI Act in Nagaland so that they could advance loans to customers against mortgage of immovable property/fixed assets in favour of the banks and, in case of default in repayment by the borrower, the Act would enable banks to confiscate and sell the property without intervention of Courts to realise their money.

He stressed that while interest of the banks must be safeguarded, the government also could not dilute the existing provisions and permits banks to sell mortgaged immovable property to outsiders.

The LoH clarified the House that the assumption that Nagas were unable to avail loans from banks due to non-adoption of SARFAESI Act was misleading and erroneous as banks had adequate safeguards under existing laws {Nagaland Land and Revenue Regulation (Amendment) Act, 2002} in Nagaland to take possession of secured assets and sell them to realise their dues.

He also cited the example of Tripura, stating that Supreme Court of India had heard an appeal filed by UCO Bank over a matter pertaining to recovery of dues in the State. The appeal was made challenging Section 187 of the Tripura Act of 1960 that prohibited sale of mortgaged properties by the bank to any person who was not a member of a Scheduled Tribe.

He said Supreme Court in its judgment on November 25, 2016 held that SARFAESI Act was enacted under List I of the Seventh Schedule, in which the authority was vested with the Union government.

Rio  reminded that Nagaland had not enacted any legislation like Tripura, but intended to adopt the SARFAESI Act enacted by the Central government and wanted to ensure that as in the case of Tripura, transfer of mortgaged property took place only to indigenous Naga inhabitants of Nagaland.

He said a request had been sent for incorporation of this provision in the Act specifically for Nagaland with a view to ensure compliance with Article 371A of the constitution and clear the way for implementation of the Act in the State.

The chief minister remarked that the State had passed the Nagaland Special Economic Zone Bill, 2009 to promote economic growth and development after seeing the difficulties entrepreneurs faced in getting access to institutional credit for economic growth.

He explained that the main objective of the Bill was to create economic zones to attract investments as well as facilitate access of “our entrepreneurs” to institutional credit at affordable rates of interest and make all possible efforts to facilitate mortgage of land and fixed assets in these zones against which loans could be accessed.

Meanwhile, the opposition leader has convened a press conference on the issue on Friday.

 

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