Srinagar: In a landmark ruling, the Jammu and Kashmir High Court has said that the sovereignty of the state remains "legally and constitutionally" intact and cannot be challenged, altered or abridged.
"The sovereignty of the State of J&K under the rule of Maharaja, even after signing of Instrument of Accession and in view of framing of its own Constitution, thus 'legally and constitutionally remained intact and untampered'," a division bench of the court said.
The bench comprising Justices MA Attar and AM Magray made these observations while ruling that the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, enacted by Parliament in 2002, cannot be enforced in the state.
The power of Parliament to make laws in respect of State of Jammu and Kashmir is circumscribed and it can make laws for it only where permitted by State and not other side, and that too in accordance with mechanism prescribed by Article 370 of Constitution of India, the bench observed.
"It has been authoritatively ruled by the Supreme Court that signing of Instrument of Accession did not affect the sovereignty of Maharaja over his State," the court said referring to a judgement of the Supreme Court.
The High Court, while referring to law laid down by the apex court in some other cases, said "State of J&K occupies a distinct, unique and special position. Thus, in law, the State of J&K constitutes a class in itself and cannot be compared to the other states of the country.
"The constitutional provisions and laws, which have been extended to the State of J&K in accordance with the mechanism and procedure prescribed by Article 370 and which constitutional provisions and laws have been made applicable to the State of J&K with modifications etc make the distinct, unique and special position of the State of J&K more clear."
Citing the Constitution of India, the Court said that "Article 35(A) which has been applied to the State of J&K, clarifies the already existing constitutional and legal position and does not extend something new to state."
"This provision clears the constitutional relationship between people of rest of country with people of J&K.The citizens of State of Jammu and Kashmir have their own Constitution and their sovereign character which cannot be challenged, altered or abridged," the court said.
The bench said the SARFAESI Act is not applicable to Jammu and Kashmir owing to this unique constitutional position.
"Provisions of the Act can be availed of by the banks, which originate from the State of J&K, for securing the monies which are due to them and which have been advanced to the borrowers, who are not State subjects and residents of the State of J&K and who are non State subjects/non citizens of the State of J&K and residents of any other State of India excepting the State of J&K," it said.
The judgement underlined that Parliament does not have legislative competence to make laws contained in section 13, section 17(A), section 18(B) section 34, 35 and section 36, so far as they relate to the State of J&K.
The court quashed the notices issued by the banks in terms of section 13 of the SARFAESI Act and restrained the banks and other financial institutions from proceeding further in keeping with the Act against the State Subjects or citizens of Jammu and Kashmir.
The court, however, put the banks at liberty to recover the money due to them from the borrowers by having recourse to the appropriate laws and by approaching the appropriate forums.
The court also observed that the state of Jammu and Kashmir was at liberty to enact a law similar to that of the SARFAESI Act 2002 for securing the interests of the banks and financial Institutions.
"The State of J&K, in the event of framing such a law, has to ensure that interests of State subjects/citizens of J&K regarding their immovable properties are not affected by transferring the same to non State subjects," the court said.