Nagaland Pradesh Congress Committee (NPCC) has asserted that the power to adopt or reject the SARFAESI Act lay with Nagaland Legislative Assembly (NLA) and not with the speaker or any department.
Referring to a letter issued by the law department directing AGM of SBI Dimapur not to apply SARFAESI Act in Nagaland, NPCC president K Therie in a release termed it as unauthorised and illegal as it did not have the mandate of the Assembly.
Mentioning that Nagaland had sealed the doors of banks and other financial institutions due to restrictions on application of SARFAESI Act, 2002, also known as the Securitisation Act, Therie pointed out that farmers and entrepreneurs required both collateral and collateral-free loans for micro, small or medium enterprises and farming.
He said no major private investments could come to the State as blocking loans was blocking the growth of economy, job creation, self-employment and value addition industries. He termed the action of the State government as anti-people.
Therie suggested that village councils be allowed to stand as guarantors for farmers and be responsible to the banks and financial Institutions to ensure that land, if required for auction, did not pass on to non-indigenous individuals. Further, he advised declaring towns and municipal councils as cadastral areas to enable entrepreneurs in these areas to avail the benefits of the Act.
Therie demanded that mortgaged land, if required, should be auctioned only to individuals who were indigenous inhabitants of Nagaland, as specified in the Amendment of Section 162 (2002) of the Assam Land and revenue Regulation, 1886, thereby facilitating loans to local entrepreneurs and farmers.
Stressing that banks and other financial institutions play a major role in building the economy of a nation, he said he hoped that MLAs understood that these institutions funded farmers and entrepreneurs.
He also said if the Assembly had a better alternative to fund the farmers and entrepreneurs, it could stop the SARFAESI Act.
Stating that only NLA could debate on the Act’s merits and demerits, adopt or reject it and understand its objective, the NPCC president explained that the objective of the Act was to facilitate recovery of dues of banks and other financial institutions by non-adjudicatory body, adding the Act enabled banks and financial institutions to enforce their security interests expeditiously without being required to move to a court or tribunal. He pointed out that this did not encroach upon the Nagaland Land Revenue and Regulation Act, 1978, amended in 2002.
He pointed out that Article 371(A) clearly states “Notwithstanding anything in the Constitution; no Act of Parliament shall apply in the State of Nagaland in respect of: i-iv clause, unless the State Assembly of Nagaland so decides by a resolution”.