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HC refuses to grant relief in PIL seeking introduction of Islamic banking in J&K

‘Cannot enter into the realm of policy decision of government’

Post by on Thursday, July 28, 2022

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Srinagar, July 27: The High Court of Jammu & Kashmir and Ladakh declined to grant relief in public interest litigation (PIL), seeking the introduction of Islamic Banking in J&K.
The court observed that it cannot enter into the realm of policy decisions of the government. 
 
A division bench of Chief Justice Pankaj Mithal and Justice Javed Iqbal Wani passed the observations after it was submitted that the government, on March 21, 2017, vide its letter specifically conveyed its decision that Islamic Banking is not feasible and Shariah Banking Window cannot be opened.
 
The bench said that the above decision of the government is a policy decision "which is beyond the purview of judicial review more particularly in a public interest petition."
 
"The court cannot enter into the realm of policy decision of the government," the bench said while closing down the litigation.
 
However, the court left it open for the petitioner or any person aggrieved by the above policy decision and said that he might take appropriate steps to challenge it before the proper forum if advised.
 
"In view of the above policy decision of the government, we direct for closure of this PIL," the bench said.
 
Previously, the Reserve Bank of India (RBI) filed an affidavit stating that in the year 2013, the Ministry of Finance, Government of India had requested the RBI to give its opinion on the introduction of Islamic Banking in India.
 
An inter-departmental group was constituted under the Chairmanship of Rajesh Verma to examine the feasibility of introducing Islamic Banking in India.
 
The said committee vide its report declined to introduce Islamic Banking, however, the government appointed another committee headed by Deepak Mohanty in the year 2015 to look into the matter.
 
The Deepak Mohanty committee vide its report submitted to the RBI on December, 28, 2015 made certain recommendations permitting interest free banking in certain respects but the said report was not accepted by the government.
 
The government on March, 21, 2017 via letter specifically conveyed its decision that Islamic Banking is not feasible and Shariah Banking Window cannot be opened.
 
The court was hearing a PIL filed by an NGO, J&K Peoples Forum, in 2018, seeking directions to the union finance ministry for issuing necessary notification for the introduction of Sharia-compliant windows (Islamic banking) as recommended by Deepak Mohanty Committee as well as in the light of a report of the inter-departmental group of RBI.
 
The petitioner organization also seeks a direction to RBI for taking immediate steps in the constituent banks including the J&K Bank so as to facilitate Shariah-compliant windows.
 
The forum wants J&K Bank Limited to place before the court the entire details of Non-Performing Accounts (NPAs) and the steps taken for recovery of the outstanding amount in NPAs, saying the same is public money which cannot be allowed to be misappropriated either by the account holders or by the management of the bank.
 
It also seeks a direction to J&K Bank to take immediate steps for the opening of Shariah-compliant windows to accomplish the object of mass-level participation in Shariah Banking. 
 
The petitioner submitted that majority of the citizens in J&K are Muslims by faith and thus have a constitutional right to enjoy all avenues of development provided the same do not contravene the article of their faith.
 
It also cited the Holy Quran as well as the commandments of Prophet Muhammad (SAW) prohibiting interest. 
 
"It is of common knowledge that receiving and giving of interest (Riba in Quranic parlance) besides being prohibited for Muslims is widely disliked by other faiths as well," it stated.
 
The petitioner organization further submitted that in Hinduism also, it is said that Brahmana and a Kshatriya shall not lend anything of interest. 
 
 

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