Heading a three-member Supreme Court bench hearing a case of written off loans worth Rs 256 billion on Tuesday, Chief Justice Iftikhar Muhammad Chaudhry observed that evil should be eradiated instead of being provided a safe exit. Other members of the bench are Justice Sair Ali and Justice Ghulam Rabbani.
The CJP said writing off loans did not prevent people from obtaining them with malafide intentions, instead it increased the chances of securing more loans. He said the court wanted the loans to be recovered, but the banks concerned did not seem interested, adding that the recovery of loans was the banks’ responsibility and they should take action against those who were not repaying their debts.
Resuming his arguments, Allied Bank’s lawyer Dr Pervez Hassan submitted that the State Bank of Pakistan’s (SBP) Circular 29, which deals with writing off of loans, was neither discriminatory nor was it issued for specific people or industries, however, it had been misused to some extent. He said the circular was issued to reduce the burden of irrecoverable loans from the banks, adding that some people might have obtained loans with an intention of not returning it.
He said if the court declared Circular 29 illegal, it would also affect the borrowers whose loans were written off genuinely. The CJP said due to writing off loans, the evil of securing loans had increased. “In order to reduce crime, we have to arrest criminals, not break jails,” the CJP remarked. He said the court would examine the constitutional status of the laws dealing with writing off loans.
The lawyer said the banks suffered losses due to the non recovery of loans. The proceedings were later adjourned until today (Wednesday).
Eradicate evil instead of giving it safe exit: CJP
