TaxTMI 
TaxTMI 
2010 (8) TMI 177
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....covery of such huge amount of NPAs has resulted in substantial funds of banks not being available for development of the country's economy and this, in turn, has affected the citizens. The petitioner has alleged that the steps taken by the Union Government to recover the NPAs have not yielded positive results and the Finance Ministry of the Union Government is reported to have admitted that 27 nationalised banks had written off a staggering amount of Rs. 4,010 crores as bad debts during 1994-95 and 1995-96. According to the petitioner, most of the bad debts are on account of defaults made by men of substantial means and influence and if proper checks are introduced to ensure that loans and advances are not given to fraudulent borrowers, the NPAs will get substantially reduced. 3. Mr. Prashant Bhushan, learned senior counsel appearing for the petitioner, submitted that in the Writ Petition, as originally filed, the petitioner has suggested various measures, to check the menace of increasing NPAs by evolving a proper mechanism that would reduce the possibility of fresh loans becoming NPAs, but subsequently this Court passed orders on 9-8-2005, 8-12-2005, 9-11-2006 and 30-1-2008 di....
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....and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "the SARFAESI Act") which empowers the banks to realize the securities furnished by the borrowers to the bank and to recover the loans and advances from the defaulted borrowers, the enactment of the Credit Information Companies (Regulation) Act, 2005 which provides for the setting up of Credit Information Companies for collection, sharing and dissemination of credit information, which will help in arresting fresh accretion of NPAs and framing of the rules under the Credit Information Companies (Regulation) Act, 2005, which would ensure that the Credit Information Companies collect, process and collate accurate and complete data relating to the borrowers, so that fresh loans and advances given to the borrowers do not become sticky. He submitted that besides the legislative measures, the Reserve Bank of India has been circulating a list of non-suit filed 'doubtful' and 'loss' borrowal accounts of Rs. 1 crore and above, on 31st March and on 30th September every year to the banks and financial institutions for their confidential use. He submitted that the banks and the Union Government also....
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....ken by the Union Government to reduce the NPAs, therefore, have not been effective. He finally submitted that without statutory power and without qualified manpower, the SFIO would be teeth-less and incompetent and this Court should direct the Union Government to make the SFIO an independent statutory body consisting of qualified manpower as suggested by Mr. Harish Salve, learned senior counsel. 6. Mr. Bhushan cited the decision of this Court in Vishaka v. State of Rajasthan [1997] 6 SCC 241 for the proposition that if there is no enacted legislation to provide for the effective enforcement of any fundamental right, this Court can issue guidelines/directions for the effective enforce-ment of the fundamental right under article 32 of the Constitution, which would be law under article 141 of the Constitution, till a suitable legislation is enacted to occupy the field. He also relied on the decision in Vineet Narain v. Union of India [1998] 1 SCC 226 in which this Court has observed that the judiciary must step in, in exercise of its constitutional obligations under article 32, read with article 142, of the Constitution, to provide a solution till such time as the Legislature acts ....
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....he number and amount of NPAs and to detect and check bank frauds in future. 9. According to Mr. Prashant Bhushan, however, these legislative and administrative measures taken by the Union Government have not been effective in reducing and controlling the NPAs. Whether legislative and administrative measures taken by the Union Government have been effective or not is not for the Court but for the Union Government and Parliament to consider because reduction and control of NPAs are not within the domain of judiciary but within the domain of the Executive and Legislature under our Constitution. Moreover, as has been observed by P.N. Bhagwati, J. in State of Madhya Pradesh v. Nand Lal Jaiswal [1986] 4 SCC 566, in field of economic activities, there has to be judicial deference to legislative and Executive judgment and decisions on complex economic matters are to be based on experimentation or what one may call 'trial and error method'. It is, therefore, not for Courts to sit in judgment whether a particular policy decision of the Government is effective or not, but for Parliament to debate and decide on the policy decision. In a recent decision of this Court in Villianur Iyarkkai Pa....