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Nagaland Legislative Assembly refers Sarfaesi Act to Select Committee

By Thejoto Nienu Updated: Feb 16, 2021 12:12 am

Our Correspondent
Kohima, Feb. 15 (EMN):
The Nagaland Legislative Assembly (NLA) on Monday referred the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Sarfaesi Act, 2002) to the House Select Committee.

Stating the ‘there should be consensus resolutions and no difference’, Chief Minister Neiphiu Rio expressed the his willingness to forward the matter for resolution on implementation of Sarfaesi Act, 2002 in Nagaland, taking into consideration the accounts through the consultation of Advocate General (AG) and other experts or forward the same to the House Select Committee.

Rio expressed his appreciation to the members for participating in the discussion and showing their concerns to the people of the state who needs money to do business or otherwise. He asserted that Sarfaesi Act 2002 can only be applicable in the state with the condition that mortgaged land be sold only to indigenous inhabitants of Nagaland and only those safeguarding the interest of indigenous inhabitants.

Rio stated that there are sufficient laws safeguarding the people’s land that ensure the mortgaged land will not be transferred to non-indigenous inhabitants.

He stated that Nagaland still follows Assam Land and Revenue Regulation 1886 which provides protection to tribals in section 160, 161 and 162. Section 162 in particular prohibits any outsiders from acquiring or transfer or lease of agreement or settlement of land in the state, he said.

He also highlighted the Nagaland Revenue Regulation Act 1978, which states that no person other than the indigenous inhabitants of Nagaland can acquire land or possess any land by transfer, exchange, lease agreement or settlement.

He added the Nagaland Land Revenue Regulation Act 2002 that amended the Assam Land And Land Revenue Regulation Act,  1886 inserted the provision after sub-section (2) of section 162 permitting transfer by way of mortgage in favours of banks, registered co-operative societies and financing institutions with the condition that such entities would not transfer any land to a person other than the indigenous inhabitants of Nagaland except with the previous sanction of the state government or an authority appointed in this behalf.

He then clarified that “there should not be any apprehension that extension of Sarfaesi Act 2002 will lead to any illusion of this provision”.

Rio then exuded confidence that resolution of the Sarfaesi Act 2002 and notification of towns under clause (F) of section 58 of the Transfer of Property Act, 1882 would boost economic activities in the state.

He informed the House that a meeting headed by the finance commissioner that was attended by government officials and representatives of banks and after discussion had unanimously decided that Sarfaesi Act 2002 can be implemented with certain conditions and the suggestions were put forth for resolution.

Earlier, the minister for Planning and Coordination, Land Revenue and Parliamentary Affairs, Neiba Kronu, initiated the discussion pertaining to Sarfaesi Act 2020, stating that everyone is equally concerned about the use of land for economic progress.

He maintained that Article 371 (A) is detrimental for the people of the state. “When it is not utilised, becomes dormant and may not be good for economic purpose,” he said.

Kronu asserted that Sarfaesi Act empowers banks and financial institutions to take-over the mortgaged assets against default in repayment of loans and realise their money by selling the secured assets without the intervention of courts, which contradicts Article 371 (A) which gives special provisions for the state of Nagaland with regards to ownership and transfer of land and its resources.

He added that resolution on implementation of Sarfaesi Act 2002 in Nagaland would ease the people to secure loans as the financial institutions and banks have been reluctant to provide loans in the absence of secured assets.

Citizens at receiving end — Zeliang

Meanwhile, Leader of Opposition, TR Zeliang argued that the government of the day was silent when the Sarfaesi Act 2002 was passed and failed to take any concrete measures to solve the problems faced by the citizens of the state.

 “While banks in the state have completely stopped financing against residential/ commercial buildings and high education loans out of apprehensions arising out of a Letter that was written by the Law and Justice department to the Finance department on July 19, 2019,” he said.

Zeliang pointed out that due to non-availability of loans from the banks, the common men in the state are left at the mercy of private money lenders. While young entrepreneurs including students are left without funding options; local contractors and suppliers including businessmen have failed to obtain bank guarantee from any banks against their immovable property within the state with the letter.

He stated that contractors and suppliers in particular have had to procure bank guarantee from the banks against their assets outside the state while many do not have such property and are deprived of equal opportunity or are compelled to approach private money-lenders whose interest rates are over exorbitantly high.

Zeliang then asserted that the government must be clear on the stand of Sarfaesi Act and not make errors but seek legal opinions and refer the matter to the ‘House Select Committee’ before it is sought for adoption as resolution.

After a lengthy discussion, NLA Speaker Sharingain Longkumer referred the matter of Sarfaesi Act, 2002 to the House Select Committee.

By Thejoto Nienu Updated: Feb 16, 2021 12:12:51 am