FCIK urges Omar Abdullah to push for debt recovery tribunal in JK

Srinagar: The Federation of Chambers of Industries Kashmir (FCIK) has urged Chief Minister Omar Abdullah to take up the demand for establishing a Debt Recovery Tribunal (DRT) in Jammu and Kashmir with the Union Government, citing the financial strain, legal hurdles and inconvenience faced by borrowers who must travel to Chandigarh to pursue their cases.

In a representation submitted to the Chief Minister, the industrial body called for setting up a permanent tribunal with regular sittings in Srinagar and Jammu.

As an interim measure, it proposed scheduled circuit sittings in both cities until the tribunal becomes operational.

FCIK has asked Abdullah to raise the issue with the Union Finance Minister and the Secretary of the Department of Financial Services in the Ministry of Finance. The federation maintained that borrowers in Jammu and Kashmir require an accessible and affordable legal mechanism to challenge debt recovery proceedings.

The organisation said it had received several complaints alleging that lawyers appointed by borrowers had failed to pursue cases or attend hearings despite being paid professional fees. Such lapses, it said, had reportedly resulted in ex parte orders being passed without the affected parties being represented.

According to FCIK, these complaints warrant serious attention and reflect the difficulties faced by borrowers who cannot afford repeated journeys to Chandigarh or easily keep track of their legal proceedings.

The federation warned that the absence of legal representation during hearings could leave borrowers vulnerable to unfavourable court orders and enforcement action against their businesses and assets, sometimes without their defence being properly presented.

FCIK pointed out that borrowers in the erstwhile state had access to local judicial remedies under Sections 17-A and 17-B of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act. However, referring to the Jammu and Kashmir and Ladakh High Court judgment in _M/s Hotel Alpine Ridge and Others v. Union of India and Others_, dated April 12, 2024, the federation said changes following the 2019 reorganisation had shifted the relevant jurisdiction to the DRT in Chandigarh.

The extension of the tribunal’s jurisdiction to Jammu and Kashmir was notified through S.O. 4145(E), dated September 10, 2021.

FCIK said borrowers who previously approached local judicial institutions for relief were now required to pursue their statutory remedies outside the region, creating additional financial and logistical difficulties that warranted an institutional solution.

The federation also referred to the Department of Financial Services’ annual report for 2025–26, which listed 39 DRTs across the country, including three in Chandigarh, while none had been established in Jammu and Kashmir.

It urged the Government of India to consider the region’s geographical challenges, access to judicial institutions and the financial circumstances of borrowers while evaluating the demand, rather than relying exclusively on the volume of cases.

FCIK further noted that the High Court had described proceedings in Chandigarh as cumbersome, inconvenient and costly. The court had observed that establishing DRTs, benches or circuit benches within Jammu and Kashmir and Ladakh could help ease these difficulties.

The federation also highlighted limitations in virtual hearings, including connectivity issues that had prompted directions for physical appearances in certain cases.

FCIK Advisory Committee Head Shahid Kamili said repeated travel, accommodation expenses, legal fees and time away from business were placing an additional burden on entrepreneurs already experiencing financial difficulties.

Kamili said that while banks were entitled to recover legitimate dues, borrowers must also be provided with an affordable and effective opportunity to present their cases. He stressed that a statutory remedy could serve its purpose only if it was practically accessible to those seeking justice.

In addition to demanding a permanent tribunal and interim circuit sittings, FCIK called for hearing notices to be sent electronically and directly to borrowers as well as their legal representatives. It also sought timely access to judicial orders to help borrowers monitor their cases effectively.

The federation urged the Chief Minister to support a formal proposal to the Union Government and offer suitable premises to facilitate the establishment of the tribunal at the earliest.

FCIK said an accessible debt recovery mechanism would promote the fair and timely settlement of financial disputes while supporting broader efforts to revive and strengthen Jammu and Kashmir’s industrial sector.