Waived-off loans case: SC grants eight weeks for return of money

CJP says recovered amount will go to dams fund

ISLAMABAD: The Supreme Court on Tuesday gave last warning to companies and individuals accused of having billions of rupees worth of loans written off illegally, to return the money to the national exchequer or face consequences.

Heading a three-member bench, Chief Justice Mian Saqib Nisar remarked that the nation was burdened with huge debt and they had no right to occupy the office if they failed to bring back the nation's wealth.

During hearing of a suo motu case about written-off loans of Rs54 billion by influential persons and companies, the Additional Attorney General informed the bench that out of 222 only 39 persons had availed the apex court's offer and deposited back the written-off amount to the national kitty.

The court had earlier given options to the companies and individuals to return 75% of the outstanding amount, while waiving the interest as per a formula suggested by Justice Muneeb Akhtar, or contest their cases in banking courts.

The chief justice observed that those who did not avail the opportunity, would regret as the court would take strict action against them. In case the banking courts gave verdicts against the companies, they would have to pay the full amount of their loans and in case of failure to do so, they could go to jail, he warned.

The chief justice gave eight weeks’ time to the respondents to repay their loans. He said neither banks nor any financial department had claimed the written-off loans, therefore, the amounts would be deposited in the dams fund, he added, while adjourning the case for an indefinite period.

It may be noted that soon after the October 2002 elections, the then finance minister Shaukat Aziz and the State Bank of Pakistan (SBP) officials had approved the loan write-off scheme and subsequently the SBP had issued the BPD Circular 29 of 2002 containing guidelines in that regard.

The SBP had offered an incentive scheme advising the banks and development finance institutions (DFIs) to waive the loans of organisations showing "loss" for three years. On February 20, 2013, the Supreme Court had ordered making public a 2,200-page report compiled by one of its former judges, Syed Jamshed Ali Shah, as head of a three-member commission to probe into the written-off bank loans worth billions of rupees from 1971 to 2009.

According to the report, the total amount of waived loans over the past four decades was Rs87 billion, the major chunk of Rs4.621 billion was written off between 1992 and 2009 and Rs2.3billion from 1971 to 1991.