IHC questions if state fulfilling duties of care, rescue

Asks if govt taking any measures to alleviate hardships of citizens who owe money to banks

ISLAMABAD: The Islamabad High Court (IHC) has questioned if the state is fulfilling its duties of care and rescue during the ongoing lockdowns that are imposed to stop the spread of contagious novel coronavirus but have also rendered thousands of people jobless.

“The lockdown has indeed suspended all business activities. It, therefore, may have given rise to a situation where the state owes a ‘duty of care’ and ‘duty to rescue’ towards those who have obtained loans from the microfinance entities,” said the IHC in a written order on Friday.

The IHC Chief Justice Athar Minallah was hearing a petition requesting the court to stop banks and financial institutions from seeking monthly loan installments from their clients in view of the financial crisis that emerged in the wake of lockdowns.

The applicant, Rafiqur Rehman, had said the banks are pestering their clients whose incomes have shrunk by the cessation of business activities. He had requested the court either to waive the loan installment or suspend them till the pandemic is over.

On Friday, Rehman – a Careem captain – appeared in the court and stated that he had obtained a loan from the National Rural Support Programme (NRSP) to buy a motorcycle. Because of the lockdown, he said his business had got suspended for several weeks.

He said it is not possible for him to pay the installments in the prevailing circumstances. He said he had sent several letters to various authorities but no response was received as yet. “Despite the exceptional circumstances and lockdown, I am being harassed to pay his installments,” he said.

Later, the IHC issued notices to the federal government through Ministry of Finance secretary, the National Disaster Management Authority (NDMA) chairman, the State Bank of Pakistan (SBP) governor and the National Rural Support Programme (NRSP) chief.

The court directed the respondents to submit a report explaining if any measures have been taken to alleviate the hardships and difficulties faced by citizens who owe loans to microfinance entities.

“[State officials must] explain whether the state owes a “duty of care” and “duty to rescue” towards the small and medium enterprises during the lockdown period. If the answer is in the affirmative then they should apprise the court about the measures taken to discharge such a duty,” the order read

In the order, the court noted that “it is his [Rafiqur Rehman’s] case that the prevailing circumstances are beyond his control and that his fundamental rights are being violated by forcing him to do what has become impossible to perform.”

Justice Minallah further stated that the questions raised in the petition involve fundamental rights of not only the petitioner but the general public as well.

The court also appointed the Islamabad High Court Bar Association President Chaudhry Haseeb Muhammad, and advocate Umer Ijaz Gillani as amici to assist the court in this matter.

The IHC also ordered the secretary finance to nominate an authorized officer well conversant with the relief measures extended to small and medium enterprises and those who have obtained loans from micro finance institution but are facing hardship in payment of installments due to prevailing situation

“Till the next date fixed respondents are restrained from harassing the petitioner,” the court stated in the order while re-listing the case for April 17. According to the Pakistan Economic Survey 2018-19, there were total 3,371,695 microfinance borrowers across the country by the end of March 2019.

The Ministry of Planning last week estimated that 12.3 million to 18.5 million people in the country will lose their jobs and the economy will sustain Rs2 trillion to Rs2.5 trillion losses in just three months due to “moderate to severe shocks from the coronavirus outbreak”.

The ministry in an inter-ministerial meeting on April 2 discussed the preliminary estimates, which are based on information received from various government entities and initial research conducted by the Pakistan Institute of Development Economics.

The assessment is based on limited, moderate and complete lockdown. The country seems to have already passed the limited level and is at the moderate phase in terms of restrictions on movement and is inching towards complete restrictions.

The ministry has assessed losses at Rs1.2 trillion in limited lockdown scenario, Rs1.96 trillion in moderate and Rs2.5 trillion in case of complete restrictions on movement, which symbolises a curfew-like situation.

It assessed the losses on the basis of the impact of the restrictions – imposed to stop the COVID-19 from spreading – on business, tax revenue, international trade and cost of unemployment for three months.

[WITH INPUT FROM NEWS DESK]