The Supreme Court on Thursday said the people whose loans were waived off or written-off due to political or extraneous considerations would have to return them. A three-member bench headed by Chief Justice Mian Saqib Nisar was hearing the suo motu case on billions of rupees loans written off during the three decades. The bench directed Governor State Bank of Pakistan Tariq Bajwa to prepare the gist of commission's report on written-off loans.
The CJP said that the assets of those people who would be unable to return the loans be auctioned. The counsel for National Bank of Pakistan (NBP) stated that the apex court had formed a commission headed by former Justice Jamshed Ali over the issue of written-off loans.
He said the loans were waived-off after the SBP had issued various circulars. He said the commission was set up to prepare a report on waived-off loans. He said the issue of waived-off loans is a past and closed transaction and can't be reopened after a long time. The Chief Justice inquired about the action taken on the report. The NBP counsel said that they did not get the copy of the report.
Justice Saqib said the matter has been pending since 2007; therefore, they would like to see the report. He pointed out that loans of many textile mills were also waived-off by the SBP on political basis. He said after the release of commission's report, the case was not heard properly.
He said that after going through the commission's findings, all those who got their loans written off on political basis will be issued notices. "We want reports and clarifications over the issue," the Chief Justice said, adding the money will be recovered from those who got their loans waived-off on political basis. Barrister Zafarullah Khan, a petitioner in the case, apprised the court that politicians such as former prime ministers the late Muhammad Khan Junejo, the late Benazir Bhutto, Yousaf Raza Gilani, Nawaz Sharif and Chaudhry Shujaat Hussain had also got their loans waived-off.
A three-member Commission, headed by Justice Syed Jamshed Ali, a former judge of SC, was constituted on June 03, 2011 for the recovery of written-off loans from 1971 onward to compile a report.
The Justice Syed Jamshed Ali Commission in February 2013 submitted the report according to which Rs 87 billion were written-off in 38 years - between 1971 and 2009. The Commission's report said that loans worth Rs 2.38 billon were waived-off between 1971 and 1991, whereas loans worth Rs 84.62 billion were waived-off between 1992 and 2009.
The report not only recommended action against those who got their loans written off but also against the bankers and the officials who helped in getting the loans waived off. The report said the commission could only probe 740 different cases, but has proposed that another 222 cases should also be investigated as Rs 35 billion had been waived-off in these cases.
The report though found grave irregularities in loans given to politicians, civil and military bureaucracy, but could not get proof about waivers on political basis, as bank officials conceal the facts because they were afraid of influential persons. The bankers have given only business reasons for writing-off loans. The commission has given four options: only principal amount should be recovered from the persons who got their loans written off, or the difference amount of the principal amount and the amount they had submitted; the tribunals comprising on-duty or retired judges of the high courts should be set up for the recovery of amounts; a legislation has also been proposed for the recovery of written-off loans; and action should also been take against the provincial credit committees.
However it has given the final authority to the Supreme Court for recovery of loans. The commission has given some options about the recovery of waived off loans but says the ultimate decision in this regard will be taken by the Supreme Court. The commission had to hold bankers responsible for extending short-term or long-term loan facilities to borrowers on inadequate securities and to recommend steps to be taken against them. It had to suggest measures to safeguard the amount of loans against arbitrary concessions extended in the past on political or other considerations.