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HC directs Centre to release withheld interest subsidy to Kashmir hoteliers under tourism revival package

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Srinagar: Jammu and Kashmir High Court on Tuesday directed the central government authorities to release the entire amount of interest subsidy to Kashmir hoteliers under the tourism revival package withheld for the past two decades.

In a writ petition filed by Hotel Ashai Srinagar and others, Justice W S Nargal directed the authorities “to release the entire amount of interest subsidy in favour of the petitioners through their respective soft loan accounts maintained with their respective banks”.

The release has to be strictly in accordance with the terms of the scheme, for revival of hotels/guest-houses, issued vide notification dated 8th September 2003 by the Government of India, Department of Tourism, within a period of two months from today, it directed.

The scheme for the revival of the hotel industry in Kashmir was devised keeping in view the mammoth disruption it suffered due to the eruption of unprecedented state of violence in 1990.

A special package was sanctioned by the Ministry of Tourism vide notification bearing No. 13(18)/2003-MRD dated 08.09.2003. The expenditure, according to the scheme, was ordered to be debited by the State government (now UT) as Grant-in-Aid to the account of Government of India.

According to the petitioners, Rs 16 crores were to be provided to the hoteliers as interest subsidy for renovating and refurbishing their hotel rooms but only Rs 1.83 crores had been released since the scheme was devised.

Counsel for the petitioners submitted that the package for rehabilitation by way of soft loan of Rs 50,000 per room, for renovation and refurbishing 50 percent of the rooms of A, B, C and D category hotels (except Five Star Hotels) was prescribed.

The banks, he said, were to provide loans to the hotel and guest-houses owners and the Ministry of Tourism, Government of India, was to provide subsidy so that the hotel/guest-house owners get the loan at 4 percent interest.

The petitioners were granted soft loans at Rs 50,000 per room up to 50 percent of the capacity of the respective hotels and guesthouses.

“None of the concerned hoteliers are in arrears towards liquidation of the amount of 4 percent interest element,” the petitioners said.

With a view to fortify their claim, the petitioners obtained information from the respondents under RTI Act, which reveals that against the amount of Rs 1600 lakhs, only an amount of Rs 186.34 lakhs have been appropriated for revival of the hotels/guest-houses.

The counsel further submitted “the information with respect to the total amount of interest subsidy released by the Government of India towards revival of hotels/guest-houses under the scheme, has deliberately been withheld and not provided to the petitioners under RTI Act”.

Further case of the petitioners is “since the petitioners were faced with financial liability viz-a-viz the banks coupled with its multiplication due to application of periodical interest have been reasonably apprehending the action likely to be taken by the lending banks for recovery and thus, exposing them to manifest loss and injury.”

The court noted “the instant case revolves around the promises made by the government to the petitioners, which, however, were not fulfilled, resulting in enumerable hardships and difficulties to them, in the nature of recurring loss of income, overburdening of financial liabilities, like loans, establishment and maintenance expenses.”

The respondents are liable to settle the issues regarding release of the entire amount of interest subsidy in favour of the petitioners, which has resulted in financial liability of the petitioners, exposing them to recovery measures of the banks, said the court.

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