Srinagar: The High Court of J&K & Ladakh has directed the J&K Bank Ltd to extend all loan facilities to Banking Associates and Banking Attendants facing investigation by Anti-Corruption Bureau (ACB), under staff category after securing tangible mortgage.
Disposing of a 2023 writ petition by J&K Bank Employees Union Kashmir, Justice Sanjay Dhar directed the respondent bank “to release the loan facilities including the loan facility under staff category to the members of the petitioner Union subject to the condition of securing such loan facility by tangible mortgage or any other security to the satisfaction of the respondent bank”.
The petitioner Union contended that the incentives pertaining to grant of personal, consumption, housing and other loans were being provided to the employees including the workmen and officers of the respondent J&K Bank. However, vide a circular of January 20, 2023, such facilities are not being provided to some employees under the pretext of them being under the scanner of ACB.
It submitted that initially J&K Bank was a private company registered under the J&K Companies Act and as per the applicable rules. The Chairman of the Bank was competent to make urgent appointments wherever needed.
“Being a private bank, the provisions contained in Article 14 and 16 of the Constitution were not applicable to it. However, in 2018, the respondent bank came to be declared as a Public Sector Undertaking as the government shareholding had increased beyond 50 percent,” their petition said.
It further submitted “the appointment of Banking Associates, Assistant Banking Associates and Banking Attendants, on behalf of whom the present petition has been filed, was made by the Chairman at a time when the respondent bank was a private bank and, therefore, the Chairman had the power to make such appointments at his own level.”
However, a case was registered by the ACB against the then Chairman and other officers of the J&K Bank for violating the norms in appointing Banking Associates.
The petition stated that only 160 Banking Associates have been named in the charge-sheet filed by the ACB before the Special Judge, Anti-Corruption. But the respondent bank has stopped/withheld the extension of loan facility to all the Banking Associates, which is violative of Article 14 of the Constitution of India.
The petitioner Union argued “as per 12th Bipartite Settlement dated 08.03.2024, which is binding upon the respondent bank, it has to provide various allowances and facilities to the employees at clerical and subordinate staff level.”
The respondent bank, in its objections, submitted that the loan facility has been withheld to the members of the petitioner Union as their appointment is under investigation in FIR No.19/2019 of Anti-Corruption Bureau, J&K.
The J&K Bank stated that its Board is awaiting completion of the investigation in all the pending cases, where-after a final decision regarding appointments, which are subject matter of investigation, would be taken.
During pendency of the writ petition, a proposal was made by counsel for the petitioner that the members of the petitioner Union may be extended the loan facilities against security. Accordingly, the court vide order dated 30.09.2025, directed the respondent bank to have instructions in the matter.
Pursuant to the order an affidavit was filed which stated “the loan facility under ‘staff category’ has been denied on the rationale that in case the bank has to determine the nature of these appointments after conclusion of investigation and judicial determination, the bank should be able to do so without any liability outstanding against such employees in staff category.”
Justice Dhar while disposing of the petition ordered “this apprehension of the respondent bank can be taken care of by providing a condition for extension of loan facility under staff category to the effect that such loan should be secured by tangible mortgage or any other security to the satisfaction of the bank”.
