SRINAGAR: The Federation of Chambers of Industries Kashmir (FCIK) has urged Chief Minister Omar Abdullah to press the Union Government for the establishment of a Debt Recovery Tribunal (DRT) in Jammu and Kashmir, citing the financial burden, legal difficulties and inconvenience faced by local borrowers who are required to pursue cases in Chandigarh.
In a representation to the Chief Minister, the industrial body sought a permanent tribunal with regular sittings in Srinagar and Jammu, along with scheduled circuit sittings in both cities until the tribunal is established.
FCIK has asked Abdullah to take up the matter with the Union Finance Minister and the Secretary, Department of Financial Services, Ministry of Finance, arguing that borrowers in Jammu and Kashmir need accessible and affordable mechanisms to contest debt recovery proceedings.
The Federation said it had received several complaints alleging that lawyers engaged by borrowers had failed to pursue cases or attend hearings despite receiving professional fees, resulting in ex parte decisions, orders passed in the absence of one of the parties.
“These complaints merit serious examination and highlight the vulnerability of borrowers who can neither afford repeated travel to Chandigarh nor readily monitor their cases,” FCIK said.
It added that the failure of engaged counsel to appear could expose borrowers to adverse orders and enforcement action against their businesses and assets without their defence being effectively presented.
The Federation said borrowers in the erstwhile State had access to local judicial remedies under Sections 17-A and 17-B of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act. Referring to the Jammu and Kashmir and Ladakh High Court judgment in M/s Hotel Alpine Ridge and Others v. Union of India and Others, dated April 12, 2024, it said the statutory changes following the 2019 reorganisation had shifted jurisdiction to the DRT at Chandigarh.
The extension of the tribunal’s jurisdiction to Jammu and Kashmir was provided for through notification S.O. 4145(E), dated September 10, 2021.
“Borrowers who previously had recourse to local judicial institutions now have to pursue their statutory remedy outside J&K. The resulting cost and difficulty deserve an institutional response,” the Federation said.
FCIK also cited the Department of Financial Services’ annual report for 2025–26, which listed 39 DRTs across the country, including three in Chandigarh, but none within Jammu and Kashmir.
It urged the Union Government to consider the region’s geographical circumstances, the accessibility of judicial institutions and borrowers’ financial capacity, rather than assessing the need for a tribunal solely on the basis of caseload.
The Federation said the High Court had described proceedings at Chandigarh as cumbersome, inconvenient and expensive, while observing that DRTs or benches and circuit benches within Jammu Kashmir and Ladakh could help address the difficulties.
The court had also recorded shortcomings in virtual participation, including connectivity problems that had led to directions requiring physical appearances.
FCIK Advisory Committee Head Shahid Kamili said repeated travel, accommodation costs, legal expenses and time away from business added to the difficulties of entrepreneurs already facing financial distress.
“Banks have every right to recover lawful dues. Borrowers must equally have an affordable and meaningful opportunity to be heard. A statutory remedy must be accessible in practice,” Kamili said.
Besides seeking a permanent tribunal and interim circuit sittings, FCIK has called for electronic hearing notifications to be sent directly to borrowers as well as their counsel, along with prompt access to judicial orders.
The Federation has urged the Chief Minister to support a formal proposal to the Union Government and offer suitable premises to facilitate an early decision.
It said the establishment of an accessible debt recovery mechanism would help ensure fair and timely resolution of disputes while supporting the government’s efforts to revive the industrial sector in Jammu and Kashmir.
