NC’s ex-MLC, PDP leader’s kin among JK Bank’s defaulters

 JK Bank asks DPS Anantnag owners to pay back debt of Rs 3.43 Cr

Ahmed Ali Fayyaz

SRINAGAR, Feb 15: National Conference leader and the party’s former Member of Legislative Council, Altaf Ahmad Wani alias Altaf Kaloo, and brother of PDP leader and former Minister of State for Health, Abdul Gaffar Sofi, are among the owners of Delhi Public School, Anantnag, who have been notified by Jammu & Kashmir Bank as defaulters and asked to pay back debt outstanding of Rs 3.43 Cr in the next two months.

According to officials at JKB’s South Kashmir zonal office, NC leader Altaf Kaloo, PDP leader Abdul Gaffar Sofi’s brother, Abdul Rashid Sofi, and two other businessmen of Anantnag and Sangam towns set up Mars Educational Trust (MET) Sangam in 2004-05. Within a year, they became franchise of Delhi Public School and set up its Anantnag branch at Sangam on the National Highway. They took term loan of Rs 2.00 Cr for construction of the school buildings in 2006, term loan of Rs 63 Lakh in 2007 for expansion of the complex besides procurement of furniture, computers and labs and in the same year another term loan of Rs 56 Lakhs for purchasing school buses.

JKB officials said that promoters of the trust committed serious defaults and irregularities in backing the loan back to the back according to the agreement between the two parties. They said that when the principal amount and the interest thereon accumulated to Rs 3.43 Cr and the party did not honour its commitments and assurances made in response of several notices and meetings with the branch manager, the bank felt constrained to issue the notice through newspapers.

“All these term loans, alongwith the interest, were to be repaid by you through monthly installments of prescribed amounts but you have been willfully neglecting and refusing to pay the same. As a result of your default, the bank has been forced to recall these term loans and after a number of notices and requests, it finally recalled the same in July 2011 whereupon the entire amount outstanding in these three accounts, aggregating to Rs 34325359.57, as on 31-12-2011, has become due and payable to the bank from you”, reads the notice issued through a daily today. Bank has asked the ‘defaulters’ to pay the entire amount in two months to save themselves from further action and made it clear publicly that “said actions of the bank may entail severe hardships to the innocent students of the school but you alone shall be to blame for the same”.

With the things coming to a head between the DPS Anantnag owners and the bank, future of over a thousand students has landed into uncertainty. Classes of LKG to Class 12^th have been operational at this school, first and the last CBSE-affiliated school in south Kashmir. “We are conscious of the sensitivity of the issue but equally constrained to recover the debt in full. People can not hide behind such sensitivities and situations”, said a senior JKB official. He described it as bank’s routine activity of recovery and regularization of accounts.

Former MLC and NC’s leader, Altaf Ahmad Wani (Kaloo), who is one of the four founder members and trustees of Mars Educational Trust disputed that the promoters had committed any ‘willful default”. “We have no intention of running away with the bank’s money. We have already paid back Rs 2 Crore and owe Rs 68 Lakhs to them”, Altaf told Early Times. According to him, bank had done the favour of advancing loan of Rs 4 Crore but also been “unfair” in fixation of the “anomalous” rate of interest as well as execution of insurance.

Altaf explained that JKB had advanced voluminous loan to DPS Srinagar at just 7% while as interest rate of 13% was being arbitrarily charged from DPS Anantnag. According to him, the trust had raised this issue with the former Chairman of the bank but he did not settle it for a long time. Later, the promoters raised the same with the current chairman, Mushtaq Ahmad, who was gracious enough to issue written sanction and orders, asking the bank officials to rationalize the rate of interest and make it same as has been sanctioned in favour of DPS Srinagar. “But, the branch manager is repeatedly denying receipt and knowledge of such orders”, Altaf asserted.

Altaf said that it was not the promoters’ but the bank’s fault that it had insured only the building structures and general laboratory for a lower amount with Bajaj Allianz. He insisted that major reason of the irregularity were two massive attacks by unruly mobs on the school in 2008 and 2010. “In the first attack, we suffered damages to the tune of Rs 1.87 Cr. Due to the bank’s lapse and laxity, Bajaj cleared the claim only for Rs 51 Lakhs. That was deposited in the account. Next time, damages were assessed at Rs 1.62 Cr. Again, the insurance company is pleading to pay a small amount. No claim has been realized till date”, Altaf said. He said it was being projected in defence by Bajaj that different labs and equipments had not been specifically and separately covered in the policy made by the bank.

Known for its “softness” towards defaulters in politics and media, J&K Bank has rarely taken harsh measures to enforce recovery of loans from several classes of customers. It is after a long time that notice has been publicly served on so-called protected defaulters. While as Abdul Rashid Sofi’s brother, Abdul Gaffar Sofi, who is believed to be the real partner, was returned as PDP’s MLA from Homeshalibugh in 2002 and 2008 Assembly elections, he served as MoS Health in Mufti Mohammad Sayeed’s coalition government. Second partner, Altaf Ahmad Wani alias Kaloo, emerged as NC’s choice and was installed as the party’s MLC in 2009. He held that position for two years.

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