Yateen Foundation’s accounts at Jammu and Kashmir Bank were defreezed after a local court gave the organisation permission to use the bank accounts at various Bank branches.
The employees of the Bank Corporate Headquarters have been praised by the Chairman of the Foundation, Mohammad Rafiq Lone, for defreezing their account.
The J&K Yateem Foundation, Srinagar, has been given permission to manage the bank accounts opened at various J&K Bank branches by the 4th Additional District Judge, Srinagar, who is presided over by Gowhar Majid Dalal.
The court further ordered that the bank seek self-attested documents from the Yateem Foundation in order to protect its interests. These documents must include a photograph that is properly identifiable and a declaration from each signatory of the account holder.
The presiding officer ordered the account holders to present individual guarantees to the court that they will not break any banking laws, maintain correct accounts, and submit quarterly statements to the court.
”They will also submit another undertaking before this court that if at any point of time there will be any tax related issue, they will resolve the same of their own at their own expenses”, reads the order.
According to the case’s factual matrix, the bank had no choice but to freeze the accounts after the NGO failed to provide the updated registration, which was required by banking regulations and RBI guidelines because the previous registration was only valid until March 2018.
A legal challenge was filed against the bank’s decision, which led to a declaration that the KYC requirement was illegal in the eyes of the law and that the NGO should be free to use the bank accounts without restriction.
The bank is unsure of who will be authorised to manage the accounts as the Society is not registered, according to the bank’s attorney who is representing it in court, even if there is no explicit order for the freezing of accounts.
“It is worth to note that the account holder is a registered society, so their registration cannot be ignored, but their registration has expired, cannot be on the same footing without registration. The concerned have not renewed their registration and they are aggrieved by the action of concerned not to renew the same, have filed the writ petition before high court”, Court said.
The plaintiff would suffer an irreparable loss that cannot be made up for later, according to the court, who stated that the Society has a prima facie case in their favour at this point that comes from the face of the record.
The court ruled that because society has built up a variety of assets over the course of the service period, its institutions cannot be left to the whims of the bank and will be forced to close if the accounts are denied.
“Court is under duty to see the functioning of these should not get affected by the pendency of the litigation. They cannot be put to loss or to be closed for want of money as it is not the amount of individual-plaintiffs but the amount of public in general and due to conflict between the employees of society they cannot take the bank as shield”, Court said.
