A Division Bench of the Kerala High Court on Thursday adjourned to September 7 the hearing on writ petitions challenging the government sanction given to the Kerala State Industrial Development Corporation (KSIDC) to start a non-banking financial company (NBFC) allegedly based on Islamic principles.
The Bench comprising Chief Justice J. Chelameswar and Justice P.N. Ravindran adjourned the hearing when the petitions came up for hearing. Meanwhile, the Reserve Bank of India (RBI) sought three weeks' time to file an affidavit in response to the petitions as directed by the Bench. The RBI said the contentions in the petitions involved policy decision. Therefore, more time was bona fide required for filing an affidavit. The Bench had earlier directed the State government and its instrumentalities to desist from participating in any way, financially or otherwise, in the business of NBFC.
One of the petitioners, Janata Party president Subramanian Swamy, who was present in the court, agreed to the case being adjourned. According to Dr. Swamy, the setting up of a financial service company, with government participation, which would follow the canon of law of a particular religion, was a clear instance of the State favouring a particular religion. It was clear from the order that the company was to be set up strictly in accordance with the Shariah, he contended in his petition.
While countering the allegation that the company would function in terms of the Shariah law, the government had submitted that the allegations were baseless and misleading. There had been no provision in the memorandum of association or in the Articles of Association of the company for constituting a Shariah Advisory Board to supervise the company, as alleged in the petition, the government said. The company, Al Barakh Financial Services Limited, was registered under the Companies Act.
