HC refuses to stay state ordinance against MFIs

By S A Ishaqui

Hyderabad. Oct 23 : The Andhra Pradesh High Court on Friday refused to stay the ordinance issued by the state government to rein in micro finance institutions.
However, the High Court also gave a breather to the MFIs by allowing them to carry on with their business provided they adhered to Sections 9 and 16 of the AP Micro Finance Institutions (Regulation of Moneylending) Ordinance 2010.

These sections prohibit MFIs from collecting money beyond the principal amount and using strong arm tactics against borrowers.The HC was dealing with petitions filed by the Micro Finance Institutions Network (MFIN), SKS Micro

Finance Ltd and Spandana Sphoorty Financial Institutions, who sought a stay on the ordinance complaining that it had brought their transactions to a halt.
A division bench comprising Chief Justice Nisar Ahmad Kakru and Justice Vilas V. Afzulpurkar directed the petitioners to apply for registration under the ordinance within a week.

The High Court ordered micro finance institutions to register under the ordinance issued by the government to rein them. Pending registration, the MFIs shall carry on their business and file their returns before the competent authority within 48 hours, the court added.

The authority should pass orders on these applications within the time frame prescribed under the rules, said the bench.

The bench made it clear that if there was any violation, the state could launch prosecution, but no arrest should be made till further

orders of the court. The bench added that the orders would remain in operation till next date of hearing.The advocate-general, Mr D.V.
Seetharama Murthy, told the court that the government has decided to grant registration to MFIs within 24 hours.

ACB probe against Emaar stays

By S A Ishaqui

Hyderabad, Oct. 20: In a major blow to the Emaar Hills Township, the AP High Court on Wednesday dismissed its plea to stall the probe by the Anti-Corruption Bureau on allotment of land to it by the Andhra Pradesh Industrial Infrastructure Corporation.

Justice N.V. Ramana dismissed the writ petition filed by the company challenging the order of a lower court which directed the ACB to probe land allotments made by the APIIC to 16 companies and individuals including Emaar.

The lower court had passed the order on a complaint filed by Mr Sri Ranga Rao, a practicing advocate of the city, alleging that APIIC officials committed large-scale irregularities in connivance with private parties in land allotments.

Emaar approached the High Court contending that complaint of Mr Ranga Rao was part of a conspiracy by business, political and bureaucratic circles and had been filed at the instance of some senior officials of the APIIC.

However, Justice Ramana pointed out in his 15-page verdict that the complainant was an advocate.

AP High Court praises MFI ordinance

By S A Ishaqui
Hyderabad, Oct. 20: A division bench comprising Chief Justice Nisar Ahmad Kakru and Justice Vilas V. Afzulpurkar of the Andhra Pradesh High Court on Wednesday observed that the objective of the Andhra Pradesh Micro Finance Institutions (Regulation of Money Lending) Ordinance 2010, was praiseworthy.

The bench also observed that the legal and legislative spread that ought to govern the functioning of micro finance institutions (MFIs) is still lying unoccupied.

The bench was hearing petitions filed by the Microfinance Institutions Network (MFIN), SKS Microfinance Ltd and Spandana Sphoorty Financial Institutions challenging the ordinance.

Mr Niroop Reddy, Supreme Court counsel, arguing on behalf of SKS said the restrictions imposed on MFIs are unreasonable. He said outstanding amount of `1,400 crore has to be collected from borrowers and because of the ordinance collections are nil.

Mr S.R. Ashok, senior counsel appearing on behalf of the MFIN, told the court that he was not asking for the suspension of the ordinance, he asked the court to direct the authorities to permit the MFIs to carry out their transactions and grant stay of arrest of the representatives of the MFIs under the alleged violation of the ordinance.

Mr Vedula Venkat Ramana, senior counsel arguing on behalf of the Spandana Sphoorty Financial Institutions, said that the preamble of the ordinance itself was
vague and emotional in nature.

Emaar asks HC to restrain APIIC

By S A Ishaqui

Hyderabad, Oct. 1: Emaar Hills Township Pvt Ltd has approached the AP High Court seeking a direction from it to restrain the AP Industrial Infrastructure Corporation (APIIC) from interfering in any manner with the progress of the project.

The APIIC had served a legal notice on the company to withdraw the development agreement.

Aggrieved by the action of the APIIC, the Emaar Hills approached court and challenged the notice issued by the APIIC. The company contended that APIIC has no power to either serve the notice or to terminate the development agreement.

The petitioner also urged the court to call for the records related to the issue.

Case against Allu Aravind stayed

The AP High Court on Friday stayed all further criminal proceedings against Mr Allu Aravind, general secretary of Praja Rajyam in a lower court. Justice R. Kantha Rao while dealing with a petition filed by Mr Aravind seeking a direction to quash criminal proceedings granted interim orders.

According to the petitioner, the Jubilee Hills police registered a case against him for allegedly insulting the national flag by hoisting it upside down at the Chiranjeevi Blood Bank on August 15.