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.
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