Jammu and Kashmir has no vestige of sovereignty outside Constitution: Supreme Court

The apex court observed this while terming as "wholly incorrect" the conclusion arrived at by Jammu and Kashmir High Court which had held that the state has "absolute sovereign power" to legislate laws touching the rights of its permanent residents regarding their immovable properties.

"The State of Jammu and Kashmir has no vestige of sovereignty outside the Constitution of India and its own Constitution, which is subordinate to the Constitution of India," a bench of Justices Kurian Joseph and RF Nariman said.

"It is therefore wholly incorrect to describe it as being sovereign in the sense of its residents constituting a separate and distinct class in themselves. The residents of Jammu and Kashmir, we need to remind the High Court, are first and foremost citizens of India," it said.

The apex court said this while holding that provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) are within the legislative competence of Parliament and can be enforced in Jammu and Kashmir.

The bench set aside the verdict of Jammu and Kashmir High Court that had held that any law made by Parliament, which affects the laws made by state legislature, cannot be extended to Jammu and Kashmir.

"The High Court judgment begins from the wrong end and therefore reaches the wrong conclusion. It states that in terms of Section 5 of the Constitution of Jammu and Kashmir, the State has absolute sovereign power to legislate in respect of laws touching the rights of its permanent residents qua their immovable properties," the apex court said.

It further said, "We may also add that permanent residents of Jammu and Kashmir are citizens of India, and there is no dual citizenship as is contemplated by some other federal Constitutions in other parts of the world".

The apex court judgement came on the appeal by State Bank of India (SBI) against the high court verdict which had held that the SARFAESI Act would collide with the Transfer of Property Act of Jammu and Kashmir, 1920.

SARFAESI is an enactment which entitles banks to enforce their security interest outside the court process to take possession of secured assets of the borrower and sell them outside the court process.

The apex court, in its 61-page verdict, also said it was "disturbing to note that various parts of High Court judgment speak of the absolute sovereign power of Jammu and Kashmir."

"It is necessary to reiterate that Section 3 of the Constitution of Jammu and Kashmir, which was framed by a Constituent Assembly elected on the basis of universal adult franchise, makes a ringing declaration that the State of Jammu and Kashmir is and shall be an integral part of the Union of India. And this provision is beyond the pale of amendment," it said.

The apex court, while setting aside the high court order, held that provisions of the SARFAESI Act can be applied to Jammu and Kashmir.

"We therefore set aside the judgment of the High Court. As a result, notices issued by banks in terms of Section 13 (Enforcement of security interest) and other coercive methods taken under the said Section are valid and can be proceeded with further," the bench said.

The high court had held the Act was inapplicable for banks like the SBI which are Indian banks.