Jammu and Kashmir Bank Reopens Yateem Foundation Accounts Following Court Authorization

23-09-2023 : The Jammu and Kashmir Bank has taken the decision to unfreeze the accounts belonging to the Yateem Foundation following an approval from a local court, allowing the organization to resume its banking operations across various branches of the bank.

The Chairman of the Yateem Foundation, Mohammad Rafiq Lone, expressed his gratitude to the officials at the Bank Corporate Headquarters for facilitating the defreezing of their accounts, marking a positive turn of events for the organization.

The crucial decision was rendered by the 4th Additional District Judge in Srinagar, presided over by Gowhar Majid Dalal, granting permission to the J&K Yateem Foundation in Srinagar to reactivate and operate its bank accounts that were maintained at different branches of the J&K Bank.

In the court’s directive, it was further stipulated that, in order to safeguard the bank’s interests, each account holder from the Yateem Foundation should provide a self-attested photograph and identification, along with a declaration confirming their status as signatories for the account.

The Presiding Officer also mandated that the account holders submit individual undertakings to the court, affirming their commitment to abide by all banking rules and regulations, maintaining proper accounting practices, and regularly submitting quarterly statements to the court for review. Additionally, they were required to pledge that in the event of any tax-related issues arising, they would resolve these matters independently and at their own expense, as outlined in the court’s order.

The background of this case centers around the bank’s issuance of a Know Your Customer (KYC) notice to the NGO due to its failure to provide renewed registration documentation. The previous registration had remained valid until March 2018, and in accordance with banking norms and Reserve Bank of India (RBI) guidelines, the bank had no choice but to freeze the accounts.

Displeased with the bank’s decision, the Yateem Foundation sought legal recourse, challenging the validity of the KYC notice and requesting that the NGO be allowed to operate its bank accounts without any hindrances.

The court acknowledged that while there was no explicit order for account freezing, the circumstances suggested otherwise. The bank’s counsel had indicated uncertainty about who should be permitted to manage the accounts given the absence of registration for the Society.

The court emphasized that the account holder is, indeed, a registered society, and their registration should not be disregarded, even if it has lapsed. However, it also recognized that the Society had not renewed its registration and had filed a writ petition before the high court challenging this non-renewal.

The court concluded that the Society had a prima facie case in their favor, evident from the available records. Failure to grant the requested relief would cause irreparable harm to the plaintiff, as there would be no means of compensating for such losses later.

Furthermore, the court stressed the importance of the Society’s contributions to various institutions and assets during its period of service. Denying access to these accounts would potentially result in the closure of these institutions, which cannot be allowed to occur due to the ongoing litigation. The court recognized its duty to ensure that the functioning of these institutions is not compromised during the litigation process and emphasized the need to protect the interests of the public, as this matter transcends individual account holders.