NEW DELHI: The Delhi High Court on Wednesday issued notices to the Union Government and the National Agricultural Cooperative Marketing Federation of India (NAFED) on a public interest litigation accusing the cooperative body of giving bank guarantees or extending loans to "blacklisted" companies and individuals to conduct export-import business.

A Division Bench of the Court comprising Justice Vijender Jain and Justice Rekha Sharma asked the respondents to file replies to the petition by February 2006.

The petitioner Vikas Jain, a social activist, through his counsel Sugriv Dubey alleged that NAFED had given bank guarantees or extended loans to these firms and individuals without any collateral, moveable or immoveable.

The petitioner stated that NAFED could not take a loan of more than 10 times its capital but it had stood guarantees for loans which were more than 15 times of its capital, and in the event of the debtors failing to return the loans, the liability for repayment would fall on it as these firms and individuals had not given any security to the cooperative body.

Besides giving bank guarantees, NAFED also took loans from different private and public sector banks and disbursed them to firms and individuals who had been blacklisted by different banks for defaulting on repayment, the petition alleged.

NAFED stood bank guarantees or disbursed loans of as much as Rs.4,000 crores, the petition alleged.

Though NAFED has nothing to do with paintings, it had given a loan of Rs. 300 crores to G.S. Srivastava for purchase of paintings, including those of the famous painter M.F. Husain at a total cost of Rs. 100 crores, the petitioner alleged.

He urged the Court to direct the Registrar-General of Multi-State Cooperative Societies, to get the allegations investigated by the Central Bureau of Investigation (CBI).

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