ISLAMABAD - Chief Justice Iftikhar Muhammad Chaudhry on Monday said that the tax-payers money is being abused by writing-off loans, as the wilful defaulters are still getting loans. The Chief Justice observed that tax-payers money is used to run big industries and businesses while common mans home is auctioned if he defaulted. He said if a businessman genuinely claims that his company is bankrupt then he should first surrender the securities and the balance amount be remitted. 'But in reality contrary things were happening; as the industrialists who get their loans waived off are still running their businesses, adding, that was the reason rich are getting richer. A three-member bench headed by Chief Justice Iftikhar Muhammad Chaudhry and comprising Justice Muhammad Sair Ali and Justice Ghulam Rabbani was hearing a suo moto case of the written off loans. 'The State Bank has waived off loans worth Rs 256 billion from 1971 to 2009. The CJP questioned has ever Circular BPD-29, issued by the State Bank of Pakistan under Section 33 of the Banking Companies Ordinance 1962, which had been instrumental in waving of bank loans, was ever challenged? Iqbal Haider, counsel for SBP, replied that the Circular was neither challenged nor any court ever examined the legality or Constitutionality of it, adding, it was the first time that the superior court is examining it. Khawaja Haris, amicus curiae in the case, has urged the bench that before the commission, constituted to examine write-off loans cases, starts its proceedings the court must scrutinise its vires. Iqbal Haider said the BPD-29 is in accordance with the regional and international practices, adding, that there was nothing wrong behind the concept of issuing BPD-29, and accepted that there could be faults in its implementation. The learned counsel said that the court has to see whether the Circular BPD-29 was used with bona fide objective and was not misused. He said in 2002 Rs 231 billion were stuck up loans ,therefore, the government at that time adopted three prong strategy. 'First to issue Circular BPD-29, secondly form a committee for revival of sick units and third was to strengthen the corporate sector. The government in order to overcome the issue of bad loans sent the references of wilful defaulters to NAB, he added. Justice Sair Ali said in many cases there was collusion between banks and the borrowers, as the banks officials themselves told the borrowers stop paying the installments. Dr. Pervaiz Hassan argued that Circular BPD-29 was the valid regulation under Section 33-B of the Banking and Companies Ordinance. He said the power to write-off loans is inherent power available to all the banks under Section 196 of the Banking Companies Act. The BPD-29 only seeks to circumscribe that power. He further said the Board of Directors of the banks have endorsed BPD-29. The learned counsel pleaded: 'The writing off loans was essential for the good corporate government and accurate financial results of the banking sector, otherwise, the false picture will merge for other shareholders. He said at the time of issuing BPD-29 the ratio of non-performing loans was 25 per cent, which is now less than 10 per cent. He further said that the Circular 29 has been approved in series of superior courts cases, adding, but the court has jurisdiction to strike down the mala fide of BPD-29. The hearing was adjourned till Tuesday (today).