Bombay HC pulls up SBI, its lawyers for being ignorant of basic principles of law [Read Order]

Bombay HC pulls up SBI, its lawyers for being ignorant of basic principles of law [Read Order]

Omkar Gokhale

The Bombay High Court recently pulled up State Bank of India (SBI), its officers and the law firm engaged by it for being ignorant of basic principles of law, owing to which it was constrained to defer hearing in a writ petition filed challenging the Bank’s actions.

In the absence of effective assistance to the Court by learned counsel for Respondent No.2 (SBI), we are constrained to defer hearing in the Writ Petition, but at the outset, would be failing if we do not record our anguish on the conduct of the 2nd Respondent and the Law firm which represents the 2nd Respondent.”

A Division Bench of Chief Justice Pradeep Nandrajog and Bharati Dangre was hearing a writ plea by Rambo Fashion Limited against the SBI’s Board of Trustees.

The petitioner company had approached the Bombay High Court seeking relief from notice issued by the Bank for alleged default in repayment of a loan.  The SBI had advanced credit having a limit of Rs. 8.95 crores to the petitioner firm. A statement of account issued by the SBI on March 7, 2015 showed that there was no default until October, 2010.  The petitioner was within the limit of the credit advanced until then. The breach of the limit took place for the first time on October 14, 2010.

On June 25, 2011, a notice under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act), 2002 was issued by SBI officer to the petitioner company. On July 27, 2011, the petitioner responded to the notice through a counsel. The reply was rejected on August 8, 2011.  The petitioner company had challenged the same before the High Court.

However, it appears that SBI failed to render proper assistance to the Court when the matter was taken up earlier. this week. The Bench observed,

“In the commercial capital of the country, we find the State Bank of India, its officers and the Law firm it engaged are ignorant of even the basic principle of law. Unfortunately, during the pendency of the proceedings before the learned Debt Recovery Tribunal, the secured assets have been sold in auction.”

It, therefore, adjourned the hearing, while also directing that the authorised representative of SBI should remain present in the Court at the next hearing.  The Bench has further directed SBI to produce list of dates and events in the matter. The case will be taken up next in six weeks.

Advocates Mathew Nedumpara and Rohini Amin appeared for the petitioner, while SBI was represented by Advocate Rakesh Singh instructed by MV Kini & Co.

[Read Order dated November 25, 2019]

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