Legal

Delhi HC Rejects SBI’s Appeal Against CMM’s Remarks In Loan Recovery Case

The Delhi High Court has refused to entertain the State Bank of India’s (SBI) appeal against the adverse comments made by the Chief Metropolitan Magistrate (CMM) in a loan recovery case involving PP Jewellers.

The court criticized the bank for filing a baseless petition and for the delay in initiating the case, which it deemed inappropriate.

Background Of The Case

The legal dispute involves PP Jewellers, a company that took loans from SBI, which later became irregular and were classified as Non-Performing Assets (NPA) in 2016.

In response, the bank sent a demand notice on 8th September 2016, seeking repayment.

By January 2018, PP Jewellers accepted an out-of-court settlement (One-Time Settlement, or OTS) and agreed to settle a debt of ₹145 crore.

However, the bank continued legal proceedings in 2022, attempting to take possession of mortgaged properties from the company.

Despite the settlement, SBI filed an application in 2022 to take possession of the assets. The case was dismissed by the CMM in June 2022 due to the absence of the jeweller in court.

During the hearing, the CMM made adverse comments, accusing the bank of not progressing with the case in good faith and implying its possible involvement in collusion with the company.

SBI’s Challenge & The High Court’s Ruling

SBI challenged the CMM’s remarks, arguing that they damaged its reputation and hampered further efforts to recover the dues.

The bank claimed that the adverse comments had the potential to undermine its credibility and obstruct the recovery process.

However, Justice Dhamresh Sharma of the Delhi High Court rejected SBI’s appeal.

He noted that the CMM’s comments did not harm the bank’s reputation because the remarks caused no specific harm.

Additionally, the court highlighted that the petition filed by SBI was baseless and unjustified, considering the fact that the case had been pending for over two years without proper grounds.

Court’s Observations On Delay & Legal Conduct

The court further criticized the delay in filing the petition and stressed that the case had been wrongly initiated.

Justice Sharma noted that the delay of more than two years in addressing the matter indicated improper preparation of the case.

The High Court clarified that the bank failed to follow the legal procedure and stated that it should not file such petitions unless it grounds them in a substantial and immediate need for resolution.

The Delhi High Court’s ruling emphasized the importance of filing legitimate, timely petitions in court and avoiding unnecessary delays.

The judgment reminds parties to use the legal process responsibly, especially when pursuing financial recovery, and underscores the need for accountability in corporate legal actions.

Also Read: Delhi HC Seeks MCD Report On Unauthorized Construction In Chandni Chowk

Gopal Krishna

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