The Delhi High Court on Tuesday dismissed two writ petitions filed by State Bank of India (SBI) seeking the expungement of adverse remarks made by a Chief Metropolitan Magistrate (CMM) in a loan recovery case..Justice Dharmesh Sharma criticised the Bank for pursuing "luxury litigation," stating that it was attempting to challenge an "innocuous order" that did not cause irreparable harm.."This is a luxury litigation which is being pursued by the petitioner Bank challenging an innocuous order of the learned CMM, which in no way causes it any irreparable loss of reputation or loss of face," the order said..The case pertains to loan facilities availed by PP Jewellers Private Limited from SBI and its erstwhile subsidiaries. The company's loan account became irregular and was classified as a Non-Performing Asset (NPA) on March 31, 2016.SBI issued a demand notice under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act on September 8, 2016, recalling the outstanding dues. Subsequently, a One-Time Settlement (OTS) proposal of ₹145 crore was accepted in January 2018. However, due to non-compliance by the respondent, the OTS was canceled in March 2019, after partial payments of ₹29.60 crore were received.In 2022, SBI filed an application under Section 14 of the SARFAESI Act seeking possession of mortgaged properties. However, the application was dismissed for non-prosecution on June 4, 2022, with the CMM recording adverse remarks against the Bank for its lack of diligence and possible collusion with the respondent..SBI challenged the adverse remarks, arguing that they caused irreparable reputational harm and were being improperly relied upon in unrelated proceedings, obstructing the recovery of public funds..The High Court observed that the CMM’s remarks were made in the context of ensuring the recovery of public money and were not beyond the scope of the proceedings. "A careful perusal of the aforesaid order would show that learned CMM was concerned that a huge amount of public money was involved and unnecessary adjournments were being sought and it was in the said context that castigating the concerned official of the bank, the matter was referred to the Chairman, State of Bank of India to take action against the erring bank officials," the order noted. .On the aspect of the CMM exceeding his jurisdiction, the Court said,"It appears that there was shown no alacrity on the part of the bank in satisfying the learned CMM about the correctness of the information furnished and the measures that were being taken to pursue the recovery of loan amount in right earnest. It is not the law that the learned CMM should be sitting like a silent spectator in Court and allow any party under the SARFAESI Act to abuse the process of law, given the fact that there is a huge pendency of cases in the Court.".The Court also dismissed application by intervenors alleging collusion, stating that they had no direct connection to the loan facility or the rder. However, the Court refrained from delving into the merits of these allegations, focusing instead on the Bank’s delay in filing the petitions. While dismissing SBI's pleas, it said,"In summary, the present litigation is ill-conceived and palpably suffering from inordinate delay and barred by laches for having been filed after almost two years of arising of the cause of action.".SBI was represented by Advocates Ankur Mittal, Abhay Gupta and Muskan Jain.PP Jewellers was represented by Advocates Sanjeev Bhandari, Ravi Data and Rajesh Sharma.The intervenors were represented by Advocates Jyoti Taneja, Shantanu Sharma, Moksh Tyagi and Reny Chauhan..[Read Judgment]
