State Bank of India (SBI) has been pulled up by national company law tribunal (NCLT) for lacking diligence in its approach to a bad loan recovery case that is before the court.
The public sector bank had approached NCLT claiming it had misplaced papers pertaining to the account of a borrower, Tybros India Tours, and could not locate them at the relevant branch which had resulted in a 35 day delay in filing a claim against the borrower who has turned delinquent.
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“Being a public financial institution that is doing banking business appellant SBI is expected to be more diligent and take all possible care specially in protecting the banks interest as well as customers interest”, NCLT noted.
SBI is owed Rs. 10 crore by Tybros, a Delhi-based event management company against which recovery proceedings are ongoing at NCLT. As per the rules, all creditors are supposed to file their claims within a stipulated time frame once such legal proceedings start.
A two judge NCLT bench of Justice PSN Prasad and Justice Rahul Bhatnagar reprimanded the bank and imposed costs of Rs. 10,000 on it for the delay though it asked the company’s liquidator to consider its claim.
“An institution like SBI should be more vigilant and act with due diligence therefore plea for waiver of costs is denied”, NCLT noted. SBI submitted that the delay was neither deliberate nor intentional.
