Supreme Court issues Contempt Notice to SBI DGM and MD for not complying Court Order, Read full story
The Supreme Court of India has taken a significant step by issuing a contempt of court notice to a senior official of the State Bank of India (SBI). This action was prompted by the official’s failure to comply with the Court’s previous directive to offer a One Time Settlement (OTS) to a Himachal Pradesh-based business firm, AB Refer Warehousing Pvt Ltd, which operates from Chandigarh. The OTS was related to the adjustment of a subsidy amount towards the repayment of interest and loan installments.
Court’s Directive and Non-Compliance
A Bench led by Justice Vikram Nath has called for the presence of the SBI Managing Director of Risk Compliance & Stressed Assets Resolution Group, Nariman Point, Mumbai, and the Deputy General Manager of SBI Ludhiana, Pradeep Pandhi, before the Court. They are to appear on August 20, 2024, for the framing of charges related to their non-compliance with the Supreme Court’s order dated September 30, 2021.
The Court expressed its prima facie satisfaction that a case for contempt has been made out, issuing a notice specifically to Mr. Swaminathan J, Managing Director of Risk Compliance & Stressed Assets Resolution Group at SBI. The Bench, which also includes Justice PB Varale, stated in its order dated August 6, 2024, that the matter would be listed on August 20, 2024, for the formal framing of charges.
Clarification and Opportunity for Compliance
The Bench clarified that if the individuals named in the contempt petition are no longer holding their respective positions, the current officeholders in those positions must appear in Court on the specified date. Furthermore, the Court offered the respondents an opportunity to purge the contempt petition if they choose to do so before the hearing.
Petitioner’s Submission and Court’s Order
Senior Counsel PS Patwalia, representing AB Refer Warehousing Pvt Ltd, brought to the Court’s attention that the SBI officials had failed to implement the Supreme Court’s order from September 30, 2021. The order required SBI to offer an OTS to the business firm, involving the adjustment of Rs 10.50 crore from the subsidy reserve fund towards the repayment of the loan, and refunding the balance amount of Rs 4.73 crore in full and final settlement of all dues.
However, instead of adhering to the Court’s directive, SBI retained the subsidy amount of Rs 14.66 crore against Non-Performing Asset (NPA) dues and made a new OTS demand of Rs 9.08 crore for the final settlement. The petitioner argued that this action was in direct contradiction to the November 13, 2020, OTS, which the Supreme Court had ordered the bank to comply with.
