Telangana High Court Declines Relief Against Resumption of 100 Acres at Fabcity SEZ
The Telangana High Court has declined to intervene in the state government's resumption of 100 acres at Fabcity SEZ. Justice Nagesh Bheemapaka questioned SBI's loan approval process, as the bank seeks to recover funds from the lessee, Sem India Fab Pvt Ltd.
Highlights
- •Telangana High Court refuses to halt the resumption of 100 acres at Fabcity SEZ.
- •Justice Nagesh Bheemapaka questions SBI's decision to grant a large loan against a lease.
- •The state government resumed the land after the lessee, Sem India Fab Pvt Ltd, failed to start the project.
- •The matter is adjourned until next Thursday for the state government to provide its official response.
The Telangana High Court has recently declined to provide immediate legal relief regarding the government's decision to resume 100 acres of land located at the Fabcity SEZ in Raveriya Village, Maheswaram Mandal. This legal development follows a petition filed by the State Bank of India (SBI), which had sought to challenge the state's actions regarding the property.
High Court Scrutinizes Loan Approval Practices
During the proceedings, Justice Nagesh Bheemapaka expressed significant concern regarding the financial practices of the State Bank of India. The court questioned the justification for granting a substantial loan based on a lease document for property at the Fabcity SEZ. The bench critically examined the bank's internal processes, questioning why such a large financial commitment was made against what was described as a insecure asset. Justice Bheemapaka remarked that such lending activities potentially impact national wealth, suggesting that the bank should prioritize internal accountability before pursuing legal intervention on the merits of the case.
The core of the dispute involves M/s Sem India Fab Pvt Ltd, which had leased the 100-acre site from the state government. The authorities maintain that the company failed to initiate its proposed project and committed several defaults, leading to the formal resumption of the land. The state argues that since the land lease was revoked, the State Bank of India cannot claim rights to mortgage the property for recovery purposes.
Legal Battle and Financial Implications
The State Bank of India, represented by Senior Counsel Narender Reddy, asserted that the total loan amount—which includes interest—now exceeds 640 crores, up from the initial 169 crores. The bank argued that it was granted no-objection certificates by the government when the property was mortgaged. Consequently, the bank believes it is entitled to initiate recovery proceedings against M/s Sem India Fab Pvt Ltd under the SARFAESI Act.
This case follows previous unsuccessful attempts by the lessee to challenge the resumption of the land in the High Court and a subsequent refusal by the Supreme Court to intervene. In the current petition, SBI is seeking a declaration that the resumption proceedings, dating back to August 3, 2023, along with G.O. Ms. No. 9 of February 2010, are arbitrary and illegal. The matter has been adjourned to the following Thursday to allow the state government to submit its formal response to these claims.
