Overview
- The Supreme Court, speaking in a May 19 hearing, found negligence by State Bank of India officials for sanctioning an Rs 8.09 crore loan without proper assessment after the borrower defaulted on the first instalment.
- The court dismissed the special leave petition by Bhaskar International but ordered a status quo on the mortgaged properties until June 2, 2026 to allow the company to press for interim relief before the DRT.
- The dispute progressed under the SARFAESI Act, with a district magistrate granting possession to SBI on May 29, 2024 and the Punjab and Haryana High Court directing execution of that order on January 16, 2025.
- The bench criticised a wider pattern where banks approve large corporate loans with limited scrutiny yet impose onerous procedures on ordinary small borrowers and urged simpler, fairer recovery steps while leaving rule changes to the RBI.
- The ruling could sharpen focus on lender conduct and borrower protections as regulators consider tighter recovery rules and draft directions on bank conduct that aim to curb heavy‑handed recovery tactics.