Telangana High Court dismisses SBI plea against Sebi

A two-judge bench of the Telangana High Court rejected the SBI claim that it had the upper hand to recover the amount from defaulters over the market regulator

Hyderabad: A two-judge bench of the Telangana High Court, comprising Justice P Naveen Rao and Justice Nagesh Bheemapaka, dismissed two writ petitions filed by the SBI against Sebi. The bench rejected the SBI claim that it had the upper hand to recover the amount from defaulters over the market regulator.

The issue relates to two private companies, namely Midfield Industries and SVCL Pvt Limited, that had obtained loans from the SBI in 2004 and 2006 mortgaging their immovable properties. As the companies defaulted and the loan was declared as NPA, the SBI initiated recovery proceedings under the Sarfaesi Act.

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However, when the sub-registrar refused to register the property in the name of the successful bidder citing the prohibitory orders passed by Sebi, the SBI challenged the same. The bank said it should be prioritised in the recovery as it had given the loan long before the 2020 prohibitory order by Sebi. It also pointed out that the Sarfaesi Act and RDB Act had a non-obstante clause and hence it would prevail over the SEBI Act.

Sebi, on the other hand, argued that the present case does not fall under the non-obstante clause. Violations were committed by the entities much earlier, notices were issued to such effect, and now the SBI cannot take such a plea, the Sebi argued. The prohibitory order was passed to protect lakhs of investors, Sebi said.

Bail denied

Justice K Lakshman refused to grant anticipatory bail to the owner of Stylish Spa in the city. Ramawath Swathi is facing the allegation of running prostitution in the name of spa business. The counsel of the petitioner argued that a false case was foisted and said that the petitioner has all valid permissions for running the spa.

The counsel also pointed out that CCTV footage can be examined. The Public Prosecutor argued that the matter involves trafficking of married women. He said that the case is still under investigation and opposed granting of bail stating that petitioner can influences the witnesses and tamper with evidence, if released.