New Delhi: The Supreme Court has quashed criminal proceedings under the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act against State Bank of India (SBI) officials, observing that allegations of economic boycott or violations of banking guidelines, without specific claims of caste-based insult or discrimination, do not justify invoking the stringent law.
A bench of Justices JB Pardiwala and K Vinod Chandran set aside the February 4, 2019, FIR registered at the Criminal Investigation Department (CID) police station in Hyderabad, along with all proceedings arising from it.
The case stemmed from a commercial dispute involving credit facilities extended by SBI to Hritasha Infra Projects Private Limited, a small-scale enterprise whose accounts were classified as non-performing assets (NPA) in 2016 following significant financial losses.
The company’s director, Y Rajasekhar, had alleged that bank officials discriminated against promoters belonging to Scheduled Castes and Scheduled Tribes, forged documents, submitted false information and denied the company rehabilitation benefits. The complaint also alleged an economic boycott of SC/ST-managed enterprises and violations of Reserve Bank of India guidelines on the revival of micro, small and medium enterprises (MSMEs).
The Telangana High Court had declined to interfere in the matter, highlighting the bank’s obligations under Central government and RBI directions concerning rehabilitation.
However, the Supreme Court held that non-compliance with RBI circulars or refusal to extend a rehabilitation package could not, by itself, attract criminal prosecution under the SC/ST Act.
Describing the invocation of the law in a dispute essentially concerning loan recovery and NPA proceedings as an abuse of the legal process, the court clarified that allegations of forgery, misrepresentation and denial of rehabilitation benefits could be pursued before the appropriate forum, including the Debts Recovery Tribunal.
Allowing the appeal, the court left these commercial and financial grievances open for adjudication before the competent forum.
