SBI Appeals for Transfer of High Court Judge’s Loan Dispute Outside Tamil Nadu

In an unprecedented legal tangle, the State Bank of India (SBI) has sought the intervention of the National Consumer Disputes Redressal Commission (NCDRC) to transfer a home loan repayment dispute involving Madras High Court Justice J Nisha Banu to a forum outside Tamil Nadu.

The dispute centers on a property loan issued by SBI for a residence in Madurai, which Justice Banu acquired. According to the bank’s statement, problems arose when the partially constructed property was demolished due to substandard construction. Justice Banu, however, asserts that the crux of the matter lies with an insurance claim she placed with The New India Assurance Company, which was subsequently declined. She alleges that the denial of her insurance claim was due to a collusive effort between the bank’s officials and the insurance provider, leaving her unable to settle the outstanding loan balance.

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SBI, voicing concerns over potential bias in the Madurai District Consumer Disputes Redressal Commission—given its jurisdiction under the Madras High Court—has requested the transfer of the case, stressing the judge’s association with the court might influence the proceedings.

On August 2, the NCDRC, presided over by Justice AP Sahi along with Member Inder Jit Singh, issued a notice to SBI on its transfer petition. The hearing is set to continue on September 23. During the proceedings, SBI’s representative, Advocate Jitendra Kumar, pushed for an interim stay on the Madurai proceedings, citing apprehensions about impartiality.

However, the NCDRC was cautious, noting that the mere involvement of a High Court judge does not inherently justify the bank’s fears of partiality. The Commission has requested more concrete evidence to consider the transfer seriously.

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The bank also highlighted issues with the repayment process, noting that the judge had multiple instances of non-payment due to insufficient funds in her account during 2018 and 2019. Despite attempts to reschedule the payments, the Electronic Clearing Service (ECS) transactions failed, exacerbating the dispute.

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