After rap from Gujarat HC, SBI issues no-dues certificate withheld over farmer's outstanding amount of 31 paise

The State Bank of India on Monday told the Gujarat High Court that it has issued a no-dues certificate to a borrower in a land sale matter, which was withheld over non-payment of an outstanding amount of just 31 paise.

Last week, the HC had pulled up the country’s largest public sector lender for not issuing a no-dues certificate, observing this was nothing but harassment.

On Monday, the bank, in an affidavit filed before the court of Justice Bhargav Karia, said it has issued the no-dues certificate on April 28 to the borrower, required for clearing the land deal.

Justice Karia said in his order that with the issuance of the no-dues certificate, the petitioner has sought permission to withdraw the plea.

The SBI said it could not issue the no-dues certificate earlier in view of a letter received from the original borrower directing it not to do so.

"It was not the endeavour of the respondent bank to not issue no-dues certificate in spite of payment of the entire dues,” the SBI told the court.

The court had last Wednesday pulled up the bank for not issuing no-dues certificate over an outstanding amount of just 31 paise.

Petitioners Rakesh Verma and Manoj Verma had purchased a piece of land in Khoraj village near Ahmedabad city from farmer Shamjibhai and his family in 2020.

Since Shamjibhai had sold the land to the petitioners before repaying a crop loan of Rs 3 lakh taken from the SBI, the petitioners (who are new owners of the land) could not enter their names in the revenue records because of the bank’s charge on the land parcel.

Though the farmer later repaid the entire amount to the bank, the SBI did not issue a no-dues certificate, following which the new owners moved the high court two years ago.

During the hearing last week, when Justice Karia had asked the bank to submit the no-dues certificate in the court, SBI’s lawyer Anand Gogia said, "It’s not possible because there is an outstanding amount of 31 paise. It is system generated."