Pratip Chaudhuri arrest: Former SBI Chairman Rajnish Kumar calls the move a motivated, high-handed action

The market value of the property was assessed as Rs 160 crore in 2017, the newspaper report said. Godawan Group had approached courts after the properties were sold for a lower valuation.

Another top banker who is in competition too expressed surprise about the arrest. “If an asset is sold to an ARC, there would have been a set of rules followed. Such actions are scary. How will bankers do developmental works if this is the case?,” asked the banker who declined to be named.

Reacting to the news, former SBI Deputy Managing Director said in a tweet: "Absolutely pathetic , is the system being gamed again by defaulters despite all efforts by Modi govt, time for overhaul of judicial processes to improve transparency and introduce accountability @PMOIndia."

He further questioned Chaudhuri's arrest stating "without notice and without summons, how can police from another state arrest someone in Delhi, where is the due process of law."

SBI, in its statement, clarified that all due processes were followed while making the said sale to ARC. The bank has already offered its cooperation to the Law Enforcement and Judicial authorities and will provide further information, if any, that may be called for from their side.

“It appears from the copies of the proceedings now accessed by us that the Hon’ble Court does not appear to have been briefed correctly on the sequence of events. In as much as SBI was not a party to this case, there was no occasion for the views of SBI being heard as part of this proceedings,” the bank said.

The Loan

Further, SBI clarified that ‘Garh Rajwada’ was a hotel project in Jaisalmer, financed by the bank in 2007. The project remained incomplete for over three years and the key promoter passed away in April 2010. The account slipped into NPA in June 2010, the bank said.

“Various steps taken by the Bank for completion of the project as well as recovery of Bank’s dues didn’t yield desired results. Hence as part of the Bank’s recovery efforts, the dues were assigned to an ARC for recovery in March 2014,” SBI said.

Further, this sale to ARC by the bank was done through a laid down process as per the policy of the bank. "We further understand that the borrower was subjected to the IBC process by the said ARC and the asset has been acquired by an NBFC in Dec. 2017, again through the due process under the orders of NCLT, Delhi," the bank's statement read.

“As recovery efforts failed, approvals for sale to ARC were taken in Jan 2014, the assignment to ARC was completed in March 2014. It transpires now that the borrower had initially filed an FIR with the State Police against the sale of an asset to ARC. Aggrieved against the negative closure report filed by Police authorities, the borrower had filed a ‘Protest petition’ before the Hon’ble CJM Court,” the bank said.

“Incidentally SBI was not made a party to this case. All the directors of that ARC including Mr. Chaudhuri, who joined their Board in Oct. 2014, have been named in the said case,” the bank said.