State Bank of India challenges Telangana government's land sale in High Court
State Bank of India (SBI) has moved the Telangana High Court, filing two writ petitions to challenge the state government's e-auction sale of five acres of land in Raidurg, Rangareddy district. The land was originally allotted in 2010 by the then undivided Andhra Pradesh government to State Bank of Hyderabad (SBH), an associate bank that later merged with SBI.
Justice N.V. Shravan Kumar is set to hear the petitions on Thursday, after the government pleader sought time on Tuesday to secure instructions. The bank had filed the petitions as urgent lunch motions, citing the recent e-auction and alleged violation of earlier High Court orders.
According to the bank's senior counsels B.S. Prasad and N. Venkatraman, the land was allotted for constructing an office and other complexes. SBH paid a sale consideration of ₹13.33 crore and other charges, and an allotment letter was issued by the Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC). A sale agreement was executed in 2011, and subsequently, a bank branch office and three ATM centres were built on the premises. The bank says it complied with all terms and submitted construction timelines to the government.
On January 22, 2021, the state government issued proceedings cancelling the land allotment. SBI challenged this cancellation in the High Court, which set aside the cancellation memo and directed the government to consider the bank's request for implementing the project. The court's order effectively nullified the cancellation, and the bank contends the 2021 cancellation "ceased to exist in the eyes of the law." In a separate but related petition, the High Court also directed the government to take steps for the project's implementation. The government appealed against these orders, but the High Court affirmed its earlier decisions.
Despite these court rulings, the government issued an e-auction notice for the five-acre land on May 6 this year. The land was subsequently sold through the e-auction process. SBI argues that the sale is illegal and in direct contravention of the High Court's orders. The bank is seeking to set aside the e-auction and have the allotment restored.
The Special Government Pleader Rahul Reddy, representing the state, requested time to obtain instructions from the authorities, indicating that the government may present its side at the hearing on Thursday. The case is being closely watched as it involves a public sector bank's rights over prime land in a key commercial area.
The State Bank of Hyderabad was merged with SBI in 2017 as part of a consolidation of associate banks. Post-merger, all assets and rights of SBH, including the allotted land, were transferred to SBI. The bank had invested in infrastructure on the land and claims a legitimate interest in developing it further as per the original agreement. The land's location in Raidurg, within the Hyderabad Knowledge Centre, makes it a valuable asset in the city's information technology corridor. The bank's existing branch and ATMs are functional, serving the local community.
The High Court's upcoming ruling will determine whether the government's e-auction stands, or if the earlier court orders in favour of the bank will be upheld. The matter underscores the legal complexities when contractual land allotments are unilaterally cancelled and subsequently sold by government authorities.
