STATE BANK OF INDIA vs Prathyusha Resources Infra Pvt Ltd on 10 July 2026

ORDER

1. This application has been filed by the Petitioner / Applicant Bank praying to pass orders of attachment of the properties more fully described in the schedule to this application.

Averments in the application

2. The Petitioner / Applicant has filed the above OA against the Defendants1 to 13 for recovery of a sum of Rs.88,16,76,422/-. The 1st defendant had availed the loan facility and defendants 2 to 13 are the guarantors to the loan transaction. In order to secure the said loan the defendants had mortgaged / hypothecated the movable and immovable assets of the defendants.

3. It is stated that the defendants defaulted in repayment of the credit facility availed by the 1st defendant. The defendants 2, 3 and 5 who are the guarantors / Directors of the 1st defendant / Respondent are actively involved in all the transactions of the borrower and by definition are the key management persons.

4. In order to recover the dues the applicant bank filed the above OA against the defendants / respondents inter alia for recovery of a sum of Rs.88,16,76,422/- as on 22.10.2017 with future interest. Further the above OA as per Clause III (a) the estimated value of the properties mortgaged by the defendants / respondents as security does not satisfy the claim of the value of the secured assets that are in the possession of the petitioner / application. The respondents / defendants are frustrating all genuine efforts of the petitioner / applicant in recovering its rightful dues.

5. The pleadings of various parties viz., Respondents / Defendants 1 to 3 and 13 and the evidence of Petitioner / Applicant have been recorded. The Petitioner / Applicant had filed Proof Affidavit dated 30.05.2018 along with Exhibits A-1 to A-73 which is on file of this Tribunal. The 13th Respondent / Defendant has also filed its reply statement and counter proof affidavit.

6. The defendants 2 to 5 have definite business interests, investments and large holdings including movable and immovable assets in various other parts of the country / abroad. While so, the Petitioner / Applicant with great difficulty has traced some unsecured properties which exclusively stands in the name of the Respondents / Defendants 2, 3 and 5. The Petitioner / Applicant has put its best efforts to determine, verify and ascertain the immovable properties of the Respondents, the assets standing in the names of the foregoing defendants have been cross checked and is in the process of obtaining relevant documents in support of the same. The details of the relevant movable / immovable properties is provided in the schedule to this application.

7. It is learnt that the defendants 2, 3 and 5 have purposefully failed to declare all the assets to the Petitioner / Applicant. It is significant to note that the Respondents / Defendants 2, 3 and 5 being the Directors of the borrower / 1st defendant and guarantors to the loan transaction had all been involved in the transactions relating to the 1st respondent / defendant. Having enjoyed fruitful benefit of the same, they have also sought to evade the recovery process initiated by the applicant by remaining absent deliberately despite receiving the notice in the above proceedings, all this with the sole intention to escape from their liability. Therefore at this juncture it is imperative and essential on the part of the Petitioner / Applicant to seek an order of attachment of properties against the 2nd, 3rd and 5th Respondents before the judgment in the above OA.

8. The Petitioner reliably understands that the defendants / respondents having got information about the action of the Petitioner / Applicant is now intending to sell / alienate their assets / properties and create third party interest in the schedule properties so as to defeat any move by the petitioner in even attempting recovery against their vested interests. It is stated that if the Respondents / Defendants succeed in their alienating / selling those assets / properties, it will be difficult for the petitioner / applicant to recover its entire dues. Hence it is just and necessary that this

Tribunal favorably considers the instant application for attachment of properties mentioned in the schedule of the application herein.

9. The respondents have willfully and wantonly failed to clear the liabilities in any manner and have thus succeeded in evading the recovery measures of the petitioner. The defendants / respondents have only been saying that they will settle the dues but has not done the same and they have also not approached the Petitioner / Applicant for any settlement.

10. In the given circumstances, the petitioner is left with no other option but to approach this Tribunal for a direction towards attachment of schedule mentioned properties. Unless an attachment by this Tribunal is granted the respondents will not cooperate in clearing the outstanding dues. The money involved being public money the petitioner seeks immediate intervention by this Tribunal.

11. It is stated that the Petitioner / Applicant prima facie has a good case on merits and is likely to succeed in the OA. If this application is not allowed, then the petitioner / applicant will be put to serious loss and hardship. The petitioner has produced all requisite documents and the same be relied upon by this Tribunal. The petitioner also undertakes to produce such other documentation towards the schedule properties as required by this Tribunal in this effort of their efforts towards recovering public money.

12. The petitioner being public sector bank submits that huge sums are locked in the said accounts of the borrower and if the petition is not allowed at this stage the recovery process is bound to be jeopardized and unequivocally defeated, a consequence of which would be the petitioner being put to loss and hardship. On the contrary, the respondents herein in no manner would be prejudiced or put to any irreparable loss by allowing this petition. Thus, it is a fit case for this Tribunal to pass orders in favour of the petitioner by exercising its discretion.

Counter by 2nd Respondent

13. The petitioner has filed the above TA seeking recovery of alleged dues said to have arisen out of various credit facilities availed by the 1st respondent company viz., M/s Prathyusha Resources & Infra Pvt. Ltd. The answering respondent has been arrayed in his alleged capacity as Chairman and Managing Director and guarantor of the 1st Respondent.

14. During the pendency of the above proceedings, the petitioner filed IA No.418/2024 seeking attachment before judgment in respect of certain immovable properties standing in the name of various respondents including the answering respondent herein. It is alleged in the application that the respondents may alienate the schedule mentioned properties.

15. The Hon’ble Tribunal by order dated 26.02.2026, directed issuance of show cause notice to the Respondents in the said IA calling upon to show cause as to why the relief sought for by the petitioner should not be granted. Pursuant thereto, notice dated 6.4.2026 came to be issued to this Respondent informing him that the above application was posted for hearing on 17.4.2026.

16. It is stated that the averments made by the petitioner disprove the alleged urgency sought to be projected in the present petition. The schedule mentioned properties in this affidavit of the petitioner sought to be attached are longstanding immovable properties purchased under registered sale deeds as early as in the years 1993 and 1996 and the same have remained in the ownership and possession of the answering respondent and his family members for several decades. The petitioner itself has furnished the particulars of such registered documents in the schedule to the petition. Despite the recovery proceedings having remained pending for several years , the petitioner bank has chosen to file the present IA at a highly belated stage after substantial progress in the main proceedings. Had there truly existed any genuine apprehension of alienation or fraudulent disposal of properties the petitioner bank would have sought immediate interim protection at the earliest point of time. The prolonged delay in filing the present application clearly demonstrates absence of any imminent threat, urgency or dishonest intention on the part of this respondent to defeat the recovery proceedings.

17. The present application contains no specific pleading regarding intention to defeat recovery proceedings. Mere allegations that the answering respondent intends to alienate properties are legally insufficient. The petitioner bank has produced no sale agreement or proposed transfer documentation whatsoever.

No advertisement, negotiation or encumbrance document has been produced before this Tribunal. No material demonstrates attempted disposal of assets by the 2nd respondent at any stage. This affidavit by the petitioner bank merely states that “it is learnt” and “Petitioner reliably understands”. Such averments are entirely hearsay and unsupported by any disclosed source or particualrs. Attachment before judgment cannot be granted upon mere apprehension, suspicion or speculative allegations. The petitioner has therefore failed to establish any imminent threat warranting extraordinary interim relief.

18. The petitioner itself admits that various properties were already mortgaged and hypothecated towards the alleged loan facilities. The present application therefore seeks attachment of unsecured properties belonging to the respondent. Attachment Before Judgment cannot be invoked merely because existing secured assets are allegedly insufficient and cannot seek attachment before judgment under the guise of alleged apprehension. Mere apprehension regarding recovery shortfall cannot justify attachment of independent properties over which no security interest has been created. The remedy of attachment cannot be converted into an addition security creation mechanism. The present application therefore amounts to impermissible attempt to secure alleged dues beyond contracted securities.

19. The present application is wholly belated and lacks bonafides. The petitioner bank instituted the OA during 2017. Despite prolonged pendency the attachments proceedings were initiated against this respondent earlier. The petitioner bank therefore invoked Section 95 proceedings before Hon’ble NCLT under IBC Code, 2016 against this respondent during 2022 in CP (IB) No78/95/AMR/2022. The Hon’ble NCLT by an order dated 22.12.2022 dismissed the same as barred by limitation. The petitioner preferred appeal before Hon’ble NCLAT in Comp. App. (CH) (Ins) No.247/2023 and the same is still pending. Only thereafter the petitioner has filed the present application for attachment before judgment. The sequence of events disproves any genuine apprehension regarding alienation of scheduled properties. No material demonstrates dishonest intention by this respondent to defeat prospective recovery proceedings. The present application was filed only after failure of proceedings under Section 95, the same constitutes a coercive calculated abuse of process.

20. The conduct of petitioner bank clearly disproves any genuine apprehension of alienation. The petitioner first initiated OA proceedings before this Tribunal in 2017. Thereafter, the petitioner bank initiated proceedings under Section 95 of IBC in 2022. The said proceedings against the respondents were dismissed as barred by limitation. Only thereafter the petitioner filed the present application for attachment before judgment. The sequence of events clearly reveals a calculated recovery strategy by the petitioner bank. The present application was not triggered by any sudden threat of alienation. No material has been produced showing attempted sale or disposal of the properties. The petitioner is merely attempting every procedural remedy available before final adjudication. The present application is therefore speculative, coercive and devoid of bonafide urgency.

21. The petitioner has failed to establish any prima facie case warranting attachment before judgment. No material whatsoever evidences attempted alienation by this respondent of the schedule properties. The properties have remained with this respondent and family members for decades together. The present application was filed only after failure of proceedings before Hon’ble NCLT. The sequence of events clearly demonstrates a calculated and coercive recovery strategy by the petitioner. No immediate harm, urgency or irreparable injury has been established by the petitioner bank. The petitioner bank therefore suffers no prejudice or irreparable injury if the present application is dismissed on the other hand attachment of longstanding immovable properties would cause grave prejudice to this respondent. The present application is therefore speculative and liable to be dismissed with costs. Point for consideration

22. I have heard the learned counsel appearing for both sides and carefully perused the pleadings and records. The question that arises for consideration is whether the Applicant has made out a case for grant of attachment before judgment in respect of the schedule properties?

23. Before examining the facts, it is necessary to notice the statutory scheme governing the power of attachment before judgment.

24. Section 19(13A) of the Recovery of Debts and Bankruptcy Act, 1993 empowers the Tribunal, where it is satisfied that the defendant, with intent to obstruct or delay or frustrate the execution of any order for recovery of debt that may be passed against him, is about to dispose of or remove the whole or any part of his property, to direct the defendant to furnish security or to show cause why security should not be furnished and, in default, to order attachment of such property. The provision substantially incorporates the principles contained in Order XXXVIII Rule 5 of the Code of Civil Procedure, which reads that where the Court is satisfied, by affidavit or otherwise, that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him, is about to dispose of the whole or any part of his property or remove it beyond the jurisdiction of the Court, it may direct the defendant to furnish security or show cause and may order conditional attachment.

25. Thus, the statutory requirements are well settled. The Applicant must establish not merely the existence of a debt but also place before the Tribunal tangible material to demonstrate that the defendant is about to dispose of his property with the intention of defeating or delaying execution of the recovery certificate. Mere apprehension, suspicion or bald allegations do not satisfy the statutory requirement.

26. The Hon'ble Supreme Court in Raman Tech. & Process Engineering Co. v. Solanki Traders, (2008) 2 SCC 302, has categorically held that attachment before judgment is an extraordinary and drastic remedy which cannot be granted mechanically. The Court has held that the object of Order XXXVIII Rule 5 is not to convert an unsecured debt into a secured debt and that the plaintiff must establish by definite material that the defendant is attempting to dispose of his property with the intention of defeating execution. Similar principles equally govern the exercise of jurisdiction under Section 19(13A) of the Recovery of Debts and Bankruptcy Act.

27. The next question is whether the Applicant has produced any material satisfying the statutory requirements? The answer has necessarily to be in the negative. The entire application proceeds on the assertions that the Applicant "reliably understands" and "has learnt" that Respondents 2, 3 and 5 are intending to alienate the properties. Except these bald averments, no material whatsoever has been produced. There is no agreement of sale, no advertisement for sale, no negotiations with any purchaser, no encumbrance indicating any proposed transfer, no document evidencing creation of third-party rights and not even an affidavit disclosing the source of the alleged information. The allegations are entirely hearsay and speculative. The Tribunal cannot exercise the extraordinary jurisdiction of attachment before judgment on the basis of assumptions or conjectures. The satisfaction contemplated under Section 19(13A) of the Act and Order XXXVIII Rule 5 CPC must be founded upon objective material and not on mere apprehension.

28. The next question is whether the conduct of the Applicant supports the plea of urgency? Here again, the answer is in the negative. The Original Application was instituted in the year 2017. The pleadings have been completed and evidence has substantially progressed. The present application has been filed only in the year 2024. The Applicant itself has furnished the particulars of the registered sale deeds under which the respondents acquired the schedule properties in the years 1993 and 1996. The properties have remained in their ownership for decades. If there had been any genuine apprehension that the respondents intended to alienate the properties so as to defeat recovery, nothing prevented the Applicant from approaching this Tribunal immediately after institution of the Original Application. The unexplained delay of several years completely undermines the plea of urgency now projected.

29. The next question is whether the Applicant has established that the existing secured assets are inadequate and that attachment of additional properties is therefore necessary? The Applicant itself admits that substantial movable and immovable properties have already been mortgaged and hypothecated in its favour. The foundation of the present application is that such securities are allegedly insufficient. However, the Applicant has not produced the valuation reports of the mortgaged properties. Equally, no valuation report has been produced in respect of the properties now sought to be attached. No statement comparing the value of the existing securities with the

outstanding claim has been filed. In the absence of any valuation report relating either to the secured assets or to the schedule properties, the Tribunal is unable to ascertain whether there is any actual shortfall in security or whether the existing securities are capable of satisfying the debt. A mere assertion that the mortgaged properties are insufficient cannot be accepted in the absence of any supporting valuation. Attachment before judgment cannot be employed as a device to create additional security in favour of the Applicant.

30. The next question is whether the sequence of proceedings initiated by the Applicant has any bearing on the bona fides of the present application? The answer again is in the affirmative. The record discloses that the Applicant initiated proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016 against the 2nd Respondent before the Hon'ble National Company Law Tribunal in CP (IB) No.78/95/AMR/2022. Those proceedings were dismissed on 22.12.2022 as barred by limitation. It is stated that the appeal filed before the Hon'ble National Company Law Appellate Tribunal is pending. Significantly, the present application has been filed only after dismissal of the proceedings under Section 95. No fresh event indicating any attempt to alienate the schedule properties has been pleaded. No subsequent material has been placed before this Tribunal demonstrating any imminent threat to the recovery proceedings. The chronology of events, therefore, lends considerable support to the contention of the respondents that the present application is not founded upon any genuine apprehension of alienation but has been filed after failure of the insolvency proceedings as a further coercive measure to secure the alleged debt.

31. The next question is whether the statutory requirements of Section 19(13A) of the Recovery of Debts and Bankruptcy Act read with Order XXXVIII Rule 5 CPC stand satisfied? The answer is clearly in the negative. The Applicant has failed to establish by cogent evidence that the respondents are about to dispose of the schedule properties with the intention of obstructing or delaying execution of the recovery certificate. The application is founded entirely upon vague apprehensions unsupported by documentary evidence. The Applicant has not explained the delay in filing the application, has not produced valuation reports of either the already mortgaged properties or the properties now sought to be attached, and has not established that attachment of additional properties is warranted. The filing of the present application only after dismissal of the proceedings under Section 95 of the Insolvency and Bankruptcy Code as barred by limitation further weakens the plea of bona fide urgency. This Tribunal is therefore of the considered opinion that the Applicant has failed to satisfy the mandatory conditions prescribed under Section 19(13A) of the Recovery of Debts and Bankruptcy Act, 1993 and the principles embodied in Order XXXVIII Rule 5 CPC. The extraordinary power of attachment before judgment cannot be exercised merely because the Applicant apprehends difficulty in recovery or desires to secure additional properties pending adjudication of the Original Application.

32. In view of the foregoing, the following:

ORDER

IA No.418 of 2024 is dismissed. No order as to costs. The observations made herein are confined to the adjudication of the present interlocutory application and shall not influence the decision in the Original Application on merits.

Sd/- (SHARANG DHAR UPADHYAY)

PRESIDING OFFICER

DRT-II, CHENNAI (Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 10th day of July, 2026)