Chennai firm mortgages ‘govt’ land in Hyderabad; avails Rs 100 crore loan

Hyderabad: A Chennai-based construction company has mortgaged a prime property in the city, the ownership of which is being claimed by the Telangana state government, and raised a loan of more than Rs 100 crore. It has since defaulted on the repayment.

The State Bank of India (SBI) which sanctioned the loan without due diligence has been trying to create a third party interest by auctioning the disputed land of five acres in Gopanapally. The SBI has been proceeding with the auction despite the Ranga Reddy district administration opposing the move.“We have written to the SBI not to auction the land. We will move court to stall the auction (scheduled for January 28),” Ranga Reddy collector Amoy Kumar told Deccan Chronicle.


Inquiries revealed that JKS Constructions Pvt Ltd mortgaged five acres in survey number 36/A/3 2013 and raised the loan in 2013. As per the revenue records, there is no land on that survey number.

The records also show that the SBI did not conduct due diligence because the government had already initiated its claims on the land and issued necessary orders.

Survey numbers 36 and 37 in Gopanapally were included in the prohibitory list. Ironically, the then sub-registrar seems to have contributed to the conspiracy by registering the mortgage deed though the land was already claimed by the government and placed in the prohibitory register under 22A of the Registration Act.


The government had in two earlier instances, once in 1991 and again in 2004, proceeded with its claims with relevant orders. When these orders were challenged by private claimants, the courts left it to the government to agitate for the ownership through a civil suit and proceed in accordance with the law. The Ranga Reddy collector recently stepped up efforts to protect the land and remove encroachments in these survey numbers besides pursuing the legal matters.

The SBI, however, claimed that except for an order from the collector not to proceed with auction, the property was free from encumbrance. It informed the bidders that it obtained an interim direction from the High Court with regard to the registration of the property.


Courts in several cases categorically stated that the transactions relating to these survey numbers were subject to the final outcome of the property dispute pursued by the state government.


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