Why 2 Borrowers in Ahmedabad Are Facing Fraud Charges After ₹2.81 Crore SBI Loan Default
Summarized by AI; it may make mistakes. Check important info
Summarized by AI; it may make mistakes. Check important info
The State Bank of India (SBI) has approached the Gujarat Police alleging a ₹2.81 crore fraud involving an Ahmedabad-based pesticide manufacturer and a guarantor who allegedly sold off mortgaged machinery without bank authorization.
A formal complaint was lodged at CID Crime on September 1 by Purushottam Kumar Ajay Kumar Sharma, Assistant General Manager at SBI’s Small Industries Branch in Ahmedabad. Police have registered a case against Pankaj Kantilal Prajapati, proprietor of Hyta Bio Science Industries, alongside guarantor Lalitaben Parmar and other associates.
The Sanction and Eventual Default
According to police records, Prajapati approached SBI’s SME C G Road Branch in October 2020 seeking financial assistance for his pesticide manufacturing business. He applied for a cash credit facility of ₹80 lakh alongside a term loan of ₹1.95 crore.
Following standard credit evaluation, the bank sanctioned the credit facilities in November 2020. As security for the loans, Parmar offered property as collateral, while the machinery acquired through the term loan was mortgaged directly to the lender. SBI disbursed the ₹80 lakh cash credit facility in a single tranche and released the term loan in phased instalments.
Repayments soon turned erratic. In an effort to keep the account viable, SBI approved a debt restructuring package in October 2021. The agreement extended the term loan tenure and converted a segment of the overdue cash credit facility into a Funded Interest Term Loan.
Unauthorised Asset Disposal and Legal Action
The restructuring failed to stabilize the account. Dues continued to accumulate, eventually reaching ₹80.09 lakh under the cash credit account, ₹1.72 crore on the term loan, and unpaid interest amounting to ₹29.12 lakh, taking the total default to ₹2.81 crore.
Trouble escalated when bank officials discovered that the mortgaged machinery—hypothecated to SBI as primary security—had been sold off without the lender’s knowledge or written approval.
SBI's complaint accuses Prajapati, Parmar, and their associates of criminal breach of trust and cheating by intentionally withholding loan dues and illegally liquidating bank-secured assets. CID Crime have launched a formal investigation to trace the disposed equipment and gather documentary evidence before making further moves.
