In a landmark decision, the Civil Court has terminated the long-standing mortgage over three undeveloped resort islands and granted the State Bank of India (SBI) the right to recover over $80 million in unpaid loans as an unsecured debt.
The ruling concerns Gasveyli, Dhekunuboduveyli, and Kudausfushi—three islands leased nearly two decades ago for resort development under Gasveyli Islands Pvt Ltd, a company owned by the late Mohamed Maniku (widely known as Bis Maniku or Ellaidhoo Maniku). Despite repeated efforts, the islands failed to attract buyers, leaving the loan unpaid for years.
Gasveyli Islands Pvt Ltd had mortgaged the leasehold rights of the islands to secure two loans from SBI—$15 million from its Malé branch and $5 million from its Mauritius branch. The debt was personally guaranteed by Bis Maniku, along with Mohamed Yoosuf Moosa (M. Sisilfaru) and Ibrahim Mohamed (M. Mulige).
SBI filed a civil suit against the company in 2012, winning a favorable judgment in March 2018. The court allowed a 10-month window for repayment. However, before the period lapsed, Bis Maniku passed away on September 8, 2018.
After his death, SBI sought to transfer the liability to his heirs—wife Muslima Abdul Gayoom and children Abdulla Ishaan and Aishath Iufa Mohamed. The Civil Court, however, ruled that without the heirs’ consent, the debt could not be imposed on them and must remain tied to Maniku’s estate.
Although the Civil Court had previously authorized SBI to sell the mortgaged islands three times—most recently in March 2024—no buyers came forward. The asking price was slashed from $33 million to $4 million, and still failed to attract interest. In its latest move, the court permitted the islands to be sold for as low as $500,000, yet the property remains unsold.
Presiding Judge Sinan Ali highlighted the legal vacuum in the current Civil Procedure Act regarding how to resolve cases where mortgaged assets lose value, are damaged, or cannot be sold. Citing Article 166 of the Act, the judge ruled that SBI’s mortgage is now void and the loan should proceed as an unsecured claim.
SBI informed the court that, as of July 10, 2025, the outstanding debt had ballooned to over $80 million—with $64.5 million owed to the Malé branch and $16.1 million to the Mauritius branch—driven by years of accruing interest and penalties.
While the defense argued that interest and penalties should cease upon mortgage termination, the court reaffirmed that these charges would continue until the full debt is repaid, as stipulated in the 2018 judgment.
With the mortgage now dissolved, SBI has the option to refile the case as an unsecured debt recovery, marking a significant shift in one of the longest unresolved financial disputes in the Maldivian banking sector.
