Mumbai's Dahisar Property E-Auction Challenged Over ₹2,059-Crore Claim

A major legal dispute has emerged over the proposed e-auction of a 429-acre prime property in Mumbai's Dahisar area. The borrower, Ravijyot Finance & Leasing Pvt. Ltd., has challenged Unity Small Finance Bank Ltd.'s claim of ₹2,059 crore in alleged dues, contending that the recovery action is based on disputed and unenforceable documents.

The dispute concerns a 429-acre land parcel in Mumbai's Dahisar area, which Unity Small Finance Bank has proposed to auction. According to the bank's sale notice, the property was mortgaged to secure an alleged ₹1,220 crore mortgage overdraft facility extended to Housing Development and Infrastructure Ltd. (HDIL), with outstanding dues of ₹2,059.30 crore as on August 31, 2023.

However, Ravijyot has disputed the very existence of the mortgage, denying that the land was ever mortgaged for HDIL's borrowings. The company claims it had availed of only a ₹10 crore loan from the erstwhile Punjab & Maharashtra Co-operative (PMC) Bank, which was fully repaid in 2020. Ravijyot alleges that after PMC Bank's amalgamation with Unity Small Finance Bank in 2022, the lender initiated recovery proceedings by treating the Dahisar property as security for HDIL's alleged liabilities.

Unity Small Finance Bank has declined to comment on the matter, citing client confidentiality and ongoing legal proceedings. The bank's spokesperson stated that the matter is currently sub judice and is being adjudicated before the appropriate judicial forums, including the Debt Recovery Tribunal (DRT) and the Bombay High Court.

Ravijyot has filed a suit before the Bombay High Court, alleging that it never executed the documents relied upon by the bank, including an alleged board resolution, sanction letter, agreement to mortgage, deed of mortgage, and letter of authority. The company has raised forgery allegations, claiming that these documents are fake and unenforceable.

The public notice issued by Ravijyot has cautioned prospective buyers against participating in the sale until the dispute is resolved. The notice has been addressed to Unity Small Finance Bank, prospective bidders, financial institutions, developers, and the general public.

The dispute highlights the complexities of banking and finance laws in India, particularly in cases involving large sums of money and valuable properties. The outcome of this case will be closely watched by the financial sector and the legal community.

In the meantime, the proposed e-auction of the Dahisar property remains uncertain, pending the resolution of the dispute. The Bombay High Court and the Debt Recovery Tribunal will play a crucial role in determining the fate of the property and the validity of Unity Small Finance Bank's claim.

The case also raises questions about the accountability of banks and financial institutions in India, particularly in cases involving alleged forgery and disputed documents. The Indian banking sector has faced several challenges in recent years, including non-performing assets and fraud cases.

The resolution of this dispute will provide clarity on the rights of borrowers and the obligations of banks in similar cases. It will also highlight the importance of due diligence and verification of documents in banking and finance transactions.

In conclusion, the dispute over the Dahisar property e-auction is a complex and high-stakes case that involves allegations of forgery, disputed documents, and large sums of money. The outcome of this case will have significant implications for the financial sector and the legal community in India.