Ravijyot Challenges Unity Small Finance Bank Over 429-Acre Dahisar E-Auction
A legal dispute has erupted over a proposed e-auction of a 429-acre prime land parcel in Dahisar, Mumbai, with borrower Ravijyot Finance & Leasing Pvt. Ltd. challenging recovery proceedings initiated by Unity Small Finance Bank Ltd. The bank has proposed to auction the property to recover alleged outstanding dues of Rs 2,059.30 crore, but the borrower contends that its original loan of Rs 10 crore was fully repaid years ago and that the bank's recovery action relies on disputed documents.
The controversy centers on the land parcel bearing Survey No. 344 (Part) and CTS No. 1 in Dahisar. In a public notice, Venkataraman Narasimha Ayyangar, Director of Ravijyot Finance & Leasing Pvt. Ltd., cautioned prospective bidders, developers, financial institutions, and the public against participating in the bank's proposed e-auction until the dispute is resolved in court.
According to the bank's sale notice, the Dahisar property was mortgaged to secure an alleged Rs 1,220 crore mortgage overdraft facility extended to Housing Development and Infrastructure Ltd. (HDIL), with total outstanding dues calculated at Rs 2,059.30 crore as of August 31, 2023.
However, Ravijyot has denied that the land was ever mortgaged for HDIL's borrowings. The company stated that it had only availed of a Rs 10 crore loan from the erstwhile Punjab & Maharashtra Co-operative (PMC) Bank, which was fully repaid in 2020, with PMC Bank acknowledging the closure of the account. PMC Bank was subsequently amalgamated with Unity Small Finance Bank in 2022.
Ravijyot alleged that following the amalgamation, Unity Small Finance Bank initiated recovery proceedings by treating the Dahisar land as security for HDIL's liabilities. In a suit filed before the Bombay High Court, the company alleged that it never executed the mortgage agreement, sanction letter, board resolution, deed of mortgage, or letter of authority dated September 11, 2018, relied upon by the bank, contending that the documents are forged, unstamped, and unregistered.
Additionally, Ravijyot lodged a complaint with the Mumbai Police's Economic Offences Wing (EOW) on September 9, 2024, alleging cheating, forgery, criminal conspiracy, and criminal breach of trust. The police investigation remains ongoing.
Ravijyot also questioned the validity of the alleged Rs 1,220 crore facility, noting that HDIL's account had been classified as a non-performing asset (NPA) on October 31, 2011, making any subsequent sanction in 2018 contrary to Reserve Bank of India (RBI) norms. The public notice further cited an RBI inspection report that found no contemporaneous banking records or HDIL board resolutions authorizing the facility.
Responding to queries, a spokesperson for Unity Small Finance Bank declined to comment on specific allegations, citing client confidentiality. The spokesperson stated that the matter is currently sub judice and being adjudicated before judicial forums, including the Debt Recovery Tribunal and the Bombay High Court, and affirmed that the bank remains committed to following due process of law.
