Ahmedabad: Amidst the clamour across the country over loan-frauds worth thousands of crores of rupees by top-notch, now fugitive Indian businessmen, several similar cases of bank fraud of lower magnitude but equal importance go unnoticed by the media and people. Even as the law enforcement agencies of the country are in hot pursuit of diamantaire Nirav Modi and liquor-baron Vijay Mallya for defrauding Indian public-sector banks to the tune of thousands of crores of rupees, an identical case of bank fraud has emerged from the state of Gujarat worth more than Rs 100 crores. Real Diamond Multi-trade Private Limited, a Mumbai-based private firm, their directors Damyanti Parekh, and Pravin Parekh, allegedly in connivance with few of their associates and the valuer and panel advocate of government-owned Bank of India swindled the financial institution to the tune of Rs 100 crores by submitting an agricultural land in Gujarat’s Valsad as a guarantee for receiving credit facilities from them.

In the year 2009, Real Diamond Multitrade Private Limited applied for credit facilities worth Rs 20 crore from the Andheri corporate banking branch of Bank of India in Mumbai, Maharashtra by offering a third-party collateral land in way of equitable mortgage, perceived as a non-agricultural land in Valsad’s Vapi in Gujarat. The said property, located off National Highway 8 in Vapi village of Valsad district in Gujarat with the survey number 311 was registered under the name of Ketankumar Jayantilalal Shah, Jineshkumar Jayantilal Shah, and Abhaykumar Jayantilal Shah, who also stood as guarantors for the firm. In a letter dated September 9, 2009, the bank informed the firm of their application for a loan worth Rs 20 crore have been sanctioned by them. A copy of the letter is with MeraNews.

As expected, the borrower Real Diamond, ‘failed’ to repay the bank of the credit facilities availed by them and its account was declared a Non-Performing Asset with outstanding dues of Rs 20.18 crores (excluding interest) on June 30, 2011. The outstanding dues if added with the additional charges, penalties and interests, is approximately about Rs 100 crores or more. Since this seems to be an intentional fraud where it was pre-decided by the borrower firm and their guarantors of non-payment of the loan, they informed their lender to auction the collateral offered for recovery due to their inability to payback and accordingly, the bank initiated the attachment proceedings.

It is believed that the valuer and panel advocate of Bank of India were hand-in-glove with Real Diamond in this financial/bank fraud as the land, which was mortgaged with the bank, originally an agricultural land was fraudulently shown as non-agricultural land and this fact was not reflected by the bank’s panel Advocate in his Title Clearance Report. Moreover, showing the land to be non-agricultural, the bank’s empanelled valuer had over-valued it in his Valuation Report. It was clear that this was a planned criminal conspiracy to cheat the bank as the directors of the firm, Damyanti Parekh, and Pravin Parekh along with their associates in this crime was aware that as per Section 31(i) of the SARFAESI Act, agricultural land is exempt from recovery proceedings under this Act. Hence, the bank cannot initiate recovery proceedings under Section 17 of the SARFAESI Act in respect of agricultural land.

On the other hand, the guarantors, whose land was mortgaged with the bank, objected the auction of the land for recovery of dues citing that they are not concerned with the dealings between the bank and the borrower and that it was the responsibility of the borrower to repay the loan. The guarantors filed civil cases in Debt Recovery Tribunal, Mumbai and High Court of Gujarat to refrain the bank from auctioning the mortgaged land. In the applications filed in these civil cases the guarantors have mentioned that the land mortgaged with the bank is an agricultural land, whereas, in the bank documents signed by the guarantors at the time of sanction of credit facilities, it is clearly mentioned that it is a non-agricultural land. At the same time, the guarantors requested the bank for a one-time settlement by offering them Rs 10 crores. This was clearly an intentional action by the borrowers and the guarantors to obstruct the bank from recovering the dues as they intended to settle the dues at less than half the outstanding amount.

Further, in order to stall the proceedings by the bank, the guarantors got their sister file a complaint against themselves and the bank too, in order to create forged dispute on ownership of the property, while the said land offered as collateral was not a family inherited property but was purchased by the guarantors prior to offering to the bank. Their idea was to create a dispute in the said land to stall the bank’s recovery proceedings.

We spoke to Pravin Parekh, one of the directors of the company, who said that this property is 100 percent genuine non-agricultural plot and is certified the same. “This is a conspiracy hatched by the guarantors to cheat the bank in the scene of NPA and recovery proceedings by the bank. Their claim that the property is disputed is a total farce. The land was registered under the name of the three brothers, but they brought in their sister to create a dispute to stop the recovery. There are hotels built around the land, which is in the middle of the city, so their claim that this is agriculture land is false. They have paid money to the district collector to forge a document that claims that this is an agricultural land. I say the bank can go ahead with recovery,” said Parekh.

It is said that the directors of the borrower company did not utilize the loan amount for their business activities and had allegedly diverted the same and utilized it various other purposes, against the conditions laid down by the bank while granting the loan which said, “The credit facilities shall be utilised only for the purpose for which same are granted and said facilities shall not be diverted or siphoned off or used for any other purposes.” Further, the directors of the borrower company are habitual offenders and that the company and its sister concerns have fraudulently availed credit facilities from other banks also and the accounts with these banks have also turned NPA.

Our sources have added that a complaint has been filed with the Central Bureau of Investigation (CBI) in this regards and that they have alerted the Vigilance Department of the bank to look into the matter and submit a report to them. While Abhay Shah excused himself from commenting on the matter citing that it is sub-judice, Ketan Shah and others couldn’t be reached for their comments.

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