No Karnataka HC relief for hotel firm for borrowing Rs 300 crore with fake papers

The hotel was sought to be established on a property which the petitioner had obtained by registered sale deed with the Archdiocese of Bengaluru.

Published: 13th August 2022 07:15 AM  |   Last Updated: 13th August 2022 07:15 AM   |  A+A-

Fake, Fraud, Impersonation

For representational purpose (Express Illustrations)

By Express News Service

BENGALURU: Observing that the petitioner is not a peasant or petty farmer who has availed some petty loans to mitigate the hardships of life, but an incorporated company purported to be worth crores of rupees, the Karnataka High Court dismissed a petition filed by Nitesh Residency Hotels Private Ltd, which runs The Ritz-Carlton, Bangalore, questioning a letter issued by Yes Bank Ltd, recalling all credit facilities and notice issued under the SARFAESI Act.

The bank issued letters to the petitioner for allegedly defrauding it by furnishing a ‘terminated lease deed’ by way of security for the repayment of Rs 323 crore loan, without disclosing that the termination of lease in question was followed by arbitral proceedings.

Justice Krishna S Dixit passed the order dismissing the petition, and observed that the slogan ‘Husband Your Banking Resources’ becomes relevant nowadays when two dozen public sector banks have been closed down or merged with other banks, one of the reasons being “bad debts”.

The hotel was sought to be established on a property which the petitioner had obtained by registered sale deed with the Archdiocese of Bengaluru. On the assurance and representations of the petitioner, the bank sanctioned credit facilities for a term loan of Rs 291 crore, granted in March 2016. The leasehold rights were furnished by way of security for repayment, coupled with certain personal guarantees and hypothecations.

However, the lease deed was terminated in the year 2014 itself, and arbitration proceedings were on. Meanwhile, the petitioner was also granted an additional temporary overdraft facility of Rs 100 crore during the Covid-19 pandemic, pursuant to a letter dated November 25, 2020, the bank being kept in complete darkness to the arbitral proceedings.   



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