Mumbai: Bizman drags bank to court for turning him into defaulter
His firm's account being listed as an NPA is a circumstance created by the Union Bank of India's Ghatkopar East branch's non-cooperation, Keyur Shah claims, which the bank has termed as baseless
A loan defaulter, Keyur Shah, has dragged the Union Bank of India (UBI) to court, allegedly over non-cooperation from local bank authorities, which led to his company's account turning into a Non-Performing Asset (NPA). The bank, which too initiated legal action against Shah earlier, has refuted the claims and termed them as baseless.
Shah, a 53-year-old resident of Breach Candy has accused some UBI officials attached to the bank's Ghatkopar branch of harassing him and pushing the firm's account to the NPA list. Shah filed a suit in the city civil court against the bank, the hearing for which has been scheduled for November 7 in Mumbai. UBI on the other hand has approached the Debts Recovery Tribunal (DRT) to recover the loan.
Shah, who is engaged in the import of gold, took a cash and credit (CC) of Rs 5 crore in the Financial Year 2009-10 from UBI's Ghatkopar East branch. The businessman gave his 1BHK flat at Breach Candy (worth around Rs 3.5 crore) and commercial premises at Opera House (worth around Rs 1 crore) as collaterals.
All was going well for Shah until one day, the Directorate of Revenue Intelligence (DRI), raided his and other city-based jewellers' offices in 2012. Shah's business witnessed a downfall and the turnover and profit dipped drastically.
Understanding the crisis he was in, Shah decided to sell his property and pay off the loan. "In 2013, I wrote to the Ghatkopar East branch of UBI, asking for their cooperation and an NOC to sell the flat. I had a buyer willing to pay around Rs 3.65 crore. I told the bank that the entire amount received from the sale would be deposited in the bank to clear the CC loan. But my application was rejected," he said.
Shah claims that despite the financial crisis, he continued to pay interest and loan installments, "After my request was turned down, I paid almost R1 crore as interest to the bank. But, in 2015, my firm's account was declared as an NPA as my company did not have funds to clear the pending dues. This year in October, the bank issued an advertisement to sell the flat and the reserve price was pegged at Rs 2.85 crore. The auction failed. Had the bank cooperated with me back in 2013, they could have recovered the money and my account would not have turned into an NPA."
Asked why he did not pursue the case with higher authorities at the bank, Shah said, "I had written about the harassment to the DGM and AGM. But, there was no reply. With no option left, I have approached the court with the plea to provide me with relief and punish the erring bank officials."
Advocate Mathews Nedumpara who is part of the National Borrowers' Association, will be representing Shah in the city civil court. Nedumpara said, "In this particular case my client wanted to clear the dues by selling his properties. But non-cooperation from bank officials pushed the account to the NPA list. This clearly exhibits that the borrower is not at fault every time. At times, adamant attitudes adopted by bank authorities too hamper the banking sector in India."
Nedumpara claimed that the case would halt the recovery process until the case concludes.
However, a senior bank official claimed that the complainant only intends to malign the bank. The official, on the condition of anonymity, said, "The borrower is not an enemy of the bank. Why would a nationalised bank single out an individual customer and harass him? If a borrower has defaulted on loan repayment, it is obvious that the bank would initiate the recovery of dues. Safeguarding depositors' money is the priority of the bank." The officer further claimed that the bank has not received any communication about the court hearing scheduled for November 7. But he maintained that the bank initiated legal proceedings long before Shah. "The bank was the first to seek legal help by approaching the DRT," the official added.
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