No relief from Karnataka HC for hotel business for borrowing Rs 300 crore with fake papers – The New Indian Express

By Express press service

BENGALURU: Observing that the petitioner is not a peasant or a small farmer who has benefited from small loans to alleviate life’s hardships, but an incorporated company said to be worth millions of rupees, the Karnataka High Court has dismissed a petition filed by Nitesh Residency Hotels. Private Ltd, which operates The Ritz-Carlton, Bangalore, is challenging a letter issued by Yes Bank Ltd, recalling all credit facilities and notices issued under the SARFAESI Act.

The bank sent letters to the claimant for allegedly defrauding it by providing a ‘deed of terminated lease’ as security for the repayment of a loan of Rs 323 crore, without disclosing that the termination of the lease in question was followed by an arbitration procedure.

Justice Krishna S Dixit issued the order dismissing the motion and observed that the slogan ‘Husband Your Banking Resources’ is becoming relevant these days when two dozen public sector banks have been closed or merged with other banks , one of the reasons being “bad debts”. .

The hotel was to be established on property which the petitioner had obtained by deed of sale registered with the Archdiocese of Bangalore. On the claimant’s assurance and representations, the bank sanctioned credit facilities for a term loan of Rs 291 crore, granted in March 2016. The lease rights were provided as security for repayment, coupled with certain personal guarantees and mortgages.

However, the lease deed was terminated during 2014 itself and arbitration proceedings were underway. Meanwhile, the claimant was also granted an additional temporary overdraft facility of Rs 100 crore during the Covid-19 pandemic, as per a letter dated November 25, 2020, with the bank being kept in complete darkness from the arbitration proceedings .

BENGALURU: Observing that the petitioner is not a peasant or a small farmer who has benefited from small loans to alleviate life’s hardships, but an incorporated company said to be worth millions of rupees, the Karnataka High Court has dismissed a petition filed by Nitesh Residency Hotels. Private Ltd, which operates The Ritz-Carlton, Bangalore, is challenging a letter issued by Yes Bank Ltd, recalling all credit facilities and notices issued under the SARFAESI Act. The bank sent letters to the claimant for allegedly defrauding it by providing a ‘deed of terminated lease’ as security for the repayment of a loan of Rs 323 crore, without disclosing that the termination of the lease in question was followed by an arbitration procedure. Justice Krishna S Dixit issued the order dismissing the motion and observed that the slogan ‘Husband Your Banking Resources’ is becoming relevant these days when two dozen public sector banks have been closed or merged with other banks , one of the reasons being “bad debts”. . The hotel was to be established on property which the petitioner had obtained by deed of sale registered with the Archdiocese of Bangalore. On the claimant’s assurance and representations, the bank sanctioned credit facilities for a term loan of Rs 291 crore, granted in March 2016. The lease rights were provided as security for repayment, coupled with certain personal guarantees and mortgages. However, the lease deed was terminated during 2014 itself and arbitration proceedings were underway. Meanwhile, the claimant was also granted an additional temporary overdraft facility of Rs 100 crore during the Covid-19 pandemic, as per a letter dated November 25, 2020, with the bank being kept in complete darkness from the arbitration proceedings .

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