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R ef: Kotak Mahindra Bank Letter dated 12.11.2009

In one matter of loan transaction of Rs. 50 lacs between Kotak Mahindra Bank Ltd and Cogent Ventures India Limited executed in the year 2007, Kotak Mahindra Bank Limited had clarified by their letter dated 12.11.2009 that the loan was unsecured loan and no property was mortgaged in favour of bank regarding such loan transaction.

There was an allegation against Mr. Bhupendra Bagla that he had mortgaged the leased property situated at E-41/4, Okhla Industrial Area, Delhi in favour of bank for such transaction as a guarantor and a FIR No. 149/09 PS Barakhamba Road, New Delhi was registered against Mr. Bagla. The basis of the allegation was that Mr. Bhupendra Bagla has forged two documents i.e. one affidavit and one Power of Attorney allegedly executed by Mr. Bhupendra Bagla whereas the same was not executed by Mr. Bagla.

Later on the Court has discharged Mr. Bhupendra Bagla on 10/12/2018 in FIR No. 149/09 after conducting trial in the matter and it ultimately revealed that Mr. Bhupendra Bagla was falsely implicated in said case.

In this episode, interesting part is bringing that Bank clarified by way of a letter dated 12/09/2009 that the loan sanctioned was without any collateral security and loan was an unsecured loan.

The said letter stated – “during the meeting, after due deliberations and clarification furnished by you, it is cleared that property bearing no. E- 41/4 Ground Floor Okhla Industrial Area,  Phase-II,  New Delhi-110020 is not mortgage or hypothecated to our Bank. It is clarified that the loan otherwise also is an unsecured loan. It is further clarified that it is because of the reason that the loan is an unsecured loan that we have not proceeded against any property including the one detailed herein above treating it to be a security/mortgage for the said loan under SERFAESI.”

By the said letter dated 12/09/.2009, the identity of the Bank in itself is doubtful –

• Bank is saying that client has clarified to them that property was not mortgage in favour of It means when loan was given by Bank, Bank had no knowledge that the loan property was mortgaged or not!!

• Bank was saying that client had clarified to them that loan was unsecured loan. It means when loan was given by Bank, Bank had no knowledge that the loan was secured or unsecured!!!
• Bank was saying that client had clarified to them that loan is unsecured loan and property is not mortgaged in favour of Bank, therefore they will not proceed against the property where they have an OA before the Hon’ble DRT!!!
• Now, what sort of due diligence was done by the Bank at the time of sanctioning the said loan facility!!!