Mantri objects to ICICI Bank’s possession notice, says inter alia that bank stopped loan disbursal

The company’s CFO, S Bhaskaran, has in a letter to the bank said, “You are aware that recently on 6/8/2020, the RBI has announced a policy on one-time reschedulement of existing loans and we are eligible under these new norms and applying appropriately with the bank shortly.”

Bank’s stand

In a newspaper advertisement on Saturday, ICICI Bank stated that it has taken possession of Mantri House, spread across 30,268 sq ft of built-up area, under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFESI).

The advertisement said the bank had issued a demand notice last November to the borrower, Shore Dwellings Pvt Ltd (formerly known as Mantri Dwellings Pvt Ltd), to repay around ₹53.62 crore within 60 days. With the company failing to repay the amount, ICICI Bank took possession of the property on August 4.

The company CFO’s letter goes on to say: “The residential project Mantri Vantage is being developed by Shore Dwelling Private limited at Pune. The project property is owned and registered in our (Mantri) company name. The company as per the terms of sanction has given security of the project spread over six acres of land and created hypothecation of the project receivables.”

“…The project has seen good sales at the beginning and has sold 32% of the total project. However, due to prevailing market conditions for the last 12 months, the sales could not happen as per the original projections and hence sales milestones condition of the bank couldn’t be fulfilled, because of which the bank stopped disbursing the money…”

‘Good future cash flow’

“…The company has approached the bank asking for reschedulement of the loan, foreseeing the market situation, and discussions were going on. But as the account has become NPA, the bank expressed their inability to stop the recovery process…”

Bhaskaran notes that the project has a total future cash flow from sales of Rs 295 crore. Construction cost is Rs 94 crore, and there is surplus from the project of Rs 201 crore as against the outstanding bank loan of Rs 51 crore.