Wadias sue Axis Bank for property payment default

Say lender did not pay last instalment of Rs 33 cr in a Rs 780-cr realty deal

The Wadias of Bombay Dyeing have taken India’s third largest private sector bank — Axis Bank — to the Bombay High Court for what it calls payment default.

Axis had bought an eight-storey, 350,000 sq.ft building from the Wadias on the Bombay Dyeing campus in central Mumbai to house its headquarters, but did not allegedly release the last instalment of Rs 33 crore, on the ground that the building was incomplete at the time of possession.

The building is situated inside the Wadia International Centre, which also houses the headquarters of the Wadia group.

The bank had purchased the building for close to Rs 780 crore in May 2010. Most of the staff of the bank, including its board, moved into the building by January 2012.

The sources said repeated reminders by Bombay Dyeing, which also provided the occupancy certificate from the municipal corporation to the bank, failed to yield any result, prompting the company to move the court in January this year.

The spokespersons of both Axis Bank and Bombay Dyeing refused to comment on the issue, saying the matter was “sub judice”.

The sources said Axis Bank has decided to negotiate on the final payment, but no decision has been taken so far.

Before moving into the building, Axis Bank was operating from Cuffe Parade in South Mumbai. The purchase of the building by Axis Bank in 2010 was legally vetted by Khaitan & Co.

The Wadias — one of Mumbai largest landowners – are fighting for their land parcels with various parties. The Wadias had earlier sued the Birlas after their neighbour, Century Mills, started redeveloping the land in Central Mumbai, after its textile business in Mumbai collapsed. The Wadias argued that as they had leased the land to the Birlas for a textile business, it should be included in any plan to redevelop the land. The matter is pending in court.

The Wadias have also sued the GL Raheja group, which built a massive office complex in Malad, North Mumbai, called Mindspace.

The Wadias — who own the Rs 20,000-crore land — have argued that the Rahejas have not given them their share of the redeveloped property and hence the structure should be demolished. After losing the case in the Bombay High Court, the Wadias have decided to move the Supreme Court.

The Wadias are also sparring with the municipal corporation and the state government in the court over its Spring Mills property in Dadar, as the government has demanded that a part of the textile mill land should be set aside for housing for the poor.