AllBank attaches Centre Point in Ahmedabad

Bank's move to recover outstandings follow DRT order

Armed with an order of the Debt Recovery Tribunal (DRT), Allahabad Bank on Friday attached the property of Centre Point building in the posh Panchwati area of the city.

The bank officials reached the twin buildings "" a commercial complex and a ten-storeyed residential building located adjacent to it "" on Friday morning, and stuck notices at prominent places, announcing that the property has been attached.

"We have attached the property as per the DRT guidelines. The next course of action will be that we will approach the DRT, seeking guidelines on how to auction the premises in a bid to recover dues of the bank," said Deepak Narang, assistant general manger, Allahabad bank, who was in charge of the attachment procedure.

When told that people had already purchased shops and houses in the building, he said, "The ideal solution is that the residents and shop owners themselves purchase the units in the auction that is likely to be conducted."

The case dates back to 1998, when Allahabad Bank gave a loan of Rs 75 lakh to Amichand Park Co-operative Housing Society Ltd.

The loan was given to Hasmukh Shah, the builder and developer, Upendra Shah, who was the chairman of the society, and the loan was taken for construction of both the commercial and residential building. The loan was to be paid in four installments over a period of two years.

The land and all super structures on it were mortgaged to the bank. The value of the building today is over Rs 20 crore. The society failed to repay the complete loan, after which the bank served a notice to the society, the officials said. Of the total Rs 75 lakh loan, the society just paid Rs 38 lakh, before stopping payment to the bank, the officials said.

Allahabad Bank then filed a civil suit in the city civil court, after which the case was transferred to the DRT in 1995.

In the meantime, about 15 members of the society (individual residents), also approached the DRT, seeking that they be made a party to the case.

The DRT, in its order on February 12, 2002, said there is no pending debt against individual members of the society and that Allahabad Bank had named the co-operative society as a defendant in the case.

On November 28, 2003, the DRT issued an order, authorising Allahabad Bank to attach the property and preventing the chairman or the society from purchasing or selling any unit of the building.

The total outstanding amount that the co-operative society owes the bank today stands at Rs 3.84 crore, the officials said. The Centre Point building has been in the eye of a controversy for more than one reason.

About three years ago, the Ahmedabad Municipal Corporation had sealed the building, disconnecting its water and drainage connections, after the building allegedly failed to comply with the building use (BU) permission guidelines regarding fire safety.

In another case, the AMC also had resorted to demolishing a couple of shops in the building, because they were illegally constructed and did not adhere to the original building plans.

Residents and owners of shops in the complex were seen arguing with officials of the bank, stating that they had no idea that the co-operative society had defrauded the bank and that they had paid the full amount to the society while taking possession.