Mumbai, July 27, 2026: A major legal dispute has surfaced over the proposed e-auction of a 429-acre prime property in Mumbai's Dahisar, with the borrower alleging that Unity Small Finance Bank Ltd. (USFB) has initiated recovery proceedings despite a Rs 10 crore loan having been fully repaid several years ago. The borrower has challenged the bank's claim of Rs 2,059 crore in alleged dues, contending that the recovery action is based on disputed and unenforceable documents.
The public notice, issued by Venkataraman Narasimha Ayyangar, Director of Ravijyot Finance & Leasing Pvt. Ltd., has been addressed to Unity Small Finance Bank, prospective bidders, financial institutions, developers and the general public. It challenges the legality of the proposed e-auction and cautions prospective buyers against participating in the sale until the dispute is resolved.
Bank Declines Comment
Responding to queries, a Unity Small Finance Bank spokesperson declined to comment on a questionnaire sent by The Free Press Journal, citing client confidentiality in matters related to individual clients or ongoing legal proceedings.
"The matter is currently sub judice and is being adjudicated before the appropriate judicial forums, including the Debt Recovery Tribunal (DRT) and the Bombay High Court. The Bank remains committed to following the due process of law in all such matters," the spokesperson said.
The dispute concerns a 429-acre land parcel in Mumbai's Dahisar area bearing Survey No. 344 (Part) and CTS No. 1, which Unity Small Finance Bank has proposed to auction. According to the bank's sale notice, the property was mortgaged to secure an alleged Rs 1,220 crore mortgage overdraft facility extended to Housing Development and Infrastructure Ltd. (HDIL), with outstanding dues of Rs 2,059.30 crore as on August 31, 2023.
However, Ravijyot has disputed the very existence of the mortgage.
Borrower Disputes Mortgage
Ravijyot has denied that the land was ever mortgaged for HDIL's borrowings. Ravijyot said it had availed of only a Rs 10 crore loan from the erstwhile Punjab & Maharashtra Co-operative (PMC) Bank, which was fully repaid in 2020, and claimed the bank had acknowledged closure of the loan account.
It alleged that after PMC Bank's amalgamation with Unity Small Finance Bank in 2022, the lender initiated recovery proceedings by treating the Dahisar property as security for HDIL's alleged liabilities.
Ravijyot has alleged that despite the closure of the Rs 10 crore facility, Unity Small Finance Bank, into which PMC Bank was amalgamated in 2022, has initiated recovery proceedings claiming dues of over Rs 2,059 crore by treating the Dahisar land as security for HDIL's alleged borrowings.
Forgery Allegations Raised
In a suit filed before the Bombay High Court, the company has alleged that it never executed the documents relied upon by the bank, including an alleged board resolution, sanction letter, agreement to mortgage, deed of mortgage and letter of authority, all dated September 11, 2018. It has contended that these documents are forged, unstamped or unregistered and therefore unenforceable.
The company further said it lodged a complaint with the Mumbai Police's Economic Offences Wing (EOW) on September 9, 2024, alleging cheating, forgery, criminal conspiracy and criminal breach of trust. The investigation into the matter is continuing.
Ravijyot has further questioned the very existence of the alleged Rs 1,220 crore HDIL facility. It has argued that HDIL's account had already been classified as a non-performing asset (NPA) on October 31, 2011, and that sanctioning such a facility in 2018 would have been contrary to Reserve Bank of India (RBI) norms, raising doubts over the authenticity of the documents relied upon by the bank.
Public Caution Issued
The notice also claims that the RBI inspection report does not record the Dahisar property as security for the alleged facility and found no subsequent sanction letter, credit appraisal, process note or contemporaneous banking records evidencing either the sanction or disbursement. It further alleges that the inspection found no board resolution of HDIL authorising the facility, prompting the borrower to claim that the bank relied on allegedly fabricated or misleading records while asserting its recovery claim before judicial forums.
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Issuing a public caution, the borrower has urged prospective purchasers, developers, brokers, investors and financial institutions to refrain from participating in the proposed auction, warning that any purchaser could become embroiled in prolonged litigation if its claims are ultimately upheld.
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