Land mortgage not part of loans to Dalmia & Co

New details have emerged in the battle between Gujarat Heavy Chemicals Ltd (GHCL) and Golden Tobacco promoter Sanjay Dalmia and Indiabulls Financials which suggest that Dalmia’s companies were never supposed to, and did not mortgage, any land for the Rs 641 crore loans taken from Indiabulls Financial Services Ltd.

The main burden of Indiabulls’ police complaint was that the security given against loans either did not exist or had already been transferred to another party. In its first information report (FIR) filed in Mumbai on July 25, 2009, Indiabulls stated that as Dalmia and other accused had defaulted on payments, the company gave a loan recall notice on July 18, 2008, for the outstanding sum of Rs 225.5 crore.

According to Indiabulls, a mortgage deal was signed with the companies on July 24, 2008, which stated that several bighas of land in New Delhi were mortgaged to Indiabulls and that the land was free from encumbrances, charge or lien. A company spokesman of Golden Tobacco told DNA that Dalmia was neither a shareholder nor a director in any of the loanee companies. The police converted a civil dispute into a criminal case without due diligence.

It is claimed that the alleged mortgage deed dated July 24, 2008, was never intended to create any mortgage. The land belonging to various loanee companies such as Bharatpur Nutritional Products Ltd, Lakshmi Vishnu Investment Ltd, Bharatpur Investment Ltd, etc, was given as a security in an escrow account for a short period.
The spokesman said: “The parties had only intended to provide for deposit of title deeds in escrow with M/s Khaitan and Jaykar Solicitors.”

He further said: “Part of the understanding was acted upon in 2007 and then again in 2008 and subsequently title deeds were, in terms of agreements dated July 24, 2008, released in the first week of January, 2009, as the escrow arrangement was to be created only for a limited period of four months approximately on both occasions. Security, by the way of deposit of deeds, was created on September 28, 2007, and released on May 15, 2008. Then again on November 7, 2009, a similar security was sought for”.

These facts, the spokesman claimed, suggest that “no mortgage was ever created and, in any case, was not linked to the loan recall. The interest represented by the deposited deeds was repeatedly treated as enough security. Had the transaction dated July 24, 2008, represented any fraud on Indiabulls, neither would this deed have been cancelled mutually on December 31, 2008, nor would the complainants have asked for some security on November 9, 2009.”