On August 5, 2019, the Asset Recovery Management Branch of Punjab National Bank (PNB) in Pune released a two-and-a-half page e-auction notification featuring names of 30 companies and 36 residential and commercial assets in all. The companies had turned non-performing asset (NPA) and the assets mortgaged with the bank were being auctioned as part of the PNB's recovery process.

Among various items listed was an industrial land and building with industrial shed, plant and machinery in MIDC Pimpri, Pune. Owned by M/s Shell Packaging, the pending sum on this NPA was over Rs 4.1 crore (basis the e-auction notification) as per PNB's demand notice dated October 6, 2016. This is over and above the interest and cost (after recovery, if any), said PNB's e-auction notification.

"I was keen to look at this commercial property as part of my business diversification plans. The reserve price of that asset is Rs 1.93 crore with earnest money deposit (EMD) of Rs 19.3 lakh and increment bid amount of Rs 11,000," said the Pune-based businessman.

PNB's notification did not show any details of the owners of Shell Packaging, prompting a property/ title search with Maharashtra Industrial Development Corporation (MIDC) Pimpri, Pune. A businessman by the name Suryakant Natwarlal Mehta and two other partners featured in the current lessee column of the MIDC document.

As per property transferee details in MIDC records, Mehta had acquired the property from M/s Fixity Packaging Industries Pvt Ltd on June 14, 2010. There are no further entries on the transfer of ownership and registration of new partners on this property thereafter.

On checking Shell Packaging documents with PNB's asset recovery management, a person by the name Ketan Mehta is showing as the owner of the commercial asset. In fact, Ketan Mehta role in Shell Packaging comes into play sometime in 2016 as the property was sold to some other people in 2012 and was bought by Mehta in 2016.

"Mehta was given a loan by PNB against the Shell Packaging asset in 2016 and the bank's officer(s) turned a blind eye while sanctioning/disbursing this loan that has now turned NPA. MIDC's records are still showing Suryakant Natwarlal Mehta and two other partners as the current lessee.

"There is no record with MIDC of Shell Packaging's ownership by Ketan Mehta and a commercial loan was given to him by PNB without proper documents or a no-objection certificate (NOC) from MIDC, which is very surprising. The entire approach to this loan is a clear indication that it was a fraudulent disbursement with no accountability on the part of the sanctioning authority as the borrowers had no intention of paying back the loan," said the businessman.

Additionally, the prospective buyer would have left with making rounds of the judiciary to take possession of the said commercial asset in the event of no NOC from MIDC.

Queries emailed to PNB seeking clarity on this commercial loan remained unanswered till the time of going to print. PNB has been frequently in news post the Nirav Modi and Mehul Choksi fraud case, estimated at Rs 11,356.84 crore, that spooked the banking and finance sector and the diamond industry alike. This was followed by a borrowing fraud of Rs 3,800 crore in the case of Bhushan Power and Steel.