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The Bank of Baroda's stressed assets recovery branch has taken partial possession of the Nirmal Mall located in Mumbai's Mulund area on January 24, 2023, due to the mall's failure to repay a loan amount of Rs 161 crore. On December 6, 2019, the bank issued a demand notice to the mall and its Managing Director, Dharmesh Jain, calling for the loan to be repaid within 60 days. The partial possession was carried out under the Sarfaesi (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest) Act, 2002.
According to a source at Bank of Baroda, the bank had previously taken symbolic possession of the property and put it up for auction with a reserve price of Rs 339 crore in 2021. However, the bank has now received court orders and taken official possession of the property with the help of local police. The portion of the mall that was mortgaged to the bank, which accounts for only 3.4 lakh square feet of the 51,700 square meters, will again be put up for auction and the reserve price may be higher this time.
The bank's notice outside the mall warns borrowers, guarantors, and the public in general not to deal with the property as it is now in possession of the Bank of Baroda and any dealings with the property will be subject to the bank's charge for an amount of Rs 161 crore and interest.
According to local brokers in Mulund, most of the mall has been empty for several years, with only a few brands on the ground floor facing the main road having retail outlets. Nirmal Developers, the real-estate developer behind the mall, is facing financial constraints and has faced numerous hearings with the National Company Law Tribunal over alleged unpaid dues running into the hundreds of crores of rupees. Additionally, the Maharashtra Real Estate Regulatory Authority is also hearing several cases against the firm. In December, the Maharashtra government issued an auction notice for the sale of 2,634 square meters of land in Mulund at a base price of Rs 31.81 crore, but the auction was postponed due to technical reasons.
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