Mumbai: Bank Of Baroda on Monday cancelled the auction of actor MP Sunny Deol’s Juhu property scheduled for September 25, citing technical reasons. The bank’s statement comes just a day after it invited bids for the 600 square metre plot at a reserve price of Rs 51 crore. Sunny Villa, which houses the actor’s company Sunny Sound and other post-production facilities, is on the property.

The bank highlighted two primary reasons for the cancellation. First, the total dues were not explicitly specified. Second, the sale notice was based on the symbolic possession of the property, following Rule 8(6) of the Security Interest (Enforcement) Rules 2002. This rule requires lenders to provide a 30-day notice, allowing borrowers an opportunity to repay their debt.

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Mumbai: Bank Of Baroda has scrapped the scheduled auction of actor Sunny Deol’s Juhu plot. The bank explained that the actor had taken steps to settle the dues, which is permissible as borrowers have the right to redeem the security by paying the outstanding amount at any time before the sale of the security.

Typically, while taking action against defaulters, lenders assume “symbolic possession” of the borrower’s assets to indicate their intent to sell, and communicate to the public that the bank is interested in the property, requiring its permission for any sale. To conclude the sale, the bank must physically possess the property, allowing potential buyers to inspect it.

The bank disclosed that it had applied for physical possession of the property through an application to the chief metropolitan magistrate on August 1, 2023, and is awaiting permission.

“Since the unit is running as conveyed to us by the borrower, sale action will be initiated as per the provisions of the SARFAESI Act, once the physical possession is taken,” Bank Of Baroda said.

According to banking experts, taking symbolic possession and issuing a sale notice is generally employed to pressure borrowers into repayment if they have the means.

Deol has been representing Gurdaspur constituency of Punjab in the Lok Sabha since 2019 when he won the election against Congress’s Sunil Jhakar. The seat was earlier represented by another actor, Vinod Khanna (also from the BJP), for long.

The matter sparked a political row, with the opposition Congress raising questions about Bank Of Baroda withdrawing the e-auction notice. In a post on X, Congress general secretary Jairam Ramesh said, “Yesterday afternoon the nation got to know that Bank of Baroda had put up the Juhu residence of BJP MP Sunny Deol for e-auction since he has not paid up Rs 56 crore owed to the bank. This morning, in less than 24 hours, the nation has got to know that the Bank of Baroda has withdrawn the auction notice due to ‘technical reason’. Wonder who triggered these ‘technical reasons’?”

Mumbai: Bank of Baroda (BoB) has put up a Juhu plot for e-auction over a Rs 56 crore loan default by actor Sunny Deol. Sunny Sounds Private Ltd, a company floated by Deol, which owns the dubbing and recording studio, has been named as a corporate guarantor. The property also houses a preview theatre and post-production facilities.

According to banking sources, the Deols had taken a film-financing loan in 2015-16, during the production of Ghayal Once Again, which was a sequel to Sunny’s hit ’90s movie. The movie was produced under the banner of Vijayta Films Pvt Ltd of which Sunny and his brother Bobby are directors. The movie is understood to have a budget of Rs 50 crore, but the collections fell short.

BoB is understood to have classified its loan as a nonperforming asset towards the end of 2022. It is, however, not clear whether the loan referred to by BoB in its notice is the same loan, said banking sources.

It is not unusual for banks to issue notices under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, which allows them to possess and sell properties of defaulters. A senior public sector banker said that SARFAESI notices are issued only after the loan is classified as a non-performing asset; in other words, the borrower has not paid for 90 days after the due date.

The notice to Sunny, who is also a BJP member of Parliament representing Gurdaspur constituency, has drawn attention because the actor recently starred in a sequel to his two-decade-old movie Gadar: Ek Prem Katha. Given that Gadar 2 has done well at the box office, bankers said it is likely that the Deols would come forward for a settlement.

While it has been over two decades since film-making was classified as an industry under the IDBI Act, lenders are still wary over lending to film projects because of the completion risks. Most of the financing is undertaken without completion risks, but they are still exposed to market risks since often the returns are linked to box-office collections.

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