Canara Bank has slapped a notice on Gitanjali Gems Ltd and Gitanjali Exports Corporation Ltd under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi), 2002, to recover about ₹195 crore.

The public sector bank has also taken similar action in the case of Nakshatra Brands Ltd to recover about ₹49 crore.

In both the cases, Mehul C Choksi is the personal guarantor. Choksi is under the Central Bureau of Investigation scanner following a complaint by Punjab National Bank in the matter relating to alleged issuance of unauthorised and fraudulent issuance of letters of undertaking at its Brady House branch in Mumbai.

According to the bank, the operation and conduct of both the said financial assets/ credit facilities became irregular in December 2017.

According to the bank’s book of accounts, the liability of Gitanjali Gems Ltd towards the bank as on February 28, 2018, amounted to about ₹195 crore, together with interest at the rate of 15.30 per cent. The liability of Nakshatra Brands Ltd as on February 21, 2018, amounted to about ₹49 crore, together with interest at the rate of 15.30 per cent.

The public sector bank said the operation and conduct of the abovementioned financial assets/ credit facilities having come to a standstill as a consequence of default in repayment of principal debt/ installment and interest thereon, it was constrained to classify these facilities as non-performing assets in accordance with the directives/ guidelines relating to asset classification issued by the Reserve Bank of India.

The bank called upon the borrowers to discharge in full their liabilities to it within 60 days from the date of receipt of its notice. It also notified that the borrowers cannot transfer by way of sale, lease or otherwise secured assets without obtaining its consent.

In case the borrowers fail to discharge their liability in full within the specified period, the bank said, for realising the secured asset, it may take recourse to measures such as — taking possession of the secured assets of the borrowers, including the right to transfer by way of lease, assignment or sale; and takeover the management of the business of the borrowers, including the right to transfer by way of lease, assignment or sale.

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