Police start probe in disrupted DCHL property auction

Case registered against Indiabulls' official for an alleged false promise of lower price to a bidder

The city police on Thursday said they had begun a probe into the alleged disruption of a Deccan Chronicle Holdings Limited (DCHL) property auction at the office of Indiabulls Housing Finance here on Tuesday.  They would also look into a complaint filed by a prospective bidder in a related matter against two officials of Indiabulls.

The  police registered a case against Somajiguda municipal councillor A Mahesh Yadav and eight others for disrupting the auction of the residential property of P K Iyer, a promoter of DCHL, based on a complaint by Indiabulls’ legal manager K V Subbayya.

They also registered a case against Subbayya and his colleague based on a complaint by Chalapathi, who, according to police, alleged the duo had cheated him after taking money to help get the property at a cheaper price.

West Zone DCP V Satyanarayana said they had initiated the investigation and added they needed to question Indiabulls’ top officials to get a clear picture.

“We readily provided adequate police security to the Indiabulls’ team when they went to take possession of the said property in July this year. I do not understand why they did not seek similar protection this time,” he told Business Standard on Thursday.

The police are not only looking into the motive behind the alleged action of Mahesh Yadav but also trying to find if there was any link between him and Chalapathi, who had approached the police against Indiabulls’ officers soon after the company representatives filed a complaint against the corporator .

According to Satyanarayana, the complainant alleged Subbayya and his colleague received Rs 5 lakh as an advance to help him get the property at a cheaper price but later betrayed him by enhancing the reserve price to Rs 14 crore from the earlier figure of Rs 6 crore. Subbayya refused to comment on the issue.

Indiabulls took possession of two residential properties, including this one, of DCHL promoters after invoking the Sarfaesi Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) when they failed to repay the Rs 100 crore it lent.  

An attempt to seek relief under the sick companies Act by the DCHL promoters has failed, as the Board for Industrial and Financial Reconstruction (BIFR) declined to register the company as sick one.

“Although the company is in the business of newspaper, it had filed the reference showing its business to be that of printing which was completely misleading and factually incorrect,” an order issued by the BIFR registrar said.

Referring to a host of civil and criminal proceedings being pursued against the company promoters, the registrar, in his orders, also questioned the claim of the DCHL that Sarfaesi action has been taken only to the tune of 9.78 per cent of its securities.

“A large number of secured creditors, including Indiabulls, Canara Bank, Kotak Mahindra, JM Financial, IDFC, SBI among others have initiated a similar action much more than what has been stated by the company,” it said.