Dena Bank refuses to vacate property; harasses owners
Moneylife Digital Team 17 March 2015

Dena Bank is trying every trick to avoid vacating its branch office near Mumbai whose lease has expired over 32 months ago. This is a lesson to property owners who believe that it is ‘safe’ to rent their premises to government organisations


Property owners usually believe that leasing their premises to a nationalised bank or a government organisation is a safe bet and will give them rental income without any headache. Abhay and Sanjay Acharekar, who leased a property to Dena Bank, are learning otherwise. The bank’s lease expired in 2012, but 32 months later, Dena Bank has not only refused to vacate the property, but its legal department is trying to extort a “compensation” from the property owners.
The case becomes interesting when put in perspective. Dena Bank have bad loans to the tune of Rs4,229.92 crore as on December 2014, a jump of 5.61% compared with same quarter last year. The powerful nationalised bank, which cannot seem to recover legitimate loans, however has a legal department that is not averse to flexing its muscle to extract compensation from property owners who innocently leased their valuable asset to the bank. 
Abhay and Sanjay Acharekar leased their property at Govandi in Mumbai to Dena Bank. The lease expired in 2012. In June 2013, the Acharekar brothers decided to sell their property and requested all tenants to give them vacant possession of their rented premises. "All the tenants except Dena Bank willingly vacated the property and gave us possession of their respective premises. Dena Bank, however, has not vacated the occupied premises despite the lease expiry almost 32 months ago," Abhay Acharekar said.
The Acharekar brothers have been meeting, writing to Dena Bank officials repeatedly but have made no headway as yet. On 6 October 2012 and on 11 July 2014, they received an ‘unconditional' written commitment from the Bank (a copy of which is with Moneylife) stating that it would vacate the premises within 2 to 3 months and that it was a matter of completing necessary formalities. 
Moneylife wrote to the Dena Bank chairman, its independent directors and other top executives, including its PR firm AD Factors to find out what the bank had to say about its attempt to arm-twist property owners, refusing to vacate their property. This was on 18 February 2015. The PR agency, initially sought more time, but is clearly helpless. The agency has now responded to quote Bank officials as, "We acknowledge receipt of your mail. The matter of Govandi branch premises is under our consideration and will be resolved shortly.”
However, former police DGP, Dr PS Pasricha has been the only one to send a pro-active response almost immediately. On 18th February, in his prompt email response Dr Pasricha, a shareholder director on Dena Bank Board, said, “I have taken a note. I shall personally pursue this matter till its logical conclusion”.
Meanwhile, the Acharekars received a communication from Dena Bank's Govandi branch office, which contained observations from the Bank's Zonal Office Executive Committee. It says, "The landlords of Govandi branch premises had sold the property and want the Bank to vacant the premises. The Committee advised that the ZOPC, Mumbai Suburban to explore the possibility of obtaining compensation from landlords for surrendering premises, as per the Premises Policy 2014-15 , and resubmit the proposal at the earliest. Hence, we once again advise to you to discuss with the existing landlord and inform us accordingly.” 
Unfortunately, for the Bank, especially public sector undertaking (PSUs) there is no provision to seek compensation from the property owner in Maharashtra. The Maharashtra State Rent Act 1999, clearly mentions that banks, public sector undertakings, and public limited companies (with paid up share capital of Rs1 crore or more) are not protected under the Act. Moreover, Dena Bank's own guidelines state that the Bank should abide by Rent Acts applicable in each region as and when required.
Dena Bank had already exceeded its stay in the rented premises by about 32 months after expiration of the lease and instead of vacating the premises, it is now trying to extract compensation from the landlord, without even checking its unconditional undertaking and the provisions of laws applicable in the state.
The Bank officials are reluctant to say anything on the issue. When we again contacted the PR agency for Dena Bank, we received a reply that the Bank's legal department is perusing the matter and it would be resolved. However, there was no time frame given by the agency to resolve the issue.
This delaying tactics used by Dena Bank will only make property owners think twice before renting their premises to other banks. This in turn may give headaches to banks themselves, especially in a land-starved city like Mumbai. 
8 years ago
Why Dena Bank alone. other Public Sector Banks like SBI, BOB, United Bank, UCO Bank, Central Bank Union Bank even cheat their own staff members. The following is a well documented issue.
Scam on bank employees pension fund in the name of Amortization of the pension cost.

Proof of not deposited even 10% in pension fund

(a) SBI CMD transferred Rs 7927.41 crs from General reserve to Pension Fund as on 31.03.2011. Central Statutory Auditors clearly certified that this amount arisen because inadequate funds were transferred in the previous years. Hence previous year balance sheet was falsified to this extent.

(b) Bank of Baroda Chairman not deposited 10% statutory contribution every month as on 31.03.2010. See their annual report from the website. In fact he withdrew Rs 57 cr from pension fund to boost the profit to 3058 crore in March 2010. The bank has deposited Rs 472 crore during 2008-09 and 365 crore during 2007-08 but during 2009-10 employer contribution to pension fund is NIL . How the employer contribution can be Nil during 2009-10.?

(c) The list of PSB not deposited the statutory share in pension fund is very long which includes PSB, United Bank, UCO Bank, Central Bank Union Bank. Central Bank sponsored Common wealth game (Rs 50cr) by employees pension fund and showed their inability to deposit their 10% statutory due in pension fund.

(d) It is diversion / loot of employees retirement funds to boost the profits and claim incentive of Rs 8 lacs from the Bank on the basis of falsified balance sheet. The amount involved is more than one lac crores which has been laundered since 01.11.1997.

RBI circular No DBOD.No.BP.BC:80/21.04.018/2010-11 dated 09.02.2011 permitted amortization of enhanced expenditure of pension liability on account of new pension option under 9th BPS and amendment of Payment of Gratuity Act 1972 to banks, at the request of IBA vide guidelines on Prudential Regulatory Treatment.
Accordingly -19- PSB amortized Rs 19611.57 crore as on March 2011. This amount of Rs 19611.57 will be deposited in -5- yearly installments ending 2015 in the pension fund trust.
When existing employees have deposited their 2.8 times of basic pay and retired employees have refunded 100% of provident fund and addition 56% cost in one installment, why the banks have not deposited this 19611.57 cr in one installment.
Is it not a loss to the pension fund?. The 9% average return on amortised pension cost of Rs 19611.57 will add to pension kitty by 1765.04 cr per year.
When our Annual wage rise was Rs. 4816 (Rs. 2239 crores for officers and Rs. 2,577 crores for award staff) w.e.f. 1-11-2007 agreed as per 9th BPS (CIRCULAR NO. 85 dated 29 / 11 / 2009 of AIBOC). Loss of interest of Rs 1765.04 cr to pension fund is equal to 40% of wage rise offered in 9th BPS. Will you allow such crime/loot on your pension fund to continue?.
Can RBI allow amortization of pension cost to boost the banks profit and falsify the balance sheet?.
Can RBI allow Banks to amortize interest payable on FDR of customers and deny them the quarterly/ annual interest in the name of amortization and allow banks to boost their profit.?
Can RBI allow amortization of depreciation to boost the profits?. Is it not a fraud on the pension fund? Is it not a fraud on the balance sheet of banks?
8 years ago
A case of legal lease expired and not vacating the premises is a lesson , but if u have purchased from a builder and then a housing society do not RECOGNIZE u as a member on the UNDEMOCRATIC BYLAWS matter pending for final hearing since last 2003 in the matter wp- 8508/2003 by the time society may apply for REDEVELOPMENT.
Dhema Mahan
8 years ago
Dena Bank is a frequent committer of such illegal activities. It is a shame that government organizations like Dena Bank themselves can't abide by their own government's laws. Instead, they use such situations for their own benefit to extort money from landlords. Today they are cheating the landlords, tomorrow they will cheat their own customers! How can we trust banks to follow proper financial and economic regulations when they can't even follow simple laws like these.
Rampant corruption and fraud like this is ruining the image of not just Dena Bank but other banks and the government as a whole. RBI should get involved in this matter and put an end to this kind of nonsense.
Suketu Shah
8 years ago
Lets us not blame respected CM or FM (current) into this.This is 32 month old issue meaning the previous FM is to be blamed.BJP has inherited the mess as Mr Amit Shah rightly said.I am sure this wl see a quick logical conclusion now that this has been highlighted,much less than 32 months of Congress rule(part of BJP who have recently taken over Maharashtra 4 months ago)
Mogra Fernandes
Replied to Suketu Shah comment 8 years ago
It doesn't matter which party is in charge. The rent control act was passed more than a decade ago. Dena Bank should abide by the act and vacate the property.
Suketu Shah
Replied to Mogra Fernandes comment 8 years ago
Agree.What I am saying is donot blame BJP.They are ruling the state only since 4 months.This is a 32 month old problem for which Congress (ruling in Maharashtra) is responsible.
Replied to Suketu Shah comment 8 years ago
It is obvious Suketu is a BJP faithful and nothing wrong in that. He somehow believes that automatically things will change just because now BJP is in power. Wait for sometime and than you will see the effect of office on the new Ministers.

Mr. Suketu you are so confident of BJP; in case you don't know or have forgotten, remember the mess in Mumbai that has been created by the endemic corruption in MCGB (BMC)which is being jointly ruled by BJP & SS for the last so many years.

If you are an independent voice you will see things in the right perspective, else you will keep on parroting the lines given to you.
Suketu Shah
Replied to shivkumar comment 8 years ago
I donot write comments to get into arguments.We agree to disagree.
K. M. Rao
8 years ago
Is it not similar to having to go round the Forest department for permission in case one grows trees in his backyard and later on wants to cut them for any legitimate use of land !
R Balakrishnan
8 years ago
We have an antiquated legal system that protects the tenants and treats owners with suspicion. Maybe the landlord should choke off water supply and electricity to the building. And create enough harassment for bank customers. Take away parking facilities- create blockade at the entrance. Throw garbage in the premises.. Lodge criminal complaints against local manager, etc Wonder if one gent named Raghuram Rajan will have anything to say on this matter
Ash Chatwani
Replied to R Balakrishnan comment 8 years ago
Such actions of harassment on the part of owners will only complicate matters rather than expediting them. RBI should look into the matter as it is the one that provides guidelines to all banks on such issues and then stays hands-off when there is no conformance or enforcement.

The local bank managers are generally accessible. It is the ones who make the actual decisions that hide behind and never give a chance to meet face-to-face. Let's help resolve such cases rather than further complicate them.
Dhema Mahan
Replied to Ash Chatwani comment 8 years ago
It is a shame that the RBI is taking a hands-off approach to this situation. As the body in charge of all Banks in India, the RBI is obligated to look into this matter and to ask Dena Bank to relocate.

How can a government body just
shamelessly break the law for 32 months! If the common man doesn't pay the government the taxes he legally owes them, the government has the right to come and collect it from him. It should work the other way around too! These landlords have every right to collect the rent they have been losing for 3 whole years. 3 YEARS! Collect the rent at the market rate! Inflation in this country is very high. This Dena Bank issue is a prime example of our nation heading in the wrong direction.
8 years ago
This is the result of having incompetent legal cell by our psu banks.The owners should file criminal case against management and bring them to sense.IS OUR FM, WHO IS A LAWYER AWARE OF COMPETENCY OF LEGAL CELLS OF PSU BANKS?
Abhay Kumar Pradhan
8 years ago
very bad loosing reliability due to bank's bad attitude.
Vaibhav Dhoka
8 years ago
Here we are following British rule as far as RENT is concerned.The routine should be increase of rent every three years in conformity with inflation.Here in India landlords are treated as Children of Lessor God.Due to this attitude housing could not developed as industry.And at present due to escalation of prices of real estate DONS are coming.
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