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By Staff
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Srinagar, May 16 (UNI) The Jammu and Kashmir Bank has incurred a loss of Rs 1.89 crore by granting loan to a Delhi-based firm due to overvaluation of property in 1999, according to a CAG report.

The report said the bank had sanctioned a loan of Rs 1.50 crore in favour of a Delhi-based proprietary firm for dealership of a petrol pump in January 1999.

The loan was secured, inter alia, against hypothecation of stocks of petrol, diesel and other lubricants lying in the gas station, equitable mortgage of plant and machinery worth Rs 70.61 lakh, and land and building worth Rs 1.78 crore of one partnership concern at Haryana, of which the proprietor of the loanee firm was a partner.

The report said the value of the stocks and property was assessed by a private surveyor and loan assessor. The loan was released to the firm in February 1999, it added.

Audit scrutiny in December 2005 had revealed that the account turned defaulter and was declared non-performing assets (NPA) by the bank in April 2001 with an outstanding amount of Rs 2.94 crore of which Rs 1.47 crore was the principal balance and Rs 1.47 crore interest.

The Jammu and Kashmir Bank served a notice to the firm and the guarantors under section 13 of the Securitisation Act in December 2002, the report said.

The value of the land and the building of the firm reassessed in February 2003 by the bank's own valuer was found to be Rs 87.95 lakh only, it said, adding one of the partners of the firm filed a suit against the others for maliciously mortgaging the company's property to the bank.

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