Sunny Deol, the Bollywood actor renowned for his iconic roles in action-packed movies, is in the news again. This time, it’s not for his films, but for a financial hiccup involving the Bank of Baroda (BoB). The bank is set to auction a piece of real estate in Juhu, Mumbai, where Sunny Villa stands. This property is up for auction to recover a substantial loan of Rs 56 crore.ย
The Bank’s Notice
In a public notice, the Bank of Baroda announced that the reserve price for this auction is Rs 51. 4 51crore. The bank had previously taken symbolic possession of the property and scheduled it for inspection on September 14. As of now, BoB has not provided any comments regarding this matter. Representatives for the Deol family, including Sunny Deol, are actively working on resolving the issue and express confidence that a resolution is on the horizon.ย
Legal Framework
This auction process is being carried out under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. In this legal notice, Sunny Deol, known as Ajay Singh Dharmendra Deol, is identified as the borrower guarantor. His brother, Bobby Deol, or Vijay Singh Dharmendra Deol, and their father Dharmendra Singh Deol, are named as guarantors. Sunny Sounds Private Ltd., a company associated with Sunny Deol, is also listed as a corporate guarantor. The property in question also houses a preview theatre and post-production facilities.ย
A Loan History
Banking sources indicate that the Deol family had taken a film-financing loan back in 2015-16, during the production of “Ghayal Once Again, ” a sequel to one of Sunny’s 90s hit movies. This film was produced under the banner of Vijayta Films Pvt Ltd, a company directed by Sunny and Bobby Deol. Although the movie had a budget of Rs 50 crore, it fell short in terms of box office collections. Bob is believed to have classified this loan as a non-performing asset towards the end of 2022. However, it’s not entirely clear whether this loan is the same one referred to in BoB’s auction notice.ย
Banking Standard Procedure
Issuing notices under the SARFAESI Act is standard practice for banks when dealing with non-performing assets. This legal framework allows them to possess and sell properties owned by defaulting borrowers. According to a senior public sector banker, these notices are issued only after the loan has been classified as a non-performing asset, meaning that the borrower has not made payments for 90 days past the due date.ย
A Silver Lining?
Sunny Deol’s recent success with “Gadar 2, ” a sequel to his hit movie “Gadar: Ek Prem Katha, ” has not gone unnoticed by the banking community. Given the film’s strong performance at the box office, there is optimism that the Deol family may step forward to settle their financial obligations with the bank.ย
Film Industry Financing Challenges
While the Indian film industry was officially recognized as an industry more than two decades ago under the IDBI Act, lenders still approach film projects with caution due to inherent risks. Most financing agreements do not cover completion risks, leaving lenders exposed to market uncertainties, as returns are often tied to box-office collections.ย
In conclusion, Sunny Deol, the action hero of Bollywood, is currently facing a financial challenge with the Bank of Baroda regarding a significant loan. The upcoming auction of his property in Mumbai underscores the complexities and risks associated with film financing in India, even for established actors like Sunny Deol. The outcome of this auction and the resolution of this financial matter will certainly be of interest to many in this industry and beyond.