Dena bank and the Chennai-based Indian Bank have jointly sued Bhogilal and Laxmi Starch in the Mumbai High Court for recovery of an amount of Rs 70.61 crore.

Out of this amount, Dena Bank's share is over Rs 45 crore. The amount has accrued over the principal amount of Rs 14.62 crore lent by the bank to the Bhogilal-promoted Laxmi Starch over a period of time. The bank has called for the attachment of Bhogilal's personal property as he was a guarantor to the entire loan.

Bank of Baroda has sued Wood Polymer, another Bhogilal company, for Rs 12 crore with the Ahmedabad debt recovery tribunal. ICICI has sued the same company in in the Mumbai HighCourt for Rs 3.5 crore. Dena is also planning to file a suit against this company with the Ahmedabad debt recovery tribunal for Rs 10 crore.

Bank of Baroda sources said their bank is in the process of filing a suit against Bhogilal-promoted Wood Paper shortly to recover Rs 5 crore.

On February 2, Justice AP Shah of the Mumbai High Court appointed a receiver for the disposal of immovable property belonging to Laxmi Starch for the settlement of the Dena Bank and Indian Bank dues. However, the banks could not attach the "personal property" of Bhogilal--a sprawaling building at Walkeshar in South Mumbai and a 1,500-acre farm house on the outskirts of Ahmedabad--as Bhogilal stated that the Walkeshwar property belonged to Das Jubilee Private Ltd and the farm house is in the name of Dastan Pvt Ltd.

Earlier, the banks had informed the court that Bhogilal intended to set up a Rs 100 crore vintage car museum on the premises of the Ahmedabad farm house.

Sources said that the banks are probing the "ownership" ofthe 200 vintage cars of Bhogilal and would like to plead with the court accordingly.

Laxmi Starch has two plants--one in Nacharam (Hyderabad) and the second one in Kundra (Kerala).

Bhogilal told the court that Laxmi Starch suffered a setback in 1985-86 and 1988-89 and the accumulated losses had eroded its net worth. The company was referred to the Board for Industrial & Financial Reconstruction (BIFR) after being declared sick.

The board had in December 1989 considered and approved a relief package that involved the funding and reschedulement of term loans and granting of concession in interest rates. The BIFR had again revised the rehabilitation package in 1991 and appointed ICICI to conduct a techno-economic viability study and submit a report on additional funding for the company.

The BIFR gave its final verdict for the liquidation of the company and the process has been initiated in the Kerala High Court. Another liquidation process has been initiated against Wood Polymer at the Gujarat HighCourt.