Allowed

Hdfc Bank v. M/S Needa Textiles

DRT8 Aug 2022OA/27/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal adjudicated an original application filed by HDFC Bank against three respondents for non-repayment of a cash credit facility. The bank proved loan execution, availing, and default. The Tribunal enforced an ex parte recovery, directing payment of principal and adjusted interest, and authorized sale of mortgaged or personal assets for repayment.

What did the court decide?

Recovery of Rs. 22,10,448.32 plus 10% annual interest; issuance of Recovery Certificate; authorizing sale of mortgaged and personal assets; restraint on alienating properties.

Hdfc Bank versus M/S Needa Textiles — Banking and Recovery | DRT (2022)

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IN THE DEBTS RECOVERY TRIBUNAL AT LUCKNOW

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Present: A.H. Khan, Presiding Officer

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Case No. Original Application No.27 of 2022

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Dated: 08.08.2022

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HDFC Bank Limited a banking company
incorporated registered Under the
compinies act, 1956 having its registered
Office at HDFC bank House, Senapati
Bapat Marg, Lower Parel(West), Mumbai-
40005i having other branches all over india
including one at 38, Pranay Towers, Near
Vidhan Sabha Darbari Lal Sharma Marg,
Lucknow-226001 through Suyash
Naaraayan, Manager ........Applicant Bank
Versus
l. Mis Needa Textiles, sole proprietorship
firm, through its proprietor Shamshad Ali,
Registered address: Bharaganj Satrikh,
Barabanki, Near Budenmaie Talab U.P.-
22520t4
2. Shamshad Ali, Proprietor S/o Mohammad
Idarees, R/o House No.2, Bharaganj,
Barabanki U.P.-225204
3. Mohammad Arif S/o Mohammad Idarees,
R/o House No. BI-141, Badei Barabanki
u.P.-225204
......defendants
Counsel for applicant -bank : Shri Amit Kumar Singh, Advocate
Counsel for rhe defendants : None
JUDGMENT

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l. This Original Application has been filed by the applicant Bank under Secrion 19 of the Recovery of Debts & Bankruptcy Act, 1993, against the defendants for the recovery of Rs. 22,10,448.32 (lupees [) Twenry Two Lac, Ten Thousand, Four Hundred Forty Eight urd.p^i" )/ ,\

,/^--..._-

2 O.A. No.27 of 2022

/ t

Thirty Two only) together with pendentelite and furure interesr, cosrs and orher reliefs etc.

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The brief facts of case are that the defendant No.l is a sole proprietorship firm through its sole proprietor the defendant No.2 carrying on its business in the name and style of defendant No.l, the defendant Nos.l6s2 approached through loan application dated 30.06.2015, 02.07.2015 to avail the Cash crefit faciliry amount of Rs.40.00 Lac, where Rs.20.00 Lac was duly sanctioned on it sancrion Ietter dated 20.07.2015 with stipulated interest on ceftain terms and conditions (Exhibit No.A-2 [g Exhibit No.A-3) to this Original applicarion.

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To secure Cash Credit faciliry of Rs.20.00 Lac, the defendanr Nos.I 6g 2 signed executed various necessary security loan documents, Demand promissory Note for Rs.20.00 Lac, Master faciliry agreement, deed of Hypothecation, power of Attorney, Deed of Indemniry, Deed of Declararion, Letter of Undertaking cum Indemnity on 25.07.2015 in favor of applicant bank as well as the defendant Nos.2 6s 3 have taken their personal Guarantee by executing, sigmng, delivering irrevocable Ietter of continuing Guarantee on 25.07.2015 to confirm their liabiliries joinr, several, co-extensive as same as equal to the principal borrower (Exhibit No.A-4 to Exhibit No.A-II) in this original application.

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Further in order to secure the Repayment of the bank dues, the al defendant No.3 created the equitable mortgage of his immovable / / / property l.e.One Residential properry consrn:cced on PIot No.Araii^t' /'

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o.A. No.27 0f 2022

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No.58. Siruated at Village-Badel Under Nagarapalika. Nawabganj. Pargana. and Tehsil Nawabganj barabanki U.P.-225001 area defendant No.3 the boundaries which are as under EAST: Other Person Plot WEST: Property of Malik Jarid Khalid. NORTH : Property of Mohd. Salim Khan SOUTH: t5 feet wide Road By depositing the original ride deed on 25.07.2015 in favour of the applicant Bank, which was duly regisrered ar Sub Regisrrar Nawabganj District Barabanki U.P.(Exhibit No.A-12) ro this original applicarion. 5. After availing the credit faciiiry of Rs.20.00 Lac, the defendanr Nos.l6g2 vide requested on 20.08.2016 to the applicant bank to renew the cash credit limit of Rs.20.00 Lac, through requesr letrer, where the applicant bank renewed rhrough Sancrion lerrer on 15.09.2016 wirh sripulated inreresr the defendanr Nos.l6s2 duly executed amendment agreement dated 23.09.2016 wirh rhe applicant bank(Exhibit No.A-13 to Exhibit No.A-15) and further again rhe defendanr Nos.I&2 vide requested on 13.07.2017 to che applicant bank ro renew the cash credit Iimit of Rs.20.00 Lac, rhrough requesr letrer, where the applicant bank renewed through sancrion lerrer on 09.08.2012 with stipulated interest (Exhibit No.A-16 to Exhibit No.A-17) rhe defendanr Nos.l6s2 vide requested on 17.07.2018 ro the applicant bank ro renew the cash credit limit of Rs.20.00 Lac, through requesr lerrers, where the applicant bank renewed through Sancrion letcers on 15.11.2018 with stipulat "dirt"r"* l/[) on certain terms and conditions as accepted and acknowledged by thef

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4 O.A. No.27 of 2022

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defendants (Exhibit No.A-IS to Exhibit No.A-I9) ro rhis Original application.

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To avail the Repaymenr of Cash credir faci_lity, the applicant-bank opened a loan account in the name of the defendant No.l mainrain the Credit and debit of Sanction and renewed faciliries.

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After avafing Cash Credit loan facfiry, from the applicanr-bank, the defendants failed to maintain financial discipline also failed to comply with the terms and conditions of loan agreement as required in the matter, as the applicant bank served reminders to pa)r rhe amounr, which is undue towards for rhe realization of insralmenrs the defendants defaulted in repayrnent of many equated monthly instalments dues and failed to honour their commirment, despite several assurances given by defendants, the defendants deliberately violated the EMI Schedule, consequently as the loan account of the defendants recalled by the applicant bank issued served Regisrered legal recalVDemand Notice on 01.09.2021 (Exhibit No.A-20) as requests to defendants for repayment to clear the outstanding dues of applicant bank, but defendants did not paid their heed to the same, hence, this Original Application has been insdruted.

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As per books of the bank maintained in the usual and ordinary course of banking business, an outstanding of Rs.22,10,448)2 (Rupees Twenty Two Lac, Ten Thousand, Four Hundred Forty Eight and paisa z-_: Thirty Two only) including interest as on 01.09.2021, lying dr. fo. / I payment, for which the defendants are liabie to repay the same, which

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z-_:

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o.A. No.27 0f 2022

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they did not pay despite repeared requests and demand, applicant bank filed the staremenr of loan Accounr (Exhibit No.A-21) to rhis original application.

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Afcer availing the credit faciliry, the applicant bank obtained rhe valuacion report by the bank's approved Valuer Er. Sanjay Gupta of M/S Gupta Associates on 22.07.2015(Exhibit No.A-22) ro rhis original application.

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The cause of action for filing the present applicarion arose firstly on 20.07.2015 when Cash credit facfiry was sancrioned by rhe applicant Bank and same were availed by the defendants on the execution of necessary security documents, and the cause of action arose again on when cash credit faciliry was renewed by the applicant bank on various daces the cause of action finally arose on when applicanr bank issued the demand/recall norice dated 0I.09.2021 sent ro rhe defendanrs, lsgalling, the entire outstanding dues as they failed to pay the same. ll. The summons was served upon the defendants through registered post but the defendants opred nor to contest rhe case before this Tribunal, hence, the matter proceeded ex parte againsr the defendants

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From the perusal of rhe record, it is evident rhat the defendanrs provided with fair oppomrniries ro contesr rhe claim of rhe bank. As che defendanEs not opced to contesr the case, so only point of consideration before this Tribunal is as to wherher bank is legally entitled to Ehe amounr as claimed in ongna@lication on che basis of documents and pleading submitted Uy it.^{| /} t

O.A. No.27 of 2022

In support of the case Shri Suyash Naaraayan, Manager of the applicant bank has filed an affidavit.(Exhibit No.A-l)

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On a careful scrutiny of the evidence on a{fidavir and Exhibirs marked as Exhibit No.A-l to Exhibit No;A-22, it is proved rhat defendants availed the Cash Credir facfity and renewed the sanctioned facilities from applicant-bank by execuring loan and securiry documents detailed as above in favor of applicant-Bank, A perusal of the applicarion, evidence, documenrs relied upon clearly shows that defendants urili-sd granted loan faciliries by rhe bank, the applicanrbank had maintained the Books of account in the ordinary course of banking business showing disbursal of rhe loan amounrs. The Bank had also charged interest from time to time and the entries are relevant through certification Under/Secrion 2A(a), 2A(b) & (c) of the Banker Books of Evidence Act, 1891, the applicant bank is enrirled ro rhe principal Outstanding dues as fiiing of Origlnal applicarion as on 27.10.2021 of Rs.22,I0,448.32 (Rupees Twenty Two Lac, Ten Thousand, Four Hundred Forty Eight and paisa Thirty Two Only) In respect to Cash credit facfiry as account statement produced by che applicant bank is not the conformiry wirh the Principals laid down, I am supported in my view by the Hon'ble Supreme Court in a case tided Central Bank of India u/s Rauindra AIR 20Ol SC 3095 pages. On the Basis of forgoing discussion, Interesr of jusrice wiII be served if pendentelite and future interesr the applicant Bank cotld recover fl interest factor first thereafter the Principal amount, fi w" a*aral^/|

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O.A. No.27 of 2022

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[email protected]/o per annum as allegedly claimed by the applicanr Bank in it's O.A. that will tantamount ro undue enrichment of applicant bank, thus it will be fair reasonable to granr payable @10.00o/o per annum simple interesr with effect from 02.09.2021 for pendentelite and furure Period, I Opine rhat rhe defendanr Nos.l ro 3 are jointly and severallyliable to pay Rs.22,10,448.32 (Rupees Twenty Two Lac, Ten Thousand, Four Hundred Forty Eight and paisa Thirty Two Only) with interest granred payable @10.00% per annum wirh its costs, as rhe mortgaged property/hypothecared assers of defendants are liable ro be sold, for recovery amount dues, along with personal properties/assets of the defendants

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Accordingly, the defendant Nos.l ro 3 are direcred ro pay balance dues to the applicanr bank within a period of 2 monrhs from dare of judgment failing, which rhe applicant bank wil be enritled ro recover from the secured assets, personal movable assets, immovable assets of the defendanrs and ro sell rhe morrgaged properry/ hypothecated assets and as well as personal assets/properties of the defendants.

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In the result, the Original Application succeeds ex parre against defendanc Nos.I to 3 wirh cost, The bank proved the loan execution of security loan documents and availment of credit facfities, defendants are jointly, severally liable to repay rhe dues and rhe mortgaged property/Tlypothecated assets as wf as personal properries/assets are /) Iiable to be sold. I^/ It is, therefore , ordered ' ,r) >,1 / /-

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O.A. No.27 of 2022

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(i) That the Original Application No.27 of 2022 of rhe applicant bank for issuance of Recovery Certificate to the runes of Rs.22,10,448.32 (Rupees Twenty Two Lac, Ten Thousand, Four Hundred Forty Eight and paisa Thirty Two Only)with interest @I0.00o/o per annum with monthly resr from the dare of filing of Original applicarion i.e.27.10.202l rill amount fuIly liquidated as costs succeeds ex parte against defendant Nos.l to J.

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(ii) The applicant-bank is entitled to recover aforesaid amounr by sale of mortgaged properry,4rlpothecated asser (if not sold earlier under the provision of the S.A.R.F.A.E.S.I. Act 2002), If the dues of the applicant bank still remain, unsarisfied, the same shall be recovered by attachment and sale of the personal movable, immovable assers of defendants.

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(iii) The defendants are here by restrained by means of injunction from depleting, transferring, encumbering, alienating or in any way dealing with their properties/estates wirhout first paying the claim of the applicant-bank.

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(iv) Let Recovery Certificate be issued immediately u/s 19(22) of the Recovery of Debts {c Bankruptcy Act, 1993 by fiing 08.11.2022 //

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before Recovery Officer, DRT, Lucknow. I^/

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// ( I^/

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Judgment^{is pronounced in the open court.}

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Dated.08.08.2022

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@6;) Presiding Officer

Hdfc Bank v. M/S Needa Textiles

Case brief

What is this about?

What did the court decide?

Hdfc Bank v. M/S Needa Textiles

Case brief

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