Allowed

Punjab National Bank v. M/S Rose Guest House

DRT9 Aug 2022OA/28/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the Bank's application for recovery of outstanding dues under the RDB Act. The court upheld the debt, ordered payment with interest, and directed the issuance of a recovery certificate against respondents jointly and severally.

What did the court decide?

Recovery of Rs. 51,76,064.60 with 12% interest pending liquidation, costs, and issuance of Recovery Certificate.

Punjab National Bank versus M/S Rose Guest House — 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.28 of 2022

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Dated: 09.8.2022

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Punjab National Bank, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertaking), Act, 1970, having its Corporate Office at Plot No.4, Sector-1O, Dwarka, New Delhi-110075 and a Branch at Mangal Pandey Nagar, Meerut, UP.

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......Applica nt Bank

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Ve rsus

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M/s. Rose Guest House, (A Proprietorship Firm), through its proprietor Mr. Ashan Raza, S/o Mr. Gulzar Husain. Reeistered Office: 148/4, Patel Nagar, Meerut250001. 2nd Address: 152/8A, Patel Nagar, Meerut-

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1. Mr. Ahsan Raza, S/o Mr. Gulzar Husain, proprietor of M/s. Rose Guest House, R/o 752/ 8A, Patel Nagar, Meerut-250001.

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1. Mrs. Nuzhat Aara, W/o Mr. Ahsan Raja, R/o 152l8A, Patel Nagar, Meerut-250001. 2nd Addressl 7481A, Patel Nagar, Meerut2s0001.

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1. Mr. Babar, S/o Mr. Gulzar Hussain, R/o t48/A, Patel Nagar, Meerut-250001.

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Mr. Alirja, S/o Mr. Gulzar Hussain, R/o 15218A, Patel Nagar, Meerut-250001-.

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Counsel for the applicant-Bank^: Counsel for the defendants^:

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Defendants

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Kumar Dwivedi, Advocate.

O.A. No.28 of2022

JUDGMENT

This Original Application has been filed by the applicant Bank under Section 19 of the Recovery of Debts & Bankruptcy Act, 1993, against defendants for the recovery of Rs.51,76,064.60/- (Rupees Fifty One Lac, Seventy Six Thousand Sixty Four and Paisa Sixty Only) (Rs.49,24,863.601- in Overdraft Loan Account) & (Rs.2,51,201/- in Covid FITL Loan Account) together with pendentelite and future interest, costs and other reliefs etc.

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The brief facts of the case are that the defendant No.1 is proprietorship firm and the defendant No.2 to 5 are guarantors/mortgagors. The defendant No.lfirm through its proprietor approached the bank for grant of Overdraft facility of Rs.49.00 lacs, which was duly considered and sanctioned by the bank on certain terms and conditions^(Annexure No.A-2 & Annexure No.A-3) to this original application.

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To secure the above OD facility of Rs.49.00 lacs, the defendant No.2 on behalf of the defendant No.1/firm had executed and signed various security documents in favour of the applicant-bank 08.3.2018 like Overdraft Agreement, Letter of Hypothecation, Letter of Authority, Letter for Deposit, Undertaking and Power of attorney.^{The defendant} Nos.2 to 5 being^guarantors towards the credit facility^{had also executed} and signed Agreement of Guarantee in favour^{of the bank on 08.3.2018} acknowledging therein their liabilit$^{(Annexure No.A-4} to^Annexure (t

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No.A-10) to this original applicationl

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O.A. No.28 of2022

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Further, in order to secure the credit facility, the defendant No.2, 4 & 5 had created mortgage of their immovable property i.e. All part and^parcel of Residential house No.8, A Old, new No.148, South^patel Nagar Colonv, Meerut, UP with boundaries as per site East:73'6 House of Haii llvas, West: 73'6 House of Others, North: 31'O Nala and South: 31'0 Rasta 20' wide then Park in favour of the bank on 08.3.20j.8 by depositing of title deed of the property. The applicant-bank also got the valuation of the property by its approved valuer M/s. Mohan & Associates (Annexure No.A-11 to Annexure No.A-16 & Annexure No.A24)to this original application.

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The defendant No.2 had also executed and signed Balance and Security confirmation letter dated 01.1.2021 confirming the balance in the loan account (Annexure No.A-17)to this original application.

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Later, the defendant No.1/firm through its proprietor approached the bank for grant of Covid FITL Loan of Rs.2,29,866/- which was also considered and sanctioned by the bank on certain terms and conditions (As per this Original Application).

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For availing the aforesaid credit facilities, the appllcant Bank had opened two loan accounts in the names of defendant No.lfirm in order to maintain the account of the said loan facilities.

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After availing the aforesaid credit facilities, the defendants failed to maintain financial discipline and also failed to comply with the terms and conditions, thus, the bank sent various letter and reminders on different dates to the defendants to liquidate the dues, but, they failed

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O.A. No.28 of 2022

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to do so (Annexure No.A-18), consequently, both the loan accounts of the defendant No.lfirm were classified as NPA on 31,3.2021 by the bank as per RBI guidelines (Annexure No.A-19), therefore, the applicantbank issued Demand Notice dated 31.5.202! under Section 13(2) of the SARFAESI Act 2002 (Annexure No.A-20) and later on also issued Legal Notice dated 02.9.2027 (Annexure No.A-21), but they did not considered the same and the loan accounts of the defendant No.lfirm are still un-liquidated, hence, this Original Application has been instituted.

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As per books of the bank maintained in the usual and ordinary course of banking business, an outstanding of Rs.51,76, 064.60l-(Rupees Fifty One Lac, Seventy Six Thousand Sixty Four and Paisa Sixty Only) (Rs.49,24,853.60/- in Overdraft Loan Account) & (Rs.2,51,201/- in Covid FITL Loan Account) including interest upto 15.11.2021 were lying due for payment, for which, the defendants are jointly and severally liable to repay the same, which they did not pay despite repeated requests and demands. The applicant-bank has filed the copy of Statement of Account (Annexure No.A-22 & Annexure No.A-23) to this original application.

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The cause of action for filing the present application arose firstly when the aforesaid credit facilities were sanctioned by the applicantBank and the same were availed by defendants and necessary documents were executed. The cause of action further arose again on O2.9.2OZL when the applicant bank had issued Legal Notice to the

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O.A. No.28 of2022

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defendants recalling the entire outstanding dues and they failed to pay the same.

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The summons were served upon defendants through registered posts, but the defendants did not turn up to contest the case, hence, the matter proceeded ex-parte against the defendants.

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t2. ln support of the case, Sri Akash Dixit, Manager of the applicant

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Bank has filed affidavit (As per this original application).

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On a careful scrutiny of the evidence on affidavit and Annexure marked as (Annexure No.A-1 to Annexure No.A-24 to this original application), it is proved that defendants had availed the abovementioned credit facilities from the applicant bank by executing loan and security documents detailed as above in favour of the applicant-Bank. A perusal of the application, evidence and documents relied upon clearly show that defendants had utilized the credit facilities as granted to them. The applicant-bank had maintained the Books of accounts in the ordinary course of banking business showing disbursal of the loan amount. lt further shows that bank had regularly credited the amount paid by the defendants in the books of accounts. The Bank had also charged interest from time to time and the entries are relevant uls 4 of the Bankers Books of Evidence Act. lt is also proved that the applicant bank's claim is within limitation against the defendants from execution of Balance and Security Confirmation Letter. Th ,^the defendants are jointly and severally liable to pay the d

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O.A. No.28 of 2022

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Accordingly, the defendants are directed to pay the balance dues to the applicant bank within a period of 2 months from the date of judgment failing which the applicant bank will be entitled to sell the personal assets/properties of defenda nts.

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The applicant-bank has claimed interest @7L60% per annum in both the loan accounts together with pendent-lite and future interest till the date of its realization and costs. The contest between the applicant-bank and the defendants comes to an end and after filing of the O.A. as per the provisions of Section 19(2) of the Recovery of Debts and Bankruptcy Act, 1993 {as amended from time to time) which is analogous to Section 34 to the CPC, the Tribunal/Court has discretion in awarding pendet-lite and future interest. I am also supported in my view by Hon'ble Supreme Court in a case titled Central bank of lndia vs. Ravindra and others reported in AIR 2001 SC page 3095. On the basis of the foregoing discussion, interest of justice will be served if pendete-lite and future interest is granted @L}.OO% per annum in both the Loan Accounts with monthly rate on reducing balance from the date of filing of the O.A. till the date of realization with costs.

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ln the result, the Original Application succeeds exparte against the defendants, with costs. The bank has proved the loan execution of loan documents in favour of the bank. The liabilities of the defendants are joint and several and the hypothecated assets/mortgage property as well ap^personal property/properties of the defendants are liable to be tl l/ sold.^t i :i

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O.A. No.28 of 2022

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lt is, therefore, ordered:-

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(i) That the Original Application No.28 of 2022 of the applicant bank for issuance of Recovery Certificate to the tune of Rs.51,76,054.60/- (Rupees Fifty One Lac, Seventy Six Thousand Sixty Four and Paisa Sixty Only) (Rs.49,24,853.60/in Overdraft Loan Account) & (Rs.2,51,2OU- in Covid FITL Loan Account) with interest @1:O.OO% per annum in the loan account with monthly rest from the date of filing of the Original Application i.e. 05.1.2021 till the loan is fully liquidated and costs succeeds and is hereby allowed exparte against defendant Nos.L to 5^jointly and severally.

(ii)

(iii)

(iv)

It is pertinent to mention here that the liability of defendant Nos.3 to 5 is only to the extent of OD loan amounting to Rs.49,24,863.60/- as per execution of guarantee documents in favour of the applicant-bank.

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The defendants are directed to pay the dues within a period of two months from the date of^judgment, failing which the applicant bank will be entitled to recover the same from the personal movables and immovable assets of the defendants.

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The applicant-Bank is entitled to recover aforesaid amount

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by the sale of hypothecated assets/mortgage property (lf not sold earlier under the provisions of the S.A.R.F.A.E.S.l. Act, 2002) the, amount, if any recovered by sale of hypothecated assets/mortgage property or otherwise shall be adjusted

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O.A. No.28 of 2022

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towards the debt and only the balance amount shall be recoverable. lf the dues of the applicant bank still remain unsatisfied, the same be recovered by the attachment and sale of the personal movable and immovable assets of the defendants^jointly and severally.

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(v) The defendants are hereby restrained by means of injunction from depleting, transferring, encumbering, alienating or in any way dealing with their properties/estates without first paying the claim of the applicant bank.

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(vi) Let Recovery Certificate be issued immediately u/s 19(22) ot the Recovery of Debts Due to Banks and Financial lnstitution Act, 1993 by fixing 09.11,.2022, before R.O., DRT, Lucknow.

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