Allowed

Union Bank of India v. Mr Azaj Ahmad Ansari

DRT8 Aug 2022OA/41/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal adjudicated an ex parte application by Union Bank of India to recover dues from borrowers and a guarantor. Confirming the validity of loan documents and the status of the accounts as NPA, the tribunal directed the defendants to pay the outstanding principal, interest, and costs, restoring the bank's right to recover the debt through secured assets.

What did the court decide?

Recovery certificate for Rs. 29,79,288.86 plus future interest @ 10% p.a.; entitlement to recover from mortgaged and personal assets; injunction against alienation of properties.

Union Bank of India versus Mr Azaj Ahmad Ansari — Banking and Recovery | DRT (2022)

¶1

I '

¶2

IN THE DEBTS RECOVERY TRIBLINAL AT LUCKNOW

¶3

Present: A.H. Khan, Presiding Officer

¶4

Case No. Original Application No.4t of 2022

¶5

,^{Dated: 08.08.2022}

¶6

Union Bank of India, a body corporate constituted under the banking companies, (Acquisition and Transfer of undertakings) Act V of 1970 having its Head Office at 239,, Vidhan Bhawan Marg, Nariman Point, Mumbai-400021 and a branch amongst other places at ....Applicant Bank Chowk Lucknow. Versus 1. Mr. Azaj Ahmad Ansari son of Narullah Ansari Office address: A.J. Construction U.G.F. 12-B, RaunakPlaza, Ram Nagar, Campbell Road, Lucknow RJo House No.429/7491004, Moajjam Nagar, Campbell Road, Lucknow 2. Mohammad Raees son of Mohammad Shafiq R/o 420/44-A, Top Darwaja, Chauptiya, Chowk, Lucknow.

¶7

..defendants Counsel for the applicant-bant : Shri@ Advocate

¶8

Counsel for the defendants : None

¶9

JUDGMENT

¶10

This original Application has been filed by the applicant Bank under Section l9(l) ofthe Recovery ofDebts & Bankruptcy Act, 1993, against the defendants for the recovery of Rs.29,79,2gg.g6 (Rupees Twenty Nine Lac, Seventy Nine Thousand, Two Hundred Eighty Eight a and paisa Eighty Six Only)(Rs .29,66,961.96/- in overdraft loan accounl

o.A. No.4l of 2022

Rs.1,12,321l- in Covid Loan account) together with^{pendentelite and} future interest, costs and^{other reliefsetc.}

¶17

The brief facts of case^{are that, the defendant No.l is the borrower} and the defendant No.2 is^{guarantorin this O.A., the defendant No.l} requested to the applicant^{bank through loan application on 23.04.2013} for grant Overdraft Credit facility^{of Rs.5.00 Lac with interest, was} considered and sanctioned by^{the applicant-bankvide it sanction letter} dated 24.04.2013 and again on the^request of^{defendantNo.l to} extended the amount of Rs.5.00lac^{to Rs.26.50Lac through application} dated 09.01.2017 also take into^{consideration and sanctionedby the} applicant bank vide it sanction^{leffer on 04.02.2017under Union} mortgage scheme and as sum sanction of^{Rs.I,77,9731-for Covid loan} dated 27.11.2020 on certain^{terms and conditions(Exhibit No.A-2 to} Exhibit No.A-3) to this Original^application.

¶18

To secure the aforesaid^{Overdraftloan facility of Rs.5.00 Lac,the} defendantNo.l signed^{and executed necessarysecuritydocumentslike,} D.P. Note for Rs.5.00 Lac,^{Letter of Guaranteeby defendant No.2 to} confirm and acknowledged^{his liabilities as same as equal to the} principal borrower co extensive,^{joint and several, consent letterby} defendant No.l on 24.04-2013^{and by defendant No.2 (guarantor) on} 06.02.2017 and D.P.^{Noteand Letter of Undertaking/Fresh promises in} case of time barred debt by^{defendantNo.l on 01.06.2016 along with} letter of confirmation^{and Interestagreementby defendant No.1dated}

¶19

14.09.2016 in favour of^{applicantbank (Exhibit No.A-4 to Exhib}

¶20

' ,/'

¶21

3 o.A. No.4r of 2022

¶22

No.A-10) and the overdraft loan facility from Rs.5.00 Lac to Rs.26.50 Lac defendant No.l signed and executed the documents like D.P. Note for Rs.26.50 Lac, Leffer of continuity, Interest agreement, Letter of confirmation on 06.02.2017 Confirmation and acknowledged the debts with security letter signed by defendant No.l dated 14.07.2020 (Exhibit No. A-l I to Exhibit No.A-I5) to this Original application.

¶23

Further in order to secure the Repayments of the bank dues, as the defendant No.l created equitable mortgage of immovable properties I.e.(i) Plot No.65. part of khasra No.696 to 698. 704 to 707 and 712 to 716 measuring 46.468 SquareMeter situated Gulab Naear ward Garhi Peer Khan owned by defendant No.l following the boundaries which Plot No.64 SOUTH: Part of Plot No.65 By depositing the original title deed on 25.04.2013 and again on 06.02.2017 in favour of the applicant bank which was duly registered in Sub Registrar Vth District Lucknow in Book No.l, Zild No.8059, pages Nos.133 to 152 at Serial No.l l4l9 on 03/1012012 (ii) Shop U.G.G l2-B measuring 13.382 square Meter Raunak Plaza Built over Plot No.2l^part of Khasra No.59A. 59B Minijumla situated at Ram Nagar Lucknow owned by defendant No.l followine the boundaries which are as Under EAST: Shot No.l2A WEST:^passaee NORTH: open to Shy SOUTH: Comman passaee which was duly registered in Sub Registrar Vth District Lucknow in Book No.l, Zild No.7678, pages Nos.285 to 324 at Serial No.5302 on 0710512012⁽ⁱⁱⁱ⁾ Godam No.l0 measuring 17.843 Square Meter Raunak

¶24

,/'

¶25

4 o.A. No.4t of 2022

¶26

Plaza built over Plot No.21 Part of Khasra No.59A. 59B Minijumla situated at Ram Nagar. Lucknow owned by defendant No.l following the boundaries which are as Under EAST: Passage WEST:Godam No.ll NORTH: Open to Skv SOUTH: Part of Passase 8 feet wide which was duly registered in Sub Registrar Vth District Lucknow in BookNo.l, ZildNo.l1962,pages Nos.199 to220 at SerialNo.10945 on 27/1212016 (Exhibit No.A-16 to Exhibit No.A-19) to this Original application.

¶27

To availed the repayment of credit facilities, the applicant Bank had opened two Loan accounts in the name of defendant No.l in order to maintain credit and debit of granted facility.

¶28

After availing the loan Facilities, the defendants failed to maintain hnancial discipline and also failed to comply with the terms and conditions of the loan agreement as required in the matter, the defendants committed regular default in payment and remains regular to payment in above said loan accounts even not put any effort to regularize the loan accounts or to pay the dues, thus, the applicant bank recall the outstanding amount from the defendants as they kept mum consequently, aforesaid loan accounts of defendants classified as NPA on 30.04.2021 as per guidelines of RBI, thereafter, the applicant bank issued and sent the Demand notice on 03.07.2021 (Exhibit No.A20 & Exhibit No.A-21) under the section of l3(2) of SARFAESI^Act, 2002 to the defendants further the outstanding of loan^accounts *ut ,^a I recalled by issuing and serving^legal Notice^{dated l8/10/2021(Exhibit} '

¶29

¶30

o.A. No.4l of 2022

¶31

No.A-22) but the defendants failed to pay the same, hence, this Original Application has been instituted.

¶32

As per books of the applicant bank and maintained in the usual and ordinary course of banking business, an outstanding as the Rs.29,79,288.86(Rupees Twenty Nine Lac, Seventy Nine Thousand, Two Hundred Eighty Eight and paisa Eighty Six Only) (Rs.28,66,967.86/- in overdraft loan account + Rs.l,l2,32ll- in Covid Loan account) including interest as on 31.10.2021 in the loan account of defendants lying due for payment, for which the defendants jointly and severally liable to repay the same, the applicant Bank has filed the copy of Statement of Account (Exhibit No.A-23 to Exhibit No.A-25) to this original application.

¶33

The cause of action for filing the present application arose firstly 24.04-2013 when on the request of defendants overdraft Credit facility was sanctioned by the applicant Bank, the cause ofaction arose again on to the extend Term Loan under scheme date 04.02.2016 and covid loan dated 27 .11.2020 the same were availed by defendants on the execution of necessary documents the cause of action finally arose on 18.08.2018 when the applicant bank issued the legal notice in respect ofoutstanding dues and as they failed to pay the dues.

¶34

Despite sufficient of services of summons to defendants through registered Posts, the defendants opted not to contest the case before this,f) Tribunal, hence, the matter proceeded ex-parte against the defendants.

¶35

O.A. No.4l of 2022

¶36

¶37

From the^perusal of^{the record, it is evident that the defendants} were provided with fair^{opportunitiesto contestthe claim of the bank.} As the defendants opted not to^{contest the case, so only point of} consideration before this Tribunal^{is as to whetherbank is legally} entitled to the amount^{as claimed in originalApplication on the basis of} documents and^{pleadings submittedby it'}

¶38

I I . In support of^{the case, Shri SayyadAzaharuddin, Branch Manager} of the applicant Bank^has filed^{an affidavit.(Exhibit No.A-l)}

¶39

On a careful scrutiny^{of the evidences on afhdavit and Exhibit} marked as Exhibit No.A-l to^{Exhibit No.A-25 it is provedthat} defendants availed^{various Credit Facilitiesfrom the applicant bank by} executing loan and^{securitydocumentsdetailed as abovein favor ofthe} applicant-Bank. A^{perusal of the applications,evidences,documents} relied upon clearly shows^{that defendants utilizedthe aboveloan} facilities granted to^{them by the bank, the applicant-bankhad} maintained the Books^{of account in the ordinarycourse of banking} business showing^{disbursalof the loan amounts.The Bank had also} charged interest from^{time to time and the entries are relevant} certification under/Section^{4 of BankersBookEvidenceAct l89l,It is} also proved that^{the applicant-bank's claim is within limitation against} the defendants,^{therefore,the defendant Nos.l&2 Jointly and Severally} liable to pay bank^dues'

¶40

balances dues 13. Accordingly, to^{the applicant} the^{defendant bank Nos.l&2 withina period are directed of 2 months to pay frorrthe0}

¶41

o.A. No.4l of 2022

¶42

the date of Judgment, failing which the applicant bank wi[ be entitled to recover from the secured assets, personal movable and immovable assets of defendants and to sell the Mortgaged^properties as well^as personal assets/properties of the defendants.

¶43

The applicant-bank has claimed pendentelite and future rate of interest @10.15% per annum with monthly rest on cost of claim^plus with effect from 31.10.2021 in loans amount till the date of realization and costs. The contest between applicant-bank and the defendants comes to an end after filing the O.A. as^per the^provisions of section l9(2) of the Recovery of the 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^{pendentelite and} future interest. I am also supported in my view by Hon'ble Supreme Court in a case titled Central Bank of India vs. Ravindra and others reported in AIR 2001 SC pages 3095. On the basis of the foregoing discussion, Interest of^justice will be served if^pendentelite and^future interest is granted @10.00%^per annum with^{monthlyrestson reducing} balance from the date of filing of the O.A. till the^{date of realization} with costs.

¶44

In the result, the Original Application^{succeeds ex parteagainst} defendant Nos.l&2 with costs.^{The bank has provedthe loan execution} of security loan documents and availment^{of credit facility,the liabilities} of defendants are^joint, several^{and the Mortgaged ptfTrcrlies as wellas} ,t the personal properties/assets are^{liable to be sold. '} .,,

¶45

o.A. No.4l of 2022

¶46

¶47

It is, therefore, ordered:-

¶48

(i) The Original Application No.4l of 2022 of the applicant bank for issuance of Recovery Certificate to the tune of Rs.29,79,288.86 (Rupees Twenty Nine Lac, Seventy Nine Thousand, Two Hundred Eighty Eight and paisa Eighty Six Only)(Rs.28,66,967.861- in overdraft loan account⁺ Rs.1,12,321l- in Covid Loan account) together with pendentelite and future interest @10.00o/o per annum from the date of filing the Original Application i.e.29.12.2021 till the loans/total amount fully liquidated and costs succeeds ex parte against the defendant Nos. I &2.

¶49

(ii) The applicant-bank is entitled to recover aforesaid amount by Sale of Mortgaged^{properties (if} not sold earlier^{under the} provision of the S.A.R.F.A.E.S.I. Act, 2002), the amount, if any, already recovered by the sale of any other^mortgaged properties/ Hypothecated assets or otherwise shall be adjusted towards the debt, only the balance amount shall^be recoverable, If the dues of the^{applicant-bankstill remain} unsatisfied, recovered, by sale of^{defendantspersonal} movable and immovable assets^{jointly and severally.}

¶50

(iii) The defendants are hereby restrained by^{means of injunction} form depleting, transferring,^{encumbering, alienating or in} any way dealing with their^{properties/esPfswithout first} rt paying the claim of the applicant-bank /r

¶51

o.A. No.4l of 2022

¶52

(ir) Let the Recovery Certificate be issued immediately u/s 19(22) of the Recovery of Debts and Bankruptcy Act, 1993 by fixing 08.11.2022 before Recovery Officer, DRT, Lucknow.

¶53

(v) The applicant bank is directed to file a memo of costs for preparing Recovery Certificate uls 19(22) of the Recovery of Debts and Bankruptcy Act, 1993.

¶54

Judgment is pronounced in the open Court.

¶55

Dated: 08.08.2022

¶56

Presiding Officer

Union Bank of India v. Mr Azaj Ahmad Ansari

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Mr Azaj Ahmad Ansari

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Ashok Sharma versus Edelweiss Asset Reconstruction Company Limited

Canara Bank versus Ms Sun Shine Trading Co.

M S Shikhar Integrated Cold Chain Pvt. Ltd. versus Punjab National Bank

Hdfc Bank versus M/S Vintage Machine

Hdfc Bank versus M/S Needa Textiles

M S Neel Kanth Sweets Pvt. Ltd. versus Bank of Baroda