Allowed

Punjab National Bank v. M/S B K Enterprises

DRT17 Oct 2022OA/541/2022

Case brief

AI extract

What is this about?

Recovery tribunal allowed an original application for recovery of Rs. 35,65,694.82 plus simple interest at 10% per annum, exercising its discretion to reduce the contract rate by 1% due to the pandemic's impact on the defendants' business.

What did the court decide?

Recovery of Rs. 35,65,694.82 plus simple interest at 10% per annum from the filing date of the Original Application till realisation.

Punjab National Bank versus M/S B K Enterprises — Banking and Recovery | DRT (2022)

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DEBTS RECOVERY TRIBUNAL-2, CHANDIGARH, PRESIDED OVER BY M.M. DHONCHAK

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DATED THE 17^th DAY OF OCTOBER , 2022

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ORIGINAL APPLICATION NO.541/2022

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PUNJAB NATIONAL BANK, a body corporate and perpetual succession constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, carrying on Banking Business and having its Head Office at Plot No.4, Sector 10, Dwarka, New Delhi-110075 and Branches all over India including one at Amarheri, Jind (erstwhile Oriental Bank of Commerce) through Sh. Sohan Lal, Chief Manager/Principal Officer/General Power of Attorney Holder

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…..Applicant Bank

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Versus

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M/s B.K. Enterprises, Old Kath Mandi, Jind, through its Proprietor Ranbir S/o Sh. Bal Kishan

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Sh. Ranbir S/o Sh. Bal Kishan, Proprietor of M/s B.K. Enterprises, R/o 190/24, Old Kath Mandi, Jind, Haryana

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…..Defendants

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Argued by: Sh. Gaurav Thakur proxy counsel for Sh. Tarun Dhingra counsel for the applicant bank Defendants ex parte vide order dated 30.07.2022

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FINAL ORDER

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Present Original Application was instituted on 23.03.2022 by the applicant bank under Section 19 (1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.35,65,694.82/- (Rupees Thirty Five Lacs, Sixty Five Thousand, Six Hundred Ninety Four and Eighty Two Paisa Only) . It has been filed through Sh. Sohan Lal, Chief Manager/Principal Officer of the applicant bank, who is competent to institute the Original Application as per power of attorney, Annexure-A1 (copy).

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OA/541/2022 PUNJAB NATIONAL BANK VS. M/S B.K. ENTERPRISES AND ANOTHER 2

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The brief facts of the Original Application are that the defendants had approached the applicant bank for grant of Cash Credit (Hypothecation) Limit of Rs.25,00,000/- for manufacturing and trading of wooden and iron.

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The applicant bank sanctioned the above said loan facility to the defendants vide sanction letters dated 14.12.2011, 15.12.2012, 23.08.2014, 31.10.2015, 29.03.2018 and 30.09.2019 Annexures-A2, A4 to A7 (copy) as per the terms and conditions which were duly accepted by the defendants.

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In order to secure the aforementioned credit facility, the defendants executed various loan and security documents, i.e. hypothecation agreement and common agreement dated 14.12.2011, Annexure-A3 (copy), memorandum for fresh WCTL dated 09.07.2020, Annexure-A8 (copy) and agreement for working capital term loan, Annexure-A9 (copy).

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The aforesaid limit was further secured by creation of registered mortgage of immovable property measuring 20 square double storey shop-cum-residence, 190/24 situated at Old Kath Mandi, Jind.

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It is further the case of the applicant bank that the loan facility was duly availed of by the defendants but they failed to maintain the financial discipline of the applicant bank and resultantly, the loan account became irregular which was declared as NPA on 31.03.2021. The applicant bank recalled the entire outstanding amount vide demand notice dated 20.01.2022, Annexure-A10, but to no avail.

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It is further the case of the applicant bank that after adjusting debit and credit entries in loan account, a sum of Rs.35,65,694.82/- (Rupees Thirty Five Lacs, Sixty Five Thousand, Six Hundred Ninety Four and Eighty Two

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Paisa Only) is recoverable against the defendants as per copy of statement of accounts, Annexure-A11, duly certified under Banker’s Books Evidence Act, 1891.

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OA/541/2022 PUNJAB NATIONAL BANK VS. M/S B.K. ENTERPRISES AND ANOTHER 3

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Since the defendants did not repay the outstanding amount, therefore, the applicant bank brought the present Original Application for issuance of Recovery Certificate.

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Notices of the Original Application were duly served upon the defendants, but since none appeared on behalf of the defendants despite service, thus, the defendants were proceeded against ex parte vide order dated 30.07.2022.

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In support of the contents of the OA, affidavit of evidence of Sh. Sohan

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Lal, Chief Manager/Principal Officer of the applicant bank was filed.

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This Tribunal has heard ex-parte arguments advanced by the learned proxy counsel and gone through the record carefully.

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It was argued by the learned proxy counsel that in view of unrebutted documentary evidence brought on record, the applicant bank had proved its case for recovery of amount against the defendants. From perusal of Annexures-A1 to A11 , it is clear that the defendants had approached the applicant bank for availing of the loan facility which was granted to them and for that they had executed all the relevant documents as stated above in favour of the applicant bank. Unfortunately, the defendants failed to pay back the loan as per terms and conditions of the agreement executed between the parties. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.35,65,694.82/- (Rupees Thirty Five Lacs, Sixty Five Thousand, Six Hundred Ninety Four and Eighty Two Paisa Only) from the defendants.

¶28

In so far as pendente lite and future interest is concerned, the applicant bank in relief clause has claimed interest @14% per annum with monthly rests. In sanction letters Annexures-A2, A4 to A7, rate of interest has been mentioned @12.65% per annum with monthly rests.

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This Tribunal is of the considered opinion that sometimes in appropriate cases the prerogative of mercy is the brightest jewel in the crown of the Judge.

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OA/541/2022 PUNJAB NATIONAL BANK VS. M/S B.K. ENTERPRISES AND ANOTHER 4

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Keeping in view the facts and circumstances of the instant case including the Pandemic Covid-19 affecting businesses, nature of the mortgaged property, purpose of loan, i.e. business, quantum of loan, prevalent market rates of interest which have gone drastically downhill in yesteryears, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @10% per annum from the date of filing of the OA till realisation of the amount ordered vide this final order. It is ordered accordingly.

¶32

In the result, the Original Application is allowed with costs declaring that the defendants are liable to pay to the applicant bank a sum

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Rs.35,65,694.82/- (Rupees Thirty Five Lacs, Sixty Five Thousand, Six Hundred Ninety Four and Eighty Two Paisa Only) with current and future simple interest @10% per annum w.e.f. 23.03.2022 , till the date of realisation of the amount. The liability of the defendants shall be joint as well as several. Accordingly, the applicant bank shall be at liberty to recover aforesaid amount from the sale of mortgaged property of defendants in execution proceedings, if not sold earlier under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 or otherwise. If the dues of the bank still remain unsatisfied, applicant bank shall be at liberty to recover the same by attachment and sale of personal assets/properties of the defendants. The applicant bank is at liberty to enforce the claim through due process of law.

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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 22.11.2022.

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Copy of this order be sent to the applicant bank and the defendants through registered/speed post. This order be also uploaded on the official website of this Tribunal.

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Announced in the open Tribunal

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(M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh

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OA/541/2022 PUNJAB NATIONAL BANK VS. M/S B.K. ENTERPRISES AND ANOTHER

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Punjab National Bank v. M/S B K Enterprises

Case brief

What is this about?

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Punjab National Bank v. M/S B K Enterprises

Case brief

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What did the court decide?

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