Allowed

Punjab National Bank v. M/S Nava Ayush Fragnances

DRT18 Aug 2023OA/102/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the application filed by Punjab National Bank for the issuance of a Recovery Certificate against two respondents for an outstanding loan amount of Rs. 42,49,017.43 under the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The court held the respondents jointly and severally liable.

What did the court decide?

Recovery Certificate for Rs. 42,49,017.43 with pendent lite interest and costs, along with directions for hypothecated properties and personal assets.

Punjab National Bank versus M/S Nava Ayush Fragnances — Banking and Recovery | DRT (2023)

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O.A 1022022lORf^{Gu\ €hati}

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IN THE DEBTS RECOVERY^{TRIBUNAL,GUWAHATI}

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(North Eastern Region)

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(Tribunal of Assam, Nagaland, Meghalaya,^{Manipur, Mizoram,Arunechal Pradesh& Tripura)} Before Shri Shiv Sharan^{Dubsv.PresidinqOfficer}

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o.A. No. 10212022

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ln the matter of - Punrab National^{Bank (Erstwhile United Bankof lndia)} Lalganesh Branch, Bharali Complex,^{Lalganesh, Guwahati-34,} District- Kamrup(M),^Assam.

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Applicant

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Vs.

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M/s Nava Ayush^Fragnances

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Proprietor - Sri Saroj^OeY, Regd. Ofrice/Factory^Address: Neir ClTl Complex,^{Behind ASEB Control Room,} lndustrial Area,^{Kalapahar, Guwahati- 781016, Assam.}

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Sri Saroj Dey

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Son of Shibu^DeY,

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Resident of Andhu^{Rabha Path, Odalbakra,}

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cuwahati-^{781034, District- Kamrup(M), Assam.}

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Defendants

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Presence of the Counsel^:

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For the Applicant^: Sri Shoubhik Chanda,^Advocate For the Defendants^: None^(Ex-parte)

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Dated :18/08/2023

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JUDGi'ENT

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This is an application^{under section 19 of the Recoveryof OebtsDueto Banks} andFinanciallnstitutionsAct,lgg3filedbythePunjabNationalBank(Erstwhile United Bank^{of lndia), Lalganesh Branch, Bharali Complex' Lalganesh'Guwahati34'} District- Kamrup(M),^{Assam, with a prayertoissueRecovery Certificatefor the} sum of Rs'^{42,49,017.43(RupoesForty Two LakhsForty Nine ThouBand} Seventeen^{and PaisaFortyThree)onlyas on 28 02 2022 againstthedefendants} jointly and severally with^{pendentelite and future interestthereonat thecontractual} rate as^{applicable with monthly rests till realizationalongwith cost and other relief'}

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A few facts^{giving riseto the present applicationareas under'} ,y#4,?DRT. Guwahati

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O.A. io2l2o22loRT-Guwahatr

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The defendant No. 1 is a proprietorship firm and defendant No. 2 is the sole proprietor ot the defendant No.1 firm engaged in manufacturing and trading of lncense Sticks.

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The defendant No 2 on behalf of his defendanl No 1 firm had approached before the applicant bank and applied for financial assistance for manufacturing of lncense Sticks under PMEGP Scheme vide Loan Application daled 25.O2.2O1'l along with a DICC foMarding Lefter dated 25.1 1 .201 1.

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The competent authority of the Applicant Bank after considering the loan application and various other documents submitted therewith, vide its Sanction Letter dated 28.12.2011, sanctioned a Term Loan of Rs.^'1,15,200.00 and Cash Credit of Rs. 18,84,800.00^(total Rs. 20.00 Lacs) only under PMEGP scheme for setting up a unit for manufacturing of lncense Sticks. The interest thereon was at the rate of^{'13.60% p.a.} with monthly rest and the then base being^{10.60%. The} Term Loan was to be repaid in 60 monthly installments^{of Rs. 2,655.00 per month} w.e.f January, 2012 and the Cash Credil was^repayable on^demand.The Defendant No. 2, being the^{proprietor had signed on the said Sanction Letter along} with a Letter of Undertaking daled^{28.12.2011,thereby agreeing to the terms and} condition laid down therein.

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Having accepted the terms and^{conditionsof sanction by making} endorsement on the sanction, the^{Defendant No. 2 as the proprietor of the} Defendant No. 1 firm had^{executed a OemandPromissory Notedated 28.12.20'11} in terms of the sanction,^{inter-alia giving due effectto the termsand condition of} sanction,^{promising to repay the loan and to securethe duesof Bank. Moreover,} the Defendant No. 2^{had alsosigned and executeda Letterof Continuitydated} 28.12.20',11.

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tn connection with^{the loan amountof Rs. 20.00 Lacs only sanctionedby the} Applicant Bank and^{availed of by the DefendantNo.2,the documentssuch as} Hypothecation of Goods,^{Hypothecationof Debts and MoveableAssets'} Hypothecalion of Moveable^{Plant and Machinery and Letter of Lienall} daled 28.12.2011,^{were also signed and executedby the Defendant No. 2 as the}

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"Ym^fi81DRT, Guwahati

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O.A 1oz2o2zoRT€lwahali

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proprietor of the Defendant No. 1 firm, in^{favour of the ApplicantBankas security} for repayment of^{theloanthereby not only agreeinglo the terms and conditionsof} the said agreement^{but alsohypothecatedthe assels created out of bank finance,} etc. more fully described^{in Schedule-Aof the OA.}

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Further. a Balance Confirmation^{Letter & Demand PromissoryNote both} dated 30.12.2014^{were also signed and executed by the defendantNo 2 in this} regard, which^{clearly showsthat the liabilities were never disputed by the} Defendants. Further,^{various Cash deposit vouchers dated07 12'2013,} 20.07.2016,30.10.2018^{& 29.01.2020are enclosed with the OA to showthe} piecemeal deposit by the^present defendant^{No. 2.}

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Again, Defendant^{No.2 as the proprietorof ihe DefendantNo. I firm had} approached before^{the Applicant Bank and applied for financialassislance for} setting up a^{second unit (Unit - ll) of his firm for trading and manufacturing of} lncense Sticks vide^{LoanApplicationd ated 16.02.2017} '

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The Applicant Bank^{after consideringthe loanapplicationand various olher} documents, submitted^{by theDefendantNo 2 as the proprietor of DefendantNo'l} firm, vide its^{Sanction Letter dated20.03.2017, sanctioneda Term Loan of Rs'} 13.00 Lacs and Cash^{Creditof Rs. 12.00 Lacs(total Rs 25'00 Lacs) onlyunder} CGTMSE scheme^{for setting up an another firm (Unit- ll) for manufacturingand} tradingoflncensesticks.TheTermLoanwastobeprovidedwithinterestthereon at the rate of 3.30%^{p.a. with monthlyrest over MCLR (the then MCLRbeing} 8.80%). The^{Term Loanwas to be repaid in 71 monthlyinstallmentsof Rs'} 'l8,0OO.OO per month w.e.f April, 2017 and the^{last installmentdue in March' 2023} @^{Rs. 22,oOO.OO and the Cash Credit was repayable on demand The Defendant} No. 2 as the^{borrower had signed on said Letter, thereby agreeingto the termsand} condition laiddown^therein.

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Having accepted^{the terms and conditionsof sanction by making} endorsemenl^{on the sanction, the DefendantNo 2 further also executed Demand} Promissory Note^{dated22.03.20'17 in termsof the sanction' inter-aha givingdue} efrecttothetermsandconditionofsanction,promisingtorepaytheloanandto

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rkhqfl{t Presiding Oft"ce{ DRT, Guwahala

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o A. Io2,,2o22lDRr€wrahati

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secure the dues of Bank. Moreover, the Defendant No. 2 had also signed and executed a Letter of Continuity daled 22.03.2017 .

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ln connection with the sanction of Rs. 25.00 Lacs only sanctioned by the Applicant Bank and availed in the name of Defendanl No. 1, an Agreement for Term Loan and Hypothecation Agreement da!.ed 22.03.2017 was signed and executed by the Defendant No. 2 as the^proprietor of Defendant No. I firm, in favour of the Applicant Bank as security for repayment of the loan thereby not only agreeing to the terms and conditions^{of the saidAgreement but also hypothecaied} the assets created out of bank Iinance, etc^{(morespecifically describedin} Schedule-B of the OA) with the^{Applicant Bank. The Defendant No. 2 as the} proprietor of the Defendant no. 1 firm had also signed and executed a Letter^of Lien dated 22.03.2017^.

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The disbursement of the^{loan wasmade on the executionof security} documents as aforesaid^{in favour of the Applicant Bank by opening loan account} numbers^(TL tuc No.^{1453300003209,CCA,/c No. 1453250000806in Unit -1) and} (TL A,/c No.^{'1453300006897,} CC^{A,/c No. 14532500001458 in Unit -ll)'}

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Defendant No. 2 as^{theproprietorof DefendantNo.1 firm after availing the} aforesaid financial^{assistancefrom the Applicant Bank,neglectedand failed io} comply with the^{terms and conditions of the sanctionand were irregularin} repayment of the^dues.

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Despite several^{reminders madeby the Applicant Bank, the DefendantNo 2} never^paid any^{heed to such intimation and as such the ApplicsntBank vide Letter} datedlT.OT.202linformedtheDefendantsthattheloanaccountisnotregu|arand accordingly^{requestedthem to pay the overdues/outstandingamountbut the} Defendants failed^{to respond to the same'}

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Defendant^{No. 2 whileacknowledginghis dues towards the ApplicantBank} on30.'ll.2OlTwithoutanydisputeconfirmedtheoutstandingbalance(forUnitll) while^{promisingto repay the duesFurther, a cashdeposit voucher dated} 26.02.20'19^{(for Unit ll) is alsoenclosed herewith to showthepiecemeal depositin} thesaidaccount. *rin"ryffi

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rin"ryffi Pridino Offiter I l-v DRT. Gu*ahati

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OA 1o2/2o22lDRT-Guwahali

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The Statements of Account maintained by the^{Applicant Bank in the usual} and ordinary course of business shows^{that there is an outstanding balanceof Rs.} 42,49,017.43 only as on 28.02.2022 only^{and the Defendant No.} 2^{being the} proprietor of defendant No. 1 is solely responsible and liable to^pay the said amount to the Applicant Bank^{with interest till realization with cost and charges.}

¶47

The defendants had availed the^{loan facilitiesfrom the applicant bank but have} not^paad the outstanding amount as^{perterms and condition made with the applicant} bank in spite of repeated demands^{and requestby theapplicant bank. As theloan} accounts of defendants were^{runningextremely irregular and due to non-paymentof} principal amount and interest, the said accounls were classified as a^NPAon 3'1.'12.2019. After the accounts^{became NPA the applicantbank issued notices for} repayment of the due amount,^{the defendants have neither chosen for repaymentof} the remaining instatlments^{in the term loan account nor approachedto theapplicant} bank for settling the term^{loan accountsnorrenewed the cash credilaccounts.}

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The applicant bank thus became^{const ained} io^{file the presentOriginal} Application for the recovery of Rs,^{42,49,017.43 (RupeE3Forty Two Lakhs Forty} Nine Thousand seventeen and^{PaisaForty Three) only as on 28.02.2022a1on9with} interest and cost ofthe application.

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After filing of the OA the Tribunal issued notices upon the defendants through registered^post and the applicant bank filed service report on^{09.05.2022 and brought} on record the^postal receipts along with track consignment report^which shows^that the notices have not been served upon the^{defendants. ihereafter the Tribunal} ordered the applicant bank for taking^{stepsfor dasti service upon thedefendants.} Learned counsel for the applicant bank^{hasfiled dasti seNicereporton 24.05.2022} showing the acknowledgemeni of the notices^{by the defendants.Evenafterissuance} of notice through dasti service there^was no^{represenlationon behalfof the} defendants either by the counsel or the^{personand hencethe defendanls were set} ex-parte on 12.08.2022 and their^{rightto file written statement cum evidence on} affidavit was closed and the matter^{was postedfor hearing on behatfof the applicant} bank.

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SLl^rSfq4l,.$"A4 \tlrt1cv 0 Presding Ofllcei DRT, Guwshali'

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O A¹ o2l2o22lDRT-Guwahali

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Supporting the ctaim^{of the applicant bank Sri Guru Prasad Talukdar, Chief} Manager of the Applicant^{Bankhas filed evidence on affidavit coupled with the security} documents marked as Exhibit^{-1 to Exhibit-3s,supportingthe claim of the applicant} bank.

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Heard the learned counsel^{for the applicant bankwho prayedfor issuance of} Recovery Certificate^against the^{defendants as per pleadingsmadein the} Application, supported^{by evidenceon affidavitof theirwitness who affirmed on oath} the execution of the security^{and other documents by the defendants and also} execution of their own^{documents retied upon,which have been marked exhibits}

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Considering the^{facts and circumstancesof the case, I am of the considered} view that the documents^{filed by the applicantbankare supporting lhe claim of the} applicant bank and^{estabtishingtheliability of the defendants.lt is proved that the} defendants are^{jointly and severally liableto pay to the applicantbank lhe claim} made in the Original^{ApplicationTheloan was obtained and documentshave been} executed on 28j12.2011,^{30.12.2014 & 22.03.2017.Further,variousCash deposit} vouchers dated 07.12.2013,^20.07.20'16 '^{30'10.2018&29012020 are enclosed} with the OA to show^{the piecemeal deposit by the present defendantNo 2 The} account became^{NPA on 31 12.2019 and the OA has been filed on'14032022'} Hence, the OA is^{flled well withinthe period of limitation and this Tribunalhavinga} jurisdiction to adjudicate the Original Application'

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Considering^{the unchallenged/unrebulted version of Sri GuruPrasad Talukdar'} the applicant's^{witnessand all the documentsmarked as exhibits, including duly} certifiedcopyofthestatementofaccountalongwithinterestcalculationsheet maintained by^{theapplicant Bankin it's regular courseof business' I hold that the} applicant is entitled^{to get the Recovery Certificate as prayedfor'}

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ln the result,^{the present OriginalApplication No102 ol 2022is allowed with} cost as under^:-

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i) The defendants^{No. 1 & 2 are jointly and severallyliable to pay to the} appticant bank a^{sumof Rs. 42,49,0'17} '43^{(Rupees Forty Two Lakhs Forty} Nine Thousand^{Seventeenand Paisa Forty Threelonly with pendentelite}

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*"*ffi"-B? DRT, Guwahati

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OA 102/2022loRT-Guwahal

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and future interest @13.60%^{p.a. with monthly rests from 01.03.2022 till the} date offull^{paymenurealization and also cost of the application}

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ii) The charge of the^{certificatedamount be kept alive on hypothecated} properties, as described in Schedule-A of the^{OAtill the amount is realizedin} full.

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iiD The charge of the^{certificatedamount be kept alive on hypothecated} properties, as described in Schedule-B^{of the OA till the amountis realizedin} tull.

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iv) The applicant bank is entitled^{to proceed against the secureditems towards} recovery of the debts.

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v) The applicant bank^{is also entitledto proceed againstthe personal assets and} properties of the defendants towards^{recoveryofthe dues.}

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vi) The applicant^{bank is entitled to the costs of the O A whichincludqs the} advocale fees^{of the applicant bank. Applicant is directedto file the cost} memo within 2 weeks^{from today.}

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vii) lssue Recovery^{Certificateaccordinglyfor a sum bankthus became} constrained to fle^{the present Original Application for the recoveryof Rs'} 12,49,0'17.43^{(RupeesFofty Two Lakhs FortyNine Thousand Seventeon} and Paisa Forty^{Thrse)only in favour of the applicantbank against the} defendants No.^1&2.

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viii) Communicate^{copyof this orderto the concemed parties'} This order is dictated^{and correctedby the undersigned'}

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Judgment dated^{18th August 2023, signedand pronounced in the Tribunal}

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today under^{mY signature.}

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Copy of the JudgmenvFinal^{Orde]be uploaded in the Tribunal's Websiteand} file be consigned^{to RecordRoom.}

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s l.!^) €{^r^r*€r*.^,,. () lSniv^{staran rlf$q4} Presiding Officer DRT, Guwahati.

Punjab National Bank v. M/S Nava Ayush Fragnances

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. M/S Nava Ayush Fragnances

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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