Allowed

Union Bank of India v. M/S Krishan Pal and Sons

DRT16 Mar 2023OA/1034/2022

Case brief

AI extract

What is this about?

Dr. DRT, Chandigarh allowed the applicant bank's application for recovery of Rs.32,91,541.49 plus interest. The Court modified the claimed interest rate from 11.90% to a uniform 10% per annum, awarding a recovery certificate against the respondents.

What did the court decide?

Recovery of Rs.32,91,541.49 with future simple interest @10% per annum from 10.06.2022 till realization via recovery certificate.

Union Bank of India versus M/S Krishan Pal and Sons — Banking and Recovery | DRT (2023)

¶1

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

¶2

ORIGINAL APPLICATION NO. 1034/2022

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DATE OF INSTITUTION: 10.06.2022

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DATE OF DECISION: 16^th DAY OF MARCH, 2023

¶5

Union Bank of India , a body constituted under the banking Company, (Acquisition and Transfer of Undertakings) Act No. V of 1970, having its Head Office at 239, Vidhan Sabha Marg, Nariman Point, Mumbai and having its Branches all over India amongst other places one at Subhash Mandi, Kurukshetra, Haryana, through Sh. Sunil Kumar, Branch Manager

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....Applicant Bank

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Versus

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M/s Krishan Pal & Sons, a Proprietorship firm with Principal place of business at Shop No. 80, New Grain Market, Kurukshetra, Haryana through its proprietor Sh. Krishan Pal S/o Shri Lal Singh

¶9

Sh. Krishan Pal S/o Sh. Lal Singh R/o Village Beer-Amin, Tehsil Thanesar, District Kurukshetra, Haryana

¶10

Sh. Dharmender S/o Sh. Lekhpat R/o Village Palwal Tehsil Thanesar, District Kurukshetra, Haryana

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.....Defendants

¶12

Argued by: Sh. Pancham Sharma counsel for the applicant bank Defendants ex parte vide order dated 01.11.2022

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FINAL ORDER

¶14

Present Original Application was instituted by the applicant bank under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ‘the Act’ for brevity), against the defendants for recovery of Rs.32,91,541.49p (Rupees Thirty Two lacs Ninety One Thousand Five Hundred Forty One and Forty Nine Paisa Only) . It has been filed through Sh. Sunil Kumar, Branch Manager of the applicant bank stated to be competent to institute the Original Application vide Power of Attorney, Annexure-A1 (copy).

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OA/1034/2022 UNION BANK Vs M/s KRISHAN PAL AND ORS

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¶17

The brief facts as per the Original Application are that defendant No. 1 through defendant No. 2 had approached the applicant bank for grant of fresh CC facility of Rs.25 lacs and enhancement to Rs.45 lacs . Defendant Nos. 2 and 3 stood as guarantors for repayment of the loan.

¶18

The applicant bank sanctioned aforesaid facility to the defendants vide sanction letter dated 08.08.2021, Annexures-A2 (copy) as per the terms and conditions which were duly accepted by the defendants.

¶19

In order to secure the aforementioned credit facility, the defendants executed various loan and security documents, i.e. demand promissory notes dated 08.08.2011 and 27.09.2018, Annexures-A3 and A8 (copy), letters dated 08.08.2011 and 27.09.2018 regarding continuity of demand promissory notes, Annexures-A4 and A9 (copy), letter dated 08.08.2011 regarding not to alienate hypothecated goods, Annexure-A5 (copy), hypothecation agreements of goods and book debts dated 08.08.2011 and 27.09.2018, Annexures-A6 and A10 (copy) and agreements on rate of interest dated 08.08.2011 and 27.09.2018, Annexures-A7 and A11 (copy). Defendant Nos. 2 and 3 executed general form of guarantee dated 08.08.2011 and 27.09.2018, Annexures-A12 and A13 (copy).

¶20

The aforesaid loan was further secured by creation of mortgage in respect of defendant Nos. 2 and 3 in respect of commercial shop No. 80 measuring 188.89 Square Yards situated at New Grain Market, Thanesar, Kurukshetra, Haryana, fully detailed in para No. 5.9 of the Original Application. Registered title deed No. 8186/1 dated 24.02.2009 is Annexure-A14 (colly) (copy).

¶21

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 was declared as NPA because it became irregular. The applicant bank recalled entire outstanding amount vide notice dated 07.07.2021 under section

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OA/1034/2022 UNION BANK Vs M/s KRISHAN PAL AND ORS

¶23

¶24

13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Annexure-A15 (copy), but to no avail.

¶25

It is further the case of the applicant bank that after adjusting debit and credit entries in the loan account, a sum of Rs.32,91,541.49p (Rupees Thirty Two lacs Ninety One Thousand Five Hundred Forty One and Forty Nine Paisa Only) is recoverable against the defendants as per statement of account, Annexure-A16 (copy) along with certificate under Banker’s Books Evidence Act, 2000.

¶26

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

¶27

Notices of the Original Application were duly served upon the defendants, but since none appeared on behalf of the defendants, thus, the defendants were proceeded against ex parte vide order dated 01.11.2022 .

¶28

In support of the contents of the OA, affidavit of evidence of Sh. Sunil Kumar, Branch Manager of the applicant bank was filed.

¶29

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

¶30

It was argued by the learned counsel that in view of unrebutted documentary evidence brought on record, the applicant bank had proved its case against the defendants for recovery of the amount sought. From perusal of Annexures-A1 to A16 , it comes out that the defendants had approached the applicant bank for availing of the loan facility which was granted to them. It is further clear that the defendants 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

¶31

OA/1034/2022 UNION BANK Vs M/s KRISHAN PAL AND ORS

¶32

¶33

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.32,91,541.49p (Rupees Thirty Two lacs Ninety One Thousand Five Hundred Forty One and Forty Nine Paisa Only) from the defendants.

¶34

In so far as pendente lite and future interest is concerned, the applicant bank, in relief clause, has claimed rate of interest @11.90% per annum with half yearly rest.

¶35

This Tribunal is of the considered opinion that sometimes in appropriate cases the prerogatives of mercy and magnanimity are the brightest jewels in the crown of the Judge. Keeping in view the facts and circumstances of the instant case including the Pandemic Covid-19 affecting businesses, nature of the mortgage 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 order. It is ordered accordingly.

¶36

In the result, the Original Application is allowed with costs declaring that the defendants are liable to pay to the applicant bank a sum Rs.32,91,541.49p (Rupees Thirty Two lacs Ninety One Thousand Five Hundred Forty One and Forty Nine Paisa Only) with current and future simple interest @10% per annum w.e.f. 10.06.2022 , 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/hypothecated property of the defendants in execution proceedings, if not sold earlier under the provisions of the Securitisation and Reconstruction of Financial

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OA/1034/2022 UNION BANK Vs M/s KRISHAN PAL AND ORS

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¶39

Assets and Enforcement of Security Interest Act, 2002 or otherwise. If the dues of the bank still remain unsatisfied, the applicant bank shall be at liberty to recover the same by attachment and sale of personal assets of the defendants. The applicant bank is at liberty to enforce the claim through due process of law.

¶40

Issue Recovery Certificate accordingly.

¶41

Parties to appear before Recovery Officer concerned on 03.05.2023.

¶42

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.

¶43

Announced in the open Tribunal (M.M. Dhonchak) Presiding Officer DRT-2,Chandigarh

Union Bank of India v. M/S Krishan Pal and Sons

Case brief

What is this about?

What did the court decide?

Union Bank of India v. M/S Krishan Pal and Sons

Case brief

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What did the court decide?

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