Allowed

Union Bank of India (erstwhile Andhra Bank), v. Messrs B.S Engineers and Others

DRT18 Oct 2023OA/1035/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed a bank's application for recovery of an outstanding loan amount of over Rs. 33 lakhs. The court ordered joint and several liability of borrowers and approved a uniform simple interest rate of 7.30% per annum.

What did the court decide?

Recovery of Rs. 33,05,863.76p plus current and future interest at 7.30% p.a., costs, and entitlement to attach/sell properties.

Union Bank of India (erstwhile Andhra Bank), versus Messrs B.S… — Banking and Recovery | DRT (2023)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1035/2022

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 17.06.2022

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DATE OF DECISION: 18.10.2023

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Union Bank of India (erstwhile Andhra Bank), a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Central Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai-400021 and inter alia one of its Branch Office at SCO-2, Sector 32-A, Urban Estate, Ludhiana-141010 (Punjab) through its Attorney and Branch Manager, Sh. Amit Kumar

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……..Applicant

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Versus

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M/s B.S. Engineers, Plot No.C-26, Premier Complex, Village Bholapur, Ludhiana-141123 through its Proprietor, Sh. Baljinder Singh (Borrower)

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Sh. Baljinder Singh S/o Sh. Gurdev Singh, Proprietor of M/s B.S. Engineers, Plot No.C-26, Premier Complex, Village Bholapur, Ludhiana-141123 R/o Village Lapran, Tehsil Payal, District Ludhiana-141421 (Borrower/Mortgagor/Guarantor)

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Smt. Rajinder Kaur W/o Sh. Baljinder Singh, R/o Village Lapran, Tehsil Payal, District Ludhiana-141421 (Guarantor)

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………Defendants

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Advocates:

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Argued by Sh. Chandra Kumar Jha, counsel for the applicant Defendants are ex-parte

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FINAL ORDER

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Present Original Application was instituted by the applicant bank under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.33,05,863.76p (Rupees Thirty Three Lacs Five Thousand Eight

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Hundred Sixty Three and Paisa Seventy Six only). The Original Application has been filed through Sh. Amit Kumar, Branch Manager of the applicant bank, who is competent to institute the Original Application vide Power of Attorney dated 14.08.2012, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant No.1 through its proprietor defendant no.2 along with defendant no.3 had approached the applicant bank for the grant of Housing Loan of Rs.12.00 Lacs vide Home Loan Application dated 25.06.2020 and further for the grant of Term Loan of Rs.10.00 Lacs for purchase of machinery and Cash Credit Limit of Rs.10.00 Lacs for running the business vide Loan Application for MSME loan dated 24.06.2021, which are Annexures A2 and A13 to this OA.

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The applicant Bank sanctioned the Housing Loan of Rs.12.00 Lacs, Term Loan of Rs.10.00 Lacs and CC Limit of Rs.10.00 Lacs vide Sanction Letters dated 29.06.2020 and 01.07.2021, which are Annexures A3 and A14 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant No.2 had mortgaged his immovable property i.e. Residential building built on land measuring 200 Sq. Yards situated at Plot No.C-26, Abadi Premier Complex, Village Bholapur, H.B. No.238 Sub-Tehsil Sahnewal, Tehsil and District Ludhiana, Punjab vide Jamabandi for the Year 2015-16, Sale Deed No.4583 dated 08.01.2020 along with their translations and Memorandum of deposit of title deed dated 29.06.2020, which are Annexures A10, A10-T, A11, A11-T and A12 to this OA. Documents executed:- Housing loan agreement, Letter of undertaking, D.P. note, Interest agreement, Undertaking and Letter of continuity all dated 29.06.2020 which are Annexures A4 to A9 to this OA; D.P. notes, Undertaking, Letters of continuity, Deed of guarantee, General term loan agreement, Composite hypothecation agreement, Letter of

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undertaking, Interest agreement, Letters of undertaking from borrowers and guarantors, Hypothecation agreement of goods and debts, Memorandum of entry and Declaration all dated 02.07.2021, which are Annexures A15 to A29 to this OA; Balance sheet dated 22.06.2021, which is Annexure A30 to this OA; Notice u/s 13(2) of SARFAESI Act dated 07.05.2022, which is Annexure A31 to this OA; Postal receipt dated 09.05.2022, which is Annexure A32 to this OA; Return envelope with report of postal authorities, which is Annexure A33 to this OA; Demand notices published in newspapers dated 13.05.2022, which are Annexures A34 and A35 to this OA; Statements of Accounts, which are Annexures A36 to A38 to this OA and Certificate by the Officer In Charge of the computer system dated 15.06.2022, which is Annexure A39 to this OA.

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The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.33,05,863.76p, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant bank requested to accept the application and to issue Recovery Certificate accordingly.

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The defendants were served notices to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte on 25.09.2023.

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In support of the OA, affidavit of Sh. Amit Kumar, Branch Manager, Union Bank of India has been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant bank had proved its case. From the perusal of all the Annexures A1 to A39 to this OA, it is proved that the defendants approached applicant bank for availing of the loan facilities which were granted to them and for that they had executed all the relevant

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documents in favour of the bank. The defendants failed to pay back the loans as per terms and conditions of the agreement between the parties. Subsequently, accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.33,05,863.76p (Rupees Thirty Three Lacs Five Thousand Eight Hundred Sixty Three and Paisa Seventy Six only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the accounts.

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In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest @7.30%p.a. with monthly rests in Housing Loan account; @8.95%p.a. with monthly rests in both Term Loan account and CC Limit along with @2%p.a. penal interest in all from 01.06.2022 till the realization. The 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. Keeping in view the facts and circumstances of the instant case including nature of the mortgaged property, undertaking of the defendants, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yester years, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @7.30%p.a. in all the loan accounts from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.33,05,863.76p (Rupees Thirty Three Lacs Five Thousand Eight Hundred Sixty Three and Paisa Seventy Six only) jointly and severally, with costs, current and future simple interest @7.30%p.a. in all the loan accounts from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant bank shall be entitled to

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recover aforesaid amount from the sale of hypothecated/mortgaged properties of the defendants in execution proceedings if not sold earlier under the provisions of the SARFAESI Act, 2002. If the dues of the bank still remain unsatisfied, it shall be entitled to recover the same by attachment and sale of personal assets of the defendants. The applicant is at liberty to enforce the claim through due process of law. 12. Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 04.11.2023.

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Copy of this order be given dasti to the applicant bank and be sent to defendants through registered/speed post and this order be also uploaded on the official website of this Tribunal and record be consigned. Pronounced by me in the Open Tribunal. Dated: 18.10.2023

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(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Union Bank of India (erstwhile Andhra Bank), v. Messrs B.S Engineers and Others

Case brief

What is this about?

What did the court decide?

Union Bank of India (erstwhile Andhra Bank), v. Messrs B.S Engineers and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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