Allowed

Union Bank of India v. Sh. Sahab Singh (Since Deceased)

DRT13 Jun 2023OA/1112/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the Original Application filed by Union Bank of India against the legal heirs of a deceased borrower for recovery of Rs. 22,20,326/- along with future interest at 5% p.a. The Tribunal issued a Recovery Certificate and directed enforcement via sale of mortgaged properties.

What did the court decide?

Recovery of Rs. 22,20,326/- with simple interest @5% p.a. from date of filing till realization. Recovery enforcable via sale of secured assets or personal assets. Recovery proceedings subject to satis

Union Bank of India versus Sh. Sahab Singh (Since Deceased) — Banking and Recovery | DRT (2023)

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DEBTS RECOVERY TRIBUNAL-2, CHANDIGARH,

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PRESIDED OVER BY M.M. DHONCHAK

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ORIGINAL APPLICATION NO.1112/2022

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DATE OF INSTITUTION: 08.06.2022

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DATE OF DECISION: 13^th DAV OF JUNE, 2023

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Union Bank of India {erstwhile Corporation Bank), a body corporate constituted under the Banking Companies (Acquisition & Transfer of Undertaking) Act, 1970, having its Central Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai-400021 and inter-alia a Branch at Pipli, District Kurukshetra (hereinafter called the Bank), through its Branch Manager and Attorney holder, Sh. Ankur

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..... Applicant Bank

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Versus

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Sh. Sahab Singh (Since deceased) S/o Sh. Jhandu S/o Sh. Chhotu through following legal heirs:

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i. Smt. Mem Kaur widow of Sh. Sahab Singh S/o Sh. Jhandu being legal heir of deceased Sh. Sahab Singh R/o Village Tigri, Tehsil Shahbad (M), District Kurukshetra, Haryana

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ii. Sh. Isham Singh @Hisham Singh S/o Sh. Sahab Singh S/o Jhandu being legal heir of deceased Sh. Sahab Singh and also being Co Borrower in this loan R/o Village Tigri, Tehsil Shahbad (M), District Kurukshetra, Haryana

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iii. Sh. Karam Singh S/o Sh. Sahab Singh S/o Sh. Jhandu being legal heir of deceased Sh. Sahab Singh R/o Village Tigri, Tehsil Shahbad (M), District Kurukshetra, Haryana

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..... Defendants

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OA/1112/2022 UNION BANK OF INDIA VS SAHAB SINGH THROUGH LRs

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Argued by: Sh. Mukesh Kumar, Senior Manager for the applicant bank Defendants ex parte vide order dated 22.02.2023

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FINAL ORDER

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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.22,20,326/- (Rupees Twenty Two lacs Twenty Thousand Three Hundred and Twenty Six Only). It has been filed through Sh. Ankur, Branch Manager of the applicant bank stated to be competent to institute the Original Application vide Power of Attorney dated 04.07.2016, Annexure-A2 (copy).

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The brief facts of the case of the applicant as per Original Application are that defendant No. 1 and l(ii) had approached the applicant bank for grant of CCCK facility of Rs.20 lacs vide loan application for agriculture or short term/term loan along with interview-cum-assessment form dated 09.03.2012, Annexure-A3 (colly) (copy).

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The applicant bank sanctioned aforesaid credit facility to the defendants vide credit sanction intimation dated 19.12.2016, Annexure-A4 ( colly) ( copy) as per 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 hypothecation agreement dated 19.12.2016 for covering hypothecated crops under national insurance scheme, Annexure-AS (copy), hypothecation deed dated 19.12.2016,

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OA/1112/2022 UNION BANK OF INDIA VS SAHAB SINGH THROUGH LRs 3

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Annexure-A6 (copy), demand promissory note dated 19.12.2016, Annexure-A7 (copy), take delivery letter dated 19.12.2016 to demand promissory note, Annexure-AB ( copy) and letter of undertakings dated 19.12.2016, regarding terms and conditions, Annexure-A9 (copy).

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The aforesaid loan was further secured by creation of mortgage by defendant No. 1 and l(ii) in respect of agricultural land measuring 77 Kanals 17 Marlas situated in the revenue estate of Tigri, Tehsil Shahbad, District Kurukshetra, Haryana, fully detailed in para No. S(vi) of the Original Application. Declaration dated 14.12.2016, under Section 4(1) of the Haryana Agriculture Credit Operation and Miscellaneous Provisions (Banks) Act, 1973, Annexure-A10 (copy)

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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 and it was declared NPA on 31.03.2021. The defendants executed acknowledgement of debt letter dated 06.08.2019, Annexure-A12 (copy). The applicant bank recalled the entire outstanding amount vide legal notice dated 03.06.2022 along with its postal receipts, Annexure-A13 (colly) (copy), 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 the loan account, a sum of Rs.22,20,326/- (Rupees Twenty Two lacs Twenty Thousand Three Hundred and Twenty Six Only) is recoverable against the

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OA/1112/2022 UNION BANK OF INDIA VS SAHAB SINGH THROUGH LRs

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defendants as per statement of account, Annexure-A11 (copy) certified under Bankers' Books Evidence Act.

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Since the defendants did not repay the outstanding amount, therefore, the applicant bank preferred 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, thus, the defendants were proceeded against ex-parte vide order dated 22.02.2023.

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

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This Tribunal has heard ex-parte arguments advanced by Sh. Mukesh Kumar, Senior Manager of the applicant bank and gone through the record carefully.

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It was argued by Sh. Mukesh Kumar, Senior Manager of the applicant bank 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 A13 (colly), it is clear 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 conditions of the agreement executed between the parties. Sh. Sahab Singh had died, leaving behind defendant Nos. l(i) to l(iii) as his legal heirs who have been

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OA/1112/2022 UNION BANK OF INDIA VS SAHAB SINGH THROUGH LRs

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impleaded as defendants. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.22,20,326/(Rupees Twenty Two lacs Twenty Thousand Three Hundred and Twenty Six Only) from the defendants.

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In so far as pendent lite and future interest is concerned, the applicant bank in relief clause has claimed rate of interest @9.65% per annum plus penal interest @2% per annum. In credit sanction intimation letter dated 19.12.2016, Annexure-A4 (copy), rate of interest has been mentioned @10.80% per annum.

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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 mortgaged property, purpose of loan, i.e. agricultural, present conditions of economy based on agriculture, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yesteryears, death of the borrower and defendant No. l(i) being a lady, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @5% per annum from the date of filing of the OA till realisation of the amount ordered vide this order. It is ordered accordingly.

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In the result, the Original Application is allowed with costs declaring that the defendants are liable to pay to the applicant bank a sum of Rs.22,20,326/- (Rupees Twenty Two lacs Twenty Thousand Three Hundred and Twenty Six Only) with current

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OA/1112/2022 UNION BANK OF INDIA VS SAHAB SINGH THROUGH LRs

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and future simple interest @5% per annum w.e.f. 08.06.2022, till the date of realisation of the amount. 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 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. However, it is clarified that there should not be any ambiguity that the liability of the defendants by virtue of their being the legal heirs of the deceased borrower shall remain confined only to estate of the deceased borrower if it is inherited by them and not beyond that or otherwise. The recovery proceedings shall proceed only after the Recovery Officer is fully satisfied on the aspect

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of the estate being inherited by the Legal Representatives/Heirs and the liability being incurred

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accordingly.

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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 09.08.2023.

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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

Union Bank of India v. Sh. Sahab Singh (Since Deceased)

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Sh. Sahab Singh (Since Deceased)

Case brief

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What did the court decide?

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