Allowed

Punjab National Bank v. M/S Shri Balaji Plastic

DRT21 Aug 2023OA/1143/2022

Case brief

AI extract

What is this about?

DRT-2, Chandigarh allowed the bank's application to recover Rs. 30.83 lacs from a塑料 factory proprietor as the loan became NPA. The court ordered uniform simple interest at 9% per annum instead of the claimed rate, citing pandemic impact and market trends.

What did the court decide?

Recovery of Rs. 30,83,022.91 with simple interest at 9% per annum from 28.06.2022 till realisation; liberty to recover via sale of mortgaged properties or attachment of personal assets.

Punjab National Bank versus M/S Shri Balaji Plastic — Banking and Recovery | DRT (2023)

¶1

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

¶2

ORIGINAL APPLICATION NO.1143/2022

¶3

DATE OF INSTITUTION: 28.06.2022

¶4

DATE OF DECISION: 21^st DAY OF AUGUST, 2023

¶5

Punjab National Bank, a body corporate, constituted under the Banking

¶6

Companies (Acquisition & Transfer of Undertakings) Act, 1970, the Punjab National Bank, having its Head Office at Plot No. 4, Sector 10, Dwarka, New Delhi, 110075, one of its Branches at Shop No. 24-26, Sohna Road, Sanjay Colony, Faridabad and one of its Authorised Representative at Circle Sastra, Neelam Chowk, New Industrial Town Faridabad, Haryana, through its Senior Manager, Sh. Akash Deep.

¶7

…..Applicant Bank

¶8

Versus

¶9

M/s Shri Balaji Plastic, through its Proprietor, Ms Babita Solanki R/o Plot No. 21, Gali No. 3W, Saroorpur, Industrial Area, Faridabad, Haryana Also at:

¶10

Residential Address of Proprietor House No. 402, Thakur Mohalla, Saroorpur, Faridabad, Haryana-121004

¶11

….. Defendant

¶12

Argued by: Ms Arpita Sonkar, Manager Law for the applicant bank Defendant ex parte vide order dated 16.08.2023

¶13

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 defendant for recovery of

¶15

OA/1143/2022 PUNJAB NATIONAL BANK VS M/S SHRI BALAJI PLASTIC 2

¶16

Rs.30,83,022.91/- (Rupees Thirty Lacs Eighty Three Thousand Twenty Two and Ninety One Paisa Only) . It has been filed through Sh. Akash Deep, Senior Manager of the applicant bank stated to be competent to institute the Original Application vide General Power of Attorney dated 25.09.2019, Annexure-A1 (copy).

¶17

The brief facts of the case of the applicant as per Original Application are that defendant had approached the applicant bank for grant of cash credit facility of Rs.8 lacs and term loan facility of Rs. 12 lacs vide loan application dated 23.03.2018, Annexure-A2 (copy).

¶18

The applicant bank sanctioned aforesaid facilities to the defendant vide sanction letter dated 03.04.2018, Annexure-A3 (copy) as per terms and conditions which were duly accepted by the defendant. 4. In order to secure the aforementioned credit facilities, the defendant executed various loans and security documents, i.e. agreement dated 25.04.2018 for hypothecation of goods and book debts to secure cash credit facility, Annexure-A4 (copy), agreement dated 25.04.2018 for hypothecation of assets to secure term loan dated, Annexure-A5 (copy) and agreement dated 25.04.2018 hypothecation of movable assets forming part of fixed/block assets, Annexure-A6 (copy).

¶19

It is further the case of the applicant bank that the loan facilities were duly availed of by the defendant but he failed to maintain the financial discipline of the applicant bank and resultantly, the loan accounts became irregular and those were declared as NPA on 08.01.2019. The defendant executed balance and security confirmation letter dated 13.01.2021, Annexure-A7 (copy). The applicant bank recalled entire outstanding amount vide notice dated 13.06.2022, along with its original postal receipts, Anneuxre-A8, but to no avail.

¶20

OA/1143/2022 PUNJAB NATIONAL BANK VS M/S SHRI BALAJI PLASTIC 3

¶21

It is further the case of the applicant bank that after adjusting debit

¶22

and credit entries in the loan account, a sum of Rs.30,83,022.91/(Rupees Thirty Lacs Eighty Three Thousand Twenty Two and Ninety One Paisa Only) is recoverable against the defendant as per statements of accounts certified under Bankers’ Books Evidence Act, Annexure-A9 (colly) (copy).

¶23

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

¶24

Notice of the Original Application was duly served upon the defendant, but since none appeared on behalf of the defendant, thus, the defendant was proceeded against ex-parte vide order dated 16.08.2023 . 7. In support of contents of the OA, affidavit of evidence Sh. Akash Deep, Senior Manager of the applicant bank was filed.

¶25

This Tribunal has heard ex-parte arguments advanced by Ms Arpita Sonkar, Manager Law for the applicant bank and gone through the record carefully. 9. It was argued by Ms Arpita Sonkar, Manager Law of the applicant bank that in view of unrebutted documentary evidence brought on record, the applicant bank had proved its case against the defendant for recovery of the amount sought. From perusal of Annexures-A1 to A9 , it is clear that the defendant had approached the applicant bank for availing of the loan facilities which were granted to him. It is further clear that the defendant had executed all the relevant documents as stated above in favour of the applicant bank. Unfortunately, the defendant 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

¶26

OA/1143/2022 PUNJAB NATIONAL BANK VS M/S SHRI BALAJI PLASTIC 4

¶27

Rs.30,83,022.91/- (Rupees Thirty Lacs Eighty Three Thousand Twenty Two and Ninety One Paisa Only) from the defendant.

¶28

In so far as pendente lite and future interest is concerned, the applicant bank in relief clause has claimed rate of interest @11.05% per annum plus penal interest @2% per annum. In sanction letter dated 03.04.2018, Annexure-A3 (copy), rate of interest has been mentioned @10.85% per annum.

¶29

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, purpose of loan, i.e. business, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yesteryears and the proprietor being a female, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @9% per annum from the date of filing of the OA till realisation of the amount ordered vide this order. It is ordered accordingly. 11. In the result, the Original Application is allowed with costs declaring that the defendant is liable to pay to the applicant bank a sum of Rs.30,83,022.91/- (Rupees Thirty Lacs Eighty Three Thousand

¶30

Twenty Two and Ninety One Paisa Only) with current and future simple interest @9% per annum w.e.f. 28.06.2022 , 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 defendant 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

¶31

OA/1143/2022 PUNJAB NATIONAL BANK VS M/S SHRI BALAJI PLASTIC 5

¶32

otherwise. If the dues of the bank still remain unsatisfied, the applicant

¶33

bank shall be at liberty to recover the same by attachment and sale of personal assets of the defendant. The applicant bank is at liberty to enforce the claim through due process of law.

¶34

Issue Recovery Certificate accordingly.

¶35

Parties to appear before Recovery Officer concerned on

¶36

06.10.2023 .

¶37

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

¶38

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

Punjab National Bank v. M/S Shri Balaji Plastic

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. M/S Shri Balaji Plastic

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Bank of Baroda versus Sri Amit Kumar And Others

Uco Bank versus M/s Interface Industrial Systems

State Bank of India versus Sri Dipak Kumar

Alok Kumar versus Central Bank of India

State Bank of India versus S.R. Lab and Others

Punjab National Bank versus M/s Jai Maa Enterprises and Others