Allowed

Idbi Bank v. M/s M.S. Enterprises and Others

DRT21 Feb 2023OA/125/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an application filed by IDBI Bank Ltd. to recover a principal debt of approximately Rs. 49.43 lakhs along with interest and costs from the defendants who had defaulted on their term loan and overdraft facility. The court determined the debt based on bank records and admissions.

What did the court decide?

Recovery certificate issued in favor of IDBI Bank Ltd. to recover Rs. 49,43,332.32 with interest and costs from the defendants.

Idbi Bank versus M/s M.S. Enterprises and Others — Banking and Recovery | DRT (2023)

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OA 125 of 2022 IJ]

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DRT,PATNA

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Debts Recovery Tribunal, Patna,

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Karpuri Thakur Sadan, Aashiana Digha Road at PATNA-800025

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Presiding Officer : Shri Kaushalendra Yadav

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OA Case no. : 125of 2022

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IDBI Bank Ld. K.L. Market, Vishnu Chowk, Begusarai, DistrictBegusarai, Pin-851101.

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. Applicant

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Vs.

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Mis M.S. Enterprises proprietor Sri Ram Baran Singh, At + P.o.Keshawe, 13Pai, Begusarai, District-Begusarai, Pin code-851134.

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Sri Ram Baran Singh Sio Late Balo Singh proprietor of Mis M.S. Enterprises, At + P.O.-Keshawe, 13 Pai, Begusarai, DistrictBegusarai, Pin code-851134 PAN no. LCPPS 0826Q.

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Sri Ram Shekhar Singh Sio Late Balo Singh At + P.O. Keshawe, 13 Pai, Begusarai, District-Begusarai, Pin code-851134

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...Defendants.

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Present:

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For the Applicant : Shri J.K.Roy, Advocate For the Defendants Shri Arinjay Kumar, Advocate

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Dated: 21 .02.2023

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JUDGMENT

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1- The Applicant bank has made this application u/s 19 of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 15.2.2022 against the defendants to recover its debts from defendants of Rs.49,43,332.32 upto 5.1.2022 alongwith pendente-lite and future interest at the contractual rate with monthly rests from 6.1.2022 with costs till realization.

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2- The application has been duly registered and numbered as above.

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3- The brief facts of the case of the applicant bank as stated in the application are as under-

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The applicant IDBI Bank Ltd. a company incorporated and registered under the companies Act 1956 (1 of 1956) and a banking company within the meaning of section 5© under the Banking regulation Act 1949 carrying the business of Banking and having its registered office at IDBI Tower, WTC complex, Cuffe Parade, Mumbai-400005 and its Zonal Office at Kashi Palace in New Dak Bunglow Road, Patna and Its Regional Office at Khalifbad Chowk, Bhagalpur and a Branch Office amongst other places at K.L. Market, Vishnu Chowk, Begusarai, DistrictBegusarai, Pin-851101 .

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The defendant no. 1 is proprietorship firm, the defendant no. 2 is the proprietor of the defendant no. 1 and the defendant no. 3 is the

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guarantor. The defendants approached the bank and submitted an application on 22.1.2019 for grant of term loan of Rs. 40 lakh and cash credit limit upto Rs.9 lakh for establishment of a manufacturing Unit of Non -wooven Bags on hypothecation of stocks and receivables machinery, office equipment's and assets created out of bank finance and also by way of collateral security of the loan by executing the registered mortgage by the defendant no. 2 & 3 the details given at page 14 in schedule-II of the ~A. The defendants executed the various loan documents i.e. DP note, loan agreement, hypothecation cum loan agreement and common guarantee. The request of the defendants the bank has further sanctioned and disbursed FITL loan of Rs.56,677/- to the defendant no. 1 on 13.9.2020.

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All the transactions were entered in the ledger of the loan accounts in the name of the defendants duly maintained by the applicant bank in its usual course of business. After availing the sanctioned credit facilities became irregular in repayment of their dues as per agreed terms and failed to adhere to the financial norms of the bank and avoiding the repayment of its dues to the bank, in spite of several assurances given by it to the applicant bank resulting in the account turning as NPA on 31.3.2021.

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Thus the total liability in the loan account is Rs.49,43,332.32 as on 5.1.2022 with pendentelite and future interest at the contractual rate of interest with monthly rests from 6.1.2022 till the realization.

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The interest /compound interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

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Since, the defendants have failed and neglected in spite of several reminders to make payment of the dues recoverable to bank, hence this application has been filed by the bank.

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4- U/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993, copies of application & paper book was sent by this Tribunal to the defendants by registered/speed post on 4.6.2022, and summons/notices issued requiring the defendants to show-cause within 30 days of the service of summons/notices as to why relief prayed for, should not be granted.

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In response, the defendants appeared and filed written statement stated that the contents of para no. 1 to 5 of the petition are not disputed and same is matter of record. Para no. 6 to 10 of the plaint is not disputed. It is further stated that the defendant neglected to pay the installments of applicant's dues. It is evident from the statement of account generated on 16.11.2021 that defendant had made regular pay installments to the bank. It is further stated that the further stated that the due to some financial constrain defendant failed to deposit few installments for which his account was arbitrarily and illegally declared as NPA. The declaration of NPA is bad in law. It is further stated that the defendants had no malafide intentions to stop paying the due amount of the bank, defendant is

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suffering huge losses of his business due to manufacturing defect of his machinery as well as during covid-19 lockdown period business of the defendant is totally stopped. It is further stated that the defendants is willing to settle the account with the bank and ready to pay the remaining dues at one go. It is further stated that defendant seeks intervention of this Hon'ble Tribunal to waive off the exorbitant interest charges levied by the bank.

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However, the defendants in their written statement have not denied the sanction of loan amount, its utilization and further to secure the loan, execution of relevant documents.

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Further the defendants have not substantiated the contents made in their written statement by filing their evidence on affidavit.

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As per section 19(10B) of the Recovery of Debts and Bankruptcy Act, 1993,

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"If any of the facts or pleading in the application or written statement are not verified in the manner provided under sub section (lOA), a party to the proceedings shall not be allowed to rely on such facts or pleadings as evidence or any of the matters set out therein."

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Arguments of ld. Counsels of the applicant bank and ld. Counsel of defendants were heard and record perused and considered.

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5- To prove its case, the applicant Bank has referred various certified photocopies of documents before this Tribunal. The applicant bank has also given evidence on affidavit by way of affidavit of Shri Rajeev Ranjan, AGM of the applicant bank. The details of documents are as follows. :-

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SI.No	Description of photocopies Documents	Date of Execution	Amount	Signature of executant	Ex.! Ann. No.
1	Loan application	22.1.2019	Rs.49lakh	defendants	1
2	sanction letter	14.2.2019	Rs.49lakh	bank	2
3	copy of reg. mortgage deed no. 923	12.2.2019	...	...	3
4	DP note	14.2.2019	Rs.49lakh	defendant no. 1&2	4
5	loan facility agreement	14.2.2019	...	defendant no. 1&2	5
6	Hypothecation cum loan agreement	14.2.2019	Rs.49lakh	defendant no. 1&2	6
7	common guarantee deed	14.2.2019	Rs.49lakh	defendant no. 3	7
8	Recall notice	27.4.2021	...	bank	8
9	Guarantee invocation notice	15.5.2019	...	bank	9

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10	Demand notice	20.9.2021	...	bank	10
11	Statement of	as on	Rs.49,43,332.32	bank	11
	account	5.1.2022

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6- It is submitted by ld. Counsel of applicant bank that the defendants have admitted the loan facilities, granted to them and there is no any specific denial of execution of loan documents by the defendants. It is further submitted that there is no any stay granted by the Hon'ble Higher Court in the matter.

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It is further submitted that the applicant bank has filed the Original Application, for recovery of due amount, after deducting all the amounts, deposited by the defendants and by calculating the interest charged, as agreed by the defendant.

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It is requested that the recovery certificate may be issued for the claim amount, as made in OA, as there is no any specific denial by the defendants.

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7- It has been established that defendants are living and carrying on their business in the state of Bihar. Cause of action arose in the State of Bihar. The said claim on the date of filing of application exceeded Rs.10 lacs. The applicant bank is functioning within jurisdiction of this tribunal. Therefore, this Tribunal has territorial as well as pecuniary jurisdiction to adjudicate upon the present application.

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8 On the issue of Limitation, to prove it, the applicant bank has submitted that the account was declared as NPA on 31.3.2021, whereas the present application has been filed on 15.12.2022. Even, it is counted for the purpose of Limitation, then it is established that the applicant bank has filed the case within the limitation period. As such, it is established that present application has been filed well within the period of limitation

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9- In the affidavit of Sri Rajeev Ranjan, AGM of Applicant bank, has stated that he is well acquainted with the facts of the case and has on verification of record, sworn in the affidavit in support of contents of application and the documents as evidence and established on oath the pleadings and documents of the applicant bank as stated above.

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10On perusal of the above documents, it is clear that the applicant bank has granted loan facility to the defendants and to secure the loan, various loan documents were executed by the defendants and loan facility was availed by the defendants as stated in the application.

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11The documents as stated above reveal that the defendants have applied for loan and bank had sanctioned loans, thereafter, to secure the loan and for repayment of loan amount with interests etc., the defendants have executed various loan documents, which strength the case of the applicant bank.

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12The applicant bank has also furnished statement of account as shown above, which is not only admissible but shall be taken as correct statement of account, more so since the entries in the statement of account has not been challenged.

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13Defendants have neither denied the utilization of funds advanced by applicant bank nor have pointed out any specific error and discrepancy in the Statement of Account, which is kept in due course of business, evidence on affidavit, which has supported the claim of the applicant bank, established to have fully correct and believable. Provisions contained in Rule 9(2) of Debt Recovery Tribunal (Procedure) Rules, 1993 provide that the documents referred in the application shall be duly stated by senior officer of the bank, or financial institution as the case may be and numbered accordingly. The rule 12 (10) provides that the provisions contained in section 4 of the Banker's Books evidence that Act, 1891 (18 of 1891) shall applied to certified copy of an entry in a Banker's Books furnished alongwith application filed under sub section 1 of section 19 by the applicant.

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14On consideration of the arguments and on perusal of the application, documents, affidavit and admission of defendants, it is proved that the applicant bank has granted the loan facilities to the defendants and to secure the loan, various loan documents were executed by the defendants and facilities were availed by the defendants as stated in the application.

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15-The Section 58 of the Indian Evidence Act, 1872 reads as under-

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"58. Facts admitted need not be proved.- No fact need to be proved in any proceeding which the parties thereto or their agents agree to admit at the hearing, or which, before the hearing, they agree to admit by any writing under their hands, or which by any rule of pleading in force at the time they are deemed to have admitted by their pleadings: Provided that the Court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions.

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16In Indian Bank Vs. Blue Jaggers Estates Limited and others [2010] 8 SCC 129,the Hon'ble Supreme Court of India has observed as under-

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"The Court cannot lose sight of the fact that the bank is a trustee of public fund. It cannot compromise the public interest for benefiting private individuals. Those who take loan and avail financial facilities from the bank are duty bound to repay the amount strictly in accordance with the terms of the contract. Any lapse in such matters has to be viewed seriously and the bank is not only entitled but duty bound to recover the amount by adopting all legally permissible methods. Parliament enacted the act because it was found that legal mechanism available till then was wholly insufficient for recovery of the outstanding dues of the banks and Financial Institutions."

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17Facts of the case, in my view, are well proved by evidence of the applicant bank as well as admission of defendants. The applicant bank is entitled to receive from defendants jointly and severally of Rs.49,43,332.32 together with pendentelite and future interest @12% p.a.

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OA 125 of 2022 [J)

compounded monthly rests from 15.2.2022 (The date of filing of this O.A.) till realization. So the final order may be passed accordingly, to meet the ends ofjustice.

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ORDER

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In the result, the application of the applicant bank, is allowed and debt is determined with costs against the defendants and it is, hereby jointly and severally, ordered that the applicant bank is entitled to receive from sole defendants, it's debts with interest, amounting to Rs.49,43,332.32 together with pendentelite and future interest @12% p.a. compounded monthly rests from 15.2.2022 (The date of filing of this O.A.) till realization of the entire sum due and recoverable with costs.

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It is further made clear that any amount deposited by the defendants, be deducted in the claim amount, if not deducted.

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Defendants are debarred from transferring, alienating encumbering or otherwise dealing with or disposing of the mortgaged or hypothecated or any other properties and assets without paying the aforesaid adjudicated dues to the applicant bank to secure the ends ofjustice.

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Let a certificate of recovery be drawn up forthwith and put up for signatures in terms of provisions contained in Section 19(22)of the Act to be issued, on the basis of the order of the Tribunal to the Recovery Officer. The Recovery Officer shall realise the amount as per the certificate in the manner and mode prescribed under the Act from the defendants, by sale of mortgaged! hypothecated assets as well as other personal movable/immovable assets of the defendants.

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Parties are directed to appear before the Recovery Officer, DRT, Patna on 31.3.2023. The order be communicated accordingly.

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Judgment signed, sealed, dated and pronounced in the open court on this 21st Day of February, 2023.

Idbi Bank v. M/s M.S. Enterprises and Others

Case brief

What is this about?

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Idbi Bank v. M/s M.S. Enterprises and Others

Case brief

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