Allowed

Canara Bank v. M/S S R Car Bazar and Others

DRT21 Apr 2023OA/1361/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the Original Application filed by Canara Bank for recovery of ₹29,46,932/- plus interest from the defendants. The application was heard ex parte as respondents did not appear. The Tribunal granted a reduced rate of 9% simple interest per annum.

What did the court decide?

Recovery of ₹29,46,932/- plus 9% simple interest per annum from filing date till realization via sale of mortgaged or personal assets.

Canara Bank versus M/S S R Car Bazar and Others — 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. 1361/2022

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DATE OF INSTITUTION: 03.06.2022

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

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CANARA BANK , a body corporate constituted under the Banking Companies (Acquisitions and Transfer of Undertakings) Act, 1970 (5 of 1970) having its Head Office at JC Road, Bangalore-560002 (Karnataka) and a Branch, amongst other places known as Ambala Cantonment, Haryana through Ms Babita Kumari, Officer, Constituted Attorney and Principal Officer

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....Applicant Bank

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Versus

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M/S S.R. Car Bazar, a Partnership firm having business place at Shop No. 5, Raja Garden, Naraingarh Road, Baldev Nagar, Ambala City, Haryana, through its Partner, Sh. Sahil Rana and Smt. Kajal (Partnership firm)

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Sh. Sahil Rana S/o Sh. Sanjay Rana R/o House No. 117, Sector-B, Phase-II, Defence Colony, Ambala Cantt., Haryana

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Smt. Kajal W/o Sh. Sanjay Kumar R/o House No. 117, Sector-B, Phase-II, Defence Colony, Ambala Cantt., Haryana

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Sh. Sanjay Kumar S/o Sh. Mam Raj Rana R/o House No. 117, Sector-B, Phase-II, Defence Colony, Ambala Cantt., Haryana

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…...Defendants

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Argued by: Sh. Anup Prajapati proxy counsel for Sh. Pancham Sharma counsel for the applicant bank Defendants ex parte vide order dated 18.01.2023

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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 (herein after referred to as ‘the Act’ for

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OA/1361/2022 CANARA BANK Vs M/S S.R. CAR BAZAAR AND OTHERS

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brevity) against the defendants for recovery of Rs.29,46,932/- (Rupees Twenty Nine lacs Forty Six Thousand Nine Hundred and Thirty Two Only) . It has been filed through Ms Babita Kumari, Officer of the applicant bank.

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The brief facts as per the Original Application are that defendant No. 1 through defendant Nos. 2 and 3 had approached the applicant bank for grant of OCC facility of Rs.25 lacs vide loan application dated 11.06.2019, Annexure-A2 (colly) (copy). Defendant Nos. 2, 3 and 4 stood as guarantors for repayment of the loan.

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The applicant bank sanctioned aforesaid facility to defendants vide sanction memorandum dated 11.06.2019, Annexure-A2 (colly) (copy) as per the terms and conditions which were duly accepted by the defendants.

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In order to secure the aforementioned credit facilities, the defendants executed various loan and security documents, i.e. composite hypothecation agreement dated 06.06.2019, Annexure-A3 (copy), letter dated 30.06.2020 regarding renewal of facility, Annexure-A4 (copy), letter dated 30.06.2020 regarding revival of conditions, Annexure-A5 (copy) and link letter dated 30.06.2020 regarding renewal after amalgamation into Canara Bank, Annexure-A6 (copy) and guarantee agreements dated 06.06.2019, Annexures-A7, A8 and A9 (copy).

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The aforesaid loans were further secured by creation of mortgage by defendant No. 2 in respect of plot No. 510, Sector-B, Defence Colony, PhaseII, situated in the revenue estate of Tundla, Tehsil and District Ambala, Haryana, fully detailed in para No. 5.12 of the Original Application. Registered deed No. 2058/1 dated 04.06.2019 is 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 was declared

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OA/1361/2022 CANARA BANK Vs M/S S.R. CAR BAZAAR AND OTHERS

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as NPA because it became irregular. The applicant recalled entire outstanding amount vide legal notice dated 07.01.2021 along with its postal receipts, Annexure-A11 (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 accounts, a sum of Rs.29,46,932/- (Rupees Twenty Nine lacs Forty Six Thousand Nine Hundred and Thirty Two Only) is recoverable against the defendants as per statement of account, Annexure-A12 (copy), duly certified under Bankers’ Books Evidence Act.

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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 18.01.2023 .

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In support of the contents of the OA, affidavit of evidence of Ms Babita Kumari, Officer of the applicant bank was filed.

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This Tribunal has heard ex parte arguments advanced by the learned counsel and gone through the record carefully. 10. 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 A12 , it is clear that defendants had approached the applicant bank for availing of the loan facility which was granted to them. It is further clear that 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. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.29,46,932/- (Rupees Twenty Nine lacs Forty Six Thousand Nine Hundred and Thirty Two Only) from the defendants.

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In so far as pendente lite and future interest is concerned, the applicant

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OA/1361/2022 CANARA BANK Vs M/S S.R. CAR BAZAAR AND OTHERS

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bank has claimed rate of interest @11.25% per annum with monthly rests. In sanction letter dated 11.06.2019, Annexure-A2 (copy), rate of interest has been mentioned @MCLR+1.50% 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. business, quantum of loan, prevalent market rates of interest which have gone drastically downhill in yesteryears and defendant No. 3 being a lady, 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.

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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.29,46,932/- (Rupees Twenty Nine lacs Forty Six Thousand Nine Hundred and Thirty Two Only) with current and future simple interest @9% per annum w.e.f. 03.06.2022, 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.

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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 06.07.2023.

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Copy of this order be sent to the applicant bank and the defendants

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OA/1361/2022 CANARA BANK Vs M/S S.R. CAR BAZAAR AND OTHERS

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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 (M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh

Canara Bank v. M/S S R Car Bazar and Others

Case brief

What is this about?

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Canara Bank v. M/S S R Car Bazar and Others

Case brief

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