Allowed

Punjab National Bank v. Sh. Kantu Ram

DRT22 Dec 2023OA/1427/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's application for recovery of Rs. 21,01,925.04 owed by a deceased borrower's legal heirs. The court modified the interest rate to 5% per annum and clarified that the heirs' liability is limited to the extent of the inherited estate.

What did the court decide?

Issued Recovery Certificate for Rs. 21,01,925.04 plus simple interest @5% per annum from 16.08.2022, transferable to billers.

Punjab National Bank versus Sh. Kantu Ram — Banking and Recovery | DRT (2023)

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

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ORIGINAL APPLICATION NO.1427/2022

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DATE OF INSTITUTION: 16.08.2022

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DATE OF DECISION: 22^nd DAY OF DECEMBER, 2023

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Punjab National bank, a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Head Office at Plot No. 4, Sector-10, Dwarka, New Delhi-110075, through one of its Branch having office at Deodhar, Tehsil Partap Nagar, District Yamunanagar, through its Power of Attorney holder, Sh. Bakshi Ram Saini

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…..Applicant

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Versus

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Sh. Kantu Ram s/o Sh. Rikhi Ram since deceased through his Legal Heirs

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1(A) Smt. Shiksha Devi wd/o late Sh. Kantu Ram

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1(B) Sh. Vijay Pal s/o late Sh. Kantu Ram

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1(C) Ms Sanjogita d/o late Sh. Kantu Ram

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1(D) Ms Pinki d/o late Sh. Kantu Ram

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1(E) Ms Soni d/o late Sh. Kantu Ram

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All residents of Village and Post Office Khadri, Tehsil Chhachhrauli,

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District Yamunanagar, Haryana

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....Defendants

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Argued by: Sh. Tilak Raj Kapoor proxy counsel for Sh. Nalin Gupta, Advocate for the applicant bank (through vc) LRs of Defendant No.1 ex parte vide order dated 25.09.2023

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OA/1427/2022 PUNJAB NATIONAL BANK Vs KANTU RAM THROUGH HIS LRS 2

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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 and Bankruptcy Act, 1993 (hereinafter referred to as ‘the Act’ for brevity), a gainst the defendants for recovery of Rs.21,01,925.04/- (Rupees Twenty One

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Lac One Thousand Nine Hundred Twenty Five and Four Paisa Only) . It has been filed through Sh. Bakshi Ram Saini , Power of Attorney Holder of the applicant bank stated to be competent to institute the Original Application vide General Power of Attorney dated 10.09.2004, Annexure-A1 (copy).

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The brief facts of the case of the applicant as per Original Application are that defendant No. 1 had approached the applicant bank for grant of KCC facility of Rs. 19,50,000/- vide application Form dated 25.08.2014 for agriculture credit, Annexure-A2 (copy).

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The applicant bank sanctioned the aforesaid facility to defendant No. 1 vide memorandum of sanction dated 25.08.2014, Annexure-A3 (copy), as per terms and conditions which were duly accepted by defendant No. 1. 4. In order to secure the aforementioned credit facility, defendant No. 1 executed hypothecation agreement dated 25.08.2014, Annexure-A4 (copy). Identification proof is Annexure-A10 (copy) and death certificate dated 22.07.2017 is Annexure-A11 (copy). 5. The aforesaid loan was further secured by creation of mortgage by defendant No. 1 in respect of agricultural land measuring 24 Kanal 4 Marla situated in the revenue estate of Khadri, Hadbast No. 97, Tehsil Chhachhrauli, District Yamunanagar, Haryana, fully detailed in para No. 5.4 of the Original Application.

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OA/1427/2022 PUNJAB NATIONAL BANK Vs KANTU RAM THROUGH HIS LRS 3

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The documents related to mortgage are as under :

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i. Registered mortgage deed dated 21.08.2014, Annexure-A5 (copy).

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ii. Letter dated 21.08.2014 to the Tehsildar, Chhachhrauli for showing detail of the property, Annexure-A6 (copy).

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It is further the case of the applicant bank that the loan facility was duly availed of by defendant No.1 but he failed to maintain the financial discipline of the applicant bank leading to the loan account becoming irregular and it being classified as NPA on 28.07.2019. The defendants executed balance and security confirmation letters dated 18.03.2017, 23.01.2018 and 12.05.2020, Annexures-A7, A8 and A9 (copy).

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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.21,01,925.04/- (Rupees Twenty One Lac One Thousand Nine Hundred Twenty Five and Four Paisa Only), is recoverable against the defendants as per statement of account, Annexure-A12 (copy), interest chart, Annexure-A13 (copy), duly certified under Bankers’ Books Evidence Act, 1891, Annexure- A14 (copy).

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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, LRs of defendant No. 1 were proceeded against ex parte vide order dated 25.09.2023.

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OA/1427/2022 PUNJAB NATIONAL BANK Vs KANTU RAM THROUGH HIS LRS 4

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In support of contents of the OA, affidavit of evidence of Sh. Bakshi Ram Saini , Power of Attorney Holder of the applicant bank was filed.

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This Tribunal has heard ex-parte arguments advanced by the learned proxy counsel and gone through the record carefully. 10. It was argued by the learned proxy counsel 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 A14 , it is clear that defendant No.1 had approached the applicant bank for availing of the loan facility which was granted to him. It is further clear that defendant No.1 had executed all the relevant documents as stated above in favour of the applicant bank. Unfortunately, defendant No.1 failed to pay back the loan as per terms and conditions of the agreement executed between the parties. Sh. Kantu Ram had died, leaving behind defendant Nos. 1(A), 1(B), 1(C), 1(D) and 1(E) as his legal heirs who have been impleaded as defendants. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.21,01,925.04/- (Rupees Twenty One Lac One Thousand Nine Hundred Twenty Five and Four Paisa 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 @12.25% per annum plus penal interest @2% per annum. In interest chart, Annexure-A13 (copy), the rate of interest has been mentioned @12.25% per annum.

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OA/1427/2022 PUNJAB NATIONAL BANK Vs KANTU RAM THROUGH HIS LRS 5

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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 mortgaged property, purpose of loan, i.e. agricultural, present condition of economy based on agriculture, quantum of loan, prevalent market rates of interest which have gone drastically downhill in yesteryears, death of the borrower and defendant Nos. 1(A), 1(C), 1(D) and 1(E) being females, 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 holding that the defendants are liable to pay to the applicant bank a sum of Rs.21,01,925.04/- (Rupees Twenty One Lac One Thousand Nine Hundred Twenty Five and Four Paisa Only) with current and future simple interest @5% per annum w.e.f. 16.08.2022 , till the date of realisation of the amount. The liability of the defendants shall be joint as well as several. 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

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OA/1427/2022 PUNJAB NATIONAL BANK Vs KANTU RAM THROUGH HIS LRS 6

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applicant bank is at liberty to enforce the claim through due process of law. However, it is clarified here 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 the extent of the estate of the deceased borrower if it is inherited by legal heirs and not beyond that. The recovery proceedings shall proceed only after the Recovery Officer is fully satisfied on the aspect of the estate being inherited by the Legal Representatives/Heirs and the liability being incurred accordingly .

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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 14.02.2024.

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

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

Punjab National Bank v. Sh. Kantu Ram

Case brief

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Punjab National Bank v. Sh. Kantu Ram

Case brief

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