Allowed

Idbi Bank v. M/s Smartway Group

DRT26 Jul 2023OA/146/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by IDBI Bank Limited for issuance of a Recovery Certificate. The Tribunal held that the application was within the limitation period and the respondents were liable to repay the outstanding debt along with interest.

What did the court decide?

Issuance of Recovery Certificate for Rs. 71,07,255.18 with interest and costs; keeping charge alive on mortgaged and hypothecated properties.

Idbi Bank versus M/s Smartway Group — Execution and Attachment | DRT (2023)

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o.A 146/2022'ORT€uwahati

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IN THE DEBTS^{RECOVERYTRIBUNAL, GUWAHATI}

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(North Eastem^Region) (Tribunal of Assam,^{Nagaland, M'eghalaya, Manipur'M;oram'Arunachal Pradesh & Tripura)}

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Before Shri^{Shiv Sharan Dube}

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O.A' No'^146'2022

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ln the matter^of -

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lDBl Bank^Limited, i^"Gr^,,^{satyaNiwas,oppositeSukleswarMandir'} M.G.Road. Panbazar,^{Guwahati,Assam'}

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Applicant

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Vs.

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l. ' M/s Smartway^Group doOtutl^{Bazai,AzaraMain Road, Guwahati-781017'}

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Shri Samir^Sharma' Proprietor^{M/sSmartwaY GrouP,} botnrti aazar,^{eirportRoad, Azara, Guwahati-7810'17}

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Smti.^{GayatriSharma} Partner M/s^{SmartwayGrouP} W/o Shri Samir^Sharma'

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C/o- Shri Dhiren^Kalita,

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ft"anip"t"^{Mirzapur, P.O- Azara, District-Kamrup'} Guwahati-781017.

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Shri^{RabinchandraBarman} House^{No.4,TayebAli Path'} B.R. Path^{Beltota, Guwahati-781028}

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Defendants

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Presence^{of the Counsel:}

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For the ADplicant^: Sri Mrinmoy^Outta' Sri Elhruba^{JYoti Borah'} sri JYotirmoy^Mahanta' Sri Debashre^{Dutta,Advocates} For the Defendants : None (Ex-Parte) Dated :26'07.2023

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JUDGi'IENT

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This is an application^{under section19 of the Recoveryof Debts Due to Banks} and Financial^{lnstitutionsAct,1993 filed by the lDBlBank Limited'Panbazar'Satya} Niwas, OpposiG^{SukleswarMandir'M G Road} '^{Panbazat' Guwahati'Assam with} aprayertoissueRecoverycertificateforthesumofRs.Tl'07,255.18(Rupees

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'h"mtB$?DRT,^Guwahati

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o.a 1.6/2022,/oRT€ryahati

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Soventy One Lakh Seven Thousand Two Hundred Fifty Five and pai3a Eighteen) only as on 18.02.2022 against the defendants join y and severally with prendetelite and future interest thereon at the contraclual^.,le f(om 19.02.2022 till realization along with cost and other relief.

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A few facts giving rise to the present application are as under.

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The defendant No.^,l is a proprietorship firm and defendant no. 2 and 3 are the Partners of defendant no 1. The defendant no. 2, 3 & 4 are standing as guarantor for repayment of the roan to the applicant bank. The defendant no. 4 has also mortgaged his immovable properties as security for repayment of the loans/credit facilities.

¶27

The applicant Bank vide letter dated 05jtz2012 sanctioned financial assistance by way of working capitar Loan/cash credit of Rs. 10 rakhs. As per the terms and condllions of sanction, the loan facility carried on interest payable at Bank's Base Rate prus 4.500/0 pet annum. The base rate at that rerevant point of time was 10.50% p.a. The Cash Credit was to be recovered within 12 months from the date of sanction. The loan was to be primarily secured by creation of First charge by way of hypothecation of movable assets, including stocks, receivables, raw materials, work in progress and book debts (both present and future), first charge by way of hypothecation of prant and Machinery, equipments, furniture & fixtures etc. of the defendant No. 1 firm both present and future, demand promissory note and collateral secured lien on FD of Rs. O.5O lakh to be placed with the applicant bank. Further personal guarantee of lhe defendant No. 2 and 3 was also envisaged under the terms and conditions for sanction for securing the loan. The defendant No. 2 and 3 being the partners of the defendant No. 1 duly accepted the terms and conditions of sanction by making an endorsement in the sanction letter. Accordingly, various documents were execuled by the defendant No.2 and 3 including Hypothecation Agreement, Guarantee Agreement by defendant No. 3 and 2, Dp Note by defendant No. 3 and 2, Dp Note detivery tetter by defendant No. 3 and 2.

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Sh^rsl.ano- bJ"., DRT. Guwehati "*rorno#Jc)1ry^/

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O A 146/2022lDRT-Guwahati

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The defendants no. 2 & 3 made two applications on 06.12.20121o( lransfer of funds amounting to Rs. 7 Lakhs to the Current Account and amount of Rs. I Lakhs to the CC account of defendant no. 1 respectively. Accordingly, disbursement were made by opening Account No. 01 15651 1 000001 98.

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The Cash Credit limit was enhanced to Rs 25 lakh on 312114 sub.iect to the conditions set forth in the sanction/enhancement letter. As^per the terms and conditions of sanction/enhancement, the Cash Credit^Facility carried^{interest payable} at Banks' Base Rate^plus 2.75%^p.a. The Base Rate at the^{relevant point} of time^was 1o.25o/o p.a. The Cash Credit was to be reviewed within 12 months from the date^of renewal and was repayable on demand.^{The loan was to be primarily securedby} crealion of First charge by way of hypolhecation^{of movable assets,including stocks,} receivables, raw materials, work in^{progress and book debts,(both presentandfuture),} flrst charge by way of hypothecation^{of Plant and Machinery, equipments, furnitures &} fixtures etc of the defendant no.1^{firm both present and future, and collaterally secured} by creation of equitable mortgage^{of land measuring'1 bigha 15 lecha(15.43 Are)} under Dag No.60(0)/473^{(N): Vill: Sadilapur, Mouza: Jalukbari, P.O & P.S Jalukbari,} DislKamrup^(M), valued^{at Rs.71.87 Lakhs with distress Sale Value of Rs. 57.50} Lakhs, continuation of^{Lien of FD of Rs. 50,000/-. Further, personal guarantee of the} defendant nos 2, 3 and^{4 was alsoenvisaged underthe terms and conditions for} sanction, for securing the^{loan. Further,Iiquidateddamages} @^{2o/opa in addition to} the applicable rate^{of interestwas also payable on thedefaulted amountsincluding} interest and other monies. in the event^{of default}

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Having accepted the^{termsand conditions of sanction, the defendants} executed the following^{documents for availing the cash credit facilitysanctioned by the} Applicant bank by^{being present on 4n114 at the bank's Branchpremisesat} Panbazar, Guwahati.

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a. Acknowledgement^{of Debt and Confirmation of Security dated 4/2/14}

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b. Supplemental^{HypothecationAgreemenldaled412114}

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c. Demand Promissory^{Notedaled 4l2l'14}

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d. Demand Promissory^{Note Deliverylefiet daled412114}

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e. Continuing^{Security letter dated 4/2/14}

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f. Common Guarantee^{Deed by Defendant No. 2 dated 4/2/14}

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S[.Ltsta,t-a,. U" ",."'0,"n#tg?'3ORT, Guwahati

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O A 146r02zoRT-Guwahali

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g. Common Guarantee Deed by Defendant No. 3 daled 4/21'14

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h. Common Guarantee Deed by Defendant No.4 dated 4/214

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i. Undertaking lo route all receivables/ sale proceeds

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j. Letter of Authorizalion to sel off on all operative accounls of the defendants to be opened maintained with the applicant bank dated 4/2/14.

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k. Undertaking to create mortgage dated 4/2/14

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l. Undertaking furnished by the Personal Guarantor Defendant No.2 dated 4t2114

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m. Undertaking furnished by the Personal Guarantor Defendant No.3 dated 412114.

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n. Undertaking furnished by the Personal Guarantor Oefendant No.4 Dated 4t2t't4

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o. Letter of Authorily daled 412114 by lhe defendant No 2 and 3

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p. Declaration and Undertaking in the matler of mortgage by deposit of title deeds by Defendant No. 4 dated 42y14

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q. Oeclaration obtained from the borrower daled 412114

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r. Partnership Lettet daled 412114

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s. Undertaking of Negative Lien dated 4/2/14

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l. Undertaking for lnterest Free Unsecured Loan daled 4t2114

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u. No litigation declarulion daled 412114

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v. Attendance Sheet signed by the defendants.

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For securing the loan/limits, the defendant no. 4 deposited the title deeds^for creating First Charge by way of equitable^mortgageover the^{landedproperty} measuring 1 bigha and 15 lechas^(15.43 ares)^{coveredby K.P patta} no.185(old)/332(new) under Dag no. 60(old)/473(new)^situated at^{revenue village} Sadilapur, Mouza- Jalukbari, Kamrup^{(M). Assam standingin thenameof Defendant} No.4 more appropriately described^{in Schedule A of the OA.}

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The defendant no. 4 by an affidavit dated 512114^{alfumedthe deposit of various} title deeds/documents with an^{intention to create equitable mortgageto secure the} Cash credit facilities of^{Rs. 25 Lakhs granted to the defendantno.1}

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The defendants had availed the^{said CashCredit Facilities, fromtheapplicant} bank but have not^{paid the oulstanding amountas per lerms and condition made} with the applicant bank in spite^{of repeated demandsand request by the applicant bank.}

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s!.iuslg6i$*.t r Pr€Biding Offidrt' ' <sup>'- 'J DRT, Gumhati

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o.A 1462022/DRT-G!shatr

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Hence the loan accounts^{became NPA on 31 05.2015.Afterthe account became NPA} the applicant bank issued^{noticesfor repayment of the due amount, but the defendants} have neither chosen^{for repayment of the loan amount nor approachedto the applicant} bank for Ienewal of^{the loan account}

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The applicant^{bank thus became constrainedto lile the present Original} Application for lhe^{recoveryof Rs. 71,07,255.'18(Rupoos Seventy One LakhSeven} Thousand Two^{HundredFifty Five and Paisa Eighteen) onlyas on la O22o22} along with interest^{and costof the application'}

¶64

After filing of^{the OA the Tribunalissued notices upon the defendants} through registered^{post and the applicant bank filed service reporton 07 06 2022 and} brought on^{recordthe postal receipts alongwith track mnsignment report which} shows that^{the noticeshas notbeen served upon the defendants lt was observed} from the track^{consignment reportthat the notice has not been served upon the} defendants.^{Hence serviceis not completed upon all the defendantsThereafter the} Tribunal ordered^{paper publication of notice uponthe defendants and the applicant} bank issued^{notice to the defendants on 02 08 2022through Paper Publicationin two} newspapers^{namely "TheTimesof lndia"and "DainikAsom"'Even afierissuanceof} notice lhrough Paper^{publication alsoihere was no representationon behalfof the} defendants^{and hencethe defendantswere made set ex-parte on '12 09 2022 and lhe} matter was^{posted for ex-parte hearingon behalfof the applicantbank'}

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Supporting^{theclaimot theapplicantbankMrs Bharati Maheswari'Branch} Head^{of the ApplicantBank has filed evidenceon affidavitcoupledwith the security} documenb^{markedas Exhibit A'l1 to N56' suPporting the claimof the applicantbank'}

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Heard^{the learned counsel for the applicant bank who prayedfor issuanceof} RecoverycertificateagainstthedefendantsaSperpleadingsmadeintheApplication, supported^{by evidence on affidavit of their witnesswho affirmed on oath the execution} of the security^{and other documentsby the defendants and also executionof their own} documents^{reliedupon' which have been markedexhibits'}

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Considering^{the facts and circumstancesof the case' I am of the considered} view that^{the documentsfiled by the applicant bank are supportingthe claimof the}

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sLiu et'a^o' &''{"1 ;,"",0,""&6J,o)^l.,3 , DRT, Guu,Bhali

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O A 146/202ZORT-Ouwah.ti

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applicani bank and establishing the liability of the defendants. tt is proved that the defendants are liable to pay to the applicant bank the claim made in the Original Application. The loan was obtained and documenls have been executed on 05.12.2012,04.02.2014, 05.02.2014. Moreover after perusing the documenls on record and taking into consideration of the fac{s and circumstances of the case. I find that the mortgage has been created by the defendant No.4 where the limitation available is for 12 years and as such taking into account of the crealion of the mo gage the application appears to have been filed well within the period of limitation. The account became NpA on 31.05.2015and the OA has been filed on 05.04.2022. Hence, the OA is filed we within the period of limitation and this Tribunal having a jurisdiction to adjudicate the Original Application.

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Considering the unchallenged/ unrebutted version of Mrs Bharati Maheswari, the applicant's witness and all the documents marked as exhibits, including duly certified copy of the statement of account along with inlerest calculation sheet maintained by the applicant Bank in it's regular course of business, I hold that the applicant is entitled to get the Recovery Certificate as prayed for.

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ln the result, the present Original Application No. 146 of 2022 is allowed with cost as under i

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i) The defendants No. 1,2, 3 & 4 are^jointly and severally liable to pay to the applicant bank a sum of Rs. 71,07,255.18 (Rupses Ssventy On6 Lakh Seven Thousand Two Hundred Fifty Five and Paisa Eightsen) only with pendentelite and future interest @13% p.a. with monthly rests from 19.02.2022 till the date of full^{paymenurealization} and also cost of the application.

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ii) The charge of the certificated amount be kept alive on mortgaged property i.e. a^plot of a land measuring an area of 1 bigha 15 lechas^(15.43 Areas) covered by Dag no. 60(old)/473(New) of Patta No. 185(old)/332(New) of revenue village - Sadilapur under Mouza - Jalukbari, in the District of Kamrup(Metro), Assam owned by defendant no. 4, bounded by- North: Land ol Dag No. 59, South: Land of Dag no. 61 & 65, East: Land of Dag No. 252, West: Land of

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\L,^sl.c.a.' )."1"Y )6lc)l)l I PresKling Oflicer\ \ , ORT, Guwehati

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o,l. lao/zo2zDRl€rmh.li

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oag no. 85, as described in Schedule-A of the OA till the amount is realized in tu .

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iii) The charge of the certificate amount be kept alive on hypothecated properties as described in Schedule B of the OA till the amount is realized in full

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iv) The charge of the certificate amount be kept alive on movable properties as described in Schedule C of the OA till the amount is realized in full.

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v) The applicant bank is entitled to proceed against the secured items towards recovery of the debts.

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vi) The applicant bank is also entitled to proceed against the personal assets and properties of the defendants towards recovery of the duas.

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vii) The applicant bank is entitled to the costs of the O.A. which includes the advocate fees of the applicant bank. Applicant is directed to file the cost memo within 2 weeks from today.

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viii) lssue Recovery Certificate accordingly for a sum Rs. 71,07,255.18 (Rupess Seventy One Lakh Seven Thousand Two Hundrod Fifty Five and Paisa Eighteen) only in favour of the applicant bank against the defendants No. 1,2,3 & 4.

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Communicate copy of this order to the concemed^parties.

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This order is dictated and corrected by the undersigned.

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Judgment dated 26h July 2029, signed and^pronounced in the Tribunal today

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under my signature.

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Copy of the JudgmenUFinal Order be uploaded in the Tribunal's Website and

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file be consigned to Record Room.

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_SL", d.61vr_r^ &'',,t,..t I :alt'l l)t (Shiv Sharan DLb6 ) 'l Presiding Officer DRT, Guwahati.

Idbi Bank v. M/s Smartway Group

Case brief

What is this about?

What did the court decide?

Idbi Bank v. M/s Smartway Group

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

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