Allowed

State Bank of India v. M/S Bhole Shanker Trading Company and Others

DRT19 May 2023OA/1495/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant bank's application for issuance of a Recovery Certificate against three respondents. The court directed the respondents to pay a principal sum of Rs. 25,91,442/- along with future simple interest at 9% per annum, citing pandemic circumstances to reduce the claimed rate.

What did the court decide?

Issuance of Recovery Certificate for Rs. 25,91,442/- plus future simple interest at 9% per annum.

State Bank of India versus M/S Bhole Shanker Trading Company… — 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.1495/2022

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DATE OF INSTITUTION: 08.08.2022

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DATE OF DECISION: 19^th DAY OF MAY, 2023

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State Bank of India, a body corporate constituted under the State Bank of India, Act, 1955 (23 OF 1955) and the successor to State Bank of Patiala, under the Acquisition of State Bank of Patiala, Order No. G.S.R. 159 (E) dated 22.02.2017 passed by the Central Government under Section 35 of the State Bank of India, Act, 1955 (23 of 1955), having its Corporate Office at Madam Cama Road, Nariman Point, Mumbai, one of its Local Head Offices at Sector-17A, Chandigarh, having Branches all over India, including one at Kalayat, District Kaithal, Haryana, through its Branch Manager and Principal Officer, Sh. Manoj Kumar Varun

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…..Applicant Bank

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Versus

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M/s Bhole Shanker Trading Company works at Shop No.30, Anaj Mandi, Kalayat, District Kaithal, Haryana, through its Proprietor, Sh. Pardeep Kumar

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Sh. Pardeep Kumar S/o Sh. Ram Kumar R/o Shop No.30, Anaj Mandi, Kalayat, District Kaithal, Haryana

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Smt. Neelam Devi W/o Sh. Rajesh Kumar R/o Village Chausala, Tehsil Kalayat, District Kaithal, Haryana

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…..Defendants

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Argued by: Ms Sonia Gupta counsel for the applicant bank Defendants ex parte vide order dated 23.01.2023

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FINAL ORDER

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Present Original Application was instituted by the applicant

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bank under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ‘the

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Act’ for brevity), against the defendants for recovery of

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Rs.25,91,442/- (Rupees Twenty Five lacs Ninety One Thousand Four Hundred and Forty Two only) . The OA has been filed through Sh. Manoj Kumar Varun, Branch Manager of the applicant bank, stated to be competent to institute the Original Application.

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The brief facts of the case of the applicant as per the Original Application are that defendant No.2 being Proprietor of defendant No.1 firm had approached the applicant bank for enhancement of existing cash credit limit from Rs.5 lacs to Rs.18 lacs vide application for MSME loan dated 01.09.2015, Annexure-A1 (copy).

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The applicant bank sanctioned the above said loan facility to the defendants vide arrangement letter dated 15.09.2015, Annexure-A2 (copy) as per terms and conditions which were duly accepted by the defendants. For repayment of that loan defendant No.3 stood as a guarantor.

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In order to secure the aforementioned credit facility, the defendants executed loan and security documents, i.e. demand promissory note delivery-cum-continuity letter dated 15.09.2015, Annexure-A3 (copy), agreement for loan-cum-hypothecation dated 15.09.2015, Annexure-A4 (copy) and guarantee agreement dated 15.09.2015, Annexure-A5 (copy).

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The aforesaid loan facility was further secured by equitable mortgage by defendant No.3 in respect of commercial property measuring 450 Square Yards situated west side of Kulwant Nagar, Kalayat, District Kaithal, Haryana, fully described in para No. 5 (vii) of the Original Application.

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Documents related to mortgage are as under:

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i. Letter dated 15.09.2015, regarding confirmation for extension of mortgage by deposit of sale deed No.2475 dated 22.01.2010, Annexure-A6 (copy).

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ii. Title Verification Report dated 02.09.2020, prepared by the Advocate, Annexure-A7 (copy).

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iii. Valuation Report dated 13.01.2021, Annexure-A8 (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 became irregular and it was declared NPA on 28.10.2019. Defendants executed revival letters dated 09.07.2018, 22.04.2019 and 16.11.2019, Annexure-A9 (colly) (copy). The applicant bank recalled entire outstanding amount vide legal notice dated 26.03.2020 along with its postal receipts dated 15.04.2020, Annuxre-A10 (colly) (copy) and notice dated 16.11.2019 under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act’ for brevity) along with its postal receipt and possession notice dated 12.02.2020 under section 13(4) of the Act, 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.25,91,442/- (Rupees Twenty Five lacs Ninety One Thousand Four Hundred and Forty Two only) is recoverable against the defendants as per statement of account dated 12.07.2022, Annexure-A12 (copy), certified under Bankers’ Books Evidence Act.

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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 despite service, thus, the defendants were proceeded against ex parte vide order dated 23.01.2023.

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In support of contents of the OA, affidavit of evidence of Sh. Manoj Kumar Varun, Branch Manager 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.

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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 the defendants had approached the applicant bank for availing of the loan facilities which were granted to them after they 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.25,91,442/(Rupees Twenty Five lacs Ninety One Thousand Four Hundred and Forty Two only) from the defendants.

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In so far as pendente lite and future interest is concerned, the applicant bank has claimed in relief clause, interest @9.45% per annum with monthly rests. In letter of arrangement dated 15.09.2015, Annexure-A2 (copy), the rate of interest has been mentioned @12.45% per annum with monthly rests.

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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, 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 final 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.25,91,442/- (Rupees Twenty Five lacs Ninety One Thousand Four Hundred and Forty Two only) with current and future simple interest @9% per annum , w.e.f. 08.08.2022 , 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 property of 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

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otherwise. If the dues of the bank still remain unsatisfied, applicant bank shall be at liberty to recover the same by attachment and sale of personal assets/property 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 24.07.2023.

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

State Bank of India v. M/S Bhole Shanker Trading Company and Others

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S Bhole Shanker Trading Company and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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Parties & counsel

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