Allowed

Canara Bank v. Smt. Veena Chauhan

DRT12 Dec 2023OA/1514/2022

Case brief

AI extract

What is this about?

The DRT allowed the bank's application for a recovery certificate against the legal heir of a deceased borrower. The court fixed interest at 5% p.a. and clarified that the heir's liability is limited to the inherited estate.

What did the court decide?

Original Application allowed; Recovery Certificate issued; Defendant liable to pay Rs. 24,27,018.87 with 5% p.a. interest; Liberty to recover via sale of mortgaged or personal assets; Liability of hei

Canara Bank versus Smt. Veena Chauhan — 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. 1514/2022

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DATE OF INSTITUTION: 20.08.2022

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DATE OF DECISION: 12^th DAY OF DECEMBER, 2023

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Canara Bank a body corporate and Nationalised Bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Head Office at 112, J.C Road, Bangalore and amongst others one at Bakana, Yamaunanagar, Haryana (earlier known as Syndicate Bank) through its General Power of Attorney, Sh. Yogesh Roshan Kainse

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…..Applicant

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Versus

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Smt. Veena Chauhan w/o Sh. Jeet Singh now deceased, through her husband being her legal heir namely, Sh. Jeet Singh Chauhan s/o Khadak Bahadur Singh resident of House No. 454, Ward No. 4, Hariom Shiv Home Junior School, Radaur, Tehsil Radaur, District Yamunanagar, Haryana

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.....Defendants

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Argued by: Ms Hemlata Issar counsel for the applicant bank Defendant ex parte vide order dated 25.09.2022

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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 Institution Act, 1993 (hereinafter referred to as ‘the Act’ for brevity), against the defendants for recovery of

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OA/1514/2022 CANARA BANK VS VEENA CHAUHAN 2

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Rs.24,27,018.87/- (Rupees Twenty Four lac Twenty Seven Thousand Eighteen and Eighty Seven Paisa Only) . It has been filed through Sh. Yogesh Roshan Kainse, Branch Manager of the applicant bank stated to be competent to institute the Original Application vide General Power of Attorney dated 25.10.2017, Annexure-A1 (copy).

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The brief facts of the case of the applicant as per Original Application are that Smt. Veena Chauhan had approached the applicant bank for grant of KCC facility of Rs. 11 lac and term loan facility of Rs. 7 lac vide loan applications dated 28.09.2017 and 27.10.2017, Annexures-A3 and A8 (copy).

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The applicant bank sanctioned aforesaid credit facilities to the defendants sanction letters dated 29.09.2017 and 27.10.2017, Annexures-A3 and A8 (copy).

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In order to secure the aforementioned credit facilities, the defendants executed various loan and security documents, i.e. agriculture advances agreements dated 29.09.2017 and 03.11.2017, Annexures-A5, A6 and A10 (copy) and deeds of guarantee dated 29.09.2017 and 03.11.2017, Annexures-A7 and A11 (copy). Death certificate of the borrower in Annexure-A12 (copy).

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The aforesaid loan were further secured by creation of mortgage by defendant in respect of agricultural land measuring 60 Kanal situated in the revenue estate of Khajuri, Hadbast No. 197, Tehsil Radaur, District Yamunanagar, Haryana, fully detailed in para No. 5(IX) of the Original Application. Declarations dated 28.09.2017 and 30.10.2017 under Section 4(1) of the Haryana Agricultural

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OA/1514/2022 CANARA BANK VS VEENA CHAUHAN 3

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Credit Operations and Miscellaneous Provisions (Banks) Act, 1973 along with copy of ‘Jamabandis’ are Annexures-A4 and A9 (copy). 6. It is further the case of the applicant bank that the loan facilities were duly availed of by the husband of the defendant but he failed to maintain the financial discipline of the applicant bank leading to the loan accounts becoming irregular and those being classified as NPA on 20.01.2021. Sh. Jeet Singh executed acknowledgement of debt letter dated 09.04.2020, Annexure-A13 (copy). The applicant bank recalled entire outstanding amount vide legal notice dated 10.05.2021 along with postal receipts, AnnexureA14 (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.24,27,018.87/- (Rupees Twenty Four lac Twenty Seven Thousand Eighteen and Eighty Seven Paisa Only), is recoverable against the defendant as per statements of accounts, duly certified under Bankers’ Books Evidence Act, 1891, Annexures-A15 and A16 (colly) (copy).

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Since the defendant did not repay the outstanding amount, therefore, the applicant bank preferred the present Original Application for issuance of Recovery Certificate.

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Notice of the Original Application was duly served upon the

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defendant, but since none appeared on behalf of the defendant, thus, the defendant was proceeded against ex parte vide order dated 25.09.2022 .

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OA/1514/2022 CANARA BANK VS VEENA CHAUHAN 4

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In support of contents of the OA, affidavit of evidence of Sh. Yogesh Roshan Kainse, GPA holder and Branch Manager of the applicant bank was filed.

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This Tribunal has heard ex-parte arguments advanced by the learned counsel for the applicant bank and gone through the record carefully.

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It was argued by the learned counsel for the applicant bank that in view of unrebutted documentary evidence brought on record, the applicant bank had proved its case against the defendant for recovery of the amount sought. From perusal of Annexures-A1 to A16 , it is clear that the defendant had approached the applicant bank for availing of the loan facilities which were granted to her. It is further clear that the defendant had executed all the relevant documents as stated above in favour of the applicant bank. Unfortunately, the defendant failed to pay back the loan as per terms and conditions of the agreement executed between the parties. Smt. Veena Chauhan had died, leaving behind Sh. Jeet Singh as her legal heir who has been impleaded as defendant. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.24,27,018.87/-

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(Rupees Twenty Four lac Twenty Seven Thousand Eighteen and Eighty Seven Paisa Only) from the defendant.

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In so far as pendent lite and future interest is concerned, the applicant bank in relief clause, has not claimed any particular rate of interest. In sanction letters dated 29.09.2017 and

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OA/1514/2022 CANARA BANK VS VEENA CHAUHAN 5

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27.10.2017, Annexures-A3 and A8 (copy), the rate of interest has been mentioned @9.75% 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 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, defendant being a female and death of the borrower, 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 defendant is liable to pay to the applicant bank a sum of Rs.24,27,018.87/- (Rupees Twenty Four lac Twenty

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Seven Thousand Eighteen and Eighty Seven Paisa Only) with current and future simple interest @5% per annum w.e.f. 20.08.2022 , 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 defendant 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

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OA/1514/2022 CANARA BANK VS VEENA CHAUHAN 6

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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 defendant. The 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 defendant by virtue of his being the legal heir of the deceased borrower shall remain confined only to the extent of the estate of the deceased borrower if it is inherited by legal heir and not beyond that. The recovery proceedings shall proceed only after the Recovery Officer is fully satisfied on the aspect

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of the estate being inherited by the Legal Representative/Heir and the liability being incurred

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accordingly .

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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 02.02.2024.

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

Canara Bank v. Smt. Veena Chauhan

Case brief

What is this about?

What did the court decide?

Canara Bank v. Smt. Veena Chauhan

Case brief

What is this about?

What did the court decide?

What the court decided

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