Allowed

Idbi Bank v. Sh. Satbir Singh Now Deceased through Lrs

DRT15 Nov 2023OA/1589/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application by IDBI Bank against the legal heirs of a deceased borrower for recovery of an agricultural loan of Rs. 24,20,347.16. The court issued a Recovery Certificate and reduced future interest to 5% per annum, clarifying that the heirs' liability is limited to the inherited estate.

What did the court decide?

Recovery Certificate issued for Rs. 24,20,347.16 plus simple interest @5% p.a. from 24.08.2022; liability confined to inherited estate.

Idbi Bank versus Sh. Satbir Singh Now Deceased through Lrs — Banking and Recovery | DRT (2023)

¶1

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

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ORIGINAL APPLICATION NO. 1589/2022

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DATE OF INSTITUTION: 24.08.2022

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DATE OF DECISION: 15^th DAY OF NOVEMBER, 2023

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IDBI Bank Limited, Company registered under the Companies Act, 1956 (1 of 1956) and a Company within the meaning of Section 2 (20) of the Companies Act, 2013 and a Banking Company within the meaning of Section 5(c) of the Banking Regulation Act, 1949 (10 of 1949), having its registered office at IDBI Tower, WTC Complex, Cuffe Parade, Mumbai400005, having a Branch, amongst others at Killa No. 54/20/2, Village Dhaturi, PO Bighan, Block Murthal, Sonepat-131001 (Haryana), through Sh. Manoj Kumar, BH/MGR and Authorised Signatory of IDBI Bank Limited

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…..Applicant

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Versus

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Sh. Satbir Singh s/o Sh. Sukhdev Singh since deceased through his Legal Heirs

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1(A) Smt. Sumitra w/o Late Sh. Satbir Singh

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1(B) Sh. Mohit s/o late Sh. Satbir Singh

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1(C) Sh. Rohit s/o Late Sh. Satbir Singh

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All residents of Village Sanpera, Tehsil Ganaur, District Sonepat, Haryana

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....Defendants

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Argued by: Sh. Ram Pal Kohle proxy counsel for Sh. Tajinder K. Joshi Advocate for the applicant bank LRS of Defendant No.1 ex parte vide order dated 11.09.2023

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OA/1589/2022 IDBI BANK LIMITED VS SATBIR SINGH SINCE DECEASED THROUGH HIS LEGAL HEIRS 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. 24,20,347.16/- (Rupees Twenty Four Lac Twenty Thousand Three Hundred Forty Seven and Sixteen Paisa Only) . It has been filed through Sh. Manoj Kumar, Branch Head and Manager of the applicant bank stated to be competent to institute the Original Application vide Delegation of Powers, Annexure-A1 (copy).

¶18

The brief facts of the case of the applicant as per Original Application are that defendant had approached the applicant bank for grant of KCC facility of Rs. 19,22,000/- vide loan application dated 10.02.2015 for agriculture loan, Annexure-A2 (copy).

¶19

The applicant bank sanctioned the above said facility to defendant vide intent letter dated 25.02.2015, Annexure-A3 (copy) as per terms and conditions which were duly accepted by the defendant.

¶20

In order to secure the aforementioned credit facility, defendant No.1 executed various loan and security documents, i.e. hypothecation-cum-loan agreement dated 04.03.2015, Annexure-A5 (copy), demand promissory note dated 04.03.2015, Annexure-A6 (copy) and delivery letter dated 04.03.2015 for demand promissory note, Annexure-A7 (copy).

¶21

The aforesaid loan was further secured by creation of mortgage by defendant No. 1 in respect of agricultural land measuring 48 Kanal 2 Marla situated in the revenue estate of Sanpeda, Tehsil Gannaur,

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OA/1589/2022 IDBI BANK LIMITED VS SATBIR SINGH SINCE DECEASED THROUGH HIS LEGAL HEIRS 3

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District Sonipat, Haryana, fully detailed in para No. 5(e) of the Original Application.

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The documents related to mortgage are as under :

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i. Registered mortgage deed dated 04.03.2015, Annexure-A4 (copy).

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ii. Affidavit dated 25.02.2015 for showing detail of the property, Annexure-A8 (copy).

¶27

It is further the case of the applicant bank that the loan facility was duly availed of by the deceased defendant 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. The defendants executed acknowledgement of debt-cum-revival letter dated 17.11.2020, Annexure-A9 (copy). The applicant bank recalled entire outstanding amount vide recall notice dated 22.07.2022, AnnexureA10 (copy), but to no avail.

¶28

It is further the case of the applicant bank that after adjusting debit and credit entries in the loan account, a sum of Rs. 24,20,347.16/- (Rupees Twenty Four Lac Twenty Thousand Three Hundred Forty Seven and Sixteen Paisa Only), is recoverable against the deceased defendant as per statement of account, duly certified under Bankers’ Books Evidence Act, 1891, Annexure-A11 (colly) (copy).

¶29

Since the defendants who are LRs of the deceased borrower, did not repay the outstanding amount, therefore, the applicant bank preferred the present Original Application for issuance of Recovery Certificate.

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OA/1589/2022 IDBI BANK LIMITED VS SATBIR SINGH SINCE DECEASED THROUGH HIS LEGAL HEIRS 4

¶31

Notices of the Original Application were duly served upon the defendants, but since none appeared on behalf of the defendants, thus, LRs defendant Nos. 1 were proceeded against ex parte vide order dated 11.09.2023.

¶32

In support of contents of the OA, affidavit of evidence of Sh. Manoj Kumar, Branch Head and Manager of the applicant bank was filed.

¶33

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

¶34

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 A11 , it is clear that the deceased defendant had approached the applicant bank for availing of the loan facility which was granted to him. It is further clear that the deceased defendant had executed all the relevant documents as stated above in favour of the applicant bank. Unfortunately, the deceased defendant failed to pay back the loan as per terms and conditions of the agreement executed between the parties. Sh. Satbir Singh had died, leaving behind defendant Nos. 1(A), 1(B) and 1(C) as his legal heirs who have been impleaded as the defendants. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs. 24,20,347.16/- (Rupees Twenty Four Lac Twenty Thousand Three Hundred Forty Seven and Sixteen Paisa Only) from the defendants.

¶35

In so far as pendent lite and future interest is concerned, the applicant bank in relief clause, has claimed rate of interest

¶36

OA/1589/2022 IDBI BANK LIMITED VS SATBIR SINGH SINCE DECEASED THROUGH HIS LEGAL HEIRS 5

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@BBR+1.25% per annum plus penal interest @2% per annum. In letter of intent dated 25.02.2015 for agriculture and allied activities, Annexure-A3 (copy), the rate of interest has been mentioned @10.25% per annum.

¶38

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 No. 1(A) being a female, 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.

¶39

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. 24,20,347.16/- (Rupees Twenty Four Lac Twenty Thousand Three Hundred Forty Seven and Sixteen Paisa Only) with current and future simple interest @5% per annum w.e.f. 24.08.2022 , 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

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OA/1589/2022 IDBI BANK LIMITED VS SATBIR SINGH SINCE DECEASED THROUGH HIS LEGAL HEIRS 6

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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. 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 .

¶42

Issue Recovery Certificate accordingly.

¶43

Parties to appear before Recovery Officer concerned on 27.12.2023.

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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.

¶45

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

Idbi Bank v. Sh. Satbir Singh Now Deceased through Lrs

Case brief

What is this about?

What did the court decide?

Idbi Bank v. Sh. Satbir Singh Now Deceased through Lrs

Case brief

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What did the court decide?

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