Allowed

Punjab National Bank v. M/S Arrow Impex

DRT10 Aug 2023OA/161/2023

Case brief

AI extract

What is this about?

The TRIBUNAL allowed the bank's original application for recovery of ₹42,12,023.90 from the defaulting borrowers as none appeared. The Tribunal ordered recovery including future simple interest at 8% per annum and authorized enforcement via sale of mortgaged property.

What did the court decide?

Recovery of Rs.42,12,023.90 with future simple interest @8% per annum w.e.f. 28.12.2022 by sale of mortgaged/hypothecated property.

Punjab National Bank versus M/S Arrow Impex — Banking and Recovery | DRT (2023)

¶1

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

¶2

ORIGINAL APPLICATION NO.161/2023

¶3

DATE OF INSTITUTION: 28.12.2022

¶4

DATE OF DECISION: 10^th DAY OF AUGUST, 2023

¶5

Punjab National Bank, a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act No.5 of 1970, having its Head Office at Plot No.4, Sector-10, Dwarka, New Delhi and amongst many Branches one at Ambala Cantt., Haryana, through Sh. Madan Lal, General Attorney and Principal Officer of Circle Sastra Centre, Kurukshetra

¶6

…..Applicant Bank

¶7

Versus

¶8

M/s Arrow Impex, Plot No. 122, Village Mohra, G.T. Road, Ambala Cantt., Haryana, through its Partners

¶9

Sh. Parshottam Bhatti s/o Sh. Om Parkash Bhatti (Partner) R/o 101, Manali House, Ambala City

¶10

Also at: Plot No. 122, Village Mohra, G.T. Road, Ambala Cantt.

¶11

Ms Rachneet Kaur Jaggi s/o Sh. Satinder Pal Singh (Partner) R/o House No. 68 A, Vikas Vihar, Ambala City

¶12

Also at: Plot No. 122, Village Mohra, G.T. Road, Ambala Cantt.

¶13

…..Defendants

¶14

Argued by: Ms Priyanka Gupta, Chief Manager, Law for the applicant bank Defendants ex parte vide order dated 09.05.2023

¶15

OA/161/2023 PUNJAB NATIONAL BANK Vs M/S ARROW IMPEX BHATTI AND OTHERS 2

¶16

FINAL ORDER

¶17

Present Original Application was instituted by the applicant bank under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ‘the Act’ for brevity), against the defendants for recovery of Rs.42,12,023.90/- (Rupees Forty Two Lacs Twelve Thousand Twenty Three and Ninety Paisa Only) . It has been filed through Sh. Madan Lal, General Attorney and Principal Officer of the applicant bank stated to be competent to institute the Original Application vide General Power of Attorney, Annexure-A1 (copy).

¶18

The brief facts of the case of the applicant as per the Original Application are that the defendant No.1 through defendant Nos. 2 and 3 had approached the applicant bank for grant of cash credit limit of Rs. 40 lacs and term loan-I for Rs. 28 lacs, term loanII for Rs. 24 lacs and term loan-III for Rs. 31 lacs vide application form dated 23.10.2012, Annexure-A2 (copy).

¶19

The applicant bank sanctioned above mentioned credit facilities of cash credit limit of Rs. 40 lacs and term loan for Rs. 57.80 lacs to the defendants vide sanction letters, Annexures-A3 and A9 (copy) as per terms and conditions which were duly accepted by the defendants.

¶20

In order to secure the aforementioned credit facility, the defendants executed various loan and security documents, i.e. agreement dated 23.10.2013 for loan/cash credit/overdraft, Annexure-A4 (copy), agreement dated 23.10.2013 for hypothecation of goods and book debts to secure cash credit facility, Annexure-A5 (copy), acceptance letter dated 23.10.2013 regarding

¶21

OA/161/2023 PUNJAB NATIONAL BANK Vs M/S ARROW IMPEX BHATTI AND OTHERS 3 terms and conditions, Annexure-A6 (copy) and supplementary agreement dated 31.12.2020, Annexure-A10 (copy).

¶22

The aforesaid loans were further secured by creation of equitable mortgage by defendant No.2 in respect of plot No. 122, measuring 303 Square Yards situated in the revenue estate of Mohra, Tehsil Ambala Cantt., District Ambala, fully detailed in para No. 5.5 of the Original Application.

¶23

The documents related to mortgage are as under:

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i. Registered transfer deed , Annexure-A7 (copy).

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ii. Letter dated 06.11.2013 regarding confirmation of deposit, Annexure-A8 (copy).

¶26

It is further the case of the applicant bank that the loan facilities were duly availed of by the defendants but they failed to maintain the financial discipline of the applicant bank and resultantly, the loan accounts became irregular and those were declared as NPA on 31.03.2022. The defendants executed balance and security confirmation letters dated 22.02.2019 and 04.02.2022, Annexures-A11 and A12 (copy). The applicant bank recalled the entire outstanding amount vide notices dated 20.04.2022 along with postal receipts, Annexure-A13 (colly) (copy), but to no avail.

¶27

It is further the case of the applicant bank that after adjusting debit and credit entries in the loan accounts, a sum of Rs.42,12,023.90/- (Rupees Forty Two Lacs Twelve Thousand Twenty Three and Ninety Paisa Only), is recoverable against the defendants as per statement of account, certified under Bankers’ Books Evidence Act, Annexure-A14 (copy).

¶28

OA/161/2023 PUNJAB NATIONAL BANK Vs M/S ARROW IMPEX BHATTI AND OTHERS 4

¶29

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

¶30

Notices of the Original Application were duly served upon the defendants, but since none appeared on behalf of the defendants, thus, the defendants were proceeded against ex-parte vide order dated 09.05.2023 .

¶31

In support of contents of the OA, affidavit of evidence of Sh. Madan Lal, General Attorney and Principal Officer of the applicant bank was filed.

¶32

This Tribunal has heard ex-parte arguments advanced by Ms Priyanka Gupta, Chief Manager, Law for the applicant bank and gone through the record carefully.

¶33

It was argued by Ms Priyanka Gupta, Chief Manager, Law of the applicant bank 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 A14 , it is clear that the defendants had approached the applicant bank for availing of the loan facilities which were granted to them. It is further clear that the defendants 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.42,12,023.90/(Rupees Forty Two Lacs Twelve

¶34

OA/161/2023 PUNJAB NATIONAL BANK Vs M/S ARROW IMPEX BHATTI AND OTHERS 5 Thousand Twenty Three and Ninety 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 @14.65% per annum. In vide sanction letter, Annexure- 9 (copy), rate of interest has been mentioned @8.90% per annum.

¶36

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, purpose of loan, i.e. business, quantum of loan and 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 @8% per annum from the date of filing of the OA till realisation of the amount ordered vide this order. It is ordered accordingly.

¶37

In the result, the Original Application is allowed with costs declaring that the defendant is liable to pay to the applicant bank a sum of Rs.42,12,023.90/- (Rupees Forty Two Lacs Twelve Thousand Twenty Three and Ninety Paisa Only) with current and future simple interest @8% per annum w.e.f. 28.12.2022 , 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

¶38

OA/161/2023 PUNJAB NATIONAL BANK Vs M/S ARROW IMPEX BHATTI AND OTHERS 6 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 defendant. The applicant bank is at liberty to enforce the claim through due process of law.

¶39

Issue Recovery Certificate accordingly.

¶40

Parties to appear before Recovery Officer concerned on 03.10.2023 .

¶41

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.

¶42

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

Punjab National Bank v. M/S Arrow Impex

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. M/S Arrow Impex

Case brief

What is this about?

What did the court decide?

What the court decided

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