Allowed

State Bank of India v. Ltz Enterprise

DRT15 Jun 2023OA/163/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant's application for a Recovery Certificate against the respondents for an outstanding loan of Rs. 54,61,047.22 along with future interest and costs, following an ex-parte hearing.

What did the court decide?

Issuance of Recovery Certificate for Rs. 54,61,047.22 with future interest @7.80% p.a. and costs; defendants held jointly and severally liable.

State Bank of India versus Ltz Enterprise — Money Laundering | DRT (2023)

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O.A 1 632022/ORT€u*'.hali

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(North Eastern Region) (Tribunalof Assam, Nagaland, Meghalaya. Manipur, Mizoram, Arunachal Pradesh & Tripura) Before Shri Shiv Sharan Dubev. Presidino Officor

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O.A. No. 16312022

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ln the matter of -

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State Bank of lndia Stressed Assets Recovery Branch, Bamunimaidam, M.R.D.Road, Guwahati-21 Dislricl Kamrup (M), Assam

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.Applicant

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Vs.

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LTZ Enterpriso Prop.- Lalrammawii, 840, Dawrpui Vengthar Dawrpui, Aizawl, Mizoram, Pin-796009.

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Lalrammawii

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Daughter of Sangzuala Prop.- LTZ Enterprise. 840, Dawrpui Venglhar Dawrpui, Aizawl, Mizoram, Pin-796009

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Defendants

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Prosenco of tho Counsol :

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For the Applicant : Mr K K Nandi, Ms Rochoita Das, Advocates For the Defendants : None (Ex-parte)

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Datod : 15.06.2023

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JUDGMENT

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This is an application under section 19 of the Recovery of Debts Due to Banks and Financial lnstitutions Act, 1993 filed by the State Bank of lndia, Stressed Assets Recovery Branch, Bamunimaidam, M.R.D.Road, Guwahati-21, District- Kamrup (M), Assam, with a prayer to issue Recovery Certificate for the sum of Rs. 54,6'1,047.22 (Rupees Fifty Four Lacs Sixty One Thousand Forty Seven And Paisa Twenty Two) only as on 04.05.2022 against the defendants with pendentetite and future interest @7.80% per annum with monthly rests till realization along with cost and other relief.

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A few facts^giving rise to the^present application are as under. -SUrLt{l^4@4b.& e*".'s olrlS^{/ rj}

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O A. 163/2022loRT-Gwahaii

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The defendant no.1 is a^{proprietorship} firm which deals in the business of relating to food besides others. The defendant no.2 is the proprietor of the defendant no.1. The defendanl no.l represented by its proprietor being defendant no. 2 approached and applied to the applicant bank for financial assistance for purpose of its business by submitting an application daled 22.04.2019. The applicant bank on consideration of the said application dated 22.U.2019 sanctioned cash credit facility (Orop line-OD) of Rs.50,00,000.00 to the defendant no.1 vide Letter of Arrangement dated 27.00.2019. The terms and conditions of the letter of arrangement dated 27.05.20.19 was duly accepted by the defendants and as a token of acceptance of the same the defendant no. 2 as proprietor of defendant no..l have signed in letter of arrangement dated 27.05.2019 of having accepted the terms and conditions. lt was also the terms and conditions of the letter of arangement that the effective rate of interest of the cash credit loan will be 2.30% above MCLR the effeclive rate being i0.90% per annum rising or falling therewith, calculated on daily products at monthly rests.

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The defendant no.1 availed of the cash credit facility (Orop line_Oo) from the applicant bank and the defendant no.^.l represented by its proprietor being defendant no.2 have executed Agreement of Loan- cum-Hypothecation dated 27.05.2019 duly filled up in favour of the appticant bank.

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The defendant no. 1 availed of the cash credit facility from the applicant bank and as a security for repayment of the cash credit facility the defendant no 2 created equitable mortgage of land measuring 74.16 sq.m (798.28 sq.ft) by deposit of tifle deeds with the applicant bank on 24.05.2019. The defendant no. 2 deposiled with the applicant bank, title deeds such as Certificate of Land Setflement being LSC No.AZL-210 of.1977, Site Plan, No Objection Certificate dated 16.06.2016, Certificate of land valuation dated '16.06.2016, Non- encumbrance- certificate dated 16.06.2016,Revenue payment receipt dated 28.05.2019. The defendant no.2 has executed Letter of Confirmation on 29.05.2019 confirming deposit of title deeds with the applicant bank with the intention to create an equitable mortgage as a security for repayment of loan availed by defendant no 1. The property (land) mortgaged by the defendant no 2 with the applicant bank is specifically described in schedule A of the OA. I l";, l";,^S

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I l";, l";,^S Lar4l^ D-L"r ISTM Pr.idng om+r P\l ORT. Guwahet

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O A 1632022/ORT-GNahati

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The defendant no. I represented by its^proprietor being defendant no.2 approached the applicant bank for working capital term loan. The applicant bank on consideration of the^prayer so made sanctioned term loan^(WCTL under GECL) of Rs.5,00,000.00 in favour of the defendant no. 1 vide letter of arrangement dated 25.06.2020. The defendant no. I represented by its^proprietor being defendant no 2 accepted the terms and conditions of the arrangement letter dated 25.06.2020 and as a token of acceptance of the same defendant no.2 as^proprietor of defendant no t have signed in the arrangemenl letter of having accepted the terms and conditions. That the defendant no 1 agreed to repay the term loan in 36 installments. lt was also the terms and conditions of the sanction letter that the effective rate of interest in the term loan will be being 7.80%^per annum with monthly rests subject to changes as^per banURBl guidelines and besides other terms and conditions recited therein. The defendant no 1 agreed to repay the term loan in 36 monthly installments of^{Rs 14000.00} each.

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The defendant no.1 availed of the term loan from the applicant bank^and defendant no. 2 as^proprietor of the defendant^no.1 have executed^Supplemental Agreement of Loan cum Hypothecation dated^{25.06.2020and by thesaidagreement} the defendant no.1 represented by its^{proprietor b€ing defendantno.2 agreed to the} terms and conditions^{recited thereinand have agreedupon that the agreement is} supplemental to the Agreement^{of Loan cum Hypothecationdated27.05.2019.The} defendant no.2 as^proprietor of the defendant^{no.'t further agreedthat the assets} hypothecated and charged^{in favour of the applicant bankshall standcharged in favour} of the applicant bank as continuing^{security by way of Iirst charge. lt was agreed upon} that all the covenants, terms^{and conditionsto be observed and performedby the} defendant no.1 and all the^{rightsremedies conferredon the Bank by/under the} agreement shall apply^{and extendto the existingfacilities granted by the applicant bank} upto the aggregate^limit.

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ln respect of fresh credit^{facilities availed by the defendantno.1 fromlhe} applicant bank, the^{defendantno. 2 executed Letterof Confirmationfor extensionof} equitable mortgage^{dated 26.06.2020 andby the said conlirmationletter the defendant}

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S0.;Jid",rk)"I,4 ,.""r,HSl'] J ORT. Guwahali '

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OA 163r02ZDRI-Gqahati

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no. 2 confirmed and admitted to have deposited title deeds^with the^{applicant bank with} the lntention of creating equitable mortgage in favour of the applicant bank.

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The defendant no 2 mnfirmed that consequent upon the enhancement of credit limit the benelit of mortgage shall apply for, stand extended lo and cover the enhanced credit limit and also for all other liabilities and indebtedness of the defendant no I to the applicant bank. The^property mortgaged/ created charge by the defendant no 2 with the applicant bank as a security for repayment of loan/ credit facilities availed by defendant no^'l is more specmcally described in Schedule-A of the OA.

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The defendant no I approached the applicant bank for financial assistance by way of deferment of interest in working capital and conversion of the same to FITL. The applicant bank upon consideration of the prayer so made sanctioned Rs 225202.00 by way of FITL vide letter of arrangement dated 27.08.2020. The terms and conditions of the arrangement letter dated 27.08.2020 was duly accepted by the defendant no 1 represented by its proprietor and as a token of acceptance of the same the defendant no 2 being lhe proprietor have signed in the arrangement letter of having accepted the terms and conditions. The defendant no 1 agreed to repay the term loan by 31.03.2021 and the rate of interest applicable in the term loan account is as per working capital (term loan) account.

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The Defendants had availed of the said loan facilities from the Applicant Bank, but have nol^paid the loan amounts as^per the terms and conditions as agreed upon with the Applicant Bank, inspite of repeated demands and requests by the Applicant Bank. As the defendants failed to repay the loan amounts, the said accounts became NPA on 22.'10.2020. After the accounts became NPA the applicant bank issued notices for repayment of the due amount, but the defendants have neither chosen for repayment of the remaining installment in the term loan account nor approached to the applicant bank for settling the loan account^{nor renew} the^{cash credit loan account.}

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The applicant bank thus became constrained to tile the^present Original Application for the recovery of Rs. 54,61,047.22^{(Rup6es Fifty Four Laca Sixty One} Thousand Forty Soven And^{Paisa Twenty Two)onlyas on} 04.05.2022 along with interest and cost ofthe application.

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St"rIJ.a1ar5'^i"?t ISfr6l)z U Prslidno O0icer l.DRT, Guwahali

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O.A. 163/202ZDRT-Guwahali

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After Iiling of the OA the Tribunal issued notices upon^{the defendants through} registered^post and the applicant bank liled service^{reporton 27.06.2022 and brought} on record the^postal receipts along with track^{consignment report. lt is observedthat} the summon has been served^{upon the defendant No.1 and summon has been served} upon the defendant No.2.^{Thereafter the Tribunal ordered paper publication of notice} upon the defendant No.2 and the applicant^{bank issued notice to the defendantNo.2} on 17.08.2022 through^{PaperPublicationin two newspapers namely"The Zozam} Iirnes' and 'Newslin(.^{Even after proper serviceof notice uponthe defendant No.1} and even after issuance of^{notices uponthe defendant No 2 throughpaper} publication also there was no representation on behalf^{of thedefendantsNo. 'l & 2} either by the counsel or the^{personand hence the defendantsNo. 1 & 2 were} made set ex-parte on 19.10.2022^{and their rightto Iile written statement cum evidence} on affidavit was closed^{and the matter was posted for hearing on behalfof the} applicant bank.

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Supporting the^{claim of the applicant bank Sti TarunChandra Kalita, Chief} Manager of the Applicant^{Bank has filed evidence on affdavitcoupled withthe} security documents^{marked as Exhibit Al to 4-26supportingthe claimof the applicant} bank.

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Heard the learned^{counselfor the appticant bank whoprayed for issuance of} Recovery Certiticate^{against the defendantsas per pleadings made in the Application,} supportedbyevidenceonaffidavitoftheirwitnesswhoaffirmedonoaththeexecution ofthesecurityandotherdocumentsbythedefendantsandalsoexecutionoftheirown documents relied^{upon, which have been markedexhibits'}

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Considering the^{facts and circumstancesof the case, I am of the considered} view that the documents^{filedby theapplicant bankare supportingtheclaimof the} applicant bank^{and establishing the liability of the defendants lt is proved that the} defendants^{are liable io pay to the appticant bankthe claim madein theOriginal} Application. The^{loan wasobtainedand documentshave been executedon} 27.05.20'19,29.05.2019,^{25.06.2020,26 06 2020, 27 'O8'2O20 The accounlbecame} NPA on 22.10.2020^{and the OA has been filed on 10 05 2022Hence' the OA is tiled}

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$'d;;#q*7

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DRT, Guwahali

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OA 1632022/DRl4ryahali

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well within the^period of limitation and this^{Tribunal having a} iurisdiction^{to adjudicate} the Original Application.

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Considering the unchallenged/unrebutted version of Sri^Tarun Chandra^Kalita, the applicant's witness and all the documents marked as exhibits,^{including duly} certified copy of the statement of account along^with interest calculation sheet maintained by the applicant Bank in ii'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. 163 of 2022 is allowed with cost as under :-

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The defendants No. 1 & 2 are^jointly and severally liable to^pay to the applicanl bank a sum of Rs. 54,6'l,047.22^(Rupeo3 Fifty Fou, Lacs Sixiy Ono Thousand Forty Sev6n And Paisa Twenly Two) only wiih^pendentelite and future interest @7.80%^p.a. with monthly resls from 05.05.2022 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.} All that^piece and^parcel of a^plot of^{land measuring 74.16 sq.m (798.28sq. ft)} under LSC No. AZL-210 of^{1977 situated at DawrpuiVengthar,House No. B-} 40, P.O. Vaivakawn, District Aizawl, Mizoram^and is^{bounded as under:} North: Rangkunga; South: C. Raltawna;^{East: C. Raltawna;West:Sairang} Road, as described in Schedule-A^{of lhe OAiill the amount is realizedin full.}

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iii) The applicant bank is entitled^{to proceed againstthesecured items towards} recovery of the debts.

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iv) The applicant bank is also entitled^{to proceed against the personal assets and} properties of the defendants towards recovery of the^dues.

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v) The applicant bank is entitled^{to the costs of the O.A. whichincludesthe} advocate fees of^{the applicant bank. Applicant is directedto file the cost} memo within 2 weeks^{from todaY.}

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vi) lssue Recovery^{Certilicate accordingly for a sum tu. 54,61'047.22 (Rupees} Fifty Four Lac8^{SixtyOneThousand Forty SevenAnd Paisa Twenty Two)} only in favour of^{the applicant bank against the defendants No. 1 & 2}

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SUrd-4.r4^U, \ P.6iiding Oficf. I- DRT. Guwahdti

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O A.¹ fir2o22lDRT-Guwahati

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viu Communicate copy of this order to the concerned parties.

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This order is dictated and corrected by the undersigned.

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Judgment dated 15h June 2023, 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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lile be consigned to Record Room.

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i},^J d,q^yt." ]"4-1 (shiv sharan orLS96P ( Pre3ldlng Offlcor DRT, Guwahati.

State Bank of India v. Ltz Enterprise

Case brief

What is this about?

What did the court decide?

State Bank of India v. Ltz Enterprise

Case brief

What is this about?

What did the court decide?

What the court decided

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