Allowed

State Bank of India v. Sh. Shamsher Singh

DRT7 Jun 2023OA/1644/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the recovery application filed by State Bank of India against the defendant for a loan default. The defendant was declared liable to repay the principal amount along with interest.

What did the court decide?

Declaration of liability to pay Rs. 23,49,669/- with simple interest at 8% p.a. w.e.f. 12.09.2022; liberty to recover via sale of mortgaged or personal assets; issuance of Recovery Certificate.

State Bank of India versus Sh. Shamsher Singh — 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.1644/2022

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DATE OF INSTITUTION: 12.09.2023

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DATE OF DECISION: 7^th DAY OF JUNE, 2023

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State Bank of India , a body corporate constituted under the provisions of the State Bank of India, Act, 1955, having its corporate Office at Madam Cama Road, Nariman Point, Mumbai and one of its Local Head Offices at Sector-17A, Chandigarh and Branches all over India and one of its Branches at Ahar, Tehsil Israna, District Panipat, through its Branch Manager and Principal Officer, Sh. Ashwani Kumar Sharma

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…..Applicant Bank

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Versus

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Sh. Shamsher Singh S/o Sh. Balbir Singh R/o Village Ludana, Post Office Ludana, Tehsil Safidon, District Jind, Haryana

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…..Defendant

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Argued by: Sh. Divjot Singh Rekhi, Nodal Officer for the applicant bank

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Defendant ex parte vide order dated 02.02.2023

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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 Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ‘the Act’ for brevity) against the defendant for recovery of Rs. 23,49,669/- (Rupees Twenty Three lacs Forty Nine Thousand

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Six Hundred Sixty Nine Only) . It has been filed through Sh. Ashwani Kumar Sharma, Branch Manager and Principal Officer of the

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OA NO.1644/2022 STATE BANK OF INDIA VS SH. SHAMSHER 2

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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 had approached the applicant bank for grant of Cash Credit facility of Rs. 18,94,000/- vide loan application dated 24.06.2013, Annexure-A1 (copy).

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The applicant bank sanctioned the above said loan facility to the defendant vide arrangement letter dated 26.06.2013, Annexure-A2 (copy) as per the terms and conditions which were duly accepted by the defendant.

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In order to secure the aforementioned credit facility, defendant executed hypothecation agreement dated 01.07.2013, Annexure-A3 (copy).

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The aforesaid loan was further secured by creation of mortgage by defendant in respect of agricultural land measuring 13 Kanals 1 Marla situated in the revenue estate of Morkhi, Tehsil PilluKhera, District Jind, Haryana, fully detailed in para No. 5(7) 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 26.06.2013, AnnexureA4 (copy).

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ii. Letter dated 29.06.2013 to the Tehsildar, Pillu-Khera, for entry/mutation of mortgaged property, Annexure-A5 (copy).

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It is further the case of the applicant bank that the loan facility was duly availed of by the defendant but he failed to maintain

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OA NO.1644/2022 STATE BANK OF INDIA VS SH. SHAMSHER 3

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the financial discipline of the applicant bank and resultantly, the loan account became irregular and it was declared as NPA on 01.09.2020. The defendant executed revival letters dated 01.06.2016 and 20.05.2019, Annexures-A6 and A7 (copy). The applicant bank recalled the entire outstanding amount vide legal notice dated 12.08.2022 along with postal receipt, Annexure-A8 (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 account, a sum of Rs. 23,49,669/- (Rupees Twenty Three lacs Forty Nine Thousand Six Hundred Sixty Nine Only) is recoverable against the defendant as per statement of account duly certified under Bankers’ Books Evidence Act, Annexure-A9 (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 defendant, but since none appeared on behalf of the defendant despite service, thus, the defendant was proceeded against ex parte vide order dated 02.02.2023 .

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In support of the contents of the OA, affidavit of evidence of Sh. Ashwani Kumar Sharma, Branch Manager of the applicant bank was filed.

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This Tribunal has heard ex-parte arguments advanced by Sh. Divjot Singh Rekhi, Nodal Officer of the applicant bank and gone through the record carefully.

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OA NO.1644/2022 STATE BANK OF INDIA VS SH. SHAMSHER 4

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It was argued by Sh. Divjot Singh Rekhi, Nodal Officer of 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 A9 , it is clear that the defendant had approached the applicant bank for availing of the loan facility which was granted to him after he 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. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs. 23,49,669/- (Rupees Twenty

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Three lacs Forty Nine Thousand Six Hundred Sixty Nine Only)

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from the defendant.

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In so far as pendente lite and future interest is concerned, the applicant bank in relief clause has claimed rate of interest of @10.60% per annum with half yearly rests. In arrangement letter dated 26.06.2013, Annexure-A2 (copy), the rate of interest has been mentioned @13.70% 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, purpose of loan, i.e. agricultural, present conditions of economy based on agriculture, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yesteryears, while exercising the discretion

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OA NO.1644/2022 STATE BANK OF INDIA VS SH. SHAMSHER 5

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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 final order. It is ordered accordingly.

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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. 23,49,669/- (Rupees Twenty Three lacs Forty Nine Thousand Six Hundred Sixty Nine Only) with current and future simple interest @ 8% per annum , w.e.f. 12.09.2022 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 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 defendant. 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 05.08.2023.

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

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Presiding Officer

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DRT-2, Chandigarh

State Bank of India v. Sh. Shamsher Singh

Case brief

What is this about?

What did the court decide?

State Bank of India v. Sh. Shamsher Singh

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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