Allowed

Punjab National Bank v. M/S Tayal Traders

DRT20 Jul 2023OA/171/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an original application filed by Punjab National Bank against M/s Tayal Traders for recovery of Rs. 62,94,810.09. The tribunal granted uniform simple interest at 10% per annum pending realization and authorized execution proceedings.

What did the court decide?

Recovery Certificate issued for Rs. 62,94,810.09 with 10% simple interest p.a. w.e.f. 12.01.2023.

Punjab National Bank versus M/S Tayal Traders — Contract and Commercial Disputes | DRT (2023)

¶1

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

¶2

ORIGINAL APPLICATION NO.171/2023

¶3

DATE OF INSTITUTION: 12.01.2023

¶4

DATE OF DECISION: 20^th DAY OF JULY, 2023

¶5

Punjab National Bank, a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings), Act, 1970, having its Head Office at Plot No.4, Sector-10, Dwarka, New Delhi-110075 and its Branch Punjab National Bank at Main Market, Sector-8, Karnal132001, through its Authorised Representative, Sh. Gurmeet Singh Kapoor, Senior Manager, Punjab National Bank, Circle SASTRA Centre, Sector-12, Karnal-132001

¶6

…..Applicant Bank

¶7

Versus

¶8

M/s Tayal Traders, through its Proprietor, Sh. Yogesh Kumar Gupta S/o Sh. Ved Pal Gupta, Shop No.58, New Grain Market, VPO Kunjpura, District Karnal-132022

¶9

Also at : Bania Wala Mohalla, VPO Kunjpura, District Karnal-132022

¶10

…..Defendant

¶11

Argued by: Ms Arpita Sonkar, Manager Law for the applicant bank Defendant ex parte vide order dated 04.07.2023

¶12

FINAL ORDER

¶13

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.62,94,810.09 (Rupees Sixty Two Lacs Ninety Four Thousand Eight Hundred Ten and Nine Paisa only) . The OA has been filed through Sh. Gurmeet Singh Kapoor, Senior Manager of the applicant bank, stated to be competent to institute the Original Application vide General Power of Attorney dated 23.11.2001, Annexure-A1 (copy).

¶14

The brief facts of the case of the applicant as per the Original Application are that defendant No.1 being a sole Proprietorship firm, through its sole Proprietor had approached the applicant bank for grant of overdraft limit of Rs.30 lacs. Further, the defendant again approached the applicant bank for enhancement of overdraft limit from Rs.30 lacs to Rs.50 lacs . Further, the defendant again approached the applicant bank for enhancement of overdraft limit from Rs.50 lacs to Rs.60 lacs .

¶15

The applicant bank sanctioned the aforesaid credit facility to the defendant vide sanction letters dated 08.05.2013, 17.11.2014 and 05.07.2016, Annexures-A2, A5 and A7 (copy) and as per terms and conditions which were duly accepted by the defendant.

¶16

In order to secure the aforementioned credit facility, the defendant executed various loan and security documents, i.e. agreement of hypothecation of assets dated 08.05.2013, Annexure-A3 (copy), agreement for overdraft dated 08.05.2013, Annexure-A4 (copy) and supplemental agreements to secure credit/loan facilities dated 20.11.2014 and 05.07.2016, AnnexuresA6 and A8 (copy).

¶17

The aforesaid loan facility was further secured by creation of equitable mortgage by the defendant in respect of Shop No.58, measuring 111.11 Square Yards situated at New Grain Market, Kunjpura, Tehsil and District Karnal, Haryana, fully described in para No. 5 (ix) of the Original Application.

¶18

Documents related mortgage are as under:

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i. Sale deed No.10331/1 dated 26.02.2014, Annexure-A9 (copy).

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ii. Letter dated 04.06.2020, regarding continuity of charge over the mortgage property, Annexure-A10 (copy).

¶21

It is further the case of the applicant bank that the loan facility was duly availed of by the defendant but they failed to maintain the financial discipline of the applicant bank and resultantly, the loan account became irregular and it was declared NPA on 12.04.2022. Defendant executed balance and security confirmation letter dated 30.04.2022, Annexure-11 (copy). The applicant bank recalled entire outstanding amount vide demand notice dated 18.06.2022 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act’ for brevity), Annexure-A12 (copy), possession notice dated 26.08.2022 under Section 13(4) of the Act along with publication in newspapers dated 29.08.2022, Annexures-A13 (colly) (copy), copy of objection/reply dated 07.09.2022 by the defendant, Annexure-A14 , copy of reply dated 29.09.2022 by the applicant bank to the objection raised by defendant, Annexure-A15 and legal notice dated 03.10.2022 along with its original postal receipts, Annexure-A16 (colly) (copy) but to no avail.

¶22

It is further the case of the applicant bank that after adjusting debit and credit entries in the loan account, a sum of Rs.62,94,810.09 (Rupees Sixty Two Lacs Ninety Four Thousand Eight Hundred Ten and Nine Paisa only) is recoverable against the defendant as per statement of account, certified under Bankers’ Books Evidence Act, Annexure-A17 (copy).

¶23

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

¶24

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 04.07.2023.

¶25

In support of contents of the OA, affidavit of evidence of Sh. Gurmeet Singh Kapoor, Senior Manager of the applicant bank was filed.

¶26

This Tribunal has heard ex-parte arguments advanced by Ms Arpita Sonkar, Manager Law and gone through the record carefully.

¶27

It was argued by Ms Arpita Sonkar, Manager Law 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 A17 , 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.62,94,810.09 (Rupees Sixty Two Lacs Ninety Four Thousand Eight Hundred Ten and Nine Paisa only) from the defendant.

¶28

In so far as pendente lite and future interest is concerned, the applicant bank has claimed in relief clause, interest @11.65% per annum plus additional penal interest @2% per annum. In sanction letters dated 08.05.2013, 17.11.2014 and 05.07.2016, AnnexuresA2, A5 and A7 (copy), the rate of interest had been mentioned @11.75% and @11.10% per annum respectively.

¶29

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 the mortgaged properties, purpose of loan, i.e. business and prevalent market rates of interest which have gone drastically downhill in yesteryears, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @10% per annum from the date of filing of the OA till realisation of the amount ordered vide this final order. It is ordered accordingly.

¶30

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.62,94,810.09 (Rupees Sixty Two Lacs Ninety Four Thousand Eight Hundred Ten and Nine Paisa only) with current and future simple interest @10% per annum , w.e.f. 12.01.2023 , 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 properties of the defendant in execution proceedings, if not sold earlier under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement

¶31

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.

¶32

Issue Recovery Certificate accordingly.

¶33

Parties to appear before Recovery Officer concerned on 14.09.2023

¶34

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.

¶35

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

Punjab National Bank v. M/S Tayal Traders

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. M/S Tayal Traders

Case brief

What is this about?

What did the court decide?

What the court decided

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