The Debts Recovery Tribunal allowed an ex-parte application by Punjab National Bank to recover a debt of over Rs.56 lakhs along with interest from the defendants, as they failed to appear despite notice.
Recovery certificate issued for Rs. 56,15,847.56 with future interest to be realized from defendants through sale of mortgaged assets.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
OA 173of2022 [J]
DRT,PATNA
Debts Recovery Tribunal, Patna
Karpuri Thakur Sadan, Aashiana Digha Road at PATNA-800025
Presiding Officer : Shri Kaushalendra Yadav
OA Case no. : 173of 2022
Punjab National Bank, Itmah Branch, District-Rohtas or Circle SASTRA Office, Circle Office, Aurangabad
....... Applicant
Vs.
... Defendants.
Present:
For the Applicant : Shri Prashant Kumar, Advocate For the Defendants : None
Dated: 01.07.2023
JUDGMENT
1- The Applicant bank has made this application uls 19 of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 23.2.2022 against the defendants to recover its debts from defendants of Rs.56,15,847.59 as on 31.1.2022 alongwith pendente-lite and future interest at the contractual rate from 1.2.2022 with costs till realization.
3- The brief facts of the case of the applicant bank as stated in the application are as under-
The applicant bank body corporate constituted under Banking companies (Acquisition and Transfer of Undertakings) Act, 1970 having its corporate office at Plot no. 4, Sector 10, Dwarka, New Delhi 110075 and inter alia one of its Granch Office at Rohtas, District-Rohtas-82131O.
The defendant no. 1 through its proprietor i.e. defendant no. 2 applied for a credit facility for working capital by way of cash credit facility to the tune of Rs.20 lakh on 2.2.2015 to the applicant bank through its Branch Office situated at Itmah, District-Rohtas. The bank considering the said loan application had sanctioned the credit facility of
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OA 1730(2022 IJI
DRT,PATNA
Rs.20 lakh on 2.2.2015. The defendants executed the various loan documents i.e. loan agreement, agreement of guarantee and defendant no. 2 further created mortgage of his landed property by way of deposit of title deed details given at page 25 & 26 in Schedule-A of OA. The defendant no. 1 & 2 again approached before the bank on 26.2.2016 seeking enhancement of cash credit facility upto RsAO lakh. The bank sanctioned the loan of RsAOlakh on 26.2.2016. The defendants executed the various loan documents. The defendant no. 2 get the mortgage created by him of his landed property to be held extended towards the aforesaid enhanced credit limit of RsAO lakh. The defendants again approached before the bank vide his loan application dated 9.1.2019 for a term loan in order to purchase a car to the tune of Rs.9.90 lakh. Considering the past relationship and also after giving due credit to the said proposal for term loan in order to purchase a car the bank vide sanction letter dated 9.1.2016 has sanctioned a term loan in order to purchase a car of Rs.9.90 lakh in favour of the defendant no. 2 upon fresh terms and conditions as mentioned in the said sanction letter and the same has duly been accepted by the defendant no. 2.
All the transactions were entered in the ledger of the loan accounts in the name of the defendant duly maintained by the applicant bank in its usual course of business. After availing the sanctioned credit facilities became irregular in repayment of their dues as per agreed terms and failed to adhere to the financial norms of the bank and avoiding the repayment of its dues to the bank, in spite of several assurances given by it to the applicant bank resulting in the account turning as NPA on 2.5.2021
Thus the total liability in the loan account is Rs.56,15,847.59 with pendentelite and future interest at the contractual rate from 1.2.2022 till the realization.
The interest /compound interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.
Since, the defendants have failed and neglected in spite of several reminders to make payment of the dues recoverable to bank, hence this application has been filed by the bank.
4V/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993, copies of application & paper book was sent by this Tribunal to the defendants by registered/speed post on 25.5.2022 and summons/notices issued requiring the defendants to show-cause within 30 days of the service of summons/notices as to why relief prayed for, should not be granted.
On perusal of the case records, it is clear that on 25.5.2022, summons/notices were sent to the defendants, but the defendants have not appeared, hence, the Registry of this Tribunal has ordered to publish the
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DRT,PATNA
notice in newspaper and subsequently, substituted service by publication of notice by way of advertisement in newspaper was also made against the defendants on 10.9.2022in "Dainik Jagaran" newspaper.
Despite the registered summons/notices and publication of notice in newspaper, the defendants have not appeared before this Tribunal to contest the case. The sufficient time has been given to the defendants to defend their case, but they failed to appear and to file WS, hence, the Tribunal has passed an order to proceed ex-parte against the defendants 1.12.2022.
5- To prove its case, the applicant Bank has referred various certified photocopies of documents before this Tribunal. The applicant bank has also given evidence on affidavit by way of affidavit of Shri Ujjwal Prakash, Senior Manager -cum-deputy SASTRA Head of the applicant bank. The details of documents are as follows. :-
| SI.No | Description of photocopies Documents |
Date of Execution |
Amount | Signature of executant |
Ex.! Ann. No. |
|---|---|---|---|---|---|
| 1 | Loan application | 2.2.2015 | Rs.20 lakh | defendant no. 1& 2 |
1 |
| 2 | sanction letter | 2.2.2015 | Rs.20 lakh | bank | 2 |
| 3 | Agreement for loan | 2.2.2015 | Rs.20 lakh | defendant no. 1& 2 |
3 |
| 4 | Agreement of guarantee |
2.2.2015 | Rs.20 lakh | defendant no. 3 |
4 |
| 5 | copy of sale deeds no. 11055 |
29.8.2011 | ... | defendant no. 2 |
5 |
| 6 | loan application for enhancement |
26.2.2016 | Rs.40 lakh | defendant no. 1& 2 |
6 |
| 7 | sanction letter | 26.2.2016 | Rs.40 lakh | bank | 7 |
| 8 | hypothecation of goods and book debts |
26.2.2016 | Rs.40 lakh | defendant no. 1&2 |
8 |
| 9 | agreement of guarantee |
26.2.2016 | Rs.40 lakh | defendant no. 3 |
9 |
| 10 | Letter | 1.3.2016 | ... | bank | 10 |
| 11 | Car Loan application | 9.1.2019 | Rs.9.90 lakh | defendant no.2 |
11 |
| 12 | sanction letter | 9.1.2019 | Rs.9.90 lakh | bank | 12 |
| 13 | letter of hypothecation |
9.1.2019 | Rs.9.90 lakh | defendant no. 2 |
13 |
| 14 | agreement of guarantee |
9.1.2019 | Rs.9.90 lakh | defendant no.3 |
14 |
| 15 | retail invoice, sale certificate and registration card |
... | .... | 15 | |
| 16 | Balance and security confirmation letter |
1.2.2021 | ... | defendant no. 1 & 2 |
16 |
| 17 | Demand notice | 16.9.2021 | ... | bank | 17 |
V c\l
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DRT,PATNA
OA 173 of 2022 IJI
| 18 | Loan recall notice | 16.9.2021 | ... | bank | 18 |
|---|---|---|---|---|---|
| 19 | Balance and security confirmation letter |
13.1.2022 | ... | defendant no. 2 |
19 |
| 20 | Statement of account | as on 31.1.2022 |
Rs.56,15,847.59 | bank | 20 |
6- Opportunity of hearing has been fully given to both the parties, but despite several opportunities given to defendants, the defendants have not appeared to contest the case, hence, the ex-parte arguments of learned counsel for applicant bank were heard and perused the case record.
Ld. counsel of applicant bank submitted that the defendants have taken the loan and utilized the same and also executed the various loan documents to secure the loan. Further, submitted that the claim of the bank has been proved by documentary evidence.
It is further submitted by ld. Counsel of applicant bank that there is no any stay granted by any Higher Court, in respect of the proceedings of the present OA and requested to issue recovery certificate, as claimed for, inOA.
7- It has been established that defendants are living and carrying on their business in the state of Bihar. Cause of action also arose in the State of Bihar. The said claim on the date of filing of application exceeded Rs.20 lacs. The applicant bank is functioning within jurisdiction of this tribunal. Therefore, this Tribunal has territorial as well as pecumary jurisdiction to adjudicate upon the present application.
8- On the issue of Limitation, to prove it, the applicant bank has submitted that the applicant bank has declared the account as NPA on 2.5.2021, whereas the present application has been filed on 23.2.2022 Even, it is counted for the purpose of Limitation, then it is established that the applicant bank has filed the case within the limitation period. As such, it is established that present application has been filed well within the period of limitation.
9- In the affidavit of Shri Ujjwal Prakash, Senior Manager -cumdeputy SASTRA Head of the applicant bank, has stated that he is well acquainted with the facts of the case and has on verification of record, sworn in the affidavit in support of contents of application and the documents as evidence and established on oath the pleadings and documents of the applicant bank as stated above.
The documents as stated above reveal that the defendants have applied for loan and the bank had sanctioned the loan and to secure the loan and for repayment of loan amount with interests etc., the defendants have executed various loan documents, which strength the case of the applicant bank.
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OA 173 of 2022[JI
DRT,PATNA
The applicant bank has also furnished statement of account as above, which is not only admissible but shall be taken as correct statement of account, more so since the entries in the statement of account has not been challenged.
10Since, the case was proceeded ex-parte against defendants, all contentions raised and documents produced by plaintiff remained unrebutted and the tribunal may act upon the affidavit of the applicant as per law. Defendants have neither denied the utilization of funds advanced by applicant bank nor have pointed out any specific error and discrepancy in the Statement of Account, which is kept in due course of business, evidence on affidavit, which has supported the claim of the applicant bank, established to have fully correct and believable. Provisions contained in Rule 9(2) of Debt Recovery Tribunal (Procedure) Rules, 1993 provide that the documents referred in the application shall be duly stated by senior officer of the bank, or financial institution as the case may be and numbered accordingly. The rule 12 (10) provides that the provisions contained in section 4 of the Banker's Books evidence that Act, 1891 (18 of 1891) shall applied to certified copy of an entry in a Banker's Books furnished alongwith application filed under sub section 1 of section 19 by the applicant.
11On consideration of the arguments and on perusal of the application, documents and affidavit, it is proved that the applicant bank has granted the loan facility, documents were executed by the defendants and facility was availed by the defendants as stated in the application.
12The applicant bank has sought for recovery of a sum of Rs.56,15,847.56 with cost and further interest at the contractual rate from 1.2.2022till realization.
13Learned Advocate appearing for applicant bank submits that the applicant bank has charged interest in terms of the agreements and that interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.
14On consideration of the arguments and on perusal of the pleadings, documents and affidavit, it is proved that the applicant has charged interest against defendants in terms of documents and as per directives of RBI.
15None of the defendants appeared before the tribunal to contest the claim made by the applicant, therefore, it necessarily goes to establish that the claim made by the applicant bank is genuine and true. It is manifest that the defendants have not disputed the claim, therefore, the claim referred to the tribunal is recoverable till full and final realization of the claim.
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OA 173 of 2022 [J]
DRT,PATNA
16In Indian Bank Vs. Blue Jaggers Estates Limited and others [2010] 8 SCC 129,the Hori'ble Supreme Court of India has observed as under-
"The Court cannot lose sight of the fact that the bank is a trustee of public fund. It cannot compromise the public interest for benefiting private individuals. Those who take loan and avail financial facilities from the bank are duty bound to repay the amount strictly in accordance with the terms of the contract. Any lapse in such matters has to be viewed seriously and the bank is not only entitled but duty bound to recover the amount by adopting all legally permissible methods. Parliament enacted the act because it was found that legal mechanism available till then was wholly insufficient for recovery of the outstanding dues of the banks and Financial Institutions."
17In my view, Facts of the case stand proved by evidence of the applicant bank ex-parte. Accordingly, The applicant bank is entitled to recover from defendants jointly and severally of Rs.56,15,847.56 alongwith pendente-lite and future interest @14.25% p.a. with compounded monthly rests from 23.2.2022 (The date of filing of this O.A.) till realization. So the final order may be passed accordingly, to meet the ends ofjustice.
ORDER
In the result, the application of the applicant bank is, allowed exparte and debt is determined with costs against the defendants. The defendants are hereby jointly and severally, ordered to pay the applicant bank it's debts amounting to Rs.56,15,847.56 alongwith pendente-lite and future interest @14.25% p.a. with compounded monthly rests from 23.2.2022 (The date of filing of this O.A.) till realization of the entire sum due and recoverable with costs.
It is made clear that any amount deposited by the defendants, be deducted in the claim amount, if not deducted.
Defendants are debarred from transferring, alienating encumbering or otherwise dealing with or disposing of the mortgaged or hypothecated or any other properties and assets without paying the aforesaid adjudicated dues to the applicant bank to secure the ends of justice. The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to the final order under the recovery proceedings in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993. The applicant may submit the certified copy of this Judgment and the Recovery Certificate before the Registrar/ Sub- registrar to endorse the charge over the secured assets.
Let a certificate of recovery be drawn up forthwith and put up for signatures in terms of provisions contained in Section 19(22)of the Act to be issued, on the basis of the order of the Tribunal to the Recovery
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OA 173 of 2022 (J]
DRT,PATNA
Officer. The Recovery Officer shall realize the amount as per the certificate in the manner and mode prescribed under the Act from the defendants, by sale of mortgaged/ hypothecated assets as well as other personal movable/immovable assets of the defendants.
Parties are directed to appear before the Recovery Officer, DRT, Patna on 01.09.2023. The order be communicated accordingly.
Judgment signed, sealed, dated and pronounced in the open court on this 01 st Day of July, 2023.
Dictated & corrected by me.
{~~7 [Kaushalendra Yadav] Presiding Officer Debts Recovery Tribunal, Patna
[See Regulation 24( 1)1
.- DEBTS RECOVERY TRIBUNAL PATNA 2nd Floor, (A. B & F Wing) Karpuri Thakur Sadan, Kendriya Karamchari Parisar (GPOA), Ashiana Digha Road, Patna-ll00025.
RECOVERY CERTIFICATE UNDER SECTION 19m READ WITH SECTION 19(1l) Of THE RECOVERY Of DEBTS & BANKRUPTCV ACT, 199:, AS AMENDED mOM TIME TO TIME.
RC No. 40112023
IN Case No: OA/173/2022
In the Matter of: (CH- I) PUNJAB NATIONAL BANK ITMAH BRANCH ROHTAS ,BIHAR -821310
Applicant(s)
------ Versus ---.---
To,
(CD- I) MIS BABA MINI RICE MILL AND OTHERS rheough its Proprietor namely, Gauri Shankar Ojha, Sio Sri Baliram I Ojha, situated at Village + P.O. Itmah, P.S. Nasariganj Distcict Rohtas ( BIHAR) Rohtas ,BIHAR -821305
(CD- 2) GAURI SHANKAR OJHA (PROPRIETORI MORTGAGOR) S/O- SRI BALlRAM OJHA RESIDENT OF WARD NO. 13, NAGAR ASHRAM, PAll ROAD, P.O.+ P.S.- DEHRI, DISTRICT- ROHTAS- (BIHAR) -lS2130S
De fendant( s)
(CD- 3) SHIV SHANKAR JHA (GUARANTOR) S/O- SRI BALRAM OJHA, RESIDENT OF WARD NO. 13, NAGAR ASHRAM, PALl ROAD, P.O.+P.S.- DEHR1, DlSTRICT- ROHTAS (BIHAR) 8~ 130S
~y. Certificate for Rs 5615847.56 L..B.up..ttLf]fiy' Six Lakhs fifteen Thousands Eight Uundred forty Seven And Paise fifty..£i!.Qn!y_ J
In terms of final order dated Oll07/2023 passed by this Tribunal in the above mentioned case, it is ordered that the Applicant Certificate Holder Bank is entitled to recover a sum of Rs. 5615847.56 along with cost, expenses and interest from the 23/02/2022 i.e, date of tiling 1 with effective date of the OA/173/2022 and future interest from order date till the date uf realisation in full, jointly or severally from the Certificate Debtors, hereinafter referred to as:-
CD Name EffectiveDate OrderDate 'IAmount(Rs.) i LiabilityType
'j
1/07/2023 'iS615R47.56
,i
1/07/2023 '15615847.
In case of failure to pay the aforementioned adjudicated amount within 30 days, same shall be recovered from the sale of the mortgagedihypothecated assets as well as other personal movablel Immovable assets of the certificate debtors.
The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to thefinal order under the recovery proceeding in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993
Parties are directed to appear before ASHISH KUMAR, Recovery Officer, DEBTS RECOVERY TRIBUNAL PATNA on 01/07/2023. The Recovery Officer shall realize the amount as per this Certificate in the manner and mode prescribed under Sections 25 to 28 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (as amended from time to time) from the above named Certificate Debtors.
This Certificate has been issued under my signature and seal of the Tribunal on this 0 I 107/2023
PRES~nR DEBTS RECOVERY TRIBUNAL PATNA
FORM NO. 10
--.
[See Regulation 24(2)]
DEBTS RI~COVERY TRIBUNAL I)ATNA
2nd Floor, (A. B & F Wing) Karpuri Thakur Sadan, Kendriya Karamchari Parisar (GPOA),
Ashiana Digha Road, Patna-800025.
SCHEDULE TO RECOVERY CERTIFICATE MEMO OF COSTS
RC No. 40112023
IN
Case No: OAl173/2022
Applicant(s): PUNJAB NATIONAL BANK
Versus
Defendant(s): MIS BABAMINI RICE MILL AND OTHERS
| Rs. | |
|---|---|
| e on the application "'"""""""'."._ •••••••••• . ..••._'." ••••,.,.'" '''' •••"··,,••· ,_,., ' .. m.__ '''' ''''''."'.~ "''''' , ,'0, " ' •••••••. "_.~ |
. |
| ess Fees(Inc. Publication) A· ~.,· ••".v·.·.. _ •••·· •••_ •.',.~,·~~~,y.y..' _ """'A· _··' |
|
| . ioner/Receiver/Valuation/Security Fee |
|
| 59000 |
Place: PATNA
Date: 01107/2023
PRESIDIN~CER DEBTS RECOVERY TRIBUNAL PATNA
Note: Strike out whichever is not applicable
3 issues framed by the court
Whether the application filed by the bank to recover dues of Rs.56,15,847.59 along with interest is maintainable within the limitation period.
Whether the defendants are entitled to any relief or exemption from recovering the dues given their failure to appear.
Whether the recovery certificate should be issued against the defendants for the adjudicated debt.
Colour shows how this judgement treated each authority
Indian Bank Vs. Blue Jaggers Estates LimitedReferred¶66
Indian Bank Vs. Blue Jaggers Estates Limited and others [2010] 8 SCC 129 · Who else cites this
2 provisions across 1 enactments
Punjab National Bank, Itmah Branch, District-Rohtas
Baba Mini Rice Mill, At Village + P.O.-Itmah, P.S.Nasariganj
Gauri Shankar Ojha
Shiv Shankar Jha
Shri Kaushalendra Yadav
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
