Allowed

Union Bank of India v. M/S Indian Global Sourcing Industries

DRT7 Jun 2023OA/1784/2022

Case brief

AI extract

What is this about?

This single judge order of the Debts Recovery Tribunal allowed the applicant bank's original application for recovery of Rs. 98,48,388.52 along with interest at 9% per annum against the defendants who defaulted on a cash credit facility.

What did the court decide?

Declaration of liability to pay Rs. 98,48,388.52 with simple interest at 9% per annum w.e.f. 25.05.2022 till realization; issuance of Recovery Certificate.

Union Bank of India versus M/S Indian Global Sourcing Industries — 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. 1784/2022

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DATE OF INSTITUTION: 25.05.2022

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

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Union Bank of India, having its Head Office at Union Bank Bhawan, 239, Vidhan Bhawan Marg, Nariman Point, Mumbai-400021 and Branches amongst others being Gurgaon, Main Branch situated at 548/1, Dayanand Colony, New Railway Road, Gurugram-122001, Haryana

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…..Applicant Bank

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Versus

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M/s Indian Global Sourcing Industries, through its Proprietor, Ms Shweta Sharad Srivastava

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Registered Office at: 975-B/27, Lane No.11, Madan Puri, Gurugram-122001, Haryana

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Also at: J-1265 C, Industrial area, Phase V, Bhiwadi, Tehsil Tijara, Alwar, Rajasthan-301019

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Ms. Shweta Sharad Srivastava W/o Sh. Sameer Saxena, Proprietor, M/s Indian Global Sourcing Industries

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Registered Office at: 975-B/27, Lane No.11, Madan Puri, Gurugram-122001, Haryana

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Also at: R/o A-406, Amrapali Green, Near Shipra Mall, Vaibhav Khand, Indrapuram, Shipra Sun City, Ghaziabad-201014, Uttar Pradesh

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WhatsApp No. : 9811600164

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E-mail id: [email protected]

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…..Defendants

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Argued by: Sh. Mukesh Kumar, General Power of Attorney holder for the applicant bank Defendants ex parte vide order dated 07.02.2023

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OA 1784/2022 UNION BANK OF INDIA V/S M/S INDIAN GLOBAL SOURCING INDUSTRIES AND ANOTHER 2

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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 defendants for recovery of Rs.98,48,388.52/- (Rupees Ninety Eight lacs Forty Eight Thousand Three Hundred Eighty Eight and Fifty Two Paisa only) . The OA has been filed through Sh. Hans Raj, Principal Officer of the applicant bank, stated to be competent to institute the Original Application vide Power of Attorney, Annexure-A (copy).

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The brief facts of the case of the applicant as per the Original Application are that defendants had approached the applicant bank for grant of Cash Credit facility of Rs. 90 lacs vide loan application dated 04.05.2018, Annexure-B (copy).

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The applicant bank sanctioned the above said loan facility to the defendants vide sanction letter dated 28.05.2018, Annexure-C (copy) as per terms and conditions which were duly accepted by the defendants.

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In order to secure the aforementioned credit facility, the defendants executed loan and security documents, i.e. demand promissory note dated 28.05.2018, Annexure-D (copy), hypothecation agreement dated 28.05.2018, Annexure-E (copy), confirmation letter dated 28.05.2018 regarding availed credit facility, Annexure-F (copy), interest agreement dated 28.05.2018, Annexure-G (copy), letter dated 28.05.2018 of continuity, Annexure-H (copy), undertaking dated 28.05.2018 regarding not to

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OA 1784/2022 UNION BANK OF INDIA V/S M/S INDIAN GLOBAL SOURCING INDUSTRIES AND ANOTHER 3

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alienate hypothecated goods, Annexure-I (copy), letter dated 28.05.2018 regarding terms and conditions, Annexure-J (copy) and letter of guarantee dated 28.05.2018, Annexure-K (copy).

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It is further the case of the applicant bank that the loan facility was duly availed of by the defendants but they failed to maintain the financial discipline of the applicant bank and resultantly, the loan account became irregular and it was declared as NPA on 28.11.2021. The defendants executed composite balance confirmation letter dated 15.07.2020, Annexure-L (copy). The applicant bank recalled the entire outstanding amount vide notice dated 09.12.2021, AnnexureM (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.98,48,388.52/- (Rupees Ninety Eight lacs Forty Eight Thousand Three Hundred Eighty Eight and Fifty Two Paisa only) is recoverable against the defendants as per statement of account certified under Bankers’ Books Evidence Act, Annexure-N (copy).

¶28

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

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Notices of the Original Application were duly served upon the defendants, but since none appeared on behalf of the defendants despite service, thus, the defendants were proceeded against ex parte vide order dated 07.02.2023 .

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OA 1784/2022 UNION BANK OF INDIA V/S M/S INDIAN GLOBAL SOURCING INDUSTRIES AND ANOTHER 4

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In support of the contents of the OA, affidavit of evidence of Sh. Hans Raj, Chief Manager of the applicant bank was filed.

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This Tribunal has heard ex-parte arguments advanced by Sh. Mukesh Kumar, General Power of Attorney holder of the applicant bank and gone through the record carefully.

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It was argued by Sh. Mukesh Kumar, General Power of Attorney holder 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-A to N, it is clear that the defendants had approached the applicant bank for availing of the loan facility which was granted to them after they 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.98,48,388.52/-

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(Rupees Ninety Eight lacs Forty Eight Thousand Three Hundred Eighty Eight and Fifty Two Paisa only) from the defendants.

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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 @24% per annum with monthly rests plus @2% per annum penal interest. In hypothecation agreement dated 28.05.2018, Annexure-E (copy), the rate of interest has been mentioned @11.25% 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

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OA 1784/2022 UNION BANK OF INDIA V/S M/S INDIAN GLOBAL SOURCING INDUSTRIES AND ANOTHER 5

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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 mortgaged property, purpose of loan, i.e. business, quantum of loan, prevalent market rates of interest which have gone drastically downhill in yesteryears and defendant No.2 being a lady, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @9% 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 defendants are liable to pay to the applicant bank a sum of Rs.98,48,388.52/- (Rupees Ninety Eight lacs Forty Eight Thousand Three Hundred Eighty Eight and Fifty Two Paisa only) with current and future simple interest @9% per annum , w.e.f. 25.05.2022 , till the date of realisation of the amount. The liability of defendants shall be joint as well as several. Accordingly, the applicant bank shall be at liberty to recover aforesaid amount from the sale of mortgaged/hypothecated property of the defendants 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 defendants. The applicant bank is at liberty to enforce the claim through due process of law.

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OA 1784/2022 UNION BANK OF INDIA V/S M/S INDIAN GLOBAL SOURCING INDUSTRIES AND ANOTHER 6

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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 07.08.2023.

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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.

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Announced in the open Tribunal (M.M. Dhonchak) Presiding Officer

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DRT-2, Chandigarh

Union Bank of India v. M/S Indian Global Sourcing Industries

Case brief

What is this about?

What did the court decide?

Union Bank of India v. M/S Indian Global Sourcing Industries

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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