Allowed

Punjab National Bank (United Bank of India) v. M/s Multi Developer and Others

DRT8 Feb 2023OA/179/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal adjudicated an ex-parte application by Punjab National Bank to recover agricultural overdraft dues. The court verified loan documents, accounts, and interest charges in the absence of respondents, determining the debt amount and order recovery certificate issuance.

What did the court decide?

Direct debit to pay Rs.413,766 plus interest at 11.75% from 23.2.2022, barment on asset disposal, and direction to issue recovery certificate to Recovery Officer.

Punjab National Bank (United Bank of India) versus… — Contract and Commercial Disputes | DRT (2023)

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OA 1790£2022 [J]

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DRT,PATNA

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Debts Recovery Tribunal, Patna

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Karpuri Thakur Sadan, Aashiana DighaRoad at PATNA-800025

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Presiding Officer : Shri Kaushalendra Yadav

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OA Case no. : 179of 2022

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Punjab National Bank, Dehri, Station Road, P.O.-Dalmiyanagar, District-Rohtas, Pin 821305.

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. Applicant

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Vs.

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1. MIs Multi Developer a proprietorship Concern through its proprietor Iftekhar Ahmad JoharBasavan Path, Dehri, P.O.-Dalmianagar, Rohtas,821305.

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Iftekhar Ahmad Johar, Aged about 58 years Sio Md. Haroon Rio Hariharganj, P.O.-Bank, P.S.-Akhodi Gola, Rohtas,-821031.

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Shahida Begum aged about 51 years Wlo Iftekhar Ahmad Johar, Rio Hariharganj, P.O.-Bank, P.S.-Akhodi Gola, Rohtas,-821 031.

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...Defendants.

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Present:

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For the Applicant : Shri Manish Kishore, Advocate For the Defendants : None

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Dated: 08.2.2023

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JUDGMENT

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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 RsAO,13,7661- as on 31.1.2022 alongwith pendente-lite and future interest at the contractual rate from 1.2.2022 with costs till realization.

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2- The application has been duly registered and numbered as above.

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3- The brief facts of the case of the applicant bank as stated in the application are as under-

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The applicant bank body corporate constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970, having its Corporate Office Plot no. 4,Sector-l0,Dwarka New Delhi-l10075 and inter alia a branch Office at Dehri, Station Road, P.O.-Dalmiyanagar, District-Rohtas, Pin 821305.

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The defendant no. 2 in order to expand his business of supply of construction materials in the name of defendant no. 1 as proprietor approached for financial assistance before the applicant bank. The defendant no. 2 accordingly submitted loan application on 1.3.2013 for

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credit facilities by way of working capital. The defendant no. 3 offered herself to become guarantor in order to secure the credit facilities by offering her property to mortgage in favour of the bank. The loan proposal of the defendants was processed and after due appraisal sanctioned the overdraft facility against mortgage as working capital of Rs.32 lakh under united mortgage loan with the terms and conditions incorporated therein. Accordingly the applicant bank communicated regarding sanction of cash credit facility through the sanction letter dated 6.3.2013 incorporating therein the various terms and conditions of such sanction and acknowledged the terms and conditions of sanction in token of which they sworn an affidavit regarding their acceptance. The defendants executed the various loan documents i.e. Declaration, undertaking, DP note, hypothecation agreement request for disbursement of loan, agreement, consent for disclosure, letter of lien and power of attorney and agreement of guarantee. The defendant no. 2 & 3 created mortgage by way of deposit of title deeds standing in their joint names i.e. registered sale deed bearing deed no. 844 dated 29.1.2010 details given at page 22 in schedule-A of ~A.

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The rate of interest as agreed by the defendants in respect of housing loan payable to the bank is 11.75% p.a. compounded monthly and in case of liability becoming overdue additional interest shall also be payable as penal interest to the bank. The rate of interest being floating rate as per the directives of the RBI is liable for increase and / or decrease.

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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 9.2.2020.

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Thus the total liability in the loan account is RsAO,13,766/- with pendentelite and future interest at the contractual rate from 1.2.2022 till the realization.

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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.

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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.

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4- D/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 27.5.2022, and summons/notices

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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.

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On perusal of the case records, it is clear that on 27.5.2022, summons/notices were sent to the defendants, but the defendants have not appeared, hence, the Registry of this Tribunal has ordered to publish the notice in newspaper and subsequently, substituted service by publication of notice by way of advertisement in newspaper was also made against the defendants on 20.7.2022 in "Dainik Bhashkar" newspaper.

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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 29.9.2022.

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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, Deputy Circle Sastra Head at circle Sastra Centre, Aurangabad of the applicant bank. The details of documents are as follows. :-

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SI.No	Description of photocopies Documents	Date of Execution	Amount	Signature of executant	Ex.! Ann. No.
1	Loan application	1.3.2013	Rs.35lakh	defendants	1
2	Sanction letter	6.3.2013	Rs.32lakh	bank	2
3	Affidavit	7.3.2013	...	...	3
4	Declaration	...	...	defendants	4
5	undertaking	7.3.2013	...	defendants	5
6	DP note	7.3.2013	Rs.32lakh	defendant no. 1&2	6
7	Hypothecation agreement	7.3.2013	Rs.321akh	defendant no. 1&2	7
8	request for disbursement of loan	7.3.2013	Rs.32lakh	defendants	8
9	agreement	7.3.2013	Rs.32lakh	defendants	9
10	consents	7.3.2013	...	defendants	10
11	letter of lien	7.3.2013	...	defendants	11
12	power of attorney	7.3.2013	...	defendants	12
13	letter of guarantee	7.3.2013	Rs.32lakh	defendant no. 2&3	13
14	copy of sale deed no. 844	29.1.2010	...	...	14
15	letter relating to deposit of title deed	7.3.2013	...	bank	15

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16	letter	7.3.2013	...	...	16
17	letter of set off	....	....	defendant no. 2 & 3	17
18	letter confirming contents	7.3.2013	...	defendants	18
19	request letter	9.3.2013	...	defendant no. 1 & 2	19
20	DP note	28.12.2017	Rs.321akh	defendant no. 1 & 2	20
21	revival letter	28.12.2017	...	defendant no. 1 & 2	21
22	renewal document	29.3.2018	....	....	22
23	Renewal document	5.3.2019	...	...	23
24	Revival letter	20.3.2020	...	defendant no. 1 & 2	24
25	overdue notice	2.1.2021	...	bank	25
26	recall notice	16.4.2021	...	bank	26
27	statement of account	as on 31.1.2022	Rs.40,13,766/-	bank	27

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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.

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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.

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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.

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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.

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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 9.2.2020, 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.

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9- In the affidavit of Shri Ujjwal Prakash, Deputy Circle SASTRA Head Aurangabad 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.

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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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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.

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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.

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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 facilities, documents were executed by the defendants and facilities were availed by the defendants as stated in the application.

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12The applicant bank has sought for recovery of a sum of RsAO,13,766/- with cost and further interest at the contractual rate from 1.2.2022till realization.

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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

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rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

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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.

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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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16In Indian Bank Vs. Blue Jaggers Estates Limited and others [2010] 8 SCC 129, the Hon'ble Supreme Court of India has observed as under-

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"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."

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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 defendantsjointly and severally ofRsAO,13,766/- alongwith pendente-lite and future interest @ 11.75% 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.

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ORDER

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In the result, the application of the applicant bank is, allowed exparte and debt is determined with costs against the defendants. The defendants is hereby jointly and severally, ordered to pay the applicant bank its debts amounting to RsAO,13,766/- alongwith pendente-lite and future interest @ 11.75% 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.

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It is made clear that any amount deposited by the defendants, be deducted in the claim amount, if not deducted.

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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 ofjustice.

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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 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.

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Parties are directed to appear before the Recovery Officer, DRT, Patna on 28.3.2023. The order be communicated accordingly.

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Judgment signed, sealed, dated and pronounced in the open court on this os" Day of February, 2023.

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7 CJ'\ ~fV'{

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Dictated & corrected by me.

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[Kaushalendra Yadav] Presiding Officer Debts Recovery Tribunal, Patna

Punjab National Bank (United Bank of India) v. M/s Multi Developer and Others

Case brief

What is this about?

What did the court decide?

Punjab National Bank (United Bank of India) v. M/s Multi Developer and Others

Case brief

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What did the court decide?

What the court decided

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