Allowed

Punjab National Bank (United Bank of India) v. M/s Singh Dairy and Others

DRT8 Feb 2023OA/181/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal, Patna allowed an ex parte application by Punjab National Bank. The court determined that the loan amount of Rs. 25,52,436 along with interest and future interest is recoverable from the defaulting borrowers who failed to appear and contest the claim.

What did the court decide?

Issued a recovery certificate directing the Recovery Officer to realize Rs. 25,52,436/- along with future interest and costs from the defendants.

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

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DRT,PATNA

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OA 181 of 2022 [JI

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Debts Recovery Tribunal, Patna

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Karpuri Thakur Sadan, Aashiana Digha Road at PATNA-800025

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Presiding Officer : Shri Kaushalendra Yadav

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OA Case no. : 181 of 2022

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Punjab National Bank, Branch Office - Dehri, Station Road, P.O.Dalmiyanagar, District-Rohtas, Pin-82130S.

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. Applicant

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Vs.

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MIs Singh Dairy a proprietorship concern through its Proprietor Kush Bahadur Singh, Shanti Nagar, Station Road, Dehri On Sone, Rohtas-8213 07.

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Kush Bahadur Singh aged about 31 years Sio Niwas Singh Resident of H. No. 60, Bhagwan Singh, East of Cold Storage, Ward no. 14, Dalmia Nagar, Dehri,Rohtas-82130S.

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Avinash Kumar Singh aged about 40 years Sio Late Ram Pyare Singh, Rio Purvi Mohan Bigha, P.O.-Dalmiya Nagar, Dehri On Sone,District- Rohtas, Pin-8213 OS.

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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: 08.02.2023

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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 Rs.2S,S2,436/- 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 Head Office at Plot no. 4,Sector-l0, Dwarka, New Delhi-II 007S and Branch Office - Dehri, Station Road, P.O.-Dalmiyanagar, DistrictRohtas, Pin-82130S.

DRT,PATNA

OA 181 of 2022 [J]

Defendant no. 2 with an aim to start new venture of Dairy Unit in the name of defendant no. 1 being proprietorship concern approached for financial assistance. The defendant no. 2 accordingly submitted loan application on 1.2.2019 for credit facilities by way of working capital as well as term loan. The defendant no. 3 offered himself to become guarantor in order to secure the credit facilities by offering his property to mortgage in favour of the bank. After appraisal sanctioned the working capital requirement of Rs.14.25 lakh by way of cash credit limit and Rs.9.50 lakh as term loan to procure plant and machinery under PMEGP scheme with the terms and conditions incorporated therein. The bank communicated regarding sanction of cash credit facility and term loan through the sanction letter dated 8.3.2019 incorporating therein the various terms and conditions. The defendants executed the various loan documents in favour of the bank i.e. Declaration, undertaking, DP note, agreement of term loan, hypothecation agreement, agreement for term loan, letter of continuity, letter of lien, consent clause and guarantee agreement. The defendant no.3 was advised to get the immoveable property mortgaged in favour of the bank. 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 12.15% p.a. compounded monthly and in case of liability becoming overdue additional interest shall also be payable as penal interest to the bank. The said rate of interest being floating rate as per the Directives of the RBI is liable for increase and decrease. The defendant no. 2 by letter dated 13.1.2020 requested the bank for disbursement of Rs.l lakh from balance loan amount and accordingly the said amount was disbursed from the term loan account. The bank received the subsidy amount amounting to Rs.8,75,0001- which has not been adjusted in the loan account because as per guidelines the claim amount has to be kept in fixed deposit and to adjust the same only in eligible accounts. Since the defendants account is not eligible for adjustment towards liability hence the same is still lying in fixed deposit bearing account no. 0567307042883..

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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 9.10.2020.

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Thus the total liability in the loan account is Rs.25,52,4361- with pendentelite and future interest at contractual rate from 1.2.2022 till the realization.

DRT,PATNA

OA 181 of 2022 [J)

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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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 27.5.2022, 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.

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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 22.7.2022 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. 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 Raushan Kumar, Branch Manager 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	1.2.2019	TLRs.9.50 lakh CCRs.14.25 lakh	defendant no. 1&2	1
2	sanction letter	8.3.2019	Rs.23.75Iakh	bank	2
3	Declaration of sole proprietorship	...	...	defendant no.2	3
4	Undertaking	...	...	defendant no.2	4
5	DP note	8.3.2017	Rs.23. 75 lakh	defendant no. 2	5
6	Agreement of term loan	8.3.2019	RS.9.50 lakh	defendant no. 2	6

DRT,PATNA

OA 181 of 2022 [J]

7	Hypothecation agreement	...	....	defendant no.2	7
8	Agreement for term loan and hypothecation	8.3.2019	Rs.23.75Iakh	defendant no.2	8
9	letter of continuity	8.3.2019	Rs.23.75Iakh	defendant no.2	9
10	letter of lien	8.3.2019	...	defendant no. 2	10
11	letter of guarantee	8.3.2019	Rs.23.75Iakh	defendant no.3	11
12	consent	...	...	defendants	12
13	copy of sale deed no. 7696	4.6.2015	...	...	13
14	letter	14.3.2019	..	defendant no. 3	14
15	letters	14.3.2019	...	bank	15
16	Letter	14.3.2019	...	bank	16
17	letter	18.7.2019	...	bank	17
18	request letter	13.1.2020	...	defendant no. 2	18
19	Demand notice	16.4.2021	...	bank	19
20	Statement of account	as on 31.1.2022	Rs.25,52,436/-	bank	20

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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.

DRT,PATNA

OA 181 of 2022 [J]

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 9.10.2020, 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 Raushan Kumar, Branch Manager 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 facility, documents were executed by the defendants and facility was availed by the defendants as stated in the application.

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DRT,PATNA

OA 181 of 2022 [JJ

12The applicant bank has sought for recovery of a sum of Rs.25,52,436/- 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 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 ofRs.25,52,436/- alongwith pendente-lite and future interest @12.15% 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 are hereby jointly and severally, ordered to pay the applicant bank it's debts amounting to Rs.25,52,436/- alongwith pendente-lite and . ,(/

OA 181 of 2022 [JJ

DRT,PATNA

future interest @12.1S% 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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Dictated & corrected by me.

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[Kau alendra Yadav] Presiding Officer Debts Recovery Tribunal, Patna

Punjab National Bank (United Bank of India) v. M/s Singh Dairy and Others

Case brief

What is this about?

What did the court decide?

Punjab National Bank (United Bank of India) v. M/s Singh Dairy and Others

Case brief

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