Allowed

Punjab National Bank v. M/s Maa Saraswati Mini Modern Rice Mill and Ors.

DRT10 Apr 2023OA/182/2022

Case brief

AI extract

What is this about?

In a debt recovery proceedings, the Debts Recovery Tribunal, Patna, allowed the Punjab National Bank's application under Section 19 of the RDB Act. The defendants failed to appear or file counter-claims. The Tribunal verified loan documents and account statements, rejected lack of denial by defendants as admission, and directed issuance of a recovery certificate for the outstanding amount.

What did the court decide?

Issuance of recovery certificate for Rs.24,32,480 along with pendente lite and future interest at 13.05% p.a., attached hypothecated assets, and debarred defendants from transferring them without paym

Punjab National Bank versus M/s Maa Saraswati Mini Modern Rice… — Banking and Recovery | DRT (2023)

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OA 182 of 2022 [J]

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DRT,PATNA

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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.: 182of 2022

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

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. Applicant -Bank

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Vs.

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Mis Maa Saraswati Mini Modern Rice Mill a Partnership firm having its Office at Berkup, P.O.-Darihat, P.S.-Darihat, Rohtas.

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Ajay Singh Sio Ramji Singh, H.No. 146,Village Subhash Nagar, P.O.-Dehri, Rohtas.

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Dhananjay Singh Sio Ram Bachan Singh, 499, New Sindhauli, Narayan Tola, P.S.-Dehri, P.O.-Dalmianagar, Rohtas.

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...Defendants.

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Present:

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For the Applicant : Shri Manish Kishore, Advocate For the Defendants Shri Brajesh Kr. Jha, Advocate

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Dated: 10.4.2023

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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.24,32,4801- upto 31.1.2022 alongwith pendentelite 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 is a body corporate constituted under provisions of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 having its Head Office at 7 Bhikhaji Cama Place,New Delhi and Branch Office at Dehri Station Road, P.O.-Dalmiyanagar, DistrictRohtas, Pin-82130S..

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The defendant no. 1 is a partnership firm and defendant no. 2 & 3 are partners who carry on the business jointly. The defendant no. 1 required financial assistance by way of working capital for running and transacting the business of partnerhip firm of trading and processing of paddy. Thus the defendant no. 2 & 3 being Partners of defendant no. 1

\Y\o'"

OA 1820(2022 [JI

DRT, PATNA

approached the bank for running limit of Rs.20 lakh for running and transacting the business of trading and processing of paddy to arwa rice in the name of defendant no. 1 by submitting loan application dated 28.7.2010. Proposal of the defendants was duly considered and after appraisal it was found that defendant no. 1 was eligible for credit limit of Rs.20 lakh as working capital, which was duly sanctioned on 28.7.2010 by the bank. The defendants executed the various loan documents i.e. DP note, letter of continuity, letter of lien, consent letter, hypothecation of debts, hypothecation of goods. The rate of interest as agreed by the defendants in respect of housing loan payable to the bank is 13.05% p.a. compounded monthly and in case of liability becoming overdue additional interest shall also be payable as penal interest to the bank.

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The bank made persistent efforts by approaching defendants in order to get the overdue amount deposited but all such efforts did not yield any result. Hence the applicant bank regularly made demands by serving demand notices on various dated to the defendants calling him to regularize the account failing which bank would be free to exercise its right in terms of agreement for recovery of due amount of loan. As the defendants failed to regularize the account hence the loan account became irregular and classified as NPA on 30.11.2019.

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As per the statement of loan account total outstanding due amount of loan is Rs.24,32,480/- as on 31.1.2022 and further unapplied interest from 1.2.2022 is also due and the defendant is liable to pay the same to the bank.

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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 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.

DRT,PATNA

OA 182 of 2022 IJ]

In response of defendants has appeared and filed vakalatnama. but statuary period for filing the written statement has already been expired.

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Ld. Counsel for the defendants argues the case without filing of written statement and has not denied the sanction of loan amount, its utilization and further to secure the loan, execution of relevant documents.

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Arguments of ld. Counsels of the applicant bank and ld. Counsel of defendants were heard and record perused and considered.

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5- To prove its case, the applicant Bank has referred various 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 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	28.7.2010	Rs.20 lakh	defendants	1
2	sanction letter	28.7.2010	Rs.20 lakh	bank	2
3	DP note	10.8.2010	Rs.20 lakh	defendants	3
4	Letter of continuity	10.8.2010	Rs.20 lakh	defendants	4
5	letter of lien	10.8.2010	...	defendants	5
6	consent to recover under PRD act	10.8.2010	...	defendants	6
7	hypothecation of debts and moveable assets	10.8.2010	Rs.20 lakh	defendants	7
8	Hypothecation of goods	10.8.2010	Rs.20 lakh	defendants	8
9	agreement,	10.8.2010	Rs.20 lakh	defendants	9
10	consent	...	...	defendants	10
11	sanction letter	16.12.2011	.....	bank	11
12	Balance confirmation letter	1.10.2013	...	bank and defendants	12
13	account renewal sanction	30.12.2015 18.3.2018 31.3.2019	Rs.20 lakh	bank	13 to 15
14	demand letter	17.10.2019	...	bank	15
15	Recall notice	30.12.2019	Rs.20 lakh	bank	16
16	Account renewal sanction	27.3.2020	Rs.20 lakh	bank	17
17	demand letter	6.8.2020	...	bank	18

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DRT,	PATNA				OA 182of	2022(JI
18	recall notice		16.4.2021	...	bank	19
19	Statement	of	as on	Rs.24,32,4801-	bank
	account		31.1.2022

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DRT,PATNA

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6- It is submitted by ld. Counsel of applicant bank that the defendants have admitted the loan facilities, granted to them and there is no any specific denial of execution of loan documents by the defendants. It is further submitted that there is no any stay granted by the Hon'ble Higher Court in the matter.

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It is further submitted that the applicant bank has filed the Original Application, for recovery of due amount, after deducting all the amounts, deposited by the defendants and by calculating the interest charged, as agreed by the defendant. It is further submitted that the defendants have not deposited any amount, after filing of the OA.

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It is requested that the recovery certificate may be issued for the claim amount, as made in OA, as there is no any specific denial by the defendants.

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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 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 pecuniary 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 account was declared as NPA on 30.11.2019, 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 Sri Ujjwal Prakash, Deputy Circle Sastra Head of 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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10On perusal of the above documents, it is clear that the applicant bank has granted loan facility to the defendants and to secure the loan, various loan documents were executed by the defendants and loan facility was availed by the defendants as stated in the application.

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11The documents as stated above reveal that the defendants have applied for loan and bank had sanctioned loans, thereafter, to secure the loan and for repayment of loan amount with interests etc., the defendants

DRT,PATNA

OA 182 of 2022 [JI

have executed various loan documents, which strength the case of the applicant bank.

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12The applicant bank has also furnished statement of account as shown 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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13Defendants 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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14On consideration of the arguments and on perusal of the application, documents, affidavit, it is proved that the applicant bank has granted the loan facilities to the defendants and to secure the loan, various loan documents were executed by the defendants and facilities were availed by the defendants as stated in the application.

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15-The Section 58 of the Indian Evidence Act, 1872reads as under-

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"58. Facts admitted need not be proved.- No fact need to be proved in any proceeding which the parties thereto or their agents agree to admit at the hearing, or which, before the hearing, they agree to admit by any writing under their hands, or which by any rule of pleading in force at the time they are deemed to have admitted by their pleadings: Provided that the Court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions.

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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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17Facts of the case, in my view, are well proved by evidence of the applicant bank as well as admission of defendants. The applicant bank is

DRT,PATNA

OA 182of20221JI

entitled to receive from defendantsjointly and severally of Rs.24,32,480/together with pendentelite and future interest @13.05% p.a. 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 and debt is determined with costs against the defendants and it is, hereby jointly and severally, ordered that the applicant bank is entitled to receive from sole defendants, it's debts with interest, amounting to Rs.24,32,480/- together with pendentelite and future interest @13.05% p.a. 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 further 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 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.

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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 realise 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 23.5.2023. The order be communicated accordingly.

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Judgment signed, sealed, dated and pronounced in the open court ~ on this loth Day of April, 2023.

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Dictated & Corrected by me

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"v7 \ fJ\.J.

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[Kaushalendra Yadav] Presiding Officer Debts Recovery Tribunal, Patna

Punjab National Bank v. M/s Maa Saraswati Mini Modern Rice Mill and Ors.

Case brief

What is this about?

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Punjab National Bank v. M/s Maa Saraswati Mini Modern Rice Mill and Ors.

Case brief

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