Allowed

Icici Bank Limited v. M/S Sunny Fashion

DRT22 Sept 2023OA/1839/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an ex parte application by ICICI Bank seeking recovery of an overdraft amount. The Tribunal ordered payment of the principal excluding claimed penalty interest, granting 5% simple interest instead, and clarified that the guarantor's legal heir is liable only to the extent of the inherited estate.

What did the court decide?

Issue of Recovery Certificate; Defendants to pay Rs.25,95,879.10 with 5% simple interest from filing date to realization.

Icici Bank Limited versus M/S Sunny Fashion — Banking and Recovery | DRT (2023)

¶1

DEBTS RECOVERY TRIBUNAL-2, CHANDIGARH, PRESIDED OVER BY M.M. DHONCHAK

¶2

ORIGINAL APPLICATION NO.1839/2022

¶3

DATE OF INSTITUTION: 04.10.2022

¶4

DATE OF DECISION: 22^nd DAY OF SEPTEMBER, 2023

¶5

ICICI Bank Limited, a body corporate, incorporated under the Companies Act, 1956 and Bank within the meaning of the Banking Regulation Act, 1949 and having its registered office at Near Chakli Circle, Old Padra Road, Vadodara- 390007, and its corporate office at ICICI Bank Towers, Bandra Kurla Complex, Mumbai-400051 and having Branches all over India and one of its Branches situated at Plot No.143-A, Industrial Area, Phase-I, Chandigarh-160002, through its Authorised signatory, Sh. Vikas Kaundal

¶6

…..Applicant Bank

¶7

Versus

¶8

M/s Sunny Fashion, through its Proprietor, Shop No.8, Guru Nanak Complex, Cloth Market, Ambala City, Haryana-134003 (PAN No. BPUPK4081F)

¶9

Sh. Mukesh Kumar s/o late Sh. Satish Kumar, Proprietor M/s Sunny Fashion r/o House No.1971, Near Badi Sabji Mandi, Ambala City, Haryana- 134003

¶10

2^nd Address :-

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Shop No.8, Guru Nanak Complex, Cloth Market, Ambala City, Haryana- 134003

¶12

Smt. Shashi Bala w/o late Sh. Satish Kumar (since deceased) through her legal heir:

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OA/1839/2022 ICICI BANK Vs M/S SUNNY FASHION AND OTHERS 2

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i. Sh. Mukesh Kumar s/o late Sh. Satish Kumar r/o House No.1971, Near Badi Sabji Mandi, Ambala City, Haryana134003

¶15

2^nd Address :

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Shop No.8, Guru Nanak Complex, Cloth Market, Ambala City, Haryana-134003

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(Respondent No.3 (i) is Proprietor of defendant No.1, Guarantor as well as legal heir of late Smt. Shashi Bala)

¶18

…..Defendants

¶19

Argued by: Sh. Parveen Kumar, Manager for the applicant bank Defendants ex parte vide order dated 20.05.2023

¶20

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.25,95,879.10/- (Rupees Twenty Five Lac Ninety Five Thousand Eight Hundred Seventy Nine and Ten Paisa Only) . It has been filed through Sh. Vikas Kaundal, Authorised Signatory of the applicant bank stated to be competent to institute the Original Application vide Power of Attorney dated 09.03.2021, Annexure-A1 (copy).

¶22

The brief facts of the case of the applicant as per the Original Application are that defendant No.1 through defendant No.2 had approached the applicant bank for grant of overdraft facility of Rs. 25 lacs .

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OA/1839/2022 ICICI BANK Vs M/S SUNNY FASHION AND OTHERS 3

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The applicant bank sanctioned aforesaid facility to the defendants vide final credit application form dated 08.04.2019, Annexure-A3 (copy) as per terms and conditions which were duly accepted by the defendants.

¶25

In order to secure the aforementioned credit facility, the defendants executed sole proprietor letter dated 08.04.2019, Annexure-A2 (copy) and guarantee deed dated 08.04.2019, Annexure-A4 (copy).

¶26

The aforesaid limit was further secured by creation of equitable mortgage by defendant No.3 in respect of residential property bearing No. 1972/5569-B-2 measuring 156.41 Square Yards situated at Ward No. 2, Abadi Chota Bazar, Dogra Mohalla, Ambala City, Haryana.

¶27

The documents related to mortgage are as under:

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i. Registered sale deed dated 13.07.2018, Annexure-A5 (copy).

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ii. Declaration dated 08.04.2019 in respect of immovable and movable properties, Annexure-A6 (copy).

¶30

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 leading to the loan account becoming irregular and it being classified as NPA on 28.02.2022. The applicant bank recalled entire outstanding amount vide demand notice dated 31.05.2022 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Annexure-A7 (copy), but to no avail.

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OA/1839/2022 ICICI BANK Vs M/S SUNNY FASHION AND OTHERS 4

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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.25,95,879.10/- (Rupees Twenty Five Lac Ninety Five Thousand Eight Hundred Seventy Nine and Ten Paisa Only), is recoverable against the defendants as per statement of account, certified under Bankers’ Books Evidence Act, 1891, Annexure-A8 (copy).

¶33

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

¶34

Notices of the Original Application was duly served upon the defendants, but since none appeared on behalf of the defendants, thus, the defendants were proceeded against ex-parte vide order dated 20.05.2023 .

¶35

In support of contents of the OA, affidavit of evidence Sh. Vikas Kaundal, Authorised Signatory of the applicant bank was filed.

¶36

This Tribunal has heard ex-parte arguments advanced by Sh. Parveen Kumar, Manager for the applicant bank and gone through the record carefully.

¶37

It was argued by Sh. Parveen Kumar, Manager 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-A1 to A8 , it is clear that the defendants had approached the applicant bank for availing of the loan facility which was granted to them. It is further clear that the defendants had

¶38

OA/1839/2022 ICICI BANK Vs M/S SUNNY FASHION AND OTHERS 5

¶39

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. Smt. Shashi Bala had died, leaving behind defendant No. 3(i) as her legal heir who has been impleaded as defendant statedly being beneficiary of the property and estate of the deceased. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.25,95,879.10/-

¶40

(Rupees Twenty Five Lac Ninety Five Thousand Eight Hundred Seventy Nine and Ten Paisa Only) from the defendants.

¶41

In so far as pendente lite and future interest is concerned, the applicant bank in relief clause claimed @16% per annum rate of interest. In final credit application form dated 08.04.2019, Annexure-A3 (copy), rate of interest has been mentioned @10% per annum.

¶42

This Tribunal is of the considered opinion that sometimes in appropriate cases the prerogatives of mercy and magnanimity are the 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 and prevalent market rates of interest which have gone drastically downhill in yesteryears and death of the guarantor and defendant No. 3 being a female, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @5% per annum from the date of filing of the OA till

¶43

OA/1839/2022 ICICI BANK Vs M/S SUNNY FASHION AND OTHERS 6 realisation of the amount ordered vide this order. It is ordered accordingly.

¶44

In the result, the Original Application is allowed with costs holding that the defendant is liable to pay to the applicant bank a sum of Rs.25,95,879.10/- (Rupees Twenty Five Lac Ninety Five Thousand Eight Hundred Seventy Nine and Ten Paisa Only) with current and future simple interest @5% per annum w.e.f. 04.10.2022 , till the date of realisation of the amount. The liability of the 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, the applicant bank shall be at liberty to recover the same by attachment and sale of personal assets of the defendants. The applicant bank is at liberty to enforce the claim through due process of law. However, it is clarified that there should not be any ambiguity that the liability of the defendant by virtue of his being the legal heir of the deceased guarantor shall remain confined only to estate of the deceased guarantor if it is inherited by him and not beyond that or otherwise. The recovery proceedings shall proceed only after the Recovery Officer is fully satisfied on the aspect of the estate being inherited by the Legal Representative/Heir and the liability being incurred accordingly .

¶45

OA/1839/2022 ICICI BANK Vs M/S SUNNY FASHION AND OTHERS 7

¶46

Issue Recovery Certificate accordingly.

¶47

Parties to appear before Recovery Officer concerned on 24.10.2023 .

¶48

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.

¶49

Pronounced in the open Tribunal (M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh

Icici Bank Limited v. M/S Sunny Fashion

Case brief

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Icici Bank Limited v. M/S Sunny Fashion

Case brief

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