Allowed

State Bank of India v. Sh. Kuljinder Singh

DRT20 Sept 2023OA/1875/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the bank's application for recovery of an agricultural loan. The court reduced the claimed interest rate from 10.75% to 8% per annum considering the pandemic and economic conditions, and ordered enforcement against mortgaged or personal assets.

What did the court decide?

Recovery Certificate issued for Rs.32,59,536/- plus simple interest at 8% p.a. from 06.10.2022; order to appear before Recovery Officer on 16.10.2023.

State Bank of India versus Sh. Kuljinder Singh — 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. 1875/2022

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DATE OF INSTITUTION: 06.10.2022

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DATE OF DECISION: 20^th DAY OF SEPTEMBER, 2023

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State Bank of India, a body corporate constituted under the provision of the State bank of India Act, 1955, having its corporate office at Madame Cama Road, Nariman Point, Mumbai and one of its local Head Offices at Sector 17-A, Chandigarh, having Branches all over India and one of its Branches at Ranwar, Tehsil and District Karnal, through its Branch Manager and Principal Officer, Sh. Dharuva Chand Kumar

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…..Applicant Bank

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Versus

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Sh. Kuljinder Singh s/o Sh. Lakhwinder Singh r/o House No. 1815, Urban Estate, Sector-9, Karnal

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Second Address:

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Village and Post Office Darar Tehsil and District Karnal (Haryana)

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....Defendant

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Argued by: Sh. Divjot Singh Rekhi, Nodal Officer for the applicant bank Defendant ex parte vide order dated 20.05.2023

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FINAL ORDER

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Present Original Application was instituted by the applicant

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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 defendant for recovery of Rs.32,59,536/- (Rupees Thirty Two Lac Fifty Nine Thousand

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and Five Hundred Thirty Six Only) . It has been filed through Sh.

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OA/1875/2022 STATE BANK OF INDIA VS KULJINDER SINGH 2

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Dharuva Chand Kumar, Branch Manager of the applicant bank stated to be competent to institute the Original Application.

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The brief facts of the case of the applicant as per Original Application are that the defendant had approached the applicant bank for grant of Cash Credit Limit of Rs. 19,50,000/- vide loan application dated 10.09.2015, Annexure-A1 (copy).

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The applicant bank sanctioned aforesaid facility to the defendant vide sanction letter dated 07.10.2015, Annexure-A2 (copy), as per terms and conditions which were duly accepted by the defendant.

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In order to secure the aforementioned credit facility, the defendant executed hypothecation agreement dated 07.10.2015, Annexure-A3 (copy) and letter of undertaking dated 07.10.2015 regarding terms and conditions, Annexure-A4 (copy).

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The aforesaid limit was further secured by creation of equitable mortgage by defendant in respect of agricultural land measuring 24 Kanals 18 Marlas situated in the revenue estate of Darar, Tehsil and District Karnal, Haryana.

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The documents related to mortgage are as under:

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i. Registered mortgage deed dated 05.10.2015, Annexure-A5 (copy).

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ii. Copy of ‘Jamabandi’ for the years 2012-2013, Annexure-A6 (copy).

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It is further the case of the applicant bank that the loan facility was duly availed of by the defendant but he failed to maintain the financial discipline of the applicant bank leading to the loan

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OA/1875/2022 STATE BANK OF INDIA VS KULJINDER SINGH 3

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account becoming irregular and it being classified as NPA on 24.09.2020. The defendant executed revival letters dated 11.05.2018 and 15.05.2020, Annexures-A7 and A8 (copy). The applicant bank recalled entire outstanding amount vide demand notice dated 09.07.2022 along with postal receipt, Annexure-A9 (colly) (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.32,59,536/- (Rupees Thirty Two Lac Fifty Nine Thousand and Five Hundred Thirty Six Only), is recoverable against the defendant as per statement of account duly certified under Bankers’ Books Evidence Act, 1891, Annexure-A10 (copy).

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

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

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In support of contents of the OA, affidavit of evidence of Sh. Dhurva Chand Kumar, Branch Manager of the applicant bank was filed.

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This Tribunal has heard ex-parte arguments advanced by Sh. Divjot Singh Rekhi, Nodal Officer of the applicant bank and gone through the record carefully.

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OA/1875/2022 STATE BANK OF INDIA VS KULJINDER SINGH 4

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It was argued by Sh. Divjot Singh Rekhi, Nodal Officer for the applicant bank that in view of unrebutted documentary evidence brought on record, the applicant bank had proved its case against the defendant for recovery of the amount sought. From perusal of Annexures-A1 to A10 , it is clear that the defendant had approached the applicant bank for availing of the loan facility which was granted to him. It is further clear that the defendant had executed all the relevant documents as stated above in favour of the applicant bank. Unfortunately, the defendant 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.32,59,536/(Rupees Thirty Two Lac Fifty Nine Thousand and Five Hundred Thirty Six Only) from the defendant.

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In so far as pendente lite and future interest is concerned, the applicant bank has claimed rate of interest @10.75% per annum. In sanction letter dated 07.10.2015, Annexure-A2 (copy), the rate of interest has been mentioned @11.45% 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 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. agricultural, present conditions of economy based on agriculture, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yesteryears, while

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OA/1875/2022 STATE BANK OF INDIA VS KULJINDER SINGH 5

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exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @8% per annum from the date of filing of the OA till realisation of the amount ordered vide this order. It is ordered accordingly.

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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.32,59,536/- (Rupees Thirty Two Lac Fifty Nine Thousand and Five Hundred Thirty Six Only) with current and future simple interest @8% per annum w.e.f. 06.10.2022 , till the date of realisation of the amount. Accordingly, the applicant bank shall be at liberty to recover aforesaid amount from the sale of mortgaged/hypothecated property of the defendant 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 defendant. However, the applicant bank is at liberty to enforce the claim through due process of law.

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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 16.10.2023.

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Copy of this order be sent to the applicant bank and the defendant through registered/speed post. This order be also uploaded on the official website of this Tribunal.

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

State Bank of India v. Sh. Kuljinder Singh

Case brief

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State Bank of India v. Sh. Kuljinder Singh

Case brief

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