Allowed

State Bank of India v. Sh. Bharat

DRT20 Sept 2023OA/1880/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the State Bank of India's original application to recover Rs. 27,33,221 from the defendant, finding him liable due to defaulted loan facility and failure to repay. The bank was granted interest at 8% p.a. instead of the contract rate, and a recovery certificate was issued.

What did the court decide?

Recovery of Rs. 27,33,221 with simple interest at 8% per annum from the date of filing; issuance of Recovery Certificate.

State Bank of India versus Sh. Bharat — Contract and Commercial Disputes | DRT (2023)

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

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ORIGINAL APPLICATION NO. 1880/2022

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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. Bharat s/o Sh. Ishwar Singh r/o Village and Post Office Phoosgarh, Block 1, Tehsil and District Karnal

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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 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.27,33,221/- (Rupees Twenty Seven Lac Thirty Three Thousand and Two Hundred Twenty One Only) . It has been filed through Sh. Dharuva Chand Kumar, Branch Manager and

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OA/1880/2022 STATE BANK OF INDIA VS BHARAT 2

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Principal Officer 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. 15,50,000/- vide loan application dated 18.09.2015, Annexure-A1 (copy).

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The applicant bank sanctioned aforesaid facility to the defendant vide sanction letter dated 22.09.2015, 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 22.09.2015, Annexure-A3 (copy).

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The aforesaid limit was further secured by creation of equitable mortgage by defendant in respect of agricultural land measuring 04 Kanals situated in the revenue estate of Phoosgarh, 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 21.09.2015, Annexure-A4 (copy).

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ii. Letter dated 21.09.2015 to the Tehsildar, Karnal, for entry/mutation of mortgage property, Annexure-A5 (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 account becoming irregular and it being classified as NPA on

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OA/1880/2022 STATE BANK OF INDIA VS BHARAT 3

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28.09.2021. The defendant executed revival letters dated 11.05.2018 and 07.05.2021, Annexures-A6 and A7 (copy). The applicant bank recalled entire outstanding amount vide notice dated 09.07.2022 along with postal receipt, Annexure-A8 (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.27,33,221/- (Rupees Twenty Seven Lac Thirty Three Thousand and Two Hundred Twenty One Only), is recoverable against the defendant as per statement of account duly certified under Bankers’ Books Evidence Act, 1891, Annexure-A9 (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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It was argued by Sh. Divjot Singh Rekhi, Nodal Officer for the applicant bank that in view of unrebutted documentary evidence

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OA/1880/2022 STATE BANK OF INDIA VS BHARAT 4

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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 A9 , 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.27,33,221/- (Rupees Twenty Seven Lac Thirty Three Thousand and Two Hundred Twenty One 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 @10.95% per annum. In sanction letter dated 22.09.2015, Annexure-A2 (copy), the rate of interest has been mentioned @11.75% 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 exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @8% per

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OA/1880/2022 STATE BANK OF INDIA VS BHARAT 5

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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.27,33,221/- (Rupees Twenty Seven Lac Thirty Three Thousand and Two Hundred Twenty One 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. Bharat

Case brief

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State Bank of India v. Sh. Bharat

Case brief

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