Allowed

Union Bank of India v. M/s Shri Waheguru Industries

DRT5 Dec 2023OA/1904/2022

Case brief

AI extract

What is this about?

In this debt recovery matter, the DRT allowed the bank's application seeking recovery of Rs.21.72 lakhs. The court held the defendants jointly and severally liable for the principal amount plus costs and interest at 10% per annum.

What did the court decide?

Recovery of Rs.21,72,271.27 jointly and severally with costs and simple interest @10% p.a.; Issue of Recovery Certificate; Sale of hypothecated/personal assets if dues remain unsatisfied.

Union Bank of India versus M/s Shri Waheguru Industries — Banking and Recovery | DRT (2023)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1904/2022 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 14.11.2022

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DATE OF DECISION: 05.12.2023

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Union Bank of India, (erstwhile Andhra Bank) a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Central Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai, Maharashtra-400021 and inter alia one of its Branch Office at SCO-2, Sector-32 A, Urban Estate, Ludhiana-141010 (Punjab), through its attorney and Branch Manager, Sh. Nikhil Jain

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……..Applicant

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Versus

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M/s Shri Waheguru Industries, House No.6899, Street No.12, New Janta Nagar, Near Kali Mata Mandir, Ludhiana, Punjab-141003

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Sh. Sachin Kumar S/o Sh. Tirath Ram Prop. M/s Shri Waheguru Industries, House No.6899, Street No.12, New Janta Nagar, Near Kali Mata Mandir, Ludhiana, Punjab-141003

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….……Defendants

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Advocates:

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Argued by Sh. Chandra Kumar Jha, counsel for the applicant Defendants are ex-parte

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FINAL ORDER

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Present Original Application was instituted by the applicant bank under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.21,72,271.27p (Rupees Twenty One Lacs Seventy Two Thousand Two Hundred Seventy One and Paisa Twenty Seven only). The Original Application has been filed through Sh. Nikhil Jain, Branch Manager o f the applicant bank, who is competent to institute the Original

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Application vide Power of Attorney dated 31.07.2013, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant No.1 through defendant No.2 had approached the applicant bank for the grant of Open Cash Credit Limit of Rs.19.00 Lacs under CGTMSE scheme and further for its several renewals. 3. The applicant Bank sanctioned the Open Cash Credit Limit of Rs.19.00 Lacs under CGTMSE scheme and also renewed it several times vide Sanction Letters dated 02.06.2017, 30.08.2018, 13.09.2019 and 15.12.2020, which are Annexures A2, A8, A15 and A20 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendants had hypothecated their movable properties i.e. all kinds of Stocks and Book debts vide Composite Agreements dated 03.06.2017, 30.08.2018 and 13.09.2019, which are Annexures A3, A9 and A16 to this OA. Documents executed:- Supplement to the Composite Agreement, R.F. 211, Letter of Consent and Consent for Disclosure all dated 03.06.2017, which are Annexures A4 to A7 to this OA; Composite Agreement, Supplement to Composite Agreement, R.F. 211, Letter of Consent, Consent for Disclosure and Undertaking all dated 30.08.2018, which are Annexures A9 to A14 to this OA; Composite Agreement, R.F. 211, Consent for Disclosure and Undertaking dated 13.09.2019, which are Annexures A16 to A19 to this OA; Request letter, Interest Agreement and Demand Promissory Note all dated 15.12.2020, which are Annexures A21 to A23 to this OA; Balance Sheets as on dated 31.03.2018 and 31.03.2020, which are Annexures A24 and A26 to this OA; Tax Audit Report alongwith Balance Sheet dated 13.10.2019, which is Annexure A25 to this OA; Letter of Continuity, which is Annexure A27 to this OA; Legal Notice along with postal receipts dated 21.10.2022, which is Annexure A28 to this OA; Composite

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Debit Balance Confirmation dated 15.12.2020, which is Annexure A29 to this OA; Statement of account along with the Certificate, which are Annexures A30 and A31 to this OA.

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The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs.21,72,271.27p, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant bank requested to accept the application and to issue Recovery Certificate accordingly.

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The defendants were served notices to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte on 25.09.2023.

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In support of the OA, affidavit of Sh. Nikhil Jain, Branch Manager, Union Bank of India has been filed.

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Heard ex-parte arguments and perused record. 9. It was argued by learned counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant bank had proved its case. From the perusal of all the Annexures A1 to A31 to this OA, it is proved that the defendants approached applicant bank for availing of the loan facility which was granted to them and for that they had executed all the relevant documents in favour of the bank. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.21,72,271.27p (Rupees Twenty One Lacs Seventy Two Thousand Two Hundred Seventy One and Paisa Twenty Seven only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the accounts.

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In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest @10.45%p.a. plus @2%p.a. additional interest with monthly rests in the loan account from 01.11.2022 till the realization.

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The Tribunal is of the considered opinion that sometimes in appropriate cases the prerogative of mercy is the brightest jewel in the crown of the Judge. Keeping in view the facts and circumstances of the instant case including nature of the mortgaged property, undertaking of the defendants, quantum of loans and prevalent market rates of interest which have gone drastically downhill in yester years, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @10.00%p.a. in the loan account from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly.

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In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.21,72,271.27p (Rupees Twenty One Lacs Seventy Two Thousand Two Hundred Seventy One and Paisa Twenty Seven only) jointly and severally, with costs, current and future simple interest @10.00%p.a. in the loan account from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant bank shall be entitled to recover aforesaid amount from the sale of hypothecated/mortgaged properties of the defendants in execution proceedings if not sold earlier under the provisions of the SARFAESI Act, 2002. If the dues of the bank still remain unsatisfied, it shall be entitled to recover the same by attachment and sale of personal assets of the defendants. The applicant is at liberty to enforce the claim through due process of law. 12. Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 13.12.2023.

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Copy of this order be given dasti to the applicant bank and be sent to defendants through registered/speed post and this order be also uploaded on the official website of this Tribunal and record be consigned.

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Pronounced by me in the open Tribunal. Dated: 05.12.2023

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(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Union Bank of India v. M/s Shri Waheguru Industries

Case brief

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Union Bank of India v. M/s Shri Waheguru Industries

Case brief

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