Allowed

State Bank of India v. Dharampal and Others

DRT26 Jun 2023OA/1908/2022

Case brief

AI extract

What is this about?

In an ex-parte hearing, the Tribunal allowed the bank's original application for a recovery certificate of Rs.29,11,011/- along with uniform simple interest at 7% per annum from the date of filing, deeming the lower rate more appropriate given current economic conditions.

What did the court decide?

Recovery certificate issued directing recovery of Rs.29,11,011/- with simple interest @7% per annum w.e.f. 12.10.2022.

State Bank of India versus Dharampal and Others — 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.1908/2022

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DATE OF INSTITUTION: 12.10.2022

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DATE OF DECISION: 26^th DAY OF JUNE, 2023

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State Bank of India , a body corporate constituted under the provisions of the State Bank of India, 1955 (23 of 1955) and the successor to State Bank of Patiala under the Acquisition of State Bank of Patiala Order No. GSR 159(E) dated 22.02.2017 passed by the Central Government under Section 35, of the State Bank of India Act, 1955 (23 of 1955), having its Corporate Office at Madam Cama Road, Nariman Point Mumbai, one of its Local Head Offices at Sector 17-A, Chandigarh, Branches all over India including one at Chhachhrauli, District Yamunanagar, Haryana, through its Branch Manager, Sh. Ravi Prabh

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…..Applicant Bank

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Versus

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Sh. Dharampal S/o Sh. Sadhu Ram R/o Village Mujafat-Kalan, Tehsil Chhachhrauli, District Yamunanagar, 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 06.06.2023

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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

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OA/1908/2022 STATE BANK OF INDIA Vs DHARAMPAL 2

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Rs.29,11,011/- (Rupees Twenty Nine lacs Eleven Thousand

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and Eleven Only) . It has been filed through Sh. Ravi Prabh, 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 KCC facility of Rs.5 lacs and further approached for enhancement of KCC facility to Rs. 17.25 lacs vide loan applications dated 22.08.2013 and 04.06.2016, Annexures-A1 and A8 (colly) (copy).

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The applicant bank sanctioned aforesaid facility to the defendant vide letter of sanction letters dated 22.08.2013 and 04.06.2016, Annexures-A1 and A8 (colly) (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 various loans and security documents, i.e. arrangement letters dated 22.08.2013 and 15.06.2016, AnnexuresA2 and A9 (copy), hypothecation agreements dated 22.08.2013 and 15.06.2016, Annexures-A3 and A10 (copy) and consent letters regarding disclosure of information to CIBIL, Annexures-A4 and A11 (copy).

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The aforesaid loan was further secured by creation of registered mortgage by the defendant in respect of agricultural land measuring 32 Kanals 17 Marlas situated in the revenue estate of Mujafat-Kalan, Tehsil Chhachhrauli, District Yamunanagar, Haryana, fully detailed in para No. 5(xv) of the Original Application.

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The documents relating to the mortgage are as under:

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OA/1908/2022 STATE BANK OF INDIA Vs DHARAMPAL

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i. Registered mortgage deed dated 14.08.2013, AnnexureA5 (copy).

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ii. Declaration dated 14.06.2016 under Section 4(1) of the Haryana Agricultural Credit Operations and Miscellaneous Provisions (Banks) Act, 1973, Annexure-A12 (copy).

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iii. Request letters dated 14.08.2013 to the Tehsildar, Chhachhrauli, for entry/mutation of mortgaged property, Annexure-A6 (copy).

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iv. Title Verification reports dated 12.08.2013 and 08.06.2016 prepared by Advocate, Annexures-A7 and A13 (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 and resultantly, the loan account became irregular and it was declared as NPA on 31.03.2021. The defendant executed balance confirmatory-cumacknowledgement of security letters dated 22.03.2017 and 18.03.2019 and revival letter dated 22.03.2021, Annexure-A14 (colly) (copy). The applicant bank recalled the entire outstanding amount vide legal notice dated 24.09.2020 along with postal receipt, Annexure-A15 (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.29,11,011/- (Rupees Twenty Nine lacs Eleven Thousand and Eleven Only) is recoverable against the defendant as per statement of account dated 07.10.2022, Annexure-A16 (copy) duly certified under Bankers’ Books Evidence Act.

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OA/1908/2022 STATE BANK OF INDIA Vs DHARAMPAL 4

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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 06.06.2023 . 8. In support of the contents of the OA, affidavit of evidence of Sh. Ravi Prabh, Branch Manager of the applicant bank was filed. 9. 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 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 A16 , 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.29,11,011/- (Rupees Twenty Nine lacs Eleven Thousand and Eleven Only) from the defendant.

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OA/1908/2022 STATE BANK OF INDIA Vs DHARAMPAL 5

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In so far as pendente lite and future interest is concerned, the applicant bank in relief clause has claimed rate of interest @10.75% per annum with half yearly rests. In hypothecation agreement dated 15.06.2016, Annexure- A10 (copy), the rate of interest has been mentioned @7% per annum up to 3 lacs and above.

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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 the 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 @7% 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 declaring that the defendant is liable to pay to the applicant bank a sum of Rs.29,11,011/- (Rupees Twenty Nine lacs Eleven Thousand and Eleven Only) with current and future simple interest @7% per annum w.e.f. 12.10.2022 , 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

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OA/1908/2022 STATE BANK OF INDIA Vs DHARAMPAL 6

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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. 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 28.08.2023.

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

State Bank of India v. Dharampal and Others

Case brief

What is this about?

What did the court decide?

State Bank of India v. Dharampal and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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