Allowed

Punjab National Bank v. M/S A.G. Agro Overseas

DRT11 Sept 2023OA/193/2023

Case brief

AI extract

What is this about?

The DRT allowed the applicant bank's OA for a recovery certificate of Rs. 1.92 crore against the borrowers and guarantors who failed to repay the loan. The court fixed future interest at 9% per annum and granted liberty to recover via asset sale.

What did the court decide?

Recovery Certificate issued for Rs. 1,92,74,354.17 with future simple interest @9% p.a.; liberty to recover via sale of mortgaged/hypothecated property or personal assets if dues remain unsatisfied.

Punjab National Bank versus M/S A.G. Agro Overseas — Contract and Commercial Disputes | DRT (2023)

¶1

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

¶2

ORIGINAL APPLICATION NO.193/2023

¶3

DATE OF INSTITUTION: 10.01.2023

¶4

DATE OF DECISION: 11^th DAY OF SEPTEMBER, 2023

¶5

Punjab National Bank, a body corporate and perpetual succession, constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act of 1970, carrying on banking business having its Head Office at Plot No.4, Sector-10, Dwarka, New Delhi and one of its Branches amongst other places at Uklana, Hisar, Haryana, through Sh. Rahul Jhamb, Senior Manager, Circle Sastra (Recovery Cell), Hisar/Principal Officer/General Power of Attorney holder

¶6

…..Applicant Bank

¶7

Versus

¶8

M/s A.G. Agro Overseas, Shop No. 130, New Grain Market, Uklana, District Hisar, Haryana, through its Proprietor, Sh. Aman Goyal

¶9

Sh. Aman Goyal s/o Sh. Ram Bilas, Proprietor of M/s A.G. Agro Overseas r/o House No. 1434, Gulab Colony, Uklana Mandi, Hisar

¶10

Ms Anju Goyal w/o Sh. Ram Avtar Goyal r/o House No. 226, Urban Estate II, Hissar-125005

¶11

Sh. Ashish Kumar Goyal s/o Sh. Ram Bilas Goyal r/o House No. 1434, Gulab Colony, Uklana Mandi, Hisar

¶12

…..Defendants

¶13

Argued by: Ms Arpita Sonkar, Manager Law for the applicant bank Defendants ex parte vide order dated 01.04.2023

¶14

OA/193/2023 PUNJAB NATIONAL BANK Vs M/S A.G. AGRO OVERSEAS AND OTHERS 2

¶15

FINAL ORDER

¶16

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.1,92,74,354.17/- (Rupees One Crore Ninety Two Lacs Seventy Four Thousand Three Hundred Fifty Four and Seventeen Paisa Only) . It has been filed through Sh. Rahul Jhamb, Senior Manager of the applicant bank stated to be competent to institute the Original Application vide General Power of Attorney, Annexure-A1 (copy).

¶17

The brief facts of the case of the applicant as per the Original Application are that defendant No.1 through its Director, defendant No. 2 had approached the applicant bank for grant of cash credit of Rs. 2 crores vide loan application dated 04.07.2017, Annexure-A2 (copy). Defendant Nos. 3 and 4 stood as guarantors for repayment of the loan. The defendants during COVID period requested for Rs. 20,00,000/- under CECF, which was sanctioned on 24.04.2020. However, the account with regards to COVID loan facility was closed. 3. The applicant bank sanctioned above mentioned credit facility to the defendants as per terms and conditions which were duly accepted by the defendants.

¶18

In order to secure the aforementioned credit facility, the defendants executed hypothecation agreement dated 04.07.2017, Annexure-A3 (copy), guarantee agreements dated 04.07.2017 and

¶19

OA/193/2023 PUNJAB NATIONAL BANK Vs M/S A.G. AGRO OVERSEAS AND OTHERS 3 24.04.2020, Annexures-A4 and A6 (copy) and supplementary agreement dated 24.04.2020, Annexure-A5 (copy).

¶20

The aforesaid loan was further secured by creation of mortgage by defendant No. 4 in respect of factory land and building measuring 28 Kanals 09 Marlas situated in the revenue estate of Saniana, Tehsil Tohana, District Fatehabad, fully detailed in para No. 13 of the OA. Request letter dated 29.06.2017 to the Sub-Registrar, Tohana, for entry/mutation of the mortgaged property is Annexure-A7 (copy).

¶21

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 27.09.2021. The defendants executed balance and security confirmation letters dated 03.04.2019 and 14.01.2022, AnnexureA8 (colly) (copy). The applicant bank recalled the entire outstanding amount vide recovery notice dated 19.04.2021 and notices dated 14.10.2022 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, along with postal receipts, Annexure-A9 (colly) (copy), but to no avail.

¶22

It is further the case of the applicant bank that after adjusting debit and credit entries in the loan account, a sum of Rs.1,92,74,354.17/- (Rupees One Crore Ninety Two Lacs Seventy Four Thousand Three Hundred Fifty Four and Seventeen Paisa Only), is recoverable against the defendants as

¶23

OA/193/2023 PUNJAB NATIONAL BANK Vs M/S A.G. AGRO OVERSEAS AND OTHERS 4

¶24

per statement of account, certified under Bankers’ Books Evidence Act, 1891, Annexure-A10 (copy).

¶25

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

¶26

Notices of the Original Application were 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 01.04.2023 .

¶27

In support of contents of the OA, affidavit of evidence of Sh. Rahul Jhamb, Principal Officer of the applicant bank was filed.

¶28

This Tribunal has heard ex-parte arguments advanced by Ms Arpita Sonkar, Manager Law for the applicant bank and gone through the record carefully.

¶29

It was argued by Ms Arpita Sonkar, Manager Law 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 A10 , 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 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. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum

¶30

OA/193/2023 PUNJAB NATIONAL BANK Vs M/S A.G. AGRO OVERSEAS AND OTHERS 5 of Rs.1,92,74,354.17/- (Rupees One Crore Ninety Two Lacs Seventy Four Thousand Three Hundred Fifty Four and Seventeen Paisa Only) from the defendants.

¶31

In so far as pendente lite and future interest is concerned, the applicant bank in relief clause, has claimed rate of interest @14% per annum plus penal interest @2% per annum. In hypothecation agreement dated 04.07.2017, Annexure-A3 (copy), rate of interest has been mentioned MCLR plus @0.60% per annum.

¶32

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 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 @9% per annum from the date of filing of the OA till realisation of the amount ordered vide this order. It is ordered accordingly.

¶33

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.1,92,74,354.17/- (Rupees One Crore Ninety Two Lacs Seventy Four Thousand Three Hundred Fifty Four and Seventeen Paisa Only) with current and future simple interest @9% per annum w.e.f. 10.01.2023 , till the date of realisation of the amount. Accordingly, the applicant bank shall be at liberty to

¶34

OA/193/2023 PUNJAB NATIONAL BANK Vs M/S A.G. AGRO OVERSEAS AND OTHERS 6 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. However, the applicant bank is at liberty to enforce the claim through due process of law.

¶35

Issue Recovery Certificate accordingly. 13. Parties to appear before Recovery Officer concerned on 11.10.2023 .

¶36

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.

¶37

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

Punjab National Bank v. M/S A.G. Agro Overseas

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. M/S A.G. Agro Overseas

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Punjab National Bank versus Sh Balka Singh @ Balaka Singh

Canara Bank versus Satnam Singh

Canara Bank versus Sh. Kuldeep Singh

Punjab National Bank versus M/S J M D Traders

Kishore Nichani versus India Resurgence Arc Trust IV

State Bank of India versus M/s Chandrawati Cement and Hardware and Others