Allowed

Punjab National Bank v. M/s Grewal Sweets and Dairy Products

DRT22 Sept 2023OA/203/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application by Punjab National Bank for recovery of Rs.61,59,115.00 from the proprietors of M/s Grewal Sweets and Dairy Products, who were jointly liable for unpaid cash credit and term loans with mortgage security.

What did the court decide?

Declaration against defendants to pay Rs.61,59,115.00 with costs and simple interest @7.25%p.a.; Recovery Certificate issued; Liberty to enforce via sale of assets.

Punjab National Bank versus M/s Grewal Sweets and Dairy… — Company and Corporate | DRT (2023)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.203/2022

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 02.02.2022

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DATE OF DECISION: 22.09.2023

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Punjab National Bank, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at Plot No.4, Sector 10, Dwarka, New Delhi110075 and Branch amongst others at Samrala, Ludhiana through its recovery vertical i.e., Circle Sastra Centre (East), Circle Office, Site No.5, Ferozepur Road, Ludhiana (Punjab)-141012 through Sh. Dharam Pal Malik, Senior Manager, Principal Officer and duly constituted Attorney of the applicant bank

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……..Applicant

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Versus

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M/s Grewal Sweets and Dairy Products shop at Bhagwanpura Road, Samrala, District Ludhiana-141114 being applicant through its proprietor

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Sh. Dhanwant Singh S/o Sh. Dalwara Singh, R/o H.No.158, Ward No.02, Mohalla Kanupeer, Machiwara Road, Samrala, District Ludhiana-141114 being its proprietor

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………Defendants

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Advocates:

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Argued by Sh. Rajesh Gupta, 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.61,59,115.00 (Rupees Sixty One Lacs Fifty Nine Thousand One Hundred and Fifteen only). The Original Application has been filed

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through Sh. Dharam Pal Malik, Senior Manager of the applicant bank, who is competent to institute the Original Application vide Power of Attorney dated 28.02.2003, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant No.1 i.e. firm through its proprietor defendant No.2 had approached the applicant bank for the grant of Cash Credit Limit of Rs.50.00 Lacs vide Loan Application dated 01.07.2016 and also for a GECL (Working capital Term Loan) of Rs.10.00 Lacs vide Loan Application dated 19.06.2020, which are Annexures A2 and A11 to this OA.

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The applicant Bank sanctioned the Cash Credit Limit of Rs.50.00 Lacs and GECL Loan of Rs.10.00 Lacs vide Sanction Letters dated 01.07.2016 and 19.06.2020, which are Annexures A3 and A12 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant No.2 had mortgaged his immovable property i.e. Land measuring 00K-07M situated at Samrala, Hadbast No.127, Tehsil Samrala, District Ludhiana, Punjab vide Title Deed bearing Vasika No.57 dated 07.04.2016 along with its translation, which are Annexures A9 and A9-T to this OA.

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Documents executed:- Hypothecation of goods and book debts to secure cash credit facility dated 19.07.2016, which is Annexure A4 to this OA; Affidavit regarding ownership and Affidavit of Sh. Dalbara Singh regarding not to cancel transfer; both dated 05.07.2016, which are Annexures A5 and A6 to this OA; Letter regarding delivery of title deeds dated 19.07.2016, which is Annexure A7 to this OA; Letter regarding receipt of title deeds dated 28.09.2016, which is Annexure A8 to this OA; Balance confirmation letter dated 06.07.2019, which is Annexure A10 to this OA; Promissory note, Agreement for hypothecation of current assets, Agreement for working capital term loan (WCTL) for existing borrowers, Hypothecation of goods and book debts to secure cash credit facility, Master agreement, Agreement of

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guarantee and Letter of continuity all dated 20.06.2020, which are Annexures A13 to A19 to this OA; Recall notice dated 08.09.2021, which is Annexure A20 to this OA; Demand notice u/s 13(2) of SARFAESI Act dated 11.10.2021, which is Annexure A21 to this OA; Statements of accounts, which is Annexure A22 to this OA and Certificate of Bankers Book Evidence Act dated 27.01.2022, which is Annexure A23 to this OA.

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The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.61,59,115.00, 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 25.08.2023.

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In support of the OA, affidavit of Sh. Dharam Pal Malik, Senior Manager, Punjab National Bank has been filed. 8. 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 A23 to this OA, it is proved that the defendants approached applicant bank for availing of the loan facilities which were 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 loans as per terms and conditions of the agreement between the parties. Subsequently, accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.61,59,115.00 (Rupees Sixty One Lacs Fifty Nine Thousand One Hundred and Fifteen

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only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the account.

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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 @7.55%p.a. in the CC Limit and @7.25%p.a. in GECL account plus @2%p.a. penal interest from the date of filing of this application 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 loan 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 @7.25%p.a. in both the loan accounts from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.61,59,115.00 (Rupees Sixty One Lacs Fifty Nine Thousand One Hundred and Fifteen only) jointly and severally, with costs, current and future simple interest @7.25%p.a. in both the loan accounts 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.

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Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 30.09.2023. 15. 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. Pronounced by me in the Open Tribunal. Dated: 22.09.2023

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

Punjab National Bank v. M/s Grewal Sweets and Dairy Products

Case brief

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Punjab National Bank v. M/s Grewal Sweets and Dairy Products

Case brief

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