Allowed

Canara Bank v. M/s Mamta Collection

DRT22 Nov 2023OA/204/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application by a bank seeking a Recovery Certificate against a proprietorship firm and its guarantor. The court upheld the bank's claim based on unchallenged evidence, finding the defendants jointly and severally liable and the appeal within the limitation period.

What did the court decide?

The Recovery Certificate was issued for Rs. 35,64,544.54 with future interest at 14.50% p.a. and costs of the application against the defendants.

Canara Bank versus M/s Mamta Collection — Banking and Recovery | DRT (2023)

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O A 204/2022lDRT_Guw.hatr

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IN THE DEBTS RECOVERY TRIBUNAL,^GUWAHATI

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(North Eastern Region)

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(Tribunal ofAssam, Nagaland, Meghalaya, lvanipur,^{i/lizoram, Arunachal Pradesh& Tlipura)}

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Before Shri Shiv Sharan Oubev. Presidinq^Officer

O-A. No.2o4l2t22

ln the matter of -

CANARA BANK

Dimapur Branch, First Floor, Near Plaza Bakery, Nyamo Lotha Road^(Church Road), Dimapur, Nagalang-7g71 12.

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Appticant

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.I. ii,S i'AMTA COLLECTION,

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Represented by its Proprietor^{Mr. Kutu Das} New Market, Dimapur, Pin-797112

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2. UR KUTU DAS,

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S/o Adhir Das

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Ryo Lhomithi Colony, Near Sitala^Mandir

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Oimaput-7 97 1'12, Nagaland.

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SRI BAPPAN DAS,

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S/o Adhir Das

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R/o Lhomithi Colony, Near Sitala^Mandir Dimapur-7971 12, Nagaland

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Oefendants

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Presence of the Counsel:

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: Mr. Mukesh Sharma, Forthe Applicant Ms. Ellora Bharali, Advocates

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For the Defendants None (Ex-parte)

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Oaled :2211112023

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JUDGMENT

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This is an application under section 19 of the Recovery of^{Debts Due} to^Banks and Financial lnstitutions Act, 1993 filed by the Canara^{Bank, Dimapur Branch, First} Floor, Near Plaza Bakery, Nyamo Lotha Road^(Church Road), Dimapur, Nagalang797112, with a^prayer to issue Recovery Certificate for the sum of Rs. 35,64,5,14.54 (Rupees Thirty-Five Lakhs Sixty-Four Thousand Five Hundred Forty-Four and Paise Fifty-Four) only as on 31 03.2022 against the defendants with^pendentelite and

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ll.iullata*&*,1"r )>,t|., 7 I Presiding Offcer^'r - {/ DRT, Guwahati

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O.A. 204l2022loRT_Gowahaii

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future interest thereon at contractual rate till realization along with cost and other relief.

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A few facts giving rise to the present application are as under.

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The Defendant No.1 is the proprietorship firm of Defendant No.2 as well as the borrower and Oefendant No.3 is the guarantor to the loan availed by the defendanl No.1 firm

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The Defendant No. 2 as proprietor had approached the Applicant Bank and applied for financial assistance by submitting a Loan Application dated 31.10.200g for its business and after considering the said Application, the Applicant Bank vide its Sanction Memorandum dated 05.11.2008 had sanctioned an Overdraft Cash Credit (OCC) of Rs.6,00,000 Lacs (Rupees Six Lakhs) only to the Defendant firm, with interest @ PLR+2=14.50% per annum compounded monthly subject to changes from time to time as per Banks guidelines. The cash credit limit is payable on demand. The Defendant had signed on the said Sanction Memorandum, thereby agreeing to the terms and condition laid down therein. The Oefendant No. 2 as the Proprietor of the firm had also executed a Request for overdraft facilities dated 05.11.2008 thereby confirming the availing of the loan facility from the applicant bank and also accepted the terms and conditions contained therein.

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ln conneclion with the sanction of the Overdraft Cash Credit Facility of Rs, 6,00,000/- Lacs, sanctioned by the Applicant Bank and availed of by the Defendant firm, a Demand Promissory Note dated 05.11.2008, Composite Hypothecation Agreemenl dated 05.1 1.2008 has been signed and executed by the Defendant No. 2 as the Proprietor of the firm in favour of the Applicant Bank as security for repayment of the loan, thereby agreeing to all the terms and conditions laid down in the said Agreement and also charged/ hypothecation of present and future stocks, furnitures and fixtures etc. in favour of the Applicant Bank. lt is pertinent to mention herein that at present there are no stocks available as the business has become defunct.

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ln connection with the sanctioning of the cash credit facility of Rs. 6,00,000/-

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skU sl(La^hl"a e,""iaine om&I^{l/ 13 (}

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ORT. Guwahati

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O A. 204/2022lDRT-Guwahati

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Lacs sanction^{by the applicant bankand availedoff by the defendantno 1 firm'} Guarantee Agreement^{dated 05.11.2008was signed and executed by the} defendant no.^{3, who stoodas the personal guarantorto the said loan facility} availed by the^{defendant no.1 firm. The saidGuaranteeAgreementin Defendant} No.3's capacity as^{the personal guarantor had not only confirmed the signing and} execution of the^{Guarantee Agreement dated 05 11 2008 but alsoacknowledged} its availed by obligation^{as the personal guarantorto theloan facility ihe defendant} no. 1 firm.

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The Defendant^No. 2^{as proprietorof DefendantNo lhad confirmedand} acknowledged its^{indebtednesstowards the bank by signingand executing} Acknowledgement of^{Debt and Security dated03.02.201,l,02.O2.2014,20.01.201.7} and 04.01.2020 also^{confirmed the execution of loan documents and the relative} securities in connection^{the saidloan facility availed of by the defendants.}

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The defendants had availed the said loan facility^from the^{applicant bankbut} have not^paid the outstanding loan amount as^{per terms} and^conditionsas agreed upon with the applicant bank, in spite of^{repeated demandsand requestby the} applicant bank. As the defendants failed to repay the^loan amount,^{the saidloan} accounts became NPA on 06.08.2011. After the account^{becameNPAthe applicant} bank issued notices for repayment of the due^{amount,but thedefendants failed to} repay the Loan amount.

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The applicant bank thus became constrained to file the^present Original Application for the recovery of Rs. 35,64,544.54^(Rupees Thirty-Five Lakhs SixtyFour Thousand Fiye Hundred Forty-Four and Paise Fifty-Four) only as^on 3'l.03.2022 along with^interest and cost^{of the application.}

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After filing of the OA the Tribunal issued notices upon the defendants through registered post and the applicant bank filed service report on 03.08.2022 and brought on record the^postal receipts along with track consignment^{report which shows that} nolices have nol been served upon the defendants.^Thereafter the Tribunal ordered paper publication of notice upon the defendants and the applicant bank issu-ed notice

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Slurslq4^,Q"17 Presiding Offcsr^'- U DRT, Grlwahati

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o.A. 201l2022loRr-Guwahati

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to the defendants on 3.1.08.2022 through paper publication in two newspapers namely "The Morung Exqess" and "The Nagarand posf'l Even after issuance of notice through paper publication also there was no representation on behalf of the defendants either by the counsel or the person and hence the defendants were set ex_parte on .lS_12_ 2022 and their right to fire written statement cum evidence on affidavit was crosed and the matter was listed for hearing on behaf of the applicant bank.

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Supporting the claim ofthe applicant bank Mr purtoshi Ao, Senior Manager ofthe Applicant Bank has filed evidence on affidavit coupled with the seeJrity documents marked as Exhibit P, AW-1/1 toAW-1ft supporting the claim of the applicant bank.

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Heard the learned counsel for the applicant bank who prayed for issuance of Recovery Certificate against the defendants as per pleadings made in the Application, supported by evidence on affidavit of their witness who affirmed on oath the execulion of the security and other documents by the defendants and also execution of their own documents relied upon, which have been marked exhibits.

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Considering the facts and circumstances of the case, I am of the considered view that the document filed by the applicant bank are supporting the claim of the applicant bank and establishing the tiability of the defendants. lt is proved that the defendants are^jointly and severally liable to pay to the applicant bank the claim made in the Original Application. The loan was obtained and documents have b€en executed on 05.11.2008. The Defendant No. 2 as proprietor of Defendant No.i had confirmed and acknowledged its indebtedness lowards the bank by signing and executing Acknowledgement of Debt and Security dated 09.02.2011, 02.02.2014, 2O.O1.20'17 and 04.01.2020 also confirmed the execution of loan documents and the relative securities in connection the said loan facility availed of by the defendants. The account became NPA on 06.08.2011 and the OA has been filed on 24.05.2022. Hence, the OA is filed well within the period of limitation and this Tribunal having a^jurisdiction to adjudicate the Original Application.

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-(i.,, s [*",,].Ju t ,) . ).1 ,.1 Prosid'ng Oflicer^' --' !l DRT, Guwahali

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oA 2o4po22lDRr-Guwahali

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Considering the unchallenged/unrebutted version of Mr purtoshi Ao, the applicant's witness and all the documents marked as exhibits, including duly certified copy of the statement of accounl along with interest calculation sheet maintained by the applicant Bank in it's regular course of business, I hold that the applicant is entitled to get the Recovery Certificate as prayed for.

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ln the result, the present Originat Application No. 204 ot 2022 is allowed with cost as under: -

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i) The defendants No. 1, 2 & 3 are jointly and seveIally tiable to pay to the applicant bank a sum of Rs. 35,64,544.5/t (Rupees Thifi-Fivo Lakhs Sixty-Four Thousand Five Hundred Forty-Four and^paise Flfty-Four) only with pendentelite and future interest @14.50% p.a. with monthly rests from 01.04.2022 till the date of full paymenurealization and also cost of the application.

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ii) The charge of the certificated amount be kept alive on hypothecated properties as described in Schedule-A of the OA till the amount is realized in full.

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iii) The applicant bank is entitled to proceed against the secured items towards recovery of the debts.

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iv) The applicant bank is also entitled to proceed against the personal assets and properties of the defendants towards recovery of the dues.

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v) The applicant bank is entitled to the costs of the O.A. which includes the advocate fees of the applicant bank. Applicant is directed to file the cost memo within 2 weeks from today.

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vi) lssue Recovery Certiticate accordingly for a sum Rs. 35,64,544.54 (Rupo6s Thirty-Five Lakh3 Sixty-Four Thousand Five Hundrad Forty-Four and Paise Fifty-Four) only in favour of the applicant bank against the defendants No. 1,2&3.

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J.^a .\ r \h t" t^{(rtta, id.^r t'} 1 2>.t1.23 n \ Preddng Ofic6r oRT, Guwehali

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OA 204/2022lDRT-Guwahati

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vii) Communicate copy of this order to the concerned parties.

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This order is dictated and corrected by the undersigned.

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Judgment daled 22nd November 2023, signed and pronounced in the Tribunal

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today under my signature.

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Copy of the JudgmenuFinal Order be uploaded in the Tribunal,s Website and file be consigned to Record Room.

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| .'.,,h ,x ' q}.r ! _t c, y ,:.; 'a, t lshiv Sharan Dubey) presiding Officer DRT, cuwahati.

Canara Bank v. M/s Mamta Collection

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s Mamta Collection

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

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Case details

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