The Tribunal allowed the bank's application for recovery of Rs.42,45,001.56 against the main borrowers, guarantors, and legal heirs. The Court awarded simple interest at 5% per annum and directed issuance of a recovery certificate joint and several against the respondents.
Recovery of Rs.42,45,001.56 along with simple interest at 5% per annum from 28.12.2021.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
DEBTS RECOVERY TRIBUNAL-2, CHANDIGARH, PRESIDED OVER BY M.M. DHONCHAK
ORIGINAL APPLICATION NO.21/2022
DATE OF INSTITUTION: 28.12.2021
DATE OF DECISION: 15th DAY OF JULY, 2023
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 Delhi-110075 and Branch at Shahabd-Markanda, through its Attorney, Sh. Naresh Bheem, Senior Manager, Punjab National Bank, Circle SASTRA Centre, Kurukshetra
…..Applicant Bank
Versus
OA NO. 21 OF 2022 PUNJAB NATIONAL BANK Vs M/S SHISH PAL PARVEEN KUMAR AND ORS 2
…..Defendants
Argued by: Ms Arpita Sonkar, Manager Law for the applicant bank Defendant ex parte vide order dated 20.10.2022
FINAL ORDER
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.42,45,001.56 (Rupees Forty Two Lacs Forty Five Thousand One and Fifty Six Paisa only) . The OA has been filed through Sh. Naresh Bheem, Senior Manager of the applicant bank, stated to be competent to institute the Original Application vide General Power of Attorney dated 05.03.2002, Annexure-A1 (copy).
cash credit facility from Rs.5 to Rs.12 lacs . Further, the defendants again approached the applicant bank for enhancement of cash credit facility from Rs.12 to Rs.35 lacs vide application
OA NO. 21 OF 2022 PUNJAB NATIONAL BANK Vs M/S SHISH PAL PARVEEN KUMAR AND ORS 3
Form dated 03.03.2009 for small business, Annexure-A13 (copy). Defendant Nos.4 to 6 stood as guarantors for repayment of the loan.
Documents related mortgage are as under:
OA NO. 21 OF 2022 PUNJAB NATIONAL BANK Vs M/S SHISH PAL PARVEEN KUMAR AND ORS 4
was duly availed of by the defendants but they failed to maintain the financial discipline of the applicant bank and resultantly, the loan account became irregular and it was declared NPA in March, 2019. Defendants executed balance and security confirmation letters dated 04.09.2006, 03.08.2007, 01.08.2008, 15.07.2011, 20.06.2014, 03.06.2017 and 09.03.2020 are Annexure-26 (colly) (copy). The applicant bank recalled entire outstanding amount vide loan recall/ legal notices dated 06.12.2018, 16.02.2019, 12.03.2019, 18.06.2020, 07.09.2020, 06.11.2020 and 28.12.2020 are Annexures-A24 (colly) (copy), but to no avail.
It is further the case of the applicant bank that after adjusting debit and credit entries in the loan account, a sum of Rs.42,45,001.56 (Rupees Forty Two Lacs Forty Five Thousand
One and Fifty Six Paisa only) is recoverable against the defendant as per statement of account, certified under Bankers’ Books Evidence Act, Annexure-A25 (copy).
Since the defendants did not repay the outstanding amount, therefore, the applicant bank preferred the present Original Application for issuance of Recovery Certificate.
OA NO. 21 OF 2022 PUNJAB NATIONAL BANK Vs M/S SHISH PAL PARVEEN KUMAR AND ORS 5
OA NO. 21 OF 2022 PUNJAB NATIONAL BANK Vs M/S SHISH PAL PARVEEN KUMAR AND ORS 6
annum with monthly rests plus penal interest @2% per annum. In deeds of hypothecation of goods and book debts to secure cash credit facility dated 26.03.2009, Annexures-A3, A7 and A14 (copy), the rate of interest had been mentioned @10.75%, @10.25% and @13% per annum respectively.
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 properties, purpose of loan, i.e. business, prevalent market rates of interest which have gone drastically downhill in yesteryears and defendant Nos. vi (a) and vi (b) i and iii being females, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @5% per annum from the date of filing of the OA till realisation of the amount ordered vide this final order. It is ordered accordingly.
OA NO. 21 OF 2022 PUNJAB NATIONAL BANK Vs M/S SHISH PAL PARVEEN KUMAR AND ORS 7
Financial Assets and Enforcement of Security Interest Act, 2002 or otherwise. If the dues of the bank still remain unsatisfied, applicant bank shall be at liberty to recover the same by attachment and sale of personal assets/property of the defendants. The applicant bank is at liberty to enforce the claim through due process of law. However, it is clarified that there should not be any ambiguity that the liability of the defendants by virtue of their being the legal heirs of the deceased guarantor shall remain confined only to estate of the deceased guarantor if it is inherited by them and not beyond that or otherwise. The recovery proceedings shall proceed only after the Recovery Officer is fully satisfied on the aspect of the estate being inherited by the Legal Representatives/Heirs and the liability being incurred accordingly.
Announced in the open Tribunal (M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh
2 issues framed by the court
Whether the application for recovery of Rs.42,45,001.56 against the defendants and their legal heirs should be allowed.
Whether the rate of interest to be awarded shall be 5% per annum despite higher rates in the loan documents.
1 provisions across 1 enactments
Punjab National Bank
M.M. DHONCHAK
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
