Allowed

Punjab National Bank v. M/S Hans Raj and Sons

DRT11 Jul 2023OA/2100/2022

Case brief

AI extract

What is this about?

This arbitration tribunal allowed the applicant bank's original application for recovery of debt, holding the defendants liable to pay the principal amount with interest at 8% per annum from the date of filing. The order directed enforcement against mortgaged and personal assets.

What did the court decide?

Directing defendants to pay Rs. 31,63,531.69 with simple interest at 8% p.a. from filing date; liberty to recover via sale of mortgaged or personal assets; issuance of recovery certificate.

Punjab National Bank versus M/S Hans Raj and Sons — 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. 2100 of 2022

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DATE OF INSTITUTION: 07.11.2022

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

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Punjab National Bank , a body corporate, constituted under the Banking Companies (Acquisition & Transfer of Undertaking) Act 1970, having its Head Office at Plot No-4, Sector-10, Dwarka, New Delhi-110075 and the successor of Oriental Bank of Commerce/ United Bank of India, by Scheme of Amalgamation of Oriental Bank of Commerce, United Bank of India, passed by the Central Government under Section 9 of the Banking Companies (Acquisition and Transfer of Undertaking) Act 1980 and amongst many Branches, one at Cheeka, District Kaithal, through Sh. Malkeet Singh Soday, duly Constituted Attorney of Circle SASTRA Centre, Jind

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.......Applicant Bank

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Versus

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M/s Hans Raj & Sons, S.C.F No. 114-A, Grain Market, Cheeka District Kaithal, Haryana through its Proprietor, Sh. Dhani Ram

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Sh. Dhani Ram S/o Sh. Hans Raj R/o S.C.F No. 114-A, Grain Market Cheeka, District Kaithal, Haryana

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Sh. Rohit Garg S/o Sh. Dhani Ram R/o S.C.F No. 114-A, Grain Market, Cheeka, District Kaithal, Haryana

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......Defendants

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Argued by: Ms Arpita Sonkar, Manager Law for the applicant bank Defendants ex parte vide order dated 04.03.2023

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OA/2100/2022 PUNJAB NATIONAL BANK Vs M/S HANS RAJ AND OTHERS 2

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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 defendants for recovery of Rs.31,63,531.69/(Rupees Thirty One Lacs Sixty Three Thousand Five Hundred Thirty One and Sixty Nine Paisa Only) . The OA has been filed through Sh. Malkeet Singh Soday, duly Constituted Attorney of the applicant bank, stated to be competent to institute the Original Application vide Power of Attorney, Annexure-A1 (copy).

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The brief facts of the case of the applicant as per Original Application are that the defendants had approached the applicant bank for grant of overdraft facility of Rs. 5 lacs, and again approached for enhancement of overdraft facility to Rs. 38 lacs again approached for reduction of overdraft facility to Rs. 25 lacs vide loan application dated 02.04.2020, Annexure-A9 (copy) and at the request of the defendants overdue amount was transferred to Funded Interest Term Loan of Rs. 3.65 lacs dated 25.06.2021, AnnexureA12 (copy). Defendant No. 3 stood as a guarantor for repayment of the loan.

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The applicant bank sanctioned aforesaid facilities vide sanction letters dated 21.12.2017, 01.05.2020 and 25.06.2021, AnnexuresA4, A10 and A12 (colly) (copy) as per terms and conditions duly accepted by the defendants. 4. In order to secure the aforementioned credit facilities, the defendants executed various loans and security documents, i.e.

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OA/2100/2022 PUNJAB NATIONAL BANK Vs M/S HANS RAJ AND OTHERS 3

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supplemental agreement dated 28.10.2013 to secure credit/loan facilities, Annexure-A2 (copy), common agreement dated 28.10.2013, Annexure-A3 (copy) and acceptance letter dated 25.06.2021 regarding terms and conditions of the restructured facility, AnnexureA12 (colly) (copy). Defendant No. 3 executed agreement of guarantee dated 03.02.2020, Annexure-A6 (copy).

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The aforesaid loans were further secured by creation of mortgage by defendant No. 3 in respect of commercial shop No. 114 A measuring 47.30 Square Yards situated at Anaj Mandi, Cheeka, Kaithal, Haryana, fully detailed in para No. 5.4 of the Original Application.

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The documents relating to the mortgage are as under:

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i. Registered title deed dated 03.02.2020, Annexure-A7 (copy).

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ii. Memorandum dated 04.02.2020, confirming deposit of title deed by mortgagor, Annexure-A8 (copy).

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iii. Office note dated 03.02.2020 regarding change of mortgaged property, Annexure-A5 (copy).

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It is further the case of the applicant that the loan facilities were duly availed of by the defendants but they failed to maintain the financial discipline of the applicant bank and resultantly, the loan accounts became irregular and those were declared NPA on 31.03.2022. The defendants executed balance and security confirmation letter dated 28.05.2020, Annexure-A11 (copy) and request letter dated 02.04.2020 regarding confirmation of payment of dues, Annexure-A9 (copy). The applicant bank recalled entire outstanding amount vide notices dated 03.08.2022 under section 13(2) of the Securitisation and Reconstruction of Financial Assets and

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OA/2100/2022 PUNJAB NATIONAL BANK Vs M/S HANS RAJ AND OTHERS 4 Enforcement of Security Interest Act, 2002, Annexure-A13 (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 loan accounts, a sum of Rs.31,63,531.69/(Rupees Thirty One Lacs Sixty Three Thousand Five Hundred Thirty One and Sixty Nine Paisa Only) is recoverable against defendants as per statements of accounts, certified under Bankers’ Book Evidence Act, Annexures-A14 and A15 (copy).

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

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Notices of the Original Application were duly served upon the defendants, but since none appeared on behalf of the defendants despite service, thus, defendants were proceeded against ex-parte vide order dated 04.03.2023 .

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In support of the contents of Original Application, affidavit of evidence of Sh. Malkeet Singh Soday, General Attorney and Principal Officer of the applicant bank was filed.

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

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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 A15 , it comes out that the defendants had approached the applicant bank for availing of the loan facilities which were granted to them. It is

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OA/2100/2022 PUNJAB NATIONAL BANK Vs M/S HANS RAJ AND OTHERS 5

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further cleared that the defendants had executed all the relevant documents as stated above in favour of the applicant bank. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.31,63,531.69/- (Rupees

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Thirty One Lacs Sixty Three Thousand Five Hundred Thirty One and Sixty Nine Paisa Only) from the defendants, from the date of filing the present Original Application, till realisation of the amount. 11. 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. In sanction letter dated 25.06.2021, Annexure-A12 (copy), rates of interest have been mentioned @8.40% per annum.

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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. business, quantum of loan, 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 @8% per annum from the date of filing of the OA till realization of the amount ordered vide this order. It is ordered accordingly.

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In the result, the Original Application is allowed with cost declaring that the defendants are liable to pay to the applicant bank a sum Rs.31,63,531.69/- (Rupees Thirty One Lacs Sixty Three Thousand Five Hundred Thirty One and Sixty Nine Paisa Only) with current and future simple interest @8% per annum w.e.f.

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OA/2100/2022 PUNJAB NATIONAL BANK Vs M/S HANS RAJ AND OTHERS 6

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07.11.2022 , till the date of realisation of the amount. The liability of

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the defendants shall be joint as well as several. Accordingly, the applicant bank shall be at liberty to recover aforesaid amount from the sale of mortgaged/hypothecated property of defendants in execution proceedings, if not sold earlier under the provisions of the Securitization 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. The applicant bank is at liberty to enforce the claim through due process of law.

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13. Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 11.09.2023.

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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.

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Announced in the open Tribunal

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(M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh

Punjab National Bank v. M/S Hans Raj and Sons

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. M/S Hans Raj and Sons

Case brief

What is this about?

What did the court decide?

What the court decided

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