Allowed

Punjab National Bank v. Ms Dinesh Electronics

DRT17 Jul 2023OA/218/2022

Case brief

AI extract

What is this about?

An application was filed seeking issuance of a Recovery Certificate against borrower and guarantors for an outstanding loan. The tribunal found the claim established and, noting the application was within the limitation period, issued the certificate along with costs and directions to keep charges on hypothecated and mortgaged properties alive.

What did the court decide?

Recovery Certificate issued for Rs. 1,02,33,937.71 with interest; costs awarded; charges kept alive on hypothecated and mortgaged properties.

Punjab National Bank versus Ms Dinesh Electronics — Insurance | DRT (2023)

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O A 21 8/2o2zoRT.cueahali

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(North Eastern Region)

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(Tribunal ofAssam, Nagaland, Meghataya, Manipur. lvlizoram, Arunachal pradesh & Tripura) Befors Shri Shiv Sharan Dubev.^presidinq Officer

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O.A. No.21Bt2O22

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ln the mattor of -

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Punjab National Bank Kamakhya Branch, Maligaon, Guwahati-781 012 in the District of Kamrup (Metro), Assam

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.Applicant

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Vs.

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t. M,/s Dinesh Electronica A Proprietorship firm represenled by its Proprietor Mr. Saniay^pacheriwala. Shop No. 14-A, Ahmed Market, Near Railway Gate No.2, Lakhtokia, cuwahati in the District of Kamru; (Meho), Assam-781 001.

¶11

Mr Sanjay Pacheriwala Son of Vir Kumar^pacheriwala Resident of Ftat-B 204, cotden Heights, Chatribari Main Road cuwahali in the District of Kamrup (Metro), Assam_7g1 00c

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Mrs Sunita Pacheriwata

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Wife of Mr. Sanjay^pacheriwala Resident.of Flat-B 204, Golden Heights. Chatribari Main Road. uuwanatr tn the District of Kamrup (Metro). Assam_7gl OOg.

¶14

Mr Nawal Kishore Bajaj Son of Ghan Shyam Baiai, l::id"jt 9l ?hy?I^{golony, Diphu,p o. & p.s.} Diphu rn the District of Karbi Anglong, Assam-7g2460.

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Defendants

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Presence of the Counsel :

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For the Applicant : Mr Shoubhik Chanda, Advocate For the Defendants : None (Ex-parte)

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Daled : 17.07.2023

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JUDGTltENT

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This is an apprication under section 19 of the Recovery of Debts Due to Banks and Financial lnstitutions Act,^,1993 liled by the puniab National Bank, Kamakhya Branch, Maligaon, Guwahati-781 012 in the District of Kamrup (Metro), Assam, with

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:H*--HtYr

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O A 21 8/2o22lDRT-Guwahati

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a prayer to issue Recovery Certificate for the sum of Rs. 1,02,33,937.71 (Rupees one Crore Two Lacs Thirty Three Thousand Nine Hundred Thirty Seven And Paisa Seventy One) only as on 31.05.2022 against the defendants with pendentelite and future interest at contraclual rates with monthly rests 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.'l is a Proprietorship tirm of Defendant No-2, engaged in the business of Electronic aoods, who availed credit facilities from the Applicant bank as borrower. The Defendant No.3 & 4 are the Guarantors for repayment of the credit facility availed by the Oefendant No.1 Firm.

¶26

The Defendant No.2 as Proprietor of Oefendant No.1 Firm had approached before the Applicant Bank and requested for financial assistance for its business by submitting an Application dated 12.09.2004 and afler considering the said Application, the Applicant Bank vide Sanction Letter 15j02004 had sanctioned a Cash Credit Facility of Rs.12,00,000.00 (Rupees Twelve Lacs) only in the name of Defendant No.1, with rate of interest @12.250lo per annum subject to variation from time to time. The cash credit facility was repayable on demand.

¶27

ln consideration ofthe aforesaid Cash Credit Facility of Rs.'12,00,000.00 (Rupees Twelve Lacs) only, the Defendant No.2 as Proprietor of the Defendant No.1 Firm, duly executed the following documents in terms of the sanction, inter-alia giving due effect to the terms and condition of sanction, promis;ng to repay the loan and to secure the dues of Applicant Bank.

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a) Demand Promissory Note dated 15.10.2004; b) Letter of Continuity dated 15.10.2004; c) Letter of Lien dated 15.10.2004: d) Hypothecation of Goods dated 15.10.2004; e) Hypothecation of Debts & Movable Assets dated 15.10.2004.

¶29

ln consideration of the Applicant bank agreeing to grant the said loan to the Defendant No.'1, the Defendant No.3 & 4 had executed a Letter of cuarantee dated 15.10.2004, in favour of the Applicant bank on the terms and conditions contained herein.

¶30

Thereafter, the Defendant No.2 as Proprietor of Defendant No.1 Firm vide

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st -clifilft{J, Prcr*rns dft;l \ DRT, Guwahali

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o A 21 8/2o2zDRr4uw.hati

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Application dated 30.03.2005, requested^{the Applicant Bankfor enhancementof the} Cash Credit Facility and in consideration of^{the said request, the Applicant Bank vide} Sanction Letter dated 12.04.2005^{had enhanced the existingCash CrcditLimit of} Rs.12.oo Lacs^(Rupees Twelve Lacs)^{only to Rs.38.00Lacs (RupeesThirty Eight Lacs)} only with the rate of interest @ 11.25%^per annum^{with Monthly rest. The Cash Credit} Facility was repayable on demand.

¶34

ln consideration of the aforesaid enhanced^{limit of Rs.38.00 Lacs (RupeesThirty} Eight Lacs) only, the Defendant^{No.2 as Proprietorof the DefendantNo.'l Firm, duly} executed a Letter of^{continuitydated 12.04.2005in termsof the sanction, inter-alla} giving due effect to the terms and condition of sanction,^{promisingto repay lhe loan and} to secure the dues ofApplicant^Bank

¶35

The aforesaid enhanced limit^{of Rs.38,00,000.00 (RupeesThirtyEight Lacs) only} was further secured with^{the creationof equitablemortgage by the Defendant No.3 over} the Flat No.1O2 on the^{Mahavir Apartment situatedat Narayannagar(Kumarpara),} Guwahati -781009. Accordingly,^{theDefendant No 3 had deposited the TitleDeedsfor} creation of equitable^{mortgageof her lmmovableproperty in favor of the Applicant} Bank. The Defendant^{No.3by executinga specimenof acknowledgment letterdated} '12.04.2005 had confirmed the deposit of Title Deeds in favor of the Applicant^Bank,

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The Defendant No.2 as^{Proprietor of Defendant No.1, had executed a Demand} Promissory Note^{for RS.38,OO,OOO.OOonly and a Link Letter (bothdated on 31 03 2008)} thereby admitted^{the crrrectnessof the account and promisedto pay the Applicant} Bank the said amount^{with interest.}

¶37

The Defendant^{No.2 as Proprietorof Defendant No lFirm, vide Letterdated} 14.07.2010 and^{12.'IO.2O1O requestedthe Applicant Bankfot changeof collateral} security,^(i.e. the^{collateral security be substituted/changedfrom Flat No102 on the} Mahavir Apartment^{situated at Narayannagar (Kumarpara), Guwahati -78'1009 by^o} another^{property more parlicularly describedin Schedule-B)lt is perlinenito mention} here that, in course^{of time thesame was duly doneand thecollateral securityupon} which equitable^{mortgagewas initially created was substitutedby anotherproperty} more^{particularlymentioned in Schedule-B of the oA.} -Sl.lf^Sl*L+-

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OA 2182o22/DRTCBahali

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Again on lhe request of the defendants, the Applicant Bank vide Sanction Advice dated 15.1'1.20'10, had renewed the cash credit facility of Rs.38,00,000i- (Rupees Thirty Eight Lacs) only with the rate of interest @ 13.75% (BR^+5.50%) per annum subject to change from time to time as^per Bank's decision and in consideration of the renewal of the credit facility, the Defendant No.2 as Proprietor of Defendant No.1 had executed a Demand Promissory Note for Rs.38,00,000/- and a Link Letter both dated 15.11.2010 in favour of the Applicant thereby^promised to^pay the said amount with lnterest to the applicant on demand. Further, the Defendant No.2 as Proprietor of Oefendant No.1 had also executed a Hypothecation of Goods dated^'15.11.2010, thereby hypothecating the stocks of Electric & Electronic^goods, Battery, lnverter etc.

¶41

The Defendant No. 3 & 4 by executing Letter of Guarantee dated 15.11.2010 thereby again agreed and^guaranteed to the Applicant^Bank lhe due^paymentand discharge on demand of all amounts advanced to the^{Principal with interest and other} charges and expenses.

¶42

The aforesaid Cash Credit Facility of Rs.38,00,0004^{(Rupees Thirty Eight Lacs)} only was further secured with the creation of^{equitable mortgage by the DefendantNo.2,} over the substituted^property i.e.^{the shop unit No.G- 01 on the ground floor of the} building complex namely Golden^{Heights,situated at Sahar Guwahati Part-ll under} Mouza Guwahati, Chartibari,^{Guwahati more fully describedin the schedule-Bof the} OA. Accordingly, the Defendant^{No.2 depositedthe Title Deedsfor creation of} equitable mortgage of^{his immovableproperty in favorof the Applicant Bank. The} Defendant No.2 by executing^{a letter dated15.11.2010 had confimed thedepositof} Title Deeds in favor of^{the Applicant Bank.}

¶43

The Defendant No.2 as^Proprietor of^{Defendant No.l had further executed} Demand Promissory Note^{for RS.38,OO,OOOO0 and a Letter of continuity (bothdated} 29.08.2011\ in favour^{of the Applicant thereby promisedto paythesaid amountwith} interest to the applicant on^demand

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The Defendant No.2 as^{Proprietorof Defendant No. 1 vide letter} daled 20.1O.21al1, requested^{the Applicant Bankfor allowinga temporary adhoclimitof}

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O A 21812022/DRT-Gryahatr

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Rs.5,00,000/- (Rupees Five Lacs) only over the existing limit of Rs.38,00,000/- (Rupees Thiriy Eight Lacs) only for purchase of raw materials and in consideration of the said request, the Applicant Bank allowed an adhoc limit of Rs.5,00,000/- (Rupees Five Lacs) only to the Defendant No.1 for 36 days.

¶48

ln consideration of the sanction of adhoc limit of Rs.5,00,000.00 (Rupees Five Lacs) only and existing Cash Credit Limit of Rs.38,00,000.00 (Rupees Thirty Eight Lacs) only, Defendant No.2 as Proprietor of Defendant No.1 had executed a Demand Promissory Note for Rs.43,00,000.00 and a Letter of continuity both dated 20.10.201,1 in favour of the Applicant thereby promised to pay the said amount with interest to the applicant on demand.

¶49

Again the Defendant No. 2 as^proprietor of Oefendant No..l, vide letter dated 05.07.2012 requested before the Applicant Bank for temporary adhoc limit of Rs.7,50,000.00 (Rupees Seven Lacs Fny Thousand) onty over the existing limit of Rs.38,00,000.00 (Rupees Thirty Eight Lacs) onty for supply of materiats and in consideration of the said request, the Applicant Bank on 07.07.2012, sanc{ioned an adhoc limit of Rs.7,S0,000.00 (Rupees Seven Lacs Fifty Thousand) only to the Defendant No.'l for 60 days.

¶50

ln consideration of lhe sanclion of adhoc limit of RS.7,5O,OOO.OO (Rupees Seven Lacs Fifty Thousand) onty and existing Cash Credit Limit of RS.38,OO,0OO.OO (Rupees Thirty Eight Lacs) onry, Defendant No.2 as proprietor of Defendant No.i had executed a Demand Promissory Note for RS.45,5O,OOO.OO dated 11.07.20.t2 in favour of the Applicant thereby promised to pay the said amounr with interest to the appricant on demand.

¶51

Thereafter, on the request of the Defendants for enhancement of the Credit facility, the Applicant Bank vide sanction Letter dated 20.11.2013 had enhanced the credit facility from Rs.38,00,000.00 (Rupees Thirty Eight Lacs) onty to Rs. 95,00,OOO.OO (Rupees Ninety Five Lacs) only to the Defendant No.i with rate of interest @ 1S.SO% per annum on monthly rest, subjec{ to change as per Bank,s decision lo be taken from time to time.

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OA 21&zo2zoRT4uwahatr

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ln consideration of sanction of the enhanced limit of Rs.95,00,000.00^(Rupees Ninety Five Lacs) only, Defendant No.2 as Proprietor of Defendant No.l had executed a Demand Promissory Note for Rs.95,00,000.00, Letter of Continuity and Hypothecation of Goods all dated 20.11.2013 in favour of the Applicant thereby^promised to^pay the said amount with interest to the applicant on demand. The Defendant No.2 as Proprietor of Defendant No.l had also executed a Link Letter dated 20.11.2013 thereby admitted and acknowledged the dues to the Applicant Bank.

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The aforesaid cash credit limit of Rs. 95,00,000.00 (Rupees Ninety Five Lacs) only was further secured with an extension of equitable mortgage by deposit of tille deeds, which was erstwhile deposiled with the Applicant Bank on 15.11.2010 as securily for repayment of the cash credit limit of Rs. 38,00,000.00^(Rupees Thirty Eight Lacs) only over the schedule - B^property. The Defendant No.2 by executing a Letter dated 20.11.2013 confirmed the creation of extension of equitable mortgage as collateral security to cover the enhanced^limit.

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On the request of the defendants, the Applicant Bank^vide Sanction^{Letter dated} 20.01.2015 had renewed the credit facility at^its existing^limit of^{Rs.95,00,000.00} (Rupees Ninety Five Lacs) only with the rate of interest 14.50%^per annum on monthly rest, sub.iecl to change as^per Bank's decision to be taken^{from time} to^time.

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Again on the request of the defendants, the Applicant^{Bank vide SanctionLetter}

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dated 25.05.20'16 had renewed^{the creditfacility at its existing limit of Rs.95,00,000.00} (Rupees Ninety Five Lacs) only with the rate of interest @^{13.00%per annum on} monthly rest, sub.lecl to change^{as per Bank's decisionto be taken from time to time.}

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The Defendant No.2 as Proprietor of^{Defendant No.1 vide Letter dated} 05.10.2017 again requested the^{ApplicantBank for temporary overdraftof} Rs.4,80,OOO.00^(Rupees Four Lacs^{EightyThousand) only and in consideration of sald} request the Applicant^Bank on^{05.10.2017 had sanctiona temporary overdraft of} Rs.4.80,000.00^(Rupees Four Lacs^{Eighty Thousand) only for 30 days}

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ln consideration of the sanction ot^{temporary overdraft of Rs 4'80'000.00} (Rupees Four Lacs Eighty Thousand) only, Defendant^{No.2 as Proprietor of Defendant}

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No.1 had executed a Demand Promissory Note for Rs.4,80,000.00 and a supplemental Deed of Hypothecation Agreement all dated 05.10.2017 in favour of the Applicant thereby promised to pay the said amount with interest to the applicant on demand. Thereafrer, the Defendant No.2 as Proprietor of Defendant. No.1 had again executed a Demand Promissory Note dated on 05.10.2018.

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The Defendant No.2 as Proprietor of Defendant No.1 firm vide Letter dated 30.05-2019 requested the Applicant Bank for restructuring the Loan account and on such application, the Applicant Bank had sanctioned a Funded lnteresi Term Loan (FITL) of Rs.5,41,000.00 (Rupees Five Lacs Forty One Thousand) only for un-serviced portion of interest of existing Cash Credit Facility, thereby restructured lhe existing credit facilities availed by the Defendant No.1 Firm.

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Thereafter, the Defendants failed and neglected to repay the loan amounts, as

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such the Loan accounts became NPAS on 30.09.2019 as^per lhe^guidelines of Reserye Bank of lndia. Therefore, the Applicant Bank on 21.10.20'19 initiated proceedings u/s 13(2) of Securitization and Reconstruction of Financial Assets and Enforcemenl of Security lnterest^(SARFAESD Acl, 2002 and thereby called upon the Defendants to discharge their liabilities in full within 60 days from the date of receipt of this notice, falling which the Applicant Bank shall be constrained to enforce the security created by them. But the Defendants failed to discharge their liabilities within the stipulated^period of time. As such, subsequently the Applicant has taken symbolic^possession of the mortgage^property vide Possession Notice dated 06.01.2020

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The Applicant Bank vide Letters dated^{'18.11.2020 informed} the^Defendants about the declaration of NPAS of the^{Loan accountsand requestedto regularize the} Loan Account within seven days failing which the^{Applicantwill boundto adjust the} security.

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The Defendant No.2 vide Letter daled 3'1.'12.2020^{requestedthe ApplicantBank} for upgrading the loan account and^{accordinglythe Applicant Bank upgraded the loan} account. Thereafter, again^{due to the default of the defendantsthe accountswere} declared N.P.A. on 31.03.2021.

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O A 21 8zo22loR1-Guwahati

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The Defendants had availed of the said loan facilities from the Applicant Bank, but have not^paid the loan amount as^per the terms and conditions as agreed upon with the Applicant Bank, inspite of repeated demands and requests by the Applicant Bank. As the defendants failed to repay the loan amounts, the said accounts became NPA on 31.03.202'1. Afrer the accounts became NPA the applicant bank issued notices for repayment of the due amount, but the defendants have neither chosen for repayment of the loan amounts nor approached to the applicant bank^{for renewal} of the cash^credit account.

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The applicant bank thus became constrained to tile the^{presentOriginal} Application for the recovery of^{Rs. 1,02,33,937.71 (Rupees One Crore Two Laca} Thirty Three Thousand^{Nine HundredThirty SevenAnd Paisa Seventy One) only} as on 31.05.2022 along^{withinterest and cost of the application.}

¶73

After filing of the^{OA the Tribunal issued notices upon the defendants through} registered^post and^{the applicant bank filed service reporton 03 08 2022 and brought} onrecordtheposlalreceiptsalongwithtrackconsignmentreport.ltisobservedthat the summons^{have not been served upon the defendants Thereafterthe Tribunal} ordered^{paper publicationof notice uponthe defendantsand the applicantbank} issuednoticestothedefendantson2l.Ol'Zo22throughPaperPublicationiniwo newspapers namely^{"The Timesof lndia" aod "NiyomiyaBada"Evenafter issuanceof} notices upon the^{defendantsthroughpaperpublicationalso there wasno} representation^{on behalf of the defendantseither by the counsel or lhe personand} hencethedefendantsweremadesetex.parteono2.ll.2022andlheirrighttofile written slatement^{cum evidence on affidavit was closed and the matter was posted for} hearing on behatf^{of the applicant bank}

¶74

Supporting the^{claimof the applicantbank Sri Guru Prasad Talukdar'Chief} Manager of^{the Applicant Bankhas tiled evidence on aflidavit coupled with the} security documenls^{marked as Exhibit -1 to Exhibit- 57 supportingtheclaimof the} applicant bank.

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Heard the learned^{counsel for the applicant bank who prayedfor issuanceof}

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O A 2182022/DRT-Gwahali

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Recovery Certificate against the defendants as^per pleadings made in the Application, supported by evidence on affidavit of their witness who afiirmed on oath the execution 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 documenls liled by the applicant bank are supporting tha claim of the applicant bank and establishing the liability of the defendants. lt is proved that the defendants are liable to pay to the applicant bank lhe claim made in the Original Application. The loans were obtained and documents have been executed on 15.10.2004, 12.U.2005, 31.03.2008, 15.11.2010, 29.08.2011, 20.10.2011, 11.07.2012, 20.11.2013, 20.01.2015, 25.05.2016, 05.10.2017, 05.10.2018, 30.05.2019, 31.122020. The accounts became NPAon 31.03.2021and the OA has been filed on 18.06.2022. Hence, the OA is filed well^within the^period of limitation and this Tribunal having a^jurisdiction to adjudicate^{the originalApplication.}

¶80

Considering the unchallenged/unrebutted^version of Sri Guru^Prasad Talukdar, the applicant's witness and all the documents^{marked as exhibits, including} duly certified copy of the statement of account along^{with interest} calculation^sheet maintained by the applicant Bank in it's regular course^{of business,} I^{holdthat the} applicant is entitled to^get the Recovery^{Certificate as prayed for.}

¶81

ln the result, the^preseni Original^{ApplicationNo. 218 of 2022 is allowed with} cost as under:-

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i) The defendants No. 1,2,3 & 4 are^{jointly and severally liable to pay to the} applicant bank a sum of Rs.^{1,02,33,937.7'l(Rupsss One Crors TwoLacs} Thirty Three Thousand Nine^{HundredThirty SevenAnd Paba Sevonty} One) only with^{pendentelite and future inierest} @12.25olo^{p.a. withmonthly} rests from 01.06.2022 till the date^{of full paymenUrealization and also cost of} the application.

¶83

ii) The charge of the certificated^{amouni be kept alive on hypothecated properties,}

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as described in Schedule-A of the^{OA till the amount is realizedin full.}

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skrlslg.gfli"Lil eresiainso\nUi' | - (/ DRT. Guwahati

¶86

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O A. 21 &2o22lDRl-Guwahati

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iii) The charge of the certiticated amount be kept alive on mortgaged^property i.e. all that^part and^parcel of Shop No. G-01 on the Ground floor of the building 'Golden Heights' standing over the^plot of land measuring 7 katha 10 lecha covered by Dag No. 861, 862, 863(New)/428(Old) of K.P.Patta No. 429(New)/522(Old) situated at Village Sahar Guwahati under Mouza Guwahati in the District of Kamrup^(Metro), Assam in the name of defendant No.2 , as described in Schedule-B of the OA till the amount is realized in tull.

¶89

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

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v) The applicant bank is also entitled to proceed against the p€Gonal assets and properties of the defendants towards recovery of the dues.

¶91

vi) 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.

¶92

vii) lssue Recovery Certificate accordingly for a sum Rs. 1,02,33,937.71 (Rupees Ona Crore Two Lacs Thirty Three Thousand Nins Hundred Thirty Seven And Paisa Sevonty One) only in favour of the applicant bank against the defendants No. 1,2,3 & 4.

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viii) 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 dated lTrh July 2023, signed and pronounced in the Tribunal today

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under my signature.

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Copy of the JudgmenuFinal Order be uploaded in the Tribunal's Website and

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file be consigned to Record Room.

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Sk-19-n+''N l,.["1 (shivsharan btfE))l') . I Presiding Officer DRT, Guwahati.

Punjab National Bank v. Ms Dinesh Electronics

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. Ms Dinesh Electronics

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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