Allowed

Kotak Mahindra Bank Limited v. Sh. Shish Pal

DRT19 Jun 2023OA/2254/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by Kotak Mahindra Bank Ltd for recovery of a loan amount of Rs. 35,38,163.82 along with interest at 7% p.a. The tribunal reduced the claimed interest rate owing to pandemic conditions and agricultural nature of the loan.

What did the court decide?

Recovery of Rs. 35,38,163.82 with simple interest at 7% per annum from 30.11.2022 till realisation.

Kotak Mahindra Bank Limited versus Sh. Shish Pal — Banking and Recovery | DRT (2023)

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DEBTS RECOVERY TRIBUNAL-2, CHANDIGARH, PRESIDED OVER BY M.M. DHONCHAK

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ORIGINAL APPLICATION NO. 2254/2022

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DATE OF INSTITUTION: 30.11.2022

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DATE OF DECISION: 19^th DAY OF JUNE, 2023

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Kotak Mahindra Bank Limited, a body corporate constituted under Banking Regulation Act, 1949, having its registered office at 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai-400051 and the successor to ING Vyasa Bank under the Amalgamation Scheme on 01.04.2015, sanctioned by the Reserve Bank of India in exercise of powers contained in Sub Section (4) of Section 44A of the Banking Regulation Act, 1949, having its Branches all over India including Branch at Kotak Mahindra Bank Limited, commercial banking, SCO 153-154-155, Basement, Sector-9C, Madhya Marg, Chandigarh, through its Authorised Representative, Sh. Munish Sharma

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…..Applicant Bank

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Versus

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Sh. Shish Pal S/o Sh. Ram Niwas R/o VPO Kheri Rai Wali, Haryana-136026

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Smt. Sneh Lata W/o Sh. Shish Pal R/o House No. 113, Kheri Rai Wali, Tehsil Kaithal, District Kaithal, Haryana-136026

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…..Defendants

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Argued by: Sh. Munish Sharma, Senior Manager for the applicant bank Defendants ex parte vide order dated 04.02.2023

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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

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OA 2254/2022 KOTAK MAHINDRA BANK V/S SH. SHISH PAL AND ANOTHER 2

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and Financial Institutions Act, 1993 (hereinafter referred to as ‘the Act’ for brevity) , against the defendants for recovery of Rs.35,38,163.82/(Rupees Thirty Five lacs Thirty Eight Thousand One Hundred Sixty Three and Eighty Two Paisa only) . The OA has been filed through Sh. Munish Sharma, Authorised Representative of the applicant bank, stated to be competent to institute the Original Application vide Resolution dated 27.06.2022, Annexure-A2 (copy).

¶16

The brief facts of the case of the applicant as per the Original Application are that defendants had approached the applicant bank for grant of KCC facility of Rs. 32 lacs.

¶17

The applicant bank sanctioned the above said loan facility of Rs. 28 lacs to the defendants vide credit arrangement letter dated 17.12.2014, Annexure-A3 (copy) as per terms and conditions which were duly accepted by the defendants.

¶18

In order to secure the aforementioned credit facility, the defendants executed various loan and security documents, i.e. demand promissory note dated 17.12.2014, Annexure-A4 (copy), demand promissory note delivery letter dated 17.12.2014, Annexure-A5 (copy), hypothecation agreement dated 17.12.2014, Annexure-A6 (copy), consent letter dated 17.12.2014, AnnexureA7 (copy), undertaking-cum-authorisation letter dated 17.12.2014 for insuring crop and other movable assets, Annexure-A8 (copy) and agreement dated 17.12.2014 regarding rate of interest, Annexure-A9 (copy).

¶19

The aforesaid loan was further secured by creation of registered mortgage by defendant No. 1 in respect of agricultural land

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OA 2254/2022 KOTAK MAHINDRA BANK V/S SH. SHISH PAL AND ANOTHER 3

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measuring 95 Kanals 5 Marlas situated in the revenue estate of KheriRaiwali, Tehsil Dhand, District Kaithal, fully detailed in para No. 5(vi) of the Original Application.

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The documents related to mortgage are as under:

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i. Registered mortgage deed dated 23.12.2014, Annexure-

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A10 (copy).

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ii. Request letter to the Tehsildar/Naib Tehsildar, Dhand, for entry/mutation of mortgaged property and letter dated 20.12.2014 regarding mortgage of land, Annexure-A11 (colly) (copy).

¶26

It is further the case of the applicant bank that the loan facility 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 as NPA on 31.03.2022. The applicant bank recalled the entire outstanding amount vide legal notice dated 17.11.2022 along with original postal receipts, Annexure-A12 (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.35,38,163.82/(Rupees Thirty Five lacs Thirty Eight Thousand One Hundred Sixty Three and Eighty Two Paisa only) is recoverable against the defendants as per statement of account certified under Bankers’ Books Evidence Act, Annexure-A13 (copy).

¶27

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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OA 2254/2022 KOTAK MAHINDRA BANK V/S SH. SHISH PAL AND ANOTHER 4

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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, the defendants were proceeded against ex parte vide order dated 04.02.2023 .

¶30

In support of the contents of the OA, affidavit of evidence of Sh. Munish Sharma, Manager of the applicant bank was filed.

¶31

This Tribunal has heard ex-parte arguments advanced by Sh. Munish Sharma, Senior Manager of the applicant bank and gone through the record carefully.

¶32

It was argued by Sh. Munish Sharma, Senior Manager of the applicant bank 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- A2 to A13, it is clear that the defendants had approached the applicant bank for availing of the loan facility which was granted to them after they had executed all the relevant documents as stated above in favour of the applicant bank. Unfortunately, the defendants failed to pay back the loan as per terms and conditions of the agreement executed between the parties. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.35,38,163.82/(Rupees Thirty Five lacs Thirty Eight Thousand One Hundred Sixty Three and Eighty Two Paisa only) from the defendants.

¶33

In so far as pendente lite and future interest is concerned, the applicant bank in relief clause has claimed rate of interest @12% per annum with monthly/half yearly rests plus penal interest of @2% per

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OA 2254/2022 KOTAK MAHINDRA BANK V/S SH. SHISH PAL AND ANOTHER 5

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annum. In credit arrangement letter dated 17.12.2014, Annexure-A3 (copy), the rate of interest has been mentioned @12% per annum.

¶36

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 mortgaged property, purpose of loan, i.e. agricultural, present conditions of economy based on agriculture, quantum of loan, prevalent market rates of interest which have gone drastically downhill in yesteryears and defendant No.2 being a lady, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @7% per annum from the date of filing of the OA till realisation of the amount ordered vide this final order. It is ordered accordingly.

¶37

In the result, the Original Application is allowed with costs declaring that the defendants are liable to pay to the applicant bank a sum of Rs.35,38,163.82/- (Rupees Thirty Five lacs Thirty Eight Thousand One Hundred Sixty Three and Eighty Two Paisa only) with current and future simple interest @7% per annum , w.e.f. 30.11.2022 , till the date of realisation of the amount. The liability of 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 the defendants in execution proceedings, if not sold earlier under the provisions of the Securitisation and Reconstruction of 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

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OA 2254/2022 KOTAK MAHINDRA BANK V/S SH. SHISH PAL AND ANOTHER 6

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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.

¶40

Issue Recovery Certificate accordingly.

¶41

Parties to appear before Recovery Officer concerned on 19.08.2023.

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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.

¶43

Announced in the open Tribunal (M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh

Kotak Mahindra Bank Limited v. Sh. Shish Pal

Case brief

What is this about?

What did the court decide?

Kotak Mahindra Bank Limited v. Sh. Shish Pal

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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