Allowed

Punjab National Bank v. M/S Mehndipur Balaji Screening Plant

DRT1 Aug 2023OA/2282/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the applicant bank's application for recovery of Rs.20,00,048.30 owed by defendants on loan facilities. The court granted interest at 10% per annum and directed issue of a recovery certificate.

What did the court decide?

Recovery certificate directed; defendants liable to pay Rs.20,00,048.30 plus 10% simple interest per annum; liberty to recover via sale of assets.

Punjab National Bank versus M/S Mehndipur Balaji… — 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. 2282 of 2022

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DATE OF INSTITUTION: 14.12.2022

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DATE OF DECISION: 1^st DAY OF AUGUST, 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, through one of its Branches having office at Ranjitpur, Tehsil Bilaspur, District Yamunanagar, through its Power of Attorney Holder, Sh. Subhash Chand

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.......Applicant Bank

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Versus

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M/s Mehendipur Balaji Screening Plant situated at village Ranipur, P.O. Mugalwali, Tehsil Bilaspur, District Yamunanagar, Haryana

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through its Proprietor, Sh. Manjit Singh S/o Sh. Mahender Singh

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Sh. Manjit Singh S/o Sh. Mahender Singh R/o House No. 33, Tulsi Nagar, Azad Nagar, Hissar, Disrict Hissar, Haryana

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.....Defendants

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Argued by: Ms Arpita Sonkar, Manager Law, GPA Holder for the applicant bank Defendants ex parte vide order 18.02.2023

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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 and Financial Institutions Act, 1993 (hereinafter referred to as ‘the Act’ for brevity) , against defendants for recovery of Rs.20,00,048.30/- (Rupees Twenty Lacs Forty Eight and Thirty Paisa Only) . The OA has been filed through Sh. Subhash Chand,

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OA/2282/2022 PUNJAB NATIONAL BANK Vs MEHENDIPUR BALAJI AND ANOTHER 2

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Power of Attorney holder of the applicant bank, stated to be competent to institute the Original Application vide Power of Attorney dated 28.02.2003, Annexure-A1 (copy).

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The brief facts of the case of the applicant as per Original Application are that defendant No. 1 through defendant No. 2 had approached the applicant bank for grant of cash credit facility of Rs. 4.50 lacs and term loan facility of Rs. 18 lacs vide loan application form dated 23.12.2020, Annexure-A2 (copy).

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The applicant bank sanctioned aforesaid facilities to the defendants as per terms and conditions duly accepted by the defendants.

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In order to secure the aforementioned credit facilities, the defendants executed various loan and security documents, i.e. hypothecation agreement dated 21.01.2021, Annexure-A3 (copy), term loan agreement dated 21.01.2021, Annexure-A4 (copy) and master agreement dated 21.01.2021, Annexure-A5 (copy). PAN card is Annexure-A9 (copy).

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It is further the case of the applicant bank 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 27.05.2022. The applicant bank recalled entire outstanding amount vide legal notice dated 05.05.2022, Annexure-A6 (copy) and its postal receipts, Annexures-A7 and A8 (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.20,00,048.30/(Rupees Twenty Lacs Forty Eight and Thirty Paisa Only) is

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OA/2282/2022 PUNJAB NATIONAL BANK Vs MEHENDIPUR BALAJI AND ANOTHER 3 recoverable against defendants as per interest chart, Annexure-A12 (copy) and statements of accounts, Annexures-A10 and A11 (copy) certified under Bankers’ Book Evidence Act, Annexure-A13 .

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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 18.02.2023 . 7. In support of contents of the Original Application, affidavit of evidence of Sh. Subhash Chand, Branch Manager 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 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 A13, it comes out that the defendants had approached the applicant bank for availing of the loan facilities which were granted to them. It is further clear 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.20,00,048.30/- (Rupees Twenty Lacs Forty Eight and Thirty Paisa Only) from the

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OA/2282/2022 PUNJAB NATIONAL BANK Vs MEHENDIPUR BALAJI AND ANOTHER 4

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defendants, from the date of filing the present Original Application, till realization of the amount.

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In so far as pendente lite and future interest is concerned, the applicant bank in relief clause has claimed rate of interest @11.95% per annum with monthly rests plus penal interest @2% per annum in both facilities. In hypothecation agreement and term loan agreement dated 21.01.2021, Annexures-A3 and A4 (copy), rate of interest has been mentioned @11.95% per annum in both facilities.

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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, 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 @10% 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.20,00,048.30/- (Rupees Twenty Lacs Forty Eight and Thirty Paisa Only) with current and future simple interest @10% per annum w.e.f. 14.12.2022 , till the date of realisation of the amount. The liability of 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

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OA/2282/2022 PUNJAB NATIONAL BANK Vs MEHENDIPUR BALAJI AND ANOTHER 5

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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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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 27.09.2023.

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

Punjab National Bank v. M/S Mehndipur Balaji Screening Plant

Case brief

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Punjab National Bank v. M/S Mehndipur Balaji Screening Plant

Case brief

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