Allowed

Canara Bank v. M/s Li- Style

DRT20 Dec 2023OA/237/2022

Case brief

AI extract

What is this about?

The DRT Guwahati allowed the Bank's application for a Recovery Certificate under Section 12 RDDBFI Act against a proprietorship firm, its proprietor, and a guarantor for an outstanding loan of Rs. 44.28 lakhs marked NPA in 2014. The Tribunal found the defendants jointly liable based on unchallenged documentary evidence regarding the loan, hypothecation, and overdue accounts, and confirmed the appl

What did the court decide?

Issued a Recovery Certificate for Rs. 44,28,983.64 with future interest at 13% p.a. against the respondents; liable to proceed against hypothecated/mortgaged and personal assets.

Canara Bank versus M/s Li- Style — Banking and Recovery | DRT (2023)

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O.A 237l2022lDRT-cRahati

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(North Eastern Region)

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(Tribunal of Assam, Nagaland, Meghalaya, Manipur, Mi-zoram, Arunachal pradesh & Tnpura)

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O.A. No.23 2O22

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ln the matter of - CANARA BANK Dimapur Branch, First Floor, Near Plaza Bakery, Nyamo Lotha Road (Church Road) Dimapur, Nagaland-7g7'l 12.

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Applicant

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vs.

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tit/s Ll-swLE Proprietorship Iirm represented by Ms Lucky Regmi Shop at SC-22, Super Market, Dimapur-797112.

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iIS. LUCKY RAGUI Son of Somi Ragui Resident of Wangram Colony, Purana Bazar, Oimapu[-7 97'l'12, Nagaland. 3, MRS. PISKIM KASOM D/o M. Kasom,

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R o Putana Bazar, House No.142, Dimapur-l 97'l 12, Nagaland.

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Defendants

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Presence of the Counsel: For the Applicant : Mr. Mukesh Sharma, Ms. Ellora Bharali, Advocates For the Defendants : None (Ex-parte)

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Oaled :2011212023

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JUDGMENT

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This is an application under section^.lg of the Recovery of Debts Due to Banks and Financial lnstitutions Act, 1993 filed by the Canara Bank, Dimapur Branch, First Floor, Near Plaza Bakery, Nyamo Lotha Road (Church Road), Dimapur, Nagaland_ 797112, wilh a prayer to issue Recovery Certificate for the sum of Rs. 44,2g,9g3.64 (Rupees Forty-Four Lakhs Twenty-Eight Thousand Nine Hundred Eighty-Three

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Slirs-[a^a- 0"1r, )o.l L.L\ Y Presiding Oficer - U DRT. Guwahati

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o A.23lt2}z2t)RJ-Gusehati

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and Paise Sixty-Four) only as on 31.05.2022 against the defendants with future interest at the conlractual rate 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. 1 is the proprietorship firm of the Defendant No.2as well as the borrower and mortgagor and Defendant No.3 is the guarantor to the loan availed by the defendant No.^'l firm.

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The Defendant No. 2 as proprietor had approached the Applicant Bank and applied for financial assistance by submitting a Loan Application dated 16.07.2013 for its business and after considering the said Application, the Applicant Bank vide its Acknowledgement receipt dated 16.07.2013 had sanctioned an Cash Credit (CC) of Rs.13,00,000/- (Rupees Thirteen Lakhs) only to the Defendant firm, with interest @ 137o per annum compounded monthly subject to changes from time to time as per Banks guidelines. The cash credit limit is payable on demand. ln the event of derault, the bank shall also be entitled to charge at its own discretion and the borrower shall be liable to pay such enhanced rate of interest on the said cash credit account. The Oefendant had signed on the said Sanction Memorandum, thereby agreeing to the terms and condition laid down therein. The Oefendant No. 2 as the Proprietor of the firm had also executed a Process Note dated 16.07.20'13 thereby confirming the availing of the loan facility from lhe applicant bank and also accepted the terms and conditions contained therein.

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ln connection with the sanction of the Cash Credit Facility of Rs. 13,00,000/Lacs, sanctioned by the Applicant Bank and availed of by the Defendant no.1 firm Composite Hypothecation Agreement dated 16.07.2013has been signed and executed by the Defendant No. 2 as the Proprietor of the Defendant No.,l firm in favour of the Applicant Bank as security for repayment of the loan, thereby agreeing to all the terms and conditions laid down in the said Agreement and also charged/ hypothecation of stock in trade etc. in favour of the Applicant Bank

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ln connection with the sanctioning of the overdraff facility of Rs. 13.00 Lacs sanction by the applicant bank and availed off by the defendant no. 1 firm,

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Slni, d^a ta., $q,L,q eresioins omSF Iz 4 f DRT. Guwahati

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o.A 237zozzDRT.cuvai.ti

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Guaranlee Agreement dated 16.07.2013 was signed and executed by the defendant no.3, who stood as the personal guarantor to the said loan facility availed by the defendant no. 1 firm. The said Guarantee Agreement was duly signed and executed by the Defendants no.3, whereby in her capacity as the personal guarantor had not only confirmed the signing and execution of the Guarantee Agreement dated 16.07.2013 but also acknowledged its obligation as the personal guarantor to the loan facility availed by the Defendants no. 1 firm.

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The aforesaid Cash Credit Facitity of RS.13.OO Lacs (Rupees Thirteen Lakhs) only was further secured by creation of equitable mortgage of the immovable property by Defendant No.2 bearing Sale Deed registered no. SD198512012 dated 21.12.20'12 (more futty & specifica y described in (Schedute- B). Accordingly, the Defendant no 2 had deposited all the documents of ti e relaling to the immovable property as security for repayment to the Applicant for all the amounts advanced or to be advanced under various facilities granted or to be granted by the applicant bank to the Defendant No. 1 fim together with interest, compound and/or additional interest in case of default, cost, other charges in favour of the Applicant Bank. The Defendants have confirmed the equitable mortgage lo cover the aforesaid cash credit facility by submitting letter of handling over title deeds of propenies and Confirmation of Deposit of Tifle Deeds. lt is pertinent to mention that the Title Deeds of the aforesaid properties originally deposited for various financial facilities availed by them.

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The Defendant No. 2 as proprietor of Defendant No.l ,irm had confirmed and acknowledged its indebtedness towards the bank by signing and executing Acknowledgement of Debt and Security dated 15.07.2016 also confirmed the execution of loan documents and the relative securities in connection with the said loan facility availed of by the Oefendants.

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The defendanls had availed the said loan facilities from the applicant bank but have not paid the outstanding loan amount as per terms and conditions as agreed upon with the applicant bank, in spite of repeated demands and request by the

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OA. 2372022lDRT-cwahari

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applicant bank. As the defendants failed to repay the loan amount, the said loan accounts became NPA on 30.06.2014. However, the Defendant No. 2 as proprietor of Defendant No.1 had confirmed and acknowledged its indebtedness towards the bank by signing and executing Acknowledgement of Debt and Security dated 14.07.2019 and 01.02.2021 also confirmed the execution of loan documents and the relative securities in conneclion with the said loan facility availed of by the Defendants. After the account became NpA the applicant bank issued notices for repayment of the due amount, but the defendants failed to repay the loan amount.

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The applicant bank thus became constrained to file the present Original Application for the recovery of Rs. 44,28,983.64 (Rupees Forty-Four Lakhs TwentyEight Thousand Nine Hundred Eighty-Three and^paiso Sixty-Four) only as on 31.05.2022 along with interest and cost ofthe application.

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Afler filing of the OA the Tribunal issued notices upon the defendants through registered post and the applicant bank filed service report on 26.09.2022 and brought on record the postal receipts along with track consignment report which shows that notices have not been served upon the defendants. Thereafter the Tribunal ordered paper publication of notice upon the defendants and the applicant bank issued notice to the defendants on '14.09.2022lhtough Paper Publication in lwo newspapers namely "Morung Exprcss" and 'The Nagaland Posl'l Even after issuance of notice through paper publication also there was no representalion on behalf of the defendants either by the counsel or the person and hence the defendants were sel ex-parte on 02-01-2023 and their right to file written statement cum evidence on affldavit was closed and the matter was listed for hearing on behalf of the applicant bank.

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Supporting the claim of the applicant bank Pudoshi A.O., Senior Manager of the Applicant Bank has liled evidence on afiidavit coupled with the security documents marked as Documenl No. P, Exhibit-Aw-1/1 to AW-l/18 supporting the claim of the applicant bank.

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Heard the learned counsel for the applicant bank who prayed for issuance of

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Sfur4a\a".4.4., e,"oains off""?o'^lr' ) fl ORT, Guwahali

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Recovery Certilicate against the defendants as per pleadings made in the Application, supported by evidence on affidavit of their witness who afflrmed 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 document filed by the applicant bank are supporting the claim of the applicant bank and establishing the liability of the defendants. lt is proved that the defendants are^jointly and severally liable to pay to the applicant bank the claim made in the Original Application. The loan was obtained and documents have been executed on 16.072013. Acknowledgement of Oebt are dated 15.07.2016, 14.07 .2019 & 01.02.2021. Moreover, after perusing the documents on record and taking into consideration ofthe facts and circumstances of the case, I find that the mortgage has been seated by the defendant No.2 where the limitation available is for 12 years and as such taking into account of the creation of the mortgage the application appears to have been filed well within the^period of limitation. The account became NPA on 30.06.2014 and the OA has been filed on 27.06.2022. Hence, the OA is liled wellwithin the period of limitation and this Tribunal having a^jurisdiction to adjudicate the Original Application.

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Considering the unchallenged/unrebutted version of Purtoshi A.O., the applicant's wltness 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 hold that the applicant is entitled to^get the Recovery Certificate as^prayed for.

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ln the result, the present Original Application No. 237 ot 2022 is allowed with cost as under: -

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(i) The defendants No. 1,2 & 3 are^jointly and severally liable to^pay

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to the applicant bank a sum of Rs.44,28,983.64^(Rupees Forty-Four Lakhs

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9irJAol-a"^4"t)o,t),)L r Presiding Otrcor^:-' 0 DRT, Guwaheti

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O.A. 237l2o2z,DRt-Guwahati

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Twenty-Eight Thousand Nino Hundred Eighty-Three and Pabe Sixty-

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Four) only with pendentelite and future interest @13% p.a. with monthly rests ftom 01.06.2022 till the date of full paymenurealization and also cost of the application.

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(ii) The charge of the certilicated amount be kept alive on hypothecated properties as described in Schedule-A of the OA till the amount is realized in full.

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iii) The charge of the certificated amount be kept alive on mortgaged property i.e. Land measuring 018-00K-14 % Ls covered by Patta No. 128, Oag No. 88, Block- Purana Bazar, A.K.Mouza No.3 which is bounded as under: North: Plot of Yarnao; South: Plot of Khanaoshang: East: Plot of Hopson; West: Plot of Ramyola, as described in Schedule-B of the OA till the amount is realized in full.

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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^personal assets and properties of the defendants towards recovery of the dues.

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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.

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vii) lssue Recovery Cerlificate accordingly for a sum Rs. 44,28,983.64 (Rupeeg Forty-Four Lakhs Twenty-Eight Thousand Nine Hundred Eighty-Three and Paise Sixty-Four) only in favour of the applicant bank against the defendants No. 1,2 & 3.

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viii) Communicate copy of this order to the concemed parties. This order is dictated and corrected by the undersigned.

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Judgment dated 20h December 2023, signed and pronounced in the Tdbunal today under my signature.

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Copy of the JudgmenvFinal Order be uploaded in the Tribunal's Website and file be consigned to Record Room.

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sh;lcfan",^Q*l-ul, rsr'irstaran2ofCllvi4⁰ Pr.siding Officsr DRT, Guwahatl.

Canara Bank v. M/s Li- Style

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s Li- Style

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

Coram

Case details

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