Allowed

Canara Bank v. M/s Sambhawa Agro Farms and Other

DRT1 Jul 2023OA/239/2022

Case brief

AI extract

What is this about?

The DRT allowed an ex-parte application filed by the applicant bank to recover a debt of approximately Rs. 30.6 lakhs plus interest. The court held that unchallenged documentary evidence and the bank's affidavit established the loan's validity due to the defendants' non-appearance.

What did the court decide?

Recovery order for Rs. 30,59,662/ + interest (11.9% p.a.) + costs. Issuance of Recovery Certificate. Attachment of mortgaged assets.

Canara Bank versus M/s Sambhawa Agro Farms and Other — Banking and Recovery | DRT (2023)

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OA 239of2022[JI

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DRT,PATNA

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Debts Recovery Tribunal, Patna Karpuri Thakur Sadan, Aashiana Digha Road Patna-800025 Presiding Officer : Shri Kaushalendra Yadav

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OA Case No. 239 of 2022

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Canara Bank, Branch Office Hazipur, Vaishali

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....... Applicant

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Vs.

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MIs Sambhawa Agro Farms through its Proprietor Kumar Sambhaw S/o Sri Binod Kumar Singh: RIo Village + PO Khokhsa Bujurga, Jandaha Road, PS Desari, District- Vaishali, PIN-844504.

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Kumar Sambhaw S/o Sri Binod Kumar Singh: RIo Village + PO Khokhsa Bujurga, Jandaha Road, PS Desari, District- Vaishali, PIN844504, PAN CQWPS0623P.

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Binod Kumar Singh, S/o Late Ram Singar: RIo Village +PO Khokhsa Bujurga, Jandaha Road, PS- Desari, District -Vaishali, PIN844504, PAN No. BKSPS6513D

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.......... Defendants

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For the Applicant : Shri Arvind Kumar, Advocate For the Defendants : None

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Dated: 01.07.2023

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JUDGMENT

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1- The Applicant bank has made this application uls 19 of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 23.03.2022 against the defendants to recover its debts from defendants of Rs.30,59,662 as on 22.3.2022 along with Pendente-lite and future interest at the contractual rate from 23.03.2022 with costs till realization.

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2- The application has been duly registered and numbered as above.

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3- The brief facts of the case of the applicant bank as stated in the application are as under-

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The applicant bank, a body corporate constituted under the Banking Companies (Acquisition and Transfer of undertaking) Act 1970 having its head/corporate office at 112 J.C. Road, Bangalore-560002, inter alia carrying on business among other places also at B/o Hazipur, District Vaishali, Bihar

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The defendant no. 1 is a Proprietor and carries on business of Hatchery. The defendant approached and applied for the SOD limit of RS.15 lakh for the business of Hatchery to the applicant Bank on 25.10.2011 and the applicant bank sanctioned SOD facility. In respect of said facilities the defendant no. 1 executed the securities documents. The defendant no. 1 approached and applied for the enhancement of SOD

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limit from RS.15 lakh to Rs.20 lakh to the applicant Bank in addition to existing credit facilities. The applicant Bank enhanced SOD facility from RS.15 lakh to Rs.20 lakh 01.02.2013 and defendant no. 1 executed the securities documents. The defendant no. 3 executed Agreement of Guarantee on 08.03.2013 to secure the liability undertaken by defendant no. 1 and 2. The defendant no. 3 further created equitable mortgage details given of at page 16in schedule-I of OA.

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All the transactions were entered in the ledger of the loan accounts in the name of the defendant duly maintained by the applicant bank in its usual course of business. After availing the sanctioned credit facilities became irregular in repayment of their dues as per agreed terms and failed to adhere to the financial norms of the bank and avoiding the repayment of its dues to the bank, in spite of several assurances given by it to the applicant bank resulting in the account turning as NPA on 29.06.2019.

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Thus the total liability in the loan account is Rs.30,59,662 /- with Pendent-lite and future interest contractual rate from 23.3.2022 till the realization.

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The interest /compound interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

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Since, the defendants have failed and neglected in spite of several reminders to make payment of the dues recoverable to bank, hence this application has been filed by the bank.

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4- Uzs 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993, copies of application & paper book was sent by this Tribunal to the defendants by registered/speed post on 14.05.2022 and summons/notices issued requiring the defendants to show-cause within 30 days of the service of summons/notices as to why relief prayed for, should not be granted.

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Despite the registered summons/notices which is evident from the tracking report and the Sufficient time has been given to the defendants to defend their case, but they failed to appear and to file WS, hence, the Tribunal has passed an order to proceed ex-parte against the defendants on 10.8.2022.

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5- To prove its case, the applicant Bank has referred various certified photocopies of documents before this Tribunal. The applicant bank has also given evidence on affidavit by way of affidavit by Shri Arvind Kumar, Chief Manager of the applicant bank. The details of documents are as follows. :-

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SI.No	Description Documents Photocopies	of	Date of Execution	Amount	Signature of Executants	Ex.! Ann. No.
1	Loan application		25.10.2011	RS.15lakh	Defendant no. 1&2	I

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2	Hypothecation Agreement	25.10.2011	Rs.15lakh	Defendant no. 1& 2	2
3	Loan application	19.12.2012	Rs.22lakh	Defendant no. 1& 2	3
4	Sanction letter	01.02.2013	Rs.20 lakh	bank	4
5	Hypothecation Agreement	08.03.2013	Rs.20 lakh	Defendant nos 1 & 2	5
6	Guarantee Agreement	08.03.2013	Rs.20 lakh	Defendant no.3	6
7	confirmation of deposit of title deeds	19.02.2013	Rs.20 lakh	Defendant no. 3	7
8	Acknowledgement	28.02.2022	....	Defendant no .. 3	8
9	Statement of account as on date	as on 22.3.2022	Rs.30,59,662/-	bank	9

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6- Opportunity of hearing has been fully given to both the parties, but despite several opportunities given to defendants, the defendants have not appeared to contest the case, hence, the ex-parte arguments of learned counsel for applicant bank were heard and perused the case record.

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Ld. Counsel of applicant bank submitted that the defendants have taken the loan and utilized the same and also executed the various loan documents to secure the loan. Further, submitted that the claim of the bank has been proved by documentary evidence.

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It is further submitted by ld. Counsel of applicant bank that there is no any stay granted by any Higher Court, in respect of the proceedings of the present OA and requested to issue recovery certificate, as claimed for, inOA.

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7- It has been established that defendants are living and carrying on their business in the state of Bihar. Cause of action also arose in the State of Bihar. The said claim on the date of filing of application exceeded Rs.20 lacs. The applicant bank is functioning within jurisdiction of this tribunal. Therefore, this Tribunal has territorial as well as pecumary jurisdiction to adjudicate upon the present application.

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8- On the issue of Limitation, to prove it, the applicant bank has submitted that the applicant bank has declared the account as NPA on 29.06.2019 whereas the present application has been filed on 23.03.2022. Even, it is counted for the purpose of Limitation, then it is established that the applicant bank has filed the case within the limitation period. As such, it is established that present application has been filed well within the period of limitation.

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9- In the affidavit of Shri Arvind Kumar, Chief Manager, of the applicant bank, has stated that he is well acquainted with the facts of the case and has on verification of record, sworn in the affidavit in support of contents of application and the documents as evidence and established on oath the pleadings and documents of the applicant bank as stated above.

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OA 239 of2022[JI

The documents as stated above reveal that the defendants have applied for loan and the bank had sanctioned the loan and to secure the loan and for repayment of loan amount with interests etc., the defendants have executed various loan documents, which strength the case of the applicant bank.

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The applicant bank has also furnished statement of account as above, which is not only admissible but shall be taken as correct statement of account, more so since the entries in the statement of account has not been challenged.

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10Since, the case was proceeded ex-parte against defendants, all contentions raised and documents produced by plaintiff remained unrebutted and the tribunal may act upon the affidavit of the applicant as per law. Defendants have neither denied the utilization of funds advanced by applicant bank nor have pointed out any specific error and discrepancy in the Statement of Account, which is kept in due course of business, evidence on affidavit, which has supported the claim of the applicant bank, established to have fully correct and believable. Provisions contained in Rule 9(2) of Debt Recovery Tribunal (Procedure) Rules, 1993 provide that the documents referred in the application shall be duly stated by senior officer of the bank, or financial institution as the case may be and numbered accordingly. The rule 12 (10) provides that the provisions contained in section 4 of the Banker's Books evidence that Act, 1891 (18 of 1891) shall applied to certified copy of an entry in a Banker's Books furnished along with application filed under sub section 1 of section 19 by the applicant.

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11On consideration of the arguments and on perusal of the application, documents and affidavit, it is proved that the applicant bank has granted the loan facility, documents were executed by the defendants and facility was availed by the defendants as stated in the application.

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12The applicant bank has sought for recovery of a sum of Rs.30,59,662/-with cost and further interest at the contractual rate from 23.03.2022 till realization.

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13Learned Advocate appearing for applicant bank submits that the applicant bank has charged interest in terms of the agreements and that interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

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14On consideration of the arguments and on perusal of the pleadings, documents and affidavit, it is proved that the applicant has charged interest against defendants in terms of documents and as per directives of RBI.

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15None of the defendants appeared before the tribunal to contest the claim made by the applicant, therefore, it necessarily goes to establish that the claim made by the applicant bank is genuine and true. It is

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manifest that the defendants have not disputed the claim, therefore, the claim referred to the tribunal is recoverable till full and final realization of the claim.

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16In Indian Bank Vs. Blue Jaggers Estates Limited and others [2010] 8 SCC 129,the Honorable Supreme Court of India has observed as under-

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"The Court cannot lose sight of the fact that the bank is a trustee of public fund. It cannot compromise the public interest for benefiting private individuals. Those who take loan and avail financial facilities from the bank are duty bound to repay the amount strictly in accordance with the terms of the contract. Any lapse in such matters has to be viewed seriously and the bank is not only entitled but duty bound to recover the amount by adopting all legally permissible methods. Parliament enacted the act because it was found that legal mechanism available till then was wholly insufficient for recovery of the outstanding dues of the banks and Financial Institutions."

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17In my view, Facts of the case stand proved by evidence of the applicant bank ex-parte. Accordingly, the applicant bank is entitled to recover from defendantsjointly and severally of Rs.30,59,662/-along with pendente-lite and future interest @ 11.9% p.a. with compounded monthly rests from 23.03.2022 (The date of filing of this OA) till realization. So the final order may be passed accordingly, to meet the ends ofjustice.

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ORDER

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In the result, the application of the applicant bank is, allowed exparte and debt is determined with costs against the defendants. The defendants are hereby jointly and severally, ordered to pay the applicant bank its debt amounting to Rs.30,59,662/-along with pendente-lite and future interest @ 11.9% p.a. with compounded monthly rests from 23.03.2022 ( The date of filing of this OA) till realization of the entire sum due and recoverable with costs.

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It is made clear that any amount deposited by the defendants, be deducted in the claim amount, if not deducted.

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Defendants are debarred from transferring, alienating encumbering or otherwise dealing with or disposing of the mortgaged or hypothecated or any other properties and assets without paying the aforesaid adjudicated dues to the applicant bank to secure the ends of justice. The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to the final order under the recovery proceedings in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993.The applicant may submit the certified copy of this Judgment and the Recovery Certificate before the Registrar/ Sub- registrar to endorse the charge over the secured assets.

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Let a certificate of recovery be drawn up forthwith and put up for signatures in terms of provisions contained in Section 19(22)of the Act to

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OA 239 of 20221JI

be issued, on the basis of the order of the Tribunal to the Recovery Officer. The Recovery Officer shall realize the amount as per the certificate in the manner and mode prescribed under the Act from the defendants, by sale of mortgaged! hypothecated assets as well as other personal movable/immovable assets of the defendants.

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Parties are directed to appear before the Recovery Officer, DRT, Patna on 01.09.2023. The order be communicated accordingly.

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Judgment signed, sealed, dated and pronounced in the open court on 01 st Days of July 2023

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Dictated &corrected by me.

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~ J 0\ 'I'Y? [Kaushalendra Yadav] Presiding Officer Debts Recovery Tribunal, Patna

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[Sec Regulation 24( I)]

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DEBTSItEeO" £RY TRIBUNAL "ATI\A 2nd Floor, (A. B & F Wing) Karpuri Thakur Sadan, Kendriya Karamchari Parisar (GPOA), Ashiana Digha Road, Patna-H00025.

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RECOVERYCERTIFICATEUNDERSECTION 19(1) READWITH SECTION 19(U) Of THE RECOVERYOF PEBTS& BANKRUPTCY Md. 1993, ASAMENDEDfROM TIMt: TO TIME.

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RC No. 40012023 IN Case No: OA/239/2022

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In the Matter of: (CH- 1) CANARA BANK BRANCH OFFICE HAZIPUR VAISHALI ,BIHAR -800028

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Applicant(s)

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------ Versus -.-----

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To,

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(CD-I) MiS SAMBHAWAAGRO FARMS AND OTHER

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Through its Proprietor Kumar Sambhaw Sio Sri Binod Kumar Singh Sio Sri Binod Kumar Singh Rio Village PO Khokhsa Bujurga, ,Jandaha Road, PS Desari Vaishali ,BIHAR -844504

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(CD- 2) KUMAR SAMBHAW SIO SRI BINOD KUMAR SINGH RIO VILLAGE-+ PO KHOKHSA BUJURGA, JANDAHA ROAD. PS DESARI. DISTRICT- VAISHALI PIN 844504

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Defendanns)

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(CD- 3) BINOD KUMAR SINGH (GUARANTOR I MORTGAGOR) SIO LATE RAM SINGAR SINGH RIO VILLAGE + PO KHOKHSA BUJURGA, JANDAHA ROAD. PS DESARl, DISTRICT- VAISHALl, PIN 844504

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ry, Certificate for Rs 3059662.00 LJ.!yy Lakhs Fifty Nine Thousands Six Hundred Sixty Two OnIY_1

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In terms of final order dated 01/07/2023 passed by this Tribunal in the above mentioned case, it is ordered that the Applicant Certificate Holder Bank is entitled to recover a sum of Rs. 3059662.00 along with cost. expenses and interest from the 23/03/2022 i.e. date of filing 1 with effective date of the OA/239/2022 and future interest from order date till the date of realisation in full,jointly or severally from the Certiticate Debtors, hereinafter referred to as:-

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			~	==== ! RC 1Amount(Rs.} t.. .	'/Remark! : : 11... .'
				j 130Sl)6~2.00 :	r-- I... ... .
				. 9~	~r=1
ILl) 'I-~3/03!2	7/7.023' i ..	305%62.00 1.	J	'13059662.00 , j	I .1 .

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In case of failure to pay the aforementioned adjudicated amount within 30 days, same shall be recovered from the sale of the mortgaged/hypothecated assets as well as other personal movable/Immovable assets of the certificate debtors..

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The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to thefinal order under the recovery proceeding in pursuance of the Recovery certificate issued under Section )9(22) of Recovery of Debts and Bankruptcy Act 1993

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Parties arc directed to appear before ASHISH KUMAR, Recovery Officer, DEBTS RECOVERY TRIBUNAL PATNA on 01/0912023.

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The Recovery Ofticer shall realize the amount as per this Certificate in the manner and mode prescribed under Sections 25 to 28 of the Recovery of Debts Due to Banks and Financial Institutions Act, )91)3(as amended from time to time) from the above named Certificate Debtors.

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This Certificate has been issued under my signature and seal of the Tribunal on this 01/07/2023

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v PRESIDING UFFICER DEBTS RECUVERYTRIBUNAL PAIN/I

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FORM NO. 10 [See Regulation 24(2)]

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"";'_.,

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DEBTS RECOVERY TRIBUNAL

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PATNA