Allowed

Bank of India v. M/s Royal Steel Fabrication

DRT21 Aug 2023OA/241/2022

Case brief

AI extract

What is this about?

Application under Section 19 of the RDBFI Act filed by Bank of India for issuance of Recovery Certificate. Tribunal found documents establishing liability, held claim within limitation, and granted Recovery Certificate with interest and costs.

What did the court decide?

Recovery Certificate issued for Rs. 27,41,426.09 with pendentelite and future interest at 7.35% per annum with monthly rests.

Bank of India versus M/s Royal Steel Fabrication — Banking and Recovery | DRT (2023)

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O A. 241/2o22lDRT-Gusahati

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IN THE DEBTS^{RECOVERYTRIBUNAL,GUWAHATI}

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(North Eastern Region)

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(Tribunal of Assam,^{Nagaland, Meghalaya, Manipur, Mizoram,Arunachal Pradesh& Tripura)}

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Before Shri Shiv Sharan^{oubev. PresidinqOffiGer}

O.A. No,24112022

ln ths matter of -

Bank of lndia

Khanapara Branch, VIP Road, Chachal,^Sixmile, Khanapara, Guwahati-^{781 022,Assam.}

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Applicant

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Vs.

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M/s Royal^{Steel Fabrication,} Proprietor:- Md.^AshikFaruk, S/o Md. Faznur^{HaqueChoudhury'}

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Khaochuchi,^{Lokhra, Near Hockey Stadium'} Guwahati- 781M0,^Assam.

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ild. Ashik^Faruk

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Proprietor of M/s^{Royal Steel Fabrication} S/o Md. Faznur^{Haquechoudhury,}

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R/O Village- ChePti^{(Pub- Sahan)} P.O. and P.S.-Rangia,^{District- Kamrup-78'1354, Assam'}

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Defendants

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Pre3ence of tho^{Counssl :}

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For the Applicant^: Sri Vishal Kumar^{Dewan, Advocate} Mr' l S Mazumder'^Advocate For the Defendants^: (Right to fire ws-cum-EA^crosed) Dan=d.z,uout2oz3

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JUDGMENT

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This is an^{applicationunder section 19 of the Recoveryof Debts Dueto Banks} andFinanciallnstitutionsAct,lgg3filedbytheBankoflndia,KhanaparaBranch'vlP Road, Chachal,^{Sixmile,Khanapara,Guwahati- 781022'Assam'in the District of} Kamrup^{(Metro), Assam, with a prayer to issue Recovery Certificatefor the sum} ol Rs.27,11,126.09^{(Rup€es Twenty Seven Lacs Forty One ThousandFour} Hundred^{Twenty Six and Paise Nine)only as on 30 05 2022 againstthe defendants} jointly and severally^{withpendenteliteand futureinterest @735% per annum at} monthly rests^{from 3 1.O5.2022lill ealizationatongwithcost and other relief'}

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A few facts^giving rise to the^{present applicationare as under.}

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The Defendant No.^{1 is a proprietorshipfirm and the DefendantNo 2 is its} proprietor and they are the main Borrowers^{in the Cash Credit AccountoI the} Defendant No 1.

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On 25.10.2016, the defendant^No 2 in the^{name of his proprietorship} concern had requested and^{appliedto the ApplicantBankfor financialassistance} to the tune of RS.22,oO,OOO/-^{by way of CashCreditLimit for the purpose of} purchasing raw materials and financing stocks for his business^{of fabricationand} giving all necessary details to the applicant bank.^{Thedefendanl No.2had offered} the security of hypothecation^{of stocksof steeland rods and finished goods and} CGTMSE coverage.

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The applicant bank on^{19.11.2016 sanctioneda Cash CreditLimit of} RS.22,OO,0OO^ to the defendant^{No 2 in the name of his proprietorship concern for} the^purpose for of his^{businessof fabricationon the followingterms and conditions:}

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a) The said limit shall be^{repayable on demand.}

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b) The rate of interest shall^{be chargedat the rate ol 1'l.9oo/o per annumon} monthly rest, subject to changes^{from time to time.}

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c) The above Cash^{Credit limit shall be secured by way of hypothecationof} stock of steel, rods and^{finished goods.}

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d) The above Cash^{Credit Limitshall also be securedby the CGTMSE} covera9e.

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The terms and conditions^{were accepied and acknowledgeby the defendantNo 2'}

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ln order to avail^{the aforesaid Cash credit facilitiesforRs22,00'000/-the} defendant No 2 in the^{nameof his proprietorshipconcern had executed the} necessary loan documents^{on 19.11.2016, suchas Promissory Note, Loan Bearer} Letter, Hypothecation^{Agreement, Hypothecation of Loan Agreement(Plant and} Machinery, Stock^{and Book Debt) and Undenaking all dated 19'1'1 2016'}

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On^'18.11.2019 the^{defendantNo. 2 beingthe proprietor of the defendant No'} t had acknowledged^{the debtand securityand confirmed the correctness of the} outstanding dues^{in his Cash Credit Account.}

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$"i, ela"/,,QL """^.'"13,8ORT GLrwahali^ry(

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O A 241 /2o2ZORT-Gaahati

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As the defendants^{had failedto repay lheoutstanding amountin ihe loan} account, the^{applicant bankhad demanded and requestedthe defendants to paythe} entireduesintheloanaccount,butthedefendantsfailedtorepaytheentireduesin theloanaccount.Asthedefendantsfailedtorepayiheoutstandingamounlintheloan accounts, the said^{acrount became NPAon 31.03.2021.After theaccountbecame} NPA the applicant^{bank issuednoiicesfor repaymentof the due amount, but the} defendants failed to^{repay the loan amount or renew the loan account'}

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The applicanl bank^{thus became constrained to file the presentOdginal} Application for the^{recovery of Rs.27,1'1,426.09(RuPee3 TwentySevonLaca Fortv} One Thousand^{Four HundredTwenqSix and Paiso Nine) only as on 30 05 2022} along with interesl^{and cost of the applicaiion.}

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After filing of the^{OA the Tribunal issued notices upon the defendants through} registered^{postand the applicant bank filed service reporton 29 08 2022 and brought} on record the^{postal receipt along with trackconsignment reporilt is observed that on} l2.Og.2O22learnedcounselMr.l.s.MazumdarliledVakalatnamaonbehalfofthe defendants No.^{1 & 2. Thercafter thecasewas listedon several occasionsie' on} 1 1.10.2022.^{27.',10.2022,10.1 1.2022,24.1 1.2022,09'12'2022, 19 12 2022',} 04.01.202g &^{2O.O1.2029,but the written statement cum evidence on affidavit has not} been filed by the^{learned counsel for the defendants Hence the right of the} defendants^{to file the writtenstatementcum evidence on affidavit was closed on} 20.ol.2023andthematterwaspostedforhearingonbehalfoftheapplicantbank.

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Supporting the^{claimof the applicant bankShri Ring Tshaw DawDaulagupu'} Deputy zonal^{Managerof the ApplicantBank has filed evidenceon affdavitcoupled} with the security^{documenbmarkedas Exhibit A-1 to A-15,supporting the claim of the} applicant bank.

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Heardthelearnedcounselfortheapplicantbankwhoprayedforissuanceof Recovery Certificate^{againstthe defendants as per pleadings madein the Application'} supported^{by evidenceon affidavitof their witnesswho affirmed on oath the execution} of the security^{and other documentsby ihe defendants and also execution of their own} documents^{relied upon, which have been marked exhibits'} SLiV Sl"a,,,a-

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SLiV Sl"a,,,a-^OJ eresioins omili^{o 8' 2J} DRT, Guwahali

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O A 211 nO22lDRI-GMehali

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Considering the^{facts and clrcumstancesof the case'I am of the considered} view that the documents^{filed by theapplicant bankaro supportingthe claimof the} applicant bank and establishing^{the liability of the defendants.lt is provedthat the} defendants are liable to^{pay to the applicant bank the claim made in the Original} Application. The loan was obtained and documents^{have been executedon} 19.11.2016. on 18.11.2019 the defendant No. 2 being the^proprietor of the defendant No. t had acknowledged the debt and security and coniirmed the correctness of the outslanding dues in his Cash Credit Account. The account became NPA on 31.03.2021 and the OA has been filed on 01.01.2022. Hence, lhe OA is filed well within the period of timitation and this Tribunal having a jurisdiclion to adjudicate the Original Application.

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Considering lhe unchallenged/unrebutted version of Shri Ring Tshaw Daw Daulagupu, the applicant's witness and all the documents marked as exhibits, including duly certified copy of the statement of account arong with interest carcuration sheet maintained by the applicant Bank in it,s regular course of business, I hold that the applicant is enti ed to get the Recovery Certilicate as prayed for.

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ln the resutt, the present Originat Application No.241 ol 2022 is a owed with cost as under i

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i) The defendanls No. 1 & 2 are joinfly and severally liable lo pay to the applicant bank a sum of Rs. 27,,11,426.09 (Rupees Twenty Seven Laca Forty One Thousand Four Hundred Twonty Six and paise Nine) only with pendentelite and future interest @7.35% per annum with monthly rests from 31.052022 ti the date ot full payment/reatization and atso cost of the application.

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ii) The charge of the certificaled amount be kept alive on hypothecated

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properties as descdbed in Schedule A of the OA fill the amount is realized in full.

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iii) The applicant bank is entifled to proceed against the secured items towards recovery of the debts

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S.",.l sla.arqrf P'""i0'"soif9? 2] DRT, Guwaheti

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o.A 2a1l2o22 rRl'Guvandi

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iv) The applicant bank^{is also entitledto proceed againstthe personal ass€ts and} properties of tha defendanls towards recovery of lhe^dues.

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v) The applicant bank is entitled^{to the costsof the O.A. which includes tha} advocate fees of the^{applicant bank. Applicantis directedto lile lhecost} memo within 2 weeks from today.

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vi) lssue Recovery Certilicate accordingly for a^sum of^{Rs. 27,41'426.09} (Rupee3 Twenty Seven Laca Forty Ono Thousand Four Hundred Twonty Six and Pabo Nine) only in^favour of^{the applicantbankagainstthe} defendant No. 1&2.

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viil Communicate copy ofthis order to the concemed^parties. This order is dic{ated and conected by tha undersigned.

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Judgment daled 21d August' 2023, signed and^pronounced in the Tribunal

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today under my signature.

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

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<lt't d*^a^A',* tstiv^srrariJ dr[e2# I Prssiding Ofticel ORT, Guwahati.

Bank of India v. M/s Royal Steel Fabrication

Case brief

What is this about?

What did the court decide?

Bank of India v. M/s Royal Steel Fabrication

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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