Allowed

Canara Bank v. M/s Tizu Trade Agencies

DRT12 Jun 2023OA/257/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal, Guwahati, allowed an application filed by Canara Bank praying for the issuance of a Recovery Certificate against a proprietorship firm, its proprietor, and a personal guarantor. The Tribunal held the defendants liable based on unchallenged documentary evidence and executory security documents, dismissing the ex-parte application with costs.

What did the court decide?

Issuance of Recovery Certificate for Rs. 44,17,778.69 with interest at 14.50% p.a., costs of the application, and direction to keep charges alive on hypothecated/mortgaged properties.

Canara Bank versus M/s Tizu Trade Agencies — Consumer Protection | DRT (2023)

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O.A 257l2022roRT-Guwahati

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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, Mlzoram, Arunachal Pradesh & Tripura)

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Beforo Shri Shiv Sharan Dubev. Presidino Officer

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O.A. No. 25712022

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ln the matter of -

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Canara Bank ( Erstwhilo Syndicatg Bank) Oimapur Branch, First Floor, Near Plaza Bakery, Nyamo Lotha Road (Church Road) Dimapur, Nagaland-7971 12

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Applicant

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Vs.

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'1. Mrs Tizu Trade Agencieg Proprietor firm of Mr Kavita V Yepthomi NH-39, Padumpukhuri Dimapur-797112.

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Mr Kavita V Yepthomi Son of Late Vikuho Yepthomi AO Khel, Nuton Basti, Oimapur7g7112.

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Mr Kiyokhu Sema S.A.PWO, EE Division, Dimapur-797113

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Defendants

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Presence of the Counsel :

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For the Applicant : Mr Mukesh Sharma, Ms M Jaiswal, Advocates

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For the Defendants : None (Ex-parte)

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Dated:12.06.2023

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JUDGMENT

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This is an application under section 19 ofthe Recovery of Debts Due to Banks and Financial lnstitutions Act, 1993 filed by the Canara Bank ( Erstwhile Syndicate Bank) Oimapur Branch, First Floor, Near plaza Bakery, Nyamo Lotha Road (Church Road) Dimapur, Nagaland-7g71'12, with a prayer to issue Recovery Certificate for the sum of Rs,44,17,778.69 {Rupees Forty Four Lacs Seventeon Thousand Seven Hundred Sevonty Eight And^paisa Sixty Nino) onty as on 30.04.2022 against the defendants with pendentelite and fulure interest at contractual rates till realization along with cost and other retief.

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Slliu d..at a_ l:]t€l Presiding Ofli+r I

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O A 257l2022lDRT-Guwahaii

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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, Defendant No. 2 is the borrower as well as mortgagor and Defendant no. 3 is the^guarantor to the loan facility availed by the defendant No. 1 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 1.04.20'13 for its business and after considering the said Application, the Applicant Bank vide its letter of Sanction dated^'16.05.2013 had sanctioned an Overdrafr Cash Credit^(OCC) of^Rs.15.00 Lacs^(Rupees Fifteen Lakhs) only to^{the DefendantIirm, with interest'14.50% per} annum compounded monthly sub.iect to^{changes fromtime} to^{time as perBanks} guidelines. The Overdraft limit is^payable on demand. The Defendants had signed on the said Sanclion Memorandum,^{thereby agreeingto the terms and condition laid down} therein. The Defendants^No. 2^{as the Proprietor of the firm had alsoexecuted a} Request for overdraft facilities^{dated Nil thereby conlirming the availing of the loan} facility from the applicant bank and also^{accepted the termsand mnditionscontained} therein.

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ln connection with the sanction of^{the Overdraft Facility of Rs. 15.00Lacs,} sanctioned by the^{Applicant Bank and availed of by the Defendantfirm, a Demand} Promissory Note dated^{16.05.2013,Composite HypothecationAgreement dated} 16.05.2013 has been signed^{and executed by the DefendantNo l & 2 as the Proprietor} of the defendant^{no.1 firm in favour of the Applicant Bank as securityfor repaymentof} the loan, thereby agreeing to^{all the terms and conditionslaid down in the said} Agreement and also^{charged/hypothecationof stock in trade etc. in favourof the} Applicant Bank.

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ln connection with the^{sanctioningof lheoverdraftfacility of Rs.15.00 Lacs} sanction by the^{applicantbank and availedoff by the defendantno.2, Guarantee} Agreement dated 16.05.2013^{was signed and executed by the defendantno3, who} stood as the^{personal guarantor lo the said loanfacility availed by the defendant no 2'} The said Guarantee^{Agreement was duly signed and execuled by the Defendantsno 3,} whereby in her capacity^{as the personalguarantor had not only con,irmedlhe signing}

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and execulion of the Guarantee Agreemenl dated 16.05.2013 but also acknowledged its obligation as lhe personal guarantor to the loan facility availed by the Defendant No.2.

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The aforesaid Cash Credit Facility of Rs.iS.OO Lacs (Rupees Fiffeen Lakhs) only was furths secured by creation of equitable mortgage of the immovable property by Defendant No.2 bearing cift Deed dated 16.09.2011 (more fuly & specifically described in (Schedule B of the OA). Accordingly, the Defendant no.2 had deposited all the documents of titre rerating to the immovabre property as security for repayment to the Applicant for a[ the amounts advanced or to be advanced under various facirities granted or to be granted by the applicant bank to the Defendant No. 2 together with interest, compound and/or additional interest in case of defaull, cost, other charges in favour of the Applicant Bank. The Defendants have confirmed the equitable mortgage to cover the aforesaid cash credit facility by submifting letter of handling over ti{e deeds of properties and conlirmation of oeposit of riUe Deeds. lt is pertinenl to mention herein that the Title Deeds of the aforesaid properties originaly deposited for various rinanciar facilities availed by them.

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The Defendant no. I as the proprietor of the defendant no. 2 had again approached the applicant Bank with a loan application for renewal the overdraft facility and after mnsidering the said request, the Applicant Bank vide Sanction Memorandum datd 07.11.20'14 had renewed ihe existing cash credit facility of Rs. 15.00 Lacs only with interest BR+ '1.50% per annum compounded monthly subject to change from time to time as per Banks guidelines. overdraft limit is payable on demand. The Defendant No. 2 as lhe Proprietor of the defendant no. I firm had signed on the said Sanction Memorandum, rhereby agreeing to the terms and condition raid down therein. The defendant no. 2 as the^proprietor of the defendant no. 1 firm had also signed and executed a Letter of Renewal dajrrd 07.11.20.14 thereby agreeing to the terms and conditions conlained therein.

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The Defendant No. 2 as proprietor of Oefendant No.1 had confirmed and acknowledged its indebtedness towards the bank by signing and executing Acknowledgement of Debt and security daled 12.0s.2016 and 10.05.2019 arso

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Sklslqra^h^t, **,*J&flD⁽ DRT. Guwahati

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OA 257,2022,oRT€wahaii

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confirmed the execution of loan documents and the relative securities in connection with the said loan facility availed of by the Defendants.

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The Defendants had availed of the said loan facility from the Applicant Bank, but have not paid the loan amount as per the terms and conditions as agreed upon. with the Applicant Bank, inspite of repeated demands and requests by the Applicant Bank. Thereafter, the Applicant through its Counsel has sent a legal notice of demand dated 16j0.2021 whereby it was demanded and requested the Defendants to repay the total outstanding amount of Rs.40,36,939/- under Loan Account No. 7980125000'1155 in the loan account along with interest charges within 30 Cfhirty) days from the daie of the notice, but the defendants failed to comply with the same-

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The Defendants had availed of the said loan facility from the Applicant Bank, but have not^paid the loan amount as^per the terms and conditions as agreed upon^withthe Applicant Bank, inspite of repeatd demands and requests by the Applicant^Bank. However, the Defendant No. 2 as^proprietor of^{DefendantNo.1 had confirmedand} acknowledged its indebtedness towards the bank by^signing and^executing Acknowledgement of Debt and Security dated 05.02.2022^{also confirmedthe execution} of loan documents and the relative securities^{in conneclionwith the said loan facility} availed of by the Defendants. As the defendants^{failed to repay the loan amount or} renew the Cash Credit account, the said a@ounts^{became NPA on 29.12.2015. After} both the accounts became NPA the applicant bank^{issued noticesfor repaymentof the} due amount, but the defendants have neither chosen^{for repaymentof the loan amount} in the cash credit facility nor approached to the^{applicant bank for renew lhe cashcredil} account.

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The applicanl bank thus became constrained to lile the^{presentOriginal} Application for the recovery of Rs.^{4/1,17,778.69(Rupee3 Forty Four Laca} Seventeen Thousand Sevon^{Hundred SevontyEight And Paisa SixtyNine) only} as on 30.04.2022 along with^{interest and costof the application.}

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After filing of the OA the^{Tribunal issued notices upon the defendants through} registered^post and the applicant^{bank Iiled service reporton 05.092022 and brought} on record the^{postal receipts along with track consignment report. lt is observedthat}

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J(..,,d^ana.,,D,'!t' l2lai.lrt Pr$iding Oltto* |^/ DRT. Guwahat

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O.A. 2572022lDRT-Gwahatr

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the summons have not been served upon the defendanls. Thereafler the Tribunal ordered^{paper publication} of notice upon the defendants and the applicant bank issued notices to the defendants on 14.09.2022 through Paper Publication in two newspapers namely^"Tha Morung ExprBss'' and^"Nagaland Post'. Even after issuance of notices upon the defendants through^{paper publication} also there was no representation on behalf ofthe defendants either bythe counsel or the^person and hence the defendants were made set ex-parte on 27.'10.2022 and their right to file written statement cum evidence on affidavit was closed and the matter was^posted for hearing on behalf of the applicant bank.

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Supporting the claim of the applicant bank Sri Purtoshi A.O., Senior Manager of the Applicant Bank has filed evidence on affidavit coupled with the security documents ma*ed as Exhibit -P, Exhibit AW-1/1 to AW-1/'18 supporting the claim of the applicant bank.

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Heard the learned counsel for the applicant bank who prayed fff issuance of Recovery Certificate against the defendants as per pleadings made in the Application, supported by evidence on affidavit of their wilness who affirmed 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 documents liled by the applicant bank are suppoding the claim of the applicant bank and establishing the liability of the defendants. lt is proved that the defendants are liable to pay to the applicant bank the claim made in the Originat Application. The loan was obtained and documents have been executed on 16.05.2013. The Defendanl 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 Securi9 dated 12.05.2016, 10.05.2019 and 05.02.2022. The account became NPA on 29.12.2015 and lhe OA has been filed on 28.06.2022. Hence, the OA is filed well within 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 Sri Purtoshi A.O., the

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$^,d^a,ta" D"1,, "."^,oJ\of DRT. Guv.hati^{lD /)}

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applicant's witness and all^{the documentsmarkedas exhibits, including duly certified} copy of the statement of account^{along with interest calculation sheet maintainedby} the applicant Bank^{in it's regular course of business,I hold that the applicantis entitled} to get the Recovery Certificate^{as prayed for.}

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ln the rgsult, the^present Original^{ApplicationNo. 257 of 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 to the} applicant bank a^sum of^{Rs. /i4,'17,778.69 (RupsosForiy Four Lacs} Seventeen Thou3and^{Seven Hundred SeventyEight And PabaSixty} Nine) only with^{pendentelite and future interest} @14.50%^{p.a. withmonthly} rests from O'l.05.2022 till lhe^{dateof full paymenurealization and also cost of} the application.

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ii) The charge ofthe^{certificated amount be kepl aliveon hypothecated properties,} as described in^{Schedule-Aof the oA till the amount is realizedin full'}

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iii) The charge of the^{certificated amountbe keptalive on mortgaged property ie'} land measuring 01B-02K-13Ls^{Gifted at Bamunpukhuri-2Village,Dimapur,} Mouza No.3, Covered^{by Dag No. 1421505,under Patta No. 430 andis} bounded as under:^{North: Main Road; South: Vinizhe: East: MainRoad:} West: Mrs Shela^{Moho, as described in Schedule-Bofthe OAtill the amount} is realized in full.

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iv) The applicant^{bank is entitled to proceed against the secured items towards} recovsry of the debts.

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v) The applicant^{bank is also entitled to proceedagainst 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 costsof the O.A. whichincludes the} advocate fees of the^{applicant bank. Applicantis directed to tile the cost} memo within 2^{weeks from today.}

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vii) lssue Recovery^{Certilicateaccordinglyfor a sum R3'/t4,17'778'69 (Rupoes} Forty Four Laca Sevente€n^{ThousandSovenHundred Saventy Eight And} Palra Slxty Nlno) only^{in favourof theapplicani bank against the defendantsNo1'2}

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viii) Communicate copy of this order to the concerned parties.

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This order is dic{ated and corrected by the undersigned.

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Judgment dated 12h June 2029, signed and^pronounced in the Tribunal today under my signature.

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Copy of the JudgmenuFinal Order be uploaded in the Tribunal's Website and

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file be consigned to Record Room.

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-Shin;$ou.fl.,U,,Lr., tst'i,^staranlBl$&l ']3 J/ Presiding Oflicer^I ORT, Guwahati.

Canara Bank v. M/s Tizu Trade Agencies

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s Tizu Trade Agencies

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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