Allowed

Standard Chartered Bank v. Piyush

DRT18 Oct 2023OA/262/2022

Case brief

AI extract

What is this about?

In a debt recovery application, the tribunal allowed the applicant bank's claim for recovery of over Rs. 46 crores from four guarantors of a defaulter company undergoing CIRP. The court directed payment within 60 days or recovery from sale of assets, acknowledging the obligations of guarantors despite the main moratorium.

What did the court decide?

Defendants 1-4 to pay Rs. 46,40,69,649.91 with interest within 60 days; failing which, recovery from sale of hypothecated/mortgaged assets distributed pari passu; stay on dealing with properties; reco

Standard Chartered Bank versus Piyush — Banking and Recovery | DRT (2023)

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O. A. NO. 262 of 2022

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Registered on: 16.06.2022 Decided on: 18.10.2023

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IN THE DEBT RECOVERY TRIBUNAL-I AT MUMBAI ORIGINAL APPLICATION NO. 262 of 2022

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STANDARD CHARTERD BANK, A Bank ) Incorporated in England having its Principal) Office at I, Basinghall Avenue, London, ) EC2V5DD, and having Branch in India, inter ) alia , at Crescenzo, Floor 3A, C-38/39, G-Block) Bandra-Kurla Complex, Bandra East ) Mumbai 400 051 ) Through its Authorized Signatory Mr. Kamal) Vyas vide Power of Attorney dated 05.10.2021)

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...APPLICANT

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VERSUS

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1. PIYUSH CHHEDA ) 601 K. N. Building, 6^th Floor, Bhandarkar) Road, Matunga, Mumbai-400 019 )

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2. RUPAL CHHEDA ) 601 K. N. Building, 6^th Floor, Bhandarkar) Road, Matunga, Mumbai 400 019 )

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3. HARSHVARDHAN PIYUSH CHHEDA ) 601 K. N. Building, 6^th Floor, Bhandarkar) Road, Matunga, Mumbai 400 019 )

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4. PRINCE INDUSTRIES ) 101/102, Sunshine Plaza, 1^st Floor, ) Naigaum Cross Road, Nr. Kailash Lassi) Dadar (East), Mumbai 400 014 )

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5. AXIS BANK ) Corporate Office, 7^th Floor, Axis House ) C-2, Wadia International Centre, )

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O. A. NO. 262 of 2022

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Pandurang Budhkar Marg, Worli, ) Mumbai – 400 025 )

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6. ICICI BANK LIMITED ) ICICI Bank Towers, Bandra-Kurla ) Complex, Bandra (East) Mumbai 400051)

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7. CANARA BANK ) Kshamalaya, 37, Opp. Patkar Hall Lines) New Marine Lines Mumbai 400020 )

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...DEFENDANTS

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________________________________________________________________

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Counsel for the Applicant : Advocate Aarti Sonawne i/b Argus Partners

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Counsel for the Defendants : Ex-parte

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J U D G M E N T

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The Original Application has been filed by the Applicant for recovery Rs.46,40,69,649.91 (Rupees Forty Six Crores Forty Lakhs Sixty Nine Thousand Six Hundred Forty Nine and paise Ninety One only) as on 30.10.2021 along with interest @ 12.60% p.a. from 31.10.2021 till its realization.

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Facts as succinctly set out in the present OA are that M/s Prince SWR Systems Private Limited (PSSPL) presently under CIRP, is engaged in the business of manufacturing water piping systems and is a registered company to whom the Applicant had sanctioned the credit facilities in the month on June, 2012. Defendant No. 1 to 3 are Directors and Personal Guarantors in respect of the facility sanctioned to the PSSPL. Defendant No. 4 is

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the corporate guarantor and Defendant No. 5 to 7 are Banks having charge on pari passu basis with the Applicant Bank on mortgaged properties.

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It is stated that Midas Impex Private Limited also filed an Insolvency Petition under section 9 of the Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal, Mumbai against PSSPL bearing Company Petition No. C.P. (IB) 4345 (MB)/2019. By an order dated 16.04.2021 the said company petition was admitted and the CIRP was initiated against PSSPL. In view of the same, moratorium under section 14 of the IBC, 2016 it has been imposed and the Applicant herein cannot proceed against PSSPL in the present OA. The Applicant therefore has filed the instant application against the personal and corporate guarantors of PSSPL and is seeking to recover the monies advanced to PSSPL vide various facility agreements.

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It is stated that at the request of the PSSPL, the Applicant sanctioned and granted credit facilities i.e. Overdraft facility of Rs.10 Crores and letter of credit facility of Rs.5 Crores, aggregating to Rs. 15 Crores vide its facility letter dated 21.06.2012. which includes;. The said credit facilities were exclusively taken by PSSPL for the purpose of taking over the existing limits from State Bank of India and remaining to meet working capital requirements of PSSPL. The terms of the said letter were duly accepted by PSSPL and in order to avail/enhance the aforementioned credit facilities, the Defendant No.1 to 4 executed the following documents:

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(i) Hypothecation Agreement dated 25.06.2012;

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(ii) Facility Agreement dated 25.06.2012;

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(iii) Guarantee agreement dated 25.06.2012 executed by Defendant No.1 & 2.

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It is further stated that the aforesaid credit facilities were secured by the following assets:

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(i) Primary Security: Hypothecation of stocks and book debts (Pari passu charge on current assets of PSSPL with multiple bankers viz. ICICIC Bank & Asis Bank)

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(ii) Collateral security: Equitable mortgage of the following properties:

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a. Commercial office premises located at 101 & 102, 1^st Floor, Naigaon, Cross Road, Sunshine Plaza, Dadar (East), Mumbai 400014, owned and mortgaged by PSSPL.

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b. Industrial Property on Factory, land & building at Survey No. 100/1/1/2/3, Demni Road, Village Dadra, Dadra and Nagar Havelli, Silvassa- 396 230, owned and mortgaged by PSSPL.

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c. Industrial property on factory, land & building at Survey No. 245/5/1, 3 & 4, Demni Road, Village Dadra, Dadra and Nagar Havelli, Silvassa- 396 191 owned and mortgaged by PSSPL.

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d. Fixed deposit liened to the facilities.

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(iii) Guarantees: All monies guarantee executed under seal by the Defendant No. 1 & 2.

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(iv) Additional mortgage security documents:

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a. All monies mortgaged over letter of confirmation of Mortgage creation/ Extension in the name of Defendant No. 1 & 2.

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b. All monies equitable mortgage over MOE in the name of Defendant No. 1 & 2.

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It is further stated that on or around September, 2013 at the request of the PSSPL the Applicant amended the terms of facility letter dated 21.06.2012 with facility agreement dated 25.06.2013 and 17.09.2013. The terms of facility letter were duly accepted by the by the Defendants. Further, the facilities were secured by the following assets in addition to the assets previously mortgaged under facility letter dated 21.06.2012:

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(i) Primary Security: Hypothecation of stocks and book debts and book debts on pari passu with Axis Bank and ICICI Bank. Proportion of the Applicant was Rs. 13,07,00,000/- as against the total value of Rs. 67,90,00,000/-.

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(ii) Collateral security: Mortgage as follows:

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a. Commercial office premises located at 101 & 102, 1^st Floor, Naigaon, Cross Road, Sunshine Plaza, Near Kailash Lassi, Dadar (East), Mumbai 400014, owned and mortgaged by PSSPL.

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b. Second Charge of Applicant on Industrial Property on Factory, land & building at Survey No. 100/1/1/2/3, Village Sayali, Dadar and Nagar Havelli, Silvassa- 396 230, owned and mortgaged by PSSPL. The first charge being with Axis Bank and ICICI Bank.

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c. Second charge of the Applicant on Industrial property on factory, land & building at Survey No.

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245/5/1, 3 & 4, Demni Road, Village Dadra, Dadra and Nagar Havelli, Silvassa- 396 191 owned and mortgaged by PSSPL. The first charge being with the Axis Bank and ICICI Bank.

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d. Fixed deposit liened to the facilities;

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(iii) Guarantees: Personal guarantees which were necessarily to include the guarantees executed under by the Defendant No. 1 & 2.

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It is further stated that on or around June, 2014 at the request of the PSSPL, the Applicant amended/modified the credit facilities vide facility letter dated 10.06.2014. The aforesaid facilities were secured by the following assets in addition to the assets previously mortgaged under facility letter dated 21.06.2012 and 17.09.2013:

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(i) Primary Security: Hypothecation of Stocks and Book debts on pari passu with Axis Bank, ICICI Bank and ING Vysya Bank.

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(ii) Collateral security: Mortgage as follows:

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a. Commercial office premises located at 101 & 102, 1^st Floor, Naigaon, Cross Road, Sunshine Plaza, Near Kailash Lassi, Dadar (East), Mumbai 400014, owned and mortgaged by PSSPL. The Applicant shares pari passu charge in respect of the mortgaged property with ICICI Bank, Axis Bank and ING Vysya Bank.

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b. Second Charge of Applicant on Industrial Property on Factory, land & building at Survey No. 100/1/1/2/3, Village Sayali, Dadra and Nagar Havelli, Silvassa- 396 230, along with ING Vyasa Bank, owned and mortgaged by PSSPL. The first charge being with Axis Bank and ICICI Bank.

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c. Second charge of Applicant on Industrial property on factory, land & building at Survey No. 245/5/1, 3 & 4, Demni Road, Village Dadra, Dadra and Nagar Havelli, Silvassa- 396 191 along with ING Vyasa Bank owned and mortgaged by PSSPL. The first charge being Axis Bank and ICICI Bank.

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d. Fixed deposit liened to the facilities.

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(i) Guarantees: Personal guarantees which were necessarily to include the guarantees executed under by the Defendant No. 1 & 2.

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It is further stated that on or around July, 2015 at the request of the PSSPL, the Applicant amended/modified the credit facilities vide facility letter dated 23.07.2015. The terms of the facility letter were duly accepted by the by the Defendants. The credit facilities were secured by the following assets in addition to the assets previously mortgaged under facility letter dated 21.06.2012, 17.09.2013 and 10.06.2014:

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(i) Primary Security: Hypothecation of Stocks and Book debts on pari passu with Axis Bank, ICICI Bank and ING Vysya Bank.

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(ii) Collateral security: Mortgage as follows:

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a. Commercial office premises located at 101 & 102, 1^st Floor, Naigaon, Cross Road, Sunshine Plaza, Dadar (East), Mumbai 400014, owned and mortgaged by PSSPL. The Applicant shares pari passu charge in respect of the mortgaged property with ICICI Bank, Axis Bank and ING Vysya Bank.

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b. Second Charge of the Applicant on Industrial Property on Factory, land & building at Survey No. 100/1/1/2/3, Village Sayali, Dadra and Nagar

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Havelli, Silvassa- 396 230, along with ING Vyasa Bank, owned and mortgaged by PSSPL. The first charge being with Axis Bank and ICICI Bank.

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c. Second charge of the Applicant on Industrial property on factory, land & building at Survey No. 245/5/1, 3 & 4, Demni Road, Village Dadra, Dadra and Nagar Havelli, Silvassa- 396 191 along with ING Vyasa Bank owned and mortgaged by PSSPL. The first charge being Axis Bank and ICICI Bank.

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d. Fixed deposit lieced to the facilities.

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(i) Guarantees: Personal guarantees which were necessarily to include the guarantees executed under by the Defendant No. 1 & 2 and the Defendant No. 3 to be submitted.

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It is further stated that on or around June, 2016 at the request of the PSSPL, the Applicant amended the credit facilities vide facility letter dated 12.01.2016. Subsequently, the credit facilities was further amended vide a supplemental facility letter dated 26.08.2016 and credit facilities of Rs. 15 Crores were enhanced to Rs. 30 Crores. Further, the credit facilities were secured by the following assets in addition to the assets previously mortgaged under facility letter dated 21.06.2012, 17.09.2013, 10.06.2014 and 23.07.2015:

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(i) Primary Security: Hypothecation of Stocks and Book debts on pari passu with Axis Bank, ICICI Bank and ING Vysya Bank.

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(ii) Collateral security: Mortgage as follows:

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a. Commercial office premises located at 101 & 102, 1^st Floor, Naigaon, Cross Road, Sunshine Plaza, Dadar (East), Mumbai 400014, i.e. Mortgaged Property

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owned and mortgaged by PSSPL. The Applicant shares pari passu charge in respect of the mortgaged property with ICICI Bank, Axis Bank and ING Vysya Bank and Tamil Nadu Mercantile Bank.

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b. Commercial office premises located at 103 & 104, 1^st Floor, Naigaon, Cross Road, Sunshine Plaza, Dadar (East), Mumbai 400014, owned and mortgaged by Defendant No. 1 & 2. The Applicant shares pari passu charge in respect of the Mortgage Property with ICICI Bank, Axis Bank, ING Vysya Bank and Tamil Nadu Mercantile Bank.

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c. Second Charge of Applicant on Industrial Property on Factory, land & building at Survey No. 100/1/1/2/3, Village Sayali, Dadra and Nagar Havelli, Silvassa- 396 230, along with ING Vyasa Bank, owned and mortgaged by PSSPL. The first charge being with Axis Bank and ICICI Bank.

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d. Second charge of the Applicant on Industrial property on factory, land & building at Survey No. 245/5/1, 3 & 4, Demni Road, Village Dadra, Dadra and Nagar Havelli, Silvassa- 396 191 along with ING Vyasa Bank owned and mortgaged by PSSPL. The first charge being Axis Bank and ICICI Bank.

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e. Fixed deposit liened to the facilities.

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(iii) Guarantees: Personal guarantees which were necessarily to include the guarantees executed under by the Defendant No. 1 & 2 and Defendant No. 3 to be submitted.

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It is further stated that the credit facilities were secured by the following assets in addition to the assets previously mortgaged under facility letters dated 21.06.2012, 17.09.2013, 10.06.2014,

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23.07.2015 and 12.01.2016 vide the Supplemental Facility Letter dated 28.08.2016 as follows:

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(i) Primary Security: Hypothecation of Stocks and Book debts on pari passu basis of Applicant with Axis Bank, ICICI Bank, ING Vysya Bank & Tamil Nadu Mercantile Bank (the share of the Applicant was 23 %)

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(ii) Collateral security: Mortgage as follows:

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a. Commercial office premises located at 101 & 102, 1^st Floor, Naigaon, Cross Road, Sunshine Plaza, Dadar (East), Mumbai 400014, owned and mortgaged by PSSPL. The Applicant shares pari passu charge in respect of the mortgaged property with ICICI Bank, Axis Bank, ING Vysya Bank & Tamil Nadu Mercantile Bank. (the share of the Applicant was 23%)

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b. Commercial office premises located at 103 & 104, 1^st Floor, Naigaon, Cross Road, Sunshine Plaza, Dadar (East), Mumbai- 400014 owned and mortgaged by Defendant No. 1 & 2. The Applicant shares pari passu charge in respect of the Mortgage Property with ICICI Bank, Axis Bank, ING Vysya Bank and Tamil Nadu Mercantile Bank. (the share of the Applicant was 23 %)

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c. Second Charge of the Applicant on Industrial Property on Factory, land & building at Survey No. 100/1/1/2/3, Village Sayali, Dadra and Nagar Havelli, Silvassa- 396 230, along with ING Vyasa Bank, owned and mortgaged by PSSPL. The first charge being with Axis Bank and ICICI Bank.

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d. Second Charge of the Applicant on Industrial property on factory, land & building at Survey No. 245/5/1, 3 & 4, Demni Road, Village Dadra, Dadra and Nagar Havelli, Silvassa- 396 191 along with ING

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Vyasa Bank owned and mortgaged by PSSPL. The first charge being Axis Bank and ICICI Bank.

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e. Fixed deposit liened to the facilities.

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(iii) Guarantees: Personal guarantees which were necessarily to include the guarantees executed under by the Defendant No. 1 & 2 and Defendant No. 3 to be submitted.

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It is further stated that the terms of the facility letter dated 12.01.2012 & Supplemental facility letter dated 26.09.2012 were duly accepted by PSSPL and in order to avail/ enhance the aforementioned credit facilities, PSSPL through Defendant No. 1 to 4 executed following documents in addition to once previously executed:

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(i) Hypothecation Agreement dated 02.03.2016 executed between PSSPL through its Director Respondent No. 1 in favour of the Applicant whereby PSSPL hypothecated its current assets being the stocks, book debts and movable fixed assets. As per the said Hypothecation Agreement, it is stated that the scope of charge by way of hypothecated over PSSPL’s assets had been enhanced or increased commensuration with the enhancement or increase of additional facility by the Applicant to PSSPL.

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(ii) Indenture of Mortgage dated 08.09.2016.

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(iii) Deed of Guarantee (Supplemental) dated 02.02.2016 executed by Defendant No.2 to 4.

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It is further stated that on or May, 2017 at the request of the PSSPL the Applicant amended the credit facilities vide facility letter dated 15.05.2017. The terms of the facility letter were duly accepted by PSSPL. Further, the credit facilities were secured by the following

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assets in addition to the assets previously mortgaged under facility letter dated 21.06.2012, 17.09.2013, 10.06.2014, 23.07.2015, 12.01.2016 and 26.08.2016:

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(i) Primary Security: Hypothecation of Stocks and Book debts on pari passu basis of Applicant with Axis Bank, ICICI Bank, ING Vysya Bank & Tamil Nadu Mercantile Bank (the share of the Applicant was 23 %)

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(ii) Collateral security: Mortgage as follows:

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a. Commercial office premises located at 101 & 102, 1^st Floor, Naigaon, Cross Road, Sunshine Plaza, Dadar (East), Mumbai 400014, owned and mortgaged by PSSPL. The Applicant shared pari passu charge in respect of the mortgaged property with ICICI Bank, Axis Bank, ING Vysya Bank & Tamil Nadu Mercantile Bank. (the share of the Applicant was 23%)

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b. Commercial office premises located at 103 & 104, 1^st Floor, Naigaon, Cross Road, Sunshine Plaza, Dadar (East), Mumbai- 400014, i.e. Mortgaged Property owned and mortgaged by Defendant No. 1 & 2. The Applicant shares pari passu charge in respect of the Mortgage Property with ICICI Bank, Axis Bank, ING Vysya Bank and Tamil Nadu Mercantile Bank. (the share of the Applicant was 23 %)

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Second Charge of Applicant on Industrial Property on Factory, land & building at Survey No. 100/1/1/2/3, Village Sayali, Dadra and Nagar Havelli, Silvassa- 396 230, along with ING Vyasa Bank, owned and mortgaged by PSSPL. The first charge being with Axis Bank and ICICI Bank.

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d. Second Charge of the Applicant on Industrial property on factory, land & building at Survey No. 245/5/1, 3 & 4, Demni Road, Village Dadra, Dadra

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and Nagar Havelli, Silvassa- 396 191 along with ING Vyasa Bank owned and mortgaged by PSSPL. The first charge being Axis Bank and ICICI Bank.

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e. Fixed deposit liened to the facilities.

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(iii) Guarantees: Personal guarantees which were necessarily to include the guarantees executed under by the Defendant No. 2 & 3 and Defendant No. 4 to be submitted.

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It is further stated that on or around November, 2017 at the request of the PSSPL the Applicant amended/modified the credit facility vide facility letter dated 13.11.2017 and credit facilities of Rs.30 crores were enhanced to Rs.44,03,33,750/-. The terms of the facility letter were duly accepted by PSSPL. Further, the credit facilities were secured by the following assets in addition to the assets previously mortgaged under facility letter dated 21.06.2012, 17.09.2013, 10.06.2014, 23.07.2015, 12.01.2016 and 26.08.2016:

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(i) Primary Security: Hypothecation of Stocks and Book debts on pari passu basis of Applicant with Axis Bank, ICICI Bank and Canara Bank (the share of Applicant was 27%)

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(ii) Collateral security: Mortgage as follows:

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a. Commercial office premises located at 101 & 102, 1^st Floor, Naigaon, Cross Road, Sunshine Plaza, Dadar (East), Mumbai 400014, owned and mortgaged by PSSPL. The Applicant shares pari passu charge in respect of the mortgaged property with ICICI Bank, Axis Bank, and Canara Bank.

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b. Commercial office premises located at 103 & 104, 1^st Floor, Naigaon, Cross Road, Sunshine Plaza, Dadar (East), Mumbai- 400014, owned and mortgaged by

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Defendant No. 1 & 2. The Applicant shares pari passu charge in respect of the Mortgage Property with ICICI Bank, Axis Bank and Canara Bank.

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c. Flat No.601 and 602, 6^th Floor, K. N. Building, Plot No.360, Bhandarkar Road, Matunga, Mumbai-40001 owned by Defendant No.1.

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d. Industrial Property on Factory, land & building at Survey No. 100/1/1/2/3, Village Sayali, Dadra and Nagar Havelli, Silvassa- 396 230, along with ING Vyasa Bank, owned and mortgaged by PSSPL. The Applicant shared pari passu charge in respect of the said property with Axis Bank, ICICI Bank and Canara Bank.

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e. Industrial property on factory, land & building at Survey No. 245/5/1, 3 & 4, Demni Road, Village Dadra, Dadra and Nagar Havelli, Silvassa- 396 191 owned and mortgaged by PSSPL. The Applicant shared pari passu charge in respect of the said property with Axis Bank, ICICI Bank and Canara Bank.

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f. Cash Margin at 21.5 on each LC issuance PSSPL as well as of Harshwardhan International

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(iii) Guarantees: Personal guarantees which were necessarily to include the guarantees executed by the Defendant No.1 & 2 and Defendant No. 3 to be submitted.

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It is further stated that on or around March, 2018 at the request of the PSSPL the Applicant amended the credit facility vide facility letter dated 15.03.2018. Further, the credit facilities were secured by the following assets in addition to the assets previously mortgaged under facility letter dated 21.06.2012, 17.09.2013, 10.06.2014, 23.07.2015, 12.01.2016, 26.08.2016 and 13.11.2017:

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(i) Primary Security: Hypothecation of Stocks and Book debts on pari passu basis with Axis Bank, ICICI Bank, & Canara Bank (Covering all limits of Rs. 41,50,00,000/-). Hypothecation on plant and machinery of Defendant No. 1 (Covering limit of Rs. 2,53,33,750/-)

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(ii) Collateral security: Mortgage as follows:

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a. Commercial office premises located at 101 & 102, 1^st Floor, Naigaon, Cross Road, Sunshine Plaza, Near Kailash Lassi, Dadar (East), Mumbai 400014, owned and mortgaged by PSSPL. The Applicant shares pari passu charge in respect of the mortgaged property with ICICI Bank, Axis Bank, & Canara Bank (Covering all limits of Rs. 44,03,33,750/-)

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b. Commercial office premises located at 103 & 104, 1^st Floor, Naigaon, Cross Road, Sunshine Plaza, Near Kailash Lassi, Dadar (East), Mumbai- 400014, owned and mortgaged by Defendant No. 1 & 2. The Applicant shares pari passu charge in respect of the Mortgage Property with ICICI Bank, Axis Bank, and Canara Bank (Covering all limits of Rs. 44,03,33,750/)

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c. Exclusive charge of the Applicant in respect of Flat Nos. 601 & 602, 6^th Floor, K. N. Building, Plot No. 360, Bhandarkar Road, Matunga, Mumbai 400 019, owned by Defendant No. 1 (Covering all limits of Rs.44,03,33,750/-).

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d. Corporate Guarantee of Defendant No. 4 (Covering all limits of Rs. 44,03,33,750/-).

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e. Industrial Property on Factory, land & building at Survey No. 100/1/1/2/3, Village Sayali, Dadra and Nagar Havelli, Silvassa- 396 230, owned and mortgaged by PSSPL. The said mortgaged property is on first charge basis with Axis Bank, ICICI Bank & Canara Bank for their working capital exposure (Covering all limits of Rs. 44,03,33,750/-).

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f. Industrial property on factory, land & building at Survey No. 245/5/1, 3 & 4, Demni Road, Village Dadra, Dadra and Nagar Havelli, Silvassa- 396 191 owned and mortgaged by PSSPL. The mortgage property is on first charge basis with Axis Bank, ICICI Bank, Canara Bank & Applicant for the term exposure and on second pari passu charge with the Applicant, Axis Bank ICICI Bank and Canara Bank for their working capital exposure. (Covering all limits of Rs.44,03,33,750/-).

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g. Cash Margin at 5% on each LC issuance (PSSPL as well as Harshwardhan International) (Covering all limits of Rs.44,03,33,750/-).

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(iii) Guarantees: Personal guarantees which were necessarily to include the guarantees executed by the Defendant No. 1 to 3. (Covering all limits of Rs. 44,03,33,750/-).

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It is further stated that the terms of the facility letter dated 15.03.2018 were duly accepted by PSSPL and in order to avail/ enhance the aforementioned credit facilities, PSSPL through Defendant No. 1 to 4 executed following documents in addition to once previously executed:

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(i) Guarantee Agreement (Supplemental) dated 15.03.2018 executed by Defendant No.1 to 3 and Defendant No.4.

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(ii) Supplemental Hypothecation Agreement dated 03.09.2018 executed between PSSPL through its Director Defendant No. 1 in favour of the Applicant whereby PSSPL hypothecated its current assets being the stocks, book debts and movable fixed assets. As per the said Hypothecation Agreement, it is stated that the scope of charge by way of hypothecation over PSSPL’s assets had been enhanced or increased commensuration with the

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enhancement or increase of additional facility by the Applicant to PSSPL.

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(iii) Supplemental Memorandum of Entry for deposit of title deeds dated 28.11.2018 executed by Defendant No.1.

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(iv) Letter of lien over fixed deposit/set off dated 15.03.2018.

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However, upon sanction and disbursement of the credit facilities, PSSPL began defaulting in its payment obligations, thus, the account became irregular and same was classified as NPA on 09.12.2019. The PSSPL has admitted to its liability to the Applicant in its audited balance sheet as at 31.03.2019 to the extent of Rs.28,08,41,039/-. Thereafter, the Applicant issued a Recall Notice dated 04.08.2020 and called upon the PSSPL and Defendant No.1 to 4 to pay the outstanding dues but they failed to pay the dues. Further, the Applicant invoked the Guarantee vide notice dated 24.08.2020 to Defendant No.2 to 4 and called upon them to pay the outstanding dues but they failed to pay the dues. Thereafter, notice under Section 13(2) of the SARFAESI Act, 2002 was issued to PSSPL and Defendant No.1 to 4 and called upon them to pay the dues but to avail. Hence, the present OA has been filed.

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Notices were issued to the Defendants. Despite service, none appeared for the Defendants nor filed the WS thus, they were proceeded ex-parte vide order dated 14.09.2023.

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The Applicant Bank has produced all the Original Loan documents and other relevant documents along with their Claim Affidavit

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filed through authorized representative Pravin Baburao Pachpinde.

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I have heard the Ld. Counsel for the Applicant Bank and perused the record.

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The witness of the Applicant Bank has fully corroborated the averments made in the OA, even otherwise the whole case of the Applicant Bank is based on documents and the witness has duly proved all these documents as against the defendants. In my view there is no question of disbelieving the evidence led by the Applicant Bank and the Applicant Bank has proved its case beyond reasonable doubt. The liability of Defendant No.1 to 4 is joint and several. The Defendant No.5 to 7 are the proforma Defendants and no relief is claimed against these Defendants.

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In the light of above discussions, the Original Application filed by the Applicant Bank deserves to be allowed against the Defendant No.1 to 4.

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O R D E R

¶172

(i) I allow the present O.A. and direct the Defendant No.1 to 4, to pay to the Applicant, jointly and severally, within a period of 60 days, a sum of Rs.46,40,69,649.91 (Rupees Forty Six Crores Forty Lakhs Sixty Nine Thousand Six Hundred Forty Nine and paise Ninety One only) as on 30.10.2021 along with interest @ 12.60% p.a. from 31.10.2021 till its realization.

¶173

Page 18 of 19

¶174

O. A. NO. 262 of 2022

¶175

(ii) Failing which the aforesaid amount shall be recovered from the sale of the hypothecated assets, mortgaged properties, as well as other personal moveable and immoveable assets of the Defendant No. 1 to 4, however, the amount shall be distributed amongst the Applicant and Defendant No.5 to 7 as per their respective pari passu charge.

¶176

(iii) Defendant No. 1 to 4 are hereby directed not to deal with their properties till further direction of Ld. Recovery Officer.

¶177

(iv) Defendant No. 1 to 4 shall also pay the cost and expenses of the OA.

¶178

(v) Recovery Certificate be issued forthwith and be sent to the Recovery Officer of this Tribunal.

¶179

Copy of this order be sent to the parties as per rules.

¶180

File be consigned to record.

¶181

Place: Mumbai. (Dr. Rekha G. Dhakar) Date : 18.10.2023 Presiding Officer, DRT-1, Mumbai.

¶182

Tjs/-

¶183

Page 19 of 19

Standard Chartered Bank v. Piyush

Case brief

What is this about?

What did the court decide?

Standard Chartered Bank v. Piyush

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

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