Allowed

Union Bank of India v. Ibis Paper Products

DRT26 Jul 2023OA/271/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by Union Bank of India for recovery of dues against IBIS Paper Products and guarantors. The bank sought principal amounts and interest. The court found defendants jointly and severally liable, upheld the bank's claim, and awarded costs pending proof of additional expenses.

What did the court decide?

Defendants 1 to 8 to pay Rs.10,01,60,668.50 for Term Loan; Defendants 1 to 9 to pay Rs.34,30,447.34 for WCTL; total Rs.1,34,46,514.19 with interest; entitle bank to proceed against assets and defendan

Union Bank of India versus Ibis Paper Products — DRT (2023) — LawSathi Research

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IN THE DEBTS RECOVERY TRIBUNAL-II AT HYDERABAD DATED THIS THE 26TH DAY OF JULY. 2023

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PRESENT: SH. RAMESHWAR KOTHE, B.com, L.LB. (Hons,), M.A. PRESIDING OFFICER

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Originat Application No. 271 OF 2()22

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Union Bank of India Erstwhile Andhra Bank SlvlE Nacharam Branch Rlo 9-24, Street No.1 Plot No.63, HMT Nagar Nachara m, Hyderabad. Rep. by its Chief Manager. Versus

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....Applicant.

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lYls. IBIS Paper Products Rep. by its Partners Mr. S. Sada Siva & lYrs.K. Sangeetha R/o Plot No.40 Survey No. 125 Part IDA Mallapur

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Hyderabad - 500 076. 2. Mr. S. Sadashiva S/o S. Lingappa Major, Occ: Business H. No. 3-4-63111 Arvind Nagar Ramanthapur

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Hyderabad - 500013. 3. Mrs.K. Sangeetha Wo^{K. Yadag} iri^Reddy lvlajor, Occ: Business R/o Plot No. 4 H. No. 8-7-69/PH/tl4 Indraprastha Colony, Phase-I B.N. Reddy Nagar

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H ydera bad - 5 0 0070. ffg*

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2ofj

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oANo.277l2O22

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N4rs.A. Laxmi Bai W/o A. Gopal Rao lYajor, Occ: Business H. No. t-9-202/E/L MCH Colony East Ram Naga r Musheerabad Hydera bad- 5 00020. 5. Mrs.T. Su nitha W/o T. Shashank^Reddy Major, Occ: business R/o H. No.1-42 SulthanPur^{Pa rigi} K.V. Ranga Reddy Telangana-501 501' 6. Mrs. M. Kavitha W/o Majji Damodhar^Reddy Aged about 45 Years Occ: Business R/o H. No. t-9-278/491Al7/7A New Balaji Nagar, Adlkmet Ramnagar, Hydera ba^{d - 5000 02 0.} 7. Mr. Sri Katlpally^{Yadagiri Reddy} S/o Ram Reddy Aged about 46 Years Occ: Employee, R/o^{H. No.4} H. No. a-7-69/PHII/4 Indraprastha Colony, Phase-I B.N. Reddy Nagar Hydera bad- 50 0 0 70. 8. M r. Majji Damodhar Reddy Aged about 57^years Occ: Business R/o H. No. 7-9-2781491A/7ltA New Balaji Nagar, Adikmet Ramnagar, Hyderabad-5000020. 9. Mr.A. Gopal Rao, S/o A.S.N. Rao Aged about 68^years Occ: Business R/o H. No. 1-9-202/E/L/B/7 lvlcH Colony, East Ramnagar 2wo

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3ot7

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oANo.277/2022

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Hyderabad - 5 0 0 0 20.	....Defendant
Counselfor the Applicant	:Mr.SrinivasaRaoChakrala.
Counselfor 1, 3to8 Defendants	:Mr.A. SrinivasReddy.
Defendants 2and9	:Exparte.

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....Defendants.

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:: oRDER ::

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The Applicant Bank filed the present OA for the recovery of a total sum of Rs.1,34,46,514.19ps i.e., Rs.1,00,16,066.85ps towards Term Loan A/c No.087330100103094 from defendants 1to 8 together with subsequent interest @1Oo/o p.a. with monthly rests and Rs.34,30,447.34ps towards WCTL A/c No.087330100- 125500 from all the defendants with subsequent interest @10.40olo9o p.a. with monthly rests from the date of Application till the date of realisation along with costs and sale of OA schedule assets.

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The averments of applicant bank as per the OA, briefly, are that 1st defendant iS a partnership firm represented by its partners defendants 2 to 6 availed credit facilities from the applicant bank vide sanction letter dated 21.03.2017, Defendants 2 to 9 are the guarantors and Defendants 3, 6 to 9 are mortgagors who ofFered their respective properties as a security for the loan availed by 1st defendant firm. The defendants executed requisite loan/guara ntee/mortgage documents. The credit facillties were restructured on 29.03.2019. The defendant firm committed default in payment of loan amount in accordance wlth the loan agreement, resulting in classification the account as NPA on 31.03.2021. In

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oA No.27112022

spite of notices^{under SARFAESIAct calling uponthe} defendants^{to liquidate the outstanding dues,the did not clear} the same.^{Hence the} Present^OA.

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The 8th defendant^{filed written statement which hasbeen} adopted by defendants^{1, 3 to 7. The submissions of the} defendants, in^{brief are, that defendants were regularin} repayment of^{loan amount but for Covid' 19 pandemic impacting} the business^{and crippllng the market conditions'This factual} aspect^{has been overlookedby the applicant bank by initiating} the^{present recoveryproceedings.The defendants means of} business are^{from educationalinstitutions, which were} completely shut^{during Covid.19pandemic The present} applicant^{is premature and no causeof action arose to file the} Application. In^{view of these facts and clrcumstances'} defendants^{prayedfor dismissal of the OA'}

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2nd defendant^{served summons through paper publication,} whereas summons^{to 9rh defendantreturned unclaimedhence} deemed to be^{servedon 9th defendant'Defendants2 and 9} were set ex^pafte on^{28 09.2022 as called absentand no} representation.

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The Applicant Bank^{examined K. Vijaya Kumar,chief Manager,} as AW-1 and marked 25^{documents through him as Ex. A.1 to} Ex. A.25.

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The right of adducing evidence^{by contesting defendants} forfeited on 27.06.2023 as there^{was no representationon their} behalf.

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Heard learned counsel appearing for the applicant^{bank. Right} of advancing arguments on behalf of contesting^defendants forfeited on 71.o7.2023 as there was no /tutrepresentation on their u' 5),1'ry

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5 ot1

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OA No.Z7tl2OZ2

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behalf. Perused the written arguments submitted by the applicant and the material placed on record.

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The point that arises for consideration is:-

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Whether the Applicant Bank is enti ed for the claim made in the OA against the Defendants and OA schedule properties as prayed for?

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According to learned counsel for the applicant bank, defendants availed the loan facilities but failed to repay the same as per agreed terms. They were served with notices under the SARFAESI proceedings but to no avail. Defendants failed to adduce evidence or advance arguments despite aFfording opportunities by this Tribunal. Learned counsel further submits that the OA claim is amply proved by recitals in Exs.A.1 to A.25 marked through AW.1 and therefore, OA may be allowed.

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The contesting defendants admitted in their written statement of committing default in repayment of loan as per agreed terms. As stated supra, the defendants neither adduced evidence nor chose to cross examine the applicant's witness to substantiate their case. On the other hand, the applicant bank examined its witness and marked exhibits to prove its case. Under such circumstances, Evidence Affidavit coupled with the recitals in the documents viz., Exs. A.1 to A.25 marked on behalf of the Applicant Bank clinches the claim of the Applicant Bank against the defendants. Hence, I hold that the Defendants 1 to 8 in respect of Term Loan Account and defendants 1 to 9 in respect of WCTL accounts are^jointly and severally liable to^pay the OA claims of the respective loans to the Applicant Bank with future interest and costs.

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oA No.271l2022

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11, In the result, the^{present OriginalApplicatlon No.271/2022is} allowed as under:^-

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i) The Defendants 1 to 8 are^jointly and^severally liable to pay to the Applicant Bank a^{sum of} Rs.1,00,16,066.85Ps towards Term^{Loan Account} No.087330100103094 and Defendants^1to 9^are jointly and severally liable to pay the Applicant a sum of Rs.34,30 ,447.34Ps towards^WCTL A/c^No. 087330100125500, i.e., a total sum^of Rs.1,34,46,514.19Ps with future interest @10o/o p.a. simple from the date of application till the date of realization;

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ii) the OA claim is secured by way of hypothecation/mortgage of assets described in the schedule annexed to the OA and the applicant bank is entitled to^proceed against the same for recovery of its dues;

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iii) the applicant bank is also entitled to^proceed against the person and properties of the defendants for realizatlon of its dues; and

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iv) the applicant bank is entitled for the costs.

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L2. The Applicant Bank is directed to file Cost Memo within 2 weeks from the date of receipt of this order. cY*

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OANo.27tl2O22

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Issue Recovery Certificate accordingly.

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L4. Communicate a copy of this order to^{the parties concerned.}

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(Dictoted to the steno, tronscribed by him, corrected, signed ond^{pronouncedbyme in} the open court on this the 26th doy of^{July, 2023).}

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0Y"* (na-rqesuwARKorHE) PRESIDING OFFICER

Union Bank of India v. Ibis Paper Products

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Ibis Paper Products

Case brief

What is this about?

What did the court decide?

What the court decided

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