Allowed

Canara Bank v. Messers Sing and Sing

DRT13 Jun 2023OA/278/2022

Case brief

AI extract

What is this about?

Application under Section 19 of RDBFI Act, 1993 for issuance of recovery certificate for outstanding loan amount was allowed. Defendants found jointly and severally liable for principal, future interest, and costs. Possession of charge against mortgaged property directed.

What did the court decide?

Issuance of recovery certificate for Rs. 65,40,572.91 along with future interest and costs against applicants and procedure against secured and unsecured properties.

Canara Bank versus Messers Sing and Sing — Contract and Commercial Disputes | DRT (2023)

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o.a. 27azo2zoRT€uwahrti

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(Norlh Eastern Region)

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(Tribunal of Assam, Nagaland, Meghalaya, Manipur, Mizoram, Arunachal Pradesh & Tripura) Before Shrishiv SharanDubev. Presidino OflicEr

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O.A. No.278t2022

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ln the matter of -

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Canara Bank Dimapur Branch, First Floor, Near Plaza Bakery, Nyamo LothaRoad (Church Road), Dimapur, Nagaland- 7971 12.

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Applicant

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vs.

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l. M/s Sing & Sing Proprietorship tirm of Mrs. Asaing Wungleng Super Market, Shop No 54-62 Dimapur- 797112.

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Xlrs. Aaaing Wungleng W/o Mr. Along Pongener House No. 13, Bank Colony, Oimaput- 797'l 12, Nagatand.

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Ms. Piskim Kasom W/o Mr. W. Makang C/o City Clothing, Super Market, Dimapur- 7971 12, Nagatand.

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Mr. I Purtoba Pongener S/o Late lmlisangba Pongener House No. 13, Bank Colony, Oimaput- 7 97 1 I 2, Nagaland.

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Oefendants

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Presonce of the Counsal :

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For the Applicant : Mr Mukesh Sharma, Ms ElloraBharali. Advocates For the Defendants : None (Ex-parte) JUDG ENT

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Oated :1310612023

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This is an application under section ,l g of the Recovery of Debts Due to Banks and Financial lnstitutions Ac't, '1993 filed by the Canara Bank, Dimapur Branch, First Floor, Near Plaza Bakery, NyamoLotha Road(Church Road), Dimapur, Nagaland_

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S[.rvs]"aP"]..t,.r I Pr€si{ring Oftcbr llle6l)i.^-r - ' ORT, Guwehali

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da 27al2o22lDRT48.hati

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797112, with a^prayer to^{issue RecoveryCertilicate for the sum of} Rs.65,40,572.91^(Rupees Sixty^{Five Lakhs Forty ThousandFivo Hundred} Seventy Two and Paisa^{NinetyOne) only as on 30.04.2022against lhe defendants} jointly and severally with pendentelite and future interest thereon at the^contractual rate till realization along with cost^{and other relief.}

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

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Defendant No.1 is the^{proprietorshipfirm} of^{DefendantNo.2 as well as the} borrower and Defendant No.3 is the^guarantor to the^{loanand Defendant No.4 is the} mortgagor to the loan availed by the defendant No. l firm.

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Defendant No. 2 as^proprietor had approached the Applicant Bank and applied for financial assistance by submitting a Loan Application dated 03.11.2008 for its business and after considering the said Application, the Applicant Bank vide its Sanction Memorandum dated Nil had sanctioned an Overdraft Cash Credit (OCC) of Rs.9,00,0001 (Rupees Nine Lakhs) only to the Defendant firm, with interest @ '14.25% per annum compounded monthly subject to changes from time to time as per Banks guidelines. The cash credit limit is^payable on demand. The Defendant had signed on the said Sanction Memorandum, thereby agreeing to the terms and condition laid down therein. The Defendant No. 2 as the Proprietor of the firm had also executed a Request for Overdraft facilities dated 15.11.2008 thereby confirming the availing of the loan facility from the applicant bank and also accepted the terms and conditions contained therein.

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ln connection with the sanction of the Overdraft Cash Credit Facility of Rs. 9,00,000/-, sanctioned by the Applicant Bank and availed of by the Defendant firm, a Demand Promissory Note dated^{'15.1'1.2008,Composite HypothecationAgreement} dated 15.1'1.2008 has been signed and executed^{by the Defendant} No.2^{as the} proprietor of the fim in favour of the Applicant Bank as security for repayment of the loan.

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ln connection with the sanctioning^{of thecash creditfacility of Rs.9,00,000/-} sanctioned by the applicant^{bank and availed off by thedefendantno.1firm,} Guarantee Agreement^{dated'15.11.2008was signed and executed by the defendant}

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SI.L'r-S.aia-)*'., lSl}t"lD I Presl&Uoficei^{</sup> DRT, Gusahali}

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OA 276l202zoRT€u*ahan

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no. 3, who stood as the^{personal guarantorto the said loan facility availed by the} defendant no.l tirm. The said Guarantee^{Agreementin DefendantNo.3'scapacity as} the^{personalguarantorhad not onlyconfirmed the signingand execution of the} Guarantee Agreement dated^{15.11.2008but also acknowledged its obligation as the} personal guarantor to the loan facility availed by the defendant No 1 firm.

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ln compliance with the terms and conditions^{of the sanctionand in orderto} assure repayment of the said^{loan facility with interest, the Defendant No. 4 had} created simple mortgage by deposit of title deeds and other^{land documentsand} delivered to lhe Applicant Bank's at its Oimapur Branch, all the title deeds in respect of the immovable^{property(more} specifically described in Schedule A of the OA). Furlher, the defendant no. 4 had also executed a Confirmation of Deposit of Title Deeds & Mortgage by Oeposit of Title Deeds dated 15.11.2008 and Letter handing over Title Deeds of Properties dated 15.11.2008 in favour of the applicant bank, thereby confiming the mortgage as security for repayment of the loan facility availed by the defendant no.1 firm.

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Defendant no. 2 as lhe Proprietor of the defendant no.1 firm had again approached the applicant Bank for renewal of the cash credit facility vide dated 22.10.2009 and after considering the said request, the Applicant Bank had renewed the existing cash credit facitity of Rs. 9,OO,OOO/- only, thereby agreeing to the terms and conditions contained therein.

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Defendants have agreed to comply with the terms and conditions of the Sanction Memorandum and other relevant agrcements and documents executed in connection with the aforesaid loan facility sanctioned by the Applicant Bank and have accepted the same by executing the said documents as mentioned in the foregoing paragraphs and as such the Oefendants No. 1, 2, 3 and 4are joindy and severally liable to repay the enlire loan amount.

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Defendant No. 2 as proprietor of Defendant No.l had confirmed and

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acknowledged its indebtedness towards the bank by signing and executing Acknowledgement of Debt and Security dated 01.03.2011, 01.03.2014, 01.03.2017,

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25.02.2020 also confirmed the execution of^{loan documents and the relative securities} in connection with the said loan lacility availed^{of by the Defendants.}

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The defendants had availed the said Loan facility from the applicant bank but have not paid the outstanding loan amount as^per terms and conditions as agreed upon with the applicant bank, in spite of repeated demands and request by the applicant bank. However the delendant No. 2 as the proprietor of the defendant No. 1 firm had contirmed and acknowledged its indebtedness towards the bank by signing and executing Acknowledgment of Debt and Security dated 01.03.2011, 01.03.20'14, 01.03.2017,25.02.2020 respectively also confirmed the execution of loan documenls and the relative securities in connection with 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 accounts became NPA on 3'1.05.20'10. After the account became NPA the applicant bank issued notices for repayment of the due amount, but the defendants failed to repay the loan amount or renew the loan account.

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The applicant bank thus became constrained to tile the present Odginal Application for the recovery of Rs. 65,40,572.91 {Rupees Sixty Five Lakhs Forty Thousand Fivs Hundred Seventy Two and Paisa Ninsty One) only as on 30.04.2022 along with interest and cost of the application.

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After filing of the OA the Tribunal issued noticesupon the defendants through registered post and the applicant bank filed service reporl on 09.11.2022 and brought on record the postal receipts along with track consignment report which shows that notice has not been served upon the defendants. Thereafter the Tribunal ordered paper publication of notice upon the defendanls and the applicanl bank issued notice to the defendants on 24.1'l.2022lhtough Paper Publication in two newspapers namely "The Morung Expless and "Nagaland Posl". Even after issuance of notice through paper publication also there was no representation on behalf of thedefendants either by lhe counsel or the^personand hence the defendants were set ex-parte on 25.01.2023 and their right to file written statement cum evidence on affidavit^was closed and the maller was^posted for hearing on behalf of the applicant bank.

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Supporting the claim of the applicant bank Mr. Purtoshi AO, Senior Manager^of

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Slurdl"4.t4"^Jt'{ l.]lr'61?l 0 Pre8iding Ofr&(^I - DRT, Guw.hali

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O A 278ro22lDRT-Gwahalr

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the Applicant Bank has filed evidence^{on affidavit coupled with the security documents} marked as Exhibit-P, Exhibit AW-'l to^{A-19, supportingthe claimof the applicant bank}

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Heard the learned counsel for the applicant^{bank whoprayed for issuance of} Recovery Certificate against the^{defendants as per pleadingsmade in the} Application, supported by evidence^{on affidavit of their witness who affirmed on oath} lhe 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 circumstancesof the case, I am of theconsidered} view that the documents^{filed by the applicantbankare supporting the claim of the} applicant bank andestablishing^{theliability of the defendants.lt is proved that the} defendants are^{jointly and severally liableto pay to the applicantbankthe claim} made in the Original Application.^{Theloan was obtainedand documents have been} executed on 15.11.2008.^{The defendant No. 2 as the proprietor of the defendanl No.} 'I firm had confirmed and acknowledged its indebtedness towards the bank by signing and executing Acknowledgment of^{Debt and Security dated 01.03.2011,} 01.03.20'14, 01.03.2017 & 25.02.2020.^{Theaccountbecame NPA on 31.05.2010} and the OA has been filed on 29.06.2022.^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 unrebutted version of Mr. Purtoshi AO, the applicant's witness and all the documents marked as exhibits, including duly certified copy of ihe stalement of accounl along with interest calculation sheet^maintained by 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 result, the^present Original Application No. 278 ot 2022 is allowed^with cost as under :-

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i) The defendants No. 1, 2, 3 & 4 are^jointly and^{severally liable to pay to the} applicant bank a sum of Rs.65,40,572.91^{(Rupees Sixty FiYo LakbForty} Thousand Five Hundred^seventy Two^{and Paisa Ninety one)only} with^pendentelite and^{future [email protected]% p.a. with monthly rests from}

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^l -r \ ',1(r .( lO\Ou d-,, l.]1661)3 il Presidins ffider- 1^- DRT, Guwahali

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O.A. 276l202zDRT4uw.h.ti

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01.052022 till the date of full^{paymenurealizationand also cost of the}

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application.

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ii) The charge of the certificated amount^{be kept alive on mortgagedproperty} i.e. landed^property measuring^{1 Katha06 Lechas under Mouza No 2, Patta} No. 354, Dag No. 428, as described in Schedule-A^{of the OA till the amountis} realized in full.

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iii) The applicant bank is entitled to^proceed against lhe secured^{items towards} recovery of the debts.

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iv) The applicant bank is also enlitled to^proceed against the^personal assets and properties of the defendants towards recovery of the dues.

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v) The applicant bank is entitled to the costs of the O.A. which includes the advocate fees of the applicant bank. Applicant is directed to file lhe cost memo within 2 weeks from today.

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vi) lssue Recovery Certificate accordingly for a sum Rs. 65,40,572.91 (Rupees Sixty Five Lakhs Forty Thousand Five Hundred Seventy Two and Paba Ninety Ons)only in favour of the applicant bank against the defendants No. .1, 2,3 &4.

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vii) Communicate copy of this order to lhe concerned padies.

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This order is dictated and corrected by the undersigned.

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Judgment dated 13h June 2023, signed and pronounced in the Tribunal today

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under my signature.

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

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\Lrllt.ata.., r.n*.n","n oL?liT Presiding Officer DRT, Guwahati.^PYt

Canara Bank v. Messers Sing and Sing

Case brief

What is this about?

What did the court decide?

Canara Bank v. Messers Sing and Sing

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

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Case details

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