Allowed

Canara Bank v. Messers Hoque Supary Chips Unit

DRT21 Sept 2023OA/287/2022

Case brief

AI extract

What is this about?

Debt Recovery Tribunal allowed an application by Canara Bank for a recovery certificate against two borrowers who defaulted on overdraft and GECL loans. The bank proved execution of loan documents and security agreements. The court found the defendants jointly liable for Rs. 28.91 lakhs plus interest.

What did the court decide?

Issued Recovery Certificate for Rs. 28,91,850.48 with pendent lite interest at 10.10% per annum; enforced hypothecation and personal assets.

Canara Bank versus Messers Hoque Supary Chips Unit — Banking and Recovery | DRT (2023)

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O A 287l2022loRT€mahali

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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, Mizoram, Arunachal Pradesh & Tripura)

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Before Shri Shiv Sharan Dubov. Presidino Officer

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O.A. No. 28712022

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ln the matter of -

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CANARA BANK Kharupetia Branch Kharupetia., District- Danang, Assam-784115.

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Applicant

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Vs.

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M'S HOQUE SUPARY CHIPS UNIT Proprietorship firm Represented by Mr. Aizul Hoque Village- Burigaon, P.O. Ghansimuli,

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Kharupetia, Assam-784'l 15.

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R AIZUL HOQUE Village. Burigaon, P.O. Ghansimuli,

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Kharupetia, Assam-7841 15.

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Defendants

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Preaence of the counsel :

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For the Applicant : Sri Mukesh Sharma, Ms Ellora Bharali, Advocates

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For the Defendants : None (Ex-parte)

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Dalad :2'U0912023

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JUDGMENT

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This is an application under section 19 of the Recovery of Oebts Due to Banks and Financial lnstitutions Act,^'1993 filed by the Canara Bank Kharupetia Branch, Kharupetia., District- Darrang, Assam-784115, with a^prayer to issue Recovery Certificate for the sum of Rs. 28,91,850./t8^p (Rupees Twenty Eight Lacs Ninety One Thousand Eight Hundred Fifty and Paise Forty Eight) only as on 30.06.2022 against the defendants with pendentelite and future interest at contractual rates till realization along with cost and other relief. tk,o fl^a.l fl^a.l --ir,€21 A, k.J

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tk,o fl^a.l fl^a.l --ir,€21 A, k.J^q Presiding Oflicer^{I -} i/ I DRT Guwahali

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A few facts giving rise to the presenl application are as under.

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The defendant No. 1 is the proprietorship firm anCdefendant No. 2 is the borrower and proprietor to the loan facility availed by the defendant No. 1 ,irm.

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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 for ils business and after considering the said Application, the Applicant Bank vide its Sanction Memorandum dated 04.06.2016 had sanctioned an Overdraft Cash Credit (CC) of Rs. 10,00,000 Lacs to the Defendant no. I firm, with interest @ 10.10% per annum compounded monthly subject to changes from time to time as per Banks guidelines. The Overdraft Cash Credit limit is payable on demand. ln the event of default, the bank shall also be entitled to charge at its own discretion and the borrower shall be liable to^pay such enhanced rate of interest on the said Overdraft account. The Defendant no.2 had signed on the said Sanction Memorandum, thereby agreeing to the terms and condition laid down therein. The Defendants No. 2 as the Proprietor of the firm had also executed^{a Requestfor overdraft facilities} dated 04.06.2016 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. lO,O0,OOO| Lacs, sanclioned^{by the Applicant Bank and availed of by the} Defendant firm, a Pronote,^{Cash Credit Agreement, Letter of undertakingre:} Loans/Advances, a Letter^{Evidencing Executionof Documentsall dated} 04.06.2016 has been signed^{and executedby the Defendant No.2 as the} Proprietor of the defendant^{no. 1 firm in favourof the Applicant Bank as security for} repayment of the loan, thereby^{agreeingto all the terms and conditions laid down} in the said Agreement^{and also charged/ hypothecation of stock in trade,etcin} favour of the APPlicant^Bank.

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The Defendants^{had availed of the saidloanfacilityfrom the Applicant Bank,} but have not^{paidtheloan amount as perthe lermsand conditionsas agreedupon} with the Applicant^{Bank. However, the DefendantNo. 2 as proprietorof Defendant}

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SWad"a^s-h'hn 21 05 23 ,J Pr6siding Officer '^- DRT, Guwahati

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o.A 287l2022/oRTcuw.hali

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No. t had confirmed and acknowledged its indebtedness towards the bank by signing and executing Acknowledgement of Debt and Security dated 07.12.20,17 also 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 Defendant no. 2 as the^proprietor of the defendant no. I firm had again approached the applicant Bank with a Letter of renewal dated 08.12.2017 had applied for renewal of the overdraft cash credit facility and after considering the said request, the Applicant Bank vide Sanction Memorandum dated Og.12.2},ll had renewed the existing overdraft cash credit facility of Rs. 1O.OO Lacs only with interest @ 10.45% per annum compounded monthly subject to change from time to time as per Banks guidelines. The overdraft limit is payable on demand. The Defendant No. 2 as the Proprietor of the defendant no. 1 firm had signed on the said Y Sanction memorandum, thereby agreeing to the terms and Osgndition laid down therein. The letter Evidencing Execution of Documents dated 08.12.20i7 has been signed and executed by the Defendant No. 2 as the^ploprietor of the defendant no. 1 firm in favour of the Applicant Bank.

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The Defendant no. 2 as the Proprietor of the defendant no.1 firm had again approached the applicant Bank with a Letter of renewal dated 22.05.2020 had applied for renewal of the overdraft facility and after considering the said request, the Applicant Bank vide Sanction Memorandum daled 22.05.2020 had renewed the existing overdraft cash credit facility of Rs. 19.00 Lacs only with interest @9.85% per annum compounded monthly subject to change from time to time as per Banks guidelines. The overdraft limit is payable on demand. The Defendant No. 2 as the Proprietor of the defendant no. 1 firm had signed on the said Sanction memorandum, thereby agreeing to the terms and condition laid down therein.

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ln connection with the sanction of the Overdraft cash credit Facility of Rs. 19,00,000L Lacs, sanctioned by the Applicant Bank and availed of by the Defendant firm, a Supplement Agreement dated Nil and Letter in respect of Enhancement of credit facilities dated 22.05.2020 has been signed and executed

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by the Defendant No. 2 as the^proprietor of the defendant no. r firm in favour of the Applicant Bank as security for repayment of the loan, thereby agreeing to all the terms and conditions laid down in the said Agreement and also charged/ hypothecation of stock in trade, etc. in favour of the Applicant Bank.

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The Defendant No.2 as proprietor had approached Applicant Bank and applied for linancial assistance by submitting a Loan Application dated 09.06.2020 for its business and after considering the said Application, the Applicant Bank vide its Sanction Memorandum dated 09.06.2020 had sanctioned under GECL Loan of Rs.2,00,000/- Lacs to the Defendant no.1 firm, with interest g.g5% per annum compounded monthly subiect to changes from time to time as per Banks guidelines. The Credit limit is payable on demand. ln the event of default, the bank shall also be entitled to charge at its own discretion and the borrower shall be liable to pay such enhanced rate of interest on the said Credit account. The Defendant no.2 had signed on the said Sanction Memorandum, thereby agreeing to the terms and condition laid down therein

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ln connection with the sanction of the Overdraft cash credit Facility of Rs. 2,00,000/- Lacs, sanctioned by the Applicant Bank and availed of by the Defendant firm, Pronote dated 09.06.2020 and Agreement cum Deed of Hypothecation dated Nil has been signed and executed by the Defendant No. 2 as the Proprietor of the defendant no. 1 firm in favour of the Applicant Bank as security for repayment of the loan, thereby agreeing to the terms and conditions laid down in the said Agreement and al charged/ hypothecation of stock in trade, etc. in favour of the Applicant Bank.

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The defendants had availed of the said loan facilities 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. As the detendants^{failed to repaythe loan amountor further} renew the overdrafl cash credit account, the said^{account becameNPA} on 31.05.2021. After the account^{becameNPAthe applicant bank issued notices for}

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repayment of the due amount, but the defendants failed to repay the loan amount or further renew the loan account.

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The applicant bank thus became constrained to file the present Original Application for the recovery of Rs. 28,91,850.48p (Rupees Twenty Eight Laca Ninety One Thousand Eight Hundred Fifty and paise Forty Eighi) onty as on 30.06.2022 along with interest and cost of the application.

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After filing of the OA the Tribunal issued notices upon lhe defendants through registered post and the applicani bank filed service report on 29.Og.ZO2Zand brought on record the postal receipts along with track consignment report which shows that the notices have been served upon the defendants, hence lhe service was not completed upon the defendants. Thereafter the Tribunal ordered paper publication of notice upon lhe defendants and the applicant bank issued notice to the defendants through^paper publication ln two newspapers namely "The Times of lndia,, and "Dainik Asom" both dated 19.11.2022. Even after proper service of notice upon the defendants there has been no representalion on behalf of the defendants either by the counsel or the person and hence the defendants were set ex_parte on O3.02.2O23 and the matter was posted for ex_parte hearing on behalf of the applicant bank.

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Supporting the claim ofthe applicant bank Lhungdim Romeo, Branch Manager of the Applicant Bank has ,iled evidence on alfidavit coupled with the security documents ma*ed as Exhibit -p, Exhibit_Aw_1/1 to AW-1|2O, supporting the claim of the applicant bank.

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Heard the learned counsel for the applicant bank who prayed for issuance of Recovery Certiticate against the defendants as per pleadings made in the Application, supponed by evidence on affidavit of their witness who affirmed on oath the execution of the security and other documents by the defendants and arso 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 filed by the applicant bank are supporting the claim of the applicant bank and establishing the liabitity of the defendants. lt is proved that the

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.s[i, )"a4dr^g'""^t 2t. oq 2\ /l Presiding o6d0a, u ORT. Guwahati

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defendants are liable to pay to the applicant bank the claim made in the Original Application. The loan was obtained and documenls have been executed on 04.06.2016, 08.12.2017, 22.05.2020 & 09.06.2020. The account became NpA on 31.05.2021 and the OA has been fited on 09.07.2022. Hence, the OA is fited well within the period of limitation and this Tribunar having a jurisdiction to adjudicate the Original Application.

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Considering the unchallenged/ unrebutted version of Lhungdim Romeo, the applicant's witness and all the documents marked as exhibits, including duly certified copy of the statemenl of acrount along with interest calculation sheel maintained by the applicant Bank in it's regular course of business, I hold that the applicant is entifled to get the Recovery Certificate as prayed for.

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ln the result, the present Original Application No.297 ol2022 is allowed with cost as under :-

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i) The defendants No.1 & 2 are jointly and severally liable to pay to the applacant bank a sum of Rs. 28,91,850.48 p (Rupe* Twenty Eight Laca Ninoty One Thousand Eight Hundred Fifty and paiso Forty Eight) only with pendentelite and future interest @10.10% per annum with monthly rests frcm 01.07.2022 till the date of full paymenurealization and also cost of the application.

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ii) The charge of the certificated amount be kept alive on hypothecated properties as described in Schedule-A of the OA till the amount is realized in full.

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

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iv) The applicani bank is also entitled 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 lile the cost memo within 2 weeks from today.

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St^re!gg1,$"fX Pr*idlng Ofi(j'r I^? U ORT. G'.ru.aheti

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vi) lssue Recovery Certificate accordingly for a sum Rs. 28,9,t,g50.4g p (Rupees Twenty Eight Lacs Ninety One Thousand Eight Hundred Flfty and Paise Forty Eight) only in favour of the applicant bank against the defendanls No.^.l & 2.

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vii) Communicate copy ofthis orderto the concerned parties.

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This order is dictated and corrected by the undersigned.

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Judgment dated 21sr September 2023, signed and pronounced in the Tribunat

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loday 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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SL4Al.4l.a" \uL,",rfsm, srraranbluuEis I Presiding Officer DRT, Guwahati.

Canara Bank v. Messers Hoque Supary Chips Unit

Case brief

What is this about?

What did the court decide?

Canara Bank v. Messers Hoque Supary Chips Unit

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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