Allowed

Punjab National Bank v. Ms Garage

DRT12 Oct 2023OA/288/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal, Guwahati considered an application by Punjab National Bank for issuance of a recovery certificate. The court upheld the bank's claim against the borrower and guarantors, ordering joint and several liability for the outstanding debt.

What did the court decide?

Issuance of recovery certificate for Rs. 32,14,626.46 with interest and costs against defendants jointly and severally.

Punjab National Bank versus Ms Garage — Banking and Recovery | DRT (2023)

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OA 2S8/2o22loRT-Guwahati

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IN THE DEBTS RECdVLh,Y fRBUNAL,^GUWAHATI

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(North Eastern Region)

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(Tribunal of Assam, Nagaland, Meghalaya, lranipur,^{Mizoram,Arunachal Pradesh& Tripura)}

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Before Shri Shiv Sharan Dubev.^{PresidinoOflicer}

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O.A. No.288/2022

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ln the matter of -

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Punjab National Bank,

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Meherpur Branch, N.S. Avenue, Cachar.788005, Dist: Cachar, Assam

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.Applicant

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I. M/S GARAGE

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A ProprietorshiP Firm

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Prop- Md. Shahnawaz^Ahmed Address- Jitu Market, Central^{Road, Silchar,}

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District-Cachar, Pin-788001,^Assam.

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MD. SHAHNAWAZ^{AHMEO(Borrower),} Son of - Manjur Ahmed,

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Address- Water Works^{Road, Ward No. 7,}

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Silchar, Distric! Cachar,^Pin-788001 ,^Assam.

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MANJUR AHMED^(Guarantor)

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Son of Late Hazi^{Hafiz Abdul Latif,}

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Address- Water^{Works Road,WardNo 7,}

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Pin-788001, Assam,^{Silchar, District-Cachar.}

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MIRNAWAZ AHMED^(Guarantor)'

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Son oI - Maniur Ahmed

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Address-Water Works^{Road, Ward No. 7,} Silchar, District-Cachar,^{Pin-788001, Assam}

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Defendants

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Presence of lhe^counsel:

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For the Applicant : Mr. Prasenjit Sengupta, Mr. Ridip Kumar Dutta,^Advocates

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For the Defendants : None (Ex-parie)

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Oated t12hil2o23

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JU OGMENT

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This is an application^{undersection19 of the Recoveryof Debts Due to Banks} and Financial^{lnstitutions Act,1993 filed by the Puniab National Bank,Meherpur}

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Branch, N.S. Avenue,^{Cachar-788005Dist:Cachar, Assam, with a prayer to issue}

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.t 1^r ' : h;: l) "'.' I^^{4)"1r 17} i Presrd,ng Ofl5cer DRT. Guwahali

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'J.'. .". Recovery certificate for the sum^{of,R;. '32;fi,626.46p(RupeesThirty Two Lakhg}

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Fourteen Thousand Six Hundred^{Twenty Six and Paise Forty Six} )only^{as on} 30.06.2022 against the defendants^{with pendentelite and future interestthereon 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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The Defendant No.2 as the Proprietor of^{Defendant No. 1 firm had} approached the Applicant Bank and applied^{for financial assistance underCash} Credit Loan Scheme for business^{relatingto Readymade garments, shoesetc., by} submitting a Loan Application before^{the Applicant Bankdated26.06.20'13and} after considering the said Application, the^{appropriate authorityof the Applicant} Bank vide its Sanction Advice dated^{05.07.2013had sanctioned} a^{Cash Credit} Loan facility of Rs. 15.00 Lacs to the Defendants,^{with interestcharged 15.30%per} annum with monthly rests, The Cash Credit Loan^{facility is repayable on demand} subject to further renewal. The Defendants^{has agreed upon} the^termsand conditions of the Sanction Letter^{dated 05.07.2013.The said loanwas coveredby} CGTSME Scheme, but later on it was not opted by the^{Oefendants,and} accordingly Defendant No. 3 stood^{as Guarantorof the Loan facility availed in the} name of Defendant No. 1 firm.

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ln connection with the sanction of the financial facility of Rs. 15.00 Lacs sanctioned by the Applicant Bank and availed of by the Defendant Nos. 2 as^the Proprietor/Borrower in the name of Defendant No. I^{firm, Declaration} of Sole Proprietorship, Demand Promissory Note dated 08.07.2013, Hypothecation of Debts and Movable assets dated 08.07.20'13, Hypothecation of Goods dated 08.07.2013, Hypothecation Agreement of Goods, Book Debts, Plants and Machineries dated 08.07.2013, Letter of Lien dated 08.07.2013 and Letter of Continuity dated 08.07.2013 had been signed and executed^{by the DefendantNos.} 2 as the Proprietor of Oefendant No. 1 firm in favour of the Applicant Bank as security for repayment of the loan^facilities, thereby agreeing to all the terms and conditions laid down in the said Asreement in favour of the oooli""n, !ffi glrr_ S._,6,.f

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eresiains omDr^{' l( )</sup> (l DRT. Guwahati}

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o.a 268/2o2zDRr6Mhiti

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The Defendant No. 2 as ttle BrjhOwer^had created^{hypothecationof the} stocks and^goods in the firm^(Defendant No.^{1) thereonin favour of the Applicant} Bank with regard to the loan facility availed from the^{ApplicantBank. Also, the} Defendant No. 3 stood as Guarantor of the^{loan facility and duly signedand} executed the Letter of Guarantee dated 08.07.2013^{in favour of the ApplicantBank.}

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The Defendants had agreed to comply with lhe terms^and conditions^{of the} Sanction Letter, Hypothecation^{Agreementand otherrelevantagreementsand} documents executed in connection^{with the aforesaid loan facilitysanctionedby} the Applicant Bank and^{have acceptedthe sameby executingthesaid documents} and as such the Defendants are^{legally bound to repay the entire loanamounlin} the loan account.

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ln connection with the sanction^{of the financialfacility of Rs 15.00Lacs} (Cash Credit Loan) only sanctioned by the^{Applicant Bank and availedof by the} Defendant Nos. 2 as the^{Proprietor/Borrower in thenameof DefendantNo.1 flrm,} Link Letter dated 17.02.2015,^{Demand PromissoryNole dated17 .02.2015} '^{as well} a Letter of Balance Confirmation^{dated17.02.2015owing his liabilities to Rs} '14,99,813/-; had been signed and executed by the Defendant Nos. 2 as the Proprietor of Defendant^No. I^{firm in favour of the Applicant Bank as security for} repayment of the loan facilities,^{thereby agreeing to all the termsand conditions} laid down in the said^{Agreementin favour of the Applicant Bank.Also, the} Defendant Nos. 3 and 4^{stood as guarantorsof the Loan facility and executed} Letter of Guarantee. both dated^{14.12.2015 in favour of the Applicant Bank against} the Loan.

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Again the Defendant^{No. 2 as the Proprietorof DefendantNo lfirm on} 01.06.2015 approached^{the Applicant Bankfor enhancementof the earlierCash} Credit Limit of Rs. 15.00^{Lacs to Rs. 22.00 Lacs vide Application of enhancement} And, the Applicant^{Bankafter due scrutiny enhancedthe earlier limit to Rs 22 00} Lacs on 05.06.2015,^{with interest chargedat 14.50o/oper annumwith monthly} rests. The loan is repayable^{on demand which is to be renewed} ,""r,rl[,,

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ln connection with the san;tion^{bf the financial facilityof Rs. 22.00 Lacs} (Cash Credit Loan) only sanclioned^{by the Applicani Bank and availedof by the} Defendant Nos. 2 as the^{Proprietor/Borrowerin thenameof DefendantNo.1 firm,} Link Letter dated 04.06.2015,^{Demand PromissoryNotedated 05.06.2015,} Hypothecation Agreement for^{Goods, Book Debts, Plants and Machineries dated} 05.06.2015, Letter of Lien^{alongwith consentclause dated 05.06.2015 and Letter} of Continuity dated 05.06.2015^{had been signedand executed by the Defendanl} No. 2 as the Proprietor of Defendant^{No.1 firm in favour of the ApplicantBank as} security for repaymenl of the^{can facilities, thereby agreeingto all the termsand} conditions laid down in the said^{Agreement in favour of lhe ApplicantBank.Also'} the Defendant No. 3 and^{4 stood as guarantors of the Loanfacility and executed} Letter of Guarantee, dated 05.06.2015^{in favour of the ApplicantBank against the} Loan.

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The Oefendants had availed of the^{saidloanfacility from the Applicant Bank,} but have not^paid the^{loan amount in the loan accountsas per the terms and} conditions as agreed upon^{with the Applicant Bank, inspiteof repeated demands} and requests by the Applicant^{Bank. TheDefendantNo. 2 executedLink Letter} dated^'10.05.2018, Demand Promissory^{Note dated10.05.2018,as well vide letter} of balance confirmation dated^{10.05.2018admittedhis indebtednesstowards the} Applicant Bank to the tune of Rs. 22,15,607.599/-^{in AccountNo. 03'13250203470.} Also the defendant No. 2 as the^proprietor of^{defendantNo. firm signed and} executed the Link Letter dated 09.01.2020,^{Demand PromissoryNotedated} 09.01.2020 in favour of the applicant^{bank againsttheloanaccount. The applicant} bank on 04.01.2022 visited the unit and^{found that the Unit is closed and stock is} NIL and accordingly submitted Unit^{lnspection Report.}

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The defendants had availed the credit facilities^{from the applicant bank but} have not^paid the outstanding amount^{as per termsand condition madewith lhe} applicant bank in spite of repeated demands and^{requestby the applicant bank.} As the loan account of defendanls^{was running extremely irregular and due to non-}

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^{to non-non-} SL,'t S]OO^Q

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Presdins oClr lo 2J DRT. Guwahati I

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oA 288/2022loRT Guwahati

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payment of principal amount and^{interest,the said account was classilied as a NPA} on 31 .05.2021. After^{the account became NPAthe applicant bank issuednoticesfor} repayment of the due^{amount,but the defendants haveneither chosenfor repayment} of the loan account^{nor renewedthe loan account availed by them'}

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The applicant bank thus^{became constrained to file the present Original} Application for the^{recovery of Rs. 32,14,626.46p(RupeesThirty'TwoLakhs} Fourteen Thousand^{Six Hundred Twenty-Sixand PaiseForty'Six)onty as on} 30.06.2022 along^{with interest and costof the application.}

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After filing of the^{OA theTribunal issued notices upon thedefendants through} registered^post and^{the applicant bank filed service reporton 14.09.2022and brought} on record the^{postalreceiptsalong with track consignmentreportThe learned} counsel Mr K Biswakarma^{for defendantshad appearedon 06.022023and sought} time for filing Vakalatnama^{and written statement cumevidence on affidavit'} Thereafter, the case^{was listedon severaloccasion, but the Vakalatnama and written} statement cum^{evidence on affidavithas not Seenfiled by the learned counselfor} defendants. Hence^{the defendants were set ex-parte on 30-05-2023 and their ight to} file written statement^{cum evidenceon affidavit was closed and the matter was posted} for hearing on behalf^{ofthe applicant bank.}

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Suppoding the claim^{of the applicant bankAnjana Das, Chief Managerof the} Applicant Bank has^{fited evidenceon affidavit coupledwith the securitydocumenls} marked as Exhibit^{'l to 31(a)supportingthe claimof the applicantbank'}

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Heard the learned^{counsel for theapplicant bankwho prayedfor issuance of} Recovery Certificate^{againstthe defendants as perpleadings madein ihe Application,} supported by evidence^{on affidavitof their witnesswho afiirmed on oath the execution} ofthesecurityandotherdocumentsbythedefendantsandalsoexecutionoftheirown 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 document^{filed by the applicant bankare supportingthe claim of-the} ., tk^/.etaffi;li.t7 Presding Ofllcer^{r- -} v DRT, Guwahali

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O A 288/2022loRT-Guwahalr

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applicant bank and establishing the liability of the defendants. lt is^proved that the defendants are^jointly and severally liable to^pay to the applicant bank the claim made in the Original Application. The loan was obtained and documents have been executed on 08.07.2013, 17.02.2015, 05.06.2015, 10.05.2018, 10.08.2018, 09.01 .2020. The account became NPA on 31.05.2021 and the OA has been filed on 25.07.2022. 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 Anjana Das, the applicant's witness and all the documents marked as exhibits, including duly certified copy of the statement of account along with interest calculation sheet maintained by the applicant Bank in it's regular course of business, I hold that the applicant is entitled to get the Recovery Certificate as^prayed for.

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ln the result, the present Original Application No. 288 of 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. 32,14,626.46p^(Rupees Thirty-Two Lakhs Fourteen Thousand Six Hundred Twenty-Six and Paise Forty-Six) only with^pendentelite and future interest @15.30%^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 certiflcate amount be kept alive on hypothecated properties as described in Schedule-A of the Original Application 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 applicant bank is also entitled to^proceed against the^personal assets and properties of the defendants towards recovery of the dues.

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.r:lilsLava^^{+:J,q 12 l0^{L</sup> ,I Pre6iding Offcer DRT. Guwahati}

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O-A. 288/2022loRl€uN,.h.ti

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v) The applicani bank is entitled to the costs ofthe O.A.^{which includes the advocalefees} ol the applicant bank. Applicant^is direcied^{to file the costmemowithin2 wtseksfrom} today.

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vi) lssue Recovery cerlificate accordingly for a sum^{R3. 32,14,626.46P (Rupees} Thirty-Two Lakhs Fourben Thousand Six^{HundredTwenty€ix and PaBe} Forty-Six) only in favour of the applicant bank^{against thedefendanlsNo. 1, 2,3 & 4.}

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vi) Communicate copy of this order to^{the concemed pa(ies.} This order is dictated and corrected^{by the undersigned.}

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Judgment dated 12rh October^{2023, signed and pronouncedin the Tribunal} today under my signature.

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Copy of the JudgmenuFinal^{Ordetbe uploaded in the Tribunal's Websiteand} file be consigned to^RecordRoom.

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DRT, Guwahati.

Punjab National Bank v. Ms Garage

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. Ms Garage

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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