Allowed

Canara Bank v. Messers Poddar General Stores

DRT19 Jun 2023OA/315/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed Canara Bank's recovery certificate application against borrowers and guarantor for Rs. 35.12 lakh arrears on a cash credit limit following unchallenged evidence of executed security documents and unrepaid loans.

What did the court decide?

Issued Recovery Certificate for Rs. 35,12,158.41 with interest; imposed joint and several liability; retained charge on hypothecated properties.

Canara Bank versus Messers Poddar General Stores — Banking and Recovery | DRT (2023)

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O.A. 31 5/2o2zloRl€usahari

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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) Before Shri Shiv Sharan Dubev.^presidino Officer

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O.A. No. 3t5/2022

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ln the matter of - Canara Bank Dimapur Branch, First l:loor, Near Plaza Bakery, Nyamo Lotha Road (Church Road) Dimapur, Nagaland-797'l'l 2

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.Applica nt

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Vs.

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'1. M/s Poddar Gangrsl Storea Propfletorship- ,im Represented by Sri Gauri Shankar poddar srgnat Bosti, Opposite Sub_Urban potice Station Signal Bosti, Dimapw-7g7 112, Nagaland.

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Sri Gauri Shankar poddar S/o Late Sitaram^poddar Signal Bosti, Opposite Sub-Urban police Station Signal Bosti, Oimapw-7g7,1 j2, Nagaland.

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Sri Deepak Achadea S/o Late O.M.Achariee Kevija Colony Sect l, Near lOC, Oimapur7 97 1 1 2, Nagaland

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. Dsfondant3

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Presence of the Counsel :

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For the Applicanl : Mr Mukesh Sharma, Ms Ellora Bharali, Advocates For the Defendants : None (Ex-parte)

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Dated : i9.06.2023

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JUDGiIENT

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This is an application under section 19 of the Recovery of Debts Due to Banks and Financial lnstitutions Act, 1993 fited by the Canara Bank, Dimapur Brench, First Floor, Near Plaza Bakery, Nyamo Lotha Road (Church Road) Dimapur, Nagaland797112, wth a p'ayet to issue Recovery Certiricala for th€ sum of Rs. 35,12,158.41 (Rupoos Thirty Flve Laca Twelvs Thous.nd Ons Hundrod Fifty Eight And Paba Forty Ons) only as on 3'1.05.2022 against the defendants with pendentelite and future interest at contractual rates till realizalion along with cost and other reliel

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O.A. 315,,2022roRT-Gry.hali

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A few facts giving rise to lhe present application are as under.

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The Defendant No.l is the proprietorship firm of Defendant No.2 as well as the borrower and Defendant no. 3 is the guarantor to the loan facility availed by the defendant No.^'l firm.

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The Defendant No. 2 as proprietor had approached the Applicant Bank and applied for financial assistance by submitting a Loan Apptication dated 1 1.04.200g for its business and after considering the said Apptication, the Applicant Bank vide its letter of Sanction dated 1'l.04.2008 had sanctioned an Overdraft Cash Credit (OCC) of Rs.5,00,0001 (Rupees Five Lakhs) onty to the Defendant firm, with interest @14.5% per annum compounded monthly subject to changes from time to time as per Banks guidelines. The cash credit limit was payable on demand. The Defendants had signed on the said Sanction Letter, thereby agreeing to the terms and condition laid down therein. The Defendants No. 2 as the Proprietor of the ,irm had also execuled a Request for overdraft facilities dated 12.04.2008 thereby confirming the avaiting 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 Facility of Rs. 5.00 Lacs, sanctioned by the Applicant Bank and availed of by the Defendant firm, a Demand Promissory Note dated 12.04.2008, Composite Hypothecation Agreement dated 12.O4.2OO8 has been signed and executed by the Defendant No. 2 as the Proprietor of the defendant no.1 firm in favour of the Applicanl 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 present and future of grocery items & general stationery etc. in favour of the Applicant Bank.

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ln connection with the sanctioning of the cash credit facility of Rs. 5.00 Lacs sanctioned by the applicant bank and availed of by the defendani no.1, Guaranlee Agreement dated 12.04.2008 was signed and execuled by the defendant no.3, who stood as the^{personal guaranlor} to the said loan facility availed by the defendant no.1. The said Guarantee Agreement in defendant No. 3's capacity as the personal guarantor had not only confirmed the signing and execution of lhe Guarantee

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O A 315/2022IDRT Guwahal

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Agreement dated 12.04.2008 but also acknowledged its obligation as lhe personal guarantor to the loan facility availed by the defendant No.1.

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The Defendant No. 2 as proprietor of defendant No. t had confirmed and acknowledged its indebtedness towards the bank by signing and executing Acknowledgement of Debt and Security dated 26.06.2009 and 1O.O4.2O1O 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 proprietor of Defendant No.l had conllrmed and acknowledged its indebtedness towards the bank by signing and executing Acknowledgement of Debt and Security dated 25.06.2013,23.06.2016,20.06.20.19 and 31.01.2022 also confirmed the execulion of loan documents and the relative securities in connection with the said loan facility availed of by the Defendants.

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The Defendants had availed of the said loan facility from the Applicant Bank, but have not paid the loan amount as per the terms and conditions as agreed upon with the Applicant Bank, inspile of repeated demands and requests by the Appljcant Bank. However, the Defendant No. 2 as proprietor of Oefendant No..l had confirmed and acknowledged its indebtedness towards the bank by signing and executing Acknowledgement of Oebt and Security dated 26.06.2009, 10.04.2010, 25.06.2013. 23.06.2016, 20.06.2019 and 31.O1.2022 also confirmed the execution of toan documents and the relative securities in conneclion with the said loan facirity avaired 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 30.06.2011. After the account became NPA the applicant bank issued notices for repayment of the due amount, but the defendants have neither chosen for repayment of the loan amount in the cash credit facility nor approached to the applicant bank for renew the cash credit account.

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The applicant bank thus became constrained to file the present Original Application for the recovery of Rs. 35,12,158.41 (Rupess Thirty Five Laca Twelve Thousand One Hund.ed Fifty Eight And Paisa Forty One) onty as on 31.05.2022 along with interest and cost ofthe application.

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After filing of the OA the Tribunal issued nolices upon the defendants through registered post and the applicant bank filed service report on 29.09.2022 and brought on record the postal receipts along with track consignment report. lt is observed that the summons have not been seNed upon the defendants. Thereafter the Tribunal ordered paper publication of notice upon the defendants and the applicanl bank issued notices to the defendants on U.11.2022 through Paper Publication in two newspapers namely "The Morung Expless' and "Nagaland Post". Even after issuance of notices upon the defendants through paper publication also there was no representation on behalf of the defendants either by the counsel or the person and henc€ the defendants were made set ex-pane on 23.01.2023 and their right to file written statement cum evidence on affidavit was closed and the matter was posted for hearing on behalf of the applicant bank.

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Supporting the claim of the applicant bank Sri Purtoshi A.O., Senior Manager of the Applicant Bank has filed evidence on affidavit coupled with the s€curity documents marked as Exhibit -P, Exhibit AW-'t/1 to AW-1/'l S supponing the claim of the applicant bank.

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Heard the learned counsel for the applicant bank who prayed for issuance of Recovery Certiflcate against the defendants as per pleadings made in the Application, supported by evidence on affidavit of theh witness who affirmed on oath the execution of the security and other documents by the defendants and also execution of lheir own documents relied upon, which have been marked exhibits.

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Considering lhe facts and circumstances of the case, I am of the considered view that the documents Iiled by the applicant bank are supporting the claim of the applicant bank and establishing the liability of the defendants. lt is proved that the defendants are liable to pay to the applicant bank the claim made in the Original Application. The loan was obtained and documents have been execuled on 12.04.2008. The Defendant No. 2 as proprietor of Defendant No.1 had conlirmed and acknowledged its indebtedness towards the bank by signing and executing Acknowledgement of Debt and Security dated 26.06.2009, 10.04.2010, 25.06.2013,

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O.A. 31 5l2o2zDRT€uvahdi

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23.06.201 6, 20.06.201 9 and 31.O1.2022. The account became NPA on 30.06.2011 and the OA has beenfted on12.08.2022. 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^{versionof Sri PurtoshiA.O, the} applicant's witness and all^{the documents marked as exhibits, including duly certilied} copy of the statement of account^{alongwith interest calculation sheet maintained by} the applicant Bank in^{it's regular course of business,I hold that the applicantis antitled} to get the Recovery Certificate^{as prayed for.}

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ln the result, the^{present Original ApplicationNo. 3'15of 2022 is allowed with} cost as under :-

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i) The defendants No.^1,2 &^{3 are jointly and severally liable to pay to the} applicant bank a^{sumof Rs.35,12,158.41(Rupe8 ThirtyFive Laca Twelve} Thou3and Ono Hundred Fifty^{EightAndPaisa FortyOns)onlywith} pendentelite and future interest @'14.50%^{p a. with monthly rests from} 01.06.2022 till the^{date of full paymenurealizationand also cost of the} aPPlication.

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ii) The charge of^{the celtiticatedamount be kept aliveon hypothecatedproPerties,} as described in Schedute-A^{of the OAtill the amount is realizedin full'}

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iii) The applicant^{bank is entitledto proceed againstthe secured itemstowards} rccovery of the debts.

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iv) The applicant^{bank is also entitled to proceedagainst the personal assets and} proPetties ofthe defondanls^{towards recovery of the dues'}

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v) The applicant bank^{is entitledlo the costs of the O A which includes the} advocate fees of^{the applicant bankApplicantis directedto lile the cost} memo within^{2 weeks from today.}

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vi) lssue^{Recovery Certilicate accordingly for a sum Rs' 35'12,158'41 (Rupeeg} Thirty Five^{Laca TwelveThousand One Hundred Fifty Eight And Paisa} Forty Ons) only^{in favour of theapplicantbank againstthe defendants No'} 1'2&3'

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-lUJd''a'r'a'^Q'Ia ( ""0"nI'JlMl23 DRT. Guwahati

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O.A. 315/2022,/DRT-GMahali

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viD Communicate copy of this order to the concemed parties.

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This order is dictated and corrected by the undersigned.

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Judgment dated 19th June 2023, signed and pronounced in the Tribunal today

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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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SL'^lPl-.rr^ O.tfr.t (shi, shara'{Uuir;Lp d Presiding Officer DRT, Guwahati.

Canara Bank v. Messers Poddar General Stores

Case brief

What is this about?

What did the court decide?

Canara Bank v. Messers Poddar General Stores

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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