Allowed

Canara Bank v. Sri Bikash Mallick

DRT21 Jun 2023OA/316/2022

Case brief

AI extract

What is this about?

In this application under Section 19 of the RDBFI Act, 1993, Canara Bank sought a Recovery Certificate from the Debt Recovery Tribunal against two borrowers for an unresolved overdraft facility. The tribunal, taking the evidence and documents as unchallenged, held that the defendants were liable and issued the recovery certificate.

What did the court decide?

Issue of a Recovery Certificate for Rs. 30,55,258.36 with pending and future interest at 14.5% p.a. against the defendants.

Canara Bank versus Sri Bikash Mallick — Banking and Recovery | DRT (2023)

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O A 316/2022lDRT-Gu*ahali

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IN THE DEBTS REGOVERY^{TRIBUNAL,GUWAHATI}

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(North Eastern Region)

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(Tribunal of Assam, Nagaland, l\4eghalaya, Manipur, I\rizoram, Arunachal^{Pradesh& Tripura)}

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Before Shri Shiv Sharan Dubev.^{PresidinoOflicer}

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O A. No. 316/2022

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ln the matter of -

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Canara Bank^{(Erstwhile SyndicateBank)} Dimapur Branch, First Floor, Near Plaza^Bakery, Nyamo Lotha Road^{(Church Road)} Dimapur, Nagaland-7971'12

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.Applicant

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Vs.

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l. Sri Bikash Mallick Proprietor of M/s Pranab^{VidyapilhH.S.School Canteen} S/o Sri Himangshu Mallick Hindu Milan Mandir Road, Near^Railway, Dimapu17971 l2, Nagaland.

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Sri Rekha Mallick Wo Sri Bikash Mallick

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Hindu Milan Mandir Road, Near^Railway, Dimapur-797 1 12, Nagaland

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Defendants

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Presence of the Counsgl^:

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Mr Mukesh Sharma, Forthe Applicant : Ms Ellora Bharali, Advocates

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For the Defendants : None^(Ex'parte)

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Dated : 21.06.2023

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JUDGii|ENT

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This is an application^{under section 19 of the Recoveryof Debts Dueto Banks} and Financial lnstitutions^{Act, 1993 filed by the Canara Bank (ErstwhileSyndicate} Bank), Dimapur Branch,^{First Floor, Near Plaza Bakery, Nyamo Lotha Road (Church} Road) Dimapur,^{Nagaland'797112,with a prayer to issueRecovery Certificate} for the sum of Rs.^{30,55,258.36 (RupeesThirtyLaca Fifty Five Thousand Two} Hundred Fifty Eight^{AndPaisaThirtySix)only as o^3'1 05 2022 against the} defendants with^{pendenteliteand futureinterestat contractual rateslill realization} atong with cost and^other relief. Sltl,lslarfi,zuP;tL'"/

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Sltl,lslarfi,zuP;tL'"/ Presiding offrce/ I DRT, Guwahati

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O A. 316/202?JORT-Guwahatr

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

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The Defendant No.1 is the borrower and Oefendant no. 2 is the^guarantor to the loan facility availed by the defendant No.^1.

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The Oefendant No. t had approached the Applicanl Bank and applied^for financial assistance by submifting a Loan Application dated 20.11.2008 for its business and after considering the said Application, the Applicant^{Bank vide its letterof Sanction} dated 26.'l 1.2008 had sanctioned an Overdraft Cash Credit^{(OCC)of Rs.9,50,0001 to} the Oefendants, with interest 14.5o/o^{per annumcompounded monthlysubject to} changes from time to time as^{per Banks guidelines.The cash credit limit is payable on} demand. The Oefendants had signed^{on the said Sanction Letter, therebyagreeingto} the terms and condition laid down^{therein. The DefendantsNo. t had also executed a} Request for overdraft facilities dated^{26.11.2008thereby contirming the availing of the} loan facility from the applicant^{bank and also acceptedthe terms and conditions} contained therein.

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ln connection with the^sanction of^{the OverdraftFacility of Rs. 9,50,000/-'} sanctioned by the Applicant^{Bankand availedof by the DefendantNo.1' a Oemand} Promissory Note, Composite^{HypothecationAgreementboth dated 26.11.2008 has} been signed and executed^{by theOefendantNo. 1 in favourof the Applicant Bank as} security for repayment of^{the loan, thereby agreeingto all the ierms and conditions laid} down in the said^{Agreement and alsocharged/ hypothecationof presentand future} stocks etc. in favour of^{the Applicant Bank.}

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ln connection with the^{sanctioningof the cashcredit facility of Rs. 9,50,000/-,} sanclioned by^{the applicant bank and availed off by the defendant no 1, Guarantee} Agreement dated^{26.1'l.2OOgwas signed and executed by the defendantno2 who} stood as the^{personal guarantor to the said loanfacility availedby the defendant no 1'} The said Guarantee^{Agreement indefendantNo. 2's capacity as the} personal guarantor had not only confirmed^{the signingand execution of the Guarantee} Agreement dated^{26.11.2008 but also acknowledgedits obligation as the personal} guarantor to the loan facility^{availedby the defendant No.1'} Skl ckt^ ckt^ 4':l'l

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Skl ckt^ ckt^ 4':l'l 2tlL"0\DQ Prosidin! Oflicbr DRT. Guw.hsli

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O A 316/2022loRT-G!wahati

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The defendant No. t had again approached the applicant bank and applied for renewal by Loan Application daled^'13.12.2011 and afrer considering the said^request, the applicant bank had renewed the existing cash credil^facility of^Rs. 9,50,000/-^only thereby agreeing to the terms and mnditions contained therein.

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ln connection with the sanction of the Overdraft Facility of^{Rs. 9.50lacs,} sanclioned by the applicant bank and^availed of by the^{defendantNo. 1, a} Acknowledgement Receipt and^{Composite HypothecationAgreement both dated} 23j22011 has been signed^{and executed by the defendantNo lin favour of the} applicant bank as security^{for repaymentof theloan,thereby agreeing to all the terms} and conditions laid^{downin the said agreementand also charged/hypothecationof} stock in trade etc. in favour^{of the applicant bank.}

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ln connection with the^{sanctioning of the overdraftfacility of Rs.9 50 lacs,} sanctioned by the applicant^{bank and availed off by the defendant no'1,Guarantee} Agreement daled 29j22011^{was signedand executed by the defendant no-2, who} stood as the^{personal guarantor to the said loanfacility availed by the defendant no'1'} The said Guarantee^{Agreement was duly signed and executedby the defendantNo 2'} whereby in heer^{capacity as the personal guarantor had not only con'irmed the signing} andexecutionoftheGuaranteeAgreementdated23.l2.20,llbutalsoacknowledgedits obligation as the^{personal guarantor to the loan facility availed by the defendant No 1'}

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The Defendant^{No.l had confirmed and acknowledged its indebtedness towards} the bank by signing^{and executing Acknowledgementof Debt and Securitydated} 18.12.2014,^{15.12.2017 & 14.12.2020also confirmed the executionof loan documents} and the relative^{securities in connectionwith the said loan facility availed of by the} Defendants.

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TheDefendantshadavailedofthesaidloanfacilityfromtheApplicantBank,but have not^{paid the loan amount as perthe tems and conditions as agrdupon with the} Applicant Bank,^{inspiteof repeated demands and requestsby the ApplicantBank'} However,theoefendantNo'lhadconfirmedandacknowledgeditsindebtedness towards the bank^{by signing and executingAcknowledgementof Debt and} Security dated^{18]12.2014,15.'12'20'17& 14 12 2020 alsoconfirmed the executionof loan}

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sL st"""+- &,"1't >l I tcl t-5 t) Presiding Oftcdr^{</sup> DRT, Guwahati}

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oA.316/2o2zoRT-Guwahari

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documents and the rerative securities in connection with the said roan facirity avaired of by the Defendants. As the defendants failed to repay the loan amount or renew the Cash Credit account, lhe said accounts became NpA on 31.10.2013. 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 appricant bank for renew the cash credit account.

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The applicant bank thus became constrained to tile the present Original Appljcation for the recovery of Rs. 30,85,258.36 (Rupees Thirty Lacs Fifty Five Thousand Two Hundred Fifty Eight And paisa Thirty Six) onty as on 91.05.2022 atong with interest and cost of the application.

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After filing of the OA the Tribunal issued notices upon the defendants through registered post and the applicant bank filed service report on Zg.Og.ZO22 and brought on record the postal receipts along with track consignment report. lt is observed that the summons have not been served upon the defendants. Thereafter the Tribunal ordered paper publication of notice upon the defendants and the applicant bank issued notices to the defendants on 04]11.2022 through paper publication in two newspapers namely 'The Morung Express' 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 hence the defendants were made set ex-parte on 23.01.2023 and their right to file written statement cum evidence on aftidavit 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 security documents marked as Exhibit -P, Exhibit AW-l/1 to AW-l/15 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, supported by evidence on affidavit of their witness who affirmed on oath the execution

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Iundory-',),J-I )tl16l7q 0 Presiding Officer I^r- DRT. Guwahali

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oA 3r o/2oz2lDRl€e.hari

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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 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 liability of the defendants. lt is proved that the defendants are liable to pay to the applicant bank the claim made in lhe Original Application. The loan was obtained and documents have been executed on 26.11.2008 & 23.12.2011. The Defendant No.1 had confirmed and acknowledged its indebtedness towards the bank by signing and executing Acknowledgement of Debt and Security dated 18.12.2014, 15.12.2017 & 14.12.2020. The account became NpA on 31.,0.2013 andtheOAhas been filed on 12.08.2022. Hence, the OA is rited we within the period of rimitation and this Tribunar having a iurisdiction to adjudicate the Original Application.

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Considering the unchallenged/unrebuted veEion of Sri purtoshi A.O., the applicant's witness and all the documents marked as exhibits, including duly certified copy of the statement of ac@unt along with interesl calculation sheet maintained by the applicant Bank in il's regular course of business, I hold that the applicant is entited to get the Recovery Certificate as prayed for.

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ln the result, the present Original Apptication No. 316 of 2022 is a[owed with cost as under :-

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i) The defendanls No. 1 & 2 are .ioinfly and severally liable to pay to the applicant bank a sum of Rs. 30,55,258.36 (Rupees Thl;ty Lacs Finy Five Thousand Two Hundred Fifty Eight And paisa Thirty Six) only with pendentelite and future interest @14.50% p.a. with monthly rests from 01.06.2022 titt 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 propenies, as described in Schedule-A of the OA tilt the amount is reatized in full.

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

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,lloyl^{l"-r-.+^} A"t r 2ll0 tlL\ .l Pr*iding Offcer I ' ORT. Guwaheli

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oa 315/2o2zDRT-Guw.naii

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iv) The applicant bank is also entited io proceed against the personal assels and properties of the defendants towards recovery of the dues.

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

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vi) lssue Recovery Certificate accordingly for a sum Rs. 30,55,258.36 (Rupees Thirty Lacs Fifty Five Thousand Two Hundred Fifty Eight And paisa Thirty Six) only in favour of the applicant bank against the defendants No. 1 &2.

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vii) Communicate copy of this order to the concerned parties.

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This order is dictated and correcled by the undersigned.

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Judgment dated 21{ June 2023, signed and pronounced in the Tribunal today

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under my signature.

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Copy of the Judgment/Final Order be uploaded in the Tribunal,s Website and

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lile be consigned to Record Room.

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St^r^sl./"4. hl::1 >t\fr 173/1 (Shiv sheian ouUJy) ' ' presiding Officer DRT, Guwaha0.

Canara Bank v. Sri Bikash Mallick

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sri Bikash Mallick

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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