Allowed

Uco Bank v. Ms T D Enterprise

DRT15 Nov 2023OA/335/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's application for a Recovery Certificate. The court held that the respondents' general denial amounted to an admission and that the application was maintainable and within limitation, directing issuance of the certificate for the claimed amount.

What did the court decide?

Issued a Recovery Certificate for Rs. 52,03,425.46 with pendent interest at 11.55% p.a., costs, and charge on hypothecated properties.

Uco Bank versus Ms T D Enterprise — Company and Corporate | DRT (2023)

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oA 33512022/DRT_GuwaMti

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.^I

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IN THE DEBTS^{RECOVERYTRIBUNAL' GUWAHATI}

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(North Eastern Region)

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(Tibunal of Assam, Nagaland.^{Meghalaya,Manipur'lvlizoram'ArunachalPradesh& Tnpura)}

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Before Shri Shiv Sharan^{Dubev.PresidinoOfficer}

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O.A. No.335/2022

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ln the matter of - UCO BANK Dibrugarh Branch, Dibrugarh-786001,^Assam

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Applicant

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Vs.

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M'S T. D.^ENTERPRISE A ProprietorshiP^firm,

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Ganesh Chandra^{DuftaPath, Ward No.6,} Holding No.6/389,^{Chiring Chapori, Dibrugarh,} P.S. & District-^{Dibrugarh, Dibrugarh-786001,Assam'}

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SMT NAMRATA OUTTA Proprietor ot M/s T.^{D. Enterprise} Daughter of Sri^AbirDutta, South AmolaPatty,^Mohanaghat P.S. & District-^{Dibrugarh, Dibrugarh-786001,Assam}

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Defendants

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Presence of the^Counsel:

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Mr Manoj Kumar Roy, Advocate

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For the Defendants^: Mr. Manoj Kumar Das, Advocate.

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Dated :15.11.2023

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JUDGMENT

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This is an application under^{section 19 of the Recoveryof DebtsDue to Banks} and Financial lnstitutions^{Act, 1993 liled by the UCo Bank,DibrugarhBranch,} Dibrugarh-78600'1 , Assam,^with a^prayer lo^{issue Recovery Certificatetor the} sum of Rs.52,03,425.46^{(Rupees Fifty Two Lacs Three Thousand Four Hundred} Twenty Five and Paisa Forty^{Six) only as on 30.06.2022 againstthe defendants with} pendentelite and future interest till realization along with cost and other relief

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

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The defendant no.2 as the^proprietor of^{the defendantno. 1 firm had}

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S[h^{*e.^o-ed,'1} Pr66iding ofic€. - u ORT, GuwBheti

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O A. 335/2022/ORT-Guwahai

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approached the applicant bank and applied for financial assistance for its business by submitting a loan application dated 30.08.2017 and after considering the said application, the Applicant Bank vide Sanction Letter dated 03.09.20'17 had sanctioned a cash credit limit of Rs.40.00 Lacs (Rupees Forty Lacs) only under CGTIVISE scheme to the defendants with interest charged at 11.55% per annum with monthly rests. The cash credit loan was repayable on Demand. The defendant no.2 being the proprietor of the defendant no.1 firm has signed the sanction letter, thereby accepting all the terms and conditions contained therein.

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ln connection with the sanction of cash credit facility of Rs.40.00 Lacs sanctioned by the applicant bank and availed of by the defendants, a Hypothecation of Goods to secure a Demand Cash Credit dated 05.09.2017 has been signed and executed by the defendant no. 2 being the proprietor of the defendant no.1 firm, thereby agreeing not only to all the lerms and conditions of the said Agreements and also hypothecated the Stocks of^packaged drinking water, stocks in trade etc. with the Applicant Bank. lt is staled by the applicant that recently on inspection, it was found that the establishment uniushop is closed and lhe borrower also could not be contacted at the recorded address.

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ln order to secure the repayment of the credit facility. the defendant no. 2 as the^proprietor of the defendant no.l firm have signed and executed a Demand Promissory Note dated 05.09.2017,^{Document(A-3) dated 05.09.2017 and Letter} of waiver^(A-47) dated 05.09.2017, thereby^promising to^{pay the Applicant Bank} the entire loan amount received together^{with interest1'1.55o/oper annumwith} monthly rests on demand.

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Thereafter again the defendant^{no.2approachedthe applicant bankand} applied for emergency fund under^{Covid-19 EmergencyLine of Credit (UCECL)} vide loan application dated^{11.5.2020 and after considering the said application the} applicant bank vide its Sanction^{Letterdated12.05.2020 had sanctioned a Ad hoc} Term Loan of Rs.1.50^{Lacs (RupeesOne Lacs and Fifty Thousand) onlyto the} defendants with interest^7.30o/o Pa.^{The Term Loan is to be repaid in '18 monthly} installments of Rs. 8,823/- each^{after a moratorium period of 6 months. Monthly}

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ll.i-.i^{gt ra- 0"i.nl} ls. lt.2J^t Presiding Oftcer DRT, Guwahali

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o.A 33t2022/oRT'GRahali

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interest during^{the moratorium is payableas and when appliedThe defendantno'} 2 in connection^{with the sanctionof Ad hocTerm Loanunder UCECL schemehad} signed and executed^{an Agreement relating to Term Loan dated 12'052020 and} Composite Oeed of^{Hypothecationdated 12 05 2020in favour of the applicant} bank as security^{to the adhocfacility availedby the defendants thereby agreeingto} all the terms^{and conditions contained therein'}

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The defendant^{No.2 being theproprietor of the defendant no 'l firm had also} signed and^{executeda Demand PromissoryNote dated 12 O5'202O and Letter of} waiver^{(A-47) dated 12.05 2020,therebypromisingto paythe ApplicantBank the} entire loan^{amount together with interest.}

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The Defendants had^{availedof the said loan facilities fromthe Applicant} Bank, but have^{not paid the loan amountin the Term Loan accountas per the} terms and conditions^{as agreedupon with the ApplicantBank' inspite of repeated} demands and^{requestsby the ApplicantBank Hence,the said accountsbecame} NPA on 31.05.2021.^{However,the defendantno, 2 being the proprietorof the} defendant no.1^{firm had signed and executeda BalanceConfirmation Letter dated} 31.08.2020 thereby^{confirming the amount outstanding in the loan account as on} date and also^{confirmingthe executionof the security documentsin connection} with the availing^{of the financialfacility Afterthe accountsbecame NPA the} applicant^{bank issued noticestor repayment of the due amount, but thedefendants} have neither chosen^{for repaymentof the remaining installment of the tetm loan} amount nor^{approachedto the applicantbankfor settlingthe termloan accountnor} renewed the cash credit^{loan account.}

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The applicant^{bank thusbecameconstrainedto file the presentOriginal} Application^{for the recoveryof Rs. 52,03,425'46(Rupses Fifty-Two Laca Three} Thousand Four^{Hundred Twenty-Five and PaisaForty€ix)only as on 30 062022} along with interest^{and cost ofthe application.}

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Afler filing of the^{OA the Tribunal issued notices upon the defendants through} registered^post and^{the applicant bank liledservicereport on '19'10'2022and brought} on record the^{postal receipts alongwith trackconsignment report-The learned}

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\L*,)il^&'@'g"l'+ t5 |.2) 0 Presiding Ofllcer DRT, Guwehali

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oA 3352o22/DRr€!qharr

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counsel for defendants have appeared on 29.10.2022 and filed their wrinen statement and evidence on affdavit on 0g.02.2023 to which learned counsel for the applicant has filed rejoinder on 30.03.2023 against written statement and evidence on afrdavit liled by both the defendants. Thereafrer the matter was posted for hearing.

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Supporting the claim of the applicant bank Shri Ravindra Ramchandra Sultan, Chief Manager of the Applicanl Bank has filed evidence on afiidavit coupted with ihe security documents marked as Document-p, Exhibit AW_1 to AW_16(a) supporting the claim of the applicant bank details of which are :-.

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Sl.No.	Nameofthe documents	ExhibitNo.
1	Cedmedcopyotttret_etterot7utttoritiOitea 27 .07.2022	P
2	LoanApplicationdateO3O.OA7bl7indSanAion Letter dated 03.09.2017	AW.l&AW-2
3	HypothecationofCooaslosecu-reaOemina lqesh^{creditdated 05.09.2017}	AW.3
4	DemandPromissoryNote datedO5O92O1Z Document(A-3) dated05.09.2017andLetter of Waiver(A-47) dated 05.09.2017	AW4,AW-s& AW.6
5	Loan ApplicationdateO^'tt.OSZOZO anOSanction Letter dated12.05.2020,Agreement relatingto Term Loan daled'12.05.2020,Composite Deedof Hypothecationdated12.05.2020,Demand Promissory Notedated12.05.2020andLetterof Waiver(A-47)dated12.05.2020	AW.7, AW.8, AW-g, AW-10,AW. 11&AW-12
6	BalanceConfirmationLetter dated3'1.08.2020	AW.13
7	Certified copiesofStatementsofAccountforthe loan account with interest calculation sheet.	AW-14, AW-14(a), AW-15,AW-l5(a), AW-16 &^'16(a)

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The defendants have appeared and contested the claim of the applicant bank by filing written statement and evidence on afiidavit stating interalia that the original application is not maintainable in law as well as fac{s. There is no cause of action for the above noted Original Application. The Original Application is also baned by the law of limitation. lt is further stated that mere Letter of Authority of Chief Manager without any statements or re@rds to that effect as lo how the Chief Manager had acquired the authority to sign the Vakalatnama, Plaint, Evidence on Affidavit etc. and to file the Original Application liled by him, is without Jurisdidion and illegal and on this ground itsetf the Original Application is liable to be dismissed. The Original Application, are vague and incomplete and nowhere in the^pleadings as well as in the evidence it has been specified as to which defendant had signed the securi9 cum loan documents and

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Slirc-l.ar4"A ,,".,o,noJ5lf4 ORT, Guwahati

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o.A. 33s/zoa2lDRT.Guwahali

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even in the evidence, the Appricant Bank is compretery sirent as to which defendant had signed the said security cum loan documents. The calculation of interesf is highly incorrect and more importanfly the calculation sheet has be€n prepared on the basis of ,ixed rate of interest which is not at all plausible as there was a variation of base rate during that point of time as per changes in the RBI notifications. penal interest has been capitalized in the cash credit loan account. The Applicant Bank has intentionally suppressed the capitalization by providing improper and incorrect certificate to that effect. The witness of the Applicant Bank had failed identiry or specify the signature of the defendant who had actually signed and not even categorically exhibited the signatures in the said Letter. The OriginalApplication fited by the applicant bank against the defendants has no merit and same is liable to be dismissed with exemplary cost.

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The leamed counsel for the applicant bank has filed rejoinder against the written statement cum evidence on affdavit filed by the defendants in which it has been stated that the original apptication has been filed well within the period of timitation. The defendants had avaired lhe roan facirities on 03.09.2017 and 12.05.2020 and signed the balance confrmation on 3'1.08.2020 and the case was liled on 31.0g.2022, therefore the original application has been filed wefl within the period of rimitation. The statements made in paragraph no. 6 of the written statemenl arc vague and misleading as the proprietor and the proprietorship firm has both been made parties in lhe original application riled by the bank. lt is further stated that the letter ofAuthority is issued by the Deputy Zonal Head and the original application and the evidence on affidavit are signed by the Chief Manager who is a scale 4 officer of the Bank and also being the principal officer of the bank can depose on behalf of the applicant bank. The applicant bank further relies on the case of United Bank of lndia Vs Naresh Kumar and another AIR 1997 Supreme Court 3, where the Hon'ble Court had held that suit instituted or defended by public corporation like bank - Allowing public interest to be defeated on mere technicality- not^justified. The defendants have not denied the execution of documents, availing of loan and signatures appearing on the documents. lt is further stated that non specific denial constitutes an implied admission by the defendants. The statement of account is system generated and there is no involvement of any manual

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-(;rtr,"^A^u1 ,.",0"01*Jl4^o DRT, Guwahati

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O A 335/2O2ZORT€uwahalr

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intervention and rate of interest that had been charged are as^per contraclual rale and RBI guidelines and also changes in the rate from time to time. The Capitalized Penal lnterest had also been deducted from the total outstanding amount on the date of NPA. ln view of the above the Original Application filed by the Applicant Bank be allowed and a Recovery Certificate may be issued on the basis of the claim lodged by the applicant bank as per the Original Application as vrell as the Evidence on Affidavit.

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Heard the learned counsel for the applicant bank who^prayed for issuance of Recovery Certificate against the defendants as^{per pleadings made} in^the Application, supported by evidence on affidavit of^{theirwitness who afiirmed on oalh} the 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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None has appeared for the defendants to^{put forth} their^arguments.

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I have carefully^perused the documents on record including original^application, evidence on affidavit and exhibited^{documents as well as written statement and} evidence on aftldavit filed by the^defendants.

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It is observed that the defendants^{have not deniedthe availment of loan,} execution of documents and their^{signatureon the same.}

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It is observed that the answering defendants^{have made generaldenial in their} written statement. lt is well settled^{law that the written statement must specificallydeal} with each of the allegation of^{fact madein theplaint.The failure to make specific denial} amounts to an admission.^{ln thepresentcase, lhe defendants have made a general} denial that amounts^{to admission on the part of the defendants ofthe factspleaded in the} original application^{by the applicant. Moreover, the defendantshave not filed any} document in suppori^{of their pleadingsand failed to justryand provethestatements} made in their written stratement and evidence^{on affidavit.}

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It is evident from the slalement^{of accountfiled by the applicant bankthat the} defendants have defaulted^{in repayment of the loan.lf there is default in repaymentofthe} loan the applicant bank^{has everyrightto proceed against the defendantsfor realization} of the outstanding dues.^{Hence, I have no hesitationto hold thatthis original applicationis} maintainable. -(L,44,4,,

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. 7

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o A. 335/2o2zDRT<Mhari

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The applicant bank has produced on record the copies of the statement of account in respect of the defendants, dury cerrified under Bankers, Books Evidence Act. The applicant bank by the evidence-on_affidavit of Shri Ravindra Ramchandra Sultan, Chief Manager of the applicant bank had deposed the correciness of the affidavit and certiried copy of the account. Beyond that nothing more has to be deposed by an oficer of the bank. lt is thus obvious that apart from the entries of the Books of account there are ample evidence on the remrd to corroborate the said entries.

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The documents executed by the principal borrower are duly proved by the applicant bank and the witness of the applicant. The applicant has sufficient cause of action for filing the instant application due to disbursemenuavailment of loan to/by the defendants and on default in repayment of the loan by the defendants, inspite of demands made, as per exhibited documents filed by the applicant bank.

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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 estabrishing the riabirity ofthe defendants. rt 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 executed on 05.09.2017 & '12.05.2020. Balance Confirmation Lefter is dated 31.OO.2O2O. The account became NPA on 31.05.2021 and the OA has been fid on 23.0g.2022. Hence, the OA is filed wetl within the period of limitation and this Tribunal having a jurisdiction to adjudicate the Original Apptication.

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Considering the version of by Shri Ravindra Ramchandra Sullan, the applicant,s witness and all the documents marked as exhibits, including duly certified copy of the stalement 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 entifled to get the Recovery Certificate as prayed for.

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ln the result, the present Original Applicalion No. 33S of 2022 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

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applicant bank a sum of Rs.52,03,425.46 (Rupees Fifty-Two Lacs Three

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Shrcfa4a^'^A"I7 Prosiding Omc6r DRT, Guwehati

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.⁸

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o.A 3352022/DRT-G!s.hari

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Thousand Four Hundred Twenty_Fivo and paisa Forty-Six) only with pendentelite and future interest @.11.55% p.a. with monlhly rests from 01.07.2022, till the date of fufl paymenurealization and also clst of the application.

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ii) The charge of the certificated amount be kepl alive on hypothecaled properties, as described in 3A of the OA till the amount is realized in full.

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

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

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v) The applicant bank is entifled 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. 52,03,428.46 (Rupees Fifty-Two Laca Three Thousand Four Hund?ed Twenty-Five and paisa Forty-Six) only in favour of the applicant bank against the defendants No. ,l & 2.

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vii) Communicate copy of this order lo the concerned parties. This order is dictated and corrected by the undersigned.

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Judgment dated 15th November 2023, signed and pronounced in the Tribunal

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today under my signature.

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Copy of the JudgmenvFinal Order be uptoaded in the Tribunal,s Website and

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,ile be consigned io Record Room.

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$i ,.ls [a-ror, Q, t! ,, r (shivsh.ran l'rollP d Pr€lding Ofricer DRT, Guwahati.

Uco Bank v. Ms T D Enterprise

Case brief

What is this about?

What did the court decide?

Uco Bank v. Ms T D Enterprise

Case brief

What is this about?

What did the court decide?

What the court decided

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