Allowed

Punjab National Bank, v. Messrs Maha Luxmi Timber Merchants and Others

DRT27 Dec 2023OA/337/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application by Punjab National Bank against borrowers for recovery of Rs.30.83 lakhs, directing joint and several liability with 8.75% simple interest. The court ordered issuance of a Recovery Certificate and mentioned execution of hypothecated/ mortgaged property.

What did the court decide?

Recovery Certificate issued; respondents ordered to pay Rs.30.83 lakhs plus 8.75% simple interest; permitted to recover from sale of mortgaged and personal assets.

Punjab National Bank, versus Messrs Maha Luxmi Timber… — Banking and Recovery | DRT (2023)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.337/2022 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 28.02.2022

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DATE OF DECISION: 27.12.2023

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Punjab National Bank, a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at Plot No.4, Sector 10, Dwarka, New Delhi (A Government of India Undertaking) and having one of its Branch situated at Punjab National Bank (Erstwhile Oriental Bank of Commerce), Anaj Mandi, Ghanaur, District Patiala, Punjab through Sh. Gurcharan Singh, who is presently working as Senior Manager, Punjab National Bank, Circle Sastra, SCO-146, 2^nd Floor, Improvement Trust Complex, Chhoti Baradari, Patiala, Punjab constituted Power of Attorney Holder of the Bank and Principal Officer

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……..Applicant Versus

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M/s Maha Luxmi Timber Merchants, through its Proprietor, Mrs. Anju Bala, Ward No.2, Ghanaur, Tehsil Rajpura, District Patiala, Punjab

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Mrs. Anju Bala, Proprietor of M/s Maha Luxmi Timber Merchants, W/o Sh. Surinder Kumar, R/o Ward No.2, Ghanaur, Tehsil Rajpura, District Patiala, Punjab

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Sh. Surinder Kumar S/o Sh. Kasturi Lal, R/o Ward No.2, Ghanaur, Tehsil Rajpura, District Patiala, Punjab

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………Defendants

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Advocates: Argued by Sh. S.N. Sharma, counsel proxy for Sh. Mohinder Nath Sharma, counsel for the applicant Defendants are ex-parte

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FINAL ORDER

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Present Original Application was instituted by the applicant bank under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.30,83,223.38p (Rupees Thirty Lacs Eighty Three Thousand Two Hundred Twenty Three and Thirty Eight Paisa only). The Original Application has been filed through Sh. Gurcharan Singh, Senior Manager of the applicant bank, who is competent to institute the Original Application vide General Power of Attorney dated 11.10.2007, which is Annexure A1 to this OA.

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The brief facts of the OA are that the Defendant No.1 through its Proprietor Defendant No.2 had approached the applicant bank from time to time for the grant of Working Capital Limit of Rs.25.00 Lacs and also for its several renewals vide Loan Applications dated 13.03.2014, 05.06.2015, 30.05.2016, 06.10.2017 and 27.12.2019, which are Annexures A2, A18, A20, A22 and A25 to this OA.

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The applicant Bank sanctioned the Working Capital Limit of Rs.25.00 Lacs vide Sanction Letter dated 13.03.2014, which is Annexure A5 to this OA and further renewed it several times vide Sanction Letters dated 05.06.2015, 04.06.2016, 16.12.2017 and 31.12.2019, which are Annexures A19, A21, A23 and A26 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant No.2 had mortgaged her immovable property i.e. land measuring 1 Bigha situated at Village Ghanaur, Sub-Tehsil Ghanaur, Tehsil Rajpura, District Patiala, Punjab vide Registered Mortgage Deed bearing Vasika No.534 dated 28.06.2001 along with its translation, Advocate report on title, Affidavit by Mrs. Anju Bala, Letter by borrower, Non Encumbrance Certificate and Letter by bank to Naib Tehsildar, which are Annexures A6, A6-T and A7 to A11 to this OA. Documents executed:- Gazette notification dated 04.03.2020, which is Annexure A1-A to this OA; Due diligence report, which is Annexure

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A3 to this OA; Branch certificate of compliance, Agreement of hypothecation, Common agreement, D.P. note and Agreement of guarantee all dated 13.03.2014, which are Annexures A4 and A14 to A17 to this OA; Letter by bank for confirming the creation of equitable mortgage dated 13.03.2014, which is Annexure A12 to this OA; Sole proprietorship letter dated 13.03.2014, which is Annexure A13 to this OA; Balance and security confirmation letters dated 25.01.2018, which is Annexure A24 to this OA; Letter by bank to the borrower dated 29.05.2020 and 19.06.2020, which are Annexures A27 and A28 to this OA; Legal notice dated 21.06.2021, which is Annexure A29 to this OA and Statement of account, which is Annexure A30 to this OA.

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The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs.30,83,223.38p, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant bank requested to accept the application and to issue Recovery Certificate accordingly.

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The defendants were served notices to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte on 31.08.2023.

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In support of the OA, affidavit of Sh. Gurcharan Singh, Senior Manager, Punjab National Bank has been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned proxy counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant bank had proved its case. From the perusal of all the Annexures A1 to A30 to this OA, it is proved that the defendant No.1 through its proprietor, defendant No.2 approached applicant bank for availing of the loan facility which was granted to them and for that they had executed all the relevant documents in favour of the bank. The defendants failed to pay back the loan as per terms and conditions

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of the agreement between the parties. Subsequently, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.30,83,223.38p (Rupees Thirty Lacs Eighty Three Thousand Two Hundred Twenty Three and Thirty Eight Paisa only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the account.

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In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest @8.75%p.a. along with @2%p.a. additional/penal interest with monthly rests from 01.02.2022 till the realization.

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The Tribunal is of the considered opinion that sometimes in appropriate cases the prerogative of mercy is the brightest jewel in the crown of the Judge. Keeping in view the facts and circumstances of the instant case including nature of the mortgaged property, undertaking of the defendants, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yester years, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @8.75%p.a. in the loan account from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly.

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In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.30,83,223.38p (Rupees Thirty Lacs Eighty Three Thousand Two Hundred Twenty Three and Thirty Eight Paisa only) jointly and severally, with costs, current and future simple interest @8.75%p.a. in the loan account from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant bank shall be entitled to recover aforesaid amount from the sale of hypothecated/mortgaged properties of the defendants in execution proceedings if not sold earlier under the provisions of the SARFAESI Act, 2002. If the dues of the

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bank still remain unsatisfied, it shall be entitled to recover the same by attachment and sale of personal assets of the defendants. The applicant is at liberty to enforce the claim through due process of law. 12. Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 10.01.2024.

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Copy of this order be given dasti to the applicant bank and be sent to defendants through registered/speed post and this order be also uploaded on the official website of this Tribunal and record be consigned.

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Pronounced by me in the Open Tribunal.

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Dated: 27.12.2023

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(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Punjab National Bank, v. Messrs Maha Luxmi Timber Merchants and Others

Case brief

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Punjab National Bank, v. Messrs Maha Luxmi Timber Merchants and Others

Case brief

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