Allowed

Dbs Bank India Limited, v. Messrs Chawla Traders and Another

DRT20 Dec 2023OA/340/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's application for recovery of dues against habitual defaulters who failed to appear. The Tribunal confirmed liability for the principal amount and reduced the claimed interest rate to a uniform 8.00% per annum.

What did the court decide?

Recovery certificate issued; defendants ordered to pay Rs. 2,74,64,322.45 with simple interest at 8.00% p.a. from filing date; enforcement via sale of mortgaged or personal assets.

Dbs Bank India Limited, versus Messrs Chawla Traders and Another — Banking and Recovery | DRT (2023)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.340/2022

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 31.01.2022

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DATE OF DECISION: 20.12.2023

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DSB Bank India Limited, a Banking Company, registered under the provisions of the companies Act, 1956 having its Registered Office at G.F. Nos. 11 & 12 FF nos. 110 to 115, Capitol Point, BKS Marg, Connaught Place, New Delhi 110001 and its branch offices throughout India and amongst other places a Branch at Ground Floor, B-2040004/39-F, Malhar Road, Sarabha Nagar, Ludhiana, Punjab, through its duly authorized officer Sh. Pankaj Maroo, Vice President, RMG, Special Assets Management, DBS Bank India Ltd., Express Tower, Nariman Point, Mumbai. ……..Applicant Versus 1. M/s Chawla Traders having registered officer at B-13-568-Field Ganj, Kucha No.8, Ludhiana, Punjab through its proprietor. Second Address: Near Metro Store, Village Bhatian, Opposite Amul Factory, Ludhiana, Punjab (Proprietorship Firm/Borrower) 2. Sh. Harpreet Singh S/o Sh. Charanjit Singh R/o 568-B-13 Field Ganj Kucha No.8, Ludhiana, Punjab (Proprietor of Defendant no.1) ………Defendants Advocates: Argued by Ms. Manjari Joshi, Advocate for 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.2,74,64,322.45p (Rupees Two Crore Seventy Four Lacs Sixty Four Thousand Three Hundred Twenty Two and Paisa Forty Five only). The Original Application has been filed through Sh. Sh. Pankaj Maroo, Vice President, o f the applicant bank, who is competent to institute the Original Application vide Resolution dated 08.01.2021, which is Annexures 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 for the grant of CC Limit of Rs.2.30 crore and Guaranteed Emergency Credit Line (GECL)-Working Capital Term Loan (WCTL) Limit of Rs. 36,88,300.

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The applicant Bank sanctioned the CC Limit of Rs. 2.30 crore and Guaranteed Emergency Credit Line (GECL)-Working Capital Term Loan (WCTL) Limit of Rs. 36,88,300 vide Offer Letters dated 17.12.2020 and 22.12.2020, which are Annexure A2 and A15 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant no.2 had mortgaged his immovable property through equitable mortgage i.e.

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(i) Residential Plot measuring 55 square yards bearing Municipal No. B-13-568 (New) and B-12-465(old) situated at Kucha No.8, Field Ganj, Ludhiana, Punjab

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(ii) Residential Plot measuring 64 square yards bearing Municipal No. B-13-570 situated at Kucha No.8, Field Ganj, Ludhiana, Punjab (iii) Residential Plot measuring 74 square yards bearing Municipal No. B-13-569 situated at Kucha No.8, Field Ganj, Ludhiana, Punjab vide Sale Deeds no. vasika No.2018-19/106/1/15475, vasika no. 3450 and vasika no. 16458 dated 22.03.2019, 07.05.2018 and

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01.12.2017, along with their translations which are Annexure A9 and A9-T, A10 and A10-T and A11 and A11-T to this OA. Documents executed:- Working Capital Facilities Agreement, Demand Promissory Note, Letter of Continuity, End use Declaration for working Capital Limits and Deed of Guarantee all dated 19.12.2020, which are Annexures A3 to A6 and A8 to this OA; Undertaking Letter which is Annexure A7 to this OA; Memorandum of entry for recording mortgage by deposit of title deeds, Declaration both dated 25.02.2021, which are Annexure A12 and A13 to this OA; Request Letter cum Application Form dated 13.12.2020 which is Annexure A14 to this OA; Facility Agreement dated 24.12.2020, which is Annexure A16 to this OA; Memorandum of entry for Mortgage by Constructive Delivery, Declaration and Relevant Extract from Mortgage Register all dated 25.02.2021, which are Annexures A17 to A19 this OA; CERSAI Registration dated 21.04.2021, which is Annexure A20 to this OA; Recall Notice and Notice under section 13(2) of the SARFAESI Act both dated 10.01.2022, which are Annexures A21 and A22 to this OA; Statement of Accounts with Certificate under Banker’s Books Evidence Act dated 25.01.2022 which are Annexure A23 to A25 to this OA. 5. The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.2,74,64,322.45p 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. 6. 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 29.09.2023. 7. In support of the OA, affidavit of Sh. Pankaj Maroo, Vice President, RMG, Special Assets Management, DBS Bank India Ltd. h as been filed. 8. Heard ex-parte arguments and perused record.

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It was argued by learned 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 A25 to this OA, it is proved that the defendants approached applicant bank for availing of the loan facilities which were 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 of the agreement between the parties. Subsequently, accounts 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. 2,74,64,322.45p (Rupees Two Crore Seventy Four Lacs Sixty Four Thousand Three Hundred Twenty Two and Paisa Forty Five only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the accounts.

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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 @11.50%p.a (8.50% + 3% penal interest) in OD Limit and @11.00%p.a (8.00% + 3% penal interest) in WCTL and @11.75%p.a (8.75% + 3% penal interest) in GECL account with monthly rests from dated 31.12.2021 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 @8.00%p.a. in all the loan accounts 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. 2,74,64,322.45p (Rupees Two Crore Seventy Four Lacs Sixty Four Thousand Three Hundred Twenty Two and Paisa Forty Five only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in all the loan accounts 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 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.

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Any other application pending stands disposed of.

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 02.01.2024

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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. Pronounced by me in the Open Tribunal. Dated: 20.12.2023

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

Dbs Bank India Limited, v. Messrs Chawla Traders and Another

Case brief

What is this about?

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Dbs Bank India Limited, v. Messrs Chawla Traders and Another

Case brief

What is this about?

What did the court decide?

What the court decided

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