Allowed

Uco Bank v. Sadhna Tv Centre and Others

DRT17 Apr 2023OA/344/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal, Patna allowed UcoBank's ex-parte application under Section 19 of the RDB Act. The bank proved loan facilities availed by defendants totaling Rs. 28,63,587. The Tribunal determined the debt, ordered joint and several liability, directed attachment of assets, and instructed issuance of a Recovery Certificate.

What did the court decide?

Banks allowed to recover Rs.28,63,587 along with pendente-lite and future interest @11.45% p.a.; Recovery Certificate issued under Section 19(22); assets attached.

Uco Bank versus Sadhna Tv Centre and Others — Execution and Attachment | DRT (2023)

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DRT,PATNA

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OA 344 of2022 (J]

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Debts Recovery Tribunal, Patna

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Karpuri Thakur Sadan, Aashiana Digha Road at PATNA-800025

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Presiding Officer : Shri Kaushalendra Yadav

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OA Case no. : 3440f2022

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UcoBank, Behea, District-Bhojpur

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....... Applicant

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Vs.

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Sadhna TV Centre through its proprietor Mr. Guddu Kumar, Situated at Gupta Mandi, Raja Bazar, Ward no. 11,P.O. + P.S.-Behea, District-Bhojpur, Pin-802152.

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Mr. Guddu Kumar Proprietor of Sadhna TV Centre, S/o Sri Dina Nath Singh, Rio Judge Bazar, Navodai Road, Ward no. 11, Post + P.S.-Behea, District-Bhojpur, Pin-802152.

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Sri Dina Nath Singh S/o Sri Gupteshwar Singh Rio Judge Bazar, Navodai Road, Ward no. 11, Post + P.S.-Behea, District-Bhojpur, Pin802152.

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...Defendants.

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Present:

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For the Applicant Shri Manoj Kumar, Advocate For the Defendants : None

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Dated: 17.4.2023

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JUDGMENT

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1- The Applicant bank has made this application U/S 19 of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 10.6.2022 against the defendants to recover its debts from defendants of Rs.28,63,587 as on 31.3.2022 alongwith pendente-lite and future interest at the contractual rate from 1.4.2022 with costs till realization.

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2- The application has been duly registered and numbered as above.

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3- The brief facts of the case of the applicant bank as stated in the application are as under-

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The applicant bank body corporate constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970, having its Heard office at 10 BTM Sarani, Baraboume Road, Kolkata700001and Branch Office at Behea, District-Bhojpur.

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The defendant no. 1 is proprietorship firm and defendant no. 2 is proprietor. The defendant no. 3 is Co-borrower are approached the bank for seeking cash credit loan of Rs.l 0 lakh for retail business of Television and sound system under the Uco Traders Scheme vide loan application dated 24.2.2015. Upon consideration of the proposal for retail business of Television and Sound system under Uco Traders Scheme ofRs.10 lakh was sanctioned by the bank on 24.2.2015. The defendants executed the

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OA 344 of 2022 [J]

various loan documents i.e. hypothecation agreement, DP note, demand note, guarantee agreement. The defendants again approached the bank for enhancement of cash credit facility for Rs.15lakh on 7.5.2016 and bank upon consideration of the enhancement of loan proposal for cash credit facility of Rs.15 lakh on 7.5.2016. The defendants executed the various loan documents i.e. Hypothecation agreement, DP note, Demand note., The defendants again approached the bank for term loan of Rs.10 lakh under uco property loan scheme vide loan application dated 1.12.2016. Upon consideration of the another proposal for term loan of Rs.10 lakh and the same was sanctioned by the bank on 30.12.2016. The defendants executed the various loan documents i.e. Dl": note, PDR, guarantee agreement and term loan agreement. As per agreed term and conditions the cash credit loan was repayable on demand. The loan carried effective rate interest being 11.70% p.a. calculated on dally balance of the cash credit loan accounts and term loan repayable in 144 equated monthly installments of Rs.12803/- carried effective rate of interest being 11.45% p.a. calculated on daily balance at monthly rests provided that the applicant bank shall at any time and from time to time be entitled to vary margin and the base at its discretion and that the defendants would pay the effective rate of interest.

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A first charge by way of hypothecation of the entire goods, movable and immovable and other assets present and future including document of title to the goods and other assets such as book debts receivables by way of cash assistance and cash incentives under the cash incentive scheme or any other scheme, claims including claims by way of refund of customs duties under the duty draw back credit scheme or any other schemes, bills invoices, documents, contract, insurance policies, guarantees engagements, securities, investments, and rights uncalled capital and all machinery present and future of such form satisfactory applicant bank.

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The bank at request of defendants granted them a GECL loan vide loan of rS.3 lakh was sanctioned by the applicant bank Various terms and conditions as set out in loan documents and agreed upon by the defendants.

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All the transactions were entered in the ledger of the loan accounts in the name of the defendant duly maintained by the applicant bank in its usual course of business. After availing the sanctioned credit facilities became irregular in repayment of their dues as per agreed terms and failed to adhere to the financial norms of the bank and avoiding the repayment of its dues to the bank, in spite of several assurances given by it to the applicant bank resulting in the account turning as NPA on 20.9.2021

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Thus the total liability in the loan account is Rs.28,63,587/- with pendentelite and future interest at the contractual rate from 1.4.2022 till the realization.

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OA 344 of 2022 [J]

The interest /compound interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

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Since, the defendants have failed and neglected in spite of several reminders to make payment of the dues recoverable to bank, hence this application has been filed by the bank.

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4- D/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993, copies of application & paper book was sent by this Tribunal to the defendants by registered/speed post on 18.7.2022, and summons/notices issued requiring the defendants to show-cause within 30 days of the service of summons/notices as to why relief prayed for, should not be granted.

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On perusal of the case records, it is clear that on 18.7.2022, summons/notices were sent to the defendants, but the defendants have not appeared, hence, the Registry of this Tribunal has ordered to publish the notice in newspaper and subsequently, substituted service by publication of notice by way of advertisement in newspaper was also made against the defendants on 17.9.2022in "Prabhat Khabar" newspaper.

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Despite the registered summons/notices and publication of notice in newspaper, the defendants have not appeared before this Tribunal to contest the case. The sufficient time has been given to the defendants to defend their case, but they failed to appear and to file WS, hence, the Tribunal has passed an order to proceed ex-parte against the defendants 9.11.2023.

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5- To prove its case, the applicant Bank has referred various certified photocopies of documents before this Tribunal. The applicant bank has also given evidence on affidavit by way of affidavit of Shri Abhishek Pathak, Branch Manager of the applicant bank. The details of documents are as follows. :-

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SI.No	Description of photocopies Documents	Date of Execution	Amount	Signature of executant	Ex.! Ann. No.
1	Loan application	24.2.2015	RS.I0Iakh	defendant no. 1&2	1
2	Sanction letter	24.2.2015	Rs.IO lakh	bank	2
3	Hypothecation agreement	24.2.2015	Rs. 10 lakh	defendant no. 1&2	3
4	DP note	24.2.2015	Rs. 10 lakh	defendant no. 1&2	4
5	Demand note	24.2.2015	Rs. 10 lakh	defendant no. 1&2	5
6	Guarantee agreement	24.2.2015	Rs.I0 lakh	defendant no. 3	6
7	Loan application	7.5.2016	Rs.15lakh	defendant no. 1&2	7
8	sanction letter	7.5.2016	RS.151akh	bank	8

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OA 344 of 2022 [JI

9	hypothecation agreement	7.5.2016	Rs.15lakh	defendant no. 1&2	9
10	DP note	7.5.2016	Rs.151akh	defendant no. 1&2	10
11	Demand note	7.5.2016	Rs.151akh	defendant no. 1&2	11
12	Demand note	7.5.2016	Rs.15lakh	defendant no. 1&2	12
13	term loan application	1.12.2016	Rs.I0 lakh	defendants	13
14	sanction letter	30.12.2016	Rs.10 lakh	bank	14
15	DP note	30.12.2016	Rs.I0 lakh	defendants	15
16	Demand note	30.12.2016	Rs.I0 lakh	defendants	16
17	PDR	30.12.2016	Rs.10 lakh	defendants	17
18	guarantee agreement	30.12.2016	Rs.I0 lakh	defendant no. 3	18
19	term loan agreement	9.1.2017	Rs.I0 lakh	defendants	19
20	copy of sale deed no. 12350	8.5.1984	...	...	20
21	Revival letter	13.12.2019	...	defendant no. 1&2	21
22	legal notice	22.2.2022	...	bank	22
23	statement of account	as on 31.3.2022	Rs.28,63,587/-	bank	23

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6- Opportunity of hearing has been fully given to both the parties, but despite several opportunities given to defendants, the defendants have not appeared to contest the case, hence, the ex-parte arguments of learned counsel for applicant bank were heard and perused the case record.

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Ld. counsel of applicant bank submitted that the defendants have taken the loan and utilized the same and also executed the various loan documents to secure the loan. Further, submitted that the claim of the bank has been proved by documentary evidence.

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It is further submitted by ld. Counsel of applicant bank that there is no any stay granted by any Higher Court, in respect of the proceedings of the present OA and requested to issue recovery certificate, as claimed for, inOA.

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7- It has been established that defendants are living and carrying on their business in the state of Bihar. Cause of action also arose in the State of Bihar. The said claim on the date of filing of application exceeded Rs.20 lacs. The applicant bank is functioning within jurisdiction of this tribunal. Therefore, this Tribunal has territorial as well as pecuniary jurisdiction to adjudicate upon the present application.

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8- On the issue of Limitation, to prove it, the applicant bank has submitted that the applicant bank has declared the account as NPA on 20.9.2021, whereas the present application has been filed on 10.6.2022. Even, it is counted for the purpose of Limitation, then it is established that

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OA 344 of 2022 (J)

the applicant bank has filed the case within the limitation period. As such, it is established that present application has been filed well within the period of limitation.

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9- In the affidavit of Shri Abhishek Pathak, Branch Manager of the applicant bank, has stated that he is well acquainted with the facts of the case and has on verification of record, sworn in the affidavit in support of contents of application and the documents as evidence and established on oath the pleadings and documents of the applicant bank as stated above.

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The documents as stated above reveal that the defendants have applied for loan and the bank had sanctioned the loan and to secure the loan and for repayment of loan amount with interests etc., the defendants have executed various loan documents, which strength the case of the applicant bank.

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While on perusal of the loan documents it appears that the applicant bank has initially sanctioned Rs.I0 lacs and to secure the loan, the defendants has executed various loan documents, including the guarantee documents. Thereafter the applicant bank has further sanctioned/enhanced loan facility of RS.15lakh and to secure the loan the defendant no. 1 & 2 have executed various loan documents including the guarantee documents. Thereafter the applicant bank has further sanctioned loan facility of Rs.I0 lakh and to secured the loan, the defendants has executed various loan documents, including the guarantee documents.

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In view of the above, it is clear that the defendant no. 3 has given guarantee for the CC loan of Rs.l 0 lakh only and term loan of Rs.l 0 lakh only. Therefore, the defendant no. 3 is liable to pay the CC loan of Rs.I0 lakh and term loan of Rs.l 0 lakh only with interest

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The applicant bank has also furnished statement of account as above, which is not only admissible but shall be taken as correct statement of account, more so since the entries in the statement of account has not been challenged.

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10Since, the case was proceeded ex-parte against defendants, all contentions raised and documents produced by plaintiff remained unrebutted and the tribunal may act upon the affidavit of the applicant as per law. Defendants have neither denied the utilization of funds advanced by applicant bank nor have pointed out any specific error and discrepancy in the Statement of Account, which is kept in due course of business, evidence on affidavit, which has supported the claim of the applicant bank, established to have fully correct and believable. Provisions contained in Rule 9(2) of Debt Recovery Tribunal (Procedure) Rules, 1993 provide that the documents referred in the application shall be duly stated by senior officer of the bank, or financial institution as the case may be and numbered accordingly. The rule 12 (10) provides that the provisions contained in section 4 of the Banker's Books evidence that Act, 1891 (18 of 1891) shall applied to certified copy of an entry

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OA 344 of 2022 (J)

in a Banker's Books furnished alongwith application filed under sub section 1 of section 19 by the applicant.

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11On consideration of the arguments and on perusal of the application, documents and affidavit, it is proved that the applicant bank has granted the loan facilities, documents were executed by the defendants and facilities were availed by the defendants as stated in the application.

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12The applicant bank has sought for recovery of a sum of Rs.28,63,587/- with cost and further interest at the contractual rate from 1.4.2022 till realization.

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13Learned Advocate appearing for applicant bank submits that the applicant bank has charged interest in terms of the agreements and that interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

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14On consideration of the arguments and on perusal of the pleadings, documents and affidavit, it is proved that the applicant has charged interest against defendants in terms of documents and as per directives of RBI.

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15None of the defendants appeared before the tribunal to contest the claim made by the applicant, therefore, it necessarily goes to establish that the claim made by the applicant bank is genuine and true. It is manifest that the defendants have not disputed the claim, therefore, the claim referred to the tribunal is recoverable till full and final realization of the claim.

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16In Indian Bank Vs. Blue Jaggers Estates Limited and others [2010] 8 SCC 129, the Hon'ble Supreme Court of India has observed as under-

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"The Court cannot lose sight of the fact that the bank is a trustee of public fund. It cannot compromise the public interest for benefiting private individuals. Those who take loan and avail financial facilities from the bank are duty bound to repay the amount strictly in accordance with the terms of the contract. Any lapse in such matters has to be viewed seriously and the bank is not only entitled but duty bound to recover the amount by adopting all legally permissible methods. Parliament enacted the act because it was found that legal mechanism available till then was wholly insufficient for recovery of the outstanding dues of the banks and FinancialInstitutions,"

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17In my view, Facts of the case stand proved by evidence of the applicant bank ex-parte. Accordingly, The applicant bank is entitled to recover from defendants jointly and severally of Rs.28,63,587/- alongwith pendente-lite and future interest @11.45% p.a. with compounded monthly rests from 10.6.2022 (The date of filing of this O.A.) till realization. Since the defendant no. 3 is liable to pay the CC

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OA 344 of 2022 [J)

loan of Rs.I0 lakh and term loan of Rs.l 0 lakh only with interest. So the final order may be passed accordingly, to meet the ends ofjustice.

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ORDER

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In the result, the application of the applicant bank is, allowed exparte and debt is determined with costs against the defendants. The defendants is hereby jointly and severally, ordered to pay the applicant bank it's debts amounting to Rs.28,63,587/- alongwith pendente-lite and future interest @11.45% p.a. with compounded monthly rests from 10.6.2022 (The date of filing of this O.A.) till realization of the entire sum due and recoverable with costs.

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It is made clear that the defendant no. 3 is liable to pay the CC loan of Rs.I0 lakh and term loan ofRs.l 0 lakh only with interest.

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It is made clear that any amount deposited by the defendants, be deducted in the claim amount, if not deducted.

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Defendants are debarred from transferring, alienating encumbering or otherwise dealing with or disposing of the mortgaged or hypothecated or any other properties and assets without paying the aforesaid adjudicated dues to the applicant bank to secure the ends of justice. The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to the final order under the recovery proceedings in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993. The applicant may submit the certified copy of this Judgment and the Recovery Certificate before the Registrar/ Sub- registrar to endorse the charge over the secured assets.

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Let a certificate of recovery be drawn up forthwith and put up for signatures in terms of provisions contained in Section 19(22)of the Act to be issued, on the basis of the order of the Tribunal to the Recovery Officer. The Recovery Officer shall realize the amount as per the certificate in the manner and mode prescribed under the Act from the defendants, by sale of mortgaged! hypothecated assets as well as other personal movable/immovable assets of the defendants.

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Parties are directed to appear before the Recovery Officer, DRT, Patna on 31.5.2023. The order be communicated accordingly.

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Judment signed, sealed, dated and pronounced in the open court on this 1 i Day of April, 2023. _/v If_

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~/v If '1-:;7' .r ryVf"V Y _'-A\ .(V ) _.J~ [Kaushalendra Yadav] Presiding Officer Debts Recovery Tribunal, Patna

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Dictated & corrected by me.

Uco Bank v. Sadhna Tv Centre and Others

Case brief

What is this about?

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Uco Bank v. Sadhna Tv Centre and Others

Case brief

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