Allowed

Punjab National Bank (United Bank of India) v. M/s Diksha Steel and others

DRT3 Jul 2023OA/352/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application by Punjab National Bank to recover a loan of Rs. 56,20,773.60 from the proprietors and proprietress of Mis Diksha Steel. The claim was established ex-parte as the defendants failed to appear. The court issued a recovery certificate with interest.

What did the court decide?

Debt of Rs. 56,20,773.60 with pendent-lite and future interest at 9.25% p.a. from 24.05.2022 till realization, along with a direction to issue a Recovery Certificate.

Punjab National Bank (United Bank of India) versus… — Contract and Commercial Disputes | DRT (2023)

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OA 352 of2022[JI

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DRT,PATNA

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Debts Recovery Tribunal, Patna Karpuri Thakur Sadan, Aashiana Digha Road Patna-80002S

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Presiding Officer : Shri Kaushalendra Yadav

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OA Case No. 352 of 2022

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Punjab National Bank, Khalifabagh Branch D.N.Singh Road, Khalifabagh Chowk, District- Bhagalpur-812002

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....... Applicant

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Vs.

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1. Mis Diksha Steel, Registered address at Nurpur, Near Nathnagar Railway Crossing, PS- Nathnagar, Bhagalpur-812006 through its Proprietor.

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Diwesh Kumar, Proprietor of Mis Diksha Steel, Son of Shri Dilip Kumar Bhagat, Residing at Nurpur, Near Nathnagar Railway Crossing, PSNathnagar, Bhagalpur-812006, (PAN No. EYEPK5294F)

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Smt. Dipali Bhagat, Wife of Shri Dilip Kumar Bhagat @ Dilip Bhagat, Residing at Nurpur, Near Nathnagar Railway Crossing, PS- Nathnagar, Bhagalpur- 812006

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......... Dfendants.

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For the Applicant : Dr. Binod Bihari Sinha, Advocate For the Defendants : None

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Dated: 03 .07.2023

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JUDGMENT

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1- The Applicant bank has made this application uls 19 of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 24.05.2022 against the defendants to recover its debts from defendants ofRs. 56,20,773.60 as on 15.05.2022 along with Pendentelite and future interest at the contractual rate from 16.05.2022 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, a body corporate constituted under the Banking Companies (Acquisition and Transfer of undertaking) Act 1970 having its head office of Plot No.4, Sector-l0, Dwarka, New Delhi -110075 and the successor of United Bank of India, by scheme of amalgamation of Oriental Bank of Commercel United Bank of India, passed by the Central Government under Section 9 of the Banking Companies ( Acquisition and Transfer of undertakings) Act, 1980 and after implementation of the scheme on 1st April,2020 the branches of United Bank of India be known as Punjab National Bank.

DRT,PATNA

OA 352 of 2022[J)

The defendant no. 1 namely Mis Diksha Steel is proprietorship Firm and its managed by the defendant no. 2, namely Diwesh Kumar, son of Shri Dilip Kumar Bhagat @ Dilip Bhagat a loanee of the Bank and defendant no. 3 namely Dipali Bhagat is a guarantor of the said loan. The Proprietor of the Firm namely Diwesh Kumar approached the applicant bank and submitted an application for financial assistance of Rs. 50 lakhs in the shape of Cash Credit Facility. After considering the said application the applicant bank sanctioned the Cash Credit facility ofRs. 40 lakhs on 02.09.2019 on the terms and conditions of the bank.

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The defendants accepted the terms and conditions of the Bank by executing the same and agreed to execute the necessary loan documents as prescribed for providing the said facility. The defendants executed the necessary loan documents as required under the rules and norms. The defendant no. 3 also executed the letter of Guarantee in favour of the Bank on 02.09.2019 to secure the liability of loan as taken by the Borrower. The defendant no. 3 also mortgage the landed property as a security of the loan details given at page 12 in schedule-A of ~A. The defendants availed and utilized the loan for promoting his business.

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Further, the defendant no. 1 & 2 approached the bank and requested to provide the GECL & CFITL of Rs.8,00,0001- and Rs.2,33,0001- respectively. The bank after considering provided the same to the defendants in the year 2020.The defendants executed the documents and after execution of the aforesaid loan documents the applicant Bank allowed the defendants to avail the said loan facility.

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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 31.03.2021.

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Thus the total liability in the loan account is Rs.56,20,773.60 with Pendent-lite and future interest contractual rate from 16.05.2022 till the realization.

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The interest Icompound 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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4Vis 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993, copies of application & paper book was sent by this Tribunal to

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OA 352 of20221J]

DRT,PATNA

the defendants by registered/speed post on 20.07.2022 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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Despite the registered summons/notices service by the registered post which is evidence on the tracking report, 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 11.10.2022.

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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 by Smt. Sweta Singh, Senior/ Branch Manager, of the applicant bank. The details of documents are as follows. :-

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SI.No	Description of Documents Photocopies	Date of Execution	Amount	Signature of Executants	Ex.! Ann. No.
1	Gazette Notification	......	...	...	1
2	Loan application	....	Rs.SOlakhs	Defendant no. 1&2	2
3	Sanction letter	02.09.2019	RsAOlakhs	bank	3
4	Hypothecation Agreement	.....	RsAOlakhs	Defendant no. 1&2	4
S	Letter of Guarantee	02.09.2019	RsAOlakhs	Defendant no. 3	S
6	Title Deed 14494	31.12.2018	.....	Defendant no. 3	6,6A
7	Valuation report	....	.....	.....	7
8	Application with Undertaking	11.06.2020	Rs.8lakh	....	8/9
9	Recall notice	28.06.2021	....	bank	10
10	Statement of account	as on IS.S.2022	Rs.S6,20,773.60	bank	11

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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

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DRT,PATNA

OA 352 of2022[J]

proceedings of the present OA and requested to Issue recovery certificate, as claimed for, in OA.

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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 31.03.2021, whereas the present application has been filed on 24.05.2022. Even, it is counted for the purpose of Limitation, then it is established that 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 Smt. Sweta Singh, Senior/ 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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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

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DRT,PATNA

OA 352of2022[J)

applied to certified copy of an entry in a Banker's Books furnished along with 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 facility, documents were executed by the defendants and facility was 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.56,20,773.60 with cost and further interest at the contractual rate from 16.05.2022 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 Honorable 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 Financial Institutions."

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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 defendantsjointly and severally of Rs.56,20,773.60 along with Pendente-lite and future interest @9.25% p.a. with compounded monthly rests from 24.05.2022 (The date of filing of this OA) till

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DRT,PATNA

OA 352 of2022[J]

realization. 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 are hereby jointly and severally, ordered to pay the applicant bank its debt amounting to Rs.56,20,773.60 along with Pendente-lite and future interest @9.25% p.a. with compounded monthly rests from 24.05.2022 ( The date of filing of this OA) till realization of the entire sum due and recoverable with costs.

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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/ Subregistrar 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 4.9.2023. The order be communicated accordingly.

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Judgment signed, sealed, dated and pronounced in the open court on 03rd Days of July 2023

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FORM NO.9 [See Regulation 24( I)]

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DEBTS RECOVERY TRIBUNAL PATNA

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2nd Floor, (A. B & F Wing) Karpuri Thakur Sadan, Kendriya Karamchari Parisar (GPOA), Ashiana Digha Road, Patna-800025.

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RECOVERY CERTIFICATE UNDER SECTION 19(1) READ WITH SECTION 19(U) OF THE RECOVERY OF DEBTS & . BANKRUPTCY ACT,..l22J., AS AMENDED FROM TIME TO TIME.

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BC No. 422/2023

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IN Case No: OAl352/2022

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In the Matter of:

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'.,.

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(CH- t) PUNJAB NATIONAL BANK (UNITED BANK OF INDIA) KHALIFABAGH BRANCH D N SINGH ROAD KHALTFABAGH CHWOK BHAGALPUR ,BIHAR -812002

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Applicant(s)

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------ Versus -------

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To,

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(CD- I) MIS DIKSHA STEEL AND OTHERS.

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Registered Address at Nurpur, Near Nathnagar ,Railway Crossing PS- Nathnagar Bhagalpur ,BIHAR -812006

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'.,.

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(CD- 2) DIWESH KUMAR PROPRIETOR OF MIS DlKSHA STEEL, SON OF SHRI DlLlP KUMAR BHAGAT @ DILIP BHAGAT, RESIDING AT NURPUR, NEAR NATHNAGAR RAILWAY CROSSING, PS- NATHNAGAR, BHAGALPUR-812006

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(CD- 3) SMT. DlPALI BHAGAT WIFE OF SHRI DILIP KUMAR BHAGAT @ DILIP BHAGAT @ DILIP BHAGAT RESIDING AT NURPUR, NEAR NATHNAGAR RAILWAY CROSSING PS_ NATHNAGAR BHAGALPUR812006

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Defendant(s)

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~ Certificate for Rs 5620173.60 1....RllJW:t.fif.tY. Six Lakhs TwentY.Thousands Seven Hundred SeventY.Three And Paise Six,ty....Qn!y_) •

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In terms of final order dated 03/07/2023 passed by this Tribunal in the above mentioned case, it is ordered that the Applicant Certificate Holder Bank is entitled to recover a sum of Rs. 5620773.60 along with cost, expenses and interest from the 24/05/2022 i.e. date of filing 1 with effective date of the OAl352/2022 and future interest from order date till the date of realisation in full, jointly or severally from the Certificate Debtors, hereinafter referred to as:-

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				Interest
Effective Date	Order Date	Amount(Rs.	Liability Type		RC

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'.,.

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In case of failure to pay the aforementioned adjudicated amount within 30 days, same shall be recovered from the sale of the mortgaged/hypothecated assets as well as other personal movablel Immovable assets of the certificate debtors..

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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 proceeding in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993

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Parties are directed to appear before MANOJ KUMAR, Recovery Officer, DEBTS RECOVERY TRIBUNAL PATNA on 04/09/2023.

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The Recovery Officer shall realize the amount as per this Certificate in the manner and mode prescribed under Sections 25 to 28 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (as amended from time to time) from the above named Certificate Debtors.

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'.,.

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This Certificate has been issued under my signature and seal of the Tribunal on this 03/07/2023

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PRE~CER DEBTS RECOVERY TRIBUNAL PATNA

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FORM NO. 10 [See Regulation 24(2)]

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DEBTS RECOVERY TRIBUNAL PATNA

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2nd Floor, (A. B & F Wing) Karpuri Thakur Sadan, Kendriya Karamchari Parisar

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(GPOA), Ashiana Digha Road, Patna-800025.

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SCHEDULE TO RECOVERY CERTIFICATE MEMO OF COSTS

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RC No. 422/2023

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¶114

Case No: OA/352/2022

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Applicant(s): PUNJAB NATIONAL BANK (UNITED BANK OF INDIA) Versus

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Defendant(s): MIS DIKSHA STEEL AND OTHERS

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the application
s(Inc. Publication)
s
issioner/ReceiverNaluationlSecuri ty Fee
	59000

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Place: PATNA

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Date: 03/07/2023

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PRESID~CER DEBTS RECOVERY TRIBUNAL PATNA

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Note: Strike out whichever is not applicable

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Date of order or proceeding	DEBTS RECOVERY TRIBUNAL, PATNA Order with the Signature of the Court	Office action taken with data
	OA 352 of 2022
03.07.2023	Judgment written on separate sheets kept on the case file and pronounced. Certificate of recovery be issued to the ld. Recovery officer for its execution. presidikrficer
03.07.2023	Certificate uls 19(7& 22) of the DRT Act, 1993 as amended from time to time in the form no. 09 of the Rules and procedures made there under prepared and signed by me for sending it to ld. Recovery Officer for its execution in accordance with law. presidin~er

Punjab National Bank (United Bank of India) v. M/s Diksha Steel and others

Case brief

What is this about?

What did the court decide?

Punjab National Bank (United Bank of India) v. M/s Diksha Steel and others

Case brief

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