Allowed

Canara Bank v. Messers John Varieties

DRT18 Dec 2023OA/364/2022

Case brief

AI extract

What is this about?

This application was filed by Canara Bank to issue a Recovery Certificate against the respondents for outstanding dues arising from various Mudra, GECL, and FITL loan accounts. The Tribunal observed that the loans became NPA, security documents were executed, and an acknowledgement of debt was signed. Being satisfied with the evidence, the Tribunal held the OA was filed within limitation and allow

What did the court decide?

Issue of Recovery Certificate for Rs. 28,80,949.59 with future interest and costs, and directions to proceed against secured and personal assets.

Canara Bank versus Messers John Varieties — Banking and Recovery | DRT (2023)

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o.A. 36:12022loRr4uwahali

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(North Eastern Region)

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(T bunalofAssam, Nagaland, Meghalaya, Manipur, Mizoram, Arunachal Pradesh & Tripura)

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Before Shri Shiv Sharan Dub6v. Presidino Officer

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O.A. No. 364/2022

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ln the matter of -

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CANARA BANK Ambassa Branch, AA Road, Ambassa. Dhalai, P.O.- Ambassa, Tripura, PIN- 799289.

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Applicant

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Vs.

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I. M/S JOHN VARIETIES

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Represented by its Proprietor, Mrs. Chandanden Halam, Wo Sri Chandralal Halam off Add:

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Kachuchara Bazar, P.O. Kachuchara,

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P.S.- Kachuchara, Dist Ohalai, State- Tripura, PtN-799278.

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Mrs. Chandanden Halam

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W/o Sri Chandralal Halam

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Rl/o- Vill- South Kachuchara, P.O. Kachuchara,

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P.S.- Kachuchara, Dist- Dhalai, State- Tripura, PtN-799278.

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Defendants

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Presence of the Counsel:

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For the Applicant : Mr. Hiren Chakrabarty, Advocate

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For the Defendants ; None^(Ex-parte)

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Daled :1811212023

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JUDG[rlENT

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This is an application under section^{'19 of the Recovery of Debts Due to Banks} and Financial lnstitutions^{Act, 1993filed by theCanara Bank, AmbassaBranch,AA} Road, Ambassa. Dhalai,^{P.O.- Ambassa,Tripura, PIN- 799289,with a prayer to issue} Recovery Certificate^{for thesumof Rs. 28,80,949.59 (RupessTwenty-Eight Lakhs} Eighty Thousand Nine Hundred^{Forty-Nineand PaiseFifty'Nine) only as on}

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sl,..,,^i c+aa^"{W4 1?' lt t[ Presdrns Offic€r - Y DRT, Guwahati

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O.A. 3642022,oRI€uwahali

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25.08.2022 againslthe defendants^{jointly and severally (i) with futureinterest} @9.150/o per annum at monthly rest for value received^{in cash credil account from 0'1.08.2022;} (ii) wilh future interest @7.90%^{perannum at monthly rest in the GECL account Irom} 06.08.2022; (iii) with^{futureinterest} @9.55%^{per annumat monthlyrest in FITL} account from 01.O8.2022,^{(iv) with future interest} @9.55%^{perannum at monthly rest} in credit facility ftom^{26.08.2022i (v) with future interest} @7.90o/o^{per annumat} monthly rest in GECL^{account from26.08.2022, till realizationalong with cost and} other relief.

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A few facts^{giving riseto the present applicationareas under'}

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The defendant No.^{1, is} a^{proprietorship} firm and^{defendantno. 2 is the} who is the businesswoman^{and is the customerof} proprietor of the defendant no.¹ the applicant^bank.

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The defendant no.2 vide^{loan applicationdated. 23-M-2018 approached} before the applicant^{bank, seekingfinancial assistancesfor thepurposeof salesof} electronic and furniture^{goods and in supportof their loan proposal' the defendant} no.2 also submitted^{all necessary papersand other documentsetc which were} examined by the^{applicant bank. Further,on beingsatisfied with all thenecessary} documents, the^{applicant bankon 23-04-20'18 was pleased to sanctionan OCC} (Mudra) MSME loan of Rs.^{9,5O,OOO/-in favour of the defendants against the prime} security of hypothecation^{of stocks,the then rate of interestbeing MCLR +215} above MCLR=8.4^{O+215=1O55o/o p.a floatingrate of interest, compounded} monthly and the^{loan is under guarantee cover CGFMU and on various other terms} and conditions^{stipulatedin the sanction memorandumand on various documents} execuled by^defendants.

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The defendanls^{in considerationof grantingand sanctioning of OCC loan of}

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Rs.9,50,O0O/-^{executed the following documentsin favour of the applicantBank:}

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a) Copy of^{Cash Credit Agreementdated23-04-2018of Rs 9'50'000/- by the} defendint no.2 on^{behalfof the defendant no'l} '

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b) Copy of^{Pronote of RS.9,5O,OOO/-dated 23-04-2018 by the defendantNo 2 on} behalf of defendant^No.1.

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U.l.Sluuvr,,2"L, l& Ir'zn' Y Presidng Offcer DRT. Guwahati

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O.A. 364/2O2ZDRI_Guwahati

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c) Copy of^{Request for Overdraft Facility dated23-04-2018'}

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d) Copy of^{Letter of undertaking dated23-04-20'18'}

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Whereas again^{vide application dated 04-06-2019 upon requestbeing made} by the defendant^{No. 2, the applicant bank considered the said loan application} and sanctioned/renewed^{with enhancementof cashcredit limitfrom Rs 9'50'000/-} (Rupees Nine Lakhs^{Fifty Thousand only) to Rs 15'OO'000/-(Rupees Fifteen} lakhs) only^{vide Sanction letter dated04-06- 2019 againstthe prime securityof} hypothecation^{of slocks, the then rateof interest being10 25% (linked to MCLR)} and the^{abovementioned loanwas alsosubiect to other terms and conditionsthat} prescribed in lhe^{loan documentsand the defendants acceptedthe ierms and} conditions^{of the sanction as mentionedin the sanctionlgtter'}

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The defendants^{executed various documents in favorof the applicant bank} to secure^{the above limitare referred below:-}

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a) Copy of^{supplemental agreement dated 04-06-2019executed by the defendants'} b) Copy of^{Link Letter in respectof enhancemeniol credit facilitiesdated} 04-06-2019.

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c) Copy^{ol Letter of RenewalforOCC LimitofRs 1s'OO'OOOfdated04-06-2019'} d) Copy^{of Pronote of Rs. 15,Oo,Ooo/-daied04-06-2019'}

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e) Copy of^{letter of undertaking dated 04-06-2019'}

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Whereas again^{vide application datedO5-06-2020upon requestbeing made} by the defendant^{No. 2, the applicant bank considered the saidloanapplication} and sanctioned^{creditfacilityunder GECLfor Covid-19 affectedcustomersfor} RS.2,9O,OOO/-^{only vide Sanctionletter dated05-06-2O2o againstthe prime} security of^{hypothecation of stocks,the thenrateof interest being 7'90o/o linkedto} RLLR^{(7.30+0.60)compoundedmonthly and the repaymentis 12 months} moratorium and^{Rs. 9,400 x 36 EMI and the other terms and conditionswill be as} per OCC sanctioned^{terms and on various other termsand conditions stipulatedin} thesanctionmemo'andumandonvariousdocumentsexecutedbydefendants.

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Thedefendantsexecutedvariousdocumentsinfavoroftheapplicantbank to secure the^{above limitare referred below:-} \ln;,, S[f.{_o",

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\ln;,, S[f.{_o",^Q.+\l 1S, 12'?J I Presding Ofllcer v oRT. Guwaha{

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o.A 3642o2zoRT€uwahali

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a) Copy of Agreement cum^{Deed of Hypothecationexecuted by the defendantno 2} on behalf of the defendant^{no.1 dated.05-06-2020.}

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b) Copy of Pronote of^{Rs. 2,90,000/-dated 05-06-2020.}

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c) Copy of undertaking^{from borrowers.}

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d) Copy of letter of^{proprietorship dated 05-06-2020.}

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e) Copy of letter of undertaking^{dated 05-06-2020.}

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The applicant bank on^{03-09-2020during Cavid'19pandemicthe} abovementioned CC^{accountinterestwere convertedto FITL account(Funded} lnterest Term Loan account)^{being account no.4186710000022.}

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Whereas again vide application^{dated 25-09-2018 upontequest being made} by the defendant No.2,^{the applicant bank consideredthe said loan application} and sanctioned credit^{facilityunder MSME-Mudrafor Rs5,00,000/- only vide} Sanction letter dated.^{25-09-2018 against the prime securityof hypothecation of} stocks and assets, the^{then rate of interestbeing 10.60% (linkedto MCLR) and the} repayment is Rs. 1O,8OO/-^{x 60 EMI w.e.t. Oct 2018 and guarantee beingunder} ccUFME and the other^terms and^{conditionswill be as per creditfacility} sanctioned terms and on^{variousolher termsand conditions stipulated in the} sanction memorandum and^{on various documentsexecuted by defendantno.2.}

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The defendant no.2 executed^{various documentsin favor of the applicant} bank to secure ihe above^{limit are referred below:-}

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a) Copy of Agreement^{cum Deed of Hypothecationexecuted by the defendantno 2} dated 25-09-2018.

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b) Copy of undertaking^{re: loans/advances dated 25-09- 2018.}

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c) Copy of letter of undertaking/consent.

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d) Copy of^particulars of^{vehicles/machinery/equipmenu livestocketc...} hypothecated

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Whereas again vide application^{dated 25-06-2020 upon request being made} by the defendant No.^{2, the applicant bank considered the saidloanapplication} and sanctioned credit facility^{under GECLfor Covid-19affected customersfor Rs.} 7O,OOO/- only vide Sanction^{letter dated.25-06-2020 against the security of} hypothecation of stocks, the then^{rateof interest being 7.50 % linked to RLLR-(6.90}

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.\t.,i,r ' s-fo"a', Q.&r. lA.!1.21 I

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Presidinq Ofrcdf -/'t DRT. Guwahati

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O A 364/2022lDRT-G!wahati

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+0.60) compounded monthly and the repayment is 12 months moratorium and^Rs. 2,200 x 36 EMI and the other^{termsand conditionswill be as per term loan} sanctioned and on various^{otherterms and conditions stipulatedin the sanction} memorandum and on various^{documents executedby defendantno.2}

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The defendant no.2 executed^{various documentsin favor of lheapplicant} bank to secure the above^{limit are referred below:-}

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a) Copy of Agreement^{cum Deed of Hypothecationexecuted by the defendant no.2} dated 25-06-2020.

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b) Copy of take delivery^{letter to DPNdated 25-06-2020,}

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c) Copy of Pronote of^{Rs. 70,000^dated. 25-06-2020.}

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d) Caps of undertaking^{re: loans/advances dated 25-06-2020.}

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The defendants had availed^{the said loan facilities from the applicant bankbut} have not^paid the outstanding^{loan amount as per terms and conditionsas agreed} upon with the applicant^{bank, in spite of repeateddemandsand requestby the} applicant bank. As the^{defendantsfailed to repay the loan amount, all the loan} accounts being OCC, GECL^{& FITL Accounts became NPA on 30.12.2020 and Credit} Facility Loan Account & GECL^{Account became NPA on 30.03.2021.The defendants} executed Acknowledgement of^{Debt and Security dated12-02-2020 and dated} 21-09-2O2'l thereby confirming^{the correctnessof the balance heldby the applicant} Bank and acknowledged her^{liability to the tune of Rs. 15,11,399.'16/- and} Rs.4,09,413.74l- onty respectively.^{After the accounts became NPA the applicant} bank issued notices for^{repaymentof the due amount,but thedefendants failed to} repay the loan amount.

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The applicant bank thus^{became constrained to Iile the present Original} Application for the^{recovery of R3. 28,80,949.59(RuPees Twenty-Eight Lakhs Eighty} Thousand Nine Hundred^{Forty-Nineand Paise Fifty'Nine)onlyas on 25.09.2022} along with interest^{and cost ofthe application.}

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After liling of the OA the^{Tribunal issued notices upon thedefendantsthrough} registered^post and the^{applicant bank filed service reporton 15.11.2022 and brought} - ek;;s\g1,,$$1

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Presid,ns Oftcar -- J DRT. Guwahali

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oA 364/2o2zoRT-Gwahai

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on record lhe postal receipts along with track consignment report which shows that nolices have not been served upon the defendants. Thereafrer the Tribunar ordered paper publication of notice upon the defendants and the applicant bank issued notice to the defendants on 24j22022 thtough paper publication in two newspapers namety "Tipun Obsevef'and "Dainik Ganadoo( Even after issuance of notice through paper publication also there was no representalion on behalf of the defendants either by the counsel or the person and hence the defendants were set ex_parte on 21-02-2023 and their right to tire written statement cum evidence on affidavir was crosed and the mattel was listed for hearing on behalf ofthe applicant bank.

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Supporting the claim of the applicant bank Sri Ranadhir Nath, Manager (Legal) of the Applicant Bank has fired evidence on affidavit coupred with the security documents marked as Exhibit AW-.t to AW-s1 supporting the claim of the applicant bank.

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Heard the learned counsel for the applicant bank who prayed ,or issuance of Recovery Certificate against the defendants as per pleadings made in the Application, supported by evidence on afridavit of their witness who affimed on oath the execution of the security and other documents by the defendanls and also execulion of their own documents relied upon, which have been marked exhibits.

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Considering the facts and circumstances of the case, I am of the considered view that the document filed by the applicant bank are supporting the claim of the applicant bank and establishing the tiability of the defendants. lt is proved that the defendants are^jointly and severally liable to pay to the applicant bank the claim made in lhe Original Application. The loans were obtained and documents have been executed on 23.04.201.8, 04.06.2019, 05.06.2020, 25.09.2018 & 25.06.2020. The defendants executed Acknowledgement of Debt and Security dated^,12-02-2020 and dated 21-09-2021 thereby confirming the correctness of the balance held by the applicant Bank and acknowledged her liability to the tune of Rs. 1S,l I,399.16/and Rs.4,09,413.74l- only respectively. The accounts became NPA on 30j22020 & 30.03.2021 and the OA has been filed on 03.09.2022. Hence, the OA is tiled wett

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shilrta,g",|:{7 u Pre6iding Oli6r '^j, ORT, Guwahati

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O.A. 364/2022lDRT-Guwahati

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wilhin the period of limitation and this Tribunat having Original Application.

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a^jurisdiction to adjudicate the

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Considering the unchallenged/unrebutted version of Sri Ranadhir Nath, the applicant's witness and allthe documents marked as exhibits, including duly certified copy of the statement 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 entitled to get the Recovery Certilicate as prayed for.

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ln the result, the present Original Application No. 364 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 lhe applicant bank a sum of Rs. 28,80,949.59 (Rupees Twenty-Eight Lakhs Eighty Thousand Nine Hundred Forty-Nine and Paise Fifty-Nine) only with pendentelite and future interest i.e. : (i) @9.15% per annum at monthly rest for value received in cash credit account from 01.08.2022, (ii) @7.90% per annum at monthly rest in the GECL account from 06.08.2022, (iiD @9.550/0 per annum at monthly rest in FITL account from 01.08.2O22i (iv) @9.55% per annum at monthly rest in credit facility ftom 26.O8.2022i (v) @7.90% per annum at monthly rest in GECL account from 26.08.2022, till the date of full paymenurealization and also cost of the application.

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ii) The charge of the certificated amount be kept alive on hypothecated properties, as described in Schedule of the OA till the amount is realized in full.

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iii) The applicant bank is entitled to^proceed against the secured items towards

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recovery of the debts.

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

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g"{cl,oe-,},t?1 Pr€sidino Ofi6r^--' v DRT. Gu*Ehati

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, i. I

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o.A. 36,{r2o2zDRrcuEhari

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v) The applicant bank is entitled 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. 2E,80,949.59 (Rupees} Twonty-Eight Lakhs Eighty Thousand Nine Hundred Forty-Nine^{and Paise} Fifty-Nine) only in favour of the applicant^{bank againstthe defendants No. 'l &} 2.

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vii) Communicate copy of this order to the^{mncernedparties.}

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This order is dictated and corrected^{by the undersigned.}

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Judgment dated 18th December^{2023, signedand pronounced in the Tribunal}

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today under my signature.

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Copy of the JudgmenuFinal^{Order be uploaded in} the Tribunal's Website and

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s!,i,i{62}f,f

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file be consigned to Record Room.

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(Shiv ShaBn Dubey) - V Presiding Officer DRT, Guwahati.

Canara Bank v. Messers John Varieties

Case brief

What is this about?

What did the court decide?

Canara Bank v. Messers John Varieties

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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Case details

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