Allowed

Union Bank of India v. Sh. Ajmer Singh

DRT6 Jun 2023OA/365/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the applicant bank's application for recovery certificate against three defendants for Rs.28,06,579.51/- arising from a KCC facility default. The court granted 7% annual interest and directed enforcement via sale of mortgaged or personal assets.

What did the court decide?

Issued recovery certificate for Rs.28,06,579.51/- plus 7% p.a. simple interest from 16.02.2023; liberty to recover via sale of mortgaged or personal assets.

Union Bank of India versus Sh. Ajmer Singh — Banking and Recovery | DRT (2023)

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DEBTS RECOVERY TRIBUNAL-2, CHANDIGARH, PRESIDED OVER BY M.M. DHONCHAK

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ORIGINAL APPLICATION NO.365/2023

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DATE OF INSTITUTION: 16.02.2023

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DATE OF DECISION: 6^th DAY OF JUNE, 2023

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Union Bank of India (erstwhile Known as Andhra Bank) , a body constituted under the Banking Company (Acquisition and Transfer of Undertaking) Act No. V of 1970, having its Head Office at 239, Vidhan Sabha Marg, Nariman Point, Mumbai and having its Branches all over India amongst other places at Sector 12, Panipat, S.C.O 12, HUDA Sector 12, Panipat, Haryana-132103, through Sh. Atul Raj, its Constituted Attorney and Principal Officer

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…..Applicant Bank

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Versus

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Sh. Ajmer Singh S/o Sh. Zile Singh R/o Village Dhadola, Tehsil Bapoli and District Panipat, Haryana-132108

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Smt. Suresho Devi W/o Sh. Ajmer Singh R/o Village Dhadola, Tehsil Bapoli and District Panipat, Haryana-132108

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Sh. Krishan S/o Sh. Ajmer Singh R/o Village Dhadola, Tehsil Bapoli and District Panipat, Haryana-132108

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…..Defendants

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Argued by: Sh. Akaant Kumar Mittal counsel for the applicant bank

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Defendants ex parte vide order dated 02.06.2023

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FINAL ORDER

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Present Original Application was instituted by the applicant

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bank under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to

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OA/365/2023 UNION BANK OF INDIA Vs AJMER SINGH AND ANOTHER 2

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as ‘the Act’ for brevity), against the defendants for recovery of Rs.28,06,579.51/- (Rupees Twenty Eight lacs Six Thousand Five Hundred Seventy Nine and Fifty One Paisa Only) . It has been filed through Sh. Atul Raj, Constituted Attorney of the applicant bank stated to be competent to institute the Original Application vide Power of Attorney dated 19.03.2020, Annexure-A1 (copy).

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The brief facts of the case of the applicant as per Original Application are that defendant Nos. 1 and 2 had approached the applicant bank for grant of KCC facility of Rs.21.95 lacs vide loan application dated 25.05.2018, Annexure-A2 (copy). Defendant No. 3 stood as guarantor for repayment of the loan.

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The applicant bank sanctioned aforesaid credit facility to the defendants vide sanction letter dated 25.05.2018, Annexure-A3 (copy) as per terms and conditions which were duly accepted by the defendants.

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In order to secure the aforementioned credit facility, the defendants executed composite agreement dated 25.05.2018, Annexure-A4 (copy) and demand promissory note dated 25.05.2018, Annexure-A5 (copy).

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The aforesaid loan was further secured by creation of registered mortgage by defendant Nos. 1 and 2 in respect of agricultural land measuring 26 Kanals 8 Marlas situated in the revenue estate of Dadhola, Tehsil Bapoli, District Panipat, Haryana, fully detailed in para No. 5.9 of the Original Application. Declaration dated 16.05.2018 under section 4(1) of the Haryana Agriculture Credit Operations and Miscellaneous Provisions (Banks) Act, 1973, Annexure-A6 (copy).

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OA/365/2023 UNION BANK OF INDIA Vs AJMER SINGH AND ANOTHER

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It is further the case of the applicant bank that the loan facility was duly availed of by the defendants but they failed to maintain the financial discipline of the applicant bank and resultantly, the loan account became irregular and it was declared NPA on 22.05.2022. The applicant bank recalled entire outstanding amount vide legal notice dated 30.01.2023, Annexure-A7 (copy), but to no avail.

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It is further the case of the applicant bank that after adjusting debit and credit entries in the loan account, a sum of Rs.28,06,579.51/- (Rupees Twenty Eight lacs Six Thousand Five Hundred Seventy Nine and Fifty One Paisa Only) is recoverable against the defendants as per statement of account, Annexure-A8 (copy) certified under Bankers’ Books Evidence Act.

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Since the defendants did not repay the outstanding amount, therefore, the applicant bank preferred the present Original Application for issuance of Recovery Certificate.

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Notices of the Original Application were duly served upon the defendants, but since none appeared on behalf of the defendants, thus, the defendants were proceeded against ex-parte vide order dated 02.06.2023 .

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In support of the contents of the OA, affidavit of evidence of Sh. Atul Raj, Branch Manager of the applicant bank was filed.

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This Tribunal has heard ex-parte arguments advanced by the learned counsel and gone through the record carefully.

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It was argued by the learned counsel that in view of unrebutted documentary evidence brought on record, the applicant bank had proved its case against the defendants for recovery of the amount

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OA/365/2023 UNION BANK OF INDIA Vs AJMER SINGH AND ANOTHER

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sought. From perusal of Annexures-A1 to A8 , it is clear that the defendants had approached the applicant bank for availing of the loan facility which was granted to them. It is further clear that the defendants had executed all the relevant documents as stated above in favour of the applicant bank. Unfortunately, the defendants failed to pay back the loan as per terms and conditions of the agreement executed between the parties. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.28,06,579.51/- (Rupees Twenty Eight lacs Six Thousand Five Hundred Seventy Nine and Fifty One Paisa Only) from the defendants.

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In so far as pendent lite and future interest is concerned, the applicant bank in relief clause has claimed rate of interest @9.30% per annum plus @2% per annum penal interest. In sanction letter dated 25.05.2018, Annexure-A3 (copy), rate of interest has been mentioned @10.45% per annum.

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This Tribunal is of the considered opinion that sometimes in appropriate cases the prerogatives of mercy and magnanimity are the brightest jewels in the crown of the Judge. Keeping in view the facts and circumstances of the instant case including the Pandemic Covid-19 affecting businesses, nature of the mortgaged property, purpose of loan, i.e. agricultural, present conditions of economy based on agriculture, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yesteryears and defendant No. 2 being a lady while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @7% per annum from the date of filing of

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OA/365/2023 UNION BANK OF INDIA Vs AJMER SINGH AND ANOTHER

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the OA till realisation of the amount ordered vide this order. It is ordered accordingly.

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In the result, the Original Application is allowed with costs declaring that the defendants are liable to pay to the applicant bank a sum of Rs.28,06,579.51/- (Rupees Twenty Eight lacs Six Thousand Five Hundred Seventy Nine and Fifty One Paisa Only) with current and future simple interest @7% per annum w.e.f. 16.02.2023 , till the date of realisation of the amount. Accordingly, the applicant bank shall be at liberty to recover aforesaid amount from the sale of mortgaged/hypothecated property of the defendants in execution proceedings, if not sold earlier under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 or otherwise. If the dues of the bank still remain unsatisfied, the applicant bank shall be at liberty to recover the same by attachment and sale of personal assets of the defendants. The applicant bank is at liberty to enforce the claim through due process of law.

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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 05.08.2023 .

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

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Announced in the open Tribunal (M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh

Union Bank of India v. Sh. Ajmer Singh

Case brief

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Union Bank of India v. Sh. Ajmer Singh

Case brief

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