Allowed

Union Bank of India v. Sh. Satish Kumar

DRT6 Jun 2023OA/369/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the applicant bank's application to recover Rs.30,12,862.50 plus interest against the respondents. Despite the high claimed rate, the Tribunal exercised discretion to grant a uniform simple interest rate of 7% per annum.

What did the court decide?

Declaratory order for payment of Rs.30,12,862.50 with future simple interest at 7% per annum; issuance of Recovery Certificate; liberty to recover from sale of mortgaged or personal assets.

Union Bank of India versus Sh. Satish Kumar — Arbitration | DRT (2023)

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

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ORIGINAL APPLICATION NO. 369/2023

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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 Companies (Acquisition and Transfer of Undertaking) Act No. V of 1970, having its Head Office at 239, Vidhan Sabha Marg, Nariman Point, Mumbai and its Branches all over India amongst other places at Sector 12, Panipat, SCO 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. Satish Kumar S/o Sh. Satbir R/o Village Bhaupur, Tehsil Israna, District Panipat, Haryana-132107

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Smt. Savita Devi W/o Sh. Satish Kumar R/o Village Bhaupur, Tehsil Israna, District Panipat, Haryana-132107

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…..Defendants

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Argued by: Sh. Akaant Kumar Mittal counsel for the applicant bank 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 bank under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ‘the Act’ for brevity) , against the defendants for recovery of Rs.30,12,862.50/- (Rupees Thirty lacs Twelve Thousand Eight

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Hundred Sixty Two and Fifty Paisa only) . The OA has been filed through Sh. Atul Raj, constituted Attorney and Principal Officer of the

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OA 369/2023 UNION BANK OF INDIA V/S SH. SATISH KUMAR AND ANOTHER 2

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applicant bank, stated to be competent to institute the Original Application vide Power of Attorney dated 19.03.2020, Annexures-A2 (copy).

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The brief facts of the case of the applicant as per the Original Application are that defendants had approached the applicant bank for grant of KCC facility of Rs. 14.50 lacs and vehicle loan of Rs. 5 lacs vide loan applications dated 25.05.2016 and 20.03.2018, Annexures-A3 and A8 (copy).

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The applicant bank sanctioned the above said KCC facility to the defendant vide sanction letter dated 25.05.2016, Annexure-A4 (copy) and vehicle loan as per terms and conditions which were duly accepted by the defendants.

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In order to secure the aforementioned credit facilities, the defendants executed loan and security documents, i.e. composite agreements dated 25.05.2016 and 20.03.2018, Annexures-A5 and A9 (copy), demand promissory notes dated 25.05.2016 and 20.03.2018, Annexures-A6 and A10 (copy) .

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The aforesaid loans were further secured by creation of mortgage by defendant No. 1 in respect of land measuring 29 Kanals 9 Marlas situated in the revenue estate of Bhaupur, Tehsil Israna, District Panipat, fully detailed in para No. 5.16 of the Original Application. Declarations dated 12.05.2016 and 13.02.2018 under section 4(1) of the Haryana Agricultural Credit Operations and Miscellaneous Provisions (Banks) Act, 1973 are Annexures-A7 and A11 (copy) and valuation report of property is Annexures-A1 (copy).

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It is further the case of the applicant bank that the loan facilities were duly availed of by the defendants but they failed to maintain the

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OA 369/2023 UNION BANK OF INDIA V/S SH. SATISH KUMAR AND ANOTHER 3

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financial discipline of the applicant bank and resultantly, the loan accounts became irregular and those were declared as NPA on 17.05.2022. The applicant bank recalled the entire outstanding amount vide notice dated 30.01.2023, Annexure-A12 (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 accounts, a sum of Rs.30,12,862.50/- (Rupees Thirty lacs Twelve Thousand Eight Hundred Sixty Two and Fifty Paisa only) is recoverable against the defendants as per statements of accounts certified under Bankers’ Books Evidence Act, Annexures-13 and A14 (copy).

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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 despite service, 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, constituted Attorney and Principal Officer 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 sought. From perusal of Annexures-A1 to A14, it is clear that the defendants had

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OA 369/2023 UNION BANK OF INDIA V/S SH. SATISH KUMAR AND ANOTHER 4

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approached the applicant bank for availing of the loan facilities which were granted to them after they 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.30,12,862.50/- (Rupees Thirty lacs Twelve Thousand Eight Hundred Sixty Two and Fifty Paisa only) from the defendants.

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In so far as pendente lite and future interest is concerned, the applicant bank in relief clause has claimed rate of interest @9.30% per annum with monthly rests plus @2% per annum penal interest in KCC facility and @7.95% per annum with monthly rests plus @2% per annum penal interest in vehicle loan. In sanction letter dated 25.05.2015, Annexure-A4 (copy), the rate of interest has been mentioned @11.40% per annum for KCC.

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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 mortgaged property, purpose of loan, i.e. agricultural, present conditions of economy based on agriculture, quantum of loan, 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 the OA till realisation of the amount ordered vide this final order. It is ordered accordingly.

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OA 369/2023 UNION BANK OF INDIA V/S SH. SATISH KUMAR AND ANOTHER 5

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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.30,12,862.50/- (Rupees Thirty lacs Twelve Thousand Eight Hundred Sixty Two and Fifty 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. The liability of defendants shall be joint as well as several. 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, applicant bank shall be at liberty to recover the same by attachment and sale of personal assets/property 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

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DRT-2, Chandigarh

Union Bank of India v. Sh. Satish Kumar

Case brief

What is this about?

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Union Bank of India v. Sh. Satish Kumar

Case brief

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What did the court decide?

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