Allowed

Canara Bank v. Liberty Chemist

DRT13 Oct 2023OA/377/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's original application for the recovery of outstanding dues. The court directed defendants to repay the loan principal, interest, and costs within sixty days, with a direction to the Recovery Officer to execute recovery from the sale of assets.

What did the court decide?

Defendants to pay Rs. 23,10,916.35 plus interest at 10.75% p.a. within 60 days; Recovery Certificate issued to Recovery Officer.

Canara Bank versus Liberty Chemist — Contract and Commercial Disputes | DRT (2023)

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OA 377 of 2022

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Decided on :-13.10.2023

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Registered on:-10.08.2022

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IN THE DEBT RECOVERY TRIBUNAL-I AT MUMBAI ORIGINAL APPLICATION NO. 377 of 2022

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CANARA BANK, Nationalised Bank, ) A Body Corporate constituted and functioning) Under the Banking Companies (Acquisition ) Transfer of Undertakings) Act, 1970, having ) Its Head Office at 112, J C Road, Bangalore, ) Karnataka State and having one of its Branch) Offices at Plot No. 342, TPS III, 16^th Road, ) Bandra (W), Mumbai 400 050 (Erstwhile ) Syndicate Bank which got amalgamated to ) Canara Bank on the basis Amalgamation ) Scheme dated 04.03.2020 ) Through Derbin Udayabhanu the Manager ) of the Applicant Bank who is authorised to ) Sign this Application )

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... APPLICANT

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Versus

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M/S. LIBERTY CHEMIST, ) A Partnership Firm having its office at ) Shop No: A-1, Ground Floor, Rizvi ) House Premises Co. Soc. Ltd., Plot No.:) 34, 35 – A, 36 & 36 (A), TPS- II, Hill Road) Bandra (W), Mumbai 400 050 )

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MR. KALPESH JAYANTILAL ) DUDHARA )

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MR. JITEN JAYANTILAL ) DHUDHARA )

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MR. YASH KALPESH DUDHARA )

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Page 1 of 5

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OA 377 of 2022

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All the above being Partners of ) Defendant No. 1 and having address at) Shop No: A-1, Ground Floor, Rizvi ) House Premises Co., Soc. Ltd., Plot No. ) 34,35 – A, 36 & 36 (A), TPS – II, Hill ) Road, Bandra (W), Mumbai 400 050 ) And also at

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Flat No: 2002, Veena Sky Heights, Sai ) Baba Extension Road, Next to Pawar ) Public School, Sai Baba Nagar, Borivali ) (W), Mumbai 400 092 )

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…DEFENDANTS

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________________________________________________________________ Counsel for the Applicant : Advocate Sujata D. i/b Sandhya Nanavare Counsel for Defendants : Ex-parte

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J U D G M E N T

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The Applicant has filed the present Original Application against the Defendants for recovery of Rs.23,10,916.35 (Rupees Twenty Three Lakhs Ten Thousand Nine Hundred Sixteen and paise Thirty Five Only) together with interest thereon @10.75% p.a. from the date of filing of the present OA till payment and/or realization.

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Facts as succinctly set out in the OA are that the Defendant No. 1 is the borrower and the Defendant No. 2 to 4 are the partners of Defendant No. 1 firm and also stood as Guarantors in their personal capacity to the said facility availed by the Defendant No.1.

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Page 2 of 5

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OA 377 of 2022

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It is stated that on 03.01.2017, at the request of the Defendants, the Applicant sanctioned the Term Loan facility of Rs. 25 Lakhs with interest @ 10 % p.a. compounded monthly for purpose of financing capital expenditure. The said facility was to be repaid in 84 equated monthly installments of Rs. 42,413/- each.

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In order to secure the repayment of loan Defendants furnished the security of Furniture & Fixtures by way of hypothecation and also furnished collateral security of recurring deposit for the sum of Rs. 30,000/- per month.

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In consideration of sanction the said loan, the Defendants executed the following loaning and security documents:

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i. Application for Credit Facilities

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ii. Sanction letter dated 03.01.2017

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iii. Composite Hypothecation Agreement dated 18.01.2017

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iv. Guarantee Agreement dated 18.01.2017 executed by Defendant No.2 to 4.

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However, the Defendants failed and neglected to repay the outstanding dues. Thus, the account of the borrower was classified as NPA on 30.11.2019. Thereafter, the Applicant issued legal notice dated 22.01.2020 and called upon the Defendants to pay the outstanding dues but they failed to pay the dues. Hence, the present OA has been filed.

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Page 3 of 5

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OA 377 of 2022

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Notice was issued to the Defendants. Despite service, no one appeared for the Defendants thus, they were proceeded ex-parte vide even order dated 13.10.2023.

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The Applicant Bank has produced all the Original Loan documents and other relevant documents along with their Claim Affidavit filed through their Sr. Manager Om Prakash Singh.

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I have heard the Ld. Counsel for the Applicant Bank and perused the record.

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The witness of the Applicant and has fully corroborated the averments made in the OA. Even otherwise the whole case of the Applicant Bank is based on documents and the witness has fully proved all these documents as against the Defendants. In my view there is no question of disbelieving the evidence led by the Applicant Bank and the Applicant Bank has proved its case beyond reasonable doubt. The liability of Defendant No.1 to 4 are joint and several.

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In the light of above discussions, the Original Application deserves to be allowed against the Defendant No.1 to 4.

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O R D E R

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i. The present OA is hereby allowed and Defendant No. 1 to 4 are hereby directed to pay to the Applicant, within a period of 60 days, a sum of Rs.23,10,916.35 (Rupees Twenty Three Lakhs Ten Thousand Nine Hundred Sixteen and paise Thirty

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Page 4 of 5

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OA 377 of 2022

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Five Only) together with interest thereon @10.75% p.a. from the date of filing of the present OA till payment and/or realization.

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ii. Failing which the aforesaid amount shall be recovered from the sale of the hypothecated assets as well as other personal moveable and immoveable assets of the Defendants.

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iii. Defendants are hereby directed not to deal with their properties till further direction of Ld. Recovery Officer.

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iv. Defendants shall also pay the cost and expenses of the OA.

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v. Recovery Certificate be issued forthwith and be sent to the Recovery Officer of this Tribunal.

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Copy of this order be sent to the parties as per rules.

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File be consigned to record.

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Place: Mumbai. (Dr. Rekha G. Dhakar) Date :13.10.2023 Presiding Officer, DRT-1, Mumbai.

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Tjs/-

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Page 5 of 5

Canara Bank v. Liberty Chemist

Case brief

What is this about?

What did the court decide?

Canara Bank v. Liberty Chemist

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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