Allowed

Punjab National Bank v. Burhan Uddin

DRT6 Oct 2023OA/378/2022

Case brief

AI extract

What is this about?

The DRT allowed the Bank's application under Section 19 of the RDBFI Act, 1993. The Court held that the application fell within the limitation period and the defendants were jointly and severally liable to pay the outstanding sum along with interest. A Recovery Certificate was issued against the borrower and guarantors.

What did the court decide?

Recovery Certificate issued for Rs. 1,11,20,160.60 with interest; charge kept alive on mortgaged property; Bank entitled to proceed against secured and personal assets.

Punjab National Bank versus Burhan Uddin — Contract and Commercial Disputes | DRT (2023)

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o.A. 37ar2022/oRl-cuw.hrti

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(North Eastern Region)

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(Tribunal of Assam, Nagaland, Meghataya, Manipur, Mizoram, Arunachat pradesh & Tripura)

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Beforo Shri Shiv Sharan Dubev.^presidino Officer

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O.A. No. 378/2022

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ln the matter of -

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Punjab National Bank (Erstwhile United Bank of lndia) B.O. Karimganj Branch, Station Road, Karimganj District Karimganj, Assam

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" "^Appricant

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vs.

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Burhan Uddin,

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S/o Late Kutub Uddin

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Vlllage East Kanishail,^pO Kanishail, District Karimganj, Assam, plN_78871 1.

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Sahab Uddin,

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S/o Late Kutub Uddin

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Village East Kanishait, pO Kanishait, District Karimganj, Assam, plN_788711

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Jamal Uddin Ahmed, S/o Late Kutub Uddin Village East Kanishail, pO Kanishail, District Karimganj, Assam, ptN-7887.1 1.

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Amin Uddin Ahmed, S/o Late Kutub Uddin Village East Kanishail, pO Kanjshail, District Karimganj, Assam, plN_788711.

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Halim Uddin Ahmed, S/o Late Kutub Uddin

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Village East Kanishait, pO Kanishail District Karimganj. Assam, plN.7g87.t 1

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.... Defendanis

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Presence ot the Counsel:

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For the Applicant : [4r. K K Nandi. Ms. Rochoita Das, Ms S. Dey, Advocales

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For the Defendants : lvlr. Anirban Das, Mr. N.l. Khan, Advocates (Right to fite WS cum EA ctosed)

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Oated 06t10t2023

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Sl;^,' I l,.rL vru,[i,rl^L,l .'6.10. ).- I PrBiring Offid.r^-- DRT, GUwahaT

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O A. 378/2022lDRT_Guwahati

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J UDGlJI^ENT

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This is an^{applicationundersection19 of the Recovery of Debts Due to Banks} and Financial^{lnstitutions Act,1993 filed by the Punjab National Bank(Erstwhile} United Bank^{of lndia), B.O Karimganj Branch' Station Road'Karimganj'Distric't} Karimganj,^{Assam,with a prayerto issue Recovery Certificatefor the sum of R3'} 1,11,20,160'60^{(Rupees One crore ElevenLakhs Twenty Thousandone Hundred} Sixty and^{Paise Sixty) only as on 91082022againstthe defendantswith} pendentelite and^{future interest thereon at the rateof 7 65% per annumwithmonthly} rests till realization^{along with cost and otherrelief'}

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

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The defendant^{no 1 is an individualwho deals in business of stationery items'} cosmetics,^{gift items, wholesaleof eggsand exportof coal Thedefendantno 1} availed credit^{facilities from the applicantbank The defendant nos 2 to 5 are the} guarantors of the^{loan availed by the defendantno '1 The defendant no 'l approached} the applicant^{bank for financial assistanc€ for thepurposeol hisbusinessby} submitting^{an apPlication dated 1502'2011' The applicantbank on consideration of} said application^{dated15.02.20'1 1 sanctioned cash creditfacility of Rs 24'00'00000} lacs vide Sanction^{Letter dated 05 03 201 'l lt was also the terms and conditionsof the} sanction^{letter that the effective rate of interestwill be base rate + 3% per annum with} monthly resis^{subjectto change as per bank guidelinesThedefendant no 1 accepted} the terms^{and conditionsof the Sanction Letter}

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Thedefendantno.lavailedofthecashcreditfacilityfromtheapplicantbank and have executed^{the following documenls duly filled-upin favour of theapplicant}

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bank:-

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(a) Letter of Lien^{dated 05 03 2011'}

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(b) Demand Promissory^{Note dated05032011 for Rs24'OO'00000 by which the} lJfenOant^{no I agreedio pay to ihe applicant bank on demandthe said amountof Rs} ia,oijpriii.ijo^{*itii"terest atine rate ol3%above base rate beins9 4s% with monthlv} rests.

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cl",,j[^Lra"^4"4 oL.lo 2] u Pr6iding Oficer DRT. Guurahali

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O A 378/2022lDRT-Guwahali

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(d) Hypothecation Agreement dated 05.03.20'l^1.

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(e) Consent clause by the defendant^{no 1 for disclosureby the applicant bank the} iniormation and data ;elating^{to the defendant no 1, default in any committed by him} besides others.

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(0 Hypothecation of Debts and^{Moveable dated 05.03.2011.}

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ln respect of the cash^{credit facility availedby the defendantno 1 from the} applicant bank, the^{defendantno 1 confirmed and acknowledgedthe balancein the} cash credit account as on^{11.02.2012on 13.02.2012,as on 14.05.2014on} 15.05.2014 and as on 10.04.2017^{on '11.04.2017}

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The defendant nos. 2 to 5 in their^{personal capacities stood as guarantorof the} cash credit lacility of Rs.24.00^{lacs availed by the defendanlno 1 from the applicant} bank and as^guarantor of the loan the defendant^{nos.2to 5 have executed Letter of} Guarantee dated 05.03.201^1.

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The defendant no. 1 availed of the cash credit^{facility from} the applicant^bank and as a security for repayment of the said cash credit facility loan defendant nos. 1 to 5 created equitable mortgage of land by deposit of title deeds with the applicant bank. The defendant no 1 to 5 deposited with the applicant bank, title deeds such as Sale Deed no. 2032 of 2006, Sale deed no 3937 of 2009, Sale deed no 1965 of 1996. The defendant nos 1 to 5 execuled letter confirming deposit of title deeds with the applicant bank with the intention of creating equitable mo(gage. The property mortgaged/created charge by the defendant nos 1 to 5 with the applicant bank as a security for repayment of loan availed by the defendani no. I is more sp€cmcally described in Schedule-A of the OA.

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The defendant no 1 approached the applicant bank for enhancement of cash credit limit for the purpose of his business by submitting an application dated 30.05.2017. The applicant bank on consideralion of the said application dated 30.O5.20'17 enhanced the cash credit facility from Rs. 24,OOO,O0.OO tacs to Rs 80,000,00.00 vide sanction letter dated 19.06.2017. lt is further stated by the applicant bank that the defendanl no 1 availed Home loan of Rs 20,00,000.00 from

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0 A. 378/2o22,/DRT-Guwahiii

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the applicant bank, and the then UHL limit of Rs 19.43 takhs is mentioned in the Sanction Letter dated 19.06.2017. lt was also the terms and conditions ofthe sanclion letter that the effective rate of lnterest will be MCLR + 3.30Vo -0.25ok i.e. 11.80% per annum with monthly rests subject to change as per bank guidelines.

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The defendant no. 1 availed of the enhanced cash credit facility from the applicant bank and the defendant no t have executed the following documents duly filled-up in favour of the applicant bank.

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(a) Letter of Lien dated 20.06.2017.

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(b)- Demand Promissory Note dated 20.06.2017 for Rs BO,OO,OOO.OO by which the q9f9ldant !'o 1 agreed to pay to the applicant bank on demand the said amount of Rs 80,00,000.00 with interest at the rate of 3.OS% above MCLR being g.75% with monthly rests.

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(d) Hypothecation Agreement dated 20.06.201 7.

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(e) Consent clause by the defendant no i for disclosure by the applicant bank the information and data relating to the derendant no^.1, defautt in any JJmmitteO by nim besides othe6.

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The defendant nos 2 to 5 in their personal capacities stood as guarantor of the enhanced credit facilities availed by the defendant no 1 from the applicant bank and as guarantor of the loan the defendant nos 2 to S have executed Letter of Guarantee dated 20.06.2017.

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The defendant no.^.l availed of the cash credit facility from lhe appticant bank and as a security for repayment of the said cash credit facirity roan defendant nos. 1 to 5 have created equitable mortgage of tand by deposit of tifle deeds with the appticant bank. The defendant nos. 1 to S confirmed that the equitable mo(gage which was created for avairing housing roan of Rs 2o,oo,oo0.oo shaI stand extended and be herd as mortgage and continuing security towards the enhanced credit facilities availed by the defendant no 1 from the appricant bank. The defendant nos 1 to 5 have executed confirmalion letter dated 20.06.2012 by which mortgage was extended in respect of the enhanced credit facilities availed by the defendant no ,1. The property mortgaged/created charge by the defendant nos .l to S with the applicant bank as a

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Sli,Jfara., f,rI,,r e,""o,ngghJ!⁾⁾ J DRT, Guwahali

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O A 37&2o22lDRT-Gryshati

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security for repayment of loan availed by the defendant no. 1 is more specifically described in Schedule-A of the OA.

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The defendant no 1 approached the applicant bank for grant of GECL Facility by submitting an application dated 01.06.2020 for the purpose of his business. ln the application dated 01.06.2020 the defendant no I admitted to have availed cash credit facility of Rs 80.00 lacs and Housing Loan of Rs 19.00 Lacs from the applicant bank. The applicant bank on consideration of the said application dated 01.06.2020 have sanctioned GECL facility of Rs.'12,00,000.00 lacs as working capital and have also renewed cash credit facility of Rs 80,00,000.00 and reviewed Housing loan at Rs '18,73,115.00 vide Sanction Letter dated 03.06.2020. tt was atso the terms and conditions of the sanction letter that the effective rate of interest will be RLLR+.lolo i.e 7.65% per annum with monthly rests subject to change as per bank guidelines.

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The defendant no. 1 avaited of the GECL facility from the applicant bank and the defendant no t have executed the following documents duly filled_up in favour of the applicant bank: -

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(a) Agreement for Working Capital Term Loan dated 03.06.2020. The defendant no 1 further agreed to repay the term loan within a period of 48 months in 36 instalments.

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(b) Demand Promissory Note dated 03.06.2020 for Rs^{.l2,00,OOO.OO.}

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(d) Hypothecation of Assets to secure lerm loan dated 03.06.2020 and by the said agreement the defendant no I agreed to the contents recited therein and have agreed to repay the loan in 36 monthly instalments of Rs 33,333.33 each.

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The defendant no 1 availed the credit facilities from the applicant bank but in violation of all terms and conditions of the sanction letter and the documents, the defendants failed and neglected to abide by the terms and conditions of the sanction letter and agreement, documents as well as defendants failed and neglected to repay the loan amount with interest. The applicant bank by its personal contacts through its officers on various occasions urged the defendants to deposit the inegular/ overdue amount and to regularize the loan accounts. The defendants did not pay any heed to lhe personal contacts of the applicant bank and did not care to make repayment of the outstanding dues in the loan account. The defendants have admitted the liabilities to

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1 Sk Presio'ns '^sfa Orfibi 'a'-^{I u Ir''l ?} d DRT, Guwahali

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O.A. 3782022/DRT-cwah.li

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pay the outstanding dues in the loan accounts by making payments in the loan accounts.

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The defendants had availed the said loan facilities from the applicant bank but have not paid the outstanding loan amount as per terms and conditions as agreed upon \rrith the applicant bank, in spite of repeaied demands and request by the applicant bank. As the defendants failed to repay the loan amount, the said loan accounts became NpA on 31.03.2021. After the acmunts became NpA fhe applicant bank issued notices for repayment of the due amount, but the defendants faired to repay the Loan amount.

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The applicant bank thus became constrained to file the present Original Application for the recovery of Rs. 1,1,r,20,160.60 (Rupees One Crore Eleven Lakhg Twenty Thousand One Hundred Sixty and paise Sixty) only as on 31.08.2022 along with interest and cost ofthe application.

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After filing of the OA the Tribunal issued notices upon the defendants through regislered post and the applicant bank filed service report on 05.12.2022and brought on record lhe postal receipts. The learned counsel for defendants had appeared on the same day on 05.12.2022 by fiting Vakalatnama and sought time to file written slatemenl cum evidence on affidavit. Thereafter, the case was listed on several occasion, but the written stalement cum evidence on affidavit have not been filed by the defendants. Hence, their right of lhe f e written statement cum eviden@ on affidavit was closed on 14.02.2023 and the matter was fixed for hearing.

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Supporting the claim of the applicant bank Smti Anjana Das, Chief Manager of the Appricant Bank has fred evidence on affidavit coupred with the security documents ma*ed as Exhibit A-1 to A{1 supporting the claim of the applicant bank.

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Heard the learned counsel for the applicant bank who prayed for issuance of Recovery Certificate against the defendants as per pleadings made in lha Application, supported by evidence on affidavit of their witness who affirmed on oath the execution

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-eliucl"era., B. I'v eroaurp o#& lo^)Jy' ORT, Guwahali

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o'A' 37tt/2022/DRYGMhili

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of the security^{and otherdocuments by the defendants and also execution of their own} documents relied^{upon, which have been marked exhibits}

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Considering the facts^{and circumslancesof the case, I am of theconsidered} view that the document^{filed by the applicantbank are supportingthe claim of the} applicant bank and^{establishingtheliabilityof the defendants.lt is proved that the} defendants are^{jointly and severally liable to pay to the applicant bank the claim made} in the Original Application.^{The loan was obtainedand documenls have been} executed on 05.03.2011,^{13.02.2012,15.05.2014, 30.05.2017,19.06.2017,} 20.06.20'17 & 03.06.2020.^{Balance ConUrmations are dated13.o2 2012, '15.05.2014&} 'l 1 .o4 .20'17 . Moreover, after^perusing the^{documents on rccord and takinginto} consideration of the facts^{and circumstancesof the case, I find that the mortgagehas} been created by ihe defendants^{lvhere the limitationavailable is for12 years and as such} taking into account of the creation^{of the mortgage the application appears to have been} liled well within the^period of^{limitation. The account becameNPAon 31.03.202'l and} the OA has been filed on^{16.09.2022. Hence,the OA is filed well within the periodof} limitation and this Tribunal^havinga iurisdiction^{to adiudicatethe Original Application.}

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Considering the unchallenged/unrebutted^{version of Smti AnjanaDas,the} applicanl's witness and all the documents^{marked as exhibits, includingduly cedified} copy of the statement of account along^{withinterestcalculation sheet maintained by} the applicant Bank in it's regular^{course of business, I hold that the applicantis} entitled to get the Recovery Certificate as^{prayed for.}

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ln the result, the^present Original Apptication^{No. 378 of 2022is allowed with} cost as under:-

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i) The defendants No. 1,2,3,4 & 5 are^{jointly and severally liable to payto the} applicant bank a sum of^{Rs. 1,11,20,160.60(Rupees One Croro Eleven} Lakhs Twenty Thousand One Hundred Sixty and^{Paise Sixty) only} with pendentelite and future interest @7.65%^p.a. with monthly^restsfrom

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O.A. 378a2o2zDRT4uwah.ti

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01.09.2022 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 mortgaged property i.e. All that part & parcel of land measuring 0.275 acres and O.1OS acres with RCC building and Assam Type House standing thereon covered under patta No. 671 Dag No. 73O,757,755 (otd), 956, 92S and 957 of pargana- Kushiarkut, Mouza- KarimganjTown, Kanishail^part I Gp, Sub Registrar Office Karimgani, Distric! Karimganj, Assam and is bounded and butted by North: Land ofAbdul Karim, South: Land of Owners; East: Land of Owners; West: Bye Lane, as described in Schedule-A of the OA till the amount is realized in full.

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iii) The applicant bank is entifled to proceed against the secured items towards recovery of the debts.

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iv) The applicant bank is also enti ed to proceed against the personal assets and properties of the defendant towards recovery of the dues.

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v) The applicanl bank is entiUed to the cosls of the O.A. which includes the advocate fees of the applicant bank. Applicant is directed to Iile the cosl memo within 2 weeks from today.

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vi) lssue Recovery Certificate accordingly for a sum R3. ,1,11,20,i60.60 (Rupoes One Crore Eleven Lakhs Twenty Thousand One Hundrgd Sixty and paise Sixty) only in favour of the applicant bank against the defendants No. .1,2,3,4 & 5.

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vii) Communicate copy of this order to the concemed parlies. This order is dictated and corrected by the undersigned.

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Judgment dated 6th October 2023, signed and pronounced in the Tribunal today under my signature.

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Copy of the JudgmenuFinal Order be uploaded in the Tribunal,s Website and file be consigned to Record Room.

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!Lrsi"o*,'^&"1", - oG.lo.2! U (Shlv Sharan Dubey) Prasldlng Offlcer DRT, cuwahati.

Punjab National Bank v. Burhan Uddin

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. Burhan Uddin

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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