Allowed

Axis Bank v. Chawla Traders

DRT5 Jun 2023OA/383/2023

Case brief

AI extract

What is this about?

On an ex parte application under the RDDBFI Act,1993, the Debt Recovery Tribunal allowed the bank's claim for recovery of approximately Rs.31.76 lakh principal. The court adjusted the claimed interest to a uniform 10% per annum and ordered the issue of a Recovery Certificate.

What did the court decide?

Recovery of Rs.31,76,625 with simple interest at 10% per annum from the date of filing; issue of Recovery Certificate.

Axis Bank versus Chawla Traders — 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. 383/2023 DATE OF INSTITUTION: 15.02.2023

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DATE OF DECISION: 5^th DAY OF JUNE, 2023

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Axis India Limited, a banking company, carrying on the banking business under the Banking Regulation Act, 1949, incorporated under the Companies Act, 1956 and having its Registered Office at ‘Trishul’, 3^rd Floor, Opposite Samartheshwar Temple, Law Garden, Ellis Bridge, Ahmedabad 380006, Gujarat and Branches at different places throughout India including one at Chandigarh, through its Attorney, Sh. Sandeep Kumar, Manager of the applicant bank

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…..Applicant Bank

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Versus

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M/s Chawla Traders, 568-B, 13 Kucha No.8 filed, Ganj, Ludhiana141008, Punjab, through its Proprietor, Sh. Harpreet Chawla

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Sh. Harpreet Chawla S/o Sh. Charanjit Singh, sole Proprietor of Chawla Traders, 568-B, 13 Kuch No. 8 filed, Ganj, Ludhiana141008, Punjab

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…..Defendants

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Argued by: Sh. J.S. Sehgal counsel for the applicant bank Defendants ex parte vide order dated 03.06.2023

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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.31,76,625/- (Rupees Thirty One lacs Seventy Six Thousand Six Hundred and Twenty Five only) . The OA has been filed through Sh. Sandeep Kumar, Manager of the applicant bank, stated to be

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OA 383/2023 AXIS BANK V/S M/S CHAWLA TRADERS AND ANOTHER 2

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competent to institute the Original Application vide Power of Attorney dated 16.09.2021, Annexure-A1 (copy).

¶15

The brief facts of the case of the applicant as per the Original Application are that defendant No.1 through defendant No.2 had approached the applicant bank for grant of credit facility of Rs. 30 lacs vide loan application dated 15.06.2021, Annexure-A2 (copy).

¶16

The applicant bank sanctioned the above said loan facility to the defendants as per terms and conditions which were duly accepted by the defendants.

¶17

In order to secure the aforementioned credit facility, the defendants executed loan and security documents, i.e. loan agreement dated 29.06.2021, Annexure-A3 (copy), demand promissory note dated 29.06.2021, Annexure-A4 (copy), demand promissory note-cum-waiver letter dated 29.06.2021, Annexure-A5 (copy) and undertaking dated 29.06.2021 regarding terms and conditions, Annexure-A6 (copy).

¶18

The aforesaid loan was further secured by creation of equitable mortgage by defendant No. 2 in respect of house bearing Municipal Corporation No. B-13-568 new and old No. B-12-465 measuring 55 Square Yards situated at Peerubanda, Tehsil and District Ludhiana, fully detailed in para No. 5 (v) of the Original Application.

¶19

The documents related to mortgage are as under:

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i. Sale deed dated 22.03.2019, Annexure-A7 (copy).

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ii. Translation of sale deed from Punjabi to English, Annexure-A8 (copy).

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OA 383/2023 AXIS BANK V/S M/S CHAWLA TRADERS AND ANOTHER 3

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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 as NPA. The applicant bank recalled the entire outstanding amount vide legal notice dated 28.09.2022, Annexure-A9 (copy) and original postal receipts, Annexures-A10 and A11 (copy), but to no avail.

¶24

It is further the case of the applicant bank that after adjusting debit and credit entries in the loan account, a sum of Rs.31,76,625/(Rupees Thirty One lacs Seventy Six Thousand Six Hundred and Twenty Five only) is recoverable against the defendants as per statement of account certified under Bankers’ Books Evidence Act, Annexure-12 (copy).

¶25

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

¶26

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 03.06.2023 .

¶27

In support of the contents of the OA, affidavit of evidence of Sh. Sandeep Kumar, Manager of the applicant bank was filed.

¶28

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

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OA 383/2023 AXIS BANK V/S M/S CHAWLA TRADERS AND ANOTHER 4

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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 A12 , it is clear that the defendants had approached the applicant bank for availing of the loan facility which was 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.31,76,625/(Rupees Thirty One lacs Seventy Six Thousand Six Hundred and Twenty Five only) from the defendants.

¶31

In so far as pendente lite and future interest is concerned, the applicant bank in relief clause has claimed rate of interest @16.50% per annum with half yearly rests plus @2% per annum penal interest. In loan agreement dated 29.06.2021, Annexure-A3 (copy), the rate of interest has been mentioned @16.50% per annum.

¶32

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, purpose of loan, i.e. business, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yesteryears, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @10% per annum from the date of filing of the OA till

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OA 383/2023 AXIS BANK V/S M/S CHAWLA TRADERS AND ANOTHER 5

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

¶35

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.31,76,625/- (Rupees Thirty One lacs Seventy Six Thousand Six Hundred and Twenty Five only) with current and future simple interest @10% per annum , w.e.f. 15.02.2023 , 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 04.08.2023.

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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.

¶39

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

Axis Bank v. Chawla Traders

Case brief

What is this about?

What did the court decide?

Axis Bank v. Chawla Traders

Case brief

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What did the court decide?

What the court decided

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