Allowed

State Bank of India v. M/s Bhanu Traders

DRT20 Sept 2023OA/39/2022

Case brief

AI extract

What is this about?

A Debt Recovery Tribunal allowed an application under Section 19 RDBFI Act. Recognizing the defendants default on a credit facility, the court issued a Recovery Certificate with interest and directed the bank to proceed against secured and personal assets to recover the dues.

What did the court decide?

Issuance of Recovery Certificate for Rs. 49,93,349.18 with interest; order preserving charges on hypothecated and mortgaged properties.

State Bank of India versus M/s Bhanu Traders — Contract and Commercial Disputes | DRT (2023)

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o.A. 392022/oRr-cuwahati

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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, t\I-izoram, Arunachat pradesh & Tripura) Before Shri Shiv Sharan Dubev. presidino Officer

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O.A. No. 39/2022

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ln the matter of -

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STATE BANK OF INDIA lmphal Branch, MG Avenue, lmphal-795001, Manipur.

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..Appticant

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Vs.

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M/S BHANU TRAOERS lroishemba Lourembam Leikai, lroishemba., lmphal West. Lamphelpat. Manipur-795004.

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SMT. MAIMOM ONGBI BHANU DEVI (Proprietor of M/s Bhanu Traders) Wife of Maimom Sharat Singh, lroishemba, lmphal West, Lamphelpat, Manipur-795004.

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MAIMOM SHARAT SINGH Son of Maimom Kirani Singh, lroishemba, lmphal West, Lamphelpat, Manipur-795004.

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Defendants

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Presence of the Counsel :

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For the Applicant : Mr. Subrata Dutta, Ms. Rimly Haloi,

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Mr. S.U. Haque, Advocates.

For the Defendants

: None (Ex-parte)

'5?i1tl3llT;

Oated :20t0912O23

JUDGMENT

This is an application under section 19 of the Recovery of Debts Oue to Banks and Financial lnstitutions Act, 1993 filed by the STATE BANK OF lNDlA, tmphat Branch, MG Avenue, lmphal-795001, Manipur, with a prayer to issue Recovery Certificate for the sum of Rs. 49,93,349.1g (Rupees Forty_Nine Lacs Ninety-Three Thousand Three Hundred Forty-Nine and paise Eighteen) only as o n 31 .0. .2022

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against the defendants N" 1, , :, 3 with pendentetite ""r rrrrr:,:::::H;l(CC) per annum with monthly rests till realization along with cost and other relief.

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A few facts giving rise to the present application are as under.

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The Defendant No. 1 is a^{proprietorship} Firm and Defendant No. 2 is the Proprietor of the Defendant No. 1 Firm and had availed a Cash Credit Loan and the Defendant No. 2 had also created Equitable Mortgage over her immovable property as security for repayment of the loan. The Defendant No. 3 stood as the personal guarantor to the loan facility availed by the Defendant No. 1 Firm.

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The Defendant No. 1 Firm is an authorized dealer of Valley Strong Cement engaged and usually carries out the business of relailing, selling and dealing in cements and other hardware materials.

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The Defendant No. 2 as the proprietor of the Defendant No. 1 Firm had approached the Applicant Bank and apptied for Cash Credit Loan by submitting a Loan Application dated 01.02.2019 and after considering the said application. the Applicant Bank vide its Letter of Arrangement dated 02.03.20i9 had sanctioned a Cash Credit Loan of Rs. 4S.OO Lacs (Rupees Forty-Five Lacs) only with interesl at 4.00% above Marginal Cost of Fund Based Lending Rate (MCLR), which at the time of sanction stood at 8.s5% p.a. and the effective rate at the time of sanction stood at 12.55o/o pet annum calculated on daily product at monthly rests. The cash credit facility was repayabre on demand. The Defendants No. 2 as the proprietor/ borrower/morlgagor and the Oefendant No. 3 as the guarantor had signed on the said Letter of Arrangement thereby agreeing to afl the terms and conditions of the said sanction. Further, the Oefendant No. 2 as the proprietor of the Defendant No. I Firm had also signed and executed a Dp Note and Dp Note Delivery Letter both dated 02.03.20'lg as security for the repayment ofthe loan facility.

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ln connection with the sanction of the Cash Credit Loan of Rs. 45.00 Lacs (Rupees Forty Five Lacs) sanctioned by the Applicant Bank and availed of by the Defendant No. 2, an Agreement of Loan_cum_ Hypothecation dated 02.03.20,1g has been signed and executed by Defendant No. 2 in her capacity as the proprietor of the

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Defendant No. 1 Firm in favour of the Applicant Bank as security for repayment of the loan facilities, thereby agreeing to all the terms and conditions laid down in the said Agreement and also hypothecated the stocks, book debts, current assets etc. (more specifically described in Schedule-A of the OA) in favour of the Applicant Bank.

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A security for repayment of lhe aforesaid Cash Credit loan facility availed of by the Defendant No. 1 Firm, the Defendant No. 3 had stood as the personal guarantor to the said loan by signing a Guarantee Agreement daied 02.03.2019.

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Besides the securities for repayment of the above mentioned loan facility of Rs. 45.00 Lacs, the Defendant No. 2 had created equitable mortgage over her plot of homestead land measuring 0.0172 Hectre under patta No. 5.19 (new) covered by CS Dag No. 683 of Revenue Village No. 92- lroishemba, lmphal West Oistrict, Manipur (more specmcally described in Schedule-B of the OA) by deposit of Registered Sab Deed and other related land documents on 02.03.2019. The Defendant No.2 had also confirmed the said creation of mo(gage by signing and executing a Letter of Confi rmation dated 02.03.2019.

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The defendants have availed of the said cash credit loan facility from the applicant bank, but have not repaid the loan amount as per the terms and conditions as agreed upon with the applicant bank in spite of repeated demands and requests by the applicant bank. Hence the loan accounts became NpA on 13.06.2021. After the account became NPA the applicanl bank issued notices for repayment of the due amount, but the defendants failed to repay the loan amounl or renew the loan account.

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The applicant bank thus became constrained to file the present Original Application for the recovery of Rs. 49,93,349.18 (Rupees Forty-Nine Laca NinetyThree Thousand Three Hundred Forty-Nine and paise Eighteen) only as on 3'l .0'1.2022 along with interest and cost of the application.

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Afier filing of the OA the Tribunal issued notice upon the defendants through registered post and the applicant bank filed service report on O4.OS.2OZ2 and brought on record the postal receipt along with track consignment report which shows that the notices have been served upon the defendants Thereafier the

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Tribunal ordered paper publication of notice upon the defendants and the applicant bank issued notice to the defendants on 15.0s.2022 through paper pubrication in two newspapers namely^,,Ihe Sangal txpress (English)" and "The Sangai Exprcss (Vemaculal". Even aner issuance of notice through paper publication atso there was no representation on behalf of the defendants either by the counsel or the person and hence the defendants were sel ex_parte on 1g.Oa.2O22 and their right of the file written statement cum evidence on affidavit was closed. Thereafter the matter was posted for hearing on behalf of the applicant bank.

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Supportjng the claim of the applicant bank Shri Khangebam Tarunkumar Singh, Manager (DBD) of the Appricant Bank has fired evidence on affidavit coupred with the security documents marked as Exhibit AW-1 to AW-19, supporting tha claim of the applicant bank.

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Heard the learned counsel for the applicant bank who prayed for issuance of Recovery Cenificate against the defendants as per pleadings made in the Application, supported by evidence on affidavit of their witness who affirmed on oath the execution of the security and other documents 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 circumstances of the case, I am of the considered view that the documents filed by the applicant bank are supporting the ctaim of the applicant bank and establishing the liability of the defendants. lt is proved ihal the defendants are liable to pay to the applicant bank the claim made in the Original Application. The loan was obtained and documents have been executed on 02.03.2019. Moreover, afrer perusing the documents on record and taking into consideration of the facts and circumslances of the case, I find that the mortgage has b€en^qeated by the defendant No.2 where the limitation available is for i2 years and as such taking inlo account of the creation of the mortgage the application appeaG to have been tiled werr within the peiod of rimitation. The account became NpA on 13.06.2021 and the OA has been Iiled on 08.02.2022. Hence, the OA is filed wellwithin the period of limitalion and this Tribunal having a jurisdiction to adjudicate the Original Application

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o.A. 39/2o2zDRl4u*.hari

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Considering the unchallenged/unrebutted version of Shri Khangebam Tarunkumar Singh, the applicant's witness and all the documents marked as exhibits, including duly certified copy of the statement of account along with intorest calculation sheet maintained by the applicant Bank in it's regular course of business, I hold that the applicant is entitled to get the Recovery Certificate as prayed for.

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ln the result, the present Original Application No. 39 of 2022 is allowed with cost as under :-

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r) The defendants No. 1, 2 & 3 are joinfly and severally liable to pay to the applicant bank a sum of Rs.49,93,349.18 (Rupe6 Forty-Nine Lacs Ninoty_ Three Thousand Thrce Hundred Forty-Nino and paise Eightoen) only with pendentelite and future interest @iO.5S% per annum with monthly rests from 01.02.2022 till the date of fu paymenvreatization and atso cost of the application.

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ii) The charge of the certificated amount be kept alive on hypothecated properties as described in Schedule-A of the OA till the amount is realized in full.

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iiD The charge of the certificated amount be kepl alive on modgaged property i.e. the homestead land measuring O.O172 Hectre under patta No.519 (new) covered by CS Dag No. 683 of Revenue Village No. g2_lroishemba, lmphal West District, Manipur with RCC buitding standing in the name of the defendant No.2 and which is bounded by - North: by the homestead land of Koijam Bocha Singh; South: by the homestead land of Lourembam Chandramani Singh; East: by lroishemba Lourembam Leirak; West: by the homestead land of M Rohit Kumar, as described in Schedule_B of lhe OA till the amount is realized in full.

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

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v) The applicant bank is also entifled to proceed againsl the peBonal assets and propenies ofthe defendants towards recovery of lhe dues.

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vi) The applicant bank is entifled to the costs of the O.A. which includes the advocate fees of the applicant bank. Applicant is directed to file the cost memo within 2 weeks from today.

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vii) lssue Recovery Certificate accordingly lor a sum of R3. 49,93,349.1g (Rupses Forty-Nino Laca Ninety-Three Thousand Three Hundred Forty_ Nine and Paiss Eighteen) only in favour of the applicant bank against the defendant No. l,2 & 3.

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viii) Communicate copy ofthis orderto the concemed parties.

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This order is dictated and corrected by the undersigned.

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Judgment daied 20rh September'2023, signed and pronounced in the Tribunal

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today under my signature.

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Copy of the JudgmenuFinal Order be uploaded in the Tribunal,s Website and

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file be consigned to Record Room.

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-\l.'^s0.iur4l;$+u1 (Shiv Sharan Dui{y1r l- (l Presiding Officer DRT, Guwahati.

State Bank of India v. M/s Bhanu Traders

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/s Bhanu Traders

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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