Allowed

Union Bank of India v. M/S Kitchen World

DRT3 Jun 2023OA/393/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal adjudicated an ex-parte application filed by Union Bank of India against M/s Kitchen World and another for recovery of outstanding dues. The Tribunal allowed the application, granting recovery of the principal amount with uniform interest at 10% p.a. from the filing date.

What did the court decide?

Recovery of Rs. 25,78,971/- with 10% interest from filing date; issuance of Recovery Certificate; liberty to enforce through execution proceedings.

Union Bank of India versus M/S Kitchen World — 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. 393 of 2023 DATE OF INSTITUTION: 22.02.2023

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DATE OF DECISION: 3^rd DAY OF JUNE, 2023

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Union Bank Of India, having its Head Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai, having its Branch at Union Bank Of India (earlier Andhra Bank), S.C.O 59, Sector 47-C, Chandigarh, IFSC code UBIN0828793, Email Address: [email protected], through its Attorney Holder, Sh. Sushil Kumar Tiwari, Chief Manager at Union Bank Of India, Asset Recovery and Management Branch, S.C.O 6465, Bank Square, Sector 17-B, Chandigarh-160017, IFSC code UBIN0578738, Email Address: [email protected]

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.......Applicant Bank

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Versus

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M/s Kitchen World, through its Proprietor, Sh. Kamlesh Bhaguna S/o Sh. Lalita Prasad situated at Ground Floor, S.C.O 65, Sector 47C, Chandigarh-160047

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Second Address:

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Shop No. 1229, Opposite J.P. Hospital Chandigarh-Ambala Highway, Zirakpur, Punjab-160003

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Sh. Kamlesh Bahuguna S/o Sh. Lalita Prasad, R/o House No. 2323, Sector-15, Panchkula, Haryana-134113

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......Defendants

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Argued by: Sh. Ravinder Kumar counsel for the applicant bank Defendants ex parte vide order dated 01.06.2023

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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

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OA/393/2023 UNION BANK Vs M/S KITCHEN WORLD AND ANOTHER 2

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Financial Institutions Act, 1993 (hereinafter referred to as ‘the Act’ for brevity) , against defendants for recovery of Rs.25,78,971/(Rupees Twenty five lacs Seventy Eight Thousand Nine Hundred

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and Seventy One Only) . The OA has been filed through Sh. Sushil Kumar Tiwari, Chief Manager of the applicant bank, stated to be competent to institute the Original Application vide instruction circular dated 26.03.2021 along with identity card, Annexure-A1 (colly) (copy).

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The brief facts of the case of the applicant as per Original Application are that the defendants had approached the applicant bank for grant of cash credit facility of Rs. 20 lacs and term loan facility under UGECL of Rs. 4 lacs .

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The applicant bank sanctioned aforesaid credit facilities vide sanction letters dated 05.10.2021 and 20.06.2020, Annexures-A2 and A9 (copy) as per terms and conditions duly accepted by the defendants.

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In order to secure the aforementioned credit facilities, the defendants executed various loan and security documents, i.e. demand promissory notes dated 05.10.2021 and 22.06.2020, Annexures-A3 and A10 (copy), hypothecation agreement dated 05.10.2021, Annexure-A4 (copy), composite agreement dated 22.06.2020, Annexure-A11 (copy), letters dated 05.10.2021 and 22.06.2020 regarding continuity of demand promissory note, Annexures-A6 and A13 (copy), letters dated 05.10.2021 and 22.06.2020 regarding lien and set off, Annexures-A5 and A12 (copy) and undertakings dated 05.10.2021 and 22.06.2020 regarding pre-conditions related to credit facilities, Annexures-A8 and A14 (copy).

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OA/393/2023 UNION BANK Vs M/S KITCHEN WORLD AND ANOTHER 3

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It is further the case of the applicant that the loan facilities were duly availed of by the defendants but they failed to maintain the financial discipline of the applicant bank and resultantly, the loan accounts were declared as NPA because those became irregular.

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It is further the case of the applicant bank that after adjusting debit and credit entries in loan accounts a sum of Rs.25,78,971/(Rupees Twenty five lacs Seventy Eight Thousand Nine Hundred and Seventy One Only) is recoverable against defendants as per statements of accounts and certified under Bankers’ Book Evidence Act, Annexure-A15 (colly) (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, defendants were proceeded against ex-parte vide order dated 01.06.2023 . 7. In support of the contents of Original Application, affidavit of evidence of Sh. Suhsil Kumar Tiwari, Chief Manager of the applicant bank was filed. 8. This Tribunal has heard ex-parte arguments advanced by the learned counsel and gone through the record carefully. 9. 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 A15 , it comes out that the defendants had approached the applicant bank for availing of the loan

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OA/393/2023 UNION BANK Vs M/S KITCHEN WORLD AND ANOTHER 4

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facilities which were granted to them. It is further cleared that the defendants had executed all the relevant documents as stated above in favour of the applicant bank. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.25,78,971/- (Rupees Twenty five lacs Seventy Eight Thousand Nine Hundred and Seventy One Only) from the defendants, from the date of filing the present Original Application, till realization of the amount.

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In so far as pendente lite and future interest is concerned, the applicant bank in relief clause has not claimed any particular rate of interest. In hypothecation agreement dated 05.10.2021, Annexure-A4 (copy), the rate of interest has been mentioned @8.55% per annum for cash credit and in sanction letter dated 20.06.2020, Annexure A9 (copy), rate of interest has been mentioned @7.50% per annum for term loan facility.

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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, purpose of loan, i.e. business, quantum of loan, 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 realization of the amount ordered vide this order. It is ordered accordingly.

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OA/393/2023 UNION BANK Vs M/S KITCHEN WORLD AND ANOTHER 5

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In the result, the Original Application is allowed with cost declaring that the defendants are liable to pay to the applicant bank a sum Rs.25,78,971/- (Rupees Twenty five lacs Seventy Eight Thousand Nine Hundred and Seventy One Only) with current and future simple interest @10% per annum w.e.f. 22.02.2023 , till the date of realisation of the amount. The liability of the 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 defendants in execution proceedings, if not sold earlier under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 or otherwise. If the dues of the bank still remain unsatisfied, the applicant bank shall be at liberty to recover the same by attachment and sale of personal assets 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 03.08.2023.

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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 DRT-2, Chandigarh

Union Bank of India v. M/S Kitchen World

Case brief

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Union Bank of India v. M/S Kitchen World

Case brief

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