Allowed

Bank of India, v. Kunwar Enterprises

DRT1 Sept 2023OA/403/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's original application for recovery of Rs. 60,91,884.90 outstanding dues against borrowers and guarantors who failed to repay a cash credit loan, directing recovery via sale of mortgaged properties or attachment of personal assets. Interest was fixed at 9.45% p.a.

What did the court decide?

Liability to pay Rs. 60,91,884.90 with costs and simple interest at 9.45% p.a.; Recovery via sale of mortgaged/attached assets.

Bank of India, versus Kunwar Enterprises — Banking and Recovery | DRT (2023)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.403/2022 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 11.02.2022

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DATE OF DECISION: 01.09.2023

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Bank of India, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 (5 of 1970) having its Head Office at “Star House” C-5, Block G, Bandra Kurla Complex, Bandra (East), Mumbai-400051 and branch office amongst other places AS Ludhiana Branch, Guru Teg Bahadur Market, near Clock Tower, 1^st Floor, Ludhiana, Punjab-141008, through Sh. Kailash Krishna Bhatt, its Constituted Attorney and Principal Officer.

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……..Applicant

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Versus

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Kunwar Enterprises, a Sole Proprietorship at B-23-4939, Ram Nagar, Gulati Market, Ludhiana, Punjab through its Sole Proprietor, Shri Kulwinder Singh Gulati S/o Shri Harbans Singh Gulati viz Defendant No. 2. (Borrower)

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Shri Kulwinder Singh Gulati S/o Shri Harbans Singh Gulati, R/o # 16, Gulati Market, near CMC, Ludhiana, Punjab.

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(Borrower-Proprietor-son and Legal Heir &

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Representative of late Guarantor- Shri Harbans Singh Gulati S/o Shri Isher Singh)

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Shri Pritam Singh S/o Shri Madan Singh, R/o Village Doaba Bhaini, PO Koomkalan, Tehsil Kohara, District Ludhiana, Punjab.

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(Guarantor/Mortgagor)

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Smt. Gurdeep Kaur Gulati W/o Shri Kulwinder Singh Gulati, R/o

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# 16, Gulati Market, near CMC, Ludhiana, Punjab.

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(Guarantor)

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IInd Address:

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Smt. Gurdeep Kaur Gulati W/o Shri. Kulwinder Singh Gulati, R/o B-23-4939, Ram Nagar, Gulati Market, Ludhiana, Punjab.

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….……Defendants

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Advocates:

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Argued by Sh. Mohan Prasad, counsel for the applicant Defendants are ex-parte

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FINAL ORDER

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Present Original Application was instituted by the applicant bank under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.60,91,884.90p (Rupees Sixty Lacs Ninety One Thousand Eight Hundred Eighty Four and Paisa Ninety only). The Original Application has been filed through Sh. Kailash Krishna Bhatt, Chief Manager of the applicant bank, who is competent to institute the Original Application vide Power of Attorney dated 24.10.2018, which is Annexure A1 to this OA. 2. The brief facts of the OA are that defendant No.1 through its proprietor defendant No.2 had approached the applicant bank for the grant of Cash Credit Limit of Rs. 07.00 Lacs which was further enhanced from time to time till the overall limit of Rs. 75.00 Lacs, vide Loan application dated 21.08.2002, which is Annexure A2 to this OA. 3. The applicant Bank sanctioned the Cash Credit Limit of Rs. 07.00 Lacs which was further enhanced from time to time till the overall limit of Rs. 75.00 Lacs vide Sanction Letter dated 21.09.2010, , which is Annexure A21 to this OA and the terms and conditions were duly accepted by the defendant. 4. Defendants had mortgaged their movable and Immovable properties i.e. (i) The Defendant No. 2 and 4 had Pledged their LIC Policies against the CC Limit, the details are as follows:

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(a) LIC Policy No. 161313262, 161313263, 300047838, 300046080, 161312796, 161151081, 161151079 and 161151080 in the name of defendant No.2 pledged on dated 15.09.2010 and 20.09.2010 for the surrender value of Rs.2.58 Lacs, which is Annexure A30 to this OA; (b) LIC Policy No. 161312797 and 300046172 in the name of defendant No.4 pledged on dated 15.09.2010 for the surrender value of Rs.0.87 Lacs, which is Annexure A30 to this OA;

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(ii) Equitable Mortgage of Land and Building measuring 233.33 Sq. Yards, comprised in Khata No. 528/560, Khasra No. 1285, situated at Taraf Saidan, Hadbast No.172, Near Gulati Market, Opposite Mohar Singh Nagar, Ludhiana, Punjab vide Registered Sale deed No. 22127 and 28001 dated 20.12.1993 and 09.02.1994 along with their Translations, which are Annexures A31 and A32 to this OA;

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Documents executed:- D.P. Note, Hypothecation of Tangible movable property form, Letter of lien and set off, Letter of Declaration, Undertaking and Authority, Letter of Continuing Security dated 27.08.2002, which are Annexures A3 to A7 to this OA; D.P. Note, Hypothecation of Tangible movable property form, Composite Letter, Letter of Declaration, Undertaking and Authority, Declaration re: hypothecation of stocks/book debts dated 15.03.2005, which are Annexures A8 to A12 to this OA; Consent letter re: disclosure of information and data relating to borrower to CIBIL or any other agency dated 03.02.2005, which is Annexure A13 to this OA; D.P. Note, Supplementary Agreement, Composite Letter, Letter of Declaration, Undertaking and Authority dated 20.09.2006, which are Annexures A14 to A17 to this OA; Deeds of Guarantee dated 27.08.2002, 15.03.2005 and 20.09.2006, which are Annexures A18 to A20 to this OA; D.P. Note, Supplemental Agreement, Composite Letter, Letter of Declaration, Undertaking and Authority, Letters of undertaking, Declaration and Undertaking and Deed of Guarantee all dated 22.09.2010, which are Annexures A22 to A29 to this OA; Oral Assent and Relevant portion of Attendance Register dated 15.03.2005,

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20.09.2006 and 22.09.2010, which are Annexures A33 to A37 to this OA; Security interest relating to the securities vide CERSAI registration/ charge creation, which is Annexure A38 to this OA; Letters of Acknowledgment of debts and securities dated 17.03.2005, 04.02.2008, 06.07.2010, 22.09.2010, 04.07.2013, 03.12.2015 and 21.11.2018; which are Annexures A39 to 45 to this OA; Demand/recall notices dated 27.09.2021 and 13.10.2021, which is Annexures A46 to this OA; Letters re: assigned LIC policies and pledged TDR-collectively dated 27.09.2021, which are Annexure A47 to this OA and Statement of accounts duly certified under Banker’s Book Evidence Act, 1891, which is Annexure A48 to this OA.

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The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.60,91,884.90p which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant bank requested to accept the application and to issue Recovery Certificate accordingly.

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The defendants were served notices to appear before this Tribunal but no one appeared on behalf of defendants and were proceeded ex-parte on 28.08.2023.

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In support of the OA, affidavit of Sh. Kailash Krishna Bhatt, Chief Manager, Bank of India has been filed.

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Heard ex-parte arguments and perused record.

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It was argued by learned counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant bank had proved its case. From the perusal of all the Annexures A1 to A48 to this OA, it is proved that the defendants approached applicant bank for availing of the loan facility which was granted to them and for that they had executed all the relevant documents in favour of the bank. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, account of the defendants was classified as

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NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.60,91,884.90p (Rupees Sixty Lacs Ninety One Thousand Eight Hundred Eighty Four and Paisa Ninety only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the account.

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In so far as pendent elite and future rate of interest is concerned, the applicant bank has claimed interest @9.45%p.a. for CC limit account with monthly rests from the date till the realization.

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The Tribunal is of the considered opinion that sometimes in appropriate cases the prerogative of mercy is the brightest jewel in the crown of the Judge. Keeping in view the facts and circumstances of the instant case including nature of the mortgaged property, undertaking of the defendants, quantum of loans and prevalent market rates of interest which have gone drastically downhill in yester years, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @9.45%p.a. in the loan account from the date of filing of the OA till realization of the amounts ordered vide this final order. It is ordered accordingly.

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In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.60,91,884.90p (Rupees Sixty Lacs Ninety One Thousand Eight Hundred Eighty Four and Paisa Ninety only) jointly and severally, with costs, current and future simple interest @9.45%p.a. in the loan account from the date of filing of OA till the date of realization of the amounts. Accordingly, the applicant bank shall be entitled to recover aforesaid amount from the sale of hypothecated/mortgaged properties of the defendants in execution proceedings if not sold earlier under the provisions of the SARFAESI Act, 2002. If the dues of the bank still remain unsatisfied, it shall be entitled to recover the same by attachment and sale of personal assets of the defendants. The applicant is at liberty to enforce the claim through due process of law.

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Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 11.09.2023. 15. Copy of this order be given dasti to the applicant bank and be sent to defendants through registered/speed post and this order be also uploaded on the official website of this Tribunal and record be consigned. Dated: 01.09.2023

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(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

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Order dictated, signed and pronounced by me in the open Tribunal.

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Dated: 01.09.2023

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(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Bank of India, v. Kunwar Enterprises

Case brief

What is this about?

What did the court decide?

Bank of India, v. Kunwar Enterprises

Case brief

What is this about?

What did the court decide?

What the court decided

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