Allowed

Idbi Bank v. Messers Smart Point

DRT16 Oct 2023OA/409/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal, Guwahati allowed the applicant bank's application for issuance of a Recovery Certificate for Rs. 33,91,606.38 plus interest against the borrowers and guarantor based on unchallenged documentary evidence, holding them jointly and severally liable.

What did the court decide?

Issued Recovery Certificate for Rs. 33,91,606.38 plus pendentelite and future interest at 13.30% p.a. along with costs to the applicant.

Idbi Bank versus Messers Smart Point — Banking and Recovery | DRT (2023)

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O a 40912022/DRT-Gwahaii

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IN THE DEBTS RECOVERY^{TRIBUNAL,GUWAHATI}

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(North Eastern Region)

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(Tribunal ofAssam, Nagaland, Meghalaya Manipur, [Iizoram^{Arunachal Pradesh& Tripura)}

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Before Shri Shiv Sharan^{Dubev.PresidinoOfficer}

O.A. No. 40912022

ln the matter of -

lDBl Bank Limited

Chandmari Branch House No. 216, M.D.Road, Chandmari, P.O.-Bamunimaidan.Guwahati-781 021,^Assam.

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Ap plicant

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Vs.

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M/s Smart Point,

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Proprielor: Smt Bhashwati^Das, W/o Shri Gautam Pathak

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Opposite- Durga Mandir,^{Bhuban Bhuyan Path,}

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Gopalnagar, Noonmati, Guwahati-781^{020, Assam.}

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Smt Bha3hwati Das,

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Proprietor of M/s Smart Point, W/o Shri Gautam Pathak

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House No.13, 2 No. Bijoy^{Nagar, Near Red Cross}

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Ware House, Noonmati, Guwahati-781^020,Assam.

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Defendants

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Presence o, the Counsel :

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Mr. Vishal Kumar Dewan, Advocate For the Applicant : For the Defendants : None (Ex-parte)

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Dated :1611012023

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JUDGMENT

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This is an application under section¹⁹ of the^{Remvery of DebtsDue to Banks} and Financial lnstitutions^Act, 1993^{filed by the lDBl Bank Limited,Chandmari} Branch, House No. 216,^{M.D.Road, Chandmari,P.O.-Bamunimaidan,Guwahati-} 781021, Assam, with a^prayer to issue^{Recovery Certificatefor the sum of Rs.} 33,91,606.38^(Rupees Thirty^{Three Lakhs NinstyOneThousand Six Hundred Six} and Paisa Thirty Eight) only as on^{13.07.2022 againstthedefendantswith} pendentelite and future interest al the rate of 13.30%^per annum at monthly rest till realization, along with cost and other relief.

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A few facts^giving rise tolhe^{present applicationareas under.} .,;hi ,. j iO 6, [,.t,1 lL.lt )r.^,1 P.esiding Offcbi DRT, Guwahali

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¶28

o.A. ao9/2o22rDRr€u*?h.ii

¶29

On 31.10.2017. the Defendant^{No: 2 in the name of herproprietolship concern} had requested and^{applied to the ApplicantBankfor financial assistance to the iune} of Rs. 15,0O,OOO|^{by way of TermLoanof Rs. 50,000/- and Cash CreditLimitof} Rs. 14,50,0001^{for thepurposeof setting up of retailsloreunit and working capital} facility and^{giving all necessary detailsto the APplicantBank The Defendant No: 2} had offered the^{security of hypothecationol machinery'officeequipmentand} assets created^{out of Bank Financefor the TermLoanand hypothecationof stock} and book^{debts and all assets createdout of Bank Finance for the CashCredit} Limit and^{the personal guaranteeof DefendantNo 2'}

¶30

TheApplicantBankonog.ll.2olTconsideredtheproposalgivenbythe Defendant^{No: 2 and sanctionedRs 15'oO'oOO/-to the Oefendant No: 2 in the} name of^{her proprietorship concernby way ol Term Loan of Rs 50'000/-for setting} up a^{retailstore unit and CashCredit Limit of Rs14'50'OOOfor workingcapital} requirements,^{on the variouslerms and conditions'}

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As Per^{the term and conditions:-}

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A. Term^{Loan ' Rs' 50'0001}

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re\ The said^{Term Loan shall be paidin 24 equal monthly installmentsfirst of which} ::ltHT[:l^{gl;?3].'*,"to be charged at the rate of ,t,l'55 % per annum on} [i"ff"**ti{p,mi{iJ{:::HI#hd:#t'jir#::"j:::;: No.2. loan^{is covered under NCGTC'} [i^r'n. ""ia

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B. Cash^{crodit- Rs' 14'50'000'l'}

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lilH?sfli""l;'f^{[?: j"J:3",',""85:iff S:1?lj:j'i' jiii[l]':'J3T:lllH""} i},;'f,i?*',":tr1:ii:#{i'i'jrir!i:i:tilr'"::"::i::::: befendant^{No 2.} ii'iiill^{iliiffi is covered under NcGrc'}

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ln order^{to avail the aforesaid Credit facilitiesfor Rs 15'00'OOO^ by way of} (Term Loan^{of Rs 50'OOO/-and Cash Credit Limit of Rs '14'50'000/-)' the} Defendant^{No: 2 in the name of her proprietorshipgqnggm had executedthe} fouowinedocumentsonoe.l'l'2017:-^{tLt' clirliii': i}

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Presiding^Oitcer ORT,^Guwahati

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O A 4og/2o2zDRT'Guwahatr

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(1) Demand Promissory Note dated 09.1'1.20'17 for Rs. 15,00,000L.

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(2) Demand Promissory Note Delivery Letter dated 09. 11.2017 for Rs. 15,00,000/-.

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(3) Continuing Security Letter dated 09.'l 1.2017 for Rs^15,00,000/-.

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(4) Letter of Undertaking.

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(5) Hypothecation-cum-Loan Agreement dated 09.1 1.2017

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The Defendant No: 2 on 09.11.2017 had^{personally guaranteedthe} repayment of any outstanding in both the loan accounts^{i.e. TermLoanand Cash} Credit Account of the Borrower Defendant^{No: 1} for^{Rs 15,00,000/-along with} interest, expenses or charges etc. incurred or to^{be incurred.}

¶45

In^pursuance of the execution of^{the loandocumenls and security documents} by the Defendant No: 2 in the^{nameot her proprietorship concern in favoul of the} Applicant Bank and other conditions accepted^{by theOefendants, the disbursement} of loan amounts were made to the Borrower/Defendant^No: 1^{by the Applicant} Bank. The Term Loan Account vide^{Account No: 1207671'lo901o478 and the Cash} Credit Account vide Account No: 1207651^{100000347were opened in the name of} M/s Smart Point the Defendant No: 1 vide and^{the accountwas being operatedby} its Proprietor^(Smt. Bhashwati Das) the^{Defendant No: 2. The Borrower Defendant} No: 1 represented by its^{proprietor had availedthe Term Loanon 10.11.2017and} the Cash Credit facilities from^time to^{time and suchtransactions were duly} recorded in the books of account^{maintainedby the Applicant Bankin the usual and} ordinary course of their banking business.

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Renowal and Enhancement of^{Cash CreditLimit uptoRs 19,50,000/--}

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Subsequenily on 03.05.2019, the^{DefendanlNo.2in} the^{name of her} proprietorship concern had applied and requested the Applicant Bank^{for renewal} and enhancement of the Cash Credit^{Limit upto Rs. 25 Lakhs in orderto increase} the volume of business and^{stock holding capacity.The Applicant Bank on} 24.05.2019 again considered the^{proposalof the Defendant No: 2 and sanctioned} the renewal and enhancement^{of the CashCredit Limit upto Rs.19.50,000/- to the} Defendant No: 2 in the name of her^{proprietorshipconcern for the purposeof her} business, on the various terms and conditions:-The^{said limit shall be repayable on}

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ll,e ilaa,'k,L t lL lr .') ,' Presiding Offcer DRT, Guwahali

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O A 409/2022lDRT-Guwahati

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demand and shall be valid for 12 months. The rate of interest was to be charged^at the rate of 12olo per annum on monthly rests. The Cash Credit limit shall be secured by way of hypothecation of stock and book-debts and all assets created out of bank tinance. The said cash credit limit shall also be secured by the^personal guarantee of Defendant No. 2 The said loan is covered under NCGTC.

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ln^pursuance of the execution of the loan documents and security documents by the Defendant No: 2 in the name of her^{proprietorship} concern in favour of the Applicant Bank and other conditions accepted by the Defendants, the disbursement of loan amounts were made to the Borrower/Defendant No: I by the Applicant Bank and the account was being operated by its Proprietor (Smt. Bhashwati Das) the Defendant No: 2. The Borrower/Defendant No: 1 represented by its^proprietor had continued to avail the Cash Credit facilities from Cash Credit Account vide Account No: 1 207651 1 00000347 from time to time and such transactions were duly recorded in lhe books of account maintained by the Applicant Bank in the usual and ordinary course of their banking business. The following are the loan documents for the renewal and enhancement of Cash Credit Limit upto Rs. 19,50,0001

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(1) Letter dated 03.05.2019 for the renewal and enhancement of the Cash Credit Limit upto Rs. 25 lakhs applied by the Defendant No. 2 being the^proprietor of the Defendant No. 1.

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(2) Sanction Letter dated 24.05.2019 issued by the Applicant Bank of Rs 19,50,000^ acknowledged by the Defendant^No: 2 being the^{proprietor of} Defendant No. 1.

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(3) Revival Letter dated 28.05.2019 for the Term Loan account and the Cash Credit account executed by the Defendant^{No. 2 being theproprietor of theDefendant} No. 1 in favour of the Applicant^Bank.

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(4) Demand Promissory Note dated 28.05.2019 for Rs. 19,50,000/-^{executedby the} Defendant No. 2 in the name of^{herproprietorshipfirm in favourof the Applicant} Bank.

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(5) Demand Promissory Note oelivery Letter dated 28.05.2019 for Rs.^19,50,000/- executed by the Defendant^No. 2 in^{the name} of^{her proprietorshipfirm in} favour of the Applicant Bank

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(6) Supplemental Guarantee Deed dated 28.05.2019^{for Rs 19,50,000/- executed} by the Defendant No: 2 in favour^{of the Applicant Bank for securing thecash} credit facilities of the Defendant^{No: 1.}

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.".1,) ;llrtre,^{? utt1} i;^{,, ..} ;2, ,i Presiding Officar DRT, Guwahali

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O A 409/2022lDRT-Guwahaii

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GECL Loan bv wav to Term Loan of Rs. 3.93.950/-

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Further at the request of the Oefendant No: 2. lhe Applicant Bank on 30.05.2020 granted a GECL Loan of Rs 3,93,960 by way of Working Capital Term Loan (WCTL) to the Defendant No. 1 as a relief measure to augment net working capital, meet operating liabilities and to restart operations after COVID Lockdown is over. This WCTL under GECL was granted on the following terms and conditions which were accepted and acknowledged by the Defendant No: 2 being the proprietor of the Defendant No: L As per the terms of sanction, the said loan shall carry rale of interest @ 8.1OVo per month. There shall be moratorium period of 12 months. lt shall have to be repaid in 36 monthly installments after moratorium. The lnterest shall have to be serviced as and when applied. The aforesaid loan shall be secured by the extension of charge over the existing primary and collateral securities. A GECL as Term Loan was opened in the name of M/s Smart Point the Defendant No: 1 vide Account No: 1207673200000055 and the account was being operated by its Proprietor (Smt. Bhashwati Das) the Defendant No: 2.

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Renewal of Cash Credit Limit upto Rs '19.50.000/-

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Again on 16.06.2020 the Applicant Bank at the request of the Defendant No: 2 furiher renewed the Cash Credit Limit upto Rs. 19,50,000/- for the purpose of her business, on the terms and conditions, which were accepted and acknowledged by the Defendant No: 2 being the proprietor of the Defendant No: 1. As per terms and conditions of sanction the said Cash Credit Limit shall be repayable on demand and shall be valid fo|l2 months. The rate of interest was to be charged at the rate of 12o/o pet annum on monthly rest. The Cash Credit limit shall be secured by way of hypothecalion of stock and book debts and all assets created out of bank finance. The said Cash Credit Limit shall also be secured by shall cured by way of hypothecation of stock and book-debts and all assets the personal guarantee of Defendant No. 2. The said loan is covered under NCOTC

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ln pursuance of lhe execution of the loan documents and security documents by the Defendant No: 2 in the name of her proprietorship concern in favour of the Applicant Bank and other conditions accepted by the Defendants, the disbursement

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^i. i _ , .'l' .^',) i^.'t' '^.t,. . Presiding Officer DRT, Guwahati

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o a 409/2022IORT Guwahali

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of loan amounls were made^{to the Borrower/Defendant No: 1 by the Applicant Bank} from Cash Credit Account vide Account^{No: 1207651100000347and the account} was being operated by its Proprietor^{(Smt. Bhashwati Das) the Defendant No.2.} The Borrower Defendant No: 1 represented^{by its proprietor had continuedto avail} the Cash Credit facilities^{from time} to^{time and suchtransactions were duly} recorded in the books of account maintained^{by the Applicant Bankin the usualand} ordinary course of their banking busrness.

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The following are the loan documents^{for the renewal} of^{CashCredit Limit} upto Rs. 19,50,000/-

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(1) Letter of lntent dated 16.06.2020 for Renewal of Cash Credit Facility^uptoRs 1 9,5o,Ooo-issued by the Applicant Bank^{in favour of the Defendant no. 1 duly} acknowledged by the Defendant^{No: 2 being the proprietorof Defendant No.1}

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(2) Revival Letter dated 16.06.2020 for the^{Cash Credit account executed by the} Oefendant No. 2 being the^{proprietorof the DefendantNo. 1 in favour of the} Applicant Bank.

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(3) Demand Promissory Note dated^{16.06.2020for Rs 19,50'000/-executed by the} Oefendant No. 2 in^{thename of her proprietorshipfirm in favour of the Applicant} Bank.

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(4) Demand Promissory Note Delivery^{Letter dated 16 06.2020 for Rs 19,50,0001} executed by the Oefendant^{No. 2 in the name of her proprietorshipfirmin favour} of the Applicant^Bank.

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(5) ' Continuing Defendani No. Security 2 in the Letter name dated of her proprietorship^{16.06.2020for Rs} firm^{19,50,0001 executed} in favour of the Applicant^{by the} Bank.

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(6) Supplemental Facilities Agreement^{dated04 08 2020for Rs 23,43,000- (Cash} '^.Credit ot Rs 19,50,OOO and^{GECLof Rs 3,93,960)executedby the Defendant}

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No. 2 being the^{proprietorof Defendant No. 1in favour of the Applicant Bank.}

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(7) Supplemental Deed of Hypothecation-cum-^{Loan Agreement dated 04.08 2020} ' 'for is 23,43,000/- (Cash Credit of Rs 19,50,000 and GECL of Rs 3,93'960-) executed by the^{DefendantNo. 2 beingthe proprietorof Defendant No. 1 in} favour of the Applicant Bank.

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(8) Supplemental Guarantee Deed^{dated04.08.2020for Rs 23,43,000!(Cash} ' 'crebit ot Rs 19,50,000 and GECL of Rs 3,93,960) executed by the Defendant No: 2 in favour of the^{Applicant Bank for securingthe cash creditfacilities of the} Defendant No:^'1.

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The defendants had availed^{the creditfacilities from the applicantbankbut have} not^paid the outstanding^{amountas per terms and condition madewith theapplicant} bank in spite of repeated^{demands and request by the applicant bank. As the} loan account of defendanis^{was running extremely irregular and due to non-paymentof}

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I '1 1;'' ': .,, Presiding Ofticer ORT, Guwahati

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o.A. 409/2022lDRT-Gwahaii

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principal amount and interest, lhe said account was classitied^{as a NPA} on^{30.07 .2021} on 15.06.2021 the Defendant^{tto.2 in ihe? name of her proprietorshipconcern} executed lhe revival letters^{in the confirmed and acknowledgedthe balancein the} Cash Credit Account No:^{'1 2076511 00000347 and GECL AccountNo:} 1207673200000055. The Term^{Loan Account No- 1207671100010478 which was for} Rs 5o,OOO/- was closed on 01.o2.2020.^{The Term Loan AccountNo:-} 1207671100010478 which was sanctioned^{on 09.'11.2017for Rs 50,0001 was closed} on 01.02.2020. After the^{account became NPAtheapplicantbank issued notices for} repayment of the due amount, but the^{defendants have neither chosenfor repaymentof} the loan account nor renewed the^{loan account availedby them.}

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The applicant bank thus became constrained^{to file the present OriginalApplication} for the recovery of Rs. 33,91,606.38^(Rupees Thirty^{Three Lakhs NinetyOne} Thousand Six Hundred Six and Paisa^{Thirty Eight) onlyas on 13.07.2022along} with interest and cost of the applic€tion.

¶84

After filing of the OA the Tribunal^{issued notices upon lhe defendants through} registered post and the applicant bank^filed service^{rcpod.on 12.12.2022and brought} on record the^postal receipts along^{with track consignment reportwhich shows that} nolices have not been served upon^{the defendants. ThereaftertheTribunalordered} paper publication of notice upon the defendants and the applicant bank issued notice to the defendants on 24.O3.2023^{through Paper Publicationin four newspapers namely} 'Dainik Assam" and^"Sentinel". Even after issuance^{of notice through paper publication} also there was no representation^{on behalf of the defendants eitherby the counsel or} the person and hence the defendants^{were set ex-parteon 05-06-2023 and their} right to file written statement cum evidence on affidavit^was closed and lhe^{matter was} posted for hearing on behalf of the applicant bank.

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Supporling the claim of ihe applicant bank Rupa^{Mukherjee, Branch Head of the} Applicant Bank has ,iled evidence on affidavit coupled with the security documents marked as Exhibit A-l to A-28, supporting the claim of the applicant bank.

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Heard the learned counsel for the applicant bank who^prayed for issuance of

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r .Yl -t ^^- l ,--I /'t '"r l Presidrns ofiiJf^'I' ' DRT. Guwahali

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O A,109/2022lDRT-Gwehan

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Recovery Certificate against the defendants as per pleadings made in the Application, supported by evidence on affldavit of their witness who affirmed on oath the execution of the security and other documenls by the defendants and also execution of lheir 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 claim of the applicant bank and establishing the liability of 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 obtained and documents have been executed on 09.11.20'17, 03.05.2019, 24.05.2019, 04.OB.2O2O & 15.06.2021. Revival Letters are dated 28.05.20'19, 16.06.2020 & 15.06.2021. The account became NpA on 30.07.2021 and the OA has been filed on 30.09.2022. Hence, the OA is ,iled well within the period of rimitation and this Tribunar having a jurisdiction to adjudicate the Original Application.

¶91

Considering the unchallenged/unrebutted version of Rupa Mukherjee, the applicant's witness and all the documents marked as exhibits, including duly certified copy of the three statement of accounts arong wilh interest carcuration sheet maintained by the appricant Bank in it's regurar course of business, r hord that rhe applicant is entitled to get the Recovery Certificate as prayed for.

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ln the result, the present Originat Apptication No. 4Og of 2022 is alowed with cosl as under :-

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i) The defendants No. 1 & 2 are join y and severally liable to pay to the appticant bank a sum of Rs. 33,91,606.38 (Rupees Thirty Three Lakhs Ninety One Thousand Six Hundred Six and paisa Thirty Eight) only with pendentelite and future interest @13.30% p.a. with monthly rests from 14.Ot.2022 ti| the date of full paymenvrealization and also 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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iii) The appricant bank is entifled to proceed against the secured items towards recovery of the debts.

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lktC,a,a^A,L, p*"ai,nu[El!]] I DRT, cuwahali

¶97

¶98

oA. 409/2022lDRT€usen.t

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iv) The applicant bank^{is also entitledto proceed againstthe personal assets and} properties of the defendants towards recovery of the dues.

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v) The applicant bank is entitled^{to the tostsof 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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vi) lssue Recovery Certificate accordingly^{for a sum Rs.33,91,606'3E (Rupsos} Thirty Three Lakhs Ninety Ono Thousand^{Six HundrsdSix and Paba} Thirty Eight) only in favour of^{the applicant bankagainst the defendants No.} 1&2.

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vii) Communicate copy of this^{orderto the concemed parties.}

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This order is dictated and corrected^{by the undersigned.}

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Judgment dated^161h october'^{2023, signed and pronouncedin 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 Websiteand}

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file be consigned to Record Room.

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"l .,,.([L.o A"h(shivsharan #"Pl{i

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Presiding Officer DRT, Guwahati.

Idbi Bank v. Messers Smart Point

Case brief

What is this about?

What did the court decide?

Idbi Bank v. Messers Smart Point

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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