Allowed

State Bank of India v. Ambica Metal and Alloy Pvt. Ltd.

DRT27 Jul 2023OA/420/2022

Case brief

AI extract

What is this about?

This judgment allowed an Original Application filed by State Bank of India against principal borrower M/s Ambica Metal & Alloys and several directors, guarantors, and mortgagors. The Tribunal found the witness evidence and documentary proof sufficient to establish the default and ordered the respondents to pay the outstanding dues.

What did the court decide?

Directed respondents to pay Rs.3,80,43,046.97 plus interest at 13.8% per annum within 60 days. Directed Recovery Officer to issue Recovery Certificate. Directed respondents not to deal with properties

State Bank of India versus Ambica Metal and Alloy Pvt. Ltd. — Banking and Recovery | DRT (2023)

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OA No. 420 of 2022

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Registered on : 24.08.2022

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Decided on : 27.07.2023

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IN THE DEBT RECOVERY TRIBUNAL-I MUMBAI ORIGINAL APPLICATION NO. 420 of 2022

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STATE BANK OF INDIA ) having Central Office at Mamam Cama ) Road, Mumbai- 400 021 ) And one of its Branch Office at Stressed ) Assets Recovery Branch, 6^th Floor, The ) International, 16, Maharishi Karve Road ) Churchgate, Mumbai- 400 020 through ) Its Deputy Manager, Mr. Joseph Sebastian) Valiaveeti ) … APPLICANT

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VERSUS

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M/S. AMBICA METAL & ALLOYS ) PVT. LTD ) Having its Registered Office at 5, ) Ruparam Compound, Shastri Nagar) Road, Kalina, Chuna Bhatti, ) Santacruz (East), Mumbai 400 029 ) And also at Shop No. 168, ) Fanaswadi, Ground Floor, S. Podar ) Marg, Fanaswadi Lane, Off. ) Thakurdwar Road, Giragon, ) Mumbai- 400 002. )

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2. MR. SANJAY KUMAR VORILAL ) SETHIYA )

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Page 1 of 8

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OA No. 420 of 2022

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Residing at Flat No. B/105, 1^st Floor) Sangeet Complex CHS Ltd., ) Building No. 12, Sector M & A1, ) Jesal Park, Bhayander (East), ) Thane- 401 105 )

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3. SANJEEV KUMAR GHEESULAL) SETHIYA ) Residing at Flat No. 116, 1^st Floor, ) Divine Heritage, B Wing, Sector ) F/1, Jesal Park, Bhayander (East) ) Thane- 401 105 )

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MRS. PREMLATA SETHIYA ) At, Flat No. B/ 105, 1^st Floor, ) Sangeet Complex CHS Ltd., ) Building No. 12, Sector M & A1, ) Jesal Park, Bhayander (East), ) Thane- 401 105 )

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5. MS. BABITA SANJEEV KUMAR ) SETHIYA ) At, Falt No. 116, 1^st Floor, Divine ) Heritage, B Wing, Sector F/1, Jesal ) Parak, Bhayander (East), ) Thane- 401 105 )

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6. MR. GHEESULAL CHIMANLAL ) SETHIYA ) Shop No. 168, Fanaswadi, Ground ) Floor, S. Podar Marg, Fanaswadi ) Lane, Off. Thakurdwar Road, ) Giragon, Mumbai 400 002 )

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7. M/S. AMBIKA ALU PROFILES ) COMPANY ) At, Shop No. 13, Gaurav Chintan, ) Building No. 11, Ground Floor, )

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Page 2 of 8

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OA No. 420 of 2022

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Gaurav Sankalp Complex, Phase 1, ) B- Wing, Hatkesh Mira Road (E), ) Thane 400 107 ) ... DEFENDANTS

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Counsel for the Applicant : Adv. Fatima Lakdawala Counsel for the Defendants : Ex -parte.

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J U D G M E N T

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The Original Application has been filed by the Applicant against the Defendants for recovery of Rs.3,80,43,046.97 (Rupees Three Crores Eighty Lakhs Forty Three Thousand Forty Six & Paise Ninety Seven Only) alongwith further interest at the rate of 13.8% per annum with monthly rests from the date of filing of the present OA till payment.

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The facts succinctly set out in the O.A. that the Defendant No.1 is the principal borrower and engaged in business of trading of Aluminum scrap and end product. The Defendant No.1 was formerly known as M/s Aapco Extrusion Pvt. Ltd. And got its name changed in records of Registrar of Companies on 29.09.2010. The Defendant No.2 & 3 are Directors and Promoters of the Defendant No.1. The Defendant No.7 is partnership firm of Defendant No.2 & 3. The Defendant No.2 to 7 are guarantors and also the mortgagors for the facilities extended to the Defendant No.1.

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Page 3 of 8

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OA No. 420 of 2022

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It is stated that the Defendant No.1 vide Loan Application dated 15/06/2011 applied for certain credit facilities for their business purposes. The Applicant vide its sanction letter dated 17.08.2011 granted the credit facilities i.e. Demand Cash Credit Rs. 125 Lakhs; Letter of Credit Rs. 175 Lakhs; aggregating to Rs. 300 Lakhs. The Defendants duly accepted all the terms and conditions contained in the said sanction letter.

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In consideration of the Applicants granting the aforesaid facilities, the Defendant No. 1 executed Agreement for Loan-CumHypothecation dated 17/08/2011 whereby the Defendant No. 1 agreed to particulars terms and also hypothecated their entire stock. Further in consideration of the Applicants granting the aforesaid facilities to the aggregate sum of Rs. 300 Lakhs to Defendant No. 1 to 7 executed and delivered to the Applicants Forms of Guarantee for Advances and Credits Generally all dated 17.08.2011.

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In consideration of the Applicants granting the aforesaid facilities, the Defendant No. 2 to 7 created equitable mortgage in respect of their immovable more respective properties, particularly

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described in Exhibits-A. The Defendant No.2 to 7 subsequently on 24.08.2011 confirmed the creation of the mortgage. It is further stated that Defendant No. 2 to 7 represented that they are absolute owner of the said immovable properties and they have clear and marketable tile in respect of the said properties. The deposit of the

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Page 4 of 8

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OA No. 420 of 2022

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title deeds and creation of mortgage is duly recorded by the Applicant in separate Memorandum for deposit of title deeds.

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It is also stated that before filing of the present OA, out of the total four mortgaged properties, the Applicant has sold two properties under the SARFAESI Act, 2002.

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It is further stated that at the request of the Defendant No.1, the Applicant renewed the aforesaid facilities vide its sanction letter dated 08.01.2013. The Defendant No. 1 to 7 executed and delivered to the Applicants Forms of Guarantee for Advances and Credits Generally all dated 08.01.2013.

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It is further stated that Defendant No. 1 again approached the Applicant for enhancement of limits and renewal of existing facilities. The Applicant accepted the said request of Defendant No. 1 and enhanced the credit facilities i.e. Cash credit Rs.175 Lakhs; Letter of Credit Rs. 175 Lakhs, aggregating to Rs. 350 Lakhs vide its sanction letter dated 10.04.2015.

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In consideration of the Applicants granting the aforesaid facilities, the Defendant No. 1 executed and delivered Supplemental Agreement of Cum Hypothecation dated 17.08.2011 in favour of the Applicant. Further in consideration of the Applicants sanctioned the aforesaid facilities, the Defendant No. 2 to 6 executed and delivered to the Applicant Forms of Guarantee for Advances and Credits Generally all dated 10.04.2015. Further, the Defendant No. 2 to 6 extended the equitable mortgage by deposit

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Page 5 of 8

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OA No. 420 of 2022

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of tile deeds constructively with intention to secured enhanced limits.

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However, after availing the said loan, the Defendants failed to adhere to the terms and conditions of the loan agreement and neglected to make the payment to the Applicant Bank. Therefore, the account was declared as NPA on 26.10.2015. Thereafter, the Applicant issued legal notice dated 02.07.2016 and called upon the Defendants to make the payment of the outstanding dues. The Defendant No.2 vide letter dated 18.07.2017 sent reply to the said legal notice and the same was replied by the Bank vide their rejoinder reply dated 14.12.2016. It is stated that the Defendants failed to pay the dues of the Applicant hence, the present OA has been filed.

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Notices were issued to the Defendants. Despite service, none appeared for the Defendants nor any WS has been filed thus, they were proceeded ex-parte vide order dated 07.06.2023.

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The Applicant Bank has produced all the Original Loan documents and other relevant documents alongwith its Claim Affidavit filed through Manager Mr. Vinod R. Sawadkar.

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I have heard the Ld. Counsel for the Applicant and perused the record.

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The witness of the Applicant has fully corroborated the averments made in the OA, even otherwise the whole case of the Applicant is

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Page 6 of 8

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OA No. 420 of 2022

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based on documents and the witness has duly proved all these documents as against the Defendants. In my view there is no question of disbelieving the evidence led by the Applicant and the Applicant Bank has proved its case beyond reasonable doubt. The liability of Defendant No.1 to 7 is joint and several.

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In the light of above discussions, the Original Application by the applicant bank deserves to be allowed against the Defendants.

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O R D E R

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a. I allow this OA and direct the Defendant No. 1 to 7 to pay to the Applicant, within a period of 60 days, a sum of Rs.3,80,43,046.97 (Rupees Three Crores Eighty Lakhs Forty Three Thousand Forty Six & Paise Ninety Seven Only) alongwith further interest at the rate of 13.8% per annum with monthly rests from the date of filing of the present OA till payment.

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b. Failing which the aforesaid amount shall be recovered from the sale of mortgaged properties, hypothecated stocks as well as other personal movable and immoveable assets of the Defendants.

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c. Defendants are hereby directed not to deal with their properties till further direction of Ld. Recovery Officer.

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d. Defendants shall also pay the cost and expenses of the OA.

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Page 7 of 8

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OA No. 420 of 2022

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e. Recovery Certificate be issued forthwith and be sent to the Recovery Officer of this Tribunal.

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Copy of this order be sent to the parties as per rules

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File be consigned to record.

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Sd/Place: Mumbai. (Dr. Rekha G. Dhakar) Date : 27.07.2023 Presiding Officer, DRT-1, Mumbai

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State Bank of India v. Ambica Metal and Alloy Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

State Bank of India v. Ambica Metal and Alloy Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

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