Allowed

State Bank of India v. Md. Anwar Khan

DRT20 Feb 2023OA/424/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an application by State Bank of India against a defendant for recovery of outstanding dues of Rs.38,82,175/- and interest, as the defendant admitted the loan documents and failed to contest the account entries.

What did the court decide?

Recovery certificate issued to recover Rs.38,82,175/- with interest, pendente lite, and future interest at 11.30% p.a. from defendant.

State Bank of India versus Md. Anwar Khan — Banking and Recovery | DRT (2023)

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DRT,PATNA

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OA 424 of 2022 IJI

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Debts Recovery Tribunal, Patna

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Karpuri Thakur Sadan, Aashiana Digha Road at PATNA-800025

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Presiding Officer : Shri Kaushalendra Yadav

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OA Case no. : 424 of 2022

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State Bank of India, Stressed Assets Recovery Branch, at 2 nd Floor of its Patna Main Branch Building, West Gandhi Maidan, Patna-l .

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....... Applicant

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Vs.

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Md. Anwar Khan S/o Md. Shaamshul Hoda Khan, At Mohammad Gali, Bari Road, Gaya, District-Gaya-823001. PAN no.BMPPK5503G

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... Defendant

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Present:

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For the Applicant Shri P.K. Sinha, Advocate For the Defendant Shri Hemant Kumar,

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Shri Hemant Kumar, Advocate

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Dated: 20.2.2023

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JUDGMENT

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1- The Applicant bank has made this application U/S 19 of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 14.7.2022 against the defendant to recover its debts from defendant ofRs.38,82,175/- upto 10.7.2022 alongwith pendente-lite and future interest at the contractual rate from 11.7.2022 with costs till realization.

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2- The application has been duly registered and numbered as above.

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3- The brief facts of the case of the applicant bank as stated in the application are as under-

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The applicant bank is a body corporate constituted under the State Bank of India Act 1955 carrying on the business of Banking having its corporate center at Madame Cama Road, Nariman Point, Mumbai 400021 and one of its Local Head Office at West of Gandhi Maidan, Patna 800 001 and one of its Branches at Gandhi Maidan Branch Gaya from where the account was migrated after being classified as NPA to State Bank of India, Stressed Assets Recovery Branch, Patna.

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The defendant is a transport operator approached of the bank seeking SRTO loan for purchase of Two Bus under CGTMSE term loan scheme on 18.3.2016 and 7.1.2017 and another loan ofFITL loan. Upon consideration of the loan proposal for purchase of two bus at a total cost of rS.31,31,5001- and Rs.33,64,2101- term loan of Rs. 23 lakh and Rs.18.80 lakh was sanctioned by the bank on 30.3.2016 and 8.2.2017. The remaining amount of was to be contributed by defendant, the remaining amount of Rs.8,31,5001- and RS.14,84,2101- was to be contributed by defendant towards cost of vehicle as margin. As per the RBI guideline during the situation of Covid-19 pandemic one FITL loans

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OA 424 of 2022 (J]

of Rs.1 ,30,974/- were sanctioned as working capital on 30.10.2020. The defendant executed the various loan documents i.e. agreement of loan cum hypothecation, PDR, particulars 0 vehicle and revival letter.

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The defendant submitted to the bank a quotation from Mis MSY Motors, at Maranpur, Khatkachak Bypass Road, Gaya an authorized dealer of Ashok Leyland Heavy Commercial vehicles and accepted by him for purchase of one Bus Model ALPSV 4/186 VIKING Chasis at Rs.18,81,5001- and one another bus model and from Mis MSY Motors, At Maranpur, Khatkachak, Bypass Road, Gaya an authorized dealer of Ashok Leyland Heavy Commercial Vehicles and accepted by him for purchase of one bus Model ALPSV 4/170 6200MM Chasis at Rs.19,64,210 fro two bus and M.K. Body Builders Near Pandra Petrol Pump, Ratu Road, Ranchi, of rs. 14 lakh. Mis MSY Motors at Maranpur Khatkachak, Bypass Road, Gaya sold the bus to the defendant and issued money receipt and delivered the vehicle to the defendant. The full particular of vehicles under hypothecation to the bank as security for the said loan is details given at page 10of ~A.

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A first charge by way of hypothecation of the entire goods, movable and immovable and other assets present and future including document of title to the goods and other assets such as book debts receivables by way of cash assistance and cash incentives under the cash incentive scheme or any other scheme, claims including claims by way of refund of customs duties under the duty draw back credit scheme or any other schemes, bills invoices, documents, contract, insurance policies, guarantees engagements, securities, investments, and rights uncalled capital and all machinery present and future of such form satisfactory applicant bank.

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The credit facility extended by the applicant bank to the defendants are carrying a credit Guarantee Fund Trust Scheme for Micro and Small Enterprise Guarantee cover, the necessary fees has already been paid by the applicant to CGTMSE Mumbai.

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The defendant thereafter enjoyed the benefit of said loan facility but after some time did not adhere to the terms and conditions of the said facility and despite repeated request did not clear dues within specified time as per the agreements of the facility and later on due to non- deposit of the installments by defendant his account become irregular despite regular follow up by telephone and recall notice. As a result the account of defendant had classified as NPA on 27.11.2021 as per guidelines of RBI.

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The total outstanding dues amount comes to Rs.38,82,175/- upto 10.7.2022 and the defendant is liable to pay further interest on the said amount w.e.f. 11.7.2022.

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OA 424 of 2022 [J]

The interest /compound interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

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Since, the defendant has failed and neglected in spite of several reminders to make payment of the dues recoverable to bank, hence this application has been filed by the bank.

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4V/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993, copies of application & paper book were sent by this Tribunal to the defendant by registered/speed post and summon/notice issued requiring the defendant to show-cause within 30 days of the service of summon/notice as to why relief prayed for, should not be granted.

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Despite the registered summons/notices, the defendant has appeared before this Tribunal to contest the case. The sufficient time has been given to the defendant to file written statement, but he failed to file WS.

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Ld. Counsel for the defendant argues the case without filing of written statement and has not denied the sanction of loan amount, its utilization and further to secure the loan, execution of relevant documents.

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Arguments of ld. Counsels of the applicant bank and ld. Counsel of defendant were heard and record perused and considered.

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5- To prove its case, the applicant Bank has referred various photocopies of documents before this Tribunal. The applicant bank has also given evidence on affidavit by way of affidavit of Shri Shashi Ranjan Choudhary, Chief Manager of the applicant bank. The details of documents are as follows. :-

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SJ.No	Description of photocopies Documents	Date of Execution	Amount	Signature of executant	Ex.! I Ann. , No.
1	Loan application	18.3.2016 7.1.2017	Rs.231akh	defendant	1
2	arrangement letter	30.3.2016	Rs.231akh	bank	2 I ,
3	agreement of loan cum hypothecation	30.3.2016	Rs.231akh	defendant	3
4	PDR	30.3.2016	Rs.231akh	defendant	4
5	Arrangement letter	8.2.2017	Rs.l8.80 lakh	bank	5 I
6	agreement of loan cum hypothecation	8.2.2017	Rs.l8.80 lakh	defendant	6 I
7	PDR	8.2.2017	Rs.18.80 lakh	defendant	7
8	quotation	1.3.2016 26.12.2016	...	...	8 I
9	particulars of vehicles andRe Book	..... /	...	...	9 I I

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OA 424 0(2022 [J)

10	revival letter	30.6.2018 31.8.2020 25.11.2020	...	defendant	10 I
11	Legal notice	17.6.2022	...	bank	11
12	statement of account	as on 10.7.2022	Rs.38,82,175/-	bank	12 I

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6- It is submitted by ld. Counsel of applicant bank that the defendant have admitted the loan facilities, granted to them and there is no any specific denial of execution of loan documents by the defendant. It is further submitted that there is no any stay granted by the Hon'ble Higher Court in the matter.

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It is further submitted that the applicant bank has filed the Original Application, for recovery of due amount, after deducting all the amounts, deposited by the defendant and by calculating the interest charged, as agreed by the defendant. It is further submitted that the defendant has not deposited any amount, after filing of the OA.

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It is requested that the recovery certificate may be issued for the claim amount, as made in OA, as there is no any specific denial by the defendant.

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7- It has been established that defendant is living and carrying on his business in the state of Bihar. Cause of action arose in the State of Bihar. The said claim on the date of filing of application exceeded Rs.20 lacs. The applicant bank is functioning within jurisdiction of this tribunal. Therefore, this Tribunal has territorial as well as pecuniary jurisdiction to adjudicate upon the present application.

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8- On the issue of Limitation, to prove it, the applicant bank has submitted that the account was declared as NPA on 27.11.2021, whereas the present application has been filed on 14.7.2022. Even, it is counted for the purpose of Limitation, then it is established that the applicant bank has filed the case within the limitation period.

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9- In the affidavit of Sri Shashi Ranjan Choudhary, Chief Manager of Applicant bank, has stated that he is well acquainted with the facts of the case and has on verification of record, sworn in the affidavit in support of contents of application and the documents as evidence and established on oath the pleadings and documents of the applicant bank as stated above.

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10On perusal of the above documents, it is clear that the applicant bank has granted loan facility to the defendant and to secure the loan, various loan documents were executed by the defendant and loan facility was availed by the defendant as stated in the application.

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11The documents as stated above reveal that the defendant has applied for loan and bank had sanctioned loans, thereafter, to secure the loan and for repayment of loan amount with interests etc., the defendant

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OA 424 of 2022 (J)

has executed various loan documents, which strength the case of the applicant bank.

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12The applicant bank has also furnished statement of account as shown above, which is not only admissible but shall be taken as correct statement of account, more so since the entries in the statement of account has not been challenged.

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13Defendant has neither denied the utilization of funds advanced by applicant bank nor has pointed out any specific error and discrepancy in the Statement of Account, which is kept in due course of business, evidence on affidavit, which has supported the claim of the applicant bank, established to have fully correct and believable. Provisions contained in Rule 9(2) of Debt Recovery Tribunal (Procedure) Rules, 1993 provide that the documents referred in the application shall be duly stated by senior officer of the bank, or financial institution as the case may be and numbered accordingly. The rule 12 (10) provides that the provisions contained in section 4 of the Banker's Books evidence that Act, 1891 (18 of 1891) shall applied to certified copy of an entry in a Banker's Books furnished alongwith application filed under sub section 1 of section 19 by the applicant.

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14On consideration of the arguments and on perusal of the application, documents, affidavit, it is proved that the applicant bank has granted the loan facilities to the defendants and to secure the loan, various loan documents were executed by the defendant and facilities were availed by the defendant as stated in the application.

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15- The Section 58 of the Indian Evidence Act, 1872reads as under-

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"58. Facts admitted need not be proved.- No fact need to be proved in any proceeding which the parties thereto or their agents agree to admit at the hearing, or which, before the hearing, they agree to admit by any writing under their hands, or which by any rule of pleading in force at the time they are deemed to have admitted by their pleadings: Provided that the Court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions.

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16In Indian Bank Vs. Blue Jaggers Estates Limited and others [2010] 8 SCC 129,the Hon'ble Supreme Court of India has observed as under-

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"The Court cannot lose sight of the fact that the bank is a trustee of public fund. It cannot compromise the public interest for benefiting private individuals. Those who take loan and avail financial facilities from the bank are duty bound to repay the amount strictly in accordance with the terms of the contract. Any lapse in such matters has to be viewed seriously and the bank is not only entitled but duty bound to recover the amount by adopting all legally permissible methods. Parliament enacted the act because it was found that legal mechanism available till then was wholly insufficient for recovery of the outstanding dues of the banks and Financial Institutions."

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17Facts of the case, in my view, are well proved by evidence of the applicantbank as well as admiss\2~ 7ant. The applicantbank is

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OA 424 of 2022 [J]

entitled to receive from defendant of Rs.38,82,175/- together with pendentelite and future interest @11.30% p.a. compounded monthly rests from 14.7.2022 (The date of filing of this O.A.) till realization. So the final order may be passed accordingly, to meet the ends ofjustice.

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ORDER

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In the result, the application of the applicant bank, is allowed and debt is determined with costs against the defendant and it is, hereby, ordered that the applicant bank is entitled to receive from sole defendant, it's debts with interest, amounting to Rs.38,82,175/- together with pendentelite and future interest @11.30% p.a. compounded monthly rests from 14.7.2022 (The date of filing of this O.A.) till realization of the entire sum due and recoverable with costs.

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It is further made clear that any amount deposited by the defendant, be deducted in the claim amount, if not deducted.

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Defendant is debarred from transferring, alienating encumbering or otherwise dealing with or disposing of the mortgaged or hypothecated or any other properties and assets without paying the aforesaid adjudicated dues to the applicant bank to secure the ends ofjustice.

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Let a certificate of recovery be drawn up forthwith and put up for signatures in terms of provisions contained in Section 19(22)of the Act to be issued, on the basis of the order of the Tribunal to the Recovery Officer. The Recovery Officer shall realise the amount as per the certificate in the manner and mode prescribed under the Act from the defendant, by sale of mortgaged! hypothecated assets as well as other personal movable/immovable assets of the defendant.

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Parties are directed to appear before the Recovery Officer, DRT, Patna on 30.3.2023. The order be communicated accordingly.

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Judgment signed, sealed, dated and pronounced in the open court on this zo" Day of February, 2023. oJ

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~ FCI ':7 (J-- vJ~ '"'') V~ Dictated & Corrected by me _/' .»r-" 'f 0_ V~v[Kaushalendra Yadav] Presiding Officer Debts Recovery Tribunal, Patna

State Bank of India v. Md. Anwar Khan

Case brief

What is this about?

What did the court decide?

State Bank of India v. Md. Anwar Khan

Case brief

What is this about?

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