Allowed

Punjab National Bank v. M/s North East Tea Traders

DRT20 Sept 2023OA/43/2022

Case brief

AI extract

What is this about?

In an ex-parte application under Section 19 of the RDBFI Act, the Debts Recovery Tribunal allowed the Punjab National Bank's claim for recovery of dues. The court validated the loan documents, confirmed the account's NPA status, and issued a recovery certificate against the proprietors and guarantors.

What did the court decide?

Issuance of Recovery Certificate for Rs. 21,80,863.23 with interest, costs, and charge on hypothecated properties.

Punjab National Bank versus M/s North East Tea Traders — Money Laundering | DRT (2023)

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O A. 43/2022lDRT4Nrhati

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(North Eastern Region)

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(Tribunal of Assam, Nagatand, Meghalaya, Manipur, Mizoram, Arunachal pradesh & Tripura) Before Shri Shiv Sharan Dubey.^presidinq Officer

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O.A. No. 43/2022

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ln the matter of -

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Punjab National Bank (EBtwhite United Bank of tndia) Guwahati Metro Branch, "Dihing Arcade', A.B.C.Point, G.S.Road, Opp. Dona Planet, Guwahati, Pin-781005.

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..Appllcant

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Vs.

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North East Tea Traders Prop. N4r. Anil Kumar Singh, H/No. 08, "Ekta Path", Bhaskar Nagar, Guwahati-1 8.

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Mr. Anil Kumar Singh S/o Mr. Kedarnath Singh, H/No.-230,^"Swapna Bhawan", A.K.Azad Road, Kalapahar, Guwahati-16.

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Mrs. Madhulika Singh W/o Anil Kumar Singh, H/No.-230,^"Swapna Bhawan", A.K.Azad Road, Kalapahar, Guwahati-16.

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Defendants

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Presence of the Counsel:

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For the Applicant : Mr Anil Bharali, Mr. Kailash Barman, Advocates For the Defendants : None (Ex-parte)

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Daled :2010912023

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JUDGMENT

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This is an application under section 19 of the Recovery of Debts Due to Banks and Financial lnstitutions Act,^'1993 filed by the Punjab National Bank (Erstwhile United Bank of lndia), Guwahati Metro Branch, "Dihing Arcade", A.B.C.Point, G.S.Road, Opp. Dona Planet, Guwahati, Pin-781005, with a prayer to issue Recovery Certificate

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ft^^l, \k")rl*l% w t Presiding Otrcel DRT, Guwahati

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O A 43/202ZORT-Gu{ah.tr

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for the sum of^{Rs. 21,80,863.23(Rupees Twsnty'OneLaGs Elghty Thousand}

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Eight Hundred Sixty-Threo^{and Paise Twenty-Three) only as on 31.01.2022 against} the defendants with^{pendentelite and future interestat contractual rate with monthly} rests till realization along^{with cost and other relief.}

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A few facts^giving rise to^{the present applicationare as undet.}

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The Defendant No.^{1 is the proprietorshipfirm and defendant No. 2 is the} proprietor of the firm and 3 is the^{personal guarantor} of^{lhe loan avail to the} defendant No-'1.

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The defendant No-1^{represented by defendant No. 2 approached the} applicant bank and the competent^{authorityof the applicant bank hasapproved,} Sanction of Limit 7.OO^{Lakhs (Rupees SevenLakh) onlyvide sanction letter dated} 11.05.2010. The defendants^{also accepted all the terms& conditionsof the} sanction letler dtd 1'1.05.2010.^{As per the sanctionletter, the applicablerate of} interest was 12.25o/o^{per annumwith monthlyrest The same loanwas sanctioned} against the Primary^{Security: Hypothecationof Plant & Machinery& Hypo of Stock} in trade & in transil.^{and Addl. Securities:- i Pledgement of T.D.for Rs. 2.70 Lacs,} Pledgement of R.O. @Rs. 5.00%^P.M.

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ln terms ofthe sanction letter^{dated 1'1.05.2010the following documents are} executed by the defendant^{no-1 representedby defendant no- 2 to avail the loanof} Rs. 7.00 Lakh only.

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1 . Demand^{promissory note did1 'l 05.2010 for Rs 7.00 Lakh only}

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Letter of Lien dtd^11.05.2010.

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Letter of continuity^{dtd 'l 1 .05.2010.}

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Hypothecation of^{Goods dtd 11.05.2010}

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Hypothecation of^{Debts & Moveable Assetsdtd t 1.05.2010.}

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Hypothecation of^{Moveable plaint and Machinerydtd11.05.2010'}

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Consent clause.

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Declaration of^{Sole Proprietorship}

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The defendant No-^{1 representedby defendant No. 2 approached the applicant} bank for enhancement^{of cash credit limitfrom Rs. 7.00 Lacs to Rs14 00 Lacsvide} loan application dtd^{28.05.20'11 and 02.06 2011 and the competentaulhority of the} applicant bank^{hassanctionedsaid Limit of Rs. 14.00 Lacs and defendants} executed following^{documentsto availtheloan of Rs. 14.00 Lakh only'}

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-sLn A"t*, 2)^,1

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O a 43/2022DR1-Guwahat

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Loan application did 28.05.201^1.

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Loan application dtd 02.06.2011.

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Demand^{promissory note dtd 09.09.2011 for Rs. 14.00Lakhonly.}

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Letter of Lien dtd^09.09.2011.

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Letter of continuity dtd 09.09.2011.

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Hypothecation of Goods^{dtd 09.09.2011.}

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Hypothecation of Debts^{& Moveable Assets dtd 09.09.2011.}

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Hypothecation of^{Moveable plaint and Machinery dtd 09.09.2011}

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Consent Clause.

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The defendant No-l represented^{by defendant No. 2 again approached the} applicant bank for enhancement^{of cash credit limit fromRs. 14 00 Lacs to Rs.} 24.00 Lacs and the competent^{authorityof the applicant bank has approved and} Sanction of Limit Rs 14.00^{Lakhs to Rs 24.00 Lakhs only vide sanctionletter dtd} 10.12.20'13. As^per the sanction^{letter,the applicable rate of interest was 11.25o/o} per annum with monthly rest. The same loan^{was sanctionedagainsttheSecurity} Primary Security: Hypothecation^{of Plantand Machinery, stocks of Tea, packing} materials, books debts & other^{related item and CollateralSecurities-1) Lien of RIP} no-1659100007986 for Rs. 41,9971^{in the name of Mr. Anil Kumar Singhto be} matured on 28.O5.2014,2)^{Lien of RIP no- 1659100003186for Rs. 35'000/-in the} name of Mr. Anil Kumar^{Singh to be matured on 08.09.2014,3)Lien of RIP no-} 1659100003216 for^{Rs. 1,00,000/-in the nameof Mr' Anil KumarSingh to be} matured on'10.09.2014,4)^{Lien of RIP no-1659'100005135for Rs.81,126in the} name of Mr. Anil^{Kumar Singh to be matured on 17.05.2015,5)Lien of RIP no-} 1659100000523 for Rs.^{20,6811in the nameof Mr. Anil Kumar Singh to be} malured on 1'1.02.2014,6).^{Lien of RIPno- 1659100000'1984for Rs. 2,07,004/-in} lhe name of Mr. Anil^{Kumar Singh to be matured on 08.09.2014,7) Lien of RIP no-} 1659100003186 for Rs.^{62,101/-in the nameof Mr. Anil Kumar Singh to be} matured on 18.02.20'14,8)^{Lien of RD no-1659100007979for Rs. 35,000/- in the} name of Mr. Anil^{Kumar Singhto be maturedon 25.O5.2O14,9) Assignmentof LIC} policy No-48471505 did 15.06.2010 Sum^{AssuredRs.7,00,000i-' 10) Assignment} of LIC^policy No-485237899^{did 29.07.2009 (SumAssured Rs.3,00,000/- and 'll)} Personal Guarantee^{of Sri Madhulika Singh W/oMr. Anil Kumar Singh.}

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ln terms of the sanction^{letter dtd. 10 12.2013 the followingdocuments are} executed by the^{defendant no-1 representedby defendant no-2 to availthe loan of} Rs. 24.00 Lakh only. il"ilevs#*PX

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il"ilevs#*PX Presirling Oftcel^t l----l^{/ ORT. GuYraheti

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oA 432022/DFl€uw.hali

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'1. Demand promissory note dtd'10 12.2013 for Rs.^{24.00 Lakh only'}

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Letter of Lien dtd^10.12.20'13.

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Letter of continuity^{dtd10.12.2013.}

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Hypothecation^{Agreementdtd 10.122013.}

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Consent Clause.

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Letter of Guarantee^{executed by defendantNo- 3 in favour of the applicant} bank on 10.12 2013

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consent Clause^{executed by defendant 3 in favour of the applicant Bank'}

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The Defendant No-^{'l representedby DefendantNo-2 appliedfor Temporary} overdraft of Rs.2,2O,OOOlvide^{application dtd 02.11.2016 and competent authority} of ihe applicant^{has allowed another amountof Rs.2,20,0001and Defendant No-1} represented by Defendant^{No-2 executed Demand PromissoryNote of Rs'} 26,20,000/- on 02.1 1.2016.

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ln continuation of the^{said loan defendant No-1 representedby DefendantNo-2} executed the balance^{confirmationletter dtd 28.12.2016 confirming thedebit} balance of Rs.^{23,92,467.99 as on 27.12.2016 along with followingloandocuments} infavour of applicant^bank.

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Balance confirmation^{letter dtd 28 12.2016-}

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Demand^{promissory note dtd 28.12.2016for Rs.2400 Lakh.}

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Letter of Lien dtd^28.12.2016.

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Letter of continuily did^28.12.2016.

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Hypothecation Agreement^{did 28.12.2016-}

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Consent Clause.

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Letter of Guarantee executed^{by defendantNo- 3 in favour of theapplicant} bank on 10.12.2013.

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Consent Clause^{executedby defendant 3 in favour of the applicant Bank'}

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The Defendant No-^{1 representedby Defendant No-2 appliedfor Adhoc limitof} RS.4,6O,OOO/- vide^{applicationdid 20.12.2019 and competent authorityof the} applicant has allowed^{another amount of Rs. 4,60'000/-and DefendantNo-1} represented by^{DefendantNo-2 executed Demand PromissoryNote of Rs} 4,60,000/- on 20.12.2019.

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The conduct of the^{defendantsin Cash Creditaccoun(CCOTH)A/C No-} 1659250000028, COV|Dlg-^{EmergencyCredit Facilitv account(ODCOV)A/c No-} 1659210000277 and^{Guaranteed EmergencyCredit Line 1.0 account (TLGCL- A'/c} No-1659300003322 had^{been highlyirregularand particularlythe repayment} of the loan is in violation^{of terms stipulatedin the letter of sanctionAs a result,}

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-sths{#4q w Presding Olfcei l DRT. Guwaheli

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O A 43/202zDR14ryah.li

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defendant's default^{to repay the loan in the aforesaidaccount keptand maintained} in the usual ordinary course^{of the applicant bank's businessand thereaccrued} thereon Rs. 21,80,863.23^{(Rupees Twenty-One Lacs, Eighty ThousandEighi} Hundred Sixty-Three and^{Two Three paisa) only as on. 31.O1.2022}

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The defendant availed the^{Cash Credit account(CCOTH) A,/C No-} 1659250000028, COV|Olg- Emergency^{Credit Facility account(ODCOV) A'icNo-} 1659210000277 and Guaranteed^{EmergencyCredit Line1.0 account} OLGCL-^tuc No- 1659300003322 due to the^{ordinary course of business of the applicantbank.} Due to irregulaity in both the account,^{the aforesaidaccountshad to be classified} as non-performing assets^(NPA) on 30.06.2021^{and interest at the contractual rate} has been calculated and added separalely in^{total outstandingfromrealization} from the defendant in the accounts.

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The defendants had availed the said loan facilities from the applicant bank^but have not^paid the outstanding loan amount as^{per terms} and^conditionsas agreed upon with the applicant bank, in spite of repeated demands^{and requestby the} applicant bank. As the defendants failed to repay the loan amount or renew the Cash Credit account, the said account became NPA on 30.06.2021. Afrer the account became NPA the applicant bank issued notices^for repayment of^lhe due amount, but the defendants failed lo repay the Cash Credit Loan amount or renew the Cash Credil Loan Account.

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The applicant bank thus became constrained to lile the^present Oliginal Application for the remvery of Rs, 21,80,863.23^(Rupee3 Twenty-Ono Lac. Eighty Thousand Eight Hundred Sixty-Three and Paiso Twenty-Thros) only as on 31.01.2022 along with interest and cost of the application.

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Afrer filing of the OA the Tribunal issued notices upon the defendanls through registered post and the applicant bank filed service report on^'12-05-2023 and brought on record the postal receipts along with track consignment report which shows that nolice has been served upon the defendant No.1, hence service is completed upon the defendant No.I. So far as the defendants No. 2 & 3 are concerned tha notices have not been served upon them. Thereafter the Tribunal ordered^{paper publication} of

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d;,,s-t-R',Iq 2tt^pt l,?\ I Presding ofrcer I 'l'U DRT. Guahati

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O A. 43,2022lDRT-Gwthalr

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notice upon the defendants^{No. 2 & 3 and theapplicantbank issued notice to tha} defendants No. 2^{& 3 on 24.05.2022through Paper Publicationin fournewspapeB} namely^"7he Timas of^{lndia" and "Dainik Asom". Evenafter proper serviceof notice} upon the defendant^{No. 't and evenafierissuanceof notice through paper publication} also against defendants No. 2^{& 3 there was no representationon behatf of the} defendants No. 1,2 & 3 either^{by the counsel or the personand hencethe defendants} No. 1,2 & 3 were set ex-parte^{on 19-08-2022and their right to file written statement} cum evidence on affidavit was^{closed and the matter wasposted for hearing on behalf} of the applicant bank.

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Supporting the claim of the applicant^{bank Mr. Guru Prasad Talukdar, Chief} Manager of the Applicant Bank^{has filed evidence on afidavitcoupledwiththe securiry} documents marked as Exhibit^{AW-1 to AW-46, supporting theclaimof theapplicant} bank.

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Heard the leamed counsel^{for the applicant bank who prayedfor issuance of} Recovery Certificate against the^{defendants as per pleadingsmade in the} Application, supported^{by evidence on affidavit of theirwitness who affirmed on oath} the execution of the security^{and other documents by the defendants and also} execution of their 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} thal the documents filed by^{the applicant bank are supportingthe claim ofthe 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 documentshave been executed on} 11.05.2010, 09.09.20',1 1,^{10.'12.2013,02.1',1.2016, 28.12.2016& 20.12.2019. The} accounl became NPA on 30.06.2021^{and the OA has been filed on'11.02.2022.} Hence, the OA is filed well within the^{period of limitationand this Tribunal havinga} jurisdiction to adjudicate the Original Application.

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Considering the unchallenged/unrebutted^{versionof Mr.GuruPrasad Talukdar,} the applicant's witness and all the^{documents markedas exhibits, including duly} certified copy of the three statement of accounts^{along wilhinterest calculation sheet} It,ffifq w Pr$dinq Offcoa Iⁱ DRT, Guwshsti^'

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o.A. 43/2022loRT€m.hrri

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maintained by lhe applicant Bank in it,s regular course of business, I hold that the applicant is entitled to get the Recovery Certiticate as prayed for.

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ln the resutt, the present Original Application No.43 of 2022 is allowed with

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cost as under: -

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i) The defendants No.^.1, 2 & 3 are joinfly and severally liable fo pay to the applicant bank a sum of Rs. 2,1,80,863.23 (Rupees Twenty-One Laca Eighty Thousand Eight Hund.od Sixty-Three and paisa Twenty-Three) onty with pendentelite and future interest @j2.250lo p.a. with monthly rests from O1.O2.2O22 till lhe date of full paymenurealization 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 34 of the OA till the amount is realized in full.

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iiD The applicant bank is entifled to proceed against the secured items towards recovery of the debts.

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iv) The applicant bank is also entifled to proceed against the personal assets and properties of the defendants towards recovery of the dues.

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v) The applicant bank is enti ed to the costs of the O.A. which includes the advocate fees of the appticant bank. Applicant is directed to file the cost memo within 2 weeks from today.

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vi) lssue Recovery Cedificate accordingly for a sum Rs. 21,80,863.23 (Rupeeg

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Twenty-One Laca Eighty Thousand Eight Hundred Sixty-Three and pai3. Twenty-Thrse) only in favour of the applicant bank against the defendants No. 1,2&3.

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vii) Communicate mpy of this order to the concemed parlies. This order is dictated and corrected by the undersigned.

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Judgment dated 20rh September'2023, signed and pronounced in the Tribunal

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today under my signature.

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Copy of the JudgmenyFinat Order be uploaded in the Tribunal's Website and file be consigned to Record Room.

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:,t^d^t (Shiv Sharan n Dub ay) l^r Presiding Officer DRT, Guwahati.^weu

Punjab National Bank v. M/s North East Tea Traders

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. M/s North East Tea Traders

Case brief

What is this about?

What did the court decide?

What the court decided

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