Allowed

Union Bank of India v. Sh. Manoj Kumar

DRT5 Jun 2023OA/436/2023

Case brief

AI extract

What is this about?

Debt Recovery Tribunal allowed Union Bank of India's application for recovery of Rs. 30,20,177 owed by the respondents. The court opted for a uniform simple interest rate of 8% per annum instead of the claimed rates, citing the pandemic and agricultural nature of the loan. Recovery Certificate was issued.

What did the court decide?

Recovery of Rs. 30,20,177 with simple interest @8% p.a. from 05.11.2020; Issue of Recovery Certificate; Liberty to recover via sale of mortgaged/hypothecated or personal assets.

Union Bank of India versus Sh. Manoj Kumar — Banking and Recovery | DRT (2023)

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DEBTS RECOVERY TRIBUNAL-2, CHANDIGARH, PRESIDED OVER BY M.M. DHONCHAK

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ORIGINAL APPLICATION NO. 436 of 2023

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DATE OF INSTITUTION: 05.11.2020

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DATE OF DECISION: 5^th DAY OF JUNE, 2023

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Union Bank Of India , a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act 1970, having its Central Office at 239, Vidhan Bhavan Marg, Nariman Point, Mumbai 400021 and its substitution being Transferee Bank to the then Applicant Bank, i.e. erstwhile Corporation Bank by Virtue of order of the central Government Published in the Gazette Notification No. 133 GSR 154(E) dated 04.03.2020, Transferor Bank 2”, i.e. Corporation Bank have been Amalgamated with Union Bank of India under section 9 of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 (5 of 1970) and section 9 of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1980 and having one of its Branches at Opposite Sector 7, Hissar Road, Urban Estate, Ambala City, Haryana-134003, through its Chief Manager-cum-General Power of Attorney, Sh. Harish Chander Pandey

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.......Applicant Bank

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Versus

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Sh. Manoj Kumar S/o Sh. Madan Lal R/o Village Gokalgarh, Tehsil Barara, District Ambala, Haryana

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Sh. Madan lal S/o Sh. Raghunandan R/o Village Gokalgarh, Tehsil Barara, District Ambala, Haryana

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Sh. Surender Kumar S/o Sh. Raghunandan R/o Village Gokalgarh, Tehsil Barara, District Ambala, Haryana

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OA/436/2023 UNION BANK OF INDIA Vs MANOJ KUMAR AND OTHERS 2

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Sh. Lalit Kumar S/o Sh. Surender Sharma R/o Village Gokalgarh, Tehsil Barara, District Ambala, Haryana

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......Defendants

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Argued by: Sh. Anil Sharma counsel for the applicant bank Defendants ex parte vide order dated 03.06.2023

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FINAL ORDER

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Present Original Application was instituted by the applicant bank under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ‘the Act’ for brevity) , against defendants for recovery of Rs.30,20,177/(Rupees Thirty lacs Twenty Thousand One Hundred and Seventy Seven Only) . The OA has been filed through Sh. Harish Chander Pandey, Chief Manager of the applicant bank, stated to be competent to institute the Original Application vide Power of Attorney dated 09.05.2013, Annexure-A1 (copy). 2. The brief facts of the case of the applicant as per Original Application are that defendant Nos. 1 and 2 had approached the applicant bank for grant of CCCK facility of Rs. 20 lacs and term loan facility of Rs. 3 lacs vide loan applications dated 16.05.2016 and 26.05.2016, Annexure-A2 (colly) (copy). Defendant Nos. 3 and 4 stood as guarantors for repayment of the loan. 3. The applicant bank sanctioned aforementioned credit facilities vide sanction letters dated 16.05.2016 and 26.05.2016, Annexures-A3 (colly) (copy) as per terms and conditions duly accepted by the defendants.

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In order to secure the aforementioned credit facilities, the defendants executed various loan and security documents, i.e. demand promissory note dated 16.05.2016, Annexure-A4 (copy),

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OA/436/2023 UNION BANK OF INDIA Vs MANOJ KUMAR AND OTHERS 3

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hypothecation agreements dated 16.05.2016 and 26.05.2016, Annexures-A5 and A12 (copy), agreement for hypothecation under RKBY dated 16.05.2016, Annexure-A6 (copy), letter dated 16.05.2016 and 26.05.2016 regarding declaration, Annexures-A7 and A13 (copy), letter dated 16.05.2016 regarding conditions, Annexure-A8 (copy), authority letters dated 16.05.2016 and 26.05.2016 regarding rates of interest, Annexures-A9 and A16 (copy) and agreement dated 26.05.2016 of term loan, Annexure-A11 (copy). Defendant Nos. 3 and 4 executed guarantee deeds dated 16.05.2016 and 26.05.2016, Annexures-A10 and A15 (copy). 5. The aforesaid loans were further secured by creation of mortgage by defendant No. 1 in respect of agricultural land measuring 28 Kanals 10 Marlas situated in the revenue estate of Gokalgarh,Tehsil Mullana, Haryana, fully detailed in para No. 5(v) of the Original Application.

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The documents relating to the mortgage are as under:

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i. Letter dated 26.05.2016 of authority in respect of mortgage by borrower, Annexure-A14 (copy).

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ii. Declaration dated 05.05.2016 under section 4(1) of the Haryana Agriculture Credit Operations and Miscellaneous Provisions (Banks) Act, 1973 and copy of the ‘Jamabandi’ for the years 2012-13, Annexure-A17 (colly) (copy).

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It is further the case of the applicant that the loan facilities were duly availed of by the defendants but they failed to maintain the financial discipline of the applicant bank and resultantly, the loan account became irregular and it was declared NPA on 30.08.2020. The defendants executed acknowledgement of debt/liability letters dated 21.02.2019, Annexure-A18 (colly) (copy). The applicant bank

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OA/436/2023 UNION BANK OF INDIA Vs MANOJ KUMAR AND OTHERS 4

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recalled the entire outstanding amount vide legal notices dated 09.10.2020 along with its postal receipts, Annexure-A19 (colly) (copy), but to no avail.

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It is further the case of the applicant bank that after adjusting debit and credit entries in loan accounts a sum of Rs.30,20,177/(Rupees Thirty lacs Twenty Thousand One Hundred and Seventy Seven Only) is recoverable against defendants as per statements of accounts, Annexure-A20 (colly) (copy) certified under Bankers’ Book Evidence Act.

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Since the defendants did not repay the outstanding amount, therefore, the applicant bank preferred the present Original Application for issuance of Recovery Certificate. 7. Notices of the Original Application were duly served upon the defendants, but since none appeared on behalf of the defendants despite service, thus, defendants were proceeded against ex-parte vide order dated 03.06.2023 . 8. In support of the contents of Original Application, affidavit of evidence of Sh. Harish Chandra Pandey, Chief Manager of the applicant bank was filed. 9. This Tribunal has heard ex parte arguments advanced by the learned counsel and gone through the record carefully. 10. It was argued by the learned counsel that in view of unrebutted documentary evidence brought on record, the applicant bank had proved its case against the defendants for recovery of the amount sought. From perusal of Annexures-A1 to A20 , it comes out that the defendants had approached the applicant bank for availing of the loan facilities which were granted to them. It is further cleared that the

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OA/436/2023 UNION BANK OF INDIA Vs MANOJ KUMAR AND OTHERS 5

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defendants had executed all the relevant documents as stated above in favour of the applicant bank. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.30,20,177/- (Rupees Thirty lacs Twenty Thousand One Hundred and Seventy Seven Only) from the defendants, from the date of filing the present Original Application, till realization of the amount.

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In so far as pendente lite and future interest is concerned, the applicant bank in relief clause has claimed rate of interest @10.90% in CCCK facility and @11.65% per annum in term loan facility plus @2% penal interest. In sanction letters dated 16.05.2016 and 26.05.2016, Annexures-A3 (colly) (copy), rate of interest has been mentioned @10.90% in CCCK facility and @11.65% per annum in term loan facility, respectively.

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This Tribunal is of the considered opinion that sometimes in appropriate cases the prerogatives of mercy and magnanimity are the brightest jewels in the crown of the Judge. Keeping in view the facts and circumstances of the instant case including the Pandemic Covid-19 affecting businesses, nature of the mortgaged property, purpose of loan, i.e. agricultural, present conditions of economy based on agriculture, quantum of loan, prevalent market rates of interest which have gone drastically downhill in yesteryears while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @8% per annum from the date of filing of the OA till realization of the amount ordered vide this order. It is ordered accordingly.

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OA/436/2023 UNION BANK OF INDIA Vs MANOJ KUMAR AND OTHERS 6

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In the result, the Original Application is allowed with cost declaring that the defendants are liable to pay to the applicant bank a sum Rs.30,20,177/- (Rupees Thirty lacs Twenty Thousand One Hundred and Seventy Seven Only) with current and future simple interest @8% per annum w.e.f. 05.11.2020 , till the date of realisation of the amount. The liability of the defendants shall be joint as well as several. Accordingly, the applicant bank shall be at liberty to recover aforesaid amount from the sale of mortgaged/hypothecated property of defendants in execution proceedings, if not sold earlier under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 or otherwise. If the dues of the bank still remain unsatisfied, the applicant bank shall be at liberty to recover the same by attachment and sale of personal assets of the defendants. The applicant bank is at liberty to enforce the claim through due process of law.

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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 04.08.2023.

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Copy of this order be sent to the applicant bank and the defendants through registered/speed post. This order be also uploaded on the official website of this Tribunal.

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Announced in the open Tribunal (M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh

Union Bank of India v. Sh. Manoj Kumar

Case brief

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Union Bank of India v. Sh. Manoj Kumar

Case brief

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