Allowed

Canara Bank v. Messres Dutta Brother

DRT11 Oct 2023OA/441/2022

Case brief

AI extract

What is this about?

The Tribunal allowed an application by Canara Bank for issuance of a Recovery Certificate against M/s Dutta Brother and Sri Subir Dutta for a principal sum of Rs. 1,35,16,966.05 with future interest, upholding the bank's claim based on unchallenged documentary evidence of executed loans and default.

What did the court decide?

Issuance of Recovery Certificate for Rs. 1,35,16,966.05 with future interest; directed to proceed against secured items and personal assets.

Canara Bank versus Messres Dutta Brother — Contract and Commercial Disputes | DRT (2023)

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o.A. 441/2022lDBT'Gusehati

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(North Eastern Region)

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(T bunal of Assam, Nagaland, Meghalaya, Manipur, Mizoram, Arunachal Pradesh & Tripura) Before Shri Shiv Sharan Dubev. Presidinq Officer

O.A. No. 44112022

ln the matter of -

CANARA BANK,

Lumding Branch, Kalibari Road, Lumdin9-782447, District- Hojai, Assam

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.Applicant

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'l. M/s Dutta Brother. Kalibari Road, Lumding, Lumding-785001, District-Hojai, Assam.

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Sri Subir Dutta,

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S/o- Sunil Kr. Dutta, Kalibari Road, Lumding, Lumding-785001 District-Hojal, Assam.

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Defendants

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Presence of the Counsel:

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r Mr. Akhtar Parvez, For the Applicant Mr. Sanjit Singha,

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Mr. Dipanka Gogoi, Advocates

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For the Defendants : None

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(Right to file WS cum EA closed)

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Daled :1111012023

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JU DGMEN T

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This is an application under section 19 of the Recovery of Debts Due to Banks and Financial lnstilutions Act, 1993 filed by the CANARA BANK, Lumding Branch, Kalibari Road, Lumding-782447, District- Hojai, Assam, with a prayer to issue Recovery Certiticate for the sum of Rs.l,35,16,966.05 (Rup€es One Crore Thirty Five Lakhs Sixtoen Thousand Nine Hundred Sixty Six and Five Paise) only as on 21.10.2022 againsl the defendants with^pendentelite and future interest thereon at the contractual rate till realization along with cost and other relief.

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tt.l r -sl s 1,a,, S,J^,.t |.10.1) t DRT, Guwahati

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O.A. 4412022loRT€umhati

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A few facts giving rise to the presdnt dpplication are as under.

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The Defendant No.l M/s Dutta Brother is a proprietorship concern of the defendant No.2 Sri Subir Dutta. The defendant No.1 had availed credit facilities from tlie applicant bank and has failed to pay the same back to the applicant bank in terms of covenanls.

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The say of the applicant bank is that initially: one Smt. Rupali Dutta had extended her Guarantee to secure the loan availed by the defendant No.1. However, in the year 2018, when the loan became secured under CGTMSE Scheme, the guarantee of Smt. Rupali Dutta has been released.

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The say of the applicant bank is that based upon loan application made by the defendant No.1, the competent authority of the applicant bank had sanctioned OCC (Open Cash Credit) limit of Rs.15,00,000/- to the defendants vide Sanction Memorandum dated 19-09-2015. As per the Sanction Memorandum dated 19-09-2015, the applicable rate of interest for the sanctioned Cash Credit limit was fixed at Base Rate+1.50% i.e.11.40o/o p.m. with monthty rests. The defendant No.2 being proprietor of defendant No.1 had accepted all lhe terms and conditions of sanction by putting his signatures on the foot of the sanction Memorandum dated lg_ 09-2015.

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ln order to avail the sanctioned OCC limit of Rs.1S.OO Lacs only, on 19-09-2015 itself the defendant No.2 being proprietor of defendant No.l had executed pronore for Rs.15.00 Lacs only and Cash Credit Agreement interalia agreeing to lhe tems and conditions mentioned therein. The defendant No.2 further had executed letter regarding Request for Overdraft facilities (NF 372) dated^{,19-09-20.15.} The defendant No.2 and Smt. Rupali Dutta further had executed Guaranlee Agreement dated 19-09-2015 in order to secure the loan availed by defendant No.1.

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Vide loan application dated 15-09-20i6 the defendant No.2 being proprietor of defendant No.l had applied before the applicant bank for enhancement of the existing loan. Considering the loan application, the competenl authority ofthe applicant bank ^l,,.qLo-,, (,,f,,, J pr""iorq DRT. GuwEhatio "ul'] D

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OA 441/2o22lDRl'Guwahati

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had enhanced the existing limit from Rs.15.00 Lacs only to Rs.25.00 Lacs only vide Sanction letter dal€d 22-'11-2016. As^per the sanclion letter the applicable rate of interest for the enhanced limit was fixed at MCLR+1.55% i.e. 10.85% p.a. with monthly rests. On 27-10-2016 the defendant no.2 had executed letter regarding Acknowledgement of Debt and Security interalia admitting and acknowledging his debts and liabilities towards the applicant bank.

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After enhancement of the existing loan from Rs.15.00 Lacs only to Rs.25.00 Lacs only, on 03-12-2016 the defendant No.2 being proprietor of the defendant No.1 had executed Pronote for Rs.10.00 Lacs only, Link Letter (NF 719), Letter of Renewal and Request for Overdraft Facilities.

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On 27-09-2017 the defendant Nos. 2 & Smt. Rupali Dutta had executed Acknowledgement of Debt and Security interalia admitting their debts and liabilities towards the applicant bank.

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The applicant bank further stated that based upon application made by the defendants, on 27-09-2017 the applicant bank had enhanced the existing timit to Rs.45.00 Lacs only. As per the Sanction Memorandum, the applicable rate of interest for the enhanced limit was Iixed at 10.85% p.a. with monthly rests. The defendant No.2 had accepted all the terms and conditions of sanction by putting his signature on the foot of the Sanction letter. ln order to avail the enhanced limit, on 27-Og-2017 itself the defendant No.2 had executed security documents viz., pronote for Rs.2O.OO Lacs only, Supplemental Agreement, Link Letter in respect of Enhancement of Credit Facilities and Letter of Renewal.

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Further say of the applicant bank is that based upon application made by the defendants, on 25-09-2018 the competent authority of the appticant bank had enhanced the existing limit from Rs.45.00 Lacs to 70.00 Lacs only. The rate of interest for the enhanced limit was fixed at 10.30% p.a. with monthly rests. The Sanctioned loan was covered under CGTMSE scheme. The defendant No.2 had accepted all the terms and condilions of sanction by putting his signatures on the foot of the Sanction

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!ll.r , .! [^a u, ' 1,,^{.,{ q} p,""iains om[;10^)] d DRT. Guwahali

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O A 441 /2022loRT-Guwahal'

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letter. ln order to avail the enhan@d limit, on 25-09-2018 the defendant No.2 had executed Letter of Undertaking/ Consent and Letter of Renewal. .Further, on 15-1'l-2018 the defendant No.2 being proprietor of defendant No.1 had executed Pronote and Supplemental Agreement.

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Further say of the applicant bank is that vide loan application dated 03-08-2020 the defendant No.2 being proprietor of defendant No.1 had applied for enhancement of the existing loan. Considering the application, the competent authority of the applicant bank had enhanced the existing limit to Rs.^'100.00 Lacs only vide Sanction Letter dated 04-09-2020. As per the Sanction Letter, the applicable rate of interest for the enhanced limit was fixed at 9.15% pa. with monthly rests.

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After enhancement of the existing limit from Rs.70.00 Lacs only to Rs.100.00 Lacs only, on 10-09-2020 the defendant No.2 had executed Pronote for RS.3O.OO Lacs only, Link Letter (NF 719), Supplemental Agreement (NF 718) and Letter of Renewal,

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On 01-0'l-2022 the applicant bank has renewed the loan account of the defendants which has duly been acknowledged by the defendant No.2 by putting his signatures on the foot of the Letter of Renewal dated 01-01- 2022.

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It is further stated by the applicant bank that in order to support the defendants from the effect of COVID-19 Pandemic, as per policy of the bank, the applicant bank has sanctioned a sum of Rs.7.00 Lacs only to the defendant No.1 as Term Loan on 15-05-2020 and the defendants had availed this limit by opening and operating Loan Account No. 42497530000'18 with the applicant bank

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The applicant bank further had sanctioned a sum of Rs. 13.40 Lacs only to the defendant No.'l as GECL loan on 08-06-2020 and the defendant No.1 had availed this loan by opening and operating Loan Account No. 4249755000006 with the applicant bank

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The defendant No.1 had further availed GECL loan of Rs.22.6S Lacs only from the appticant bank by opening and Operating Loan Account No 1700021(I3q_o\n^

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@.,^k.tr,i,L,1 ll.lL ?)- I Presiding Oftoer DRT. Guwahali

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O A 441/2o22loRT-Guwahan

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24-12-2021. However, the applicant bank has credited all^{the proceeds of thesethree} loan accounts directly in the Cash Credit^(OCC) loan account.

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The defendant No.1 availed the credit^{facilities from the} applicant^bankby opening and operating OCC loan account No. 4249261000009, Working Capital Demand Loan Account No.4249753000018, GECL Account No.4249755000006 and GECL Account No.170002971730 with the applicant bank. At the initial stage the loan account was running smoothly as the defendants were making regular repayments towards their loan account. Subsequently they started committing default in making repayments lowards their loan account and due to irregularity committed by the defendant in repayment of the loan amounl, the loan Account have become Non Performing Assets on 29-07-2022. After declaring the loan accounts NPA, the applicant bank has served Section l3(2) SARFAESI Notice dated 29-07-2022 upon the defendants asking them to^pay the entire debts within a^period of 60^(sixty) days from date of receipt of the notice. However, the defendants have failed to^pay any heed to the applicant bank's demand.

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The defendants had availed the credit facilities from the applicant bank but have not^paid the outstanding amount as^per terms and condilion made with the applicant bank in spite of repeated demands and request by the applicant bank. As the loan account of defendants was running extremely irregular and due to nonpayment of principal amounl and interest, the said accounts were classified as a NPA on 29-07 -2022. After lhe accounts became NPA the applicant bank issued notices for repayment of the due amount, but the defendants have neither chosen for repayment of the loan account nor renewed the loan account availed by them.

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The applicant bank thus became constrained to file the^present Odginal Application for the recovery of Rs. 1,35,{6,966.05^(Rupees One Crore Thiriy Five Lakhs Sixteen Thousand Nine Hundred Sixty Six and Five Paise) only as on 21.10.2022 alongwith interest and cost ofthe application.

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After liling of the OA the Tribunal issued notices upon the defendants through resistered posr and rhe appticant bank fited service reporr on 10.01.2021r,"t0.,T"ffii1,. t.,r" , 11.10.7\ 1 Presiding OffcCr '- J DRT, Guwahati

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O A 441/2o22lDRT-GLwahali

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on record the postal receipts. The learned counsel Ms M R Oevi for defendants had appeared on the same day on 10.01.2023 and sought time for filing Vakalatnama and written stalement cum evidence on affidavit. Thereafier, the case was listed on several occasion, but the Vakalatnama and written statement cum evidence on affidavit has not been filed by the learned counsel for defendanls. Hence, the right of the defendants to rile written statement cum evidence on affidavit was closed on '10.04.2023 and the matter was fixed for hearing.

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Supporting the claim of the applicant bank Sri Ram Chandra Hansda, Senior Manager of the Applicant Bank has filed evidence on affidavit coupled with the security documents marked as Exhibit AW-1/1 to AW-1/36 & A supporting the claim of the applicant bank.

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Heard the learned counsel for the applicant bank who prayed for issuance of Recovery Certificate against the defendants as per pleadings made in the Application, supported by evidence on affidavit of their witness 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 that the document 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 19.09.2015, 03.'12.2016, 17.09.20'17, 25.09.2018, 15.11.2018 & 10.09.2020. The acmunt became NPA on 29-07 -2022 and the OA has been filed on 02.'11.2022. Hence, the OA is filed well within the period of limitation and this Tribunal having a.,urisdiction to adjudicate the Original Application.

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Considering the unchallenged/unrebutted version of Sri Ram Chandra Hansda, the applicant's witness and all the documents marked as exhibits, including duly certified copy ofthe statement of account along with interesl calculation sheet

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(X"r,,( Ltttl,^A,trt o*",i"oo#,la²¹ J DRT, Guwahali

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O.A. 4112022loRT€usah.li

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maintained by the applicant Bank in it's regular course of business, I hold that the

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applicant is entitled to get the Recovery Certificate as prayed for.

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ln the result, the present Original Application No. 441 ol 2OZ2 is allowed with cost as under:-

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i) The defendants No. 1 & 2 are jointly and severally liable to pay to the applicant bank a sum of Rs. 1,35,16,966.05 (Rupees One Crore Thirty-Five Lakhs Sixteen Thousand Nine Hundred Sixty-Six and Five paise) only with pendentelite and future interest @ 11.40olo per annum with monthly rests ftom 22.'10.2022 till the date of full paymenurealization and also cost of the application.

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ii) The applicant bank is entitled to proceed against the secured items towards recovery of the debts.

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iii) The applicant bank is atso enti ed to proceed against the personal assets and properties of the defendants towatds recovery of the dues.

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iv) The applicant bank is entitled to the costs of the O.A. which includes lhe advocate tees of the applicant bank. Applicant is directed to file the cost memo within 2 weeks from loday.

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v) lssue Recovery Certiftcate accordingly for a sum Rs. 1,35,16,966.0S (Rupees One Crore Thirty-Five Lakhs Sixteen Thousand Nine Hundred Sixty€ix and

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Five Paise) only in favour ofthe applicant bank against the defendants No. 1 & 2.

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vi) Communicate copy of this order to the concerned parties. This order is dictated and corrected by the undersigned.

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Judgment dated 1.lth October 2023, signed and pronounced in the Tribunal

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today under my signature.

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

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JLiurf.o,u.'&.,i,, r (sr'iv straran oLL$^{1 ),} J Presiding Officer DRT, Guwahati.

Canara Bank v. Messres Dutta Brother

Case brief

What is this about?

What did the court decide?

Canara Bank v. Messres Dutta Brother

Case brief

What is this about?

What did the court decide?

What the court decided

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