Allowed

Punjab National Bank v. M/S Chetanya Industries

DRT4 Dec 2023OA/45/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal, Guwahati allowed an application by Punjab National Bank under Section 19 of the RDBFI Act. The Bank sought a Recovery Certificate for an outstanding debt of Rs. 35,25,006.89 against the defendants, who run Chetanya Industries. The Tribunal found the evidence sufficient to establish joint and several liability and issued the certificate.

What did the court decide?

Issue of Recovery Certificate for Rs. 35,25,006.89 against the respondents with pendentelite and future interest.

Punjab National Bank versus M/S Chetanya Industries — Banking and Recovery | DRT (2023)

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o.A. 45/2022,/DRT€umh.ii

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IN THE DEBTS^{RECOVERYTRIBUNAL, GUWAHATI}

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(North Eastern Region)

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(Tribunal of Assam, Naoatand,^{Meghalaya, Manipur, Mizoram,Arunachal Pradesh& Tripura)}

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Before Shri Shiv Sharan^{Dubev.Ptesidinq Officsr}

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O.A' No. 45/2022

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ln the matter of -

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PUNJAB NATIONAL^BANK A.T.Road Branch, Guwahati-781001, Assam.

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Applicant

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Vs.

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M/S CHETANYA INDUSTRIES A Proprietorship firm. C/o Phukan Boro, Fatasil Datalpara Road, Datalpara, Guwahati-781 025,

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District- Kamrup^(M), Assam

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SRI MANOJ KUMAR DAGA

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Proprietor of M/s Chetanya lndustries Son of Ratanlal Daga, State Bank of lndia Building, 3d Floor, A.T.Road, Bharalumukh, Guwahati-781009,

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District- Kamrup^(M), Assam

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Defendants

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Presence of the Counsel:

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For the Applicant : Mr. Manoj Kumar Roy, Advocate

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For the Derendants : None (Ex-parte)

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Daled 041'1212023

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JUDGIIIENT

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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, A.T.Road Branch, Guwahati-781001, Assam, with a^prayer to issue Recovery Certificate for the sum of Rs. 35,25,006.89^(Rupees Thirty-Five Lakhs Twenty-Five Thousand Six and Paiso Eighty-Nine) only as on 31.12.2021 against the defendants with pendentelite and future interest till realization along with cost and other relief.

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A few facts^giving rise to the^present application are as under.St" '^{slou,- llJ'1} aA-\2')9 I Presdrng Offic€r ORT. Guwahati

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O.A 45/2022IDRT Guwahati

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The Defendant no. 2^{as the proprietorof the defendant no. 1 firm had} approached the Applicant Bank and^{applied for financial assistancefor} manufacturing of Mattress, cushion,^{pillows etc. by submittinga Loan Application} dated 20.01.2007 and^{after considering the said Application,the ApplicantBank} vide its Sanction Letter dated^{27.02.2007 had sanctioned a TermLoan (TL) of Rs} 10.91 Lacs^(Rupees Ten lacs and^{Ninety-OneThousand) only to the Defendants} with interest charged at 12.75o/o^{per annum with monthly restsalong with penal} interest at applicable rate in case ot default. The^{Term Loan was to be repaidin 60} monthly installments of Rs. 24,7ooi0 each starting from^{3'd month} of^first disbursement and interest for moralorium^period of first 2^months to be^paid separately. The applicant bank had also^{sanctioned a cashcredit limit of Rs.7.50} Lacs (Rupees Seven Lacs and Fifty Thousand) only to^{the defendantswith interest} charged at 12.75Yo^per annum with monthly^rests along^{with penalinterest at} applicable rate in case of default.^{TheCashcredit limit was} to be^{repaid on} demand. The Defendant no. 2 as the^proprietor of the^defendant no.l^{firm had} signed on the said Sanction Letter thereby agreeing to all the terms^and conditions contained lherein.

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ln connection with the sanction of the Term Loan^(TL) of Rs. 10.91 Lacs and Cash Credit Loan of Rs.7.50 Lacs and in total Rs. 18.41^Lacs sanctioned by the Applicant Bank and availed of by the Defendants, a Hypothecation of Movable Plant and Machinery dated 01.03.2007, a Hypothecation of Debts etc. dated 01.03.2007 and Hypothecation of Goods dated 01.03.2007 has been signed and executed by the Defendant no, 2 as the^proprietor of the defendant no.1 ,irm in favour of the Applicant Dank as security for repayment of the loan facility, thereby agreeing to all the terms and conditions laid down in the said Agreemenl (more specifically described in Schedule- A of the OA) in favour of the Applicant Bank.

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ln order to secure the repayment of the credit facilities, the defendant no. 2 as the proprietor of the defendant no.1 firm have executed a Demand Promissory

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Note dated 01.03.2007, Letter of Lien dated 01.03.2007 and Letter of Continuity dated 01.03.2007, thereby^promising to^{pay the ApplicantBankthe entireloan} amount received together with interest @'12.75^{yo per} annum with monthly rests on demand.

¶32

Thereafter, the defendant No. 2 as the^proprietor of the defendant No. 1 firm had again requested the applicant bank for renewal and enhancement of the credit facilities and after considering the same, the applicant bank vide its Sanction Letter dated 19.09.2008 had renewed the Term Loan (TL) at Rs. 9.00 Lacs (Rupees Nine lacs) only to the Defendants with interest charged at 14.75o/o^per annum with monthly rests along with^penal interest at applicable rate in case of default. The Term Loan was to be repaid as^per sanction Letter dated 27.02.2007.^.|.he applicant bank had also renewed and enhanced the cash credit limit to Rs.15.00 Lacs (Rupees Fifteen Lacs) only from the earlier Rs.7.50 Lacs to the defendants with interest charged at 14.75)^o/o per annum with monthly rests along with penal interest at applicable rate in case of default. The Cash credit limit was to be repaid as^per the sanction Letter dated 27.02.2007. The Defendant no. 2 as the proprietor of the defendant no.1 firm had signed on the said Sanction Letter thereby agreeing to all the terms and conditions contained therein.

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ln connection with the renewal of the Term Loan (TL) of Rs. 9.00 Lacs and Cash Credit Loan of Rs.15.00 Lacs and in total overall limit of Rs.24.00 Lacs sanctioned by the Applicant Bank and availed of by the Defendants, a Hypothecation of Movable Plant and Machinery dated 22.09.2008, a Hypothecation of Debts and Movable Assets dated 22.09.2008 and Hypothecation of Goods dated 22.09.2008 has been signed and executed by the Defendant no. 2 as the proprietor of the defendant no.1 firm in favour of the Applicant Bank as security for repayment of the loan facility, thereby agreeing to all the terms and conditions laid down in the said Agreement (more specifically described in Schedule-A of the OA) in favour of the Applicant Bank.

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ln order to secure the repayment of the overall credit facilities of RS.24.OO

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st'rrsltg A.d'r .ry4 presidng Oftcer DRT, Guwahati

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Lacs, the defendant no. 2 as the^proprietor of the^defendant no.'l^{firm have} executed a Demand Promissory Note dated^{22.09.2008, Letter} of^{Lien dated} 22.09.20OA and Letter of Continuity dated 22.09.2008,^{thereby promisingto pay the} Applicant Bank the entire loan amount^{received togetherwith interest} @14.75Yo per annum with monthly rests on demand.

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Thereafter again, the defendant No. 2 as the^proprietor of the defendant^No. 1 firm had requested the applicant bank for additional^Te.mLoan and Cash Credit facility vide its letter dated^'10.09.2009 and after considering the same,^the applicant bank vide its Sanction Letter dated 28.09.2009^had renewed^{the Term} Loan (TL) at Rs. 7.25 Lacs (Rupees Seven lacs and Twenty-Five Thousand) only to the Defendants with interest charged at 12.00o/o^per annum with monthly^rests along with^penal interest at applicable rate in case of default. The Term Loan^was to be repaid as^per sanction Letter dated 27.02.2OO7. The applicant bank had also sanctioned a Fresh term loan of Rs.6.00 Lacs^{(RupeesSix lacs)} only to the defendants with interest charged at 12.00o/o^per annum^{with monthly rests along} with penal interest at applicable rate in case of default.^{TheFreshTerm Loan was} to be repaid in 60 equal monthly installments of^Rs.10,000.00 each starting^from January 2010. However, interest will have to be serviced at monthly rest as and when falls due. The applicant bank had also^renewed and enhanced^{the cash} credit limit to Rs.25.00 Lacs^(Rupees Twenty-Five^{Lacs) onlyfrom the earlierRs.} 15.00 Lacs lo the defendants with interest charged at 12.OOo/o^per annum^with monthly rests along with^penal interest at applicable rate in case of default. The Cash credit limit was to be repaid on demand. The Defendant no.2 as the proprietor of the defendant no.1 firm had signed on the said Sanction Letter thereby agreeing lo all the terms and conditions^contained lherein.

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ln conneclion with the renewal ot the Term Loan^(TL) of Rs. 7.25 Lacs. Fresh Term Loan of Rs.6.00 Lacs and enhanced Cash Credit Loan of Rs.25.00 Lacs and in total overall limit of Rs.38.25 Lacs sanctioned by the Applicant Bankand availed ofbythe Defendants, a Hypothecation of Movable Plant and sli ,r ilnlol^ $.d'el.Z':\r, /r- { Presiding Offcer (r DRT, Guwahati

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Machinery dated 29.09.2009, a Hypothecation of Debts and Movable Assets daied 29.09.2009 and Hypothecation of Goods dated 29.09.2009 and Letter of Continuity dated 29.09.2009 has been signed and executed by the Defendant no. 2 as the proprietor of lhe defendant no.'l firm in favour of the Applicant Bank as security for repayment of the loan facility, thereby agreeing to all the terms and conditions laid down in the said Agreement (more specifically described in Schedule-A of the OA) in favour of the Applicant Bank.

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Thereafler again, the defendant No. 2 as the proprielor of the defendant No. 1 firm had requested the applicant bank for additional Term Loan and Cash Credit facility vide its letter dated 01.02.2013 along with Loan application dated 01.02.2013 and after considering the same, the applicant bank vide its Sanction Letter dated 28.02.20'13 had renewed the Term Loan (TL) at Rs. 2.20 Lacs (Rupees Two lacs and Twenty Thousand) only to the Defendants with interest charged at 15.00% per annum with monthly rests along with penal interest @1.00%^perannumwith monthly rest in case of default subiect to maximum of 3 % per annum with monthly rest. The Term Loan was to be repaid as per existing equal monthly installments of Rs. 10,O0O.OO each. The applicant bank had atso sanctioned a Fresh term loan of RS.14.OO Lacs (Rupees Six lacs) only to the defendants with interest charged at 15.00% per annum with monthly rests along with penal interest @1.00^o/o per annum with monthly rest in case of default subject lo maximum of 3 % per annum with monthly rest. The Fresh Term Loan was to be repaid in 60 equat monthly installments of Rs. 23,333.00 each starting from May 2013. However, interest will have to be serviced at monthly rest as and when falls due. The applicant bank had arso renewed and enhanced the cash credit rimit to Rs.30.00 Lacs (Rupees Thirty Lacs) only from the earlier RS.25.OO Lacs to the defendants with interest charged at 15.00% per annum with monthly rests along with penal interest @1.00% per annum with monthty rest in case of default subject to maximum of 3or5 per annum with monthly rest. The Term Loan was to be repaid as per existing equar monthry instalments of Rs. 1o,ooo.oo each. The cash credit limit was to be repaid on demand. The Defendant no. 2 as the proprietor of the

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"-[,r.d-a-i.o.^!-'&'1 L4 tL,^tt I Presidrng Ofricer U ORT, Gtl,lvahati

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O A 4512022lDRl4uwahalr

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defendant no.l fim had signed on the said Sanction Letter thereby agreeing to all lhe terms and conditions contained therein.

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ln connection with the renewal of the Term Loan (TL) of Rs. 2.20 Lacs, Fresh Term Loan of Rs.14.00 Lacs and enhanced Cash Credit Loan of Rs.30.00 Lacs and in total overall limit of Rs.46.20 Lacs sanctioned by the Applicant Bank and availed of by the Defendants, an Agreement of Term Loan dated 28.02.2013, an Agreement for Term Loan and Hypothecation dated 28.02.2013 and Hypothecation Agreement daled 28.02.2013 has been signed and executed by the Oefendant no. 2 as the proprietor of the defendant no.l firm in favour of the Applicant Bank as security for repayment of the loan facility, thereby agreeing to all the terms and conditions laid down in the said Agreement (more specifically described in Schedule-A of the A) in favour of the Applicant Bank.

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ln order to secure the repayment of the overall credit facilities of Rs.46.20 Lacs, the defendant no. 2 as the proprietor of the defendant no.1 firm have executed a Demand Promissory Note dated 28.02.2013, Letter of Lien dated 28.02.2013 and Letter of Continuity dated 28.O2.2013, thereby promising to pay the Applicant Bank the entire loan amount received together with interest @1S.OOyo per annum with monthly rests on demand.

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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 conditions as agreed upon with the applicant bank, in spite of repeated demands and request by the applicant bank. As the defendants failed to repay the loan amount, the said loan accounts became NPA on 31.03.2021. However, the defendants have signed and executed the Balance Confirmation Letter dated 30.03.2012,^,13.1O.20i4, 31.12.2015,30.12.2019 and Revival Letter dated 30.03.2017 thereby confirming the outstanding balance on the loan account. After the account became NpA the applicant bank issued notices for repayment of the due amount, bul the defendants failed to repay the loan amount.

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The applicant bank thus^{became constrained to file the presentOriginal} Application for the recovery^{of Rs. 35,25,006.89 (Rupae3Thirty-Fivo Lakhs Twenty-} Five Thousand Six and^{Paise Eighty-Nine)only as on 31.122O2'lalongwith interest} and cost of the application.

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After filing of the OA the Tribunal^{issued notices upon thedefendants through} registered^post and the applicant^{bank liled service reporton 17 .05.2022and brought} on record the^postal receipts along^{with track consignment reportwhich shows that} notices have not been served^{upon the defendants. Thereafterthe Tribunalordered} paper publication of notice upon the defendants and the^{applicant bank issued notice} to the defendants on 25.05.2022^{through Paper Publicationin two newspapers namely} "The Times of lndia" and "Dainik Asom". Even after issuanc€ of notice through^paper publication also there was no representation on behalf of the defendants either by^the counsel or the^person and^{hence the defendants were set ex-parte on 19-07-2022and} their right to file written statement^{cum evidenceon affidavit was closed and the matter} was listed for hearing on behalf^{of the applicantbank.}

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Supporting the claim of the^{applicantbank Sri Guru Prasad Talukdar, Chief} Manager of the Applicant Bank^{hasfiled evidence on affidavit coupled with the security} documenE ma*ed as Exhibit^P & Q,^{AW-1to AW-38 supporting the claimof the} applicant bank.

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Heard the learned counsel^{for theapplicant bank whoprayed for issuance of} Recovery Certilicate against the defendants^{as perpleadings made in the Application,} suppo ed by evidence on affidavit of their^{witnesswho affirmed on oath the execution} of the security and other documents^{by the defendants and also execution of thsir 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 supportingthe claim of the} applicant bank and establishing^{the liability of the defendants.lt is proved that the} defendants are iointly and^{severallyliable} to^{pay to the applicant bank the claim} made in the Original Application. The loan was obtained^{and documentshaYe been} ' tW <sup>u)., t oA t2,r( rl Presdrng Officer DRT, Guwahati

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O.A. 412022lDRf GuMhati

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executed on 01.03.2007, 22.09.2008, 29.09.2009 &^{28.02.2013.Balance} Confirmation Letters are dated 30.03.2012, 13.10.20'14, 31.12.2015, 30.'12.2019 and Revival Letter is dated 30.03.2017. The account became NPA on 31.03.2021 and the OA has been filed on 10.02.2022. Hence, the OA is filed well within the^period of limitation and this Tribunal having a^jurisdiction to adjudicate the Original Application.

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Considering the unchallenged/unrebutted version of Sri Guru Prasad Talukdar, the applicant's witness and all the documents marked as exhibits, including duly certified copy of the statement of account along with interest calculation sheet maintained by the applicant Bank in it's regular course of business, I hold that the applicant is entitled to get the Recovery Certificate as^prayed for.

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ln the resuli, the present Original Application No. 45 of 2022 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. 35,25,006.89 (Rupees Thirty-Five Lakhs Twenty-Five Thousand Six and Paise Eighty-Nine) only with pendentelite and future interest @12.75%^p.a. with monthly rests from 01.01.2022 till the 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 Schedule-A of the OA till the amount is realized in full.

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

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

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Skv S^{ln to''} :tl'f - aa t2')3 I Presidmg Olficer DRT, Guwahati

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O.a. r5r2o2zloRT-Gut.n{u

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

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vi) lssue Recovery Certificate accordingly for a sum Rs. 35,25,006.89 (Rupees Thirty-Five Lakb Twenty-Five Thousand Six and Pabe Eighty-Nine) only in favour ofthe applicant bank against the defendants No. 1 & 2.

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vii) Communicate copy of this order to the concemed pariies.

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This order is dictated and corrected by the undersigned.

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Judgment dated 4u December 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 uploaded in the Tribunal's Website and file be consigned to Record Room.

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QI^, u^s(t,. '4 "⁹ "1'' l ^1^{rz ,)l,l} I (Shiv Sharan Dubey) - Presiding Oflicer DRT, Guwahati.

Punjab National Bank v. M/S Chetanya Industries

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. M/S Chetanya Industries

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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