Allowed

Canara Bank v. Messers Yuvaraj Trading

DRT20 Dec 2023OA/493/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by Canara Bank recovering a dues of approximately 42.90 lakhs from borrowers who failed to repay an overdraft and related loans that became non-performing assets in February 2022.

What did the court decide?

Recovery Certificate issued for Rs. 42,90,868.55 with interest at 10.80% p.a. and costs; bank allowed to proceed against secured and personal assets.

Canara Bank versus Messers Yuvaraj Trading — Banking and Recovery | DRT (2023)

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O A 493/2022loRT-cuwahalr

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(North Eastern Region) ( r nbunal of Assam, Nagatand, Meghataya l,4"nipr,, f,/liioi",rn, errrachat pradesh & Trjpura) Before Shri Shiv Sharan Dubev. presidinq Officer

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O.A. No. 493/2022

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ln the matter of -

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CANARA BANK Kharupetia Branch, ChandIa Complex, I Floor, M.B.Road, Kharupetiaghat, Kharupetia, Assam-784.11S.

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Applicant

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M/S YUVARAJ TRADING Village: Kharpuri Habi,

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P.O.- Dalgaon, District- Darrano

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Assam. Pin-784'116

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MR NAZRUL ISLAM KHAN, Son of Ahammad Ali Khan

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Village: Kharpuri Habi,

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P.O.- Dalgaon, District- Darrano.

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Assam, Pin-7841'16

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,,,',.',,,, ' ',,. ',.,,,. ' Defendants

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Presence of the Counsel:

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For the Applicant

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: Mr. Akhtar^parvez, Mr. Dipanka Gogoi, Mr. Bidul Roy, Advocates

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For the Defendants : Mr. Abhijeet Kakoti, Advocate (Right to fite WS cum EA ctosed)

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Oated :20112t2023

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JUDGMENT

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This is an apprication under section 19 of the Recovery of Debts Due to Banks and Financial lnstitutions Act,^.1993 filed by the Canara Bank, Kharupetia Branch, Chandra Complex, I Floor, M. B. Road, Kharupetiaghat, Kharupetia, Assam_784.11S, with a prayer to issue Recovery Certificate for the sum of Rs. 42,90,868.55 (Rupees Forty-Two Lakhs Ninety Thousand Eight Hundred Sixty_Eight and paise FiftyFive) only as on 17.'11.2022 against the defendanls with pendenterite and future interest thereon at contractual rate till realization along with cost and other relief.

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OI" 493t2022,/DRT-ceaha!

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A few facts giving rise to the present application are as under.

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The defendant No. 1 is proprietorship concern of defendant No.2 Nazrul lslam Khan

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Based upon apprication made by the defendants, the competent authority of the applicant bank had sanctioned OCC limit of Rs. 1O.OO Lacs onty to the defendants vide Sanction Memorandum dated 2S-Og_2017. As per the Sanction memorandum, the appricabre rate of inlerest for the sanctioned roan was fixed at 10.80% pa with monthly rests. The defendant No.2 had accepted alt the lerms and conditions of sanction by putting his signature on the foot of the Sanction memorandum dated 07 -1 1 -2019,

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ln order to avail the sanctioned OCC limit of Rs. 1O.OOO Lacs only, on 25-08-2017 itself the defendant No.2 had executed pronole for Rs.1O.OO Lacs only, Letter of Undertaking (NF 72j) and Cash Credit Agreement (NF 79S) interalia agreeing to the terms and conditions mentioned therein. The defendant No.2 being proprietor of defendant No.l further had executed lefter regarding Request For Overdraft Facilities (NF 372) dated 2S-OB- 2017.

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The defendant No.2 being^proprietor of defendant No.l along with one namely Shahidul lslam had extended his guarantee to secure the loan of Rs.1O.OO Lacs only availed by the defendant No..l by executing Guarantee Agreement dated 25-08- 2017. However, the Guarantee of Shahidul lslam has later on been released when lhe loan of the defendant No.1 became covered under CGFMU and CGTMSE Scheme.

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Subsequently by writing letter to the appticant bank, the defendant No.2 being proprietor of the defendant No.1 had requested the applicant bank for enhancement of the existing limit. Further, the defendant No.2 being proprietor of defendanl No.'l had requested the applicant bank in applicant bank,s standard Loan Application Form dated 23-11-2018 for enhancement of the existing timit. Considering the application, vide Sanction memorandum dated 23-11-2Olg the

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competent authority of the appricant bank had renewed the occ roan account of the defendants with the existing limit instead of enhancing the same. As per the Sanction memorandum dated 2g-11-2019 OCC limit was covered under CGFMU (Credit Guarantee Fund for Micro Units) Scheme. The defendant No.2 being proprietor of defendant No.1 had accepted all the terms and conditions of sanction by putting his signatures on the foot of the Sanction Memorandum. The defendant No.2 further had executed Letter of Renewal dated 23-Og-2Oi g.

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Vide loan apptication dated 18-05-2020 the defendant No.2 being proprietor of defendant No.1 had applied before the applicant bank for enhancement of the exlsting OCC limit. Considering the application, the competent authority of the applicant bank had enhanced the existing limil from RS.1O.OO Lacs only to Rs.19.00 Lacs only vide Sanction memorandum dated i8-OS-2020. As per the Sanction memorandum dated 18-05-2020 the applicable rate of interest for the enhanced limit was fixed at 10.05% p.a. with monthly rest. The enhanced limit was further covered under CGTMSE Scheme. The defendant No.2 being proprietor of defendant No.1 had accepted all the terms and conditions of sanclion by putting his signatures on the foot of the Sanction memorandum.

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ln order lo avail the enhanced OCC limit of Rs.19.00 Lacs onty, on 18-OS2020 itself the defendanl No.2 being proprietor of defendant No.1 had executed Link Letter and Supplemental Agreement interalia agreeing to the terms and conditions mentioned therein. The defendant No.2 also have executed Letter of Renewal (NF 493) dated 18-05-2020

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Vide loan application dated 1 l-09-2020 the defendant No.2 being proprietor of defendant No.1 further had applied before the applicant bank for enhancement of the existing limit. The competent authority of the applicant bank, considering the defendant's application, had enhanced the existing limit from Rs. i9.OO Lacs only to Rs.30.00 Lacs only vide Sanction Memorandum dated 11-09-2020. As per the Sanction Memorandum, the applicable rate of interest for the enhanced limit was

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fixed at 10.05%^p.a. with monthly rests. The enhanced limit was covered under CGTMSE Scheme. The defendant No.2 being^proprietor of dafendant No.'l had accepted the terms and conditions of sanction by^putting his signatures on the^foot of the Sanction memorandum dated 1'l-09-2020.

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After enhancement of the existing limit^{fromRs. 19.00 Lacs only to Rs.} 30.OO Lacs only, on 11-09-2020^{itself the defendant No.2 had executed Pronote for} Rs.11.OO Lacs only, Link Letter^{(in Hindi), Letter of renewal and Supplemental} Agreement^(NF 718)^{interalia agreeing to the terms and conditions mgntioned} therein,

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Vide loan application daled 29-11-202'l the^{defendant No.2being proprietor} of defendant No.1 had applied before^{the applicantbankfor further enhancement} of the existing OCC ban. However, the^{applicant bank did not enhance the OCC} Loan. lnstead, the applicant^{bank had renewed the OCC loan accountwith the} existing limit vide Sanction^{memorandumdated 30-11-2021. As per the Sanclion} Memorandum dated 30-11-2021^{the renewed limit was covered underCGTMSE} Coverage. The defendant^{No.2 beingproprietorof the defendant No.1 had} accepted all the terms^{and conditions of sanction by putting his signatures on the} foot of the Sanction Memorandum.^{The defendantNo.2further had executed Letter} of Renewal dated 30-1.1-2021.

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Based upon defendant's application, the competent authority of the^applicant bank had sanctioned GECL loan of Rs.2.00^{Lacs only} to^{the defendantsvide} Sanction Memorandum dated 11-06-2020. As^per the^{SanctionMemorandum} dated 1'l-06-2020, the applicable^{rate of lnterest for the sanctioned loan was fixed} al7.9o/o^p.a. with monthly rests.^The sanctioned^{loan was to be repaid in 48 Equal} Monthly lnstallment of Rs. 4,873/-only. ln order to avail the sanctioned loan, on 11-06-2020 itself the defendant No.2 had executed Pronote for Rs.2.00 Lacs only, Agreement. Cum Deed of Hypothecation^(NF 855) and Undertaking Letter from Borrower.

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Vide loan application daled 24-11-2021 the defendant No.2 being Proprietor

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of defendant No.1 had appried before the appricant bank for sancrion of another loan. considedng the defendant's apprication, vide sanction Memorandum dated 24-11-202'r the competent authority of the appricant bank had sanctioned another loan of Rs.5.8S Lacs only to the defendant No.1 as GECL_.|.0 (Extension) loan. ln terms of the Sanction Memorandum dated 24_11_202,1 the appticable rate of lnterest for the sanctioned loan was fixed at l.S0o/o p.a. with monthly rests. This loan was further covered under 100% NCGTC Coverage. The defendant No.2 being proprietor of defendant No.1 had accepted the terms and conditions of sanction by putting his signatures on the fool of the Sanction Memorandum dated 24-11-2021.

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fn order to avail the sanctioned loan, on 24_11-2021 itself the defendant No.2 being proprietor of defendant No.1 had executed pronote for Rs.5.g5 Lacs only, Link Letter, Term Loan Agreement (Appendix_74), Letter of Undenaking (NF 721) and APPENDTX-t.

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The defendants had avaited the said credit facilities from the applicant bank but have not paid the outslanding loan amount as per terms and conditions as agreed upon with the applicanl 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 29.02.2022. After the accounts became NpA the applicant bank issued notices for repayment of the due amount, but the defendants failed to repay the Loan amount.

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The applicant bank thus became constrained to file lhe present Original Application for the recovery of Rs. 42,90,809.55 (Rupaes Forty-Two Lakhs Ninety Thousand Eight Hundr€d Sixty-Eight and paiss Fifty-Five) only as on j7.11.2022 along with interest and cost ofthe application.

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After liling of the OA the Tribunal issued notices upon the defendants through registered post and the applicant bank filed service report on 31.01.2023 and brought on record the postal receipts along with track consignment report. The learned counsel for defendants had appeared on the same day i.e. on 3i.01.2023 and sought

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o.a. 493a022/DRrcmhat

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time for liling witten statement cum evidence on affidavit. Thereafter, the case was listed on several occasion, but the written statement cum evidence on aftidavit has not been filed by the defendants. Hence, their right to file written statement cum evidence on affidavit was closed on 02.06.2023 and the matter was fixed for hearing.

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Supporting the claim of the appticant bank, Sri Lhungdim Romeo Kuki, Officer of the Applicant Bank has filed evidence on afridavit coupled with the security documents marked as ExhibilAw-1/1 to AW-1/40 & A supporting the ctaim of the appticant bank.

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Heard the learned counsel for the applicant bank who prayed for issuance of Recovery Certilicate against the defendants as per pleadings made in the Application, supported by evidence on aftidavit of their witness who affirmed on oath lhe execution ofthe 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 tiability 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 25.08.2017, 23.11.2018, 18.05.2020, 11.06.2020, 11.09.2O2O, 24.'11.2021, 30.11.2021. The account became NpA on 29.02.2022 and the OA has been filed on 06.12.2022. Henc,-, the OA is fited wett within the period of timitation and this Tribunal having a^jurisdiction to adjudicate the OriginalApplication.

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Considering the unchallenged/unrebutted version of Sri Lhungdim Romeo Kuki, the applicant's witness and all the documenls marked as exhibits, including duly cenmed mpy of the statement of account along with interest calculation sheel maintained by the applicant Bank in it's regular course of business, I hold thai the applicant is entitled to get the Recovery Certificate as prayed for.

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ln the result, the present Original Application No. 493 of 2022 is a owed with cost as under: -

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sl-r,lsfqM-!"b, 2n.wB I Prcsjding Oflicer DRT, Guwaheti

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,.a 493/2022loRT-Guwahali

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i) The defendants No. 1 & 2 are joinfly and severally liable to pay to the applicant bank a sum of Rs. 42,90,g6g.55 (Rupees Forty_Two Lakhs Ninety Thousand Eight Hundred Sixty_Eight and paise Fifty_Five) onty with pendentelite and future interest @lO.8O% p.a. with monthly rests from 18.11.2022 ti, the date of fu, paymenurearization and arso cost of the application.

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

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(iii) 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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(iv) The applicant bank is entifled to the costs of the O.A. which includes the advocate fees of the appricant bank. Appricant is directed to fire the cost memo within 2 weeks from today.

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v) lssue Recovery Certificate accordingly for a sum Rs.42,90,86g.55 (Rupees Forty-Two Lakhs Ninety Thousand Eight Hundred Sixty_Eight and paise Fifty-Five) onry in favour of the appricant bank against the defendants No. I & 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 20th December 2023, signed and pronounced in the Tribunal today under my signature.

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copy of the Judgment/Finar order be uproaded in the Tdbuna.s website and file be consigned to Record Room.

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S["] sloaa-&/*+ an tL L) (l(Shiv Sharan Dubey) Presiding OIficer DRT, cuwahati.

Canara Bank v. Messers Yuvaraj Trading

Case brief

What is this about?

What did the court decide?

Canara Bank v. Messers Yuvaraj Trading

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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