Allowed

Idbi Bank v. M/s Rajat Ornaments Stores and Others

DRT7 Dec 2023OA/497/2022

Case brief

AI extract

What is this about?

The DRT, Patna allowed an ex-parte recovery application filed by IDBI Bank against borrowers and guarantors for a defaulted loan of Rs. 44.78 lakhs. Based on documentary evidence and the defendants' failure to appear, the debt was determined, a recovery certificate was issued, and assets attached.

What did the court decide?

Recovery certificate issued for Rs. 44,78,324.46 plus future interest at 10.25% p.a.; mortgaged and hypothecated assets attached.

Idbi Bank versus M/s Rajat Ornaments Stores and Others — Execution and Attachment | DRT (2023)

PATNA

0A 497 of 2022.TJI

Debts Recovery Tribunal, Patna

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Karpuri Thalour Sadan, Aashiana Digha Road Patna-80002S

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Presiding officer : Shri Kaushalendravadav

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OA Case No. 497 of 2022

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IDBI Bank Ltd., Retail Recovery, First Floor, Bhawani Market, Akharaghat Road, Muzaffaxpur-842001.

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•...... Applicant

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Vs.

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M/s Rajat Ornaments Stores, Purani Bazar, Makhan Sah Chowk, Ramna, Muzaffaapur-842001.

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Sri Vijay Kumar Patel S/o Kanhaiya Prasad Patel Proprietors, M/s Rajat Ornaments Stores.

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Smt. Aarti Chaudhary Patel, W/o Sri Vijay Kumar Patel Both Residents of purani Bazar, Malchan Sah Chown, Ramna, Muzaffarpur-842001.

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Defendants.

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Present:

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For the Applicant: Shri. Avinash Chandra Prasad, Advocate For the Defendants: None

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Dated: 07.12.2023

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JUDGMENT

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1- The Applicant bank has made this application u/s 19 of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 07.09.2022 against the defendants to recover its debts from defendants of Rs.44,78,324.46/- as on 31.03.2022 along with Pendente-lite and future interest at the contractual rate from 01.04.2022 .with costs till realization.

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2- The application has been duly registered and numbered as above.

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3- The brief facts of the case of the applicant bank as stated in the application areas under-

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The applicant bank, a body corporate constituted under the Banking Companies Act, 1956 which is competent to file a suit.

ut,,

OA 497 of 2022.TJl

PATNA

Defendants No. 1 is a Proprietorship firm. Defendant No. 2 is proprietor of defendant no. 1. was in need of Financial Assistance to run his business and approached the applicant Bank through its branch filed an application for flnancial assistance under the MSME Scheme for the purpose to run business. Defendants executed the various loan documents. The defendants no. 1 & 2 accepted the terms and conditions of the Bank. Defendant No. 3 is guarantor of loan who mortgaged her property in favour of Bank to secure loan. As per terms of sanction Bank agreed to disburse loan to the defendants for Rs.18.00 lac/-in Cash Credit loan by way of working capital facilities on 14.11.2014 to defendants.

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The rate of interest was @ Base Rate + 225 bps payable at monthly rests.

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Again defendants filed loan application for enhancement of loan. As per terms and conditions of Bank agreed to disburse loan to the defendants for Rs.34.00 lac as per sanction dated 12.04.2017 which was accepted by defendants. Defendants executed the various loan documents.

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During Covid-19 situation, the Government of India announced financial support in the name of GECL, Bank sanctioned Rs. 6,79,000/- and Later on FITL of Rs. 5,93,873/-to the defendants.

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After availing the sanctioned credit facilities became irregular in repayment of their dues as per agreed terms and failed to adhere to the financial norms of the bank and avoiding the repayment of its dues to the bank, in spite of several assurances given by it to the applicant bank resulting in the account turning as NPA on 30.03.2022.

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Thus the total liability in the loan account is Rs. 44,78,324.46/- with Pendente-lite and future interest contractual rate from 01.04.2022 till the realization. Since, the defendants have failed and neglected in spite of several reminders to make payment of the dues recoverable to bank, hence this application has been filed by the bank.

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DRT. PATNA

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OA 497 of 2022.TJl

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4-This Tribunal issued summons/notices copies of application & paper book to the defendants by registered/speed post requiring them to show-cause within 30 days of the service U/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993. But the defendants have not appeared, hence, the Registry of this Tribunal has ordered to publish the notice in newspaper and subsequently, substituted service by publication of notice by way of advertisement in newspaper was also made against the defendants on 20.12.2022 in " Aaj" newspaper.

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Despite the registered summons/notices and publication of notice in newspaper, the defendants have not appeared before this Tribunal to contest the case. The sufficient time has been given to the defendants to defend their case, but they failed to appear and to file WS, hence, the Tribunal has passed an order to Proceed ex-parte against the defendants 08.05.2023 .

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5- To prove its case, the applicant Bank has referred various certified photocopies of documents before this Tribunal. The applicant bank has also given evidence on affidavit by way of affidavit by Ms. Madhulika Kumari, Assistant General Manager, of the applicant bank. The details of documents are as follows. :-

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Sl. No	Description of Documents Photocopies	Date of Execution	Amount (lakhs)	Signature of Executants	Ex./ Am.No.
1.	Loan application	12.09.2013	Rs.15.00 lakhs	Defendantno.2	I
2	Sanction letter	14.11.2014	Rs.18.00 lakhs	bank	2
3	PAN of Aarti Chaudhary			Defendant no.3	3
4	Demand Promissory Note	14.11.2014	Rs.18.00 lakhs	Defendant no.2	4
5	Demand Promissory NoteDeliveryletter	14.11.2014	Rs,18.00 lakhs	Defendant no.2	5
6	Declaration & Undertakingdepositof TitleDeed	14.11.2014	Rs.18.00 lakhs	Defendant no.3	6
7	Undertaking by Borrower	14.1 1.2014	Rs.18.00 lakhs	Defendant no.2	7

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U,:'i,,.i.,..,

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8	Facility Agreement	14.11.2014	Rs.18.00 lakhs	Defendantno.1&2	8
9	Colrmon guarantee Deed	14.11.2014	Rs,18.00 lakhs	Defendant no. 1 to 3	9
10	Deposit of Title Deed	14.11.2014	Rs.18.00 lakhs	Defendant no.3	10
11	Title deed no. 2328 & 8189	19.12.2016 19.03.2013		Registering off,ce,Muzaffaapur	11
12	Valuation report	16.02.2021		bank	12
13	Continuing security letter	14.1 1.2014	Rs.18.00 lakhs	Defendant no. 1 & 2	13
14	CERSAI Report	29.01.2016		bank	14
15	Appl ication for renewal of loan	24.03.2017	Rs.34.00 lakhs	Defendant no.2	15
16	Sanction letter	24.03.2017	Rs.34.00 lakhs	Defendantno.2	16
17	Hypothecation	12.04.2017	Rs.34.001akhs	Defendantno.2	17
18	Declaration & undertaking aboutTitleDeed	12.04.2017		Defendant no.3	18
19	Mortgage of Deed no.22328	17.04.2017	Rs.34.00 lakhs	Defendant no.3	19
20	Cormon Guarantee Deed	12.04.2017	Rs.34.00 lakhs	Defendant no.3	20
21	Revival letter	31.10.2019	Rs.34,19,461.40	Defendantno.1,2&3	21
22	Notice u/s 13(2)	02.06.2022	Rs.46,72,873/-	Bank	22
23	Statement of Account	As on date 31.03 .2022	Rs.44,78,324.46	Bank	23

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6- Heard arguments for leaned counsel for applicant bank and perused the case record.

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Ld. Counsel of applicant bank submitted that the defendants have taken the loan and utilized the same and also executed the various loan documents to secure the loan. Further, submitted that the claim of the bank has been proved by documentary evidence. All the transactions were entered in the ledger of the loan accounts in the name of the defendant duly maintained by the applicant bank in its usual course of business. The interest /compound interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

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V„,,

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oA 497 Of 2022.r]i

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It is further submitted by ld. Counsel of applicant bank that there is no stay granted by any Higher Court, in respect of the proceedings of the present OA and requested to issue recovery certificate, as claimed for, in OA.

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7- It has been established that defendants are living and carrying on their business in the state of Bihar. Cause of action also arose in the State of Bihar. The said claim on the date of filing of application exceeded Rs.20 1akhs. The applicant bank is functioning within jurisdiction of this tribunal. Therefore, this Tribunal has territorial as well as pecuniary jurisdiction to adjudicate upon the present application.

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8- On the issue of Limitation, to prove it, the applicant bank has submitted that the appli`cant bank has declared the account as NPA on 30.03.2022, whereas the present application has been filed on 07.09.2022. Even, it is counted for the puxpose of Limitation, then it is established that the applicant bank has filed the case within the limitation period. As such, it is established that the present application has been flled well within the period of limitation.

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9- Ms. Madhulika Kumari, Assistant General Manager, of the applicant bank, has the affidavit in support of contents of application and the documents as evidence and proved on oath the pleadings and documents of the applicant bank as stated above.

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10- Section 19(3) of the Recovery of Debts and Bankruptcy Act, 1993 provides that the application u/s S.19 (1) shall be accompanied with true copies of all the documents relied on in support of the claim.

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The rule 12 (10) of the Debt Recovery Tribunal (Procedure) Rules, 1993, provides that if the defendant denies his liability to pay the claim made by the applicant, the tribunal may act upon the affidavit of the applicant who is acquainted with the facts of the case or who has on verification of the record sworn the affidavit in respect of the contents of the application and the documents as evidence.

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The rule 12 (11) of the aforesaid Rules, provides that the provisions contained in section 4 of the Banker's Books evidence that Act, 1891 (18 of

.I,.i..;;i:I,,....

OA 497 of 2022.IJl

PATNA

shall apply to a certified copy of an entry in a Banker's Books furnished along with application filed under sub section 1 of section 19 by the applicant.

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Section 4 of Banker's Books evidence that Act,1891 runs as under-

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S.4. Mode Of proof Of entries in bankers' books.-Subject [o the provisions Of this Act, a certifiied copy Of. any entry in a banker's book shall in all legal proceedings be received as prima ftacie evidence Of the existence Of such entry, and shall be admitted as evidence Of the matters, transactions and accounts thereiri recorded in every case where, and to the same extent as, the original entry itself is now by low admissible, but not further or otherwise.

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As such the certified true copies of the documents are admissible in evidence. The statement of account maintained in the ordinary course of business is not only admissible but shall be taken as the correct statement of account, more so since the entries in the statement of account have not been challenged.

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11- On consideration of the arguments and on perusal of the application, documents and affidavit, it is proved that the defendants have applied for loan and the bank had sanctioned the loan and to secure the loan and for repayment of loan amount with interests etc., the defendants have executed various loan documents, as stated in the application and prove by afore said evidence. Defendants have neither denied the utilization of funds advanced by applicant bank nor have pointed out any specific error and discrepancy in the Statement of Account.

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12- The applicant bank has sought for recovery of a sum of Rs.44,78,324.46/- with cost and further interest at the contractual rate from 01.04.2022 till realization.

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13- The evidence discussed above goes to establish that the claim made by the applicant bank is genuine and true. It is manifest that the defendants have not disputed the claim; therefore, the claim referred to the tribunal is recoverable till full and final realization of the claim.

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14- In my view, Facts of the case stand proved by evidence of the applicant bank ex-parte. Accordingly, the applicant bank is entitled to recover from defendants jointly and severally of Rs.44,78,324.46 /- alongwith pendente-lite

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OA 497 of 2022.IJl

DRT. PATNA

and future interest @10.25%p.a. with compounded monthly rests from 07.09.2022 (The date of filing of this OA) till realization. So the final order may be passed accordingly, to meet the ends of justice.

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ORDER

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In the result, the application of the applicant bank is, allowed ex-parte and debt is determined with costs against the defendants. The defendants are hereby jointly and severally, ordered to pay the applicant bank its debt amounting to Rs.44,78,324.46/- along with pendente-lite and future interest 10.25% p.a. with compounded monthly rests from 07.09.2022 (The date of filing of this OA) till realization of the entire sum due and recoverable with costs.

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It is made clear that any amount deposited by the defendants, be deducted in the claim amount, if not deducted.

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Defendants are debarred from transferring, alienating encumbering or otherwise dealing with or disposing of the mortgaged or hypothecated or any other properties and assets without paying the aforesaid adjudicated dues to the applicant bank to secure the ends of justice. The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to the final order under the recovery proceedings in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993.The applicant may submit the certified copy of this Judgment and the Recovery Certificate before the Registrar/ Sub- registrar to endorse the charge over the secured assets.

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Let a certificate of recovery be drawn up forthwith and put up for signatures in terms of provisions contained in Section 19(22) of the Act to be issued, on the basis of the order of the Tribunal to the Recovery Officer. The Recovery Officer shall realize the amount as per the certificate in the manner and mode prescribed under the Act from the defendants, by sale of mortgaged/ hypothecated assets as well as other personal movable/immovable assets of the defendants W \ '

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DRT. PATNA

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OA 497 of 2022.[Jl

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Parties are directed to appear before the Recovery Officer, DRT, Patna

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on 16.01.2024. The order be communicated accordingly.

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Judgment signed, sealed, dated and pronounced in the open court on o7th day of December, 2023

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Dictated &corrected by me.

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r-,. \y\„?

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[KaushalendraYadav] Presiding Officer Debts Recovery Tribunal, Patna

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DEBTS RECOVERY TRIBUNAL, PATNA

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FORM NO-.Jl [See Regulation 24(I )]

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I}BBTS RECOVERY TRIBUNAL PATNA

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2nd Floor, (A a & F Wing) Kapuri Thakur Sadan, Kendriya Karamchari Parisar

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(GPOA), Ashiana Digha Road, Patna-800025.

Bc NO. 78Or2ee IN

Case No: OA/497/2022

In the Matter of:

(CH- 1) IDBI BANK RETAILRECOVERYFIRSTFL00RBHAWANI MARKET AKHARAGIIAT ROAD MUZAFFARPUR ,BIHAR ~0

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-.--- Versus -----

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Applicant(s)

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To, (CD- 1) M/S RAJAT ORNAMENTS STORES AND OTHERS .

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Punlii Bazar Mal(han Sah Chowk ,Ranna Muzaffarpur ,BIHAR -842001

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(CD- 2) SRI VIJAY KUMAR PATEL S/OKANHAIYAPRASADPATELPROPRIETORS M/S RAJAT ORNAMENTS STORES

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Defendant(s)

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(CD-3) SMT. AARTI CHAUDHARY PATEL w/O SRI vl]Ay KUMAR PATEL REslDENT Or I]URANI BAZAR, MAKHAN SAH CHOWK RAMNA, MUZAFFARPUR-842001

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BffQRIryLfrffmeeifeEBi±(Hpff8JifeyLEQE±sfanyLEighL±±!!9!±saB±sEbEEHHQdredJhetyLEQEIAEd Pal8eFeri!ityLsixonlyJ

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Interrnsoffinalorderdated07/12/2023passedbythisTribunalintheabovementionedcase,itisorderedthatthe Applicant Certificate Holder Bank is entitled to recover a sum of Rs. 4478324.46 along with cost, expenses and interestfromthe07/09/2022i.e.dateoffiling/witheffectivedateoftheOA/497/2022andfutureinterestfromorder datetinthedateofrealisationinfull,jointlyorseverallyfromtheCertificateDebtors,hereinafterreferredtoas:-

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sr.no,	I CD Name	L®` ant:pe_l!	Int rtyprfuode	Int.I Ra,e'l	IEfective Date	Order Date	Amount(Rs.)	^{Liability :} Type ,	Interest ,(asOn OrderDate) I	RC ^Amount(Rs.)i	(Renlark!
11i	M/S RAJAT ORNAMENTSSTORESANI)OTHERS	I	Compciund Interest(Monthly )	•o.25'1)	Io7/og/202i	07/12/2023	^4478324.46	I JointlyAnd Severally	InterestIAson Order Date	4478324.46 I
	I21i AY SRI VIJKUMAR PATEL	i ;	^Compound ):nMteor:ts:,y)	o25'l	)onNgmfr2I I	,07/12/2023I	4478324.46	Jo,ntlyAnd Severally	InterestAson OrderDateInterest	I 4478324.46(	1
3	SMT. AARTI CHAUDHARYPATELL			Compound lrMteor:ts:,y,	10.25 i	)07:og,2o22^l	^o7/12/2o23i	^44783_2i	Jointlyd Severall	Ason OrderDateL -	I 4478324.46 _

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Incaseoffailuretopaytheaforementionedadjudicatedamountwithin30days,sameshanberecoveredfromthe sale of the mortgagedthypothecated assets as well as other personal movable/ Iirmovable assets of the certificate debtors.

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Themortgagedorhypothecatedassetstosecufetheloaninquestionareherebyattachedandshallbesubjectto thefinalorderundertherecoveryproceedinginpursuanceoftheRecoverycertificateissuedunderSection19(22)of Recovery ofDebts and Bankruptcy Act 1993.

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Partie§aredirectedtoappearbeforeMANOJKUMAR,RecoveryOfflcer,DEBTSRECOVERYTRIBUNALPATNAon16/01/2024.

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TheRecoveryOfficershallrealizetheamountasperthisCertificateinthemanerandmodeprescribedunder Sections25to28oftheRecoveryofDebtsDuetoBanksandFinanciallnstitutionsAct,1993(asamendedfromtime to time) from the above named Certificate Debtors.

¶102

ThisCertificatehasbeenissuedundermysignatureandsealc)ftheTribunalonthis08/12/2023

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pREshe<cER DEBTS RECOVERY TRIBUNAL I'ATNA

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EORMNO.in

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[See Regulation 24(2)]

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DEBTS RECOVERY TRIBUNAL PATNA

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2nd Floor, (A. 8 & F Wng) Karpuri Thakur Sadan, Kendriya Karamchari Parisar

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(GPOA), Ashiana Digha Road, Patna-800025.

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_I _~--, ~~ ---,-- ~~ ----------- ~~ -- .^ ~~ ~ .---., ~ ~~- ~-qu .---- wi-iv~~ --.-, ~--.--A .-.-.-.------------. ^ ~ _

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SCHEDULE TO RECOVERY CERTIFICATE

MEMO 0F COSTS

EINo. 780/2Q22

Case No: OA/497/2022

Applicant(s): IDBI BANK

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V rsus

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Defendant(s): M/S RAJAT ORNAMENTS STORES AND OTHERS

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I ((I. 2. _	Item of Costs Fee on the application _IProcess Fees(Inc. Publication)	Amount in Rs.470000
L.	IAdvocateFeesCommissioner/ReceiyerIva.!uL±!i_o_TdysLfs_ultyFeeMiscellaneousCharges	0
_ 4.		Oi
5.		0
IIIIIIIIIII	E Total Costs: Rs.	47000

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Place: PATNA

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Date: 08/12/2023

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PRESIDIN¥FFICER DEBTS RECOVERY TRIBUNAL PATNA

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Note: Strike out whichever is not applicable

Idbi Bank v. M/s Rajat Ornaments Stores and Others

Case brief

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Idbi Bank v. M/s Rajat Ornaments Stores and Others

Case brief

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