Allowed

Hdfc Bank Limited v. M/S Valecha and Company

DRT29 May 2023OA/531/2022

Case brief

AI extract

What is this about?

This is an original application filed by a bank for recovery of a debtor amount of approximately Rs. 34.77 lacs arising from a failed business loan. The respondents failed to appear, leading to an ex-parte decision allowing the application.

What did the court decide?

Recovery of principal amount along with simple interest at 8% per annum from the date of filing. Issuance of a Recovery Certificate.

Hdfc Bank Limited versus M/S Valecha and Company — 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.531/2022

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DATE OF INSTITUTION: 19.01.2022

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DATE OF DECISION: 29^TH DAY OF MAY, 2023

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HDFC Bank Limited, a Banking Company, incorporated under Companies Act, 1956, having its Registerd Office at HDFC Bank House, Senapati Bapat Marg, Lower Parel (West), Mumbai-400013, Maharashtra and one of its Branches at Ambala, Haryana, through its Authorised Signatory, Sh. Narender Kumar Nanda, who is duly authorised vide Board Resolution dated 16.10.2021 and presently posted as a Recovery Manager at HDFC Bank Limited, HDFC Bank House, Plot No. 28, 1^st Floor, Industrial Area, Phase-I, Chandigarh

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…..Applicant Bank

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Versus

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M/s Valecha and Company, a sole proprietorship firm, through its sole Proprietor, Sh. Mohit Kumar S/o Sh. Dev Raj, situated at Shop No.91, Grain Market, Ambala City, Haryana

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Sh. Mohit Kumar S/o Sh. Dev Raj R/o House No. 2542-A, Part 6, Village Lalru, Tehsil Dera-Bassi, District SAS Nagar

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Sh. Lajpat Rai S/o Sh. Sanwal Dass R/o House No. 2440, Part 6, Village Lalru, Tehsil Dera-Bassi, District SAS Nagar

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…..Defendants

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Argued by: Sh. Sumit Batra counsel for the applicant bank Defendants ex parte vide order dated 26.05.2023

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FINAL ORDER

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Present Original Application was instituted by the applicant

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bank under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as

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OA 531/2022 HDFC BANK V/S SH. MOHAN LAL KALIA AND OTHERS 2

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‘the Act’ for brevity) , against the defendants for recovery of Rs.34,76,960.26/- (Rupees Thirty Four lacs Seventy Six Thousand Nine Hundred Sixty and Twenty Six Paisa only) . It has been filed through Sh. Narender Kumar Nanda, Recovery Manager of the applicant bank, stated to be competent to institute the Original Application vide Board Resolution dated 16.10.2021, Annexure-A1 (copy).

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The brief facts of the case of the applicant as per the Original Application are that defendant No. 1 through defendant No. 2 had approached the applicant bank for grant of credit facility by way of ODP limit of Rs. 25 lacs vide loan application dated 19.03.2014 and request letters dated 31.05.2017 and 19.03.2019 Annexures-A2, A18 and A23 (copy) and Government Emergency Credit Line Scheme of Rs. 5 lacs. Defendant Nos. 2 and 3 stood as guarantors for repayment of the loans.

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The applicant bank sanctioned the above said loan facilities to the defendants sanction letters dated 08.05.2014 and 07.07.2020, Annexures-A3 and A27 (copy) and renewal sanction letters dated 11.03.2015, 15.03.2016, 21.03.2019, 02.06.2017, 14.05.2018, 19.03.2019 and 18.03.2020, Annexures-A15, A16, A17, A22, A24 and A25 (copy).

¶20

In order to secure the aforementioned credit facilities, the defendants executed various loan and security documents, i.e. demand promissory notes dated 10.05.2014 and 02.06.2017, Annexures-A4 and A20 (copy), letter dated 10.05.2014 regarding continuing security, Annexure-A5 (copy), master facility agreement dated 10.05.2014, Annexure-A6 (copy), letter dated 10.05.2014

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OA 531/2022 HDFC BANK V/S SH. MOHAN LAL KALIA AND OTHERS 3

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regarding continuing guarantee, Annexure-A7 (copy), amendment agreement dated 02.06.2017, Annexure-A21 (copy), addendum dated 02.06.2020 regarding switch over to MCLR rate, AnnexureA26, facility-cum-hypothecation agreement dated 07.07.2020, Annexure-A28 (copy) and declaration-cum-undertaking regarding terms and conditions, Annexure-A31 (copy).

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The aforesaid loan was further secured by creation of equitable mortgage by defendant No. 2 in respect of immovable commercial shop at plot No. 117 measuring 9 Biswansis and by defendant No.3 in respect of immovable commercial shop measuring 11 Biswansis situated in the revenue estate of Lalru-Mandi, Tehsil Dera-Bassi, District Mohali, fully detailed in para Nos. 5.12 and 5.13 of the Original Application.

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The documents relating to the mortgage are as under:

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i. Registered sale deeds No. 15482 and 5480 dated 24.02.2011 and 07.03.2001, Annexures-A8 and A9 (copy).

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ii. Memorandums dated 10.05.2014 and 07.07.2020 regarding recording past transactions of creation of mortgage by delivery of title deeds, Annexures-A10, A29 and A30 (copy).

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iii. Declaration-cum-indemnity dated 10.05.2014, Annexure-A11 (copy).

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iv. Deed of indemnity dated 10.05.2014, Annexure-A12 (copy).

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v. Valuation reports dated 05.02014 and 06.05.2014, Annexures-A13 and A14 (copy).

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It is further the case of the applicant bank that the loan facilities were duly availed of by the defendants but they failed to maintain the

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OA 531/2022 HDFC BANK V/S SH. MOHAN LAL KALIA AND OTHERS 4

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financial discipline of the applicant bank and resultantly, the loan account became irregular and it was declared as NPA on 31.03.2021. The applicant bank recalled the entire outstanding amount vide notice dated 23.07.2021 along with the postal receipts Annexure-A32 (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 the loan accounts, a sum of Rs.34,76,960.26/- (Rupees Thirty Four lacs Seventy Six Thousand Nine Hundred Sixty and Twenty Six Paisa only) is recoverable against the defendants as per statement of accounts certified under Bankers’ Books Evidence Act, Annexure-A33 (copy) and interest calculation sheets, Annexures-A34 and A35 (copy).

¶34

Since the defendants did not repay the outstanding amount, therefore, the applicant bank preferred the present Original Application for issuance of Recovery Certificate.

¶35

Notices of the Original Application were duly served upon the defendants, but since none appeared on behalf of the defendants despite service, thus, the defendants were proceeded against ex parte vide order dated 26.05.2023 .

¶36

In support of the contents of the OA, affidavit of evidence of Sh. Narender Kumar Nanda, Recovery Manager of the applicant bank was filed.

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This Tribunal has heard ex-parte arguments advanced by the learned proxy counsel and gone through the record carefully.

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OA 531/2022 HDFC BANK V/S SH. MOHAN LAL KALIA AND OTHERS 5

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It was argued by the learned proxy 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 A35 , it is clear that the defendants had approached the applicant bank for availing of the loan facilities which were granted to them after they had executed all the relevant documents as stated above in favour of the applicant bank. Unfortunately, the defendants failed to pay back the loan as per terms and conditions of the agreement executed between the parties. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.34,76,960.26/(Rupees Thirty Four lacs Seventy Six Thousand Nine Hundred Sixty and Twenty Six Paisa only) from the defendants.

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In so far as pendente lite and future interest is concerned, the applicant bank has claimed in relief sought, rate of interest @18% per annum with monthly rests. In renewal sanction letter, Annexure-A25 (copy), the rate of interest has been mentioned @9.5% per annum for ODP limit and in sanction letter, Annexure-A27 (copy), the rate of interest has been mentioned @8.25% per annum for GEC limit.

¶41

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 mortgaged properties, purpose of loan, i.e. business and 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

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OA 531/2022 HDFC BANK V/S SH. MOHAN LAL KALIA AND OTHERS 6

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grant uniform simple interest @8% per annum from the date of filing of the OA till realisation of the amount ordered vide this final order. It is ordered accordingly.

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In the result, the Original Application is allowed with costs declaring that the defendants are liable to pay to the applicant bank a sum of Rs.34,76,960.26/- (Rupees Thirty Four lacs Seventy Six Thousand Nine Hundred Sixty and Twenty Six Paisa only) with current and future simple interest @8% per annum , w.e.f. 19.01.2022 , till the date of realisation of the amount. The liability of 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 properties of the defendants in execution proceedings, if not sold earlier under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 or otherwise. If the dues of the bank still remain unsatisfied, applicant bank shall be at liberty to recover the same by attachment and sale of personal assets/property 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 28.07.2023.

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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

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DRT-2, Chandigarh

Hdfc Bank Limited v. M/S Valecha and Company

Case brief

What is this about?

What did the court decide?

Hdfc Bank Limited v. M/S Valecha and Company

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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