Allowed

Punjab National Bank v. M/s Kiran Motors and Others

DRT27 Jun 2023OA/532/2022

Case brief

AI extract

What is this about?

The DRT allowed the bank's ex-parte application under Section 19 for recovery of dues. Relying on sworn affidavit evidence and documents where defendants failed to appear or contest, the Tribunal determined the debt of ₹45.49 lac plus interest.@

What did the court decide?

The defendants were jointly and severally ordered to pay Rs. 45,49,670/- with pendente-lite interest and future interest at 7.30% p.a. compounded monthly from 30.09.2022 till realization. Recovery Cer

Punjab National Bank versus M/s Kiran Motors and Others — Banking and Recovery | DRT (2023)

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DRT,PATNA

OA 532 of2022[JI

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Debts Recovery Tribunal, Patna

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Karpuri Thakur Sadan, Aashiana Digha Road Patna-800025

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Presiding Officer : Shri Kaushalendra Yadav

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OA Case No.532 of 2022

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Punjab National Bank, Branch office at Barh, District-Patna.

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MIs Kiran Motors, through its Proprietor Sri Ravi Shankar Kumar, At-NH-31, Court Area, Near SBI Branch, P.O. & P.S. Barh, DistrictPatna-803213.

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Sri Ravi Shankar Kumar, Sio Late Bhuneshwar Prasad Singh, Proprietor Mis Kiran Motors, Resident of Village- NewArea, Nath Chak P.O. + P.S. Barh, District- Patna-803213.

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Sri Shankar Kumar, Sio Late Bhuneshwar Prasad Singh, Resident of Village- New Area, Nath Chak,P.O. + P.S. Barh, District- Patna803213.

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..... Defendants.

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For the Applicant : Shri Hemant Kr. Kam, Advocate For the Defendants None

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.. Dated: 27.06.2023

JUDGMENT

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1- The Applicant bank has made this application uls 19 of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 30.09.2022 against the defendants to recover its debts from defendants of Rs. 45,49,670/- as on 30.06.2022 along with Pendente-lite and future interest at the contractual rate from 01.07.202 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 are as under-

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The applicant bank, a body corporate constituted under the Banking Companies (Acquisition and Transfer of undertaking) Act 1970 having its Head Office at Corporate Office, Plot No.4, Sector-I0, Dwarka, New Delhi-l l0075 and inter-alia a branch office at Barh, Patna, Bihar through Sr. Manager, Circle SASTRA Centre, Patna Circle, Patna.

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The defendant no. 1 Mis Kiran Motors is a proprietorship firm of defendant no.2 and is engaged in dealership of Mahindra Vehicles having its head at NH-3I, court Area, Near SBI Branch, PO & P.S. Barh, District- Patbna-8032.l3. Defendant no. 2 Sri Ravi Shankar Kumar is proprietor of Mis Kiran Motors and resident of Village- New Area, Nath

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Chak, P.O. & P.S. Barh, District- Patna-803213. Defendant No.3 IS guarantor to the liability undertaken by defendant No.1 & 2.

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The defendant no. 2 in the name and style of defendant no. 1 made

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an application date 15.01.2015requesting the applicant bank for grant of Cash Credit limit Rs.35 lakh to run business activities efficiently & profitably. The applicant bank through its Branch at Barh, Patna, Bihar on considering the request of the defendant no. 2 and relying upon the information & documents on 29.01.2015 sanctioned credit facility in favour of the defendant no. 1 after rationalizing its requirements. The defendants agreed on the terms of sanction and accordingly executed the agreements of loan. Defendant No. 3 Sri Shankar Kumar executed Agreement f Guarantee on 29.01.2015 to secure the liability undertaken by defendant Nos. 1 & 2 in respect of the above facilities. The defendant no. 2 creation of mortgage of landed property details given at page 24 In schedule-IofOA .

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The defendant no. 2 in the name and style of defendant no. 1 made

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an application dated 06.10.2020 along with undertaking for availing facility under Guaranteed Emergency Credit Line (GECL), requesting for sanction of Loan Amount Rs.7 lakh under the said facility. The applicant bank after considering the request sanctioned and disbursed loan amount of Rs. 7 lakh under GECL facility. The defendant No.2 in the name and style of defendant no. 1 confirmed the correctness of total balance of Rs. 32,48,168/- in Cash Credit Loan account vide Balance and Security confirmation letter dated 02.01.2021.

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The Reserve Bank of India on March 27,2020 issued the statement of

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Development and Regulatory Policies where inter alia certain regulatory measures were announced to mitigate the burden of debt servicing

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... _brought about by disruptions on account of Covid-19 pandemic. RBI and the Government of India to ensure the continuity of viable business die to Covid-19 pandemic situation. The defendants approached the applicant bank and their request was considered and accepted by the applicant bank. On 23.07.2021 Working Capital Term Loan {WCTL} of Rs. 3,50,0001- was disbursed by the applicant bank in the name of Mis Kiran Motors in a separate account.

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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. 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 05.01.2022.

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Thus the total liability in the loan account is Rs.45,49,6701- with Pendent-lite and future interest contractual rate from 01.07.2022 till the realization.

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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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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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4- U/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993, copies of application & paper book was sent by this Tribunal to the . defendants by registered/speed post-on 09.11.2022 and summons/notices issued requiring the defendants to show-cause within 30 days of the service of summons/notices as to why relief prayed for, should not be granted.

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On perusal of the case records, it is clear that on 09.11.2022 summons/notices were sent to the defendants, 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 22.12.2022 in "Prabhat Khabar" newspaper.

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Despite the registered summons/notices and publication of notice

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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 22.02.2023.

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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 Shri Krishna Sharan Mishra, Sr. Manager, Circle SASTRA of the applicant bank. The details of documents are as follows. :-

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.. SI.No	Description of Documents Photocopies	Date of Execution	Amount	Signature of Executants	Ex.! Ann . No.
1	Loan application	15.01.2015"-	Rs.35.00 lakhs	Defendant no. 1 &2	1
2	Sanction letter, consent clause, undertaking and DP note	29.01.2015 31.01.2015	Rs.35.00 lakhs	Bank accepted defendants	2&3
3	Agreement of Hypothecation	29.01.2015	Rs.35.00 lakhs	Between Bank & defendant no. 1 & 2	4
4	PDR	29.01.2015	.....	Defendant no. 1,2 & 3	5
5	Agreement of guarantee	29.01.2015	Rs.35.00 lakhs	Defendant no. 3	5
6 . l'	copy of Deed no. 7096	.... ...	....	. ...	6

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7	Balance & Security Confirmation letter	03.01.2018	...	Defendant nos. 1&2	7
8	Application	06.10.2020	Rs.7lakhs	Defendant nos.l &2	8
9	Sanction order	06.10.2023	Rs.7lakhs	bank	9
10	Balance & Security Confirmation letter	02.01.2021	...	Defendant nos. 1&2	10
11	agreement for Working Capital term loan	20.07.2021	Rs.3.50 lakhs	Defendants nos. 2	11
12	Notice	19.04.2022	....	bank	12
13	Statement of account	as on 30.6.2022	.Rs.45,49,6701-	bank	13

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6- Opportunity of hearing has been fully given to both the parties, but despite several opportunities given to defendants, the defendants have not appeared to contest the case, hence, the ex-parte arguments of learned

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. counsel for applicant bank were heard 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 .

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

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7- It has been established that defendants are living and carrying on

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... . 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 lacs. The applicant bank is functioning within jurisdiction of this tribunal. Therefore, this Tribunal has territorial as well as pecuruary 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 applicant bank has declared the account as NPA on 05.01.2022 whereas the present application has been filed on 30.09.2022. Even, it is counted for the purpose of Limitation, then it is established that

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• the applicant bank has filed the case within the limitation period. As such, it is established that present application has been filed well within the period of limitation .

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.... • 9- In the affidavit of Shri Krishna Sharan Mishra, Senior Manager, Circle SASTRA Centre, of the applicant bank, has stated that he is well acquainted with the facts of the case and has on verification of record, sworn in the affidavit in support of contents of application and the documents as evidence and established on oath the pleadings and documents of the applicant bank as stated above.

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OA 532 of20221JI

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The documents as stated above reveal 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, which strength the case of the applicant bank.

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The applicant bank has also furnished statement of account as above, which is not only admissible but shall be taken as correct statement of account, more so since the entries in the statement of account ... . has not been challenged. ...

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10Since, the case was proceeded ex-parte against defendants, all contentions raised and documents produced by plaintiff remained unrebutted and the tribunal may act upon the affidavit of the applicant as per law. 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, which is' kept in due course of business, evidence on affidavit, which has supported the claim of the applicant bank, established to have fully correct and believable. Provisions contained in Rule 9(~) of Debt Recovery Tribunal (Procedure) Rules, 1993 provide that the documents referred in the application shall be duly stated by senior officer of the bank, or financial institution as the ... ..case may be and numbered accordingly. The rule 12 (10) provides that the provisions contained in section ... 4 of the Banker's Books evidence that Act, 1891 (18 of 1891) shall applied to 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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11On consideration of the arguments and .on perusal of the application, documents and affidavit, it is proved that the applicant bank has granted the loan facility, documents-were executed by the defendants and facility was availed by the defendants as stated in the application.

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12The applicant· bank has sought for recovery of a sum of Rs.45,49,6701- with cost and further interest at the contractual rate from 01.07.2022 till realization.

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13Learned Advocate appearing for applicant bank submits that the applicant bank has charged interest in terms of the agreements and that 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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14On consideration of the arguments and on perusal of the pleadings, documents and affidavit, it is proved" that the applicant has charged interest against defendants in terms of documents and as per directives of RBI.

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15None of the defendants appeared before the tribunal to contest the

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... ..claim made by the applicant, therefore,.,. it necessarily goes to establish that the claim made by the applicant bank is genuine and true. It is

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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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16In Indian Bank Vs. Blue Jaggers Estates Limited and others [2010] 8 SCC 129,the Honorable Supreme Court of India has observed as under-

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"The Court cannot lose sight of the fact that the bank is a trustee of public fund. It cannot compromise the public interest for benefiting private individuals. Those who take loan and avail financial facilities from the bank are duty bound to repay the amount strictly in accordance with the terms of the contract. Any lapse in such matters has to be viewed seriously and the bank is not only entitled but duty bound to recover the amount by adopting all legally permissible methods. Parliament enacted the act because it was found that legal mechanism available till then was wholly insufficient for recovery of the outstanding dues of the banks and Financial Institutions."

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17In 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.45,49,670/- along with pendente-lite and future interest @7.30% p.a. with compounded monthly rests from 30.09.2022 (The date of filing of this OA) till realization. So the final order may be passed accordingly, to meet the ends of justice.

ORDER

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In the result, the application of the applicant bank is, allowed exparte 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.45,4;9,6701- along with pendente-lite and future interest @7.30% p.a. with compounded monthly rests from 30.09.2022 ( 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

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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.

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Parties are directed to appear before the Recovery Officer, DRT, Patna on 30.8.2023. The order be communicated accordingly.

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Judgment signed, sealed, dated and pronounced in the open court on 27thDays of June 2023

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Dic~ated&corrected by me.

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~ [Kaus alendra Yadav] Presiding Officer Debts Recovery.TIlil; ,pe.tna .urs fH.LVW,n r,.,,,, ".r ••

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FORMNO.9 [See Regulation 24( I»)

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DEBTS RECOVERY TRIBUNAL PATNA

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2nd Floor, (A. B & F Wing) Karpuri Thakur Sadan, Kendriya Karamchari Parisar (GPOA), Ashiana Digha Road, Patna-llOOO25.

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RECOVERY CERTIFICATE UNDER SECTION 19(7.)READ WITH SECTION 19(1l) OF THE RECOVERY OF DEBTS & BANKRUPTCY ACT, 1993,AS AMENDED FROM TIME TO TIME.

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RC No. 344/2023 IN

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Case No: OAl532/2022

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In the Matter of: (CH- 1) PUNJAB NATIONAL BANK BRANCH OFFICE AT BARH PATNA ,BIHAR -800001

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Applicant(s)

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----- Versus -------

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To, (CD- I) MIS KIRAN MOTORS AND OTHERS. Prop. Sri Ravi Shankar Kumar At- NH 31 Court Area.Near SBI Branch PO and PS BArh Patna ,BIHAR -803213

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(CD- 2) SRI RAVI SHANKAR KUMAR(GUARANTOR) SIO LATE BHUNESHWAR PRASAD SINGH PROPRIETOR MIS KIRANA MOTORS, RESIDENT OF VILLAGE - NEW AREA, NATH CHAK, P.O.+P.S.- BARH, DISTRICT- PATNA-803213

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Defendant(s)

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(CD- 3) SRI SHANKAR KUMAR SIO LATE BHUNESHWAR PRASAD SINGH, RESIDENT OF VILLAGE- NEW AREA, NATH CHAK, P.O.+P.S.-BARH, DISTRICT- PATNA803213

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ry Certificate for Rs 4549670.00 1___Ry Five Lakhs Forty Nine Thousands Six Hundred Seventy.Jln.ly_1

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In terms of final order dated 27/06/2023 passed by this Tribunal in the above mentioned case, it is ordered that the Applicant Certificate Holder Bank is entitled to recover a sum of Rs. 4549670.00 along with cost, expenses and interest from the 30/09/2022 i.e. date of filing 1 with effective date of the OA/532/2022 and future interest from order date till the date of realisation in full,jointly or severally from the Certificate Debtors, hereinafter referred to as:-

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Effective Date	Order Date	Liability Type	Interest

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In case of failure to pay the aforementioned adjudicated amount within 30 days, same shall be recovered from the sale of the mortgaged/hypothecated assets as well as other personal movablel Immovable assets of the certificate debtors.

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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 proceeding in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993

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Parties are directed to appear before MANOJ KUMAR, Recovery Officer, DEBTS RECOVERY TRIBUNAL PATNA on 30/08/2023. The Recovery Officer shall realize the amount as per this Certificate in the manner and mode prescribed under Sections 25 to 28 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (as amended from time to time) from the above named Certificate Debtors.

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This Certificate has been issued under my signature and seal of the Tribunal on this 27/06/2023

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V PRESIDING OFFICER DEBTS RECOVERY TRIBUNAL PATNA

FORM NO. 10

[See Regulation 24(2)]

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DEBTS RECOVERY TRIBUNAL PATNA