Allowed

Union Bank of India v. M/S Bansal Trading Co. and Others

DRT19 May 2023OA/549/2022

Case brief

AI extract

What is this about?

In an ex-parte application filed by Union Bank of India under the RDBFI Act for recovery of loan dues of approx. Rs.63.56 lacs, the Tribunal found the bank's case established on documentary evidence. The Tribunal allowed the application and awarded interest at 9% p.a. due to prevailing economic conditions.

What did the court decide?

Defendants directed to pay Rs.63,55,981.30/- with simple interest @9% p.a. w.e.f. 21.03.2022. Amount recoverable from sale of hypothecated or personal assets.

Union Bank of India versus M/S Bansal Trading Co. and Others — Cheque Dishonour | DRT (2023)

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DEBTS RECOVERY TRIBUNAL-2, CHANDIGARH, PRESIDED OVER BY M.M. DHONCHAK

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ORIGINAL APPLICATION NO. 549/2022 DATE OF INSTITUTION: 21.03.2022

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DATE OF DECISION: 19^th DAY OF MAY, 2023

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Union Bank of India, a body corporate and a nationalized Bank under the provisions of the Banking Companies (Acquisition & Transfer of Undertaking) Act of 1970, with its Head Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai-400021 and amongst others Branch at HUDA Complex, Sonepat, Haryana, through Sh. Hari Parkash Bhergu, Chief Manager and Constituted Attorney

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....Applicant Bank

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Versus

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Sh. M/s Bansal Trading Company, a Sole Proprietorship concern situated at House No. 512 M, Piao Maniyari, Narela Road, Kundli Sonepat, Haryana-131001 through its Sole Proprietor, Sh. Sonu Kumar Bansal S/o Sh. Subhash Chand Bansal

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Sh. Sonu Kumar Bansal S/o Sh. Subhash Chand Bansal R/o House No. 512 M, Piao Maniyari, Narela Road, Kundli, Sonepat, Haryana-131001

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…...Defendants

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Argued by: Sh. Akaant Kumar Mittal counsel for the applicant bank Defendants ex parte vide order dated 02.02.2023

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FINAL ORDER

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Present Original Application was instituted by the applicant bank under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (herein after referred to as ‘the Act’ for brevity) against the defendants for recovery of Rs.63,55,981.30/- (Rupees Sixty Three lacs Fifty Five Thousand

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OA/549/2022 UNION BANK OF INDIA Vs M/s BANSAL TRADING AND ANOTHER

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Nine Hundred Eighty One and Thirty Paisa Only) . It has been filed through Sh. Hari Parkash Bhergu, Chief Manager of the applicant bank stated to be competent to institute the Original Application vide Power of Attorney dated 27.10.2017, Annexure-A1 (copy).

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The brief facts of the case of the applicant as per Original Application are that defendant No. 1 through defendant No. 2 had approached the applicant bank for grant of cash credit facility of Rs. 50 lacs . Defendant No. 2 stood as a guarantor for repayment of the facility.

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The applicant bank sanctioned aforementioned credit facility to the defendants vide sanction letters dated 07.02.2019 and 05.08.2020, Annexure-A2 and A9 (copy), as per terms and conditions which were duly accepted by the defendants.

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In order to secure the aforementioned credit facility, the defendants executed various loans and security documents, i.e. demand promissory note dated 07.02.2019, Annexure-A3 (copy), letter dated 07.02.2019 of continuity of demand promissory note, Annexure-A4 (copy), hypothecation agreement dated 07.02.2019, Annexure-A5 (copy), letter dated 07.02.2019 by borrowers to not alienate hypothecated good, Annexure-A6 (copy) and agreement dated 07.02.2019 regarding interest rates, Annexure-A7 (copy). Defendant No. 2 executed letter dated of guarantee 07.02.2019, Annexure-A8 (copy)

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It is further the case of the applicant bank that the loan facility was duly availed of by the defendants but they failed to maintain the financial discipline of the applicant bank and resultantly, the loan account was declared as NPA because it became irregular. The defendants executed simple debit balance confirmation letters dated 20.08.2020 and

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OA/549/2022 UNION BANK OF INDIA Vs M/s BANSAL TRADING AND ANOTHER

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10.09.2020, Annexures-A10 and A11 (copy). The applicant bank recalled the entire outstanding amount vide notice dated 19.03.2021, Annexure-A12 (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 account, a sum of Rs.63,55,981.30/- (Rupees Sixty Three lacs Fifty Five Thousand Nine Hundred Eighty One and Thirty Paisa Only) is recoverable against the defendants as per statement of account, Annexure-A13 (copy), duly certified under Bankers’ Books Evidence Act.

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Notices of the Original Application were duly served upon the defendants, but since none appeared on behalf of the defendants, thus, the defendants were proceeded against ex-parte vide order dated 02.02.2023 .

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In support of the contents of the OA, affidavit of evidence of Sh. Hari Parkash Bhergu, Chief Manager of the applicant bank was filed.

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

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It was argued by the learned 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 A13 , it is clear that defendants had approached the applicant bank for availing of the loan facility which was granted to them. It is further clear that defendants 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

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OA/549/2022 UNION BANK OF INDIA Vs M/s BANSAL TRADING AND ANOTHER

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record, it is proved that applicant bank is entitled to recover a sum of Rs.63,55,981.30/- (Rupees Sixty Three lacs Fifty Five Thousand

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Nine Hundred Eighty One and Thirty 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, rate of interest @9.90% per annum plus @2% per annum penal interest. In hypothecation agreement dated 07.02.2019, Annexure-A5 (copy), rate of interest has been mentioned @11.35% per annum.

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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, purpose of loan, i.e. business, quantum of loan 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 grant uniform simple interest @9% per annum from the date of filing of the OA till realisation of the amount ordered vide this 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.63,55,981.30/- (Rupees Sixty Three lacs Fifty Five Thousand

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Nine Hundred Eighty One and Thirty Paisa Only) with current and future simple interest @9% per annum w.e.f. 21.03.2022, till the date of realisation of the amount. The liability of the defendants shall be joint as well as several. Accordingly, the applicant bank shall be at

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OA/549/2022 UNION BANK OF INDIA Vs M/s BANSAL TRADING AND ANOTHER

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liberty to recover aforesaid amount from the sale of hypothecated property 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, the applicant bank shall be at liberty to recover the same by attachment and sale of personal assets 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 26.07.2023. 14. 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

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(M.M. Dhonchak) Presiding Officer

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DRT-2, Chandigarh

Union Bank of India v. M/S Bansal Trading Co. and Others

Case brief

What is this about?

What did the court decide?

Union Bank of India v. M/S Bansal Trading Co. and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

Parties & counsel

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