Allowed

Canara Bank v. Ms P K Choudhury and Sons Pvt. Ltd.

DRT7 Sept 2023OA/55/2022

Case brief

AI extract

What is this about?

In an application under Section 19 of the RDBFI Act, the Debts Recovery Tribunal Guwahati allowed the bank's claim for a Recovery Certificate against a corporate borrower and its director-guarantors for unpaid loan amounts and interest, noting the evidence was unchallenged and the application was within the limitation period.

What did the court decide?

Issued Recovery Certificate for ₹81,14,584.61 with interest and costs against the defendants and their secured properties.

Canara Bank versus Ms P K Choudhury and Sons Pvt. Ltd. — Banking and Recovery | DRT (2023)

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o.A. ss/2o2zDRTcur.ahati

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(North Eastern Region)

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(Tribunal of Assam, Nagaland, Meghalaya, Manipur, Mizoram, Arunachal Pradesh & Tripura)

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Before Shri Shiv Sharan Dubev. Presidinq Officer

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O.A. No. 55/2022

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ln the matter of -

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Canara Bank Kahilipara Branch Shivam Market, Colony Bazar, Kahilipara, Guwahati, Assam-781 01 B.

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Applicant Vs. 1. M/s P K Choudhury and Sons Pvt. Ltd. A company incorporated under Companies Act 1956 having its Registered Office at Kalapahar lndustrial Estate A KAzad Road, Gopinath Nagar, Guwahati 781016 (Represented by its Directors Defendants No. 1, 2 & 3) 2. Sri Paritosh Kumar Choudhury Son of Late N K Choudhury Resident of- House No. 51, Rajani Kanta Deka Path, Kalapahar, PO - Gopinath Nagar, Guwahati, PIN-781016 (Director of Defendants No.1) 3. Sri Sushanta Choudhury Son of Paritosh Kumar Choudhury Resident of - House No. 51, Rajani Kanta Deka Path, Kalapahar, PO - Gopinath Nagar, Guwahati, PIN-781016 (Director of Defendants No. 1) 4. Sri Prasanta Choudhury Son of Paritosh Kumar Choudhury Resident of - House No. 51, Rajani Kanta Deka Path, Kalapahar, PO - Gopinath Nagar, Guwahati, PtN-781016. Defendants Presence of the Counsel : For the Applicant : Mr. M K. Bora, Advocate For the Defendants : Mr. Devaraj Sahu, Ms. Mayurtrishna Gogoi, Advocates (Right to file WS cum EA closed)

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Dated :07/09/2023

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Sh"Aaa, ' E"[, oilr9lA / Presiding Off'cdr^{' -} L DRT, Guwahati

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O.A. 55/2022IORT-Guwahati

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JUDGMENT

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This is an application under^{section 19 of the Recoveryof Debts Due to Banks} and Financial lnstitutions^{Act, 1993 filed by the Canara Bank, KahiliparaBranch'} Shivam Market, Colony^{Bazar, Kahilipara, Guwahati,Assam-7810't8, with a prayer to} issue Recovery Certificate^{for the sum of Rs. 8'1,14,584.61(Rupees EightyOne} Lakhs Fourteen Thousand Five^{HundredEighty Four and Paise Sixty one) only} as on 31 . 12.202't against the defendants^{with pendentelite and future interest thereon} at the contractual rate till realization^{alongwith cost and other relief.}

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A few facts^giving rise to the^{present applicationare as under.}

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The defendant No.1 is a^{Private Limited Company incorporated under} companies Act 1956 doing^{manufacturingof multilayer polythenefilm with printing} and lamination work and^{defendant No.2,3 and 4 are the Directors.The defendant} No. 1 company by its^{resolution dated28-06-2004 resolved that financial} assistance of Cash Credit^{limit Rs.51.00 lac to be applied before applicantBank} and after considering,^{the applicant Bank had sanctioned a cash credit facility of} Rs.51,00,000.00 on 02-07-2004.

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ln connection with the^{sanction of the cash creditLimit of Rs.51,00,000.00} sanctioned by the^{applicant Bank and availed by the defendant No.1, Pronote of} Rs.51.00 lakh, cash^{credit Agreement, AgreementRE: Advancesagainst Book} Debt and Agreement^{RE: Collateral security: Machinery all dated02-07-2004has} been signed and executed^{by the defendant No.2, 3 and 4 on behalf of defendant} No.1 in favour of the applicant^{Bank as security for repayment of the loanfacility} thereby agreeing^{to all the terms and conditions laid down in the said documents} and hypothecated^{the Book Debts, Plant and machinery, stocks purchased out of} the Bank financed^{in favour of the applicantBank.}

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Defendants No. 2,3^{and 4 stood as guarantor for the cashcredit facilitiesof}

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Sff-i,^q,a/o, &d/.

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p,".ioing omg1ol 14 DRT, Guwahati

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O.A. ss/2o2zDRT4uwahati

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The defendant No.2,3^{and 4 had} Rs.51 .00 lakh^given to^{the defendant No.1.} executed Guarantee^{covering Letter and Guarantee Agreementon 02-07 -2004.}

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Defendant No.1 is also^{tenant of a plot of land measuring 5484 sq'ft'} situated at Kalapahar^{lndustrialarea coveredby DagNo.8 and 9 of Village Fatasil} Grazing Ground,^{Mouza- Beltola,RevenuecircleDispur, Kamrup Metropolitan} District. The description^{of land is given in ScheduleA below. ln ScheduleA land,} unit of defendant^{No.'l is standing. The Assam lndustriallnfrastructure} Development corporation^{(AIDC) a Govt. of Assam corporation by executinga} registered Deed of^{Lease beingDeed No.2272l1989dated 27-06-1989 initially} grantedleaseoftheScheduleApropertytodefendantNo.lforaperiodof30 yearsandbyexecutinganotherregisteredDeedofLeasebeingDeedNo'912/2007 dated 18-01- 2007^{extendthe lease period for another60 years. The defendant} No.2 by executing^{LetterEvidencing Depositof Title Deeds dated 01-07-2004'} deposited the^{registered Deedof Leasedated 27-06-1989 alongwithsome others} documents and^{mortgaged the scheduleA property with the applicantBank with} intention to secure^{the loan of Rs.51.00Lac given by the applicant Bank' The} AIIDC by its^{Letter dated 16-06-2004 also stated its no objection in creation of} mortgage of the^{ScheduleA propertyby the defendant No't '}

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on 30-05-2005^{existing cash credit limit of Rs.51.00 Lac was enhanced up} toRs.Tl.00lakh.ThedefendantsNo.2,3and4alsoexecutedPronote,Letterof Renewal,supplementalAgreement,GuaranteeCoveringLetter'Guarantee Agreement all^{dated30-05-2005on behalfof defendant No.1. By executingthe} Letter Evidencing^{Deposit of Title Deed dated31-05-2005 defendantsalso} mortgagedtheScheduleApropertyforenhancelimitofRs.Tl.00Lac.

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on ol-09-2006^{existing cash creditLimit of Rs.71.00 Lac was enhancedup} to Rs.100.00^{Lakh.. The defendant No.2, 3 and 4 executed Pronote, Letter of} Renewal, dated^{01-09-2006.Link Letter,supplemental Agreementall dated} 01.09.2006.

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Thereaftersaid limitof^{Rs. 100.00 Lac was renewed every year'But on}

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s,^ir"_u?gn Presiding O/frcel DRT, Guwahati

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o A. st2o2zDRT€uwahsti

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31-08-2019 said facility was reduced to^{Rs.95.00Lac and thereafteron} 26-02-2021 said facility was^{further reduced to Rs.76,75,000.00.}

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On 30-05-2005, O1-09-2006,^{17-07-2009,'t6-05-2011'31-03-2014'} 23-03-2017,31-08-2019 the^{defendants had executed Acknowledgementof Debts} and Security and hereby^{admit the correctness, confirmand acknowledge that a} sum of as mentioned^{in the respective AoDS is due and outstandingand also} admit, confirm and acknowledge^{that all the relative documents, agreements,} securities and obligation^{shall remainin force and effectuntil repaymentof the} amount due in the Cash^{Credit Loan account beingNo.2308261010134'}

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on account of financial^{stringencyfaced by the defendant No.1 due to} various internal and^{external reason, the defendantNo.1 is unable to repay the} outstanding dues^{of the cash credit limitand accordinglyall the defendantshad} approached the applicant^{Bank for restructure of the cash creditfacility. The Debts} Restructure Agreement^{and DebtorcreditorAgreementwas executedon 28-06-} 2021 . As^per said^{two agreement dated28-06-2021 interestpart of cash credit} Account which was^{amount to Rs.1,76,662.00was converted to Fundedlnterest} Term Loan^{(FITL) as per Govt . of lndia directiongiven in view of the coVlD'19} pandemic. The FITL account^{numberis 2308757000009'}

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The defendants^{had availed the said loan facilities from the applicant bank but} has not^paid the^{outstanding loan amount as perterms and conditions as agreedupon} withtheapplicantbank,inspiteofrepeateddemandsandrequestbytheapplicant bank. As the defendant^{failed to repay the outstandingamount in the loan account, the} saidaccountbecameNPAon3o.lo.2o2l.AftertheaccountbecameNPAthe applicantbankissuednoticesforrepaymentofthedueamount'butthedefendanthas neither chosen^{for repaymentof the loan accountnor approachedto the applicant} bank for renewal^{of the loan account'}

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The applicant^{bank thus becameconstrainedto file the} present Original Application^{for the recoveryof Rs. 81,14,584'61 (RupeesEightyOne} Lakhs Fourteen

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-sAirclufi Presiding Officdr ORT, Guwahati

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O.A. 55i202ZDRT-Guwahati

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Thousand Fivo Hundred Eighty Four and Paise Sixty One) only as on 31.12.2021 along with interest and cost of the application.

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After filing of the OA the Tribunal issued notices upon the defendants through registered post and the applicant bank filed service report on 06.05.2022 and brought on record the postal receipts. The learned counsel for defendants had appeared on the same day i.e. on 06.05.2022 by filing Vakalatnama and sought time to file written statement cum evidence on affidavit. Thereafter, the case was listed on 20.05.2022, 03.06.2022, 17.06.2022, 29.06.2022 & 18.07.2022, but the written statement cum evidence on affidavit has not been filed by the defendants. Hence, their right of the file written statement cum evidence on affidavit was closed on 18.07.2022 and the matter was fixed for hearing.

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Supporting the claim of the applicant bank Sri Kamal Kumar Pathak, Officer of the Applicant Bank has filed evidence on affidavit coupled with the security documentsmarked as Exhibit A-1 to A-58 supporting the claim of^{the applicantbank.}

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Heard the learned counsel for the applicant bank who^prayed for issuance of Recovery Certificate against the defendants as^{per pleadings} made in^the Application, supported by evidence on affidavit of their^{witness who affirmed on oath} the execution of the 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 liability^{of the defendants. lt is provedthat 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 02.07.2004, 30.05.2005, 01.09.2006 & 26.02.2021.^{On 30-05-2005,} 01-09-2006, 17-07-2009, 16-05-2011, 31-03-2014,^{23-03-2017,31-08-2019the} defendants had executed Acknowledgement^{of Debtsand Security,Theaccount} became NPA on 30.10.2021 and the OA has been^{filedon 16.02.2022. Hence, the}

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sl,ir.^rSlr-ta* A.Lr/ Presiding ,nodrll?) o ( DRT, Guwahati

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O.A. 55/2022lDRT-Guwahati

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OA is fited well within the^period of limitation and this Tribunal^{havinga jurisdictionto} adjudicate the Original Application.

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Considering the unchallenged/unrebutted^{version of Sri Kamal KumarPathak,} the applicant's witness and all the documents^{marked as exhibits,including duly} certified copy of the statement of account^{along with interest calculationsheet} maintained by the applicant Bank in it's regular^{courseof business,I hold that the} applicant is entitled to^get the Recovery Certificate^{as prayed for.}

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ln the result, the^present Original Application^{No. 55 of 2022 is allowed with} cost as under :-

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i) The defendants No. 1, 2, 3 & 4 are^{jointly and severally liable to pay to the} applicant bank a sum of Rs. 81,14,584.6'l^{(RupeesEighty One Lakhs} Fourteen Thousand Five Hundred Eighty^{Four and Paise Sixty One)only} with pendentelite and future interest @12.75o/o^{p.a. with monthly rests from} 01.01.2022 till the date of full^{paymenVrealizationand also cost of the} application.

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ii) The charge of the certificated amount be^{kept alive on mortgaged propertyi.e.} A plot of land measuring 5484 sq. ft. at^{lndushialarea Kahilipara covered by} Dag No. 8 and 9 of Village- Fatasil Grazing^{Ground, Mouza- Beltola, Revenue} Circle- Dispur, Kamrup Metropolitan^{District, Assam and is boundedby North:} Main Road, South: Excellent Gravure,^{East: lnternal Road, West:Kwality} Food Products, as described in Schedule-A of^{the OA till the amountis} realized in full.

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iii) The charge of the certificated amount be^{kept alive on hypothecated} properties, as described in Schedule- B of the OA till the amount^{is realizedin} full.

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iv) The applicant bank is entitled^{to proceed against the secured items towards} recovery of the debts. S,[olSN.'o,,O-

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A.\L S,[olSN.'o,,Oe,esloins 6 ofrAi'l^{i'l -.,- I} ( ?5 DRT, Guwahati

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O.A. 55/2o22lDRT6uwahati

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v) The applicant bank^{is also entitledto proceed againstthe personal assetsand} properties ofthe defendant towards^{recoveryofthedues.}

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vi) The applicant bank^{is entitled to the costs of the O.A. which includesthe} advocate fees of the^{applicant bank. Applicantis directed to file the cost} memo within² weeks^{from today.}

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vii) lssue Recovery Certificate^{accordingly for a sum Rs. 81'14'584.61 (Rupees} Eighty One Lakhs^{Fourteen ThousandFive HundredEightyFourand} Paise Sixty One)^{onlyin favour of the applicant bank against the defendants} No. 1,2,3&4.

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viii) Communicate copy^{of this order to the concerned parties.}

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This order is dictated and^{correctedby the undersigned.}

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Judgment dated^{7th September2023,signed and pronouncedin the Tribunal}

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today under my signature.

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copy of the JudgmenuFinal^{orderbe uploaded in the Tribunal'swebsiteand} file be consigned to^RecordRoom.

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SL,vs-l*,.qr W*t(Shiv Sharan oubey) l- \i Presiding Officer ORT, Guwahati.

Canara Bank v. Ms P K Choudhury and Sons Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Canara Bank v. Ms P K Choudhury and Sons Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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