i.e. letter of sole proprietorship, DP note, letter of continuing security, composite hypothecation agreement, undertaking, letter of undertaking, general form of guarantee and PDR. The rate of interest as agreed by the defendants in respect of credit facility payable to the bank is 10.40%p.a. compounded monthly and liability being overdue additional interest of 2% shall also be payable as penal interest to the bank. The defendant no. 2 was offered for pre approved loan facility under BOB guaranteed emergency credit line scheme based on guidelines issued by RBI on 28.8.2020. Accordingly the bank after due appraisal found defendant no. 2 eligible for additional working capital term loan of Rs.4 lakh. The defendants executed the various loan documents i.e. letter of sole proprietorship, undertaking, loan cum hypothecation agreement, general form of guarantee and PDR. The rate of interest as agreed by the defendants in respect of cash credit facility and term loan was at BRLLR + 1% (8%) p.a. at the time of sanction subject to revision from time to time on monthly rests, and liability being overdue additional interest of 2% shall also be payable as penal interest to the bank. The defendants further assured to regularize the account within two three month and again approached for additional support of Rs.1.85 lakh by way of working capital term loan for a period of 36 months and presented an application on 21.1.2021. The bank sanctioned and disbursed through account but even after such indulgence failed to pay single installment or regularize the other loan accounts.
