Allowed

Canara Bank v. Sh. Mukhtiar Singh

DRT20 Oct 2023OA/560/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's application under Section 19 of the RDBFI Act for recovery of a loan default. After proceeding ex-parte, the Tribunal ordered payment of the principal sum with uniform simple interest at 8% per annum from the filing date and empowered the bank to recover via security sale or attachment of assets.

What did the court decide?

Recovery of Rs. 22,98,544/- with interest at 8% p.a. from filing date; liberty to recover via sale of mortgaged property or attachment of personal assets.

Canara Bank versus Sh. Mukhtiar Singh — 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.560/2023

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DATE OF INSTITUTION: 22.03.2023 DATE OF DECISION: 20^th DAY OF OCTOBER, 2023

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Canara Bank, a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the successor to Syndicate Bank vide Notification dated 04.03.2020 issued under Section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, approved a scheme called amalgamation of Syndicate Bank with Canara Bank Scheme, 2019 and w.e.f. 01.04.2020 Syndicate Bank since amalgamated with Canara Bank, having its Head Office at 112, J.C. Road, Bangalore and inter alia having one of its Branches at Kaithal Road, Pehowa, District Kurukshetra, Haryana, through its Authorised Attorney, Sh. S.K. Arora, Senior Manager

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….. Applicant

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Versus

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Sh. Mukhtiar Singh s/o Sh. Bhan Singh r/o Village Chanalheri, Tehsil Pehowa, District Kurukshetra, Haryana

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Sh. Baldev Singh s/o Sh. Amar Singh r/o Village Chanalheri, Tehsil Pehowa, District Kurukshetra, Haryana

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…..Defendants

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Argued by: Sh. Kapil Dev Dogra, Officer for the applicant bank

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Defendants ex parte vide order dated 21.06.2023

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FINAL ORDER

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OA/560/2023 CANARA BANK Vs MUKHTIAR SINGH AND ANOTHER 2

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Present Original Application was instituted by the applicant bank under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ‘the Act’ for brevity), against the defendants for recovery of Rs.22,98,544/- (Rupees Twenty Two lac Ninety Eighty Thousand and Five Hundred Forty Four Only) . It has been filed through Sh. S.K. Arora, Senior Manager of the applicant bank stated to be competent to institute the Original Application vide authority letter dated 17.03.2023, Annexure-A1 (copy).

¶15

The brief facts of the case of the applicant as per the Original Application are that defendant No. 1 had approached the applicant bank for grant of KCC Limit of Rs. 14,00,000 and Term Loan of Rs. 3,00,000/- vide loan application dated 14.08.2019, Annexure-A2 (copy)

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The applicant bank sanctioned aforesaid facilities to the defendants vide sanction letter along with appraisal of credit requirement for multiple purpose dated 28.08.2019, Annexure-A3 (colly) (copy), as per terms and conditions which were duly accepted by the defendants.

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In order to secure the aforementioned credit facilities, the defendants executed agreements dated 29.08.2019 for agriculture advance, Annexure-A6 (colly) (copy), addendum dated 29.08.2019 to the agreements, Annexure-A7 (colly) (copy), receipts dated 29.08.2019 and 05.09.2019 of payments, AnnexureA8 (colly) (copy) and deed of guarantee dated 29.08.2019 and addendum to the agreement, Annexure-A9 (colly) (copy).

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OA/560/2023 CANARA BANK Vs MUKHTIAR SINGH AND ANOTHER 3

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The aforesaid loans were further secured by creation of mortgage of two properties by defendant No. 1 in respect of agricultural land measuring 63 Kanal 02 Marla situated in the revenue estate of Chanalheri, Hadbast No. 305, Tehsil Pehowa, District Kurukshetra, Haryana and agricultural land measuring 1 Kanal 13 Marla in the revenue estate of Surmi, Hadbast No. 51, Tehsil Pehowa, District Kurukshetra, Haryana, fully detailed in para No. 5.5 of the OA.

¶20

The documents related to mortgage are as under:

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i. Letters to Sub-Registrar, Pehowa, for entry/mutation of the mortgaged property and declarations dated 22.08.2019 under Section 4(1) of the Haryana Agricultural Credit Operations and Miscellaneous Provisions (Banks) Act, 1973, Annnexure-A4 (colly) (copy).

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ii. Copy of ‘Jamabandi’ for the year 2015-16, Annexure-A5 (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 financial discipline of the applicant bank leading to the loan accounts becoming irregular and those being classified as NPA. Defendants executed acknowledgement of debt and security letters dated 06.10.2021, Annexures-A10 and A11 (copy). The applicant bank recalled the entire outstanding amount vide legal notice dated 10.03.2023, along with postal receipts, Annexure-A13 (colly) (copy) and default letters dated 24.08.2022, 17.09.2022,

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OA/560/2023 CANARA BANK Vs MUKHTIAR SINGH AND ANOTHER 4

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28.09.2022 and 06.10.2022, Annexure-A12 (colly) (copy), but to no avail.

¶26

It is further the case of the applicant bank that after adjusting debit and credit entries in the loan accounts, a sum of Rs.22,98,544/- (Rupees Twenty Two lac Ninety Eighty Thousand and Five Hundred Forty Four Only) , is recoverable against the defendants as per statements of account, certified under Bankers’ Books Evidence Act, 1891, Annexures-A14 and A15 (copy).

¶27

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

¶28

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 21.06.2023 .

¶29

In support of contents of the OA, affidavit of evidence of Sh. S.K. Arora, Manager of the applicant bank was filed.

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This Tribunal has heard ex-parte arguments advanced by Sh. Kapil Dev Dogra, Officer for the applicant bank and gone through the record carefully.

¶31

It was argued by Sh. Kapil Dev Dogra, Officer of the applicant bank 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 A15 , it is clear that the defendants had

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OA/560/2023 CANARA BANK Vs MUKHTIAR SINGH AND ANOTHER 5

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approached the applicant bank for availing of the loan facilities which were granted to them. It is further clear that the 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 record, it is proved that applicant bank is entitled to recover a sum of Rs.22,98,544/- (Rupees Twenty Two lac Ninety Eighty Thousand and Five Hundred Forty Four Only) from the defendants.

¶34

In so far as pendente lite and future interest is concerned, the applicant bank in relief clause has claimed rate of interest @11.40% per annum in KCC account and @8.65% per annum in term loan. In sanction letter along with appraisal of credit requirement for multiple purpose dated 28.08.2019, Annexure-A3 (colly) (copy), rate of interest has been mentioned MCLR+0.75% + 0.25% respectively.

¶35

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 property, purpose of loan, i.e. agricultural, present conditions of economy based on agriculture, 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 @8% per

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OA/560/2023 CANARA BANK Vs MUKHTIAR SINGH AND ANOTHER 6

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annum from the date of filing of the OA till realisation of the amount ordered vide this order. It is ordered accordingly.

¶38

In the result, the Original Application is allowed with costs holding that the defendants are liable to pay to the applicant bank a sum of Rs.22,98,544/- (Rupees Twenty Two lac Ninety Eighty Thousand and Five Hundred Forty Four Only) with current and future simple interest @8% per annum w.e.f. 22.03.2023 , 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 liberty to recover aforesaid amount from the sale of mortgaged/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. However, 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 20.11.2023 .

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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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Pronounced in the open Tribunal (M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh

Canara Bank v. Sh. Mukhtiar Singh

Case brief

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Canara Bank v. Sh. Mukhtiar Singh

Case brief

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