Allowed

Hdfc Bank v. M/S Shri Avinash Annasaheb Musale, Prop. Mr. Avinash Annasaheb Musale

DRT6 Jul 2023OA/582/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application by HDFC Bank Ltd. for recovery of dues. The tribunal reduced the claimed amount by removing penal interest and adjusted the future interest rate to 9% for the Cash Credit account and 8.25% for the Term Loan account before ordering payment.

What did the court decide?

Defendant ordered to pay Rs. 21,36,489 with future interest @9% p.a. and Rs. 4,18,478 with future interest @8.25% p.a., along with issuance of a Recovery Certificate.

Hdfc Bank versus M/S Shri Avinash Annasaheb… — Contract and Commercial Disputes | DRT (2023)

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Presented on: 19.01.2022 Registered on: 04.07.2022 Decided on: 06.07.2023 Duration: Y M D 1 5 17

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IN THE DEBTS RECOVERY TRIBUNAL AT PUNE (Before Shri Dilip G Murumkar, Presiding Officer) ORIGINAL APPLICATION No.582/2022

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HDFC Bank Limited,

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A Banking Company incorporated under the Companies Act, 1956, having its Registered Office at HDFC Bank House, C.S. No.6/242, Senapati Bapat Marg, Lower Parel, Mumbai400 013 and having one of its Offices at Department for Special Operations, Peninsula Business Park, B Wing, 4^th Floor, Lower Parel (W), Mumbai-400 013.

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… Applicant

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Versus

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Mr. Avinash Annasaheb Musale, Proprietor of M/s. Shri Avinash Annasaheb Musale, Age- 35 years, Occupation-Business, Residing at: 2-485-8, Dhuleshwar Nagar, Kolhapur Ichalkaranji Road, Uttar Bajucha Parisar Gram, Kabnur, TalukaHatkanangale, DistrictKolhapur-416 129

… Defendant

(OA No.582/2022)

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APPEARANCES

For the Applicant Mr. Yogesh R. Hirve - Advocate For Defendant Mr. Aryan Mahindra - Advocate

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TOTAL CLAIM AMOUNT –Rs.26,49,703.85Ps.

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JUDGMENT (Delivered on 06^th July, 2023)

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The Applicant Bank has filed the present Application for recovery of aggregate sum of Rs.26,49,703.85Ps. i.e. Rs.22,13,039.64Ps. in respect of Cash Credit facility and Rs.4,36,664.21Ps. in respect of Term Loan (GECL) facility together with future interest @18% p.a. with monthly rests thereon from 19^th January, 2022 till repayment/realization of entire dues from the defendant.

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Brief facts of the application are as under:

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The defendant is the borrower who is engaged in business of manufacturing of Cloth Fabrics under his proprietary concern named as M/s. Shri Avinash Annasaheb Musale.

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The defendant approached the applicant Bank for financial assistance by way of Cash Credit of Rs.10,00,000/on 29^th December, 2014 for the purpose of his business requirements.

(OA No.582/2022)

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On 10^th February, 2015 the applicant Bank sanctioned the Cash Credit facility of Rs.7,00,000/-, although the loan was requested for Rs.10,00,000/-, and disbursed the same to defendant under CGTMSE Scheme. The Cash Credit facility was to carry interest @12.75% p.a. with monthly rests with Tenor of 12 months valid up to 20^th January, 2016.

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The defendant signed and executed loan transaction and security documents as set out in paragraph No.5.6 of the Original Application, including Letter of Hypothecation dated 22^nd February, 2015 and thereby created first charge on Stocks and Book Debts in favour of the applicant, more particularly mentioned in Schedule-I of the Original Application.

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The applicant Bank contended that the said Cash Credit facility of Rs.7,00,000/- was renewed twice on 12^th January, 2016 with interest @12.05% p.a. with monthly rests and on 19^th January, 2017 with interest @12% p.a. with monthly rests. The defendant executed amended loan and security documents as mentioned in paragraph Nos.5.16 of the Original Application for renewed Cash Credit facility.

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The applicant Bank further contended that on 09^th May,

(OA No.582/2022)

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2017 the existing Cash Credit facility of Rs.7,00,000/- was enhanced to Rs.15,00,000/- which was valid upto 20^th January, 2018 with interest @11.05% p.a. with monthly rests.

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On 01^st June, 2017 defendant signed and executed loan transaction and security documents as set out in paragraph No.5.22 of the Original Application.

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On 25^th January, 2018 the Cash Credit limit was further enhanced from Rs.15,00,000/- to Rs.20,00,000/- for which defendant executed Supplementary Agreement and other relevant documents as mentioned in paragraph No.5.28 of the Original Application. The said Cash Credit facility was further renewed on 31^st January, 2020. Defendant signed and executed Addendum dated 25^th February, 2020 for the said enhanced facility.

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The applicant Bank further contended that on 17^th July, 2020 it has sanctioned Term Loan (GECL) facility of Rs.4,02,846/repayable in 48 months by EMI of Rs.12,671/- per month commencing on 07^th August, 2020 with interest @8.25% p.a.

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On 18^th July, 2020 defendant signed and executed loan transaction and security documents as mentioned in paragraph No.5.38 of the Original Application.

(OA No.582/2022)

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The applicant Bank further contended that defendant also signed and executed Letter of Acknowledgement of Debt dated 01^st December, 2020 thereby acknowledging balance outstanding.

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The applicant Bank further contended that on 12^th February, 2021 the Term Loan (GECL) facility was renewed.

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The applicant Bank contended that after renewal, the defendant deliberately and knowingly failed to repay as agreed in spite of repeated requests by the Applicant Bank. Consequently, the loan account of the defendant became Non-Performing Asset on 14^th June, 2021.

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Thereafter, the applicant Bank through its Advocate issued Recall Notice dated 28^th October, 2021 calling upon the defendant to pay the outstanding amount. Despite issuance of Recall Notice, defendant did not pay the dues of the applicant Bank.

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Hence, this application is filed.

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Defendant was duly served with the summons. Despite service of summons, defendant failed to file Written Statement. Therefore, the application proceeded without Written Statement against defendant vide Order dated 18^th

(OA No.582/2022)

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April, 2023 passed below Application (Exhibit-1).

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The applicant Bank has filed Claim Affidavit of evidence (Exhibit-6) of Mr. Niraj Tiwari, Recovery Manager, which supports the case of the applicant Bank elucidated in the application.

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The applicant Bank has produced on record the original loan transaction documents (Sr.Nos.AW-1/1 to AW-1/45) which corroborate the case of the applicant Bank.

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I have heard arguments of the learned Advocate for the applicant Bank.

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Since the defendant failed to appear and contest the application, I find no reason to disbelieve evidence of the applicant Bank. Therefore, the applicant Bank is entitled for reliefs as claimed.

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The applicant Bank has claimed relief in respect of hypothecated assets. However, there is no detailed description with respect to the hypothecated assets. Therefore, the relief in terms of hypothecated assets cannot be granted.

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The applicant Bank has claimed Penal Interest of Rs.76,550.95Ps. in Cash Credit loan account and

(OA No.582/2022)

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Rs.18,185.97Ps. in Term Loan (GECL) account which cannot be granted and these amounts are deducted from the respective total claim amounts. Therefore, the aggregate claim amount of Rs.26,49,703.85Ps. is reduced to Rs.25,54,967/-.

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The applicant Bank has claimed future interest @18% p.a. with monthly rests for both the loan accounts. However, considering the facts of the case, I am of opinion that if future interest is granted @9% p.a. for Cash Credit loan account and @8.25% p.a. for Term Loan (GECL), it would be just and reasonable rate of interest.

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Hence, I pass the following order:-

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ORDER

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(A) Original Application No.582/2022 is allowed with costs.

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(B) Defendant shall pay to the applicant Bank towards Cash Credit loan account the sum of Rs.21,36,489/(Rupees Twenty-One Lakhs Thirty-Six Thousand Four Hundred and Eighty-Nine only) with future interest @9% p.a. from the date of filing of the Original Application i.e. 19^th January, 2022 till full

(OA No.582/2022)

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realization of the amount mentioned in this operative order.

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(C) Defendant shall pay to the applicant Bank towards Term Loan (GECL) loan account the sum of Rs.4,18,478/(Rupees Four Lakhs Eighteen Thousand Four Hundred and Seventy-Eight only) with future interest @8.25% p.a. from the date of filing of the Original Application i.e. 19^th January, 2022 till full realization of the amount mentioned in this operative order.

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(D) Issue Recovery Certificate.

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(E) The Registrar is directed to send the copy of Judgment and Recovery Certificate to the applicant Bank and defendant.

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Place : Pune Date : 06.07.2023

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Sd/( Dilip G Murumkar) Presiding Officer Debts Recovery Tribunal, Pune

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(OA No.582/2022)

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Hdfc Bank v. M/S Shri Avinash Annasaheb Musale, Prop. Mr. Avinash Annasaheb Musale

Case brief

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Hdfc Bank v. M/S Shri Avinash Annasaheb Musale, Prop. Mr. Avinash Annasaheb Musale

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