Allowed

Punjab National Bank v. Sh. Jai Bhagwan

DRT2 Sept 2023OA/697/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the original application filed by Punjab National Bank to recover Rs. 20,76,054/- from the legal heirs of a deceased borrower. The recovery includes current and future simple interest at 5% per annum from the filing date, exercisable against mortgaged/hypothecated properties.

What did the court decide?

Recovery of Rs. 20,76,054/- plus 5% simple interest per annum from filing date till realization, enforceable against mortgaged/hypothecated properties.

Punjab National Bank versus Sh. Jai Bhagwan — Contract and Commercial Disputes | DRT (2023)

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

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ORIGINAL APPLICATION NO.697/2023

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DATE OF INSTITUTION: 13.04.2023

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DATE OF DECISION: 2^nd DAY OF SEPTEMBER, 2023

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Punjab National Bank , a body corporate constituted under the Banking Companies (Acquisition & Transfer of Undertaking) Act, 1970, having its Head Office at Plot No. 4, Sector 10, Dwarka, New Delhi-110075 and Branches all over India including one at Madina, District Rohtak (eOBC Branch) (presently account is at Circle SASTRA Centre, Rohtak, as per arrangement of the bank for handling NPA accounts, through its Constituted Attorney/Senior Manager, Sh. Anil Nagpal

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…..Applicant Bank

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Versus

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Sh. Jai Bhagwan s/o Sh. Dalip Singh, since deceased through his legal heirs:

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A. Sh. Mukesh w/o late Sh. Jai Bhagwan, wife and legal heirs of deceased borrower

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B. Ms Priyanka d/o late Sh. Jai Bhagwan, daughter and legal heirs of deceased borrower

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C. Ms Sonia d/o late Sh. Jai Bhagwan, daughter and legal heirs of deceased borrower

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D. Sh. Mohit s/o late Sh Jai Bhagwan, son and legal heirs of deceased borrower

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E. Sh. Amit s/o Late Sh. Jai Bhagwan, son and legal heirs of deceased borrower

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All the rs/o Village Ajaib, Tehsil Meham, District Rohtak, Haryana

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OA/697/2023 PUNJAB NATIONAL BANK VS JAI BHAGWAN THROUGH LRs 2

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…..Defendants

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Argued by: Sh. Karan Dev Ray proxy counsel for Sh. Bhushan Bhatia counsel for the applicant bank Defendant ex parte vide order dated 30.06.2023

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FINAL ORDER

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Present Original Application was instituted by the applicant bank

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under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ‘the Act’ for brevity), against the defendant for recovery of Rs.20,76,054/- (Rupees Twenty Lacs Seventy Six Thousand and Fifty Four Only) . It has been filed through Sh. Anil Nagpal, Senior Manager of the applicant bank stated to be competent to institute the Original Application vide power of attorney dated 24.09.2004, Annexure-A1 (copy).

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The brief facts of the case of the applicant as per Original Application are that the defendant had approached the applicant bank for enhancement of OGC facility to Rs. 15 lacs vide loan application dated 27.01.2011, Annexure-A2 (copy).

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The applicant bank sanctioned aforesaid facility to the defendant vide sanction dated 27.01.2011, Annexure-A3 (copy) as per terms and conditions which were duly accepted by the defendant. 4. In order to secure the aforementioned credit facility, the defendant executed agreement dated 02.02.2011 of hypothecation of existing and future crops/movable assets/livestock to ensure as cash credit account of oriental green card, Annexure-A4 (copy). Death Certificate dated 30.06.2021 is Annexure-A9 (copy).

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The aforesaid loan was further secured by creation of mortgage by the defendant in respect of agricultural land measuring 147 Kanals 19

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OA/697/2023 PUNJAB NATIONAL BANK VS JAI BHAGWAN THROUGH LRs 3

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Marlas situated in the revenue estate of Ajaib, Tehsil Meham, District Rohtak, Haryana, fully detailed in para No. 5.6 of the Original Application.

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The documents relating to the mortgage are as under:

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i. Registered mortgaged deed dated 15.06.2007, Annexure-A5 (copy).

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ii. Registered supplementary mortgaged deed dated 28.01.2011, Annexure-A5/1 (copy).

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It is further the case of the applicant bank that the loan facility was duly availed of by the defendant but he failed to maintain the financial discipline of the applicant bank and resultantly, the loan account became irregular and it was declared as NPA on 30.09.2022. The defendant executed balance and security confirmation letter dated 30.12.2013, Annexure-A7, letter dated 29.01.2015, AnnexureA7/1, letter dated 15.03.2017, Annexure-A7/2 , letter dated 22.05.2018, Annexure- A7/3 , letter dated 15.10.2018, AnnexureA-7/4 , letter dated 25.06.2019, Annexure-A7/5 and letter dated 08.04.2022, A-7/6 (copy). The applicant bank recalled the entire outstanding amount vide notice dated 19.09.2022 along with its postal receipt, Annexure-A6 (colly) (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.20,76,054/(Rupees Twenty Lacs Seventy Six Thousand and Fifty Four Only)

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is recoverable against the defendant as per statement of account dated 23.03.2023, duly certified under Bankers’ Books Evidence Act, Annexure-A8 (copy).

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OA/697/2023 PUNJAB NATIONAL BANK VS JAI BHAGWAN THROUGH LRs 4

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

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Notices of the Original Application were duly served upon the defendant, but since none appeared on behalf of the defendant, thus, the defendant was proceeded against ex-parte vide order dated 30.06.2023 .

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In support of contents of the OA, affidavit of evidence of Sh. Anil Nagpal, Senior Manager of the applicant bank was filed. 9. This Tribunal has heard ex-parte arguments advanced by learned proxy counsel and gone through the record carefully. 10. It was argued by learned proxy counsel that in view of unrebutted documentary evidence brought on record, the applicant bank had proved its case against the defendant for recovery of the amount sought. From perusal of Annexures-A1 to A9 , it is clear that the defendant had approached the applicant bank for availing of the loan facility which was granted to him. It is further clear that the defendant had executed all the relevant documents as stated above in favour of the applicant bank. Unfortunately, the defendant failed to pay back the loan as per terms and conditions of the agreement executed between the parties. Sh. Jai Bhagwan had died, leaving behind defendant Nos. 1(a), 1(b), 1(c), 1(d) and 1(e) as his legal heirs who have been impleaded as defendants. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.20,76,054/- (Rupees Twenty Lacs Seventy Six Thousand and Fifty Four Only) from the defendants.

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In so far as pendente lite and future interest is concerned, the applicant bank in relief clause has claimed rate of interest @9.75%

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OA/697/2023 PUNJAB NATIONAL BANK VS JAI BHAGWAN THROUGH LRs 5

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per annum plus penal interest @2% per annum. In agreement dated 02.02.2011 of hypothecation of existing and future crops/movable assets/livestock to ensure as cash credit account of oriental green card, Annexure-A4 (copy), the rate of interest has been mentioned @13% 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, nature of the mortgaged property, purpose of loan, i.e. agricultural, present conditions of economy based on agriculture, quantum of loan, prevalent market rates of interest which have gone drastically downhill in yesteryears, death of the borrower and defendant Nos. 1(b) and 1(c) being females, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @5% 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 defendant is liable to pay to the applicant bank a sum of Rs.20,76,054/- (Rupees Twenty Lacs Seventy Six Thousand and Fifty Four Only) with current and future simple interest @5% per annum w.e.f. 13.04.2023 , till the date of realisation of the amount. Accordingly, the applicant bank shall be at liberty to recover aforesaid amount from the sale of mortgaged/hypothecated property of the defendant in execution proceedings, if not sold earlier under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement

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OA/697/2023 PUNJAB NATIONAL BANK VS JAI BHAGWAN THROUGH LRs 6

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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 defendant. The applicant bank is at liberty to enforce the claim through due process of law. However, it is clarified that there should not be any ambiguity that the liability of the defendants by virtue of their being the legal heirs of the deceased borrower shall remain confined only to estate of the deceased borrower if it is inherited by them and not beyond that or otherwise. The recovery proceedings shall proceed only after the Recovery Officer is fully satisfied on the aspect of the estate being inherited by the Legal Representatives/Heirs and the liability being incurred accordingly .

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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 10.10.2023.

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Copy of this order be sent to the applicant bank and the defendant 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 (M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh

Punjab National Bank v. Sh. Jai Bhagwan

Case brief

What is this about?

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Punjab National Bank v. Sh. Jai Bhagwan

Case brief

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