Allowed

Canara Bank v. Shri Kiran Arun Naik

DRT26 Dec 2023OA/75/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal-1, Mumbai allowed the Original Application filed by Canara Bank against Shri. Kiran Arun Naik for recovery of a loan default. The court found the bank's case proven on documents and awarded the principal amount with interest, directing asset recovery.

What did the court decide?

Liquidated sum of Rs. 20,39,805.1 with interest directed to be paid within 60 days, with recovery from assets if not paid.

Canara Bank versus Shri Kiran Arun Naik — Specific Performance | DRT (2023)

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OA 75 of 2023

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Registered on:16.03.2023

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Decided on: 26.12.2023

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IN THE DEBT RECOVERY TRIBUNAL-I AT MUMBAI ORIGINAL APPLICATION NO. 75 of 2023

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CANARA BANK, A body Corporate constituted under the Banking Companies Acquisition and Transfer of Undertakings Act 1970, having its Head Office at 112 JC Road, Bangalore in the State of Karnataka and one of its branch offices amongst other places at Canacona Goa-403 702 through its Authorised Signatory SHRI. VIJAY KUMAR SINGH

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…. APPLICANT

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VERSUS

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SHRI. KIRAN ARUN NAIK Prop: M/s. Multi Brands, At: Shop No:10, Ground Floor, Royal Business Hub, Chaudi, Canacona, Goa - 403 702 Also at:

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H. No.84, Partugal, Near Jivottm Math, Canacona, Goa - 403 702

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… DEFENDANT

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_____________________________________________ Counsel for the Applicant : Advocate Gajendre A. Rajput, Adv. Vijay H. Counsel for the Defendant: Ex-parte

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J U D G M E N T

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The Original Application has been filed by the Applicant against the Defendant for recovery of Rs. 20,39,805.1 (Rupees Twenty Lakh Thirty Nine Thousand Eight Hundred Five and Paise One Only) with interest at contractual rate from 01.09.2022 till the full realisation.

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OA 75 of 2023

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Facts as succinctly set out in the present OA are that the Defendant is a proprietor of the Multi Brand and is engaged in the business of retail sale of readymade cloth/garment.

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It is stated that Defendant approached the Applicant Bank in the year 2019 and requested for Term Laon facility of Rs. 8 Lakh. Pursuant to the said request, Applicant vide sanction letter dated 25.09.2019 sanctioned Rs. 8 Lakh. The said loan was to be repaid in 84 monthly with 11.15% p.a. with monthly reset.

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In consideration of sanction of the aforesaid facility, the Defendant executed following loaning and security documents in favour of the Applicant on

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i. Letter of Undertaking

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ii. Agreement Cum Deed of Hypothecation; by which Defendant have hypothecated of all stocks, receivables, book- debts and other movable in favour of the Applicant.

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It is further stated that, the Defendant approached the Applicant bank and requested for OD/CC loan facility of Rs. 5,50,000/-. Pursuant to the said request, Applicant vide sanction letter dated 18.12.2019 sanctioned Rs. 5,50,000/- to the Defendant at the rate of RLLR – 8.05 % + 2.15 % per annum with monthly resets.

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In consideration of sanction of the aforesaid facility, the Defendant have extended the charge on hypothecated of all stocks, receivables, book-debts and other movable assets and also executed following loaning and security documents in favour of the Applicant on 18.12.2019:

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i. Letter of Undertaking

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OA 75 of 2023

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ii. Particulars of Machinery/ Equipment

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iii. Pronote

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iv. Request for Overdraft Facility

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v. Cash Credit Agreement

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It is also stated that the Defendant again requested the Applicant to granted GECL Loan facility of Rs. 2,50,000/-. Pursuant to the said request, the GECL loan facility has been sanctioned by the Applicant Bank at the rate of 8.90 % p.a. with monthly resets and repayable in 48 months.

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In consideration of sanction of aforesaid facility, Defendant has executed loaning and security documents in favour of the Applicant which includes Letter of Undertaking; Agreement Cum Deed of Hypothecation.

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Further, it is stated that the Applicant due to non-servicing of the interest of the defendant, and to save the defendant account from slipping to NPA, as per the Applicant Bank scheme, Defendant have on 03.09.2020 been facilitated with COVID FITL (Funded Interest Term Loan) of an amount of Rs. 24,985/-. The Defendant was bound to strictly adhere to the terms and conditions of the loan contract and repay the loan facilities however, the Defendant failed to do so.

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However, after availing aforesaid facilities and also after giving frequent chances, Defendant has not responded, thus the became NPA on 01.03.2021. Thereafter, the Applicant issued Recall notice dated 22.10.2022 and called upon the Defendant to pay the outstanding amount, but failed to do so. Hence, the present OA has been filed.

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OA 75 of 2023

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Notices were issued to the Defendant. Despite service, none appeared on behalf of the Defendant nor any WS has been filed, thus they were proceeded ex-parte vide even date order.

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The Applicant Bank has produced all the Original Loan documents and other relevant documents along with their Claim Affidavit filed through their Authorized Signatory Chief Manager Santosh Dagadu Umbarkar.

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I have heard the Ld. Counsel for the Applicant Bank and perused the record.

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The witness of the Applicant Bank has fully corroborated the averments made in the OA, even otherwise the whole case of the Applicant Bank is based on documents and the witness has duly proved all these documents as against the defendant. In my view there is no question of disbelieving the evidence led by the Applicant Bank and the Applicant Bank has proved its case beyond reasonable doubt.

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In the light of above discussions, the Original Application filed by the Applicant Bank deserves to be allowed against the Defendant.

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O R D E R

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(i) I allow the present O.A. and direct the Defendant to pay to the Applicant, within a period of 60 days, a sum of Rs. 20,39,805.1 (Rupees Twenty Lakh Thirty Nine Thousand Eight Hundred Five and Paise One Only) with interest at contractual rate from 01.09.2022 till the full realisation.

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OA 75 of 2023

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(ii) Failing which the aforesaid amount shall be recovered from the sale of the personal moveable and moveable and immoveable assets of the Defendant.

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