Allowed

State Bank of India v. Shantinath Mobile

DRT29 Aug 2023OA/756/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the Original Application filed by State Bank of India against M/s. Shantinath Mobile. The court directed the defendant to pay the outstanding loan amounts of approximately Rs. 40 Lakhs along with interest, penalties, and costs within 60 days.

What did the court decide?

Defendant to pay Rs. 40,06,631.89 with interest; Recovery Certificate issued; properties attached.

State Bank of India versus Shantinath Mobile — Contract and Commercial Disputes | DRT (2023)

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OA 756 of 2022

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Registered on:- 27.12.2022

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Decided on:- 29.08.2023

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IN THE DEBT RECOVERY TRIBUNAL-I AT MUMBAI ORIGINAL APPLICATION NO. 756 of 2022

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STATE BANK OF INDIA, a Banking Corporation) Constituted under the provisions of State Bank of ) India Act, 1955 and having its Corporate Office ) situated at State Bank Bhavan, Madam Cama Road) Nariman Point, Mumbai- 400 021 and amongst ) Others having its Small & Medium Enterprises ) Centre (SMEC) office situated at Jasmine ) Co-operative Housing Society, Madhusudan ) Kalekar Marg, Kala Nagar, Near Guru Nanak ) Hospital, Bandra (E), Mumbai – 400 051 in ) State Of Maharashtra through its Deputy Manager) Mr. Shankar Manohar Chavan

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) ... APPLICANT

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Versus

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M/S. SHANTINATH MOBILE ) Through its Proprietor, Mr. Mukesh Sumati ) Prakash Jain Having it address situated at ) Shop No. 4, Salik Singh Chawl, Asalpha Village, ) 340 Bust Shop, Ghatkoper (West), Mumbai- 400 084)

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And

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At Room No. A/2A, Subhash Nagar, Asalpha ) Village, Ghatkoper (West), Mumbai- 400 084 ) And At Room No. 22, Pandey Niwas, Marol Military ) Road, Near Blossom Society, Andheri (East), ) Mumbai – 400 059 ) And

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At Shantinath Paper Mart, Khairani Road, ) Jangleshwar Mandir Road, Ashapura Compound ) Asalpha Village, Ghatkoper (West), Mumbai 400 084)

…DEFENDANT

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OA 756 of 2022

Counsel for the Applicant : Advocate R. J. Singh

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Counsel for the Defendant: Ex -parte

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J U D G M E N T

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The Applicant has filed the present Original Application against the Defendant for recovery of the following amounts:

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i. Rs.36,11,080.34 (Rupees Thirty Six Lakhs Eleven Thousand Eighty and Paise Thirty Four only) with further interest at the rate of 11.05% per annum alongwith pendent elite and future interest @11.05% p.a. with monthly rests and 5.25% penal interest from 05.07.2022 till payment and/or realization.

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ii. Rs.3,95,551.55 (Rupees Three Lakhs Ninety Five Thousand Five Hundred Fifty One and paise Fifty Five only) with further interest at the rate of 8.30% p.a. with monthly rests and 2% penal interest from 05.07.2022 till the payment and/or realization.

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(Aggregating an amount of Rs.40,06,631.89 (Rupees

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Forty Lakhs Six Thousand Six Hundred Thirty One and Paise Eighthly Nine only)

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Facts as succinctly set out in the OA are that the Defendant No.1 is a proprietary concerned firm, through its Proprietor Mr. Mukesh Sumati Prakash Jain, who availed Cash Credit Facility of

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Page 2 of 7

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OA 756 of 2022

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Rs.40,00,000/- and GECL (Guarantee Emergency Credit Line) Facility of Rs.5,34,000/-, aggregating an amount of Rs.45,34,000/from the Applicants.

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It is stated that on or about 27.12.2019 the Defendant through its Proprietor, Mr. Mukesh Sumati Prakash Jain submitted an application for sanction of Working Capital Credit facility/ Cash Credit Facility of Rs. 40 Lakhs for its business of sale of mobile and accessories etc. under SME Segment with CGTMSE Scheme. The Applicant considered the said application and sanctioned the said Cash Credit Facility of Rs.40 lakhs on 02.01.2020 for business of sale of mobile and accessories etc. under SME Segment with CGTMSE Scheme against hypothecation of goods, book, debts, stocks, receivables, plant and machines to the Defendant.

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It is further stated that the Defendant through its Proprietor, Mr. Mukesh Sumati Prakash Jain submitted application/request to the Applicants for renewal of the aforesaid Cash Credit Facility of Rs.40 Lakhs and sanction of CECL/WCTL Facility of Rs.5,34,000/, aggregating an amount of Rs.45,34,000/- for the aforesaid business under SME Segment with CGTMSE/Covid 19 Loan Scheme. The Applicant considered the said request and renewed Cash Credit Facility of Rs.40,00,000/- against hypothecation of stock, goods, book debts, receivables and sanctioned GECL facility of Rs.5,34,000/- against hypothecation of goods, book, debts, stocks and receivables money present and future, aggregating an amount of Rs.45,34,000/- on 30.05.2020 for it’s the aforesaid

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Page 3 of 7

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OA 756 of 2022

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business under SME Segment with CGTMSE/Covid 19 Loan Scheme to the Defendant.

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It is further stated that the said Cash Credit Loan was repayable on demand with interest, cost, charges etc. and GECL Loan amount of Rs.5,34,000/- was repayable in 36 EMIs of Rs.14,834/commencing from 30.06.2021 to 31.05.2024.

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It is also stated that Defendant hypothecated all the stocks, goods, book, debts, receivables, plant, machinery belonging to the said company by creating first charge over the said stocks and goods, book, debts, receivables, plant, machineries for securing the said credit facilities.

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It is further stated that Defendant approached the Applicant for sanction and renewal of the aforesaid credit facilities from time to time, the Applicants considered the aforesaid request and sanctioned/ renewed the aforesaid credit facilities from time to time.

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In order to secure the repayment thereof, the Defendant executed/delivered the necessary documents in favour of the Applicant from time to time.

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It is further stated that the Defendant made part payment of the said aforesaid loans to the Applicant, but Defendant failed and neglected to regularize its loan account as per the agreed terms and conditions mentioned in the arrangement letter and loan

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Page 4 of 7

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OA 756 of 2022

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documents. The Defendant also admitted its liability by executing revival letter dated 29.03.2022 under the aforesaid loan accounts. It is stated that the Applicant called upon the Defendant regularly to deposit the amount and regularize the loan accounts but they Defendant failed to regularize the account despite several reminders from the Applicant thus, the said Accounts of the Defendant were classified as NPA on 30.05.2022. Thereafter, the Applicant finally through their legal notice dated 06.06.2022 called upon the Defendant to pay the outstanding dues but the Defendant failed to pay the dues. Hence, the present OA has been filed.

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Notice was issued to the Defendant. Despite service, none appeared for the Defendant nor any WS has been filed, thus, it was proceeded ex-parte vide order dated 02.08.2023.

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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 Chief Manager Santosh R. Chawhan.

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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 and 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 fully proved all these documents as against the Defendant. In my view there is no question of disbelieving the evidence led by the

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OA 756 of 2022

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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 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 this OA and direct the Defendant to pay to the Applicant, within a period of 60 days, the following sums:

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a. Rs.36,11,080.34 (Rupees Thirty Six Lakhs Eleven Thousand Eighty and Paise Thirty Four only) with further interest at the rate of 11.05% per annum alongwith pendent elite and future interest @11.05% p.a. with monthly rests and 5.25% penal interest from 05.07.2022 till payment and/or realization.

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b. Rs.3,95,551.55 (Rupees Three Lakhs Ninety Five Thousand Five Hundred Fifty One and paise Fifty Five only) with further interest at the rate of 8.30% p.a. with monthly rests and 2% penal interest from 05.07.2022 till the payment and/or realization.

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Aggregating an amount of Rs.40,06,631.89 (Rupees Forty Lakhs Six Thousand Six Hundred Thirty One and Paise Eighthly Nine Only)

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Page 6 of 7

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OA 756 of 2022

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ii. Failing which the aforesaid amount shall be recovered from the sale of hypothecated stocks, goods, book debts, receivables, plant, machinery as well as other personal moveable and immoveable assets of the Defendant.

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iii. Defendant is hereby directed not to deal with its properties till further direction of Ld. Recovery Officer.

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iv. Defendant shall also pay the cost and expenses of the OA.

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v. Recovery Certificate be issued forthwith and be sent to the Recovery Officer of this Tribunal.

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Copy of this order be sent to the parties as per rules. File be consigned to record.

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Place: Mumbai. (Dr. Rekha G. Dhakar) Date :29.08.2023 Presiding Officer, DRT-1, Mumbai.

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Tjs/-

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State Bank of India v. Shantinath Mobile

Case brief

What is this about?

What did the court decide?

State Bank of India v. Shantinath Mobile

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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