This DRT allowed the bank's application for a recovery certificate for an outstanding loan of approx. Rs. 50.48 lakhs, directed the issuance of the certificate, and modified the claimed interest rate to 8% p.a.
Issuance of Recovery Certificate for Rs. 50,48,823.70 with simple interest @ 8% per annum from the date of filing.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
DEBTS RECOVERY TRIBUNAL-2, CHANDIGARH, PRESIDED OVER BY M.M. DHONCHAK
ORIGINAL APPLICATION NO.778/2023
DATE OF INSTITUTION: 26.04.2023
DATE OF DECISION: 19th DAY OF DECEMBER, 2023
Indian Overseas Bank , a Banking Company wholly owned by Government of India, under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Central Office at 763, Anna Salai, Chennai and Branches at various places in India, including a Branch at Retail Mart, Yadav Bhavan, Old Railway Road, Gurugram, Haryana, through its General Power of Attorney, Sh. Surender Kumar
…..Applicant
Versus
Flat No. 901, 9th Floor, Tower B-1, Sector-24, Avalon Rangoli, Dharuhera (Haryana)-122106
IInd Address:
M/s Avalon Projects (GRJ Distributors and Developers Private Limited), through its Directors, having its Registered Office at Plot No. 166, Ground Floor, Udyog Vihar, Phase-I, Gurugram, Haryana-122016
OA/778/2023 INDIAN OVERSEAS BANK VS SH. ACHIN MEHTA AND OTHERS 2
IIIrd Address:
64, Scindia House, Connaught Place, New Delhi-110001
....Defendants
Argued by: Sh. Rajan Puri counsel for the applicant bank (through VC) Defendants ex parte vide order dated 01.07.2023
FINAL ORDER
Present Original Application was instituted by the applicant bank under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 (hereinafter referred to as ‘the Act’ for brevity), against the defendants for recovery of Rs.50,48,823.70/(Rupees Fifty Lac Forty Eight Thousand Eight Hundred Twenty Three and Seventy Paisa Only) . It has been filed through Sh. Surender Kumar, General Power of Attorney holder of the applicant bank stated to be competent to institute the Original Application vide Power of Attorney, Annexure-A1 (copy).
OA/778/2023 INDIAN OVERSEAS BANK VS SH. ACHIN MEHTA AND OTHERS 3
loan facility vide loan application dated 30.10.2020, Annexure-A2 (copy).
The documents relating to the mortgage are as under:
OA/778/2023 INDIAN OVERSEAS BANK VS SH. ACHIN MEHTA AND OTHERS 4
vide legal notice dated 18.03.2023 along with original postal receipts, Annexure-A11 (colly) (copy), but to no avail.
It is further the case of the applicant bank that after adjusting debit and credit entries in the loan account, a sum of Rs.50,48,823.70/- (Rupees Fifty Lac Forty Eight Thousand Eight Hundred Twenty Three and Seventy Paisa Only) , is recoverable against the defendant as per statement of account, duly certified under Bankers’ Books Evidence Act, 1891, Annexure-A12 (copy).
Since the defendant did not repay the outstanding amount, therefore, the applicant bank preferred the present Original Application for issuance of Recovery Certificate.
OA/778/2023 INDIAN OVERSEAS BANK VS SH. ACHIN MEHTA AND OTHERS 5
the loan facility which was granted to him. It is further clear that defendant No.1 had executed all the relevant documents as stated above in favour of the applicant bank. It is also clear tripartite agreement dated 11.11.2020, Annexure-A9 (copy) was executed between the parties. 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.50,48,823.70/- (Rupees Fifty Lac Forty Eight Thousand Eight Hundred Twenty Three and Seventy Paisa Only) from defendant No.1.
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, purpose of loan, i.e. housing, quantum of loan, 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 annum from the date of filing of the OA till realisation of the amount ordered vide this order. It is ordered accordingly.
OA/778/2023 INDIAN OVERSEAS BANK VS SH. ACHIN MEHTA AND OTHERS 6
Thousand Eight Hundred Twenty Three and Seventy Paisa Only) with current and future simple interest @8% per annum w.e.f. 26.04.2023 , till the date of realisation of the amount. However, defendant Nos. 3 to 4 shall be liable in their capacity as the Directors of defendant No. 2 and not in their individual capacity. In a nutshell, the liability would be that of defendant No.1 only. Accordingly, the applicant bank shall be at liberty to recover aforesaid amount from the sale of mortgaged/hypothecated property of defendant No.1 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 defendant No.1. However, the applicant bank is at liberty to enforce the claim through due process of law.
Pronounced in the open Tribunal (M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh
2 issues framed by the court
Whether the applicant bank was entitled to recover the outstanding loan amount from the defaulting borrower.
Whether the directors of the corporate guarantor can be held liable in their individual capacity.
1 provisions across 1 enactments
Indian Overseas Bank
Sh. Achin Mehta
M/s Avalon Projects
Sh. Ajay Singal
Sh. Vaneet Jindal
M.M. Dhonchak
As recorded by the court registry
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