Allowed

Canara Bank v. M/S Harsaru Nails Private Limited

DRT18 Oct 2023OA/804/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the applicant bank's Original Application for recovery of ₹37,20,370.93/- along with 9% simple interest w.e.f. filing date, dismissing the defendants ex parte and ordering issuance of a Recovery Certificate.

What did the court decide?

Order passed allowing the application; direction to deduct interest at 9% p.a. from filing; issuance of Recovery Certificate; liberty to recover via sale of properties or attachment of assets.

Canara Bank versus M/S Harsaru Nails Private Limited — Banking and Recovery | DRT (2023)

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

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ORIGINAL APPLICATION NO.804/2023

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DATE OF INSTITUTION: 09.05.2023

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DATE OF DECISION: 18^th DAY OF OCTOBER, 2023

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Cananra Bank, a Banking Company, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Head Office at 112, JC Road, Bangalore, having Branches all over India, including one Branch at Gurgaon, Palam Vihar, District Gurugram, Haryana, through its Principal Officer and Power of Attorney holder, Sh. Sandeep Kumar, Branch Manager

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………..Applicant

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VERSUS

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M/s Harsaru Nails Private Limited, 375/A Pataudi Road, Near Shiv Mandir, Harsaru, Gurugram, Haryana

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Sh. Mukesh Singh Chauhan r/o Village Harsaru, 375/A Pataudi

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Road, Near Shiv Mandir, Harsaru, Gurugram, Haryana

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Smt. Baby Chauhan w/o Sh. Mukesh Singh Chauhan r/o Village Harsaru, 375/A Pataudi Road, Near Shiv Mandir Harsaru, Gurugram,

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Haryana

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…..Defendants

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Argued by: Sh. Kapil Dev Dogra, Officer for the applicant bank Defendants ex parte vide order dated 15.07.2023

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FINAL ORDER

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Present Original Application was instituted by the applicant bank 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 defendants for recovery of

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OA/804/2023 CANARA BANK Vs M/S HARSARU NAILS PVT. LTD. AND OTHERS 2

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Rs.37,20,370.93/- (Rupees Thirty Seven lac Twenty Thousand Three Hundred Seventy and Ninety Three Paisa Only) . It has been filed through Sh. Sandeep Kumar, Branch Manager of the applicant bank stated to be competent to institute the Original Application vide authority letter dated 15.07.2022, Annexure-A1 (copy).

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The brief facts of the case of the applicant as per the Original Application are that defendants had approached the applicant bank for grant of OCC/OD of Rs. 35 lac under MSME Scheme vide application forms dated 30.12.2020 and 12.12.2021 for micro small and medium enterprises, Annexures-A2 and A9 (copy).

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The applicant bank sanctioned above mentioned credit facility to the defendants vide sanction letter dated 30.12.2020, Annexure-A3 (copy) as per terms and conditions which were duly accepted by the defendants. Sanction memorandum dated 24.01.2022 is AnnexureA10 (copy) and renewal letter dated 24.01.2022 is Annexure-A11 (copy).

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In order to secure the aforementioned credit facility, the defendants executed various loan and security documents, i.e. guarantee agreements dated 30.12.2020, Annexures-A4 and A5 (copy), pronote dated 30.12.2020, Annexure-A6 (copy), letter dated 30.12.2020 for overdraft facility, Annexure-A7 (copy) and cash credit agreement dated 30.12.2020, Annexure-A8 (copy). Pan cards and aadhar cards are Annexures-A15 to A19 (copy).

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It is further the case of the applicant bank that the loan facility was duly availed of by the defendants but they failed to maintain the financial discipline of the applicant bank leading to the loan accounts becoming irregular and those being classified as NPA on

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OA/804/2023 CANARA BANK Vs M/S HARSARU NAILS PVT. LTD. AND OTHERS 3 29.12.2022. The defendants executed acknowledgement of debts and security dated 24.01.2022, Annexure-A13 (copy). The applicant bank recalled the entire outstanding amount vide legal notice dated 04.03.2023, Annexure-A14 (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.37,20,370.93/- (Rupees Thirty Seven lac Twenty Thousand Three Hundred Seventy and Ninety Three Paisa Only) , is recoverable against the defendants as per statement of account, certified under Bankers’ Books Evidence Act, 1891, Annexure-A12 and certificate, Annexure-A20 (copy).

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Since the defendants 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 defendants, but since none appeared on behalf of the defendants, thus, the defendants were proceeded against ex parte vide order dated 15.07.2023 .

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In support of contents of the OA, affidavit of evidence of Sh. Sandeep Kumar, Branch Manager of the applicant bank was filed.

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This Tribunal has heard ex-parte arguments advanced by Sh. Kapil Dev Dogra, Officer for the applicant bank and gone through the record carefully.

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It was argued by Sh. Kapil Dev Dogra, Officer of the applicant bank that in view of unrebutted documentary evidence brought on record, the applicant bank had proved its case against the defendants for recovery of the amount sought. From perusal of Annexures-A1 to A20 , it is clear that the defendants had approached the applicant bank

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OA/804/2023 CANARA BANK Vs M/S HARSARU NAILS PVT. LTD. AND OTHERS 4 for availing of the loan facility which was granted to them. It is further clear that the defendants had executed all the relevant documents as stated above in favour of the applicant bank. 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.37,20,370.93/- (Rupees Thirty Seven lac Twenty Thousand Three Hundred Seventy and Ninety Three Paisa 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 @9.15% per annum. In sanction letter dated 30.12.2020, Annexure-A3 (copy), rate of interest has been mentioned @9.15% per annum. 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. business, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yesteryears and defendant No.3 being a female, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @9% 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 holding that the defendant is liable to pay to the applicant bank a sum of Rs.37,20,370.93/- (Rupees Thirty Seven lac Twenty Thousand Three Hundred Seventy and Ninety Three Paisa Only) with

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OA/804/2023 CANARA BANK Vs M/S HARSARU NAILS PVT. LTD. AND OTHERS 5 current and future simple interest @9% per annum w.e.f. 09.05.2023 , till the date of realisation of the amount. The liability of the defendants shall be joint as well as several. Accordingly, the applicant bank shall be at liberty to recover aforesaid amount from the sale of mortgaged/hypothecated property of the defendants 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 the defendants. However, the applicant bank is at liberty to enforce the claim through due process of law.

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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on

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09.11.2023 .

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Copy of this order be sent to the applicant bank and the defendants through registered/speed post. This order be also uploaded on the official website of this Tribunal.

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Pronounced in the open Tribunal (M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh

Canara Bank v. M/S Harsaru Nails Private Limited

Case brief

What is this about?

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Canara Bank v. M/S Harsaru Nails Private Limited

Case brief

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