Allowed

State Bank of India v. Sh. Raj Kumar

DRT6 Dec 2023OA/860/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant bank's application for a Recovery Certificate. The Tribunal held the defendants liable to pay Rs. 29,95,210.15 along with simple interest at 8% per annum from the date of filing, permitting recovery via sale of secured or personal assets.

What did the court decide?

Issuance of Recovery Certificate; Defendants to pay Rs. 29,95,210.15 plus simple interest @ 8% p.a. from 28.04.2022.

State Bank of India versus Sh. Raj Kumar — 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. 860/2022

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DATE OF INSTITUTION: 28.04.2022

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DATE OF DECISION: 06^th DAY OF DECEMBER, 2023

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State Bank of India , a body corporate constituted under the State Bank of India Act, 1955, having Central Office at Madame Cama Road, Nariman Point, Mumbai and one of its Local Head Offices at Sector 17, Chandigarh and one of its Stressed Assets Recovery Branches, S.C.O No. 70, Sector 5, Panchkula, through its Chief Manager, Sh. Ravindra Kumar Dass

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…..Applicant

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Versus

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Sh. Raj Kumar s/o Sh. Bhag Chand r/o Village and Post Office, Dhani-Chahal, Sub-Tehsil Uklana, District Hisar, Haryana

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Sh. Kali Ram s/o Sh. Bhag Chand r/o Village and Post Office, Dhani-Chahal, Sub-Tehsil Uklana, District Hisar, Haryana

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....Defendants

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Argued by: Sh. V.K. Diwan counsel for the applicant bank Defendants ex parte vide order dated 20.10.2023

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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 and Bankruptcy Act, 1993 (hereinafter referred to as ‘the Act’ for brevity), a gainst the defendants for recovery of Rs.29,95,210.15/- (Rupees Twenty Nine Lac Ninety Five Thousand Two Hundred Ten and Fifteen Paisa Only) . It has

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OA/860/2022 STATE BANK OF INDIA VS RAJ KUMAR AND ANOTHER 2

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been filed through Sh. Ravindra Kumar Dass, Chief Manager of the applicant bank stated to be competent to institute the Original Application vide Gazette Notification dated 22.02.2017, AnnexureA1 (copy).

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The brief facts of the case of the applicant as per Original Application are that defendant No. 1 had approached the applicant bank for grant of cash credit facility of Rs. 3 lac and term loan facility of Rs. 7 lac and again approached for KCC facility of Rs. 20 lac vide application dated 19.09.2015, Annexure-A3 (copy). Defendant No. 2 stood as a guarantor for repayment of the loan.

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The applicant bank sanctioned above mentioned credit facilities to the defendants vide letters of arrangement dated 13.04.2010 and 19.09.2015, Annexures-A2 and A4 (copy) as per terms and conditions which were duly accepted by the defendants.

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In order to secure the aforementioned credit facilities, the defendants executed various loan and security documents, i.e. hypothecation agreement dated 19.09.2015, Annexure-A5 (copy), letter of undertaking from the borrower regarding agricultural advances, Annexure-A6 (copy) and deed of guarantee dated 13.04.2010, Annexure-A8 (copy).

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The aforesaid loans were further secured by creation of mortgage by defendant No. 1 in respect of agricultural land measuring 133 Kanal 12 Marla situated in the revenue estate of Pabra, Sub-Tehsil Uklana, District Hisar, Haryana, fully detailed in para No. 5.7 of the Original Application.

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OA/860/2022 STATE BANK OF INDIA VS RAJ KUMAR AND ANOTHER 3

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The documents relating to the mortgage are as under:

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i. Letter of undertaking regarding charge created on mortgaged property, Annexure-A7 (copy)

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ii. Registered mortgage deed dated 08.04.2010, Annexure-A9 (copy).

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iii. Registered supplementary mortgage deed No. 1368 dated 15.09.2015, Annexure-A10 (copy).

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It is further the case of the applicant bank that the loan facilities were 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 27.11.2020. The defendants executed revival letters dated 01.09.2018 and 14.05.2021, Annexures-A11 and A12 (copy). The applicant bank recalled entire outstanding amount vide legal notice dated 27.01.2021 along with its postal receipt, Annexure-A13 (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 accounts, a sum of Rs.29,95,210.15/- (Rupees Twenty Nine Lac Ninety Five Thousand Two Hundred Ten and Fifteen Paisa Only) , is recoverable against the defendants as per statements of accounts, duly certified under Bankers’ Books Evidence Act, 1891, AnnexureA14 (colly) (copy) and statement of recorded interest/accrued interest, Annexure-A15 (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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OA/860/2022 STATE BANK OF INDIA VS RAJ KUMAR AND ANOTHER 4

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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 20.10.2023 .

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In support of contents of the OA, affidavit of evidence of Sh. Ravindra Kumar Dass, Chief Manager of the applicant bank was filed.

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This Tribunal has heard ex-parte arguments advanced by the learned counsel and gone through the record carefully.

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It was argued by the learned counsel 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 A15 , it is clear that the defendants had approached the applicant bank for availing of the loan facilities which were 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.29,95,210.15/- (Rupees Twenty Nine Lac Ninety Five Thousand Two Hundred Ten and Fifteen 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 @10.25% per annum in KCC facility. In letter of arrangement dated

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OA/860/2022 STATE BANK OF INDIA VS RAJ KUMAR AND ANOTHER 5

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19.09.2015, Annexure-A4 (copy), the rate of interest has been mentioned @11.45% per annum in KCC facility.

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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, 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.

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In the result, the Original Application is allowed with costs holding that the defendants are liable to pay to the applicant bank a sum of Rs.29,95,210.15/- (Rupees Twenty Nine Lac Ninety Five Thousand Two Hundred Ten and Fifteen Paisa Only) with current and future simple interest @8% per annum w.e.f. 28.04.2022 , 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

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OA/860/2022 STATE BANK OF INDIA VS RAJ KUMAR AND ANOTHER 6

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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 11.01.2024.

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Copy of this order be sent to the applicant bank and the defendants through registered/speed post. This order be 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

State Bank of India v. Sh. Raj Kumar

Case brief

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State Bank of India v. Sh. Raj Kumar

Case brief

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