Allowed

Punjab National Bank v. Sh. Parampal Singh

DRT21 Nov 2023OA/875/2023

Case brief

AI extract

What is this about?

In an ex-parte recovery application, the Tribunal ruled that the defendant must repay the outstanding agricultural loan principal with simple interest at 8% per annum from the date of filing, ordering issuance of a Recovery Certificate.

What did the court decide?

Recovery of Rs. 27,47,209.57 with simple interest @8% p.a., issuance of Recovery Certificate, and liberty to attach personal assets if dues remain unsatisfied.

Punjab National Bank versus Sh. Parampal Singh — Insolvency and Bankruptcy | DRT (2023)

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

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ORIGINAL APPLICATION NO. 875/2023

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DATE OF INSTITUTION: 26.05.2023

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DATE OF DECISION: 21^st DAY OF NOVEMBER, 2023

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Punjab National Bank , a body corporate having perpetual succession, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, carrying on Banking business having its Head Office at Plot No. 4, Sector 10, Dwarka, New Delhi110075 and one of its Branches amongst other places is known as Court Road also known as Hisar Road, Ambala City, District Ambala, Haryana, which comes under Circle Sastra Center (Recovery Division/Cell), through Sh. Madan Lal, Senior Manager, its Principal Officer and General Attorney

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…..Applicant

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Versus

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Sh. Parampal Singh s/o Sh. Gurdeep Singh r/o House No.81 A, Near Shiv Mandir, Village Saunda, Jalbera Road, Ambala City, District Ambala, Haryana

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....Defendant

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Argued by: Sh. Gaurav Thakur proxy counsel for Sh. Tarun Dhingra Advocate for the applicant bank Defendant ex parte vide order dated 05.08.2023

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FINAL ORDER

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Present Original Application was instituted by the applicant bank

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under Section 19(1) of the Recovery of Debts and Bankruptcy Act, 1993 (hereinafter referred to as ‘the Act’ for brevity), against the defendant for recovery of Rs.27,47,209.57/- (Rupees Twenty

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OA/875/2023 PUNJAB NATIONAL BANK VS PARAMPAL SINGH 2

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Seven Lac Forty Seven Thousand Two Hundred Nine and Fifty Seven Paisa Only) . It has been filed through Sh. Madan Lal, Senior Manager and Principal Officer of the applicant bank stated to be competent to institute the Original Application vide General Power of Attorney dated 05.01.2007, Annexure-A1 (copy).

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The brief facts of the case of the applicant as per Original Application are that defendant had approached the applicant bank for grant of KCC facility of Rs. 20 lac vide loan application Form dated 18.11.2017 for agricultural credit, Annexure-A2 (colly) (copy).

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The applicant bank sanctioned aforesaid credit facility to the defendant vide sanction letter, Annexure-A2 (colly) (copy), as per terms and conditions which were duly accepted by the defendant.

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In order to secure the aforementioned credit facility, the defendant executed hypothecation agreement dated 21.11.2017 along with letter of undertaking dated 21.11.2017 regarding terms and conditions, Annexure-A3 (colly) (copy).

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The aforesaid limit was further secured by creation of mortgage by the defendant in respect of agricultural land measuring 35 Kanal 11 Marla situated in the revenue estate of Ladana, H.B. No.172, Tehsil and District, Ambala, Haryana, fully detailed in para No. 5(5.9) of the OA. Declaration under Section 4(1) of the Haryana Agricultural Credit Operations and Miscellaneous Provisions (Banks) Act, 1973, is Annexure-A4 (copy).

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It is further the case of the applicant bank that the loan facility was duly availed of by the defendant but he failed to maintain the financial discipline of the applicant bank leading to the loan account becoming irregular and it being classified as NPA on 02.11.2022.

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OA/875/2023 PUNJAB NATIONAL BANK VS PARAMPAL SINGH 3

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Defendant executed balance and security confirmation letter dated 03.11.2020, Annexure-A5 (copy). The applicant bank recalled entire outstanding amount vide legal/recall notice dated 01.04.2023, Annexure-A6 (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.27,47,209.57/- (Rupees Twenty Seven Lac Forty Seven Thousand Two Hundred Nine and Fifty Seven Paisa Only), is recoverable against the defendant as per statement of account duly certified under Bankers’ Books Evidence Act, 1891, Annexure-A7 (copy).

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Since the defendant did not repay the outstanding amount, therefore, the applicant bank preferred the present Original Application for issuance of Recovery Certificate.

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Notice of the Original Application was duly served upon the defendant, but since none appeared on behalf of the defendant, thus, the defendant was proceeded against ex-parte vide order dated 05.08.2023 .

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In support of contents of the OA, affidavit of evidence of Sh. Madan Lal, Principal Officer, Senior Manager of the applicant bank was filed.

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

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It was argued by the learned proxy counsel for the applicant bank that in view of unrebutted documentary evidence brought on

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OA/875/2023 PUNJAB NATIONAL BANK VS PARAMPAL SINGH 4

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record, the applicant bank had proved its case against the defendant for recovery of the amount sought. From perusal of Annexures-A1 to A7 , it is clear that the defendant had approached the applicant bank for availing of the loan facility which was granted to him. It is further clear that the defendant had executed all the relevant documents as stated above in favour of the applicant bank. Unfortunately, the defendant 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.27,47,209.57/- (Rupees Twenty Seven Lac

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Forty Seven Thousand Two Hundred Nine and Fifty Seven Paisa

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Only) from the defendant.

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In so far as pendente lite and future interest is concerned, the applicant bank has claimed rate of interest @14% per annum plus penal interest @2%. In sanction letter dated 18.11.2017 AnnexureA2 (colly) (copy), the rate of interest has been mentioned @MCLR+2.1% per annum.

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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 mortgaged property, purpose of loan, i.e. agricultural, present conditions of economy based on agriculture, quantum of loan and 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

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OA/875/2023 PUNJAB NATIONAL BANK VS PARAMPAL SINGH 5

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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.27,47,209.57/- (Rupees Twenty Seven Lac Forty Seven Thousand Two Hundred Nine and Fifty Seven Paisa Only) with current and future simple interest @8% per annum w.e.f. 26.05.2023 , till the date of realisation of the amount. Accordingly, the applicant bank shall be at liberty to recover aforesaid amount from the sale of mortgaged/hypothecated property of the defendant 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 defendant. 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 01.01.2024.

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Copy of this order be sent to the applicant bank and the defendant 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

Punjab National Bank v. Sh. Parampal Singh

Case brief

What is this about?

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Punjab National Bank v. Sh. Parampal Singh

Case brief

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