Allowed

State Bank of India v. M/s Ganesh Kumar and Others

DRT6 Dec 2023OA/91/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by State Bank of India to recover dues aggregating Rs. 2.25 crore from the defendants for defaulted loans sanctioned under various agreements including housing and cash credit facilities. The Tribunal determined the debt based on the bank's documentary evidence as the defendants failed to contest the claim.

What did the court decide?

Joint and several recovery of Rs. 2,25,72,213.13 with pendente-lite and future interest at 10% p.a. compounded quarterly from the date of filing till realization; attachment of mortgaged and hypotheca

State Bank of India versus M/s Ganesh Kumar and… — Contract and Commercial Disputes | DRT (2023)

0A 91 of 2023IJI

DRT. PATNA

Debts Recovery Tribunal, Patna

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rKarpuri Thakur Sadan, Aashiana Digha Road Patna-800025

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Presiding Officer : Shri Kaushalendra Yadav

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OA Case No.91 of 2023

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State Bank of India, (SARB) at 2nd floor, Patna Main Branch Building, West Gandhi Maidan, Patna-800001

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•...... Applicant

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Vs.

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M/s Ganesh Kumar through its proprietor Ganesh Kumar Near Barahiya Kothi, Road No. 4, RMS Colony, Kankarbagh, Patna-800020.

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Ganesh Kumar, S/o Lallan Prasad Sharina resident of near Barahiya Kothi, Road No. 4, RMS Colony, Kankarbagh, Patna-800020. PAN No. AJIPK7504L.

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.... Defendants

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Present:-

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For the Applicant : Shri. Santosh Kumar Singh, Advocate For the Defendants : Shri Nand Kishore Singh, Advocate

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Dated: 06.12.2023

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JUDGMENT

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1- The Applicant bank has made this application u/s 19 of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 27.12.2022 against the defendants to recover its debts from defendants of Rs.2,25,72,213.13/- as on 12.10.2022 along with pendente-lite and future interest at the contractual rate from 13.10.2022 with costs till realization.

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2- The application has been duly registered and numbered as above.

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3- The brief facts of the case of the applicant bank as stated in the application areas under-

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The applicant bank, a body corporate constituted under the State Bank of India Act,1955, which is competent to file a suit.

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OA 91 of 2023TJl

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I)RT. PATNA

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Defendants have approached the applicant Bank vide loan application dated 30.12.2015 for financial assistance of Rs.1 Crore for the purpose of construction of house. Loan application was considered by the Bank authority and the Bank authority sanctioned Housing Loan of Rs.1,03,84,275/-inclusive of SBI Life premia i.e. Rs.3,84,275/-vide sanction letter dated 14.01.2016 on various terms and conditions, which were accepted by the defendants.

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To secure the loan facility the defendants executed various loan documents and also agreed to pay the interest @ 9.55% p.a. with monthly rests.

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Defendant being the owner of the landed property deposited with the bank on 04.07.2016 the original title deed with other related documents and created equitable mortgage in favour of the applicant bank with intention to create equitable mortgage, details whereof have been given in schedule 8 of the original application. The applicant bank has also registered the mortgage property with central registry vide security interest ID No.400013023360, date 04.07.2016.

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Defendant No. 2 applied for cash credit loan to the tune of Rs.100.00 Lalch vide loan application dated 16.03.2017 on the same set of property which was initially equitably mortgaged with the bank. The applicant bank sanctioned C.C (Book Debts) to the tune of Rs.100/-Lakh vide sanction letter dated 31.03.2017 subject to terms and conditions, which were accepted by the defendants.

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To secure the loan facility the d`efendants executed various loan documents including the guarantee agreement and also hypothecated the movables in favour of the applicant bank by executing the hypothecation agreement. Defendants also agreed to pay the interest @ 12.60% p.a. with monthly rests. The aforesaid loan was also secured by way of extension of equitable mortgage of property, which was initially mortgaged with the applicant bank.

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OA 91 of 2023TJl

DRT. PATNA

The defendants further approached the applicant bank for sanction of Car Loan facility to the tune of Rs.13.00 Lakh vide loan application dated 24.01.2018. Upon consideration of the loan proposal for purchase of Car, the applicant bank sanctioned Rs.13.00 Lakh on 07.02.2018 for purchasing of Mahindra & Mahindra Scorpio 2018 on various terms and conditions, which were accepted by the defendants. To secure the loan facility the defendants executed various loan documents and also hypothecated the vehicle bearing registration no. BR01PJ1643 in favour of the applicant bank by executing the hypothecation agreement. Defendants also agreed to pay the interest @ 9.2% p.a. with monthly rests. Defendants have also acknowledged the earlier cash credit facility by executing revival letter dated 31.03.2020.

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After having availed the aforesaid credit facilities, the defendants requested the applicant bank for restructuring of the existing credit facilities due to suffered stressed during Covid-19 pandemic period and upon consideration of the request of defendants, the applicant bank sanctioned the credit facilities to meet the temporary liquidity mismatch arising out of Covid19 vide arrangement letter dated 29.06.2021 i.e. WCDL-Rs.102 Lakh, WCTLRs.05/-Lakh, FITL Rs.03/-Lakh, aggregating to Rs.Ilo Lakh.

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To secure the loan facilities the defendants executed various loan and security documents including the guarantee agreement in favour of the applicant bank and also hypothecated the movables in favour of the applicant bank by executing hypothecation agreement. The aforesaid loan was also secured by way of extension of equitable mortgage of property, which was initially mortgaged with the applicant bank. Defendants also agreed to pay interest @ 8.50% p.a. with monthly rests..

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After availing the sanctioned credit facilities the defendants became irregular in repayment of their dues as per agreed terms and failed to adhere to the financial norms of the bank and avoiding the repayment of its dues to the bank, in spite of several assurances given by it to the applicant bank resulting in the account turning as NPA on 04.07.2022.

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DRT. PATNA OA 9l of 2023TJI

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Thus the total lial]ility in the loan account is Rs.2,25,72,213.13/-with pendent-lite and futue interest contractual rate from 13.10.2022 till the r-tion.

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Since, the defendants have failed and neglected in spite of several reminders to make payment of the dues recoverable to bank, hence this application has been filed by the bank.

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4- This Tribunal issued summons/notices copies of application & paper book to the defendants by registered/speed post on 14.03.2023, requiring them to show-cause within 30 days of the service U/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993.

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In response to the notice defendants have appeared and filed vakalatnama on 03.04.2023 but have failed to file their written statement despite several opportunities hence vide order dated 28.08.2023 right to file written statement by the defendants was closed and the parties were given opportunity to,file evidence in support of the case. Again the defendants have failed to file any evidence and ld. Counsel for the defendants argued the case without filing of written statement or any evidence. Hence on 30.10.2023 arguments advanced by ld. Counsels for the parties were heard and the matter was reserved for orders/judgment and again 15 days' time was granted to the parties to file their written submissions. But written submission was not flled by the defendants within time.

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5- To prove its case, the applicant Bank has referred various certified photocopies of documents before this Tribunal. The applicant bank has also given evidence on affidavit by way of affidavit by Shri Anil Kumar Anal, Chief Manager, of the applicant bank. The details of documents are as follows. :-

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Sl.No	Description of	Date o f	Amount	Signature of	Ex./
	Documents	Execution	(In lakh)	Executants	Arm.
	Photocopies				No.
1..	Loan application	30.12.2015	100.00	Defendantno.2	1

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--- : ..

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oA 9\i OT ae23iji

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2	Arrangement letter	14.01.2016	Rs.1,03,84,275/-	Bank	2
3	Memorandum of Loan Agreement	14.01.2016	Rs.I,03,84,275/	- Bank accepteddefendant	3
4	Deed of undertaking	14.01.2016	Rs.1,03,84,275/-	Defendantno.2	4
5	Affidavit	14.01.2016	Rs.1,03,84,275/	- Defendantno.2	5
6	Undertaking cur declaration cumIndemnity	14.01.2016	Rs.1,03,84,275/	- Defendant no.2	6
7	Operations letter	14.01.2016	Rs.1,03,84,275/	- Defendantno.2	7
8	Armexure-A	14.01.2016	Rs.1,03,84,275/	- Defendantno.2	8
9	Photocopy of Saledeed	18.01,2016			9
10	Agreement to mortgage	14.01.2016	Rs.I,03,84,275/	- Defendant no.2	10
11	Memorandum of Deposit	04.07.2016	Rs.1,03,84,275/	- Defendant no.2	11
12	Letter of confirmation	04.07.2016	Rs.1,03,84,275/	- Defendant no.2	12
13	General details ofselectedsecurityinterest(ID.No.400013023360)				13
14	Loan application	16.03.2017	100.00	Defendantno.1&2	14
15	Letter of arrangement	28.04.2017	100.00	Bank andacceptedbyclef.no.1&2	15
16	Agreement of Loan- cur-hypothecation	28.04.2017	loo.00	Defendant no. 1 & 2	16
17	Guarantee agreement	28.04.2017	loo.00	Defendantno.2	17
18	PDR Borrower	28.04.2017	loo.00	Defendantno.I&2	18
19	PDR guarantor	28.04.2017	100.00	Defendantno.2	19
20	Letter of confirmation forextensionofmortgage	28.04.2017	210.00	Defendant no.2	20
21	Loan application	30.01.2018	13.00	Defendantno.2	21
22	Quotation	24.01.2018		Defendantno.2	22
23	Arrangement letter	07.02.2018	13.00	Defendantno.2	23
24	Loan-cum- hypothecationAgreement	07.02.2018	1 3 .00	Defendant no.2	24

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_ ---' .--.--

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25	PDR Borrower	07.02.2018	13.00	Defendantno.2	25
26	Sale certificate	07.02.2018			26
27	Vehicles registration	03.03.2018			27
28	Revival letter	31.03 .2020		Defendantno.1&2	28
29- serieS	Arrangement letter	29.06..2021	102.00 WCDL 5.00 WCTL3.00FITL	balk	29- series
30	Supplemental agreement of loan-cur-hypothecation	29.06.2021	100.00	Defendant no. I & 2	30
31	Guarantee agreement	29.06.2021	110.00	Defendantno.2	31
32	PDR Borrower	29.06.2021	110.00	Defendantno.I&2	32
33	PDR Guarantor	29.06.2021	1 10.00	Defendantno.2	33
34	Memorandum forrecordingextensionofmortgagebydepositoftitledeeds	29.06.2021	234.00	bank	34
35	Legal notice	02.11.2022		Bankadvocate	35
36	Statement ofaccounts	-		Bank	36

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6- Heard arguments for learned counsel for the parties and perused the case record.

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Ld. Counsel for the applicant has submitted that defendants are trying to settle the matter but the applicant bank has not taken any heed towards settlement.

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Ld. Counsel of applicant bank has submitted that the defendants have taken the loans and utilized the same and also executed the various loan documents to secure the loan facilities. Further, submitted that the claim of the bank has been proved by documentary evidence. All the transactions were entered in the ledger of the loan accounts in the name of the defendant duly maintained by the applicant bank in its usual course of business. The interest /compound interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

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PATNA

OA 91 of 2023TJl

It is further submitted by ld. Counsel of applicant bank that there is no stay granted by any Higher Court, in respect of the proceedings of the present OA and requested to issue recovery certificate, as claimed for, in OA.

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7- It has been established that defendants are living and carrying on their business in the state of Bihar. Cause of action also arose in the State of Bihar. The said claim on the date of filing of application exceeded Rs.20 lacs. The applicant bank is functioning within jurisdiction of this tribunal. Therefore, this Tribunal has territorial as well as pecuniary jurisdiction to adjudicate upon the present application.

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8- On the issue of Limitation, to prove it, the applicant bank has submitted that the applicant bank has declared the account as NPA on 04.07.2022, whereas the present application has been filed on 27.12.2022. Even, it is counted for the purpose of Limitation, then it is established that the applicant bank has filed the case within the limitation period. As such, it is established that present application has been filed well within the period of limitation.

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9- Shri. Anil Kumar Anal, Chief Manager, of the applicant bank, has the affidavit in support of contents of application and the documents as evidence and proved on oath the pleadings and documents of the applicant bank as stated above.

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10- Section 19(3) of the Recovery of Debts and Bankruptcy Act, 1993 provides that the application u/s S.19 (1) shall be accompanied with true copies of all the documents relied on in support of the claim.

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The rule 12 (10) of the Debt Recovery Tribunal (Procedure) Rules, 1993, provides that if the defendant denies his liability to pay the claim made by the applicant, the tribunal may act upon the affidavit of the applicant who is acquainted with the facts of the case or who has on verification of the record sworn the affidavit in respect of the contents of the application and the documents as evidence.

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The rule 12 (11) of the aforesaid Rules, provides that the provisions contained in section 4 of the Banker's Books evidence that Act,1891 (18 of

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DRT. PATNA

OA 91 of 2023lJl

shall apply to a certified copy of an entry in a Banker's Books furnished along with application filed under sub section 1 of section 19 by the applicant.

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Section 4 of Banker's Books evidence that Act,1891 runs as under-

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S.4. Mode Of proof Of ewies in bankers' books.-Subject [o the provisions Of this Act, a certified copy Of any entry in a banker's book shall in all legal proceedings be received as prima f;acie evidence Of the existence Of such entry, and shall be admitted as evidence Of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise.

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As such the certi'fied true copies of the documents are admissible in evidence. The statement of account maintained in the ordinary course of business is not only admissible but shall be taken as the correct statement of account, more so since the entries in the statement of account have not been challenged.

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11- On consideration of the arguments and on perusal of the application, documents and affidavit, it is proved that the defendants have applied for loans and the bank had sanctioned the loans and to secure the loans and for repayment of loan amount with interests etc., the defendants have executed various loan documents, as stated in the application and proved by aforesaid evidence. Defendants have neither denied the utilization of funds advanced by applicant bank nor have pointed out any specific error and discrepancy in the Statement of Account.

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12- The applicant bank has sought for recovery of a sum of Rs.2,25,72,213.13/-with cost and further interest at the contractual rate from 12.10.2022 till realization.

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13- The evidence discussed above goes to establish that the claim made by the applicant bank is genuine and true. It is manifest that the defendants have not disputed the claim, therefore, the claim referred to the tribunal is recoverable till full and final realization of the claim.

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14- In my view, facts of the case stand proved by evidence of the applicant bank. Accordingly, the applicant bank is entitled to recover from defendants

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OA 91 of 2023TJl

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DRT. PATNA

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jointly and severally of Rs.2,25,72,213.13/-alongwith pendente-lite and future interest @10% p.a. with compounded quarterly rests from 27.12.2022 (The date of filing of this OA) till realization. So the fmal order may be passed accordingly, to meet the ends of justice.

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ORDER

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In the result, the application of the applicant bank is, allowed and debt is determined with costs against the defendants. The defendants are hereby jointly and severally, ordered to pay the applicant bank its debt amounting to Rs.2,25,72,213.13/-along with pendente-lite and future interest @ 10% p.a. with compounded quarterly rests from 27.12.2022 (The date of filing of this OA) till realization of the entire sum due and recoverable with costs.

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It is made clear that any amount deposited by the defendants, be deducted in the claim amount, if not deducted.

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Defendants are debarred from transferring, alienating encumbering or otherwise dealing with or disposing of the mortgaged or hypothecated or any other properties and assets without paying the aforesaid adjudicated dues to the applicant bank to secure the ends of justice. The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to the final order under the recovery proceedings in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993.The applicant may submit the certified copy of this Judgment and the Recovery Certificate before the Registrar/ Sub- registrar to endorse the charge over the secured assets.

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Let a certificate of recovery be drawn up forthwith and put up for signatures in terms of provisions contained in Section 19(22) of the Act to be issued, on the basis of the order of the Tribunal to the Recovery Officer. The Recovery Officer shall realize the amount as per the certificate in the manner and in.ode prescribed under the Act from the defendants, by sale of mortgaged/

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DRT. PATNA

OA 91 Of 2023r-I

hypothecated assets as well as other personal movable/immovable assets of the defendants.

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Parties are directed to appear before the Recovery Officer, DRT, Patna on 12.01.2024. The order be communicated accordingly.

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Judgment signed, sealed, dated and pronounced in the open court on o6'h day of December, 2023.

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Dictated & corrected by me.

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[KaushalendraYadav] Presiding Officer Debts Recovery Tribunal, Patna

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DEBTS RECOVERY TRIBUNAL, PATNA

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[seeRegE#

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I)EBTSRECOVERYTRIBUNALPATNA 2ndFloor,(A.8&FWing)KarpurjThal(urSadan,KendrlyaKaramchariParjsar(GPOA),Ashiana

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Digha Road, Patna-

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Ermo. 769;2Q2±

Case No: OA/91/2023

In the Matter of:

(CII-I) STATE BANK OF INDIA THROUGH THE CHIEF MANAGER sTREsseD AssETs REcOvERy BRANCH SARB AT 2ND FLOOR PATNA MAIN BRANCH BUILDING WEST GANDHI MAIDAN PATNA ,BIHAR -800001

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Applicant(s)

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------ Versus -------

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To, (CD-I) M/S GANESH KUMAR AND OTHERS .

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through its proprietor Ganesh Kuinar S/o Lallan Prased Sharma ¥:::#ghfyaKothi„RoadNo-4,RMScolony Palna ,BIHAR -800020

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Defendant(s)

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(CD- 2) GANESH KUMAR

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S/0 LALLAN PRASAD SHARMA RESIDENT

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0F NEAR BARAHIYA KOTHI ROAD NO. 4, RMS COLONY KANKARBAGIJ PATNA - 800020

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RtI.rt.[ .( tdilii]Itt I.In Rx 225.-22_I I I I I RII[.!ts I.wp( rq[t [w!.nl_I it I &il[iN NLtnlI.wlz_I liuiix_inllilw.I. •Ii.lil(Ir!II .|iirleenllil I. ilsi I Ilirli±l. Qlil`_ I

¶113

In terms of final order dated 06/12/2023 passed by this Tribunal in the above mentioned case, it is ordered that the Applicant Cerdficate Holder Bank is entitled to recover a sum of Rs. 22572213.13 alongwithcost,expensesandinterestfromthe27/12/2022i.e.dateoffiling/witheffectivedateofthe OA/9l/2023andfutureinterestfromorderdatetillthedateofrealisationjnfull,jointlyorseverallyfrom the Certificate Debtors. hel.einafter referred to as:-

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I Sr.n	oi CD Name•+__ Sg3ESRH,I	#: In'. type/Mode i	II lnt. Ratej_.__~~	i Effectlvci DatejL__..~. J	11 order Date	!!Am ,R J^{I Oun( s.}	Ljabi]ity type	Interest(ason OrderDate)	RC )AmouDtais.) I 22572213 .13	lRenark i._ __ ~ -J11i•r,
Ii	+ DOTHERS i	CompoundInterest ( I (Quarterly )	I 10	27/12/2022	!	06/12/2023	22572213.13	JointlyAlld Severally	Interest IAson ^OrderDate
12	CIANESH! KUMAR !J	Comi)ound I [nteres' i (Quarterly),;	ilotI	I27/12/02	'I	o6,,2,2o2	3l 22572213.13	Ointly AIldSeverally	InterestAson ,OrderIDt ae	, 22572213.13 I

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In case of failure to pay the aforementioned adjudicated amount within 30 days, same shaH be recovered from the sale of the mortgaged/hypothecated assets as well as other personal movable/ Immovable assets of the certificate debtors.

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Themortgagedorhypothecatedassetstosedretheloaninquestioiiareherebyattachedandshallbe subject to the final order under the recovery proceeding in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993. Parties are directed to appear before ASHISH KUMAR , Recovery officer, DEBTS RECOVERY TRIBENAL PATNA on 12/01„024.

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The Recovery Officer shall realize the amount as per this Certificate in the manner and mode prescribedunderSectlons25to28oftheRecoveryofDet)tsDuetoBanksandFinanciallnstitutionsAct, 1993 (as amended from time to time) from the above named Certificate Debtors.

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This Certificate has been issued under my signature and seal of the Tribunal on this 06/12/2023

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.....` PRESIDING OFFICER DEBTS RECOVERY TRIBUNAL PATNA

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[seeReEas

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DEBTS RECOVERY TRIBUNAL PATNA

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2ndFloor,(A.8&FWing)KaipulThakurSadan,KendriyaKaramchariParisar

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(GPOA), Ashiana Digha Road, Patna-800025.