Allowed

Bank of Baroda v. M/s Rongpi Tea Plantation

DRT23 Nov 2023OA/94/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's application for a recovery certificate of Rs. 33.52 lakhs. It ruled that a bank Chief Manager can file evidence and rejected claims of blank signatures or limitation bars as unsustainable.

What did the court decide?

Recovery Certificate issued for Rs. 33,52,079.03 plus interest; respondents jointly and severally liable; charge kept alive on mortgaged property.

Bank of Baroda versus M/s Rongpi Tea Plantation — Contract and Commercial Disputes | DRT (2023)

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OA^{g4zo2zroRT4uwahati}

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IN THE DEBTS^{RECOVERYTRIBUNAL,GUWAHATI}

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(North Easlern Region)

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(Tibunal of Assam, Nagaland, Meghalaya,^{Manipur, Mizoram,AftlnachalPradesh& Tripura)}

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Before Shri Shiv Sharan^{Dubev.PresidinoOfficer}

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O.A. No. 94/2022

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ln tho matter of - BANK OF BARODA Golaghat Branch, Golaghat, Assam-785702

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Applicant

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Vs.

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M'S RONGPI TEA PLANTATION

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Represented by its^{Proprietor Shri Semson Rongpi,} S/o Late Hari Chandra^Rongpi,

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Village-Singnot Teron Gaon,

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P.O.- Chowkihola, Karbi^{Anglong-782475.}

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iIR. JABIDUR RAHMAN s/o Azizur Rahman.

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Resident of Forest Range^{Office Tiniali,}

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Ward No.2, Golaghat,^Assam.

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Defenda nts

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Presence of the Counsel:

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For the Appricant

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HI. f,5fliltJ"X,T?. Rubi Nath, Mr. Dhanjit Kumar Nath, Advocates

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For the Defendants : Mr. Gunjan Kumar Singh, Advocate.

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Dated :231'1112023

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JUDGMENT

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This is an application under section^{19 of the Recovery of Debts Due to Banks} and Financial lnstitutions Act,^{1993 liled by the Bankof Baroda,Golaghat Branch'} Golaghat, Assam-785702,^{with a prayerto issue Recovery Certificate for the sum of} Rs. 33,52,079.03^{(Rupees Thirty-Three Laca Fifty-Two ThousandSevsnty'Nine} and Paiss Three) only as on^{10.02.2022 againstthe defendants} iointly^{and severally} with pendentelite and future interest^{at contractualrale ol 12.20o/oper annumwith} monthly rests till realization along^{with cost and other} reliei qLil f f l.A,g-J.,Lg

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qLil f f l.A,g-J.,Lg )i.lr.rLI Pr€siding Omcer ORT, Guwahali

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6.A.^{ga/2o22/oRl€uyahati}

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A few facts giving rise to the present application are as under.

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The defendants had approached and requested the applicant bank to sanction a working Capital Limit of RS.3O,OOOOO/_ (Rupees Thirty Lakhs) Only for lhe purposa of expansion of Tea Garden requirements of the business on 01.07.2016. The applicant bank in course of its banking business after conducting pre sanction inspection report has sanctioned in favor of lhe defendants, worfting Capital Loan of Rs. 30,0O,OOO.OO (Rupees Thirty Lakhs) Only vide Sanction lntimation lefter dated 25.01.2016 inter alia at (Floating) interest @ i2.2oolo (MCLR ol l Year +2.75o/o) ger annum for S years i.e. 60 months.

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The defendants have accepled the terms and conditions as set forth by the applicant bank upon which the aforesaid sanction was accorded and in pursuance of the acceptance of the aforesaid sanction, the defendants had executed the following documents in favour of the applicant bank: _

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a. Loan Agreement. Cum Hypothecation Deed for priority / Non priodty Sector Advances dated 25.07.2016.

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ln consideralion of the applicant bank having agreed to grant and/or granted the loan/ limits and having agreed to make disbursements/interim disbursements to the defendant No.1, the defendant No. 2 executed unconditional and irrevocable Guarantee on 25.07.2016 vide Letter of Guarantee in favour of Bank of Baroda applicant bank, guaranteeing the repayment of lhe dues under the loan agreement.

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The defendant No.l has executed the periodic Khiraj patta of Land measudng 84 Bigha 0(zero)Katha, O(zero) Locha bearing p.p. No 635 and Dag No 1483, 1484, 1485,^.t486, 1497, 1498,^,t489, i491, 1490 atong with Jamabandi, Non Encumbran@ Certificate, Land Valuation Certificate, possession/ Land Holding Certificate, Trace Map and Revenue Receipts before the applicant bank with inlent to create the equilable mortgage.

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The defendant no. t has executed a Letter of Lien with receipt certificate No. 903103 due dale 19-Ol.2O1Z with the appticant bank as security against the loan sanctioned to the defendant.

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The defendant No. t has executed the Acknowledgement of Liability where

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Ql:rc[ora''fuL1 yz.tl.29 t/ Pr€sidnq Officer ORT, GriwEhati

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the defendant executed that he is liabte to pay a loan of Rs. 3j,gB,39S/- (Rupees Thirty-One Lakhs Eighty-Eight Thousand Three hundred and Ninety_five) only as on 05.11.2018 and Rs. 31,59,11Sl- (Rupees Thirty_One Lakhs Fifty-Nine Thousand One Hundred and Fifteen) only as on 29.03.2019 provided by the applicant bank.

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The Applicant Bank had obtained proforma Valuation Report of the Mortgaged property from their panel valuer to ascertain value of the Mortgage Property and as per valuation report dated 12.07.20161he value of the mortgage property is Rs. 82,00,000 and Forced Sates Value is Rs. 65,60,000.00.

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The defendants had availed the said credit facility from the applicant bank but have not paid the outstanding loan amount as per terms and conditions as agreed upon with the applicant bank, in spite of repeated demands and request by the applicant bank. As the defendants faired to repay the roan amounts, the said roan account became NPA on 21.0.1.2022. After the account bectme NpA the applicant bank issued notices for repayment of the due amount, but rhe defendants faired ro repay the loan amount.

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The applicant bank thus became constrained to fle the present OriginalApplication for the recovery of Rs. 33,52,079.03 (Rupees Thirty-Three Laca Fifry_Two Thousand Seventy-Nine and paise Three) onty a s on 1O.O2.2O22alon9 with interest and mst of the application.

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After riling of the OA the Tribunal issued notices upon the defendants through registered post and the applicant bank filed service report on ZO.OS.2O2Zand brought on record the postal receipts along with hack consignment report which shows that notices hav€ not been seryed upon the defendants. Thereafrer the Tribunal ordered paper publication of notice upon the defendants and the applicant bank issued notice to the defendanls on 27.O'.21z2lhtough paper publication in two newspapers namely "The Sentinel" and "Dainandin Batta". fhe learned counsel has appeared for defendants on 05.01.2022 and filed their written statement and evidence on affidavit on 26.08.2022 to which learned counsel for the applicant ,iled reioinder on 14.09.2022. The defendants have atso filed pleadings in response to Ooinder filed by applicant bank. Thereafter the matter was posted for hearing.

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S\i,tilau.'6.ta 2J,1t.21 U P6siding Offcar DRI Gufah.ti

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o.A. oaao22loRT-cu*thari

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Suppoding $e claim of the applicanl bank Sri Amitabh pathak, Chief Manager of the Applicanl Bank has filed evidence on affdavit coupled with the security dodJments marked as Exhibit AW-l to AW-17 supporting the claim of the applicant bank details of which are: -.

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Sl.No.	Nameofthe docunrents	ExhibitNo.
,		GeneralPower of Aftorney dated3O.1j.2011
2	ApplicationforLoan dated 01.07.2016	AW-2
3	SanctiontntimationtEtteidated25.0720,16	AW.3
4	LoanAgreementcu@ 25.07.2016
	Letter of GuaranteedatedTs-o7:ot6	AW-5
6	Periodic Khiraj PattadaGdl0O720D	AW.6
7	Jamabandi dated22O2701q16.o82O1& .1O.08201 6
8	Non EncumbranceCertificatelited79OZ2016	AW-8
	Land Valuation dated29'o22016	AW-9
10	Possession/LandHotdingCertifrcate dated29.022016	AWlO
11	TraceMapdated 16.012013	. 4W.11
12	RevenueReceipts 30.'10.20't 5 daled25.02.2020,05.06201S,	AW-'t2
'13	letter^{ofLien dated 25.0720.16}	AW-l3
14	Letterofnct<noWeOgement 29.03.20't9 dated05.11.2018,
	rrorormavatuallonHepondated12.O72O16	AW-15
to	olaremenrorAccount daled10.02.2022	AW16
17	Legarr\ouceoaled25.	.J1.2022

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The defendants have appeared and contesled the claim of the applicant bank by filing written statement stating interalia that the present OA No.94 fited by Amihbh Pathak on behalf of applicant Bank slands technic€lly disqualmed and no reliance on the same can be praced as per the provisions of the RDDB Acl 1993 and Rures therein. The original apptication is also barred by law of limitation. Amitabh pathak is not a vallJ constituted aftomey behalf of the appticant Bank. lt is further stated by these answering defendants that the applicant Bank had got multiple blank documents signed by them, the contenb of which were not explained to the defendants, nor the purpose of those documents disclosed. lt is further stated that no undertaking or memorandum was signed noI any tifle documents were submitted/deposited by defendants with any intention for creation of equitable mortgage as alleged by applicant Bank. The account was not inegular as alleged by the applicant Bank. The said account was regutar and standard a@ount and no demand notice was sent by the applicant Bank ever. The declaration of the account as NpA is wrong and mala ,ide as no attempt has been made

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sl",rsAaa-&rl r - 23.112\ 0 Pr*idihg Ofic.r ORT, Gumhati

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o.A.^{g4po2zDRT€uwahati}

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by the applicant Bank to adjust the liquid funds of defendants lying with applicant Bank by way of Fixed Deposit towards any outstanding whatsoever. \A/hen the Covid j9 pandemic calamity hit the global as well as lndian economy and adversely impacted each and every person in the country, the defendants kept pursuing the applicant Bank for relief to which they were entitled as per directives of RBI and Govt of lndia for restructuring of credit facilities but there was no response from the applicant Bank. The credit facilities availed by defendant 1 are governed by the Loan Agreement cum Hypothecation Deed dated 25lO7D016. The said loan agreement has absolutely no reference to any security created or offered by way of mortgage of immovable property by way of land or building. The Certiflcate regarding statement of account annexed by the applicant bank with original application is not in accordance with Bankers Books Evidence Act, 1981, hence claim of the bank is not sustainable. The applicant Bank is clearly guilty of laches in not extending the benefit of restructuring of loan to the defendant in pursuance of RBI guidelines in a Force Majeure situation. The applicant Bank never raised any other demand notice to the defendants prior to the legal notice as alleged by applicant Bank. The appljcant Bank did not encash the liquid security available with it in form of Fixed Deposit. The conducl of the applicant Bank is totally against the principles of naturaljustice. The applicant bank is not entifled for any relief as claimed.

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The leamed counsel for the applicant bank has filed rejoinder against the written statement filed by the defendants in which it has been stated that the written statement filled by the defendant no 1,2 & 3 is not maintajnable in law as the Written Statement filled by them are notarized in Calcutta where defendant No.^.l is from Karbi Anglong and also signature of defendant No.1 in the loan document mismatched with the signature in the Written Statement filled by the defendant. Thus, the same is not admissible in the eye of raw. The apprication is filed by authorized representative of the bank having valid power of attorney on being default by the defendant to repay the loan amount as per terms and conditions of the sanction. Thus, the allegation of the defendant is no validity in the eye of law so it was just to delay proceeding of court and are false and baseless and the defendant are trying to escape from liability of

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sUct^gii1fufz Presiding OIftcer DRT. Guwahati

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0.A. 942022/ORT€w!hali

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repayment afrer default to repay the loan as^per terms and condition of the sanclion. The defendant has not made any averment to substantiate the staternent made in this written stiatement, so the same cannot be taken as evidence. Simply making statement without any prove of lhe statement cannot be treat as evidence in the eye of law. The defendant admitted the sanciion of loan in the^year 2016 and the defendant has also acknowledged liability in the^year 2018, 20'19 and Original Application has been liled in lhe yeat 2022 hence, the Original application is filled very much within limitiation^period. The defendant admitted the execution of loan document though denied the content, the defendant afrer admitting the execution of loan document and enjoying lhe credit facility cannot deny that the content was not explained to them. lt is further stated that the defendant has admifted the statement of account and claimed that the loan account is standard, the loan account has become NPA as^perguideline of RBI as the defendant has failed to repay the dues as^per terms and conditions of the sanction. The defendant has already admitted execution of loan documents and creation of mortgage. The answering defendanb are silent on the deposited mortgage document, no explanation has given by the defendants in regards to the title document though raised obieclion on creation of mortgage, hence the allegation of the defendant is nothing but blunt lie. The statement of account is as^per the Banke/s Book of Evidence Ac{, 1891 and as per RBI Guidelines. The^pleading taken by the applicant bank along with annexed/exhibited documents and evidence on afiidavit will prove entire claim of the applicant bank. The defendants are making false and fabricated story afrer admitting the sanction of loan and execution of loan documents to^just escape from liability hence allegation is false and thus liable to be dismissed.

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The defendants have liled pleadings in response to rejoinder filed by applicant bank.

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Heard the learned counsel for the applicant bank who prayed for issuance of Recovery Certificate against the defendants as per pleadings made in the Application, supported by evidence on affidavit of their witness who affirmed on oath the execution of the security and other documents by the defendants and also execution of their own documents relied upon, which have been marked exhibits. The teamed counselfor the applicant bank has atso lited written argumenrol.l :LO,l r_ L{t*

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Presiulng 95]f^{I l 21 li} DRT, Guwahali

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O A^{g4/2o22lDRT'Guwahati}

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None has appearad^{for the defendantsto put foMardtheir arguments.}

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I have carefully^{perusedthe documentson record including original application,} evidence on affidavit^{and exhibited documents as well as written statement and} evidence on afiidavit^{filed by the defendants.}

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It is observed that the^{defendants have not deniedthe availment of loan,} execution of documents and^{their signatureon the same.}

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The defendants in^{their written statementhave contendedthat Shri Amitrabh} Pathak is not a valid constituted^{attomey on behafof the applicant Bank.}

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The say of the applicant bank^{is that Shri tunitabh Pathak is the Chief Managerof} the applicant bank and^{is havinga valid authorityto file the eviden@ on affidavitln the} e]se ol United Bank^{of lndiaVs. NarcshKumar and another, AIR 1997 SuqemeCoui} 3. it has been hetd by^{the Hon'ble ApexCoud that suit instituted or defended by public} mrporation like Bank-Allowing^{publicinterestto be defeatedon mere technicality - not} reclified. Suit by Bank for rccovery^{of loan dismissalon the groundof plaint beingnot} signed or verilied by competent^{person not proper' ln the caseol Kedal lai Vs.Harilal} Singh, AIR 1952 SC 47, the^{Hon'ble SupremeCoud has held that on meretechnicality} of^pleading when substance^{of the things is there and no prejudiceis causedto the} other side, however clumsily^{or inartisticallyplaint may be worded, on the groundof} technicality alone, the app€al cannot^{be thrashed out}

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ln view of the above I do^{not agree withthe contention of the defendanband the} same is negated.

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Further contention of the defendants^{is that the applicantBank had got multiple} blank documents signed by them,^{thecontents of which lvere not explained to the} defendants, nor the^purpose of those^{documents disclosed.}

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The above crntention of^{the defendantsis not only untrust-worthybut also} does not raise any triable^{issue.Under Section20 of the NegotiablelnstrumentsAct'} 1981, it is provided that when a^person signs^{and deliversto another a paper stamped} in accordance with the law relaling^{to negotiable instruments either wholly blank or} having written thereon an incomplete instrument he^{gives prima facieauthority} to the holder of such an^{instrumentto complete upon it a negotiable instrument for any}

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-s.l"i.d^{sro,ra"{-,[ 9i} 23'\a4^U Pr66iding Oficer DRT, Guraheti

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on. 94/2022lDRT€u|6hari

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amount which may be covered by the stamp affixed on it. The^person so signing is made liable upon such an instrument in the capacity in which he signed it to any holder in due course. The defendants did not raise their liftle ,inger to^point out if their signatures were obtained on any blank documents by the then Manager of the applicant bank or under duress. lf the signatures had been obtained in blank documents under duress by the Manager of the Bank, the defendants could have liled FIR or Complaint before the Compelent Authority. But no FIR has been lodged by the defendants. The documents were executed in the month of July 2016 and thereafter till August 2022 (date of filing written statement) the defendants choose to keep silent about his signatures having been obtained on blank documents or under duress. The only irresistible conclusion, therefore, is that the^plea now sought to be raised by the defendant to the effect that his signatures were obtained on blank documents is merely a sham plea, devoid of any force and as such cannot be deemed to raise any triable issue. This has also been held by the Hon'ble Delhi High Couft in the case of Punjab & Sindh Bank Vs. Ram Pnkash 1990(1) BC 3E6.

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ln the case of Grasim lndustries Limited and Anothor Vs. Agarwal Steel repoded in (2010) 1 Supreme Court Cases 83, Hon'ble Justice Ma*andey Katju and Hon'ble Justice A.K. Ganguly had held that "when a peson signs a documenl, therc is a^presumption, unless there is a proof of force or fraud, that he has read the document propedy and undorstood it and only then he has aftixed his signaturcs thereon, otheMise no signature on a document can ever be accepted. ln pafticular, bus,hessmen, being careful people (since their money is invofued) would have ordinaily read and understood a document before signing it. Hence, the presumption would be even strcnger in their case."

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ln view of the above, the plea sought to be raised by the defendants is devoid of any force. Hence the contention of the defendants is negated.

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It is evident from the statement of account filed by the applicant bank that the defendants have defaulted in repayment of the loan. lf there is defauh in repayment of the loan the applicant bank has every right to proceed against the defendants for realization of the oubtanding dues. Hence, I have no hesitation to hold that this original applic€tion is maintainable.

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The applicant bank has produced on record the copies ofthe statemenl of account

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JLu3fau"&4,, 23.1r.23 ( Pr6idin0 Ofic.r DRT, Gus,ah.ti

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O A^{g4/2o2zDRT-Guwahati}

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in respecl of the defendants, duly certmed under Bankers' Books Evidence Acl. The applicant bank by the eviden@-on-affidavit of Sri Amitabh Pathak, Chief Manager of the applicant bank had deposed the conectness of the affidavit and cedmed copy of the account. Beyond that nothing more has to be deposed by an officer of the bank. lt is lhus obvious that apart ftom the entries of the Books of account there are ample evidence on the record to conoborate the said entries.

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The documents executed by the defendants are duly proved by the applicant bank and the witness ofthe applicant. The applicant has sufficient cause of action for filing the instant application due to disbursemenvavailment of loan to/by the defendants and on default in repayment of the loan by the defendants, inspite of demands made, as per exhibited documents filed by the applicant bank.

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Considering the facts and circumstances of the case, I am of the considered view that the documents riled by the applicant bank are supporting the claim of the applicant bank and estabtishing the tiability of the defendants. lt is proved that the defendants are jointly and severally liable to pay to the applicant bank the claim made in the Original Application. The loan was obtained and documenfs have been executed on 25.07.2016. Letter of Acknowtedgement are dated 05.1j.2018 & 29.03.2019. Moreover, after perusing the documents on re@rd and taking into consideration of the facts and circumstances of the case, I find that the mortgage has been created by the defendant No.1 where the limitation available is for .12 years and as such taking into account of the creation of the mortgage the application appears to have been filed well within the pedod of limitation. The accounts became NpA on 2.1.01.2022 and the OA has been fled on 08.03.2022. Hence, the OA is fited well within the period of limitation and this Tribunat having a jurisdiction to adjudicate the Originat Application.

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Considering ihe version of by Sri Amitabh pathak, the applicant,s witness and all the documents marked as exhibits, including duly certiried mpy of the statement of account along with interest calculation sheet maintained by the applicant Bank in it,s regular course of business, I hold that the applicant is entifled to get the Recovery Certificate as prayed for.

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SL"n dra4r"A,L+ a3 tt.21 0 Pr€3iding Ofiioar DRT, Guwah.d

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O A 94/2022,DRT-Gu{ahalr

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ln the result, lhe^{present OriginalApplication No. 94 of 2022is allowed withcost}

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as under: -

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i) The defendants No.¹ & 2^{are jointlyand severallyliable to pay to the} applicant bank a sum of^{Rs.33,52,079'03 (Rupeos Thirty'ThreoLaca Fifty-} Two Thousand Seventy-Nine^{and PaiseThree)only withpendentelite and} future interest @12.2\ok^{per annumwith monthly rests from 11.02.2022fll} the date of full^{paymenurealization and also costof the application.}

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ii) The charge of the certificate^{amount be kept alive on mortgaged property i.e.} land measuring 82 Bighas^{covered under Patta No.99, Dag No. 1483'1484,} '1485, 1486, 1487 , 1488,^',1489, 149',1, 1490, situated at village- Bornewria NC, under Silonijan Revenue,^{CircleSilonijanof Karbi Anglong Autonomous} Council, Mouza- East^{Rengmain the DistrictKarbi Anglong' Assam,as} described in Schedule-A^{of the OriginalApplication till the amountis realized} in full.

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iiD The applicant bank is entitled^{to proceed against thesecured items towards} recovery of the debts.

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iv) The applicant bank^{is also entitled to proceedagainst the personal assets and} properties of the defendants towards recovery of the dues.

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v) The applicant bank is entitled^{to the costs of the O.A., whichincludes the} advocate fees of the applicant^{bank. Applicant is directed lo file the cost} memo within 2 weeks from today.

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vi) lssue Recovery Certificate accordingly^{for a sum tu' 33'52'079.03 (Rupoes} Thirty-Three Lacs Fifty-Two^{ThousandSeventy-Ninaand Paise Thr66)} only in favour of the applicant^{bank against the defendants No. 1 & 2.}

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