Allowed

Bank of Baroda v. The official liquidator

DRT28 Jul 2023TA/27/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the Bank of Baroda's recovery application for over ₹29 crores against the primary borrower, guarantors, and mortgagors. The court held the liability joint and several and directed recovery from hypothecated and mortgaged assets.

What did the court decide?

Direction to pay ₹10.92 cr cash credit dues and ₹19.27 cr LC dues with interest; recovery from sale of assets; recovery certificate issued.

Bank of Baroda versus The official liquidator — Company and Corporate | DRT (2023)

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TOA 27 of 2023

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Registered on : 01.12.2015 Decided on : 28.07.2023

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IN THE DEBT RECOVERY TRIBUNAL-I MUMBAI TRANSFER ORIGINAL APPLICATION NO. 27 of 2023

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BANK OF BARODA )

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Having its head office at Mandvi, Baroda ) And Corporate Office at Bandra-Kurla ) Complext, Bandra (East) Mumbai 400 051) And its Fort University Branch At Mittal ) Avenue, 7/9, Nanik Motwane Marg, ) Fort, Mumbai 400 023 though its Asst. ) General Mrs. Daksha Shah ) ... APPLICANT

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VERSUS

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1. THE OFFICIAL LIQUIDATOR ) Having its office at 5^th Floor, Bank ) Of India Building, M. G. Road, Fort) Mumbai 400 023 )

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2. MR. MILAN KUMAR RANKA ) Residing at Flat No. 1101, Sannidhi ) Plot No. 721, 12^th Road, Khar (West ) Mumbai- 400 052 )

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3. MR. VIJENDRA V. RANKA ) Residing at Flat No. 1101, Sannidhi ) Plot No. 721, 12^th Road, Khar (West ) Mumbai- 400 052

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4. MR. SATISH KUMAR RANKA ) Residing at C/O-369, Banarji ) Daswara, Jabalpur, Madhya Pradesh)

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Page 1 of 8

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TOA 27 of 2023

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Pin Code 482 002 ) 5. MR. JAYANT KUMAR KASLIWAL ) Residing at Flat No. 501, 5^th Floor, ) Amit Apartment, Raut Lane, Juhu, ) Mumbai- 400 049 ) 6. MRS. SUDHA KASLIWAL ) Residing at Flat No. 501, 5^th Floor, ) Amit Apartment, Raut Lane, Juhu, ) Mumbai- 400 049 )

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7. M/S. OSHIYA INDUSTRIES PVT LTD ) Having its office at Office No. 501, ) 5^th Floor, Loha Bhavan, 93, P. ) D’Mello Road, Masjid Bunder (East) Mumbai 400 009 ) ... DEFENDANTS

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Counsel for the Applicant : Adv. Nilesh Bamne i/b M/s. A. R. Bamne & Co. Counsel for the Defendants: Ex -parte.

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J U D G M E N T

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The Original Application has been filed by the Applicant against the Defendants for the recovery of Rs.10,92,02,135.09/- (Rupees Ten Crores Ninety Two Lakhs Two Thousand One Hundred Thirty Five and Paise Nine Only) under the cash credit facility with further interest thereon at the rate of 15.40% p.a. with monthly rests plus 2 % penal interest from 10/10/2015 till the payment and/or realization and sum of Rs.19,27,29,653/- (Rupees Nineteen Crores Twenty Seven Lakhs Twenty Nine Thousand Six Hundred Fifty Three Only) under the letter of credit facility with further

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Page 2 of 8

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TOA 27 of 2023

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interest thereon at the rate of 19.50% p.a. with monthly rests plus 2% penal interest form 10/10/2015 till payment and/or realization.

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The facts succinctly set out in the O.A./T.A are that the Defendant No.1 is one of the constituents of the Applicant and has been sued herein as the principle borrower. The Defendant No.2 to 7 are the guarantors. Defendant No.3, 5 & 6 are also the mortgagors. It is stated that at the request of the Defendant No. 1, the Applicant vide its sanction letter dated 21.03.2011 granted the Cash Credit (Hypnotisation of Stocks & Book-debts) of Rs. 300 Lakhs and Letter of Credit of Rs. 1200 Lakhs aggregate limit of Rs. 1500 Lakhs to the Defendant No. 1. The Defendants duly accepted the terms and conditions of their said section letter.

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In consideration of sanction the said Cash Credit (Hypothecation of stocks & Book debts) of Rs. 300 Lakhs and the Letter of Credit facility of Rs. 1200 Lakhs to the Defendant No. 1. The Defendant No. 1 executed and delivered the following documents in favour of the Applicant:

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a. Demand Promissory Note.

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b. Letter of Continuing Security.

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c. Composite Hypothecation Agreement.

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d. Power of Attorney.

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e. Undertaking not a withdraw deposit.

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f. Declaration-Cum Undertaking-Cum Authority.

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Page 3 of 8

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TOA 27 of 2023

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g. Declaration.

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h. Separate General Form of Guarantees executed by Defendant No.2, 4 to 6.

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i. Corporate Guarantee executed by Defendant No.7.

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It is further stated that Defendant No. 5 & 6 created equitable mortgagor of their immovable property being the Flat No.501 situated on 05^th Floor in the building known as “Amit Apartments” of the Juhu Amit Co-operative Housing Society Ltd., Raut Lane, Juhu, CTS No.98, 98/1 to 12 and 103, Village Juhu, Taluka Andheri, Mumbai belonging to the Defendant No.5 & 6 and deposited the title deeds on 29.03.20211.

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It is stated that Defendant No. 1 made a request to Applicant vide their sanction letter dated 01.10.2012 for enhancement of the said credit facility and by way of such enhancement granted the Cash Credit (Hypnotisation of Stocks & Book-debts) of Rs. 600 Lakhs and Letter of Credit of Rs. 2100 Lakhs aggregate limit of Rs. 2700 Lakhs to the Defendant No. 1. The Defendants duly accepted the terms and conditions of the said sanction letter.

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In consideration of enhanced the said, the Defendant No. 1 executed and delivered the following documents in favour of the Applicant:

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a. Demand Promissory Note.

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b. Letter of Continuing Security.

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c. Supplemental Composite Hypothecation Agreement.

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Page 4 of 8

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TOA 27 of 2023

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d. Declaration.

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e. Undertaking not to withdraw deposit.

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f. General Undertaking.

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g. Separate Guarantee Form executed by Defendant No.1 to 6;

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h. Corporate Guarantee executed by Defendant No.7.

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It is further stated that the Applicant granted a Term Loan (Housing) of Rs. 2,04,25,000/- to the Defendant No. 3 and as security to secure the said Term Loan, the Defendant No. 3 had created equitable mortgage on 20.12.2012 in favour of the Applicant by deposit of title deeps in respect of his immovable property being the Flat No.05 situated on the 37^th Floor with Car Parking Space No.18 & 18T Podium-III in the Podium level/stilt of Tower-A of the building known as “Imperial” Heights situated at Best Nagar, Oshiwara, Goregaon (West), Mumbai. Further, the Defendant No.5 & 6 extended on 12.02.2013 the equitable mortgage already created on 29.03.2011.

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It is stated that Defendant No.1 by ILC Application form dated 31.12.2014 requested the Applicant to open the letter of credit of Rs. 17,50,00,000/- in favour of M/s. Maheep Marketing Pvt. Ltd. In pursuant to the said requests made by the Defendant No. 1, the Applicant issued a Letter of Credit dated 31.12.2014 of Rs.17,50,00,000/-.

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However, after availing the said loan, the Defendants failed to adhere to the terms and conditions of the loan agreement and

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Page 5 of 8

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TOA 27 of 2023

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neglected to make the payment to the applicant bank. Therefore, the account was declared as NPA on 01.04.2015. Thereafter, the Applicant gave separate notices all dated 01.09.2015 to the Defendants under Section 13(2) of the SARFAESI Act, 2002 ad called upon the Defendant No.1 to 6to make the payment of the outstanding dues but they failed to pay the dues. Hence, the present OA has been filed by the Applicant.

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Notices were issued to the Defendants. Defendant No.5 & 6 put their appearance through counsel however, despite opportunities, no WS was filed thus, their right to file the WS was forfeited vide order dated 06.11.2017. None appeared for the Defendant No.5 & 6 since 03.01.2023. Despite service, none appeared for the Defendant No.2 to 4 and 7 nor any WS has been filed thus, they were proceeded ex-parte vide order dated 08.02.2017.

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During the pendency of the OA, the Defendant No. 1 Company has been ordered to be wound up in pursuant to the Order dated 08.08.2016 passed by the Hon’ble Bombay High Court in Company Petition No.77 of 2015 and an Official Liquidator has been appointed for the Defendant No.1 Company.

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The Applicant Bank has produced all the Original Loan documents and other relevant documents on along with their Claim Affidavit filed through their Assistant General Manager Mr. Manish Kaura.

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I have heard the Ld. Counsel for the Applicant and gone through the record.

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Page 6 of 8

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TOA 27 of 2023

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The witness of the Applicant Bank has fully corroborated the averments made in the OA/TA, even otherwise the whole case of the Applicant Bank is based on documents and the witness has duly proved all these documents as against the defendants. In my view there is no question of disbelieving the evidence led by the applicant bank and the Applicant Bank has proved its case beyond reasonable doubt. The liability of Defendant No. 1 to 7 are joint and several.

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In the light of above discussions, the Original Application by the Applicant Bank deserves to be allowed against the Defendants.

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O R D E R

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a. The present O.A. is hereby allowed and Defendants are hereby directed to pay to the Applicant Bank, within a period of 60 days, sums of Rs.10,92,02,135.09/- (Rupees Ten Crores Ninety Two Lakhs Two Thousand One Hundred Thirty Five and Paise Nine Only) under the cash credit facility with further interest thereon at the rate of 15.40% p.a. with monthly rests plus 2 % penal interest from 10/10/2015 till the payment and/or realization and sum of Rs.19,27,29,653/- (Rupees Nineteen Crores Twenty Seven Lakhs Twenty Nine Thousand Six Hundred Fifty Three Only) under the letter of credit facility with further interest thereon at the rate of 19.50% p.a. with monthly rests plus

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Page 7 of 8

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TOA 27 of 2023

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2% penal interest form 10/10/2015 till payment and/or realization.

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b. Failing which amount shall be recovered from the sale of hypothecated assets, mortgaged properties as well as other personal moveable and immovable assets/properties of the Defendants.

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c. Defendants are hereby directed not to deal with his properties till further direction of Ld. Recovery Officer.

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d. Defendants shall also pay the cost and expenses of the OA/TA.

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e. The Official Liquidator is hereby directed to file the Status Report before the Ld. Recovery Officer of this Tribunal.

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f. Recovery Certificate be issued forthwith and be sent to the Recovery Officer of this Tribunal.

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Copy of this order be sent to the parties as per rules.

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File be consigned to record.

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Sd/-

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Place: Mumbai. (Dr. Rekha G. Dhakar) Date : 28.07.2023 Presiding Officer, DRT-1, Mumbai

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Tjs/-

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Page 8 of 8

Bank of Baroda v. The official liquidator

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. The official liquidator

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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