Allowed

M/s Deutsche Bank Ag v. M/s Unicorn Facility Support Services Pvt. Ltd.

DRT16 Jun 2023TA/396/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's application for a recovery certificate. The court found the claim established as it was unrebutted due to the absence of a counter-affidavit. The bank is entitled to recover the principal plus contractual interest, adjusted to 13% simpliciter for future interest.

What did the court decide?

Recovery Certificate issued permitting realization of Rs.25,82,521.55 plus 13% annual simple interest from filing date until realization.

M/s Deutsche Bank Ag versus M/s Unicorn Facility… — Contract and Commercial Disputes | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 16^th day of June, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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TA No.396 of 2023

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(Originally filed before DRT-I Chennai as OA No.268 of 2019 and thereafter transferred

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to this Tribunal and renumbered as TA No.396 of 2023)

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M/s Deutsche Bank AG Presently having business at 4-4A, Western Tower Sunny Side, Ground Floor Shafi Mohammed Road

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Thousand Lights, Chennai – 600 006 Represented by its Authorised Representative Mr. M. Deiveegan …Applicant

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Versus

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M/s Unicorn Facility Support Services Pvt. Ltd., Represented by its Director

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Srekant Jha & Ms. Simmi Malhotra New No.13, Old No.37, 1^st Floor Tank Bund Road, Nungambakkam

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Chennai – 600 034

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Mr. Sreekant Jha No.2, 2^nd Street, Nawab Abibullah Avenue Nungambakkam, Chennai – 600 034

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Ms. Simmi Malhotra

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A3-Alsa Glendale 5 (Old) Haddows Road 2^nd Street, Chennai – 600 006 … Defendants

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Counsel for the Applicant Bank : M/s Sai Krishnan Associates Counsel for Defendants 1 to 3 : M/s K.F. Manavalan

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FINAL ORDER

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This application is filed by the applicant bank under Section 19(1) of Recovery

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of Debts and Bankruptcy Act, 1993 against the defendants’ seeking issuance

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of a Recovery Certificate for recovery of a sum of Rs.25,82,521.55p with further interest at the rate of 13.15% per annum with monthly rests from 04.11.2018till the date of realisation along with costs of the application.

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It is the case of the applicant that the defendants approached the applicant requesting for grant of Business Installment Loan vide application dated 26.9.2016 along with requisite documents and also agreed to the terms and conditions of the loan facility by executing Loan Agreement dated 27.10.2016. It is also the case of the applicant that in pursuance to the above, the applicant sanctioned a loan of Rs.50,00,000/- on 27.10.2016. It is stated that the defendants 2 and 3 also executed personal guarantees dated 27.10.2016 guaranteeing due repayment of the credit facility availed by the 1^st defendant. It is stated that the loan was disbursed for the purpose of the defendant’s business obligations and the same is repayable in 36 equated monthly installments of Rs.1,68,229/- each commencing from 5.12.2016 to 05.11.2019.

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It is also the case of the applicant that the defendants violated the terms and conditions of sanction, committed default in repayments and failed to regularize the loan accounts despite repeated request and hence the applicant issued a notice on 23.08.2018 calling upon the defendants to clear the outstanding dues. It is stated that despite the said notice the defendants did not come forward to clear the dues and hence the applicant is constrained to file this application for recovery of its legitimate dues.

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The defendants filed their reply statement contending that the application is not maintainable in law for the reason that there is no valid authorization, even

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if Power of Attorney were to be valid, there is no specific power to institute original applications on behalf of the applicant, interest is charged in violation of terms of contract, the documents are not certified as mandated in law, correctness of statement of accounts is disputed and receipt of payment of Rs.1,80,000/- on 31.5.2019 after issuance of legal notice dated 23.8.2018. It is contended that no cause of action has arisen after the applicant had received the sum of Rs.1,80,000/- on 30.5.2019 on the promise of no further action and without any demure after the initiation of proceedings after waiving their right to prosecute the application, even if it were otherwise valid in law.

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It is stated that contention of the applicant that there is no security available is not correct and on the other hand security that is atleast equal to or if not greater than the value of the loan is available with the applicant and their interest are fully protected. It is stated that the amount claimed by the applicant is incorrect and is not supported by any document and the same is not supported by any document.

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It is also stated that the application itself is not validly instituted and that the person allegedly acting on the applicant’s behalf has not executed the documents including the OA in the manner known to law and the OA is liable to be rejected and the documents filed in support being Exhibits A-1 to A-12 not having been executed as per law and / or inadmissible in law cannot and does not support the applicant’s case at all. The defendants thus submitting prayed for dismissing the OA.

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The applicant bank filed its proof affidavit along with 12documents, which are marked as Exhibits A-1 to A-12, the details of which are as under: -

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Sl. No.	Date	Description of Documents
1.		Certificate of Establishment of Place of Business in India issued by the Registrar of Companies
2.	05.04.1998	License No.BOM-41 granted by RBI to carry on banking business in India with effect from 5.4.1998.
3.	19.03.2019	Power of Attorney issued by the applicant bank to the Authorised Signatory
4.	26.09.2016	Loan Application Form submitted by the defendants
5.	27.10.2016	Loan Agreement executed by the defendants
6.	27.10.2016	Guarantee agreement executed by 2^nd defendant
7.	27.10.2016	Guarantee agreement executed by 3^rd defendant
8.	23.08.2018	Legal notice issued by the applicant
9.	06.09.2018	Proof of service of the notice on 1^st defendant
10.	06.09.2018	Returned cover of notice sent to 2^nd defendant
11.	05.09.2018	Proof of service of the notice on 3^rd defendant
12.		Statement of accounts in respect of the loan account.

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As there was no representation for the defendants on 18.04.2023, the defendants were called absent and set ex-parte on that day and hence no Counter Proof Affidavit was filed by the defendants.

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Heard the Ld. Counsel for the Applicant Bank. The defendants were set exparte on 18.04.2023. Perused the records.

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Having heard the Ld. Counsels for the applicant and after perusing the records, the Tribunal framed the following points for consideration: -

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1. Whether the applicant bank has established its claim against the defendants? If so, for what amount?

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2. Whether the applicant bank is entitled for pendent lite and future interest, if so, at what rate ?

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Point No.1

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Whether the applicant bank has established its claim against the defendants? If so, for what amount?

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The applicant bank in its endeavor to establish its claim against the defendant examined its official as AW1 and got marked exhibits Ex.A-1 to A-12. Ld. Counsel for Applicant placing reliance on the proof affidavit of AW-1, besides Exhibits A-1 to A-12 strenuously contended that the claim of the applicant stands established, as such, the applicant is entitled for a recovery certificate.

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Ld. Counsel for Applicant Bank would contend that even as per the Reply Statement filed, the defendants have not denied availment of credit facility, execution of loan and security documents and as such the said admission is sufficient enough to allow the claim of the applicant. Ld. Counsel would further contend that the contention of the defendants that the application is not maintainable as the same is initiated by a person who do not possess any valid authorization for initiating the proceedings is false as he has been duly authorized by Power of Attorney dated 19.3.2019. Ld. Counsel would also contend that the statement of accounts filed is proper and supported by appropriate certificate under Bankers’ Book Evidence Act and Information Technology Act and hence the contention of the defendants regarding the amount claimed cannot be countenanced. It is further contended that the defendant though filed the reply statement, did not choose to file any CPA

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despite sufficient opportunity and therefore the claim of the applicant stand unrebutted.

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As rightly contended by the Ld. Counsel for Applicant, barring filing of reply statement, the defendant did not choose to file Counter Proof Affidavit substantiating the pleas taken in reply statement. Here it is to be stated that as per the scheme of adjudication of a claim/counter under the RDB Act, parties shall file their respective affidavits/counter affidavits in support of their claim or counter claim as the case may be and the Tribunal shall on the basis of the affidavits filed, adjudicate and decide the claim/counter claim. Therefore, in the absence of any Counter Proof Affidavit, as rightly contended by the Ld. Counsel for Applicant, the defense put forth by the defendant remain unsubstantiated hence cannot be considered, thus the claim of the applicant stands unrebutted.

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Further, the applicant bank has filed the statement of accounts accompanied by certificates under Bankers’ Book Evidence Act and therefore it is clear that the applicant has charged interest at contractual rates only and therefore the claim of the defendants that the amount claimed is not proper and supported by documents fails. The other contention of the applicant that the documents have not been certified as mandated in law also cannot be countenanced for the reason that every document has been certified by the Authorised Signatory who is authorized to do the same in this behalf.

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Therefore, in the light of the discussion as aforesaid, it is clear that the proof affidavit and the documents filed along with by the applicant remain unchallenged by the defendant. Further, the Tribunal on careful perusal of the

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unrebutted Proof Affidavit of AW-1 besides Exhibits A-1 to A-12 is fully satisfied that the applicant has established its claim. This point is answered accordingly.

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Point No.2

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Whether the applicant bank is entitled for pendent lite and future interest, if so, at what rate?

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In terms of Sec. 19 (20) of the RDB Act, the Tribunal has been empowered to pass an order regarding payment of interest from the date on or before which payment of the amount is found due, up to the date of realisation or only payment, as it think fit to meet the ends of justice. Further, Hon’ble Supreme Court, in the judgement (reported in II 2009 BC pg. 696) in the matter of State Bank of India – vs – Sarath Textiles, held that “ Sec. 19 (20) of the RDDB & FI Act confers discretion on the Tribunal to award interest on the applicant being as it thinks fit to meet the ends of justice. ”. Further, Hon’ble Supreme Court of India in the matter of Central Bank of India – vs – N. Raveendra (reported in 2002 [1] SCC pg. 367) held that “ Sec. 34 of CPC confers discretion on the Court to award or not to award interest or to award interest at such rate as it deems fit de-horse notwithstanding the contract between the parties. ” Sec. 19 (20) of the RDDB & FI Act is akin to Sec. 34 CPC.

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While it is the case of the applicant that the applicant bank is entitled for contractual rate of interest till discharge of the entire outstanding dues, however, the defendant would contend that in so far as pendente lite and future interest is concerned, the contractual rate of interest may not be applied. It is to be stated that the claim of the applicant bank includes the rate

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of interest and other charges payable as per the contract. The Tribunal already held that the applicant bank is entitled for the amount claimed in the OA. As already stated, the Tribunal has awarded contractual rate of interest as claimed by the applicant bank till the date of filing the OA and in view of the fact that the subject loan being is a business loan and the lending rate had considerably come down, the Tribunal is of the view that the defendants are entitled for a reduced rate of interest. Therefore, under these circumstances, the Tribunal is inclined to grant pendente lite and future interest @ 13% p.a. simple on the OA claim amount from the date of filing till the date of realization. Point No.2 is answered accordingly.

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In view of the afore mentioned discussions, the OA is disposed off in the following manner: -

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(a) TA No.396 of 2023 stands allowed.

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(b) Applicant is permitted to realize an amount of Rs.25,82,521.55pwith further interest @13% per annum (simple) from the date of filing of the application till the date of realization in full, from the defendants jointly and severally after deducting all the amounts received by them during the pendency of OA, and also by selling the other assets of the defendants.

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(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 7 days from the date of receipt of the copy of the order.

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(e) The Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of this final order.

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Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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(Dictated to PS, transcribed by him, corrected, signed and pronounced by me in Open Court on this the 16^th day of June, 2023)

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Sd/(T. RAJESH ) PRESIDING OFFICER DRT-II, CHENNAI

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M/s Deutsche Bank Ag v. M/s Unicorn Facility Support Services Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

M/s Deutsche Bank Ag v. M/s Unicorn Facility Support Services Pvt. Ltd.

Case brief

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What did the court decide?

What the court decided

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