Allowed

Axis Bank v. Hemant Zaveri and Others

DRT30 Jan 2024OA/10/2022

Case brief

AI extract

What is this about?

The tribunal allowed an original application filed by a bank to recover principal and interest from a principal borrower and two guarantors. Relief against one defendant's company was denied as a resolution plan was already approved under IBC. Orders were passed for joint and several recovery from the other defendants' assets.

What did the court decide?

The applicant is directed to recover Rs. 44,45,28,961.85 plus interest at 9.90% p.a. from respondent No. 1 & 2 jointly and severally within 60 days, failing which from sale of their assets. A recovery

Axis Bank versus Hemant Zaveri and Others — Company and Corporate | DRT (2024)

¶1

O. A. No. 10 of 2022

¶2

Registered on : 14.01.2022 Decided on : 30.01.2024

¶3

IN THE DEBT RECOVERY TRIBUNAL-I AT MUMBAI ORIGINAL APPLICATION NO. 10 of 2022

¶4

AXIS BANK LIMITED, a company incorporated under the provision of Companies Act 1956 and a Banking Company within the meaning of the Banking Regulation Act, 1949, having its registered office at “Trishul”, Third Floor, opp Samartheshwar Temple, Law Garden, Ellisbridge, Ahmedabad 380 006 and amongst other branch office at SME Centre Mumbai-I, 1^st Floor, A- Wing, Mittal Tower, Nariman Point, Mumbai- 400 021 and at structured Asset Group at Corporate office, 7^th floor, Axis house, Wadia International Centre, Pandurang, Budhkar Marg, Worli, Mumbai 400 025, through its Senior Manager and constituted attorney, Mr. Prakash U. Prabhakar Rao.

¶5

...APPLICANT

¶6

VERSUS

¶7

1. HEMANT ZAVERI, Age Adult, having his address at 701, 7^th Floor, Krishna Apt., Worli CHS Ltd., R. G. Thadani, Mumbai 400 030.

¶8

2. TRIBHOVANDAS BHIMJI ZAVERI & BRO. PVT. LTD., A Company incorporated under the Companies Act, 1956, and having its registered office at Nirmal Lifestyle, L. B. S. Marg, Mulund (W), Mumbai 400 080.

¶9

3. TRIBHOVANDAS BHIMJI ZAVERI & Sons. PVT. LTD., a company incorporated under the Companies Act, 1956, and having its

O. A. No. 10 of 2022

...DEFENDANTS

registered office at Hermens House, 33/35 New Queens Road, Opera House, Mumbai 400004

¶14

_____________________________________________

¶15

Counsel for the Applicant : Advocate Ravindra Bhosle i/b Adv. Vivek Sawant.

¶16

Counsel for the Defendants : Ex-Parte

¶17

J U D G M E N T

¶18

The present OA has been filed by the Applicant for recovery of a sum of Rs.44,45,28,961.85 (Rupees Forty Four Crore Forty Five Lakh Twenty Eight Thousand Nine Hundred Sixty One and Paise Eight Five only), with further interest at the rate of 9.90% p.a. from 23.12.2020 till the date of realization.

¶19

Facts as succinctly set out in the OA are that Defendant No.2 & 3 are in the business of manufacturing / processing of jewellery made gold, silver, diamond or any other precious/ semi precious metals or stones, is the principle borrower of the Applicant Bank and Defendant No.1 is the Director of the Company and is guarantor on behalf of the Company in his personal and individual capacity. The Defendant No. 2 & 3 are companies and are Guarantors on behalf of the Company.

¶20

It is stated that in or around August, 2015 the company approached the Applicant for sanction of cash credit facility for a sum of Rs.40 Crore vide sanction letter dt.02.09.2015 and term and conditions were duly accepted by the company and the Defendant No. 2 & 3.

¶21

It is stated that the Board of Directors of the Defendant No.1 passed an enabling resolution on 11.09.2015 and executed the security

¶22

¶23

O. A. No. 10 of 2022

¶24

document in presence of Defendant No.1 for creation of mortgage charge over the immovable properties of the Company and hypothecation charge over the movable assets of the Company.

¶25

It is also stated that the Board of Directors of the Defendant No.2 passed an enabling resolution on 18.01.2016 and executed the security document in presence of Defendant No.1 for creation of mortgage charge over the immovable properties of the Company and hypothecation charge over the movable assets of the Company.

¶26

It is also stated that the Board of Directors of the Defendant No.3 passed an enabling resolution on 18.01.2016 and executed the security document in presence of Defendant No.1 for creation of mortgage charge over the immovable properties of the Company and hypothecation charge over the movable assets of the Company.

¶27

In consideration of sanction of Housing Loan Facility, Defendants executed security and loaning documents on 12.06.2006 as follows:-

¶28

a. Letter of Arrangement.

¶29

b. Demand Promissory Note.

¶30

c. D. P. Note Deliver cum Waiver letter.

¶31

d. Composite Hypothecation deed (Current Assets, Movable, Plant & Machinery).

¶32

e. Undertaking.

¶33

f. Under as regards creation of security.

¶34

g. Under as regards creation of security executed by Defendant No.2.

¶35

¶36

O. A. No. 10 of 2022

¶37

h. Undertaking as regards creation of security executed by Defendant No.3.

¶38

It is also stated that to pay interest @ 2.55% p.a. above Base Rate with monthly rest in respect of the Cash Credit Facility and Company created hypothecation charge in favour of the Applicant Bank over all tangible movable machinery, plant machinery, fixtures, fittings other instalments, cranes, furniture, computers, stock of raw material work-in-progress semi finished goods and finished goods and other accessories and all other articles lying or upon the said premises of the company.

¶39

In order to further secure the aforesaid Cash Credit Facility, the Defendant No. 1 executed the Deed of Guarantee dt.19.09.2015, and Defendant No. 2 & 3 executed the Deed of Guarantee dt.19.01.2016.

¶40

It is also stated that in order to secure the credit facility the Defendant No. 2 & 3 on or about 23.02.2016 created registered mortgage charge of following properties in favour of the Applicant:-

¶41

a. Property of Defendant No.2 i.e. Cadastral Survey No. 491/A (Part), Shop No.S-2, on the Ground Floor of the Building known as “Nirmal Lifestyles” Admeasuring 233 sq.fts. village Nahur, Taluka Kurla, Mumbai.

¶42

b. Property of Defendant No.3

¶43

i. Khasra No.116, Bunglow No. 24, 2850.00 sq.fts (as per sale deed) House No.719/F/Bungalow NO. 24, Poonam Aishwarya Chhindwara Road Chaoni, Taluka and District Nagpur.

¶44

¶45

O. A. No. 10 of 2022

¶46

ii. Khasra No.116, Shop No. 1 482.00 sq. fts. (as per Sale Deed) House No. 719/F/A/1, Poonam Chambers, Chhindwara Road Chaoni,, Taluka and District Nagpur.

¶47

iii. Khasra No.116, Shop No. 1-A, 1007 sq. fts. (as per sale deed) House No.719/F/Bungalow NO. 24, Poonam Aishwarya Chhindwara Road Chaoni, Taluka and District Nagpur.

¶48

iv. Khasra No.116, Shop 2, 469 sq.fts (as per sale deed) House No.719/F/Bungalow NO. 24, Poonam Aishwarya Chhindwara Road Chaoni, Taluka and District Nagpur.

¶49

v. Khasra No.116, Shop No.2-A 848 sq.fts (as per sale deed) House No.719/F/Bungalow NO. 24, Poonam Aishwarya Chhindwara Road Chaoni, Taluka and District Nagpur.

¶50

In order to further secure the credit facility the Defendant No. 3 on or about 03.08.2016 executed a Additional Securities Deed (without possession) in favour of the Applicant i.e. Shop Block No. 6, First Floor, Poonam Chambers, Corp. House No. 719/F/A/38, Kh. No.116, City Survey No. 2217/1, Sheet No. 61/49, P.H. No.11 Ward No.61 (old) Mouza Jaripatka, Sardar, Chaoni Chindwala Road, Nagpur.

¶51

It is also stated that the Defendants again approached the Applicant Bank in or around February 2017 for renewal of existing credit facilities in its favour and the Applicant sanctioned vide sanction letter dt.03.03.2017 Cash Credit Facility for a sum of Rs.40 Crore, Defendant No. 1 to 3 have executed Acknowledgement of Debt dt.07.06.2017 in favour of the Applicant Bank.

¶52

¶53

O. A. No. 10 of 2022

¶54

It is further stated that the Defendants again approached the Applicant Bank in or around May 2018 for renewal of existing credit facilities in its favour and the Applicant sanctioned vide sanction letter dt.06.06.2018 Cash Credit Facility for a sum of Rs.36 Crore and the term and condition were duly accepted by the Defendant No. 2 & 3.

¶55

However, after availing the said Credit Facilities, the Defendants failed to adhere to the terms and conditions of the Sanction of aforesaid Credit Facilities and neglected to make the payment to the Applicant bank. Therefore, the account was declared as NPA on 29.08.2019. Thereafter, the Applicant issued the legal notice dated 24.01.2020 and called upon the Defendants to make the payment of the outstanding dues but the Defendants failed to pay the dues. Hence, the present OA has been filed.

¶56

Notices were issued to the Defendants. Despite service, none appeared for the Defendants nor filed the WS thus, they were proceeded ex-parte on 28.11.2023.

¶57

During the pendency of OA, M/s. Tribhovandas Bhimji Zaveri and Sons Retail Private Limited i.e. Defendant No.3 has undergone Corporate Insolvency Process before the Hon’ble NCLT, Mumbai Bench and vide 16.02.2019, the Resolution Plan was approved.

¶58

The Applicant Bank has produced all the Original Loan documents and other relevant documents along with their Claim Affidavit filed on 27.09.2023 through the Asst. Vice President Daxesh Balsara.

¶59

I have heard the Ld. Counsel for the Applicant Bank and perused the record.

¶60

¶61

O. A. No. 10 of 2022

¶62

The witness of the Applicant Bank has fully corroborated the averments made in the OA, even otherwise the whole case of the Applicant is based on documents and the witness has duly proved all these documents as against the Defendant No. 1 & 2. 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. However, the Resolution Plan was approved qua Defendant No.3, therefore, no monetary relief is prayed against Defendant No.3. The liability of Defendant No.1 & 2 is joint and several.

¶63

In the light of above discussions, the Original Application deserves to be allowed against the Defendant No. 1 & 2.

¶64

O R D E R

¶65

(i) I allow the present OA and direct the Defendant nos. 1 & 2 to pay to the Applicant Bank, jointly and severally, within a period of 60 days, Rs.44,45,28,961.85 (Rupees Forty Four Crore Forty Five Lakh Twenty Eight Thousand Nine Hundred Sixty One and Paise Eight Five only), with further interest at the rate of 9.90% p.a. from 23.12.2020 till the date of realization.

¶66

(ii) Failing which the aforesaid amount shall be recovered from the sale of the mortgaged property, hypothecated assets, personal movable and immovable assets of Defendant No. 1 & 2.

¶67

(iii) Defendant No. 1 & 2 are hereby directed not to deal with their properties till further direction of Ld. Recovery Officer.

¶68

(iv) Defendant No. 1 & 2 shall also pay the cost and expenses of the OA.

¶69

¶70

O. A. No. 10 of 2022

¶71

(v) Recovery Certificate be issued forthwith and be sent to the Recovery Officer of this Tribunal.

¶72

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

¶73

File be consigned to record.

¶74

Place: Mumbai. (Dr. Rekha G. Dhakar) Date : 30.01.2024 Presiding Officer, DRT-1, Mumbai

¶75

SP/-

¶76

Axis Bank v. Hemant Zaveri and Others

Case brief

What is this about?

What did the court decide?

Axis Bank v. Hemant Zaveri and Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

Similar cases

Union Bank of India versus Mr Deepak Pandharinath Admane

Canara Bank versus Shri Vishal Narayanrao Patil

Bank of Baroda versus Anubhav

Idbi Bank versus Vinayak

Shashibhushan Ramchabila Pandey versus Placid Limited

State Bank of India versus Gursewak