Allowed

Union Bank of India v. M/s Jaswant Singh and Co. and Others

DRT21 May 2024OA/1002/2023

Case brief

AI extract

What is this about?

Union Bank of India, in an ex-parte recovery application, sought Rs. 59.89 lakhs secured by mortgaged properties. The tribunal reduced the claimed interest rate from 12.55% plus penal interest to 8% per annum simple interest and allowed the application for recovery from sale of mortgaged or personal assets.

What did the court decide?

Defendants ordered to pay Rs. 59,89,615.63 plus costs and 8% simple interest from the date of filing; Recovery Certificate issued; recovery via sale of mortgaged properties or attachment of other asse

Union Bank of India versus M/s Jaswant Singh and Co. and… — Execution and Attachment | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1002/2023

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 05.08.2023

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DATE OF DECISION: 21.05.2024

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Union Bank of India, a body Corporate Constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act 1970 having its Head Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai and having a Branch Office inter alia at Village Phullanwal, Tehsil and District Ludhiana, through duly authorized person and incumbent in charge Sh. Pardeep Kumar, Branch Manager.

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……..Applicant

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Versus

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M/s Jaswant Singh and Co., Main Bazar Village Jodhan, Tehsil and District Ludhiana, through its proprietor Sh. Jaswant Singh

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Sh. Jaswant Singh S/o Sh. Madho Singh, Main Bazar Village Jodhan, Tehsil and District Ludhiana (proprietor of M/s Jaswant Singh and Co.)

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Sh. Jagtar Singh S/o Sh. Kapoor Singh, R/o Village and Post office Jodhan, Tehsil and District Ludhiana

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Sh. Harbans Singh S/o Sh. Bachan Singh, R/o Village Khandoor, Tehsil and District Ludhiana

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….……Defendants

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Advocates:

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Argued by Sh. Ashok Kumar Verma, Advocate proxy for Sh. R.K. Chauhan, Advocate for the applicant Defendants are ex-parte

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FINAL ORDER

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Present Original Application was instituted by the applicant bank under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.59,89,615.63p (Rupees Fifty Nine Lacs Eighty Nine Thousand Six

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Hundred Fifteen and Sixty Thirty Paisa only). The Original Application has been filed through Sh. Pardeep Kumar, Branch Manager of the applicant bank, who was competent to institute the Original Application vide Authority Letter dated 17.03.2023, which is Annexure A1 to this OA. 2. The brief facts of the OA are that the defendants no.1 through its proprietor i.e. defendant no.2 had approached the applicant bank for the grant of CC limit of Rs.2.00 Lacs and further for its several enhancements from time to time upto Rs.40.00 Lacs. 3. The applicant sanctioned Cash Credit Limit of Rs.2.00 Lacs and further enhanced it time to time up to Rs.40.00 Lacs vide Proposals for extension of limit, Sanction Advice and Approval by RO Ludhiana dated 23.03.2011, 23.07.2012 and 26.07.2012, which are Annexures A49, A50, A67 and A68 to this OA and the terms and conditions were duly accepted by the defendants vide term and condition sanction dated 23.03.2011, which is Annexure A51 to this OA. 4. Defendants No.2 had mortgaged his immovable properties i.e. Shop-cum-Residence measuring 726 Sq. Yards situated in revenue estate of Village Rattan, H.B. No.301, Tehsil and District Ludhiana, Punjab comprising properties/details as under: a. total land measuring 1K-9M s ituated at revenue estate of Village Rattan, Tehsil and District Ludhiana, Punjab vide equitable mortgage of sale deed bearing vasika no. 14311 dated 07.01.1986 along with its Translations, Memorandum of Deposit of Title Deed dated 09.02.1996 and declarations by mortgager dated 07.02.1996 , 03.08.2004, which are Annexures A8, A9 and A14, A32 to this OA and b. total land measuring 0K-16M s ituated at revenue estate of Village Rattan, Hadbast No.301, Tehsil and District Ludhiana, Punjab vide equitable mortgage of sale deed bearing vasika no. 1545 dated 13.09.1995 along with Jamabandi of year 1991-92 and their

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translations and declarations by mortgager dated 07.02.1996 , 03.08.2004, which are Annexures A10 to A12 and A34 to this OA and also vide Memorandum of Deposit of Title Deed dated 05.08.2004, which is Annexure A30 to this OA; Declarations by mortgager dated 18.12.2007, 23.03.2011 31.07.2013 and 11.03.2014, which are Annexures A46, A65, A81 and A84 to this OA; Supplementary Memorandum (Equitable Mortgage) dated 18.12.2007, 05.08.2013 and 12.03.2014, which are Annexures A47, A83 and A85 to this OA and Memorandum of entry regarding extension of mortgage dated 24.03.2011, which is Annexure A66 to this OA.

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Documents executed:- Demand Promissory Note, Letter of Continuity, Hypothecation(goods) Agreement, Security documents D-25, Letter of Undertaking ADV 1179, Letter of Guarantee by Jagtar Singh all dated 09.02.1996, which are Annexures A2 to A7 to this OA; Affidavits dated 02.02.1996, 07.02.1996, 03.08.2004, 13.09.2004, which are Annexures A13, A15, A31, A33 and A35 to this OA; Demand Promissory Note, Letter by borrowers, Hypothecation Agreement of goods, debts and assets, Letter of Undertaking by borrowers, Letter of Undertaking 1179 by borrowers, Letter of Guarantee by Jagtar Singh all dated 23.04.2001, which are Annexures A16 to A21 to this OA; Debit Balance confirmation letter dated 04.03.2004, which is Annexure A22 to this OA; Demand Promissory Note, Letter of Continuity, Hypothecation Agreement of Goods and Debts, Letter of Undertaking not to alienate Hypothecated goods, Consent for takeover penalty, Letter of Guarantee by Jagtar Singh all dated 05.11.2005, which are Annexures A23 to A27 and A29 to this OA; Annexure I, which is Annexure A28 to this OA; Demand Promissory Note, Letter of Continuity, Hypothecation Agreement of Goods and Debts, Letter of Undertaking not to alienate Hypothecated goods, Letter of undertaking, Annexure I, Consent for takeover penalty, Letter by borrower, Letter of Guarantee by Jagtar Singh and Annexure II all dated 18.12.2007, which are Annexures A36 to A45 to this OA;

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Debit Balance confirmation letter dated 01.01.2010, which is Annexure A48 to this OA; Demand Promissory Note, Letter of Continuity, Hypothecation Agreement of Goods and Debts, Annexure 1, Letter of Undertaking not to alienate Hypothecated goods, Declaration/Undertaking, Undertaking by Borrower, Declarationundertaking by borrower, Consent for takeover penalty, Letter regarding floating rate of interest and Letters of Guarantee by Jaswant Singh and Jagtar Singh all dated 24.03.2011, which are Annexures A52 to A62 and A64 to this OA; Annexure II, which is Annexure A63 to this OA; Demand Promissory Note, Letter of Continuity AD-09, Hypothecation Agreement of Goods and Debts (SD-06), Annexure I, Letter of Undertaking not to alienate Hypothecated goods, Declarations/Undertakings, letter of Undertaking, Consent for takeover penalty, Agreement on rate of interest, Letters of Guarantee by Jagtar Singh and Annexure II by Jagtar Singh all dated 28.07.2012, which are Annexures A69 to A80 to this OA; Letter by Phullanwal Branch Ludhiana to Dugri Road, Ludhiana branch regarding extension of EM dated 31.07.2013, which is Annexure A82 to this OA; Debit Balance confirmation letter dated 11.12.2014, which is Annexure A86 to this OA; Demand Promissory Note, Letter of Continuity, Hypothecation Agreement of Goods and Debts, Agreement on rate of interest, Declaration/Undertaking, Letter of Undertaking not to alienate Hypothecated goods, Consent for takeover penalty, Annexure I, Letters of Guarantee by Harbans Singh and Annexure II by Harbans Singh all dated 08.07.2015, which are Annexures A87 to A96 to this OA; Jamabandi of year 2011-12 with its translation, which is Annexure A97 to this OA; Debit Balance confirmation letter dated 08.06.2017, which is Annexure A98 to this OA; Letters of Confirmation dated 04.01.2019 and 31.12.2021, which are Annexures A99 and A100 to this OA; Valuation Report by Gagan Rajdev dated 30.12.2022, which is Annexure A101 to this OA; Recall Notice dated 19.08.2019, which is Annexure A102 to this OA;

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Demand Notice U/s 13(2) dated 27.11.2019 with postal receipts, which is Annexure A103 to this OA; Notice to take possession dated 04.02.2020 with postal receipts, which is Annexure A104(Colly) to this OA; Possession Notice dated 13.02.2020 along with Punchnama, which is Annexure A105(Colly) to this OA; Newspaper Publication in English and Punjabi Newspaper with its translation dated 16.02.2020, which are Annexures A106 and A107 to this OA; Application for OTS Proposals by Defendants dated 17.07.2022 and 04.11.2022, which are Annexures A108 and A110 to this OA; Replies by Bank to OTS request dated 19.07.2022 and 23.11.2022 with postal receipt, which are Annexures A109 and A111 to this OA and Certified copy of Statement of Account with Certificate under Section 65-B of Indian Evidence Act, which are Annexures A112 and A113 to this OA.

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The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs.59,89,615.63p, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant bank requested to accept the application and to issue Recovery Certificate accordingly. 6. The defendants were served notices to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte on 15.05.2024. 7. In support of the OA, affidavit of Sh. Pardeep Kumar, Branch Manager, Union Bank of India, h as been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned proxy counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant bank had proved its case. From the perusal of all the Annexures A1 to A113 to this OA, it is proved that the defendants approached applicant bank for availing of the loan facility which was granted to them and for that they had executed all the relevant documents in favour of the bank. The defendants failed to pay back

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the loan as per terms and conditions of the agreement between the parties. Subsequently, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.59,89,615.63p (Rupees Fifty Nine Lacs Eighty Nine Thousand Six Hundred Fifteen and Sixty Thirty Paisa only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the dues.

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In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest @12.55%p.a. plus of penal interest @2%p.a. with monthly rests from 01.07.2023 till the realization.

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The Tribunal is of the considered opinion that sometimes in appropriate cases the prerogative of mercy is the brightest jewel in the crown of the Judge. Keeping in view the facts and circumstances of the instant case including nature of the mortgaged property, undertaking of the defendants, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yester years, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @8.00%p.a. in the loan account from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.59,89,615.63p (Rupees Fifty Nine Lacs Eighty Nine Thousand Six Hundred Fifteen and Sixty Thirty Paisa only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in the loan account from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant bank shall be entitled to recover aforesaid amount from the sale of hypothecated/mortgaged properties of the defendants in execution proceedings if not sold earlier under the provisions of the SARFAESI Act, 2002. If the dues of the bank still

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remain unsatisfied, it shall be entitled to recover the same by attachment and sale of personal assets of the defendants. The applicant is at liberty to enforce the claim through due process of law. 12. Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 10.06.2024. 15. Copy of this order be given dasti to the applicant bank and be sent to defendants through registered/speed post and this order be also uploaded on the official website of this Tribunal and record be consigned. Pronounced by me in the open Tribunal . Dated: 21.05.2024

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(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Union Bank of India v. M/s Jaswant Singh and Co. and Others

Case brief

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Union Bank of India v. M/s Jaswant Singh and Co. and Others

Case brief

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