Allowed

Union Bank of India v. M/S Stylish Suits and Others

DRT21 Oct 2024OA/1007/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application by Union Bank of India for recovery of Rs. 36,70,624.86p from defaulting borrowers. The Tribunal ordered repayment with a uniform simple interest rate of 8% p.a. and authorized recovery through property sale.

What did the court decide?

Recovery of Rs. 36,70,624.86p with 8% simple interest from filing date; authorization for sale of mortgaged properties under SARFAESI Act.

Union Bank of India versus M/S Stylish Suits and Others — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1007/2023

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 07.08.2023

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DATE OF DECISION: 21.10.2024

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Union Bank of India, a body corporate, constituted under the Banking Companies (Acquisition and 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, Civil lines, Ludhiana, through duly authorized person and attorney holder Sh. Kuljit Saluja Branch Manager.

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……Applicant Versus

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M/s Stylish Suits Shop no.12-A, Basement, Caliber Plaza, AC Market, Ludhiana through its proprietor Sh. Naval son of Sh. Telu Ram

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Sh. Naval son of Sh. Telu Ram

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Sh. Telu Ram son of Sh. Lajja Ram

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Both resident of House No. B-34-2184 B3 Civil City near Deepak Dairy, Chander Nagar, Ludhiana.

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………Defendants

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Advocates:

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Argued by Sh. Amod Kumar Thakur, Advocate proxy for Sh. R.K. Chauhan, Advocate for the applicant bank Ms. Pratula Seth, Advocate for defendants

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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.36,70,624.86p (Rupees Thirty Six Lacs Seventy Thousand Six Hundred Twenty Four And Paise Eighty Six Only). The Original Application has been filed through Sh. Kuljit Saluja, Branch Manager of

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the applicant bank, who is competent to institute the Original Application vide Power of attorney dated 26.10.2016, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant no.2 as a proprietor of defendant no.1 had approached the applicant bank for the grant of CC Limit of Rs.10.00 Lacs vide Request Letter dated 25.07.2016, which is Annexure A2 to this OA. Further, defendant no.2 as a proprietor of defendant no.1 had approached the applicant bank for enhancement of CC Limit of Rs.10.00 to Rs.20.00 Lacs vide Request Letter dated 20.12.2017, which is Annexure A13 to this OA. Further, defendants approached the applicant bank from time to time for various Credit Facilities i.e. CC Limit of Rs.20.00 Lacs and SLC (Term Loan) of Rs. 3.07 Lacs and UGCEL (Term Loan) of Rs.4.50 Lacs and CECL (Term Loan) of Rs.2.00 Lacs and FITL (Term Loan) of Rs.1.38 Lacs to this OA.

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The applicant Bank sanctioned the CC Limit of Rs.10.00 Lacs vide Sanction Advice dated 24.08.2016, which is Annexures A4 to this OA. Further, applicant Bank again sanctioned for enhancement of CC Limit of Rs.10.00 to Rs.20.00 Lacs vide Sanction Letter dated 29.12.2017, which is Annexures A14 to this OA. Further, applicant Bank sanctioned from time to time various Credit Facilities i.e. CC Limit of Rs.20.00 Lacs and SLC (Term Loan) of Rs. 3.07 Lacs and UGCEL (Term Loan) of Rs.4.50 Lacs and CECL (Term Loan) of Rs.2.00 Lacs vide Sanction Letters dated 10.07.2020, which is Annexures A37 to this OA. Later, applicant Bank sanctioned the FITL (Term Loan) of Rs.1.38 Lacs vide Sanction Letter dated 15.09.2020, which is Annexures A51 to this OA and the terms and conditions were duly accepted by the defendants. 4. Defendant No.3 had mortgaged his immovable properties i.e. (i) House built over plot no.51/1, measuring 160 Sq. yards situated at Revenue Estate of Peeru Banda, H.B. No.167, Abadi Chander Nagar, Tehsil and Distt. Ludhiana vide Sale Deed bearing vasika no.6061 dated 03.07.2007.

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(ii) House bearing MC No.B-IX-664, measuring 44.50 Sq. yards situated at Gulchaman Gali, Chauri Sarak, Tehsil and District Ludhiana vide Sale deed bearing vasika no.8506 dated 15.10.2014 along with their translation and as per Jamabandi for the year 2011-2012, which are Annexures A28 to A36 to this OA.

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Documents executed:- Application for Union Trade dated 25.07.2016, which is Annexure A3 to this OA; D.P. Note, Letter of Continuity, Hypothecation Agreement of Goods and Debts, Interest Agreement, Letter of undertaking from borrower, Letter of Guarantee by defendant no.3 & Letter of Undertaking all dated 26.08.2016, which are Annexures A5 to A12 to this OA; Term and condition of Sanction of Rs.20.00 Lacs, D.P. Note, Letter of Continuity, Hypothecation Agreement of Goods and Debts, Interest Agreement, Letter of undertaking not to alienate hypothecated goods, Text of consent clause, Letter of confirmation, Standard Terms and Conditions of working capital, Letter of Guarantee & Text of consent clause by Guarantors all dated 29.12.2017, which are Annexures A15 to A25 to this OA; Declaration regarding extension of mortgage of property at Gulchaman Gali, Ludhiana & Declaration regarding extension of mortgage of property at Chander Nagar, Ludhiana both dated 08.01.2018, which are Annexures A26 & A27 to this OA; D.P. Note, Letter of Continuity, General term loan agreement of Rs.4.50 Lacs D.P. Note of Rs.2.00 Lacs, Letter of Continuity, General term loan agreement of Rs.2.00 Lacs, Undertaking letter from the borrower, Composite Hypothecation deed pertaining to total credit facilities of Rs.29.57 Lacs & AD-02A, which are Annexures A38 to A46 to this OA; Declaration regarding extension of mortgage of property measuring 44.50 Sq. Yards dated 24.08.2020, which is Annexure A47 to this OA; Memorandum of Entry pertaining to property measuring 44.50 Sq. yards dated 25.08.2020, which is Annexure A48 to this OA; Declaration regarding extension of mortgage of property measuring 160 Sq. yards dated 24.08.2020, which is Annexure A49

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to this OA; Memorandum of Entry pertaining to property measuring 160 Sq. yards dated 25.08.2020, which is Annexure A50 to this OA; D.P. Note of Rs. 1.38 Lacs, Letter of Continuity, General term loan agreement, Composite Hypothecation deed of Rs.30.88 Lacs, Annexure-1A by borrower, Deed of Guarantee of Rs.30.88 Lacs, Annexure-1B by Guarantor all dated 16.09.2020, which are Annexures A52 to A58 to this OA; Declaration regarding extension of mortgage of property measuring 44.50 Sq. yards dated 15.09.2020, which is Annexure A59 to this OA; Memorandum of Entry pertaining to property measuring 44.50 Sq. yards dated 17.09.2020, which is Annexure A60 to this OA; Declaration regarding extension of mortgage of property measuring 160 Sq. yards dated 15.09.2020, which is Annexure A61 to this OA; Memorandum of Entry pertaining to property measuring 160 Sq. yards dated 17.09.2020, which is Annexure A62 to this OA; Application for transfer of account from Hazuri Road Branch to Civil Lines Branch of the bank dated 18.09.2020, which is Annexure A63 to this OA; Letter by Hazuri Road Branch to Regional Office for transfer of accounts dated 19.09.2020, which is Annexure A64 to this OA; Approval by regional office for transfer of account dated 23.09.2020, which is Annexure A65 to this OA; Letter regarding transfer of account from Hazuri Road, branch to civil lines branch of the applicant bank dated 09.10.2020, which is Annexure A66 to this OA; Demand notice along with postal receipts dated 04.09.2021, which is Annexure A67 to this OA; Possession Notice along with postal receipts dated 09.03.2022, which is Annexure A68 to this OA; Newspapers publication in Rojana Chardi Kalan & The Indian Express both dated 15.03.2022, which are Annexures A69 & A70 to this OA; Valuation reports dated 18.03.2022, which are Annexures A71 & A72 to this OA; Settlement Letter by borrower dated 11.03.2022, which is Annexure A73 to this OA; Reply by bank dated 12.08.2022, which is Annexure A74 to this OA; Notice by borrowers dated 20.06.2022, which is Annexure A75 to this OA; Reply by bank dated 29.06.2022, which is Annexure A76

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to this OA; High Court order dated 01.08.2022, which is Annexure A77 to this OA; Statement of account in CC Limit & (Term Loan) of various Credit Facilities UGCEL, SLC, CELC & FITL Loans & Certificates u/s 65 of Indian Evidence act pertaining to housing loan accounts of CC Limit & (Term Loan) of various Credit Facilities UGCEL, SLC, CELC & FITL Loans all dated 18.07.2023, which are Annexures A78 to A87 to this OA.

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The loan accounts became irregular and were declared NPA and after adjusting debit and credit entries in all the loan accounts there was a debit of Rs.36,70,624.86p 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.

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The defendants were served notices to appear before this Tribunal. Ms. Pratula Seth, Advocate appeared on behalf of defendant nos. 1 and 2 on 22.12.2023 and filed Power of Attorney but he did not filed WS within stipulated time. Therefore, opportunity to file their WS was closed and defense was struck off on 28.05.2024. It was submitted by Ms. Pratula Seth, Advocate that she is also appearing on behalf of defendant no.3 but did not filed Power of Attorney despite the fact that defendant no.3 is father of defendant no.2 and resides with him on the same address. Since no one appeared on behalf of defendant no.3, he proceeded ex parte on 18.10.2024.

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In support of the OA, affidavit of Sh. Kuljit Saluja, Branch Manager, Union Bank of India, has been filed. 8. Heard arguments of Ld. Counsel for applicant. No arguments advanced by Ld. Counsel for defendant nos. 1 and 2. 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 A87 to this OA, it is proved that the defendants approached applicant bank for taking the loans facilities which were granted to them and they executed all the relevant documents but

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they did not pay the loans as per terms and conditions of the agreement and their accounts were declared NPA and from the documentary evidence it is proved that bank is entitled to recover a total sum of Rs.36,70,624.86p (Rupees Thirty Six Lacs Seventy Thousand Six Hundred Twenty Four And Paise Eighty Six Only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the accounts.

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In so far as pendent elite and future interests are concerned, the applicant bank has claimed interests @10.85% p.a. in C.C. Limit and @7.50% p.a. in UGCEL Term Loan and @13.25% p.a. in SLC Loan and @8.00% p.a. in CELC Loan and @11.85% p.a. in FITL Loan accounts along with @2% penal interest with monthly rests from 19.07.2023 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 properties, undertaking of the defendants, quantum of loans 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 all the loan accounts from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly.

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In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.36,70,624.86p (Rupees Thirty Six Lacs Seventy Thousand Six Hundred Twenty Four And Paise Eighty Six Only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in all the loan accounts 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

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under the provisions of the SARFAESI Act, 2002. If the dues of the bank still 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 01.11.2024. 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

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Dated: 21.10.2024

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

Union Bank of India v. M/S Stylish Suits and Others

Case brief

What is this about?

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Union Bank of India v. M/S Stylish Suits and Others

Case brief

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What did the court decide?

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