Allowed

Canara Bank v. Messrs Web Home Decor Centre and Another

DRT17 Aug 2024OA/1147/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal examined an Original Application filed by Canara Bank for recovery of a loan facility granted to a proprietorship firm and its proprietor. The Tribunal observed that defendants failed to repay the loan, accounts were classified as NPA, and they appeared ex-parte. The Bank proved its claim via documentary evidence.

What did the court decide?

Issued Recovery Certificate. Defendants liable to pay Rs. 27,56,489.91 plus costs and 8% simple interest p.a. until realization.

Canara Bank versus Messrs Web Home Decor Centre and Another — Banking and Recovery | DRT (2024)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

¶2

ORIGINAL APPLICATION NO.1147/2023 PRESIDED OVER BY MRIDULESH KUMAR SINGH

¶3

DATE OF INSTITUTION: 15.09.2023

¶4

DATE OF DECISION: 17.08.2024

¶5

Canara Bank, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act V of 1970 carrying on business of banking and having its branches all over India and inter-alia a branch office at Patiala, District Patiala, Punjab through its duly constituted attorney Ms. Manpreet Kaur, Manager/Authorized Officer who is working as Officer of the branch Patiala, District Patiala, Punjab.

¶6

……..Applicant

¶7

Versus

¶8

M/s Web Home Decor Centre, Plot No.- D-184, Focal Point, Patiala, District Patiala, Punjab (Proprietorship Firm) through its Partner Sh. Lakhwinder Singh S/o Sh. Sewa Singh, R/o H. No. LIG 152, Phase 1, Urban Estate, Patiala, University (Patiala), Punjab (since deceased) through his LRs i.e. Mrs. Kawaljeet Kaur W/o Late Sh. Lakhwinder Singh R/o H. No. 152, Urban Estate Ph-1, Patiala, District Patiala, Punjab (Borrower)

¶9

Smt. Kawaljeet Kaur, W/o Late Sh. Lakhwinder Singh R/o H. No. 152, Urban Estate Ph-1, Patiala, District Patiala, Punjab

¶10

(Guarantor/Mortgager)

¶11

………Defendants

¶12

Advocates:

¶13

Argued by Sh. Manu Loona, counsel for the applicant Defendants are ex-parte

¶14

FINAL ORDER

¶15

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.27,56,489.91p (Rupees Twenty Seven Lacs Fifty Six Thousand Four

¶16

¶17

Hundred Eighty Nine and Paisa Ninety One only). The Original Application has been filed through Ms. Manpreet Kaur, Manager/Authorized Officer o f the applicant bank, who is competent to institute the Original Application vide Power of Attorney dated 06.02.2018, which is Annexure A1 to this OA. 2. The brief facts of the OA are that the defendant No.1 through its partners i.e. defendant no.2 and then partner Sh. Harnetar Singh had approached the applicant bank for the grant of Cash Credit Limit (OCC) of Rs.10.00 Lacs vide Loan application dated 23.05.2010, which is Annexure A2 to this OA and Further from time to time approached the applicant bank for the renewal of the same vide Letters of Renewal for OCC Limit dated 29.08.2011, 20.11.2012, 11.01.2014, 07.04.2015, 24.08.2016, 04.01.2018, 28.09.2018, 20.12.2019 and 28.04.2021, which are Annexures A3 to A8 to this OA. Defendant No.1 through its proprietor i.e. defendant no.2 had again approached the applicant bank for enhancement of the limit to Rs.20.00 Lacs, and Application form for loans to Micro Small & Medium Enterprises (MSMEs) dated 15.06.2022, which is Annexure A12 to this OA. Further from time to time approached the applicant bank for the renewal of the same vide Letters of Renewal for OCC Limit dated 28.09.2018, 20.12.2019 and 28.04.2021, which are Annexures A9 to A11 to this OA. Thereafter approached the applicant bank for the grant of Term Loan I of Rs.3.90 Lacs under GECL scheme and Term Loan-II of Rs. 2.00 Lacs under GECL 1.0 vide Loan Applications dated 20.06.2020 and 29.10.2021, which are Annexures A13 and A14 to this.

¶18

The applicant Bank sanctioned the Cash Credit Limit of Rs.10.00 Lacs vide Sanction of Memorandum dated 24.05.2010, which is Annexure A15 to this OA and further from time to time sanctioned the renewals of the same vide Sanction of Memorandum dated 19.08.2011, 20.11.2012, 11.01.2014, 07.04.2015, 19.08.2016 and 17.11.2017, which are Annexures A16 to A21 to this OA.

¶19

¶20

Applicant bank also sanctioned the enhancement of the limit to Rs. 20.00 Lacs vide Sanction of Memorandum dated 28.09.2018, which is Annexure A22 to this OA and further from time to time sanctioned the renewals of the same vide Sanction Memorandums dated 28.11.2019, 17.03.2021 and 17.06.2022, which are Annexures A23 to A25 to this OA. Thereafter, sanctioned a Term loan I of Rs.3.90 Lacs under GECL scheme and Term Loan-II of Rs. 2.00 Lacs under GECL 1.0 Lacs scheme vide Sanction Memorandums dated 20.06.2020 and 02.11.2021, which are Annexures A26 and A27 to this OA and the terms and conditions were duly accepted by the defendants.

¶21

Defendant no.2 had Mortgage her immovable properties i.e. resident House No. LIG-152, Measuring 83 Sq Yard Situated at Phase-1, Urban Estate, Patiala, Punjab vide Equitable Mortgage of Sale Deed bearing vasika no.7903 dated 28.07.2005 with its translation, Letter Evidencing Deposit of Title Deed dated 26.05.2010, Title Investigation Report dated 25.05.2010, NonEncumbrance Certificate and Affidavit of Non-Embrace Certificate, which are Annexure A60 to A64 to this OA.

¶22

Documents executed:- Cash Credit Agreements dated 26.05.2010 and 07.04.2015, which are Annexures A28 & A29 to this OA; Supplemental Agreement dated 28.09.2018, which is Annexure A30 to this OA; Agreements cum Deed of Hypothecation dated 20.06.2020 & 02.11.2021, which are Annexures A31 & A32 to this OA; Pronotes dated 26.05.2010, 07.04.2015, 28.09.2018, 20.06.2020 and 02.11.2021, which are Annexures A33 to A37 to this OA; Requests for Overdraft Facilities dated 26.05.2010, 07.04.2015, 24.08.2016 and 29.08.2018, which are Annexures A38 to A41 to this OA; Guarantee Agreements dated 26.05.2010, 29.08.2011, 11.01.2014, 07.04.2015, 30.08.2016, 28.09.2018, 20.12.2019, 28.04.2021 and 17.06.2022, which are Annexures A42 to A50 to this OA; Take Delivery dated 20.06.2020 and 02.11.2021, which are Annexures A51 & A52 to

¶23

¶24

this OA; Letter of Proprietorship dated 24.08.2016, 28.09.2018, 20.12.2019, 20.06.2020, 28.04.2021 and 17.06.2020, which are Annexures A53 to A58 to this OA; Undertaking Letter from borrower dated 20.06.2020, which is Annexure A59 to this OA; Title Investigation Report dated 25.05.2010, which is Annexure A62 to this OA; Non- Encumbrance Certificate and Affidavit of Non-Embrace Certificate, which are Annexure A63 and A64 to this OA; Notice dated 09.11.2022 along with its translations and postal Receipts and Notice issued under Section 13 (2) of the Securization & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2022 dated 17.11.2022 which are Annexures A68 & A69 to this OA; Acknowledgments dated 20.12.2022, which is Annexure A70 to this OA and Statements of accounts of CC Account and Term Loan I & term Loan II along with bank Certificate in the support of statements of account and entries made therein, which are Annexures A65 to A67 & A71 to this OA.

¶25

The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in all the loan accounts there was a debit of Rs.27,56,489.91p, 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.

¶26

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 16.05.2024.

¶27

In support of the OA, affidavit of Ms. Manpreet Kaur, Manager/Authorized Officer, Canara Bank has been filed. 8. Heard ex-parte arguments and perused record.

¶28

It was argued by learned 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 A71 to this OA, it is proved that the defendants

¶29

¶30

approached applicant bank for availing of the loan facilities which were granted to them and for that they had executed all the relevant documents in favour of the bank. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, both the accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of 27,56,489.91p (Rupees Twenty Seven Lacs Fifty Six Thousand Four Hundred Eighty Nine and Paisa Ninety One only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of all the accounts.

¶31

In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest @9.80%p.a. in Cash Credit Limit and @9.25%p.a. in both Term Loans plus penal interest @2%p.a. with monthly rests in all, from 24.01.2023 in CC Limit and from 29.01.2023 in both Term Loans till the realization.

¶32

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 both 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.

¶33

In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of 27,56,489.91p (Rupees Twenty Seven Lacs Fifty Six Thousand Four Hundred Eighty Nine and Paisa Ninety One only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in all the

¶34

¶35

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 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.

¶36

Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly.

¶37

Parties to appear before Learned Recovery Officer of this Tribunal on 09.09.2024.

¶38

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.

¶39

Pronounced by me in the open Tribunal .

¶40

Dated: 17.08.2024

¶41

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

Canara Bank v. Messrs Web Home Decor Centre and Another

Case brief

What is this about?

What did the court decide?

Canara Bank v. Messrs Web Home Decor Centre and Another

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Punjab National Bank versus Sh. Sanjeev Kumar

Union Bank of India versus Jaswinder Singh and Another

The Federal Bank Limited versus Kulwant Singh and Others

Hdfc Bank Limited versus Antarpreet Singh and Another

Punjab National Bank versus Harprit Pal Singh and Others

Indian Bank versus Messrs Durga International and Another