Allowed

Canara Bank v. Sh. Badan Singh

DRT20 Jan 2024OA/1342/2023

Case brief

AI extract

What is this about?

DRT allowed the bank's original application for recovery of Rs. 27,04,592.16 advanced as agricultural loans secured by agricultural land. The Tribunal reduced the uniform simple interest rate to 7% per annum from the filing date.

What did the court decide?

Restitution of the defendants for Rs. 27,04,592.16 with 7% simple interest from 16.09.2023, along with a Recovery Certificate and liberty to attach and sell properties.

Canara Bank versus Sh. Badan Singh — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-2, CHANDIGARH, PRESIDED OVER BY M.M. DHONCHAK

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ORIGINAL APPLICATION NO.1342/2023

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DATE OF INSTITUTION: 16.09.2023

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DATE OF DECISION: 20^th DAY OF JANUARY, 2024

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Canara Bank (erstwhile Syndicate Bank), on the basis of Amalgamation Scheme dated 04.03.2020, a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Head Office at 112, J.C. Road, Bangalore-560002 and a Branch at Chhiansa, Sub-Tehsil Mohna, Faridabad, Haryana-121005

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….. Applicant

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Versus

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Sh. Badan Singh s/o Sh. Padam Singh r/o Village Chhiansa, SubTehsil Mohna, Faridabad, Haryana-121005

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Sh. Surrender Singh s/o Sh. Padam Singh r/o Village Chhiansa, Sub-Tehsil Mohna, Faridabad, Haryana-121005

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…..Defendants

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Argued by: Ms Vandna Bhatia, Advocate for the applicant bank (through VC) Defendants ex parte vide order dated 01.01.2024

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FINAL ORDER

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Present Original Application was instituted by the applicant bank under Section 19(1) of the Recovery of Debts and Bankruptcy Act, 1993 (hereinafter referred to as ‘the Act’ for brevity), a gainst the defendants for recovery of

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OA/1342/2023 CANARA BANK Vs BADAN SINGH AND ANOTHER 2

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Rs.27,04,592.16/(Rupees Twenty Seven Lakh Four Thousand Five Hundred Ninety Two and Sixteen Paisa Only). It has been filed through Sh. Aashish Malik, Principal Officer of the applicant bank stated to be competent to institute the Original Application vide General Power of Attorney dated 18.12.2017, Annexure-A1 (copy).

¶16

The brief facts of the case of the applicant as per the Original Application are that defendant No. 1 approached the applicant bank for grant of Credit Facility Rs. 3,00,000/- and Term Loan of Rs. 5,00,000/- vide loan application Forms dated 07.07.2011 for agriculture credit, Annexures-A2 and A8 (copy). Defendant No. 2 stood as a guarantor for repayment of the loan amount.

¶17

The applicant bank sanctioned aforesaid facilities to the defendants vide sanction letter dated 07.07.2011, Annexure-A3 (copy), as per terms and conditions which were duly accepted by the defendants.

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In order to secure the aforementioned credit facilities, the defendants executed agreements dated 07.07.2011 for agricultural advances, Annexures-A4 and A9 (copy), deeds of guarantee dated 07.07.2011 for agricultural advances, Annexures-A5 and A10 (copy) and letter dated 07.07.2021 regarding repayment of the loan, Annexure-A6 (copy).

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The aforesaid loan facilities were further secured by creation of registered mortgage by defendant No. 1 in respect of four parcels of agricultural land admeasuring 5 Kanal 14 Marla situated in the

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OA/1342/2023 CANARA BANK Vs BADAN SINGH AND ANOTHER

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revenue estate of Chhiansa, Tehsil Balabhgarh, Faridabad, Haryana, fully detailed in Para No. 5.9 of the OA.

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The documents related to the mortgage are as under:

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i. Affidavit dated 06.07.2011 for verification of the property, Annexure-A7 (copy).

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ii. Registered sale deed, Annexure-A11 (colly) (copy).

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iii. Registered mortgage deed dated 06.7.2011, Annexure-A12 (copy).

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iv. Copy of ‘Jamabandi’ for the years 2002-2003, AnnexureA13 (copy).

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It is further the case of the applicant bank that the loan facilities were duly availed of by the defendants but they failed to maintain the financial discipline of the applicant bank leading to the loan accounts becoming irregular and those being classified as NPA on 31.07.2017. The defendants executed acknowledgement of debts letters dated 25.05.2017 and 08.01.2020, Annexure-A16 (colly) (copy). The applicant bank recalled the entire outstanding amount vide legal notices dated 11.12.2017 and 10.07.2018, AnnexureA14 (colly) (copy), but to no avail.

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It is further the case of the applicant bank that after adjusting debit and credit entries in the loan accounts, a sum of Rs.27,04,592.16/(Rupees Twenty Seven Lakh Four Thousand Five Hundred Ninety Two and Sixteen Paisa Only) , is recoverable against the defendants as per statements of accounts, duly certified under Bankers’ Books Evidence Act, 1891, along with calculation sheet, Annexure-A15 (colly) (copy).

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OA/1342/2023 CANARA BANK Vs BADAN SINGH AND ANOTHER 4

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Since the defendants did not repay the outstanding amount, therefore, the applicant bank preferred the present Original Application for issuance of Recovery Certificate.

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Notices of the Original Application were duly served upon the defendants, but since none appeared on behalf of the defendants, thus, the defendants were proceeded against ex parte vide order dated 01.01.2024 .

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In support of contents of the OA, affidavit of evidence of Sh. Aashish Malik, Authorised Officer of the applicant bank was filed.

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This Tribunal has heard ex-parte arguments advanced by the learned counsel for the applicant bank and gone through the record carefully.

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It was argued by the learned counsel of the applicant bank that in view of unrebutted documentary evidence brought on record, the applicant bank had proved its case against the defendants for recovery of the amount sought. From perusal of Annexures-A1 to A16 , it is clear that the defendants had approached the applicant bank for availing of the loan facilities which were granted to them. It is further clear that the defendants had executed all the relevant documents as stated above in favour of the applicant bank. Unfortunately, the defendants failed to pay back the loan as per terms and conditions of the agreement executed between the parties. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.27,04,592.16/(Rupees Twenty Seven Lakh Four

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OA/1342/2023 CANARA BANK Vs BADAN SINGH AND ANOTHER 5

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Thousand Five Hundred Ninety Two and Sixteen Paisa Only)

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from the defendants.

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In so far as pendente lite and future interest is concerned, the applicant bank in relief clause, has claimed rate of interest @11.65% per annum in both the facilities. In sanction letter dated 07.07.2011, Annexure-A3 (copy), rate of interest has been mentioned @BR+2.75% per annum.

¶40

This Tribunal is of the considered opinion that sometimes in appropriate cases the prerogatives of mercy and magnanimity are the brightest jewels in the crown of the Judge. Keeping in view the facts and circumstances of the instant case including the Pandemic Covid-19 affecting businesses, nature of mortgaged property, purpose of loan, i.e. agricultural , present conditions of economy based on agriculture, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yesteryears, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @7% per annum from the date of filing of the OA till realisation of the amount ordered vide this order. It is ordered accordingly.

¶41

In the result, the Original Application is allowed with costs holding that the defendants are liable to pay to the applicant bank a sum of Rs.27,04,592.16/- (Rupees Twenty Seven Lakh Four Thousand Five Hundred Ninety Two and Sixteen Paisa Only) with current and future simple interest @7% per annum w.e.f. 16.09.2023 , till the date of realisation of the amount. The liability of the defendants shall be joint as well as several. Accordingly, the

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OA/1342/2023 CANARA BANK Vs BADAN SINGH AND ANOTHER 6

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applicant bank shall be at liberty to recover aforesaid amount from the sale of mortgaged/hypothecated property of the defendants in execution proceedings, if not sold earlier under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 or otherwise. If the dues of the bank still remain unsatisfied, the applicant bank shall be at liberty to recover the same by attachment and sale of personal assets of the defendants. However, the applicant bank is at liberty to enforce the claim through due process of law.

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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 08.03.2024 .

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Copy of this order be sent to the applicant bank and the defendants through registered/speed post. This order be uploaded on the official website of this Tribunal.

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Pronounced in the open Tribunal (M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh

Canara Bank v. Sh. Badan Singh

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sh. Badan Singh

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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