Allowed

Central Bank of India v. Sh. Harbhajan Singh and Another

DRT19 Mar 2024OA/1368/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's Original Application for recovery of a defaulted loan. After hearing ex-parte arguments and finding the documentary evidence unrebutted, the bank was declared entitled to recover the principal amount along with simple interest at 10% p.a. A Recovery Certificate was issued.

What did the court decide?

Recovery of Rs. 23,75,657.00 with simple interest at 10% p.a. from filing date; issuance of Recovery Certificate.

Central Bank of India versus Sh. Harbhajan Singh and Another — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1368/2022

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 25.07.2022

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DATE OF DECISION: 19.03.2024

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Central Bank of India, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at Chander Mukhi Building, Nariman Point, Mumbai400021 and having one of its Branch situated at Central Bank of India, VPO Otalon, Tehsil Samrala, District Ludhiana, Punjab through Sh. Baldev Singh, who is presently working as Chief Manager, Central Bank of India, Regional Office, K.P. Complex, Adj. Hotel Park Plaza, Ferozepur Road, Ludhiana, Punjab constituted Power of Attorney holder of the Bank and Principal Officer

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……..Applicant

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Versus

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Sh. Harbhajan Singh S/o Sh. Kaur Singh, R/o Village Rajewal, Tehsil Samrala, District Ludhiana, Punjab (Borrower and Mortgagor)

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Sh. Ajmer Singh S/o Sh. Kaur Singh, R/o Village Rajewal, Tehsil

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Samrala, District Ludhiana, Punjab (Guarantor)

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….……Defendants

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Advocates:

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Argued by Ms. Ritika Kansal, Advocate proxy for Sh. Mohinder Nath Sharma, 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.23,75,657.00 (Rupees Twenty Three Lacs Seventy Five Thousand Six Hundred and Fifty Seven only). The Original Application has been filed

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through Sh. Baldev Singh, Chief Manager o f the applicant bank, who is competent to institute the Original Application vide Power of Attorney dated 08.12.2011, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant No.1 had approached the applicant bank from time to time for the grant of KCC Loan of Rs.10.00 Lacs with its subsequent enhancement to Rs.13.00 Lacs; Term Loan-I of Rs.1.00 Lac; Term Loan-II of Rs.50,000/- and for the several renewals of KCC limit vide Loan Applications dated 20.11.2012, 09.05.2013, 28.06.2014, 14.08.2014, 21.12.2015, 15.03.2016, 16.05.2016, 29.03.2018 and 08.04.2019, which are Annexures A2, A13, A14, A19, A35, A40, A42 and A43 to this OA. 3. The applicant Bank sanctioned the KCC Loan of Rs.10.00 Lacs with a subsequent enhancement to Rs.13.00 Lacs; Term Loan-I of Rs.1.00 Lac; Term Loan-II of Rs.50,000/- and renewed the KCC limit several times vide Sanction Letters dated 28.11.2012, 06.07.2014, 14.08.2014, 21.12.2015 and 15.03.2016, which are Annexures A3, A15, A20, A26 and A36 to this OA; and the terms and conditions were duly accepted by the defendants. 4. Defendant No.1 had mortgaged his immovable property i.e. land measuring 16K-00M situated at Village Otalan, H.B. No.124, Tehsil Samrala, District Ludhiana, Punjab vide Registered Mortgage Deed bearing Vasika No.2656 dated 23.11.2012 along with its translation, Declaration u/s 4(1) and Letter to Sub Registrar both dated 29.12.2015, which are Annexures A4, A4(T), A27 and A28 to this OA. Documents executed:- Advocate report on title dated 23.11.2012, which is Annexure A5 to this OA; Affidavit of defendant dated 26.11.2012, which is Annexure A6 to this OA; Certificate of non-encumbrance dated 22.11.2012, which is Annexure A7 to this OA; D.P. note, Letter of waiver, Letter of interest, Letter of continuity and Loan-cumhypothecation agreement all dated 29.11.2012, which are Annexures A8 to A12 to this OA; Term loan agreement and Guarantors consent

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letter both dated 06.08.2014, which are Annexures A16 and A17 to this OA; Form of guarantee for advances and credits, which is Annexure A18 to this OA; Loan-cum-hypothecation agreement, D.P. note and Letter of continuity all dated 14.08.2014, which are Annexures A21, A23 and A25 to this OA; Letter declaring acceptance of consent clause by the borrower and Letter of waiver, which are Annexures A22 and A24 to this OA; Loan-cum-hypothecation agreement, Supplementary agreement, Form of guarantee for advances and credits and Letter of continuity all dated 26.12.2015, which are Annexures A29, A30, A32 and A34 to this OA; Guarantor’s consent letter and D.P. note, which are Annexures A31 and A33 to this OA; Term loan agreement for small loans dated 15.03.2016, which is Annexure A37 to this OA; Form of guarantee for advances and credits and Letter declaring acceptance of consent clause by the borrower, which are Annexures A38 and A39 to this OA; Letter of acknowledgment of debt dated 20.11.2017 and 04.10.2019, which are Annexures A41 and A44 to this OA; Legal notice dated 22.01.2021, which is Annexure A45 to this OA and Statements of accounts, which are Annexures A46 to A48 to this OA. 5. The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.23,75,657.00, 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 19.02.2024. 7. In support of the OA, affidavit of Sh. Baldev Singh, Chief Manager, Central Bank of India h as been filed. 8. Heard ex-parte arguments and perused record.

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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 A48 to this OA, it is proved that the defendants 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 loans as per terms and conditions of the agreement between the parties. Subsequently, 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 Rs.23,75,657.00 (Rupees Twenty Three Lacs Seventy Five Thousand Six Hundred and Fifty Seven 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. 10. In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest @12.10%p.a. along with @2%p.a. penal interest with half yearly rests, in all, from 16.07.2022 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 @10.00%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

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Rs.23,75,657.00 (Rupees Twenty Three Lacs Seventy Five Thousand Six Hundred and Fifty Seven only) jointly and severally, with costs, current and future simple interest @10.00%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 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.

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Any other application pending stands disposed of.

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 30.03.2024.

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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: 19.03.2024

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(MRIDULESH KUMAR SINGH) Presiding Officer,

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DRT-III, Chandigarh

Central Bank of India v. Sh. Harbhajan Singh and Another

Case brief

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Central Bank of India v. Sh. Harbhajan Singh and Another

Case brief

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