Allowed

Union Bank of India v. M/s Tool Tex Industrial Corporation and Others

DRT9 May 2024OA/1388/2022

Case brief

AI extract

What is this about?

TheDebtsRecoveryTribunalheardanapplicationfiledbyUnionBankofIndiaforrecoveryofanoutstandingloanofoverRs.1croreadvancedtoM/sToolTexIndustrialCorporationandassociateddefendants.Afterservingnoticesandproceedingex-parteduetonon-appearance,thetrialservedanalyzedtheaffidavitsubmittedbytheChiefManageroftheBank.

What did the court decide?

To pay Rs.1,03,25,330.49p jointly and severally with costs and simple interest at 8% p.a. from the date of filing of the application till realization, and to issue a Recovery Certificate.

Union Bank of India versus M/s Tool Tex Industrial Corporation and… — Cheque Dishonour | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1388/2022

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 28.07.2022

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DATE OF DECISION: 08.05.2024

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Union Bank of India, a body corporate, constituted under Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 having its Head Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai200021 and having a Branch Office inter-alia at, SDPH School, Hazuri Road, Chauri Sarak, Ludhiana, through duly authorized person and attorney holder Sh. Balbir Singh Ralhan, Chief Manager.

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……..Applicant

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Versus

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M/s Tool Tex Industrial Corporation B-30-602/25, 4/2 Street no.3, Kailash Nagar, near Oswal Cancer Hospital, Sherpur Road, Ludhiana through its proprietor Sh. Surjeet Singh S/o Sh. Gurdev Singh

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Sh. Surjeet Singh S/o Sh. Gurdev Singh, R/o House no.C-230, Phase-1, Urban Estate Focal Point, Ludhiana Proprietor of defendant no.1

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Smt. Kulwant Kaur W/o Sh. Gurdev Singh, R/ House no.C-230, Phase-1, Urban Estate Focal Point, Ludhiana

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Respondents/defendant

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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 Defendants are ex-parte

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FINAL ORDER

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Present Original Application was instituted by the applicant under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.1,03,25,330.49p (Rupees One Crores Three Lacs Twenty Five Thousand Three Hundred Thirty and Paisa Forty Nine only). The

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Original Application has been filed through Sh. Balbir Singh Ralhan, Chief Manager o f the applicant bank, who is competent to institute the Original Application vide General Power of Attorney dated 19.06.2002, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant No.1 through its proprietor i.e. defendant no.2 had approached the applicant bank for the grant of Cash Credit Limit of Rs.15.00 Lacs and later on defendant No.1 through its proprietor i.e. defendant no.2 had approached the applicant bank for enhancement of CC limit to Rs.30.00 lacs and thereafter to Rs.70.00 lacs.

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The applicant Bank sanctioned the Cash Credit Limit of Rs.15.00 Lacs vide Proposal of sanction, Sanction advice and Sanction Letter dated 26.07.2011 and 29.07.2011, which are Annexure A2 to A4 to this OA. Later CC Limit enhanced to Rs.30.00 lacs vide Proposal of enhancement, Sanction advice dated 29.05.2012 and 30.05.2012, which are Annexure A16 and A17 to this OA and thereafter enhanced to Rs.70.00 lacs vide Memorandum to Management committee for enhancement and Sanction Letter dated 27.06.2013 and 28.06.2013 which are Annexure A31 and A32 to this OA and the terms and conditions were duly accepted by the defendants vide term and condition sanction dated 31.12.2018, which is Annexure A56 to this OA.

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Defendant No.2 and 3 had mortgaged their immovable properties i.e. Commercial Building measuring 190Sq. yards situated at MC No.B-30-602, Village Sherpur Kalan, H.B.No.176, Tehsil and District Ludhiana, Punjab vide Equitable Mortgage of Sale Deed bearing vasika No.14162 dated 27.06.1994 and Transfer Deed Bearing Vasika No.7941 dated 04.07.2012 along with their Translations, which are Annexures A14 and A44 to this OA; Memorandum of deposit of Title deed dated 30.07.2011, which is Annexure A15 to this OA; Declarations regarding extension of EM and Supplementary

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Memorandums of extension of EM Dated 30.05.2012 and 28.06.2013, which are Annexures A29, A30, A42 & A43 to this OA. Documents executed:- Demand Promissory Note, Letter of continuity, Hypothecation Agreement for Goods and Debts, Annexure-I, Agreement on rate of interest, Letter of undertakings not to alienate hypothecated goods, Letter of undertaking, Letter of Guarantee by Kulwant Kaur and Annexure-II all dated 29.07.2011, which are Annexures A5 to A13 to this OA; Demand Promissory Note, Letter of continuity, Hypothecation Agreement for Goods and Debts, AnnexureI, Letter of undertakings not to alienate hypothecated goods, Letter of undertaking, Composite Hypothecation Deed, Agreement on rate of interest, Debit Balance Confirmation Letter, Letter of Guarantee by Kulwant Kaur and Annexure-II all dated 30.05.2012, which are Annexures A18 to A28 to this OA; Demand Promissory Note, Letter of continuity, Hypothecation Agreement for Goods and Debts, Annexure-I, Letter of undertakings not to alienate hypothecated goods, Agreement on rate of interest, Debit Balance Confirmation Letter, Letter of Guarantee by Kulwant Kaur and Annexure-II all dated 28.06.2013, which are Annexures A33 to A41 to this OA; Jamabandi of the year 2008-2009 and its translation dated 04.03.2020, which is Annexure A45 to this OA; Valuation Report dated 22.12.2017, which is Annexure A46 to this OA; Demand Promissory Note, Letter of continuity, Hypothecation Agreement for Goods and Debts(SD-06), Interest Agreement, Letter of undertakings not to alienate hypothecated goods, Text of Consent clause, Undertaking by borrower, Letter of Guarantee by Surjit Singh and Kulwant Kaur and Annexure-II all dated 31.12.2018, which are Annexures A47 to A55 to this OA; Debit Balance Confirmation dated 22.01.2020, which is Annexure A57 to this OA; Affidavit by Surjit Singh dated 16.03.2020, which is Annexure A58 to this OA; Letter to Bank dated 07.03.2020, which is Annexure A59 to this OA; Letter by Bank Dated 16.09.2020 along with postal Receipts, which is Annexure A60 to this OA; Legal Notices

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dated 01.12.2020 and 24.12.2020 with postal receipts, which are Annexures A61 and A62 to this OA; Statement of account in cash credit limit account under banker’s Book Evidence Act. and Certificate under section 65-B of Indian Evidence Act, which are Annexures A63 and A64 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.1,03,25,330.49p, 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. Sh. Javed Ahmed, Advocate appeared on behalf of all the defendants and filed Memo of Appearance on 01.08.2023 but no POA was filed and thereafter due to non-appearance of the defendants, they were proceeded ex-parte on 19.03.2024.

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In support of the OA, affidavit of Sh. Balbir Singh Ralhan, Chief Manager, Union Bank of India has been filed. 8. Heard ex-parte arguments and perused record.

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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 A64 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 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. Rs.1,03,25,330.49p (Rupees One Crores Three Lacs Twenty Five Thousand Three Hundred Thirty and Paisa Forty Nine only) along with

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interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the account. 10. In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest @11.00%p.a. plus Penal Interest @2%p.a. with monthly rests from 01.07.2022 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 @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.

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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.1,03,25,330.49p (Rupees One Crores Three Lacs Twenty Five Thousand Three Hundred Thirty and Paisa Forty Nine 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 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.

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Parties to appear before Learned Recovery Officer of this Tribunal on 16.05.2024.

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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.

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Pronounced by me in the Open Tribunal.

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Dated: 08.05.2024

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

Union Bank of India v. M/s Tool Tex Industrial Corporation and Others

Case brief

What is this about?

What did the court decide?

Union Bank of India v. M/s Tool Tex Industrial Corporation and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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