Partly allowed

Kotak Mahindra Bank Limited v. Zenith Stone Industries

DRT7 Aug 2024OA/141/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's application for recovery of dues from a partner firm and its partners. The tribunal reduced the claimed amount after deducting legal charges and approved future simple interest at 9% per annum, directing the sale of hypothecated equipment and issuance of a recovery certificate.

What did the court decide?

Respondents to pay Rs. 3,49,10,527/- with future simple interest at 9% per annum; hypothecated crusher to be sold; recovery certificate issued.

Kotak Mahindra Bank Limited versus Zenith Stone Industries — Specific Performance | DRT (2024)

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Presented on: 27.09.2021 Registered on: 25.02.2022 Decided on: 07.08.2024 Duration: Y M D 02 10 10

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IN THE DEBTS RECOVERY TRIBUNAL AT PUNE (Before Shri Dilip G. Murumkar, Presiding Officer) ORIGINAL APPLICATION No.141/2022.

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Kotak Mahindra Bank Ltd .,

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A Banking Company within the meaning of Section 5(c) of the Banking Regulation Act, 1949, (10 of 1949) having its Registered Office at 27 BKC, C27, G-Block, Bandra - Kurla Complex, Bandra (E), Mumbai-51 and Branch Office at 4^th Floor, Zone III, Nyati Unitree, Pune - Ahmednagar Road, Yerwada, Pune - 411 006.

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… Applicant

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Versus

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1 . ZENITH STONE INDUSTRIES GNO1127 Utsav Bld Centre, Avalhwadi Road, Wagholi, Pune 412 207.

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2 . Mr. Chandar Abu Pachange At post Dhok Sangvi , Nimgaon Bhogi, Taluka Shirur, District Pune-412 220.

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3 . Mr. Pramod Balasaheb Parad At Post Kendur, Taluka Shirur, District Pune 412 413.

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4 . Mr. Chetan Chandar Pachange At post Dhok Sangvi , Nimgaon Bhogi, Taluka Shirur, District Pune-412 220.

… Defendants

(OA No.141/2022)

Page 1 of 6

[ANIL]

APPEARANCES For the Applicant For the Defendants

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Mr. Pradip Yadav - Advocate. Ex parte.

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TOTAL CLAIM AMOUNT –Rs.3,50,61,681.78Ps.

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JUDGMENT

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(Delivered on 7^th August, 2024)

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The Applicant Bank has filed present application for recovery of aggregate sum of Rs.3,50,61,681.78Ps . (i.e.Rs.2,89,42,520.15Ps towards Construction Equipment (Loan-1 A/c No.CE-821881) and Rs.61,19,161.63Ps towards ECLGS Loan–II A/c No.CE-857999) as on 14.09.2021 together with future interest and other charges thereon at the contractual rates upon the footing of compound interest until payment/ realization as specifically brought out in the particulars of the claim application, from the Defendants.

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Brief facts of the application are as under:

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Defendant No.1 is Partnership Firm and Defendant Nos.2 to 4 are the Partners of Defendant No.1 Firm. Defendant Nos.1 to 4 are the borrowers. Defendants approached the Applicant Bank in September 2019 with a request for loan. The Applicant Bank considered the request of the Defendants and sanctioned the following financial facilities to the defendants.

(OA No.141/2022)

Page 2 of 6

[ANIL]

Sr.	Particulars	Amount (Rs.)
No.
1.	Construction Equipment Loan–I (No.CE-821881)	Rs.3,12,00,000/-
2.	ECLGS Loan-II(No.CE-857999)	Rs.61,77,600/-
	Total Exposure	Rs.3,73,77,600/-

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In order to secure the above said Loan Facilities, the Defendants have executed necessary loan transactions and security documents, in favour of the Applicant Bank.

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The Applicant Bank states that the hypothecated asset i.e. CONSTRUCTION EQUIPMENT –CRUSHER - CB - AVC - 250 - STONE CRUSHER bearing Chassis No.1745 & Engine No.1742, more particularly described in Schedule-A are charged respectively by the defendants for securing the repayments of the amounts due and payable under the said credit facilities.

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It is contended that after availing and utilizing the financial facilities towards Loan (I) as well as financial facilities granted under Loan (II), the defendants have failed and/or neglected to make payments as per terms of Loan Agreement and hence, the accounts of the Defendants declared as Non-performing Assets on 05.06.2021.

(OA No.141/2022)

Page 3 of 6

[ANIL]

Thereafter, the Applicant Bank on 14.09.2021 issued Recall of Loan cum Invocation of Guarantee Notice through Advocate Pradip Yadav to the Defendants calling upon them to pay the outstanding amounts of the said loan facilities. Despite service of Notice, Defendants failed & neglected to comply with the demand in the said Notice.

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Hence, this application is filed.

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Defendants failed to appear despite service of summons. Hence, the Application proceeded ex parte against the defendants vide Order dated 12.12.2022 passed below the Application (Exhibit-01).

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The Applicant Bank has filed Claim Affidavit of evidence (Exhibit-6) of Mr. Rahul Gade, which supports the case of the applicant elucidated in the application.

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The Applicant Bank has produced in evidence the original loan documents at Exhs.AW-1 to AW-09 which corroborate the case of the Applicant Bank.

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I have heard arguments of the learned Advocate for the Applicant Bank.

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Since the Defendants failed to appear and contest the application, I find no reason to disbelieve the evidence of the Applicant Bank. Therefore, the Applicant Bank is entitled for

(OA No.141/2022)

Page 4 of 6

[ANIL]

reliefs as claimed.

The Applicant Bank has claimed Legal Charges of Rs.1,50,580/- for Construction Equipment Loan – I (No.CE821881) and Rs.575/- for ECLGS Loan-II (No.CE-857999), which cannot be granted and the same is required to be deducted from the total claim amount. Therefore, the total claim amount of Rs.3,50,61,681.78 is reduced to Rs.3,49,10,527/-.

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10 Considering the facts of the present case, I am of the opinion that if future interest is granted @9% per annum (simple) for all the facilities, it would be just and reasonable.

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11 Hence, I pass the following order: -

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ORDER

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(A) Original Application No.141/2022 is allowed with costs.

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(B) Defendant Nos.1 to 4 either jointly or severally shall pay an aggregate sum of Rs.3,49,10,527/- (Rupees Three Crore Fourty Nine Lakhs Ten Thousand Five Hundred Twenty Seven only) to the Applicant Bank (i.e.Rs.2,87,91.940.15Ps. towards Construction Equipment Loan–I (No.CE821881) and Rs.61,18,586.63Ps. towards ECLGS LoanII (No.CE-857999) with future interest @9% per annum from the date of filing of the Original Application i.e.27.09.2021 till payment/realization of the amount mentioned in this operative order.

(OA No.141/2022)

Page 5 of 6

[ANIL]

(C) The aforesaid adjudicated amount is secured by executing hypothecation of the construction equipment i.e. CRUSHER- CB - AVC - 250 - STONE CRUSHER bearing Chassis No.1745 and Engine No.1742, in favour of the Applicant Bank, more particularly described in Schedule-A of the Original Application.

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