Allowed

State Bank of India v. M/S Aspire Designs

DRT25 Jan 2024OA/141/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's original application for recovery of outstanding loan dues with interest. The court directed the defendants to pay the principal sum along with contractual and penal interest within 60 days.

What did the court decide?

Defendants to pay Rs. 5,51,98,911/- plus interest within 60 days; Recovery Certificate to be issued; Sale of mortgaged properties allowed in case of default.

State Bank of India versus M/S Aspire Designs — Contract and Commercial Disputes | DRT (2024)

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OA 141 of 2022

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Registered on:05.04.2022

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Decided on: 25.01.2024

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IN THE DEBT RECOVERY TRIBUNAL-I AT MUMBAI ORIGINAL APPLICATION NO. 141 of 2022

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STATE BANK OF INDIA a body corporate constituted under the State Bank of India Act, 1955, having its Central office at Madam Cama Road, Mumbai- 400 021 and a branch office amongst others at Stressed Asset Recovery Branch, 6^th Floor, the International, 16, Maharshi Karvey Road, Churchgate, Mumbai- 400 020 through Mr. Subhash C. Saraswat, the Authority Signatory.

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…. APPLICANT

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VERSUS

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1. M/S. ASPIRE DESIGNS, A proprietorship concern (through its sole proprietor Mr. Kirti Sumanlal Sheth) having address at: Flat No. 4, Om Dariya Mahal, 1^st Floor, 80, Napean Sea Road, Mumbai- 400 006 Also at: Flat B- 401, 4^th Floor, Anand Building, Tirupati Apartments, Bhulabai Desai Road, Mumbai- 400 026.

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2. MRS. RAMILA KIRTI SHETH Residing Indian Inhabitant, aged 68 years, having address at: Flat No. 4, Om Dariya Mahal, 1^st Floor, 80, Napean Sea Road, Mumbai- 400 006.

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… DEFENDANTS

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_____________________________________________ Counsel for the Applicant : Advocate Akash Acharya Counsel for the Defendants: None

OA 141 of 2022

J U D G M E N T

The Original Application has been filed by the Applicant against the Defendants for recovery of 5,51,98,911/- (Rupees Five Crore Fifty One Lakh Ninety Eight Thousand Nine Hundred Eleven Only) as on 18.08.2020 with further interest thereon at contractual rate i.e. @11.90 p.a. with monthly rests along with penal interest @ 2% p.a. thereon from 18.08.2020 till the full and final payment and / or realisation.

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Facts as succinctly set out in the present OA are that Defendant No. 1 is a proprietorship concern and Mr. Kirti Sumanlal Sheth is a sole proprietor. Defendant No. 1 is a principal borrower. Defendant No. 2 is the guarantor of Defendant No. 1 who has guaranteed the due repayment of the loan amount granted to Defendant No. 1.

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It is stated that Defendant No. 1 approached the Applicant in the year 2011 for grant of credit facility towards working capital requirement of Defendant No. 1. Pursuant to the request, Applicant vide sanction letter dated 08.08.2011 sanctioned credit facility under Demand Cash Credit limit of Rs. 1,90,00,000/- to the Defendant.

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In consideration of sanction of facility Defendants executed security and loaning documents on 08.08.2011 which includes; Guarantors consent for discloser; Guarantee Agreement dated 08.08.2011; Agreement of Laon cum Hypothecation.

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In order to further secure the aforesaid facility, Applicant created equitable mortgaged on 08.08.2011 by way of deposit of title deeds in respect of the immovable properties described in Schedule II of the OA.

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OA 141 of 2022

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It is further stated that around August-2012, the Defendants again approached the Applicant Bank with request for enhancement of credit facilities vide loan application dated 31.08.2012. Pursuant to the said request, Applicant vide sanction letter dated 20.09.2012 agreed to enhanced the credit facilities from Rs. 1.90,00,000/- to Rs. 4,00,00,000/-.

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In consideration of sanction of enhanced facility Defendants executed security and loaning documents on 20.09.2012 which includes; Supplement Agreement of Loan Cum Hypothecation; Guarantee Agreement.

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In order to further secure the enhanced facility, Defendants extended the equitable mortgaged on 20.09.2012 which was executed on 08.08.2011 of the immovable properties described in Schedule II of OA.

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It is stated that the Defendants again approached the Applicant Bank with request for enhancement of credit facilities. Pursuant to the said request, Applicant vide sanction letter dated 17.09.2014 agreed to enhanced the credit facilities from Rs. 4,00,00,000/- to Rs. 4,50,00,000/-.

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In consideration of sanction of enhanced facility Defendants executed security and loaning documents on 17.09.2014 which includes; Supplemental Agreement of Loan Cum Hypothecation; Guarantee agreement.

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In order to further secure the enhanced facility, Defendants extended the equitable mortgaged on 17.09.2014 which was executed on 08.08.2011 of the immovable properties mentioned in Schedule II.

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OA 141 of 2022

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It is further stated that Defendant No. 1 & 2 vide revival letter dated 13.09.2017 acknowledged the execution of all the loan and security documents and also the liability of repayment of loan amount sanctioned to Defendant No. 1.

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However, after availing aforesaid facilities, Defendants failed to regularize the account, thus the account of Defendant No. 1 was declared as NPA on 28.06.2019. Thereafter, Applicant through their advocate, sent a legal notice dated 30.05.2020 upon the Defendants to pay the outstanding dues, but the Defendants failed to do so. Hence, the present OA has been filed.

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Notice was issued to the Defendants. Defendant No. 1 & 2 put their appearance through counsel on 09.09.2022, however, despite service, none appeared on behalf of the Defendant No. 1 & 2 nor any WS has been filed.

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The Applicant Bank has produced all the Original Loan documents and other relevant documents along with their Claim Affidavit filed on 26.09.2023 through Chief Manager Rambhau A. Taktewale.

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I have heard the Ld. Counsel for the Applicant Bank and perused the record.

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The witness of the Applicant Bank has fully corroborated the averments made in the OA, even otherwise the whole case of the Applicant Bank is based on documents and the witness has duly proved all these documents as against the defendants. In my view there is no question of disbelieving the evidence led by the Applicant Bank and the Applicant Bank has proved its case beyond reasonable doubt. The liability of Defendant No. 1 & 2 is joint and several.

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In the light of above discussions, the Original Application filed by the Applicant Bank deserves to be allowed against the Defendant No. 1 & 2.

OA 141 of 2022

O R D E R

(i) I allow the present O.A. and direct the Defendant No. 1 & 2 to pay to the Applicant, jointly and severally, within a period of 60 days, a sum of Rs. 5,51,98,911/- (Rupees Five Crore Fifty One Lakh Ninety Eight Thousand Nine Hundred Eleven Only) as on 18.08.2020 with further interest thereon at contractual rate i.e. @11.90 p.a. with monthly rests along with penal interest @ 2% p.a. thereon from 18.08.2020 till the full and final payment and / or realisation.

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(ii) Failing which the aforesaid amount shall be recovered from the sale of the mortgaged property as described in Schedule II of OA, immoveable assets and other personal moveable of the Defendants.

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(iii) Defendants are hereby directed not to deal with their properties till further direction of Ld. Recovery Officer.

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(iv) Defendants shall also pay the cost and expenses of the OA.

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(v) Recovery Certificate be issued forthwith and be sent to the Recovery Officer of this Tribunal.

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Copy of this order be sent to the parties as per rules.

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File be consigned to record.

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Place: Mumbai. Date : 25.01.2024

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(Dr. Rekha G. Dhakar) Presiding Officer,

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Tjs/-

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State Bank of India v. M/S Aspire Designs

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S Aspire Designs

Case brief

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