Allowed

Union Bank of India v. M/S Manoj Trading Company

DRT25 Jan 2024OA/1456/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant bank's original application for recovery of Rs. 22,48,827 along with principal and future simple interest at 6% per annum from the filing date against proprietors and guarantors who failed to repay sanctioned loans.

What did the court decide?

Recovery of Rs. 22,48,827 with joint and several liability on all defendants and future simple interest at 6% per annum from 09.10.2023.

Union Bank of India versus M/S Manoj Trading Company — Banking and Recovery | DRT (2024)

¶1

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

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ORIGINAL APPLICATION NO.1456/2021

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DATE OF INSTITUTION: 09.10.2023

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DATE OF DECISION: 25^th DAY OF JANUARY, 2024

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Union Bank of India , a body corporate, constituted under the Banking Company (Acquisition and Transfer of Undertakings) Act, 1970, having its head office at 239, Vidhan Sabha Marg, Nariman Point, Mumbai and Branches all over India amongst other places one at Loharu Road, Bhiwani, Haryana, through Sh. Pawan Kumar,

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Manager, its Constituted Attorney and Principal Officer

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…..Applicant

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Versus

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M/s Manoj Trading Company, a Proprietorship Firm, having its business place at Near Somwari Mata, Dhobi Talab, Jal Wali Paras, Tiyan-Pana, Bhiwani, Haryana, through its Proprietor, Sh. Manoj Verma s/o Sh. Subhash Chander Verma

¶10

Sh. Manoj Verma s/o Sh. Subhash Chander Verma r/o Kumharo Wali Gali, 11 Hatta, Lohar Bazar, Bhiwani, Haryana, PAN No. AERPV6248J

¶11

Smt. Kalawati w/o Sh. Subhash Chander Verma r/o Kumharo Wali Gali, 11 Hatta, Lohar Bazar, Bhiwani, Haryana, PAN No.CRUPK0879J

¶12

Sh. Sunil Verma s/o Sh. Subhash Chander Verma r/o Kumharo Wali Gali, 11 Hatta, Lohar Bazar, Bhiwani, Haryana

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Sh. Parveen Kumar s/o Sh. Subhash Chander Verma r/o Kumharo Wali Gali, 11 Hatta, Lohar Bazar, Bhiwani, Haryana

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....Defendants

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OA/1456/2023 HDFC BANK VS M/S MANOJ TRADING COMPANY AND OTHERS 2

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Argued by: Sh. Vivek Verma proxy counsel for Sh. Brijesh Sharma counsel for the applicant bank Defendants ex parte vide order dated 08.01.2024

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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), against the defendants for recovery of Rs.22,48,827/(Rupees Twenty Two Lakh Forty Eight Thousand Eight Hundred Twenty Seven Only) . It has been filed through Sh. Pawan Kumar, Manager, Constituted Attorney and Principal Officer of the applicant bank stated to be competent to institute the Original Application vide General Power of Attorney, Annexure-A1 (copy).

¶19

The brief facts of the case of the applicant as per Original Application are that defendant No. 1 through defendant No. 2, had approached the applicant bank for grant of Cash Credit Facility of Rs. 60 lakh further approached for reduction of Cash Credit Facility to Rs. 48 Lakh and grant of Fresh Term Loan-UGECL of Rs. 9 Lakh . Defendant Nos. 3 to 5 stood as guarantors for repayment of the loan amount.

¶20

The applicant bank sanctioned aforesaid credit facilities to the defendants vide sanction letters dated 18.11.2019 and 04.09.2020, Annexures-A2 and A3 (copy), as per terms and conditions which were duly accepted by the defendants.

¶21

In order to secure the aforementioned credit facilities, the defendants executed various loan and security documents, i.e.

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OA/1456/2023 HDFC BANK VS M/S MANOJ TRADING COMPANY AND OTHERS 3

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demand promissory notes dated 08.08.2017 and 04.09.2020, Annexures-A4 and A6 (copy), term loan agreement dated 04.09.2020, Annexure-A5 (copy), letter of continuity dated 04.09.2020 of demand promissory note, Annexure-A7 (copy) and letters of guarantee dated 08.08.2017 and 10.06.2020, AnnexuresA8 to A11 (copy).

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The aforesaid loan facilities were further secured by creation of equitable mortgage by defendant Nos. 2, 4 and 5 in respect of plot/land measuring 132 Square Yard bearing M.C. Unit No. P-764/A and P-764 situated at Opposite Somwari Mata Mandir, Dobhi Talab, Bhiwani, Haryana, fully detailed in para No. 5.10 of the Original Application. Registered Mortgage deed No. 7813/1 dated 17.10.2012 is, Annexure-A12 (copy).

¶25

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 31.03.2021. The applicant bank recalled entire outstanding amount vide notice dated 02.04.2021 along with postal receipts, Annexure-A13 (colly) (copy), but to no avail.

¶26

It is further the case of the applicant bank that after adjusting debit and credit entries in the loan accounts, a sum of

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Rs.22,48,827/- (Rupees Twenty Two Lakh Forty Eight Thousand Eight Hundred Twenty Seven Only) , is recoverable against the defendants as per statements of accounts, duly certified

¶28

OA/1456/2023 HDFC BANK VS M/S MANOJ TRADING COMPANY AND OTHERS 4

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under Bankers’ Books Evidence Act, 1891, Annexures-A14 and A15 (colly) (copy).

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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 08.01.2024 .

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In support of contents of the OA, affidavit of evidence of Sh. Pawan Kumar, Manager of the applicant bank was filed.

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

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It was argued by the learned proxy counsel 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 A15 , 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.22,48,827/- (Rupees

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OA/1456/2023 HDFC BANK VS M/S MANOJ TRADING COMPANY AND OTHERS 5

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Twenty Two Lakh Forty Eight Thousand Eight Hundred

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Twenty Seven Only) from the defendants.

¶38

In so far as pendente lite and future interest is concerned, the applicant bank in relief clause, has not claimed any particular rate of interest. In sanction letters dated 18.11.2019 and 04.09.2020, Annexures-A2 and A3 , the rate of interest has been mentioned @EBLR+1.10% per annum in Cash Credit Facility and @7.50% per annum in Term Loan-UGECL, respectively.

¶39

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 the mortgaged property, purpose of loan, i.e. business , quantum of loan, prevalent market rates of interest which have gone drastically downhill in yesteryears and defendant No. 3 being a female, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @6% per annum from the date of filing of the OA till realisation of the amount ordered vide this order. It is ordered accordingly.

¶40

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.22,48,827/- (Rupees Twenty Two Lakh Forty Eight Thousand Eight Hundred Twenty Seven Only) with current and future simple interest @6% per annum w.e.f. 09.10.2023 , till the date of realisation of the amount. The liability of the defendants shall be joint as well as several. Accordingly, the applicant bank shall be

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OA/1456/2023 HDFC BANK VS M/S MANOJ TRADING COMPANY AND OTHERS 6

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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 12.03.2024.

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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

Union Bank of India v. M/S Manoj Trading Company

Case brief

What is this about?

What did the court decide?

Union Bank of India v. M/S Manoj Trading Company

Case brief

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What did the court decide?

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