Allowed

Indian Bank v. M/S Rayat Educational and Research Trust and Others

DRT29 Jul 2024OA/1484/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the recovery application filed by Indian Bank against several defendants for a debt exceeding 28 crores. The Tribunal granted uniform simple interest at 8% per annum from the date of filing and directed the issuance of a recovery certificate under the RDBFI Act. The case was heard ex-parte as the defendants had defaulted on their appearance.

What did the court decide?

Recovery Certificate issued for Rs. 28,02,10,229.72p with simple interest at 8% p.a. from the date of filing until realization.

Indian Bank versus M/S Rayat Educational and Research Trust… — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1484/2022 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 21.05.2022

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DATE OF DECISION: 29.07.2024

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Indian Bank, a body corporate, constituted under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Corporate Office at 254-260, Avvai Shanmugam Salai, Royapettah, Chennai-600014, amongst other places a branch at Rupnagar (Punjab), through Sh. Inderpal Singh, Senior Manager, being the constituted attorney holder and authorized signatory, posted at one of its branches at Rupnagar (Punjab)

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……..Applicant

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Versus

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M/s Rayat Educational & Research Trust, Village Rail Majra, District S.A.S. Nagar, Mohali, through its Trustees/Secretary/Chairman 2^nd Address:- Registered/Administrative/Corporate Office, SCO 126127, 3^rd and 4^th Floor, Sector 34, Chandigarh

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Sh. Gurvinder Singh Bahra S/o Lt. Sh. Sagli Ram, Village Rail Majra, R/o SBS Nagar, Punjab (Chairman of M/s Rayat Educational and Research Trust)

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2^nd Address:- H.No.202, Sector 21-A, Chandigarh

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Sh. Nirmal Singh Rayat S/o Sh. Channan Singh, R/o Village Rail Majra, R/o SBS Nagar, Punjab (Trustee of M/s Rayat Educational & Research Trust)

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Smt. Shalandhar Kaur W/o Sh. Nirmal Singh Rayat, R/o #1246, 1^st Floor, Sector 22-B, Chandigarh (Trustee of M/s Rayat Educational & Research Trust)

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Smt. Mohinder Kaur W/o Sh. Channan Singh, R/o #13, Ward No.1, Balachur, Nawanshahr, Punjab-144521

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Sh. Udham Singh S/o Sh. Amrik Singh, R/o 195-B, Arjun Nagar, Safdarjung Enclave, South West Delhi, South Delhi-110029

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Smt. Paramjit Kaur W/o Sh. Surinder Singh, R/o Ward No.2, Balachur, Nawanshahr, Punjab-144521

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Smt. Manjit Kaur W/o Sh. Chattar Singh, R/o Bhanun, Sahdra, Nawanshahr, Punjab-144525 9. Sh. Chattar Singh S/o Sh. Amrik Singh, R/o Bhanun, Sahdra, Nawanshahr, Punjab-144525 10.Smt. Manjit Kaur W/o Sh. Gurvinder Singh Bahra, R/o H.No.202, Sector 21-A, Chandigarh (Secretary of M/s Rayat Educational and Research Trust) ….……Defendants Advocates: Argued by Ms. Neha Arora, Advocate proxy for Sh. K.P.S. Dhillon, Advocate for the applicant Defendants are ex-parte FINAL ORDER 1. 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.28,02,10,229.72p (Rupees Twenty Eight Crores Two Lacs Ten Thousand Two Hundred Twenty Nine and Seventy Two Paisa only). The Original Application has been filed through Sh. Inderpal Singh, Senior Manager o f the applicant bank, who is competent to institute the Original Application vide Power of Attorney dated 15.12.2012, which is Annexure P/A to this OA. 2. The brief facts of the OA are that the defendant No.1 through its chairman i.e. defendant No.2 were already availing Overdraft Limit of Rs.20.00 Crores and had approached the applicant bank from time to time for several renewals of OD Limit and grant of fresh Adhoc Limit of Rs.2.00 Crores, Bank guarantee of Rs.0.10 Crore, OD Limit of Rs.2.00 Crores and also for Term Loan of Rs.2.00 Crores under COVID Emergency Credit. 3. The applicant Bank sanctioned the renewal of Overdraft Limit of Rs.20.00 Crores and also sanctioned a fresh Adhoc Limit of Rs.2.00 Crores vide Sanction Letter dated 29.09.2014, which is Annexure

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A26 to this OA and thereafter renewed the OD Limit and sanctioned a fresh Bank Guarantee Limit of Rs.0.10 Crore vide Sanction Letter dated 29.03.2016, which is Annexure A27 to this OA and further renewed OD Limit and Bank Guarantee Limit vide Sanction Letter dated 25.10.2017, which is Annexure A28 to this OA and thereafter sanctioned a OD Limit of Rs.2.00 Crores vide Sanction Letter dated 23.11.2017, which is Annexure A29 to this OA and further renewed these vide Sanction Letters dated 30.03.2019 and 18.02.2020, which are Annexures A47 and A48 to this OA and further sanctioned a Term Loan of Rs.2.00 Crores under COVID Emergency Credit and also renewed Overdraft Limit of Rs.20.00 Crore and Bank Guarantee of Rs.0.10 Crores, which was availed against FDR vide Sanction Letter dated 06.05.2020, which is Annexure A49 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant No.1 had mortgaged its immovable properties

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detailed as:-

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a. Land Measuring 28 Kanal – 0 Marla vide equitable mortgage of Sale Deed 1725 dated 13.08.2001

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b. Land Measuring 28K-0M vide equitable mortgage of Sale Deed 1726 dated 13.08.2001

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c. Land Measuring 28K-0M vide equitable mortgage of Sale Deed 1727 dated 13.08.2001

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d. Land Measuring 95k-03m vide equitable mortgage of Sale Deed 1745 dated 14.08.2001

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e. Land Measuring 95K-2M vide equitable mortgage of Sale Deed 1746 dated 14.08.2001

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f. Land Measuring 95K-3M vide equitable mortgage of Sale Deed 1747 dated 14.08.2001

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g. Land Measuring 26K-1M vide equitable mortgage of Sale Deed 2480 dated 10.11.2000

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h. Land Measuring 20K-0M vide equitable mortgage of Sale Deed 2961 dated 26.12.2000

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i. Land Measuring 25K-18M vide equitable mortgage of Sale Deed 2960 dated 26.12.2000

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j. Land Measuring 22K-3M vide equitable mortgage of Sale Deed 2959 dated 26.12.2000

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k. Land Measuring 19K-9M vide equitable mortgage of Sale Deed 2921 dated 22.12.2000

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l. Land Measuring 29K-10M vide equitable mortgage of Sale Deed 2920 dated 22.12.2000

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m. Land Measuring 29K-10M vide equitable mortgage of Sale Deed 2919 dated 22.12.2000

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n. Land Measuring 29K-10M vide equitable mortgage of Sale Deed 2918 dated 22.12.2000

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o. Land Measuring 18K-7M vide equitable mortgage of Sale Deed 2481 dated 10.11.2000

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p. Land Measuring 75K-1M vide equitable mortgage of Sale Deed 1273 dated 25.07.2002.

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q. Land Measuring 61K-7M vide equitable mortgage of Sale Deed 1997 dated 30.09.2002

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All part and parcel of building of Rayat Group of Institute situated, Village Rail Majra, Jalandhar Road, District SBS Nagar, Punjab along with their transitions and Letter to Naib Tehsildar dated 29.06.2018, which are Annexures A8 to A24 and A46 to this OA and Letters of creation of mortgage dated 24.10.2001, 23.10.2001, 10.12.2002, 22.02.2003, 03.10.2003, 28.09.2004, 05.02.2005, 18.03.2005, 28.06.2005, 12.08.2005, 11.01.2006, 03.03.2006, 29.07.2006, 04.08.2006, 13.01.2007, 27.02.2007 and 09.06.2007, which is Annexure A1 to this OA

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Documents executed:- Resolution, D.P. Note, Letter of continuity and Agreement of guarantee all dated 29.11.2010, which are Annexures A2 to A4 and A6 to this OA; Agreement of guarantee dated 13.12.2010, which is Annexure A5 to this OA; Letter from party to

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bank confirming extension of equitable mortgage dated 30.11.2010, which is Annexure A7 (colly) to this OA; Letter from party to bank confirming extension of equitable mortgage dated 10.01.2013, which is Annexure A25 to this OA; Resolution dated 23.11.2017, which is Annexure A30 to this OA; Minutes of the meeting, Resolution, Letter for release of adhoc limit, Guarantee agreements Authority, D.P. Note, Agreement of hypothecation, Letter of continuity, Undertaking and Agreements of guarantee all dated 24.11.2017, which are Annexures A31 to A40 and A42 to this OA; Agreement of guarantee all dated 20.12.2017, which is Annexure A41 to this OA; Letter confirming extension of equitable mortgage dated 28.11.2017, which is Annexure A43 (colly) to this OA; Letter for release of OD limit dated 28.05.2018, which is Annexure A44 to this OA; D.P. note dated 29.05.2018, which is Annexure A45 to this OA; D.P. note, Medium term loan agreement, Agreement of hypothecation of movable’s and Agreements of guarantee, Letters of guarantor and his reply all dated 08.05.2020, which are Annexures A50, A53 to A57 to this OA; Disposal of proceed letter, which is Annexure A51 to this OA; Letter from party to bank confirming extension of equitable mortgage, which is Annexure A58 to this OA; Statements of accounts along with Certificate, which are Annexures A59 to A60 to this OA and Demand notice dated 09.05.2022, which is Annexure A61 to this OA.

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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.28,02,10,229.72p, 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. Sh. Amrit Veer Singh, Advocate filed Memo of Appearance on behalf of all the defendant on 11.12.2023 but filed Power of Attorney on behalf of defendant Nos.3 and 4 only. No WS was filed within

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stipulated period by defendant Nos.3 and 4 and on 22.5.2024 opportunity to file WS was closed and defense was struck off and due to non appearance of all the defendants this OA was proceeded ex parte. Thereafter, Sh. Karaj Veer Singh, Advocate along with Sh. Amrit Veer Singh, Advocate filed Power of Attorney on behalf of defendant No.3 and filed IA No.1128/2024 for setting aside ex parte order dated 22.05.2024 and the same was dismissed on 18.07.2024. Thereafter, Sh. Karaj Veer Singh, Advocate on behalf of defendant No.3 filed IA No.1176/2024 for setting aside ex parte order dated 22.05.2024 and the same was dismissed on 25.07.2024.

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In support of the OA, affidavit of Sh. Inderpal Singh, Senior Manager, Indian Bank h as been filed.

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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 A61 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.28,02,10,229.72p (Rupees Twenty Eight Crores Two Lacs Ten Thousand Two Hundred Twenty Nine and Seventy Two Paisa 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 @18.80%p.a. in OD Limit with monthly rests and @13.75%p.a. in

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Covid Emergency Term Loan Account along with penal interest @2%p.a. in all, from 01.05.2022 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 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. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.28,02,10,229.72p (Rupees Twenty Eight Crores Two Lacs Ten Thousand Two Hundred Twenty Nine and Seventy Two Paisa only) jointly and severally, with costs, current and future simple interest @8.00%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. 12. Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 17.08.2024. 15. Copy of this order be given dasti to the applicant bank and be sent to defendants through registered/speed post and this order be

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also uploaded on the official website of this Tribunal and record be consigned.

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Pronounced by me in the open Tribunal . Dated: 29.07.2024 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Indian Bank v. M/S Rayat Educational and Research Trust and Others

Case brief

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Indian Bank v. M/S Rayat Educational and Research Trust and Others

Case brief

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