Allowed

Canara Bank v. M/S Rk Shoes and Another

DRT23 Aug 2024OA/1513/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed Canara Bank's application to recover approximately Rs. 22 lakh from M/s R.K Shoes and Sh. Rakesh Batta. The Tribunal deemed it appropriate to grant interest at 8% per annum instead of the claimed 11.85% and issued a Recovery Certificate under SARFAESI Act provisions.

What did the court decide?

Recovery of Rs.22,19,759.67p with simple interest @8% p.a.; issues Recovery Certificate; liberty to enforce via sale of mortgaged or personal assets.

Canara Bank versus M/S Rk Shoes and Another — Contract and Commercial Disputes | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1513/2022 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION:06.08.2022

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DATE OF DECISION: 23.08.2024

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Canara Bank, having its Head Office at, J.C. Road Bangalore-560 002 (Karnataka). Having its Branch Office At: Canara Bank Khanna District Ludhiana. Through its Attorney holder Sh. Jatinder Vir Kohli.

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……..Applicant

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Versus

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M/s R.K Shoes C/o Old Cinema Road Khanna, District Ludhiana, Punjab, through its Proprietor Sh. Rakesh Batta.

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Sh. Rakesh Batta R/o H.No.360/27, Mohalla Braham Puri, Khanna, District Ludhiana, Punjab.

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Advocates:

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Argued by Sh. Hemant Nanda, Advocate for the Applicant (through VC) Defendants are ex-parte

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FINAL ORDER

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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.22,19,759.67p (Rupees Twenty Two Lacs Nineteen Thousand Seven Hundred Fifty Nine and Sixty Seven Paise Only). The Original Application has been filed through Sh. Jatinder Vir Kohli, Manager o f the applicant bank, who is competent to institute the Original Application vide Authority Letter dated 26.07.2022, which is

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Annexure A1 to this OA.

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The brief facts of the OA are that the defendant No.1 through its partner i.e. defendant no.2 had approached the applicant bank for grant of MSEs CC Limit of Rs.4.00 Lacs vide Loan Application dated 23.03.2018, which is Annexure A2 to this OA and further approached the applicant bank for its enhancement to Rs.10.00 Lacs and a fresh

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Term Loan of Rs.27.50 Lacs vide Loan Application dated 29.09.2019, which is Annexure A9 to this OA. Thereafter the defendant No.1 through its partner i.e. defendant no.2 had approached the applicant bank enhancement of CC limit to Rs.15.00 Lacs vide Loan application dated 24.12.2020, which is Annexure A16 to this OA. Later Defedant No.1 again approached the Applicant Bank for grant of Fresh GECL Term Loan of Rs.6.00 Lacs vide Loan Application dated 01.11.2021

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The applicant Bank sanctioned the OCC limit (Covered under CGTMSE) of Rs.4.00 Lacs vide sanction letter dated 22.03.2018, which is Annexure A5 to this OA and further enhanced CC Limit (Covered under CGTMSE) to Rs.10.00 Lacs and sanctioned a fresh Term Loan of Rs.27.50 Lacs vide sanction letter dated 30.09.2019, which is Annexure A12 to this OA. Thereafter Applicant Bank sanctioned the enhancement of CC Limit (Covered under CGTMSE) to Rs.15.00 Lacs vide Sanction Memorandum dated 24.12.2020, which is Annexure A19 to this OA. Later sanctioned the GECL Term Loan (Covered under CGTMSE) of Rs.6.00 Lacs vide Sanction Letter dated 01.11.2021 which is Annexure A26 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendants No.1 had hypothecated its movable properties i.e. all kinds of existing & future stocks, hypothecation of existing & future book debt s vide Cash Credit Agreement dated 23.08.2018 and Agreement of Hypothecation dated 01.11.2021, which are Annexures A6 and A27 to this OA

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Documents executed:- Request for Overdraft Facilities, letter of proprietorship, Letter of Undertaking and Pronote all dated 23.03.2018, which are Annexures A3, A4, A7 & A8 to this OA; Request for Overdraft Facilities, Letter of Proprietorship, Supplementary Agreement, Link Letter and Letter of Renewal all dated 30.09.2019, which are Annexures A10, A11, A13, A14 & A15 to this OA; Request for overdraft Facilities, Letter of Proprietorship,

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supplementary Agreement, Letter of Renewal, Link Letter, Pronote all dated 24.12.2020, which are Annexures A17, A18, A20, A21, A22, & A23 to this OA; Letter of Proprietorship dated 01.11.2021, which is Annexure A25 to this OA; Copies Demand Notices dated 02.06.2022, 20.06.2022 & 18.07.2022, which are Annexures A28, A29 & A30 to this OA and statements of accounts with certificate which are Annexures A31 & A32 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.22,19,759.67p, 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 but no one appeared on behalf of defendants and they were proceeded ex-parte on 19.07.2024. 7. In support of the OA, affidavit of Sh. Sh. Jatinder Vir Kohli, Manager, Canara Bank h as been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned counsel through video conferencing 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 A32 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 loan 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.22,19,759.67p (Rupees Twenty Two Lacs Nineteen Thousand Seven

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Hundred Fifty Nine and Sixty Seven Paise Only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the account.

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In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest @11.85 p.a. with half yearly rests from 29.07.2022 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 accounts 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.22,19,759.67p (Rupees Twenty Two Lacs Nineteen Thousand Seven Hundred Fifty Nine and Sixty Seven Paise Only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in 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.

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Parties to appear before Learned Recovery Officer of this Tribunal on 17.09.2024. 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 also uploaded on the official website of this Tribunal and record be consigned. Pronounced by me in the open Tribunal . Dated: 23.08.2024 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Canara Bank v. M/S Rk Shoes and Another

Case brief

What is this about?

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Canara Bank v. M/S Rk Shoes and Another

Case brief

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