Allowed

Canara Bank v. M/S Piyush Poly Print Prop Smt. Pushpawati Harichand Nahar (Deceased)

DRT23 Apr 2024OA/154/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's application for recovery of outstanding dues including term loans, OD facilities, and COVID support loans along with future interest. The court adjudicated the principal amounts and modified the claimed future interest rates to reasonable levels, directing recovery from the defendant and his legal heir. The order also declared the hypothecate

What did the court decide?

Adjudication of principal amounts with future interest @7.50% to 9.00% p.a.; declaration of hypothecated assets as security; direction to sell hypothecated properties; issuance of Recovery Certificate

Canara Bank versus M/S Piyush Poly Print Prop Smt. Pushpawati… — Company and Corporate | DRT (2024)

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Presented on: 27.12.2021 Registered on: 09.03.2022 Decided on: 23.04.2024 Duration: Y M D 2 3 27

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IN THE DEBTS RECOVERY TRIBUNAL AT PUNE (Before Shri Dilip G Murumkar, Presiding Officer) ORIGINAL APPLICATION No.154/2022

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Canara Bank (Erstwhile Syndicate Bank)

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A Government of India Undertaking constituted under the Banking Companies (Acquisition & Transfer of Undertaking) Act, 1970 having its Head Office at Bangalore, Karnataka State & having their Circle Office at Shivajinagar, Pune & its Branch Office amongst other places known as Rasta Peth Branch, 588 Rasta Peth, Near Tarachand Hospital, Pune-411 011.

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… Applicant

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Versus

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M/s. Piyush Poly Print, Proprietress: Smt. Pushpawati Harichand Nahar, (Since deceased through her Legal Heir) 1 A) Mr. Jitendra Harichand Nahar, Age: Adult, Occ: Business, Add: 247/4, Vaishnavi Apartment, Shop No.1, Rasta Peth, Pune-411 011.

… Defendant

(OA No.154/2022)

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APPEARANCES

For the Applicant For Defendant	Mr. Satyen Jagtap - Advocate Exparte
	TOTAL CLAIM AMOUNT–Rs.29,66,969.78Ps.

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JUDGMENT

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(Delivered on 23^rd April, 2024)

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The Applicant Bank has filed the present Application for

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recovery of Rs.29,66,969.78Ps. i.e. Rs.1,17,187.42Ps. in respect of Term Loan-I account together with future interest @9.05% p.a. with monthly rests; Rs.25,84,670.93Ps.in respect of OD MSME Loan account together with future interest @8.90% p.a. with monthly rests; Rs.1,97,957.56Ps. together with future interest @7.65% p.a. with monthly rests and Rs.67,153.87Ps. together with future interest @7.50% p.a. with monthly rests thereon from 08^th December, 2021 till repayment/realization of entire dues, along with penal interest @2% p.a., from defendant No.1A.

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Brief facts of the application are as under:

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The defendant No.1 is the Proprietary Firm & deceased Smt. Pushpawati Harichand Nahar was its Proprietress, now represented through her Legal Heir i.e. Mr. Jitendra Harichand Nahar, defendant No.1A.

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The applicant Bank contended that deceased defendant No.1 had approached the Erstwhile applicant Bank i.e. Syndicate Bank on 04^th August, 2015 seeking financial facility for purchase of machinery and working capital.

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The applicant Bank further contended that on 10^th May, 2015 the Erstwhile applicant Bank sanctioned and disbursed Term Loan-I facility of Rs.5,00,000/- under CGTMSE for purchase of new machinery i.e. Single colour Sheet Fed Offset Printing Machine, with interest @10.25% p.a. with monthly rests, to be repaid in 84 monthly EMI of Rs.8,370/-.

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The deceased defendant had signed and executed loan transaction and security documents as set out in paragraph No.5.2 of the Original Application.

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In order to secure the Term Loan-I facility, deceased defendant had hypothecated Offset Printing Machine manufactured by Muskan Graphics Make 12/08/2015 in favour of the erstwhile applicant Bank.

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The applicant Bank further contended that on 01^st December, 2019 deceased defendant had approached the erstwhile applicant Bank for working capital of

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Rs.24,90,000/- which was sanctioned and disbursed by the erstwhile applicant Bank on 21^st December, 2019 under CGTMSE, as OD MSME Facility, with interest @11.15% p.a. with monthly rests.

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The deceased defendant had signed and executed necessary loan transaction and security documents as mentioned in paragraph No.5.6 of the Original Application, including Composite Hypothecation Agreement dated 21^st December, 2019 thereby hypothecated Machineries, stock and material lying at 247/4, Vaishnavi Apartment, Shop No.1, Rasta Peth, Pune-411 011.

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The applicant Bank further contended that during Covid 19 pandemic, deceased defendant No.1 was in financial crunch and approached the applicant Bank on 30^th May, 2020 for Term Loan-II facility of Rs.2,49,000/- which was sanctioned and disbursed by the applicant Bank on 12^th June, 2020 under Canara Credit Support to Covid-19 Affected Scheme. The said Term Loan-II facility was to carry interest @7.50% p.a. with monthly rests.

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Further, deceased defendant No.1 requested for Working Capital Demand Loan of Rs.78,000/- which was

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sanctioned by the applicant Bank on 10^th July, 2020 under Guaranteed Emergency Credit Line (GECL) to Covid-19 affected customers Scheme to provide additional liquidity to meet operational liabilities and restart the business after unprecedented situation emerging out of Covid-19.

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The aforesaid Working Capital Demand Loan (Covid Support Loan) of Rs.78,000/- was to carry interest @7.50% p.a. with monthly rests repayable in 36 months after 12 months’ moratorium.

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The applicant Bank further contended that as a security for grant of the said Working Capital Demand Loan of Rs.78,000/-, the deceased defendant had extended the hypothecation charge on Offset Printing Machine.

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The applicant Bank further contended that after availing aforesaid loan facilities, the deceased defendant had made partial repayment, however, failed and neglected to pay the installments in Term Loan account with interest. The OD MSME and Demand Loan facilities were also running irregular. Therefore, the account of deceased defendant became Non-Performing Asset on 30^th August, 2021.

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The applicant Bank repeatedly called upon the

(OA No.154/2022)

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defendant to regularize the account, but he failed and neglected to comply with the same.

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Thereafter, the applicant Bank through its Advocate issued Legal Notice dated 09^th December, 2021 to defendant. Despite issuance of Legal Notice, defendant failed to pay the outstanding.

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Hence, this application is filed.

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Defendant failed to appear despite service of Summons. Hence, the application proceeded ex parte against him vide Order dated 14^th February, 2024 passed below the application (Exhibit-1).

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The applicant Bank has filed Claim Affidavit of evidence (Exhibit-6) of Mrs. Madhumathi Sudhir Patil, Branch Manager and Power of Attorney Holder, which supports the case of the applicant Bank elucidated in the application.

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The applicant Bank has produced on record the original loan transaction documents (Sr.Nos.AW-1 to AW-25) which corroborate the case of the applicant Bank.

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I have heard arguments of the learned Advocate for the

(OA No.154/2022)

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applicant Bank.

Since the defendant failed to appear and contest the application, I find no reason to disbelieve evidence of the applicant Bank. Therefore, the applicant Bank is entitled for reliefs as claimed.

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The applicant Bank has claimed future interest @9.05% p.a. with monthly rests in respect of Term Loan-I account. However, considering the facts of the case, I am of the opinion that if future interest is granted @9% p.a. (simple) for Term Loan account, it would be just and reasonable rate of interest.

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Hence, I pass the following order:-

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ORDER

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(A) Original Application No.154/2022 is allowed with costs.

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(B) Defendant No.1A shall pay to the applicant Bank towards Term Loan-I account the sum of Rs.1,17,187/(Rupees One Lakh Seventeen Thousand One Hundred and Eighty-Seven only)

(OA No.154/2022)

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with future interest @9% p.a. from the date of filing of the Original Application i.e. 27^th December, 2021 till full realization of the amount mentioned in this operative order.

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(C) Defendant No.1A shall pay to the applicant Bank towards OD MSME loan account the sum of Rs.25,84,671/- (Rupees Twenty-Five Lakhs EightyFour Thousand Six Hundred and Seventy-One only) with future interest @8.90% p.a. from the date of filing of the Original Application i.e. 27^th December, 2021 till full realization of the amount mentioned in this operative order.

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(D) Defendant No.1A shall pay to the applicant Bank towards Term Loan-II account the sum of Rs.1,97,958/- (Rupees One Lakh Ninety-Seven Thousand Nine Hundred and Fifty-Eight only) with future interest @7.65% p.a. from the date of filing of the Original Application i.e. 27^th December, 2021 till full realization of the amount mentioned in this operative order.

(OA No.154/2022)

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(E) Defendant No.1A shall pay to the applicant Bank towards Working Capital Demand Loan (Covid Support Loan) account the sum of Rs.67,154/(Rupees Sixty-Seven Thousand One Hundred and Fifty-Four only) with future interest @7.50% p.a. from the date of filing of the Original Application i.e. 27^th December, 2021 till full realization of the amount mentioned in this operative order.

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(F) The aforesaid adjudicated amount is secured by the valid and subsisting hypothecation of Offset Printing Machine manufactured by Muskan Graphics make 12/08/2015 and stock and material lying at 247/4, Vaishnavi Apartment, Shop No.1, Rasta Peth, Pune-411 011, more particularly mentioned in paragraph Nos.5.3 and 5.7 respectively of the Original Application.

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(G) The applicant Bank is entitled to sell the hypothecated properties to recover its dues.

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(H) Issue Recovery Certificate.

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(I) The Registrar is directed to send the copy of

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Judgment and Recovery Certificate to the applicant Bank and defendant.

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Place : Pune Date : 23.04.2024

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Sd/- (Dilip G Murumkar) Presiding Officer Debts Recovery Tribunal, Pune

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(OA No.154/2022)

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Canara Bank v. M/S Piyush Poly Print Prop Smt. Pushpawati Harichand Nahar (Deceased)

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/S Piyush Poly Print Prop Smt. Pushpawati Harichand Nahar (Deceased)

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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Case details

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