Allowed

Canara Bank v. Sh. Naresh Kumar

DRT15 Jan 2024OA/1597/2022

Case brief

AI extract

What is this about?

DRT-2, Chandigarh allowed an Original Application filed by Canara Bank for recovery of outstanding dues from the legal heirs of a deceased borrower. The Tribunal modified the claimed interest rate and clarified that the heirs' liability is limited to the inherited estate.

What did the court decide?

Recovery of Rs. 20,98,180.43 plus simple interest at 5% per annum w.e.f. 12.08.2022; issuance of Recovery Certificate.

Canara Bank versus Sh. Naresh Kumar — Contract and Commercial Disputes | DRT (2024)

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

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ORIGINAL APPLICATION NO. 1597/2022

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DATE OF INSTITUTION: 12.08.2022

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DATE OF DECISION: 15^th DAY OF JANUARY, 2024

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Canara Bank , a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, with its Head Office at 112, J.C Road, Bangalore-560002 and one of its Branches at Pipli, Tehsil Thanesar, District Kurukshetra, through its Authorised Officer-cum-Power of Attorney holder, Sh. Krishna Lal Phulia

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…..Applicant

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Versus

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Sh. Naresh Kumar s/o late Sh. Kali Ram

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Smt. Phool Kali widow of late Sh. Kali Ram s/o Sh. Sadhu (original loanee Sh. Kali Ram since deceased now represented by his legal heirs defendant Nos. 1 and 2)

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Both residents of Village Rattandera, Tehsil Thanesar, District Kurukshetra, Haryana

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.....Defendants

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Argued by: Sh. Tilak Raj Kapoor proxy counsel for Sh. Nalin Gupta counsel for the applicant bank (through VC) Defendants ex parte vide order dated 27.03.2023

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FINAL ORDER

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Present Original Application was instituted by the applicant

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bank under Section 19(1) of the Recovery of Debts and

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OA/1597/2022 CANARA BANK VS NARESH KUMAR AND ANOTHER 2

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Bankruptcy Act, 1993 (hereinafter referred to as ‘the Act’ for brevity), a gainst the defendants for recovery of Rs.20,98,180.43/(Rupees Twenty Lakh Ninety Eight Thousand One Hundred Eighty and Forty Three Paisa Only) . It has been filed through Sh. Krishna Lal Phulia, Authorised Officer-cum-Power of Attorney holder of the applicant bank stated to be competent to institute the Original Application vide General Power of Attorney dated 27.06.2005, Annexure-A1 (copy).

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The brief facts of the case of the applicant as per Original Application are that Sh. Kali Ram had approached the applicant bank for grant of KCC facility of Rs. 15 lakh vide loan application-cumappraisal Form dated 02.12.2013 for KCC Scheme, Annexure-A2 (copy).

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The applicant bank sanctioned aforesaid facility to Sh. Kali Ram vide memorandum for sanction of KCC limit dated 02.12.20213, Annexure-A3 (copy), as per terms and conditions which were duly accepted by Sh. Kali Ram. 4. In order to secure the aforementioned credit facility, Sh. Kali Ram executed hypothecation agreement dated 02.12.2013, Annexure-A4 (copy). PAN card of Sh. Kali Ram, is Annexure-A10 (copy).

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The aforesaid loan was further secured by creation of mortgage by Sh. Kali Ram in respect of all part and parcel of agricultural land measuring 34 Kanal 12 Marla situated in the revenue estate of Ratandera, Tehsil Thanesar, District Kurukshetra, Haryana, fully detailed in para No. 5.4 of the Original Application.

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OA/1597/2022 CANARA BANK VS NARESH KUMAR AND ANOTHER 3

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The documents relating to the mortgage are as under:

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i. Registered mortgage deed dated 27.11.2013, Annexure-A5 (copy).

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ii. Request letter dated 27.11.2013 to the Tehsildar, Thanesar, for entry/mutation of mortgaged property, Annexure-A6 (copy).

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It is further the case of the applicant bank that the loan facility was duly availed of by Sh. Kali Ram but he failed to maintain the financial discipline of the applicant bank leading to the loan account becoming irregular and it was classified as NPA on 31.03.2022. Sh. Kali Ram and defendant No.1 executed acknowledgement of debt and security letters dated 02.12.2015, 20.05.2018 and 16.09.2021, Annexures-A7, A8 and A9 (copy).

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It is further the case of the applicant bank that after adjusting debit and credit entries in the loan accounts, a sum of Rs.20,98,180.43/(Rupees Twenty Lakh Ninety Eight Thousand One Hundred Eighty and Forty Three Paisa Only), is recoverable against Sh. Kali Ram as per interest chart dated 04.08.2022, Annexure-A12 (copy) and statement of account, Annexure-A11 (copy) duly certified under Bankers’ Books Evidence Act, 1891, Annexure-A13 (copy).

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Since Sh. Kali Ram (deceased borrower) 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

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the defendants, but since none appeared on behalf of the

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OA/1597/2022 CANARA BANK VS NARESH KUMAR AND ANOTHER 4

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defendants, thus, the defendants were proceeded against ex parte vide order dated 27.03.2023 .

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In support of contents of the OA, affidavit of evidence of Sh. Krishna Lal Phulia, Power of Attorney holder of the applicant bank was filed.

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

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It was argued by the learned proxy counsel for the applicant bank 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 A13 , it is clear that Sh. Kali Ram (deceased borrower) had approached the applicant bank for availing of the loan facility which was granted to him. It is further clear that Sh. Kali Ram (deceased borrower) had executed all the relevant documents as stated above in favour of the applicant bank. Unfortunately, Sh. Kali Ram (deceased borrower) failed to pay back the loan as per terms and conditions of the agreement executed between the parties. Sh. Kali Ram had died, leaving behind defendant Nos. 1 and 2 as his legal heirs who have been impleaded as defendants. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.20,98,180.43/(Rupees Twenty Lakh Ninety Eight Thousand One Hundred Eighty and Forty Three Paisa Only) from the defendants.

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OA/1597/2022 CANARA BANK VS NARESH KUMAR AND ANOTHER 5

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In so far as pendente lite and future interest is concerned, the applicant bank in relief clause, has claimed rate of interest @10.60% per annum plus penal interest @2% per annum. In acknowledgement of debt and security letter dated 20.05.2018, Annexure-A8 (copy), the rate of interest has been mentioned @10.70% per annum.

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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 mortgaged property, purpose of loan, i.e. agricultural , present condition of economy based on agriculture, quantum of loan, prevalent market rates of interest which have gone drastically downhill in yesteryears, death of the borrower and defendant No. 2 being a female, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @5% per annum from the date of filing of the OA till realisation of the amount ordered vide this order. It is ordered accordingly.

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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.20,98,180.43/- (Rupees Twenty Lakh Ninety Eight Thousand One Hundred Eighty and Forty Three Paisa Only) with current and future simple interest @5% per annum w.e.f. 12.08.2022 , till the date of realisation of the amount. The liability of the defendants shall be joint as well as several. Accordingly, the

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OA/1597/2022 CANARA BANK VS NARESH KUMAR AND ANOTHER 6

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applicant bank shall be 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. The applicant bank is at liberty to enforce the claim through due process of law. However, it is clarified here that there should not be any ambiguity that the liability of the defendants by virtue of their being the legal heirs of the deceased borrower shall remain confined only to the extent of the estate of the deceased borrower if it is inherited by legal heirs and not beyond that. The recovery proceedings shall proceed only after the Recovery Officer is fully satisfied on the aspect of the estate being inherited by the Legal Representatives/Heirs and the liability being incurred accordingly .

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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 01.03.2024.

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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

Canara Bank v. Sh. Naresh Kumar

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sh. Naresh Kumar

Case brief

What is this about?

What did the court decide?

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