Allowed

Punjab National Bank v. Messrs Shiv International and Others

DRT25 Sept 2024OA/1648/2022

Case brief

AI extract

What is this about?

DRT allowed PNB’s application for recovery of Rs. 1.04 Crore against Shiv International for breach of loan agreements, fixing uniform interest at 8% p.a. instead of claimed rates.

What did the court decide?

Recovery of Rs. 1,04,46,788.00 joint and several with 8% p.a. interest and recovery certificate issued.

What the court decided

Punjab National Bank versus Messrs Shiv… — Contract and Commercial Disputes | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1648/2022 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 19.05.2022

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DATE OF DECISION: 25.09.2024

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Punjab National Bank, a body corporate constituted under the banking companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Corporate Office at Plot No. 4, sector 10, Dwarka, New Delhi 110075 one of its branch at Feroze Gandhi Market, Ludhiana, Tehsil and District Ludhiana (Punjab) through its General Power of Attorney holder Sh. Naveen Behl, Senior Manager.

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……..Applicant

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Versus

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M/s Shiv International through its Proprietor Sh. Mohinder Kumar @ Sh. Mohinder Kapoor, 6966, Street No. 1, new Shakti Nagar, near Doda Motors, Ludhiana, (Punjab)

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Sh. Mohinder Kumar @ Sh. Mohinder Kapoor S/o Sh. Sham Lal, proprietor M/s Shiv International, 6966, Street No. 1, new Shakti Nagar, near Doda Motors, Ludhiana, (Punjab)

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2^nd Address: H. No. 78, Model Gram, Shakti Nagar, Ludhiana (Punjab).

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Smt. Sunita Kapoor W/o Sh. Mohinder Kumar @ Sh. Mohinder Kapoor, R/o H.No. 78, Model Gram, Shakti Nagar, Ludhiana, Punjab.

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………Defendants

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Advocates:

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Argued by Sh. Aseem Kataria, Advocate for the applicant Defendants are ex-parte

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FINAL ORDER

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Present Original Application was instituted by the applicant under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of

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Rs.1,04,46,788.00 (Rupees One Crore Four Lacs Forty Six Thousand Seven Hundred and Eighty Eight only). The Original Application has been filed through Sh. Naveen Behl, Senior Manager of the applicant who is competent to institute the Original Application vide General Power of Attorney dated 01.01.2007, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant No.1 through its proprietor i.e. defendant no.2 had approached the applicant for the grant of Cash Credit Limit of Rs.25.00 Lacs and for its enhancement to Rs.50.00 Lacs and grant of fresh Term Loan of Rs.40.00 Lacs vide Loan Application dated 02.06.2017 and 25.08.2017, which are Annexures A2 and A10 to this OA. Thereafter for grant of Term Loan-III (WCTL) of Rs.14.00 Lacs vide Loan Application dated 31.05.2020, which is Annexure A18 to this OA

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The applicant sanctioned the Cash Credit Limit of Rs.25.00 Lacs vide Sanction Letter dated 14.06.2017, which is Annexure A3 to this OA and for its enhancement to Rs.50.00 Lacs and grant of fresh Term Loan-I of Rs.22.00 Lacs Term Loan-II of Rs.18.00 Lacs vide Sanction Letters, which is Annexure A11 to this OA. Thereafter applicant sanctioned Term Loan-III (WCTL) of Rs.14.00 Lacs vide Sanction Letters 25.06.2020, which is Annexure A19 to this OA and the terms and conditions were duly accepted by the defendants. 4. Defendant nos.2 and 3 had mortgaged thier immovable properties i.e.

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a) land measuring 100 Muraba yards situated at Village Taraf Sadia, Hadbast No. 172, Tehsil and District Ludhiana, New Shakti Nagar, Punjab vide Sale Deed bearing vasika no.5777 dated 08.06.2012 b) L and measuring 300 Square Yards situated at Village Taraf Sadia, Hadbast No. 172, New Shakti Nagar, Tehsil and District Ludhiana Punjab vide Equitable Mortgage of Sale Deed bearing vasika no.1527 dated 24.04.1992 Jamabandi of the year 2007-2008 along

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with their English Translation , which are Annexures A6, A6T, A7, A7T & A17A to this OA.

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Documents executed:- Hypothecation Agreement, Guarantee agreement both dated 14.06.2017, which are Annexures A4 & A5 to this OA; Letter of Evidencing dated 30.06.2017, which are Annexures A8 & A9 to this OA; Hypothecation agreement, Term, Loan Agreement, Hypothecation Assets, Guarantee Agreement, Letter of A12 to A17 to this OA; BCL dated 27.09.2019, which is Annexure A19A to this OA; Notice u/s 13(2) dated 29.04.2021 with Postal Receipts, which is Annexure A20 to this OA and Statements of accounts, which are Annexures A21 to A24 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 both the loan accounts there was a debit of Rs.1,04,46,788.00, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant 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 06.09.2024.

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In support of the OA, affidavit of Sh. Naveen Behl, Senior Manager, Punjab National Bank has been filed. 8. Heard arguments and perused record. 9. It was argued by learned counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant had proved its case. From the perusal of all the Annexures A1 to A24 to this OA, it is proved that the defendants approached applicant 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 applicant. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, both the accounts of the defendants were

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classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.1,04,46,788.00 (Rupees One Crore Four Lacs Forty Six Thousand Seven Hundred and Eighty Eight only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of both the accounts.

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In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @11.25%p.a. in Cash Credit Limit and @9.40%p.a. in Term Loan plus penal interest @2%p.a. with monthly rests in both, from 14.10.2022 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.

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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.1,04,46,788.00 (Rupees One Crore Four Lacs Forty Six Thousand Seven Hundred and Eighty Eight 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 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 applicant still remain unsatisfied, it shall be entitled to recover the same by attachment and

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sale of personal assets of the defendants. The applicant is at liberty to enforce the claim through due process of law.

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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 17.10.2024.

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Copy of this order be given dasti to the applicant 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.

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Pronounced by me in the open Tribunal .

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Dated: 25.09.2024

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(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Punjab National Bank v. Messrs Shiv International and Others

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Punjab National Bank v. Messrs Shiv International and Others

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