Allowed

Bank of India v. M/S Hari Om Steel Traders and Others

DRT9 Oct 2024OA/172/2023

Case brief

AI extract

What is this about?

Bank of India filed an original application under Section 19 of the RDBFI Act, 1993 to recover dues of approximately Rs. 1.20 Crores from Hari Om Steel Traders and others. The Tribunal allowed the application, determining recovery of the sum with simple interest at 8% per annum.

What did the court decide?

Recovery of Rs. 1,19,55,781.01p with simple interest at 8% p.a. Recovery Certificate issued.

Bank of India versus M/S Hari Om Steel Traders and Others — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.172/2023

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 23.01.2023

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DATE OF DECISION: 09.10.2024

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Bank of India, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970, having its Head Office at Star House, C-5, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai-400051 and having its Zonal office at Surya Kiran Complex, 1^st Floor, Phase-II, The Mall, near Rakh Bagh, Civil Lines, Ludhiana and amongst various branches having its branch at Kochar Market, Modal Gram, Ludhiana, through its duly authorized officer of applicant bank Mr. Simar Preet Singh, Chief Manager Bank of India Model town Ludhiana.

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……..Applicant Versus

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M/s Hari Om Steel Traders, 31-A, Super Cycle Market, Abadi Chet Singh Nagar, opposite Kwality Dharam Kanda, Gill Road, Ludhiana, through its Proprietor.

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Sh. Sunil Kumar S/o Sh. Sobha Ram, proprietor M/s Hari Om Steel Traders, r/o H.no.188, Ranchi Colony, Threeke Road, Ludhiana.

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Smt. Asha Chadda W/o Sh. Sunil Kumar, R/o H.no.188, Ranchi Colony, Threeke Road, Ludhiana.

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………. Defendants

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Advocates:

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Argued by Sh. Satish Jaswal, Advocate proxy for Sh. Mouhit K. Goel, 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 Rs.1,19,55,781.01p (Rupees One Crore Nineteen Lacs Fifty Five Thousand Seven Hundred Eighty One and Paise One Only). The Original Application has been filed through Mr. Simar Preet Singh,

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Chief Manager o f the applicant, who is competent to institute the Original Application vide General Power of Attorney dated 04.02.2016, which is Annexure A6 to this OA.

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The brief facts of the OA are that the defendant no.1 through its proprietor defendant no.2 had approached the applicant for grant of CC Limit (stocks) of Rs.40.00 Lacs vide Loan Application dated 03.06.2016, which is Annexure A7 to this OA and Further for enhancement the CC Limit to Rs.90.00 Lacs vide Loan Application dated 16.01.2017, which is Annexure A20 to this OA. Late, defendant no.1 through its proprietor defendant no.2 & 3 had again approached the applicant bank for GECL of Rs.10.00 Lacs vide Loan Application for Assistance under Star GECL dated 04.08.2020, which is Annexure A40 to this OA.

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The applicant sanctioned CC Limit (stocks) of Rs.40.00 Lacs vide Sanction Letter dated 23.06.2016, which is Annexure A8 to this OA and Further applicant bank sanctioned the enhancement the CC Limit to Rs.90.00 Lacs vide Sanction Letter dated 08.02.2017, which is Annexure A21 to this OA. Later applicant sanctioned the GECL of Rs.10.00 Lacs and the terms and conditions were duly accepted by the defendants.

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Defendant nos.2 & 3 had mortgaged their immovable properties i.e.

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(i) total land measuring 23.33 sq. yards situated in Village Gali No.1 (Abadi Chet Singh Nagar), H.B. No.263, Tehsil & District Ludhiana (Punjab) vide equitable mortgage of sale deed bearing vasika no.8593 dated 17.10.2012 along with its translations, which is Annexure A46 to this OA.

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(ii) total land measuring 23.33 sq. yards situated in Village Gali No.2 (Abadi Chet Singh Nagar), H.B. No.263, Tehsil & District Ludhiana (Punjab) equitable mortgage of sale deed bearing vasika no.5374 dated 26.07.2012 along with its translations, which is Annexure A47 to this OA.

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(iii) total land measuring 100 sq. yards situated in Village Threekay, H.B. No.156, Tehsil & District Ludhiana Ranchi Colony, Ludhiana vide equitable mortgage of sale deed bearing vasika no.11070 dated 22.12.2016 along with jamanbandi for the year 2010-2011 and their translations, which are Annexures A48 and A49 to this OA. Documents executed:- Valuation Reports dated 20.02.2020, which are Annexures A1 & A2 to this OA; Legal Opinions dated 24.05.2016 & 07.01.2017, which are Annexures A3 to A5 to this OA; D.P. Notes, Declarations By Borrower, Deeds of Guarantee, Hypothecation of Tangible/Moveable Property, Letter, Declaration, Undertaking, Authority, MCLT Agreement & Charge and Hypothecation of Book Debts dated 27.06.2016, which are Annexures A9 to A19 to this OA; D.P. Notes, Declarations by Borrower, Deeds of Guarantee, Supplemental to the agreements of Hypothecation/Pledge, Declaration to be obtained from the borrower, Letter of declaration, Undertaking, Authority, Undertaking, Agreement cum Acknowledgements of Debts/Securities (Change of Interest consequent to switch over to MCLR), Acknowledgements of Debts/Securities all dated 08.02.2017, which are Annexures A22 to A35 to this OA; Acknowledgements of Debts/Securities dated 17.12.2019 & 06.08.2020, which are Annexures A36, A37 & A38, A39 to this OA; D.P. Note, Declaration By Borrower, Deed of Guarantee, Supplemental to the agreement of Hypothecation/Pledge, RBLR Agreement all dated 06.08.2020, which are Annexures A41 to A45 to this OA; Notices u/s 13 (2) SARFAESI Act dated 29.06.2022 & 20.09.2022, which are Annexures A50 to A53 to this OA; Photographs, which are Annexures A54 to A58 to this OA; Statement of Account along with Certificate under Banker’s Book Evidence Act, which are Annexures A59 to A61 to this OA. Memorandum of Interest, which is Annexure A62 to this OA; 5. 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.1,19,55,781.01p, which is recoverable and the

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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.

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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 25.09.2024.

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In support of the OA, affidavit of Mr. Simar Preet Singh Chief Manager, Bank of India, h as been filed.

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Heard 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 had proved its case. From the perusal of all the Annexures A1 to A62 to this OA, it is proved that the defendants approached applicant for availing of the loans facility which was 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 is entitled to recover a sum of Rs.1,19,55,781.01p (Rupees One Crore Nineteen Lacs Fifty Five Thousand Seven Hundred Eighty One and Paise One 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.

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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 @13.25%p.a. in CC Limit and @11.75%p.a. in Term Loan from 23.01.2023 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

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of the defendants, quantum of loans 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 @08.00%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. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.1,19,55,781.01p (Rupees One Crore Nineteen Lacs Fifty Five Thousand Seven Hundred Eighty One and Paise One Only) jointly and severally, with costs, current and future simple interest @08.00%p.a. in the loan accounts from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant 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 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.

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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 23.10.2024. 15. 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 . Dated: 09.10.2024

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

Bank of India v. M/S Hari Om Steel Traders and Others

Case brief

What is this about?

What did the court decide?

Bank of India v. M/S Hari Om Steel Traders and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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