Allowed

Uco Bank v. Messrs Juneja Hardware and Scrap Store and Others

DRT18 Sept 2024OA/1728/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an original application under Section 19 RDBFI Act, 1993. The bank sought recovery of Rs. 73 lakhs from property owners who defaulted on loan facilities including cash credit and term loans. Defendants appeared late and defense was struck off. Tribunal granted recovery with reduced interest rates.

What did the court decide?

Recovery of principal sum of Rs.73,19,287.97 along with future simple interest at 8% p.a.; issuance of Recovery Certificate.

Uco Bank versus Messrs Juneja Hardware and Scrap Store and… — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1728/2022 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 17.09.2022

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DATE OF DECISION: 18.09.2024

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UCO Bank, a body corporate, constituted under the Banking Companies Acquisition and Transfer of Undertaking Act 1970, having its head office at 10, Brabourn Road, Kolkata and its branches throughout India and amongst other branches having a branch office at Civil Lines, Bharat Nagar Chowk, Ludhiana, through its Constituted Attorney Sh. Pushpendra Kumar, Branch Manager, UCO Bank, Civil Lines branch, Bharat Nagar Chowk, Ludhiana who is also the Principal Officer of the Plaintiff/Applicant.

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……..Applicant

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Versus

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M/s Juneja Hardware and Scrap Store through its Sole Proprietor Sh. Simranjit Singh S/o Sh. Satpal Singh, B-12-2023, Kalsian Street, Gill Road, Ludhiana, Punjab.

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2^nd address: 536-35D-8A-9B , Jaspal Bangar Road, Opposite Jaspal Kanda, Dhandari Kalan, Ludhiana

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Sh. Simranjit Singh S/o Sh. Satpal Singh sole Proprietor M/s Juneja Hardware and Scrape Store, B-12-2023, Kalsian Street, Gill Road, Ludhiana, Punjab.

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2^nd address: 536-35D-8A-9B , Jaspal Bangar Road, Opposite Jaspal Kanda, Dhandari Kalan, Ludhiana

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Sh. Satpal Singh S/o Sh. Partap Singh, R/o House No. 37-R, Model Town, Ludhiana, Punjab.

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………Defendants

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Advocates:

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Argued by Sh. Varun Verma, 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.73,19,287.97p (Rupees Seventy Three Lacs Nineteen Thousand Two Hundred Eighty Seven and Paisa Ninety Seven only). The Original Application has been filed through Sh. Pushpendra Kumar, Branch Manager o f the applicant, who is competent to institute the Original Application vide Bank Circular dated 20.07.2012, 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.5.00 Lacs and further approached time to time for its enhancement upto Rs.55.00 Lacs vide Loan Applications dated 07.10.2020, 24.08.2021 which are Annexures A52 & A58-A to this OA. Thereafter for the grant of different Credit Facilities such as Term Loan I (UCECL) of Rs.3.50 Lacs, Term Loan-II of Rs. 6.60 Lacs (GECL) and Term Loan-III of Rs. 5.95 Lacs vide Loan Application dated 02.12.2021, which is Annexure A67 to this OA 3. The applicant sanctioned the Cash Credit Limit of Rs.5.00 Lacs and Sanctioned from time to time its several enhancements upto Rs. 55.00 Lacs vide Sanction Letter dated 14.06.2017, 09.10.2020 and 24.08.2021, which are Annexure A35, A53 and A59 to this OA The applicant later sanctioned a Term Loan I (UCECL) of Rs.3.50 Lacs, Term Loan-II of Rs. 6.60 Lacs (GECL) and Term Loan-III of Rs. 5.95 Lacs vide Sanction Letters dated 02.12.2021, which is Annexure A68 to this OA and the terms and conditions were duly accepted by the defendants. 4. Defendant no.3 had mortgaged his immovable properties i.e. Shop No. B-12-2032 situated at Taraf Perubanda, Abadi now known as Kalsian Street Gill Road, Tehsil and District Ludhiana, Punjab vide Sale Deed bearing vasika no. 26140 dated 15.01.1990 with its translation, which is Annexure A7 to this OA.

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Documents executed:- Demand Promissory Note, Letter of Waiver, Letter of Continuity, Hypothecation of goods to secure demand cash credit, letter of Continuing Guarantee all dated 02.02.2006, which are Annexures A2 to A6 to this OA; Letter of deposit of title deed to be obtained from the mortgagor dated 03.02.2006, which is Annexure A8 to this OA; Demand Promissory Note, Letter of Waiver, Letter of Continuity, Hypothecation of goods to secure demand cash credit, letter of Continuing Guarantee, Letter of deposit of title deed to be obtained from the mortgagor for covering increase in limit all dated 11.10.2007, which are Annexures A9 to A14 to this OA; Demand Promissory Note, Letter of Waiver, Letter of Continuity, Hypothecation of goods to secure demand cash credit, letter of Continuing Guarantee, Letter of deposit of title deed to be obtained from the mortgagor for covering increase in limit all dated 21.03.2009, which are Annexures A15 to A20 to this OA; Letter of Acknowledgement dated 28.03.2011, which is Annexure A21 to this OA; Form No. S-14 dated 10.06.2014, which is Annexure A22 to this OA; Demand Promissory Note, Letter of Waiver, Letter of Continuity, Hypothecation of goods to secure demand cash credit, letter of Continuing Guarantee, Letter of deposit of title deed to be obtained from the mortgagor for covering increase in limit all dated 31.12.2015, which are Annexures A23 to A28 to this OA; Form No. A-14 dated 15.10.2016, which is Annexure A29 to this OA; Demand Promissory Note, Letter of Waiver, Letter of Continuity, Hypothecation of goods to secure demand cash credit, Letter of deposit of title deed to be obtained from the mortgagor for covering increase in limit all dated 15.10.2016, which are Annexures A30 to A34 to this OA; Form No. A-14 dated 14.06.2017, which is Annexure A36 to this OA; Demand Promissory Note, Letter of Waiver, Letter of Continuity, Hypothecation of goods to secure demand cash credit, Hypothecation and Book debts to secure Demand Cash Credit, letter of Continuing Guarantee, Letter of deposit of title deed to be obtained from the mortgagor for covering increase in limit all dated 14.06.2017, which are Annexures A37 to A43 to this OA;

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Letter of Acknowledgement of debt dated 29.01.2019, which is Annexure A44 to this OA; Demand Promissory Note, Letter of Waiver, Agreement relating to Term Loan, letter of Continuing Guarantee all dated 06.05.2020, which are Annexures A45 to A48 to this OA; Demand Promissory Note, Letter of Waiver, letter of Continuing Guarantee all dated 04.06.2020, which are Annexures A49 to A51 to this OA; Demand Promissory Note, Letter of Waiver, Letter of Continuity, Hypothecation of goods to secure demand cash credit, letter of Continuing Guarantee all dated 09.10.2020, which are Annexures A54 to A58 to this OA; Form No.12 , Demand Promissory Note, Letter of Waiver, Letter of Continuity, Composite Deed of Hypothecation, letter of Continuing Guarantee, Letter of deposit of title deed to be obtained from the mortgagor for covering increase in limit all dated 24.08.2021, which are Annexures A60 to A66 to this OA; Undertaking Letter from the borrower, Demand Promissory Note, Letter of Waiver, Letter of Continuity, Agreement relating to Term Loan, Composite Deed of Hypothecation, letter of Continuing Guarantee, Letter of deposit of title deed to be obtained from the mortgagor for covering increase in limit all dated 02.12.2021, which are Annexures A69 to A75 to this OA; Notice u/s 13(2) of SARFAESI Act dated 22.03.2022, which are Annexures A76 to A77 to this OA; Notice u/s 13(4) of SARFAESI Act, which is Annexure A78 to this OA and Certified Statements of Accounts, which are Annexures A79 to A82 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.73,19,287.97p, 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.

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The defendants were served notices to appear before this Tribunal. Defendants appeared through their counsel Sh. Tajinder Singh advocate proxy for Sh. Aman Sharma and filed Power of

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Attorney on 09.10.2023 but did not filed WS within stipulated period. Therefore, opportunity to file WS was closed and defense was struck off. Since no one appeared on behalf of defendants, they were proceeded ex-parte on 14.08.2024. 7. In support of the OA, affidavit of Sh. Pushpendra Kumar, Branch Manager, UCO 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 A82 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 classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.73,19,287.97p (Rupees Seventy Three Lacs Nineteen Thousand Two Hundred Eighty Seven and Paisa Ninety Seven 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. 10. In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @11.85%p.a. plus penal interest @2%p.a. with monthly rests from 01.09.2022 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

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exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @8.00%p.a. in both 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.73,19,287.97p (Rupees Seventy Three Lacs Nineteen Thousand Two Hundred Eighty Seven and Paisa Ninety Seven only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in both 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 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. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 10.10.2024. 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. Pronounced by me in the open Tribunal . Dated: 18.09.2024 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Uco Bank v. Messrs Juneja Hardware and Scrap Store and Others

Case brief

What is this about?

What did the court decide?

Uco Bank v. Messrs Juneja Hardware and Scrap Store and Others

Case brief

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What did the court decide?

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