Allowed

Union Bank of India v. M/S Garv Impex

DRT9 Jan 2024OA/1802/2022

Case brief

AI extract

What is this about?

The Tribunal disposed of an original application filed by Union Bank of India against M/s Garv Impex and another for recovery of a loan amount of Rs. 35,91,986/- together with interest. The application was heard ex parte. The Tribunal allowed the application by issuing a Recovery Certificate and directed the defendants to pay the principal along with 7% simple interest.

What did the court decide?

Issuance of Recovery Certificate directing defendants to pay Rs. 35,91,986/- with 7% simple interest from 28.09.2022 until realization.

Union Bank of India versus M/S Garv Impex — 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. 1802/2022

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DATE OF INSTITUTION: 28.09.2022

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DATE OF DECISION: 09^th DAY OF JANUARY, 2024

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Union Bank of India , having its head office at 239, Vidhan Bhawan Marg, Nariaman Point, Mumbai and Branch at Union Bank of India, Telephone Exchange Branch, Jagadhari Road, Near Telephone Exchange, Yamunanagar, Haryana, through its Attorney holder, Sh. Vishnu Dayal Singh, Chief Manager at Union Bank of India, Regional Office, S.C.O 64-65, Bank Square, Sector -17B, Chandigarh-160017

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…..Applicant

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Versus

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M/s Garv Impex, through its Proprietor, Smt. Deepika Sethi w/o Sh. Rajiv Kumar Sethi at Shakti Nagar, Chhachhrauli Road, Jagadhari, Yamunanagar, Haryana-135001

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Smt. Deepika Sethi w/o Sh. Rajiv Kumar Sethi Proprietor of M/s Garv Impex r/o House No. 1411, Sargodha Colony, Near Gita Bhawan Mandir, Jagadhari, Yamunanagar, Haryana-135001

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....Defendants

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Argued by: Sh. Ravinder Kumar counsel for the applicant bank Defendants ex parte vide order dated 18.08.2023

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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 Bankruptcy Act, 1993 (hereinafter referred to as ‘the Act’ for brevity), against the defendants for recovery of Rs.35,91,986/-

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(Rupees Thirty Five Lakh Ninety One Thousand Nine Hundred

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OA/1802/2022 UNION BANK OF INDIA VS M/S GARV IMPEX AND ANOTHER 2

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Eighty Six Only) . It has been filed through Sh. Vishnu Dayal Singh, Chief Manager of the applicant bank stated to be competent to institute the Original Application vide Power of Attorney dated 30.01.2003, Annexure-A1 (copy).

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The brief facts of the case of the applicant as per Original Application are that defendant No. 1 through 2, had approached the applicant bank for grant of Cash Credit Facility of Rs. 30 lakh and Term Loan Facility of Rs. 5 lakh vide loan application dated 12.06.2020, Annexure-A2 (copy).

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The applicant bank sanctioned aforesaid credit facilities to the defendants vide sanction letter dated 20.06.2020, Annexure-A3 (copy), as per terms and conditions which were duly accepted by the defendants.

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In order to secure the aforementioned credit facilities, the defendants executed various loan and security documents, i.e. demand promissory note dated 20.06.2020, Annexure-A4 (copy), composite hypothecation deed dated 20.06.2020, Annexure-A5 (copy), letter dated 20.06.2020 of general lien, Annexure-A6 (copy), letter dated 20.06.2020 of continuity of demand promissory note, Annexure-A7 (copy), letter dated 20.06.2020 of undertaking not to alienate hypothecated goods, Annexure-A8 (copy), letter dated 20.06.2020 of consent regarding disclosure of information to CIBIL, Annexure-A9 (copy), general term loan agreement dated 20.06.2020, Annexure-A10 (copy) and revised legal audit report dated 07.07.2021, Annexure-A11 (copy).

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OA/1802/2022 UNION BANK OF INDIA VS M/S GARV IMPEX AND ANOTHER 3

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It is further the case of the applicant bank that the loan facilities were duly availed of by the defendants but they failed to maintain the financial discipline of the applicant bank leading to the loan accounts becoming irregular and those being classified as NPA on 28.05.2022.

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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.35,91,986/(Rupees Thirty Five Lakh Ninety One Thousand Nine Hundred Eighty Six Only) , is recoverable against the defendants as per memoranda record accounts and statements of accounts, duly certified under Bankers’ Books Evidence Act, 1891,

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Annexure-A12 (colly) (copy).

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Since the defendants 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 the defendants, but since none appeared on behalf of the defendants, thus, the defendants were proceeded against ex parte vide order dated

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18.08.2023 .

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In support of contents of the OA, affidavit of evidence of Sh. Vishnu Dayal Singh, Constituted Power of Attorney holder and Chief Manager of the applicant bank was filed. 8. This Tribunal has heard ex-parte arguments advanced by the learned counsel and gone through the record carefully.

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It was argued by the learned counsel that in view of unrebutted documentary evidence brought on record, the applicant bank had proved its case against the defendants for recovery of the

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OA/1802/2022 UNION BANK OF INDIA VS M/S GARV IMPEX AND ANOTHER 4

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amount sought. From perusal of Annexures-A1 to A12 , it is clear that the defendants had approached the applicant bank for availing of the loan facilities which were granted to them. It is further clear that the defendants had executed all the relevant documents as stated above in favour of the applicant bank. Unfortunately, the defendants failed to pay back the loan as per terms and conditions of the agreement executed between the parties. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.35,91,986/- (Rupees

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Thirty Five Lakh Ninety One Thousand Nine Hundred Eighty Six Only) from the defendants.

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In so far as pendente lite and future interest is concerned, the applicant bank in relief clause, has not claimed any particular rate of interest. In demand promissory note dated 20.06.2020, Annexure-A4 (copy), the rate of interest has been mentioned @8.80% per annum in both facilities.

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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, purpose of loan, i.e. business , quantum of loan, prevalent market rates of interest which have gone drastically downhill in yesteryears 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 @7% per annum from the date of filing of the OA till

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OA/1802/2022 UNION BANK OF INDIA VS M/S GARV IMPEX AND ANOTHER 5

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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.35,91,986/- (Rupees Thirty Five Lakh Ninety One Thousand Nine Hundred Eighty Six Only) with current and future simple interest @7% per annum w.e.f. 28.09.2022 , till the date of realisation of the amount. The liability of the defendants shall be joint as well as several. If the dues of the bank remain unsatisfied, the applicant bank shall be at liberty to recover the same by attachment and sale of hypothecated/personal assets of the defendants. However, the applicant bank is at liberty to enforce the claim through due process of law.

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Issue Recovery Certificate accordingly.

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Parties to appear before Recovery Officer concerned on 29.02.2024.

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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)

Union Bank of India v. M/S Garv Impex

Case brief

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Union Bank of India v. M/S Garv Impex

Case brief

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