The DRT allowed the bank's application for recovery of approximately Rs. 27.85 lakhs against borrowers and a guarantor who failed to repay a sanctioned credit facility, despite vague defences regarding blank documents.
Issuance of a recovery certificate for Rs. 27,85,879 plus simple interest at 8% per annum from the date of filing till realization.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
DEBTS RECOVERY TRIBUNAL-2, CHANDIGARH, PRESIDED OVER BY M.M. DHONCHAK
ORIGINAL APPLICATION NO.182/2022
DATE OF INSTITUTION: 28.12.2021
DATE OF DECISION: 19th DAY OF JANUARY, 2024
Union Bank of India, a body corporate, constituted under the Banking Companies, (Acquisition and Transfer of Undertakings) Act, 1970, having its Head Office at 239, Vidhan Sabha Marg, Nariman Point, Mumbai and its Branches amongst other places at Ambala Cantt., District Ambala (Haryana), through its Branch/Chief Manager, Sh. Kamal Aggarwal
……..Applicant
Versus
......Defendants
Argued by: Sh. Saurabh Bhardwaj, Advocate for the applicant bank Ms Arti Aman Arora, Advocate for defendant Nos.1 to 3
OA/182/2022 UNION BANK OF INDIA Vs M/S KANHIYA BEVERAGHES AND OTHERS 2
FINAL ORDER
Present Original Application was instituted by the applicant bank under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ‘the Act’ for brevity), against the defendants for recovery of Rs. 27,85,879/- (Rupees Twenty Seven Lakh Eighty Five Thousand Eight Hundred and Seventy Nine Only) . It has been filed through Sh. Kamal Aggarwal, Chief Manager of the applicant bank stated to be competent to institute the Original Application vide Power of Attorney dated 06.12.2008, Annexure-A1 (copy). 2. The brief facts of the case of the applicant as per Original Application are that defendant Nos. 1 and 2 had approached the applicant bank for grant of Cash Credit Facility of Rs. 30 lakh vide loan application Form dated 05.09.2019, Annexure-A2 (copy). Defendant No. 3 stood as a guarantor for repayment of the loan amount.
OA/182/2022 UNION BANK OF INDIA Vs M/S KANHIYA BEVERAGHES AND OTHERS 3
Annexure-A6 (copy) and letters of guarantee dated 11.10.2019 along with its certificate, Annexures-A7 and A8 (colly) (copy).
The documents relating to the mortgage are as under:
ii. Memorandums dated 11.10.2019 for deposit of title deeds along with declarations dated 03.10.2019 for creation of equitable mortgage and affidavits dated 21.09.2019 for verification of the properties, Annexures-A10 and A12 (colly) (copy).
It is further the case of the applicant bank that after adjusting debit and credit entries in the loan account, a sum of Rs.27,85,879/-
(Rupees Twenty Seven Lakh Eighty Five Thousand Eight Hundred and Seventy Nine Only) , is recoverable against the
OA/182/2022 UNION BANK OF INDIA Vs M/S KANHIYA BEVERAGHES AND OTHERS 4
defendants as per statement of account, certified under Bankers’ Books Evidence Act, 1891, Annexure-A14 (copy).
Since the defendants did not repay the outstanding amount, therefore, the applicant bank preferred the present Original Application for issuance of Recovery Certificate.
OA/182/2022 UNION BANK OF INDIA Vs M/S KANHIYA BEVERAGHES AND OTHERS 5
applicant bank had been filed through a duly authorised person, who could be said to be well aware of the facts of the case; that the present application for recovery was barred by limitation; that the OA should also be accompanied by the affidavit of evidence but in the present OA the bank failed to prove the execution of documents placed on record as well as failed to file any affidavit of evidence. Rest of the averments made in the OA were also denied in the written statement.
The sum and substance of the written statement filed by the defendants is a bit vague and non-committal and the defendants appears to be playing hide and seek because they have to pay back the money to the applicant bank. It is very easy to borrow the money but at times it is very difficult to return the same to the lender.
In the facts and circumstances of the case, this Tribunal finds nothing to believe the version set up by the defendants in their written statement. From perusal of Annexures-A1 to A14 , it comes out that
OA/182/2022 UNION BANK OF INDIA Vs M/S KANHIYA BEVERAGHES AND OTHERS 6
the defendants had approached the applicant bank for availing of the loan facility which was 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. In view of unrebutted documentary evidence brought on record, the applicant bank has proved its case for recovery of the amount against the defendants and it is proved that the applicant bank is entitled to recover a sum of Rs.27,85,879/(Rupees Twenty Seven Lakh Eighty Five Thousand Eight Hundred and Seventy Nine Only) from the defendants, from the date of filing the present Original Application, till realisation of the amount.
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 the mortgaged property, purpose of loan, i.e. business , quantum of loan, prevalent market rates of interest which have gone drastically downhill in yesteryears and defendant No.3 being a female, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @8% per annum from the date of filing of the
OA/182/2022 UNION BANK OF INDIA Vs M/S KANHIYA BEVERAGHES AND OTHERS 7
OA till realisation of the amount ordered vide this order. It is ordered accordingly.
07.03.2024 .
Pronounced in the open Tribunal
(M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh
3 issues framed by the court
Whether the documents proving the loan account and failure to repay are sufficient to warrant issuance of a recovery certificate.
What rate of future interest should be granted considering the circumstances of the case.
Whether the liability of the guarantor is joint and several with the primary borrowers.
1 provisions across 1 enactments
Union Bank of India
M/s Kanhiya Beverages
Sh. Hardeep Singh
Smt. Kusum Chauhan
M.M. Dhonchak
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
