Allowed

Bank of India v. M/s Green Bird and Others

DRT17 May 2024OA/1905/2022

Case brief

AI extract

What is this about?

The Tribunal accepted the Original Application filed by Bank of India for recovery of dues amounting to Rs.2.28 crores. Declaring the respondents liable, the order granted uniform simple interest at 8% p.a. instead of the claimed rate and directed the issue of a Recovery Certificate.

What did the court decide?

Recovery of Rs.2.28 crores; Interest reduced to 8% p.a.; Recovery Certificate issued; liberty to attach and sell personal assets.

Bank of India versus M/s Green Bird and Others — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1905/2022

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 02.11.2022

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DATE OF DECISION: 17.05.2024

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Bank of India, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) having its Head Office at Star House, Plot No.C-5, G-Block, Bandra-Kurla Complex, Bandra (East), Mumbai-400051 and a Branch Office amongst other places known as Ludhiana Branch, Guru Teg Bahadur Market, near Clock Tower, 1^st Floor, Ludhiana, Punjab141008, through Sh. Kailash Kumar Sagar, its Constituted Attorney and Principal Officer

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……..Applicant

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Versus

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1. M/s Green Bird, a proprietorship at Shop No.57, Gandhi Nagar Market, Ludhiana, Punjab through its sole proprietor Sh. Ishpreet Singh Chawla S/o Sh. Gurcharan Singh

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2^nd Address:- Factory: Green Bird, Street No.14, Gandhi Nagar, Ludhiana, Punjab 2. Sh. Ishpreet Singh Chawla S/o Sh. Gurcharan Singh, R/o H.No.B-22146, Damuriya Pull Road, Ludhiana, Punjab (Borrowers)

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1. Sh. Raj Kumar Bhagirath S/o Sh. Subhash Chander, R/o H.No.2169, Street No.4, Basant Nagar, Shivpuri, Ludhiana, Punjab (Guarantor)

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1. Smt. Preeti W/o Sh. Raj Kumar Bhagirath, R/o H.No.2169, Street No.4, Basant Nagar, Shivpuri, Ludhiana, Punjab

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1. Sh. Baljinder Singh S/o Sh. Jugal Kishore, R/o H.No.184, Golden Avenue, Rahon Road, Ludhiana, Punjab (Guarantors-Mortgagors) ………Defendants

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Advocates: Argued by Sh. Mohan Prasad, counsel for the applicant Defendants are ex-parte FINAL ORDER
1. Present Original Application was instituted by the applicant bank under Section 19 of the Recovery of Debts Due to Banks and Financial
Institutions Act, 1993, against the defendants for recovery of
Rs.2,28,99,001.37p (Rupees Two Crores Twenty Eight Lacs Ninety
Nine Thousand One and Thirty Seven Paisa only). The Original
Application has been filed throughSh. Kailash Kumar Sagar, Chief
Manager of the applicant bank, who is competent to institute the
Original Application vide Power of Attorney dated 13.12.2019, which is
Annexure A1to this OA.
2. The brief facts of the OA are that defendant No.1 through its
proprietor i.e. defendant No.2 and Guarantors/Mortgagors i.e.
defendant no.3 to 5 had approached the applicant bank for the grant of CC Limit of Rs.250 Lacs (Rs.180 Lacs against Stocks and Rs.70.00 Lacs against Book debts) vide Loan Application dated 01.04.2017 and Request Letter dated 22.07.2017, which isAnnexure A2to this OA.
3. The applicant Bank sanctioned the CC Limit of Rs.250 (Rs.180
Lacs against Stocks and Rs.70.00 Lacs against Book debts) Lacs vide
Sanction Letter dated 28.07.2017, which isAnnexure A3to this OA
and the terms and conditions were duly accepted by the defendants.
4. Defendants had mortgaged/hypothecated their
immovable/movable properties detailed as:- a) Hypothecation of stocks like cloth, T-shirts, Sweat Shirts, Jeans, Pants, all type of readymade garments etc. whatever else stored in factory premises, godown or various work sites or in transit or elsewhere and Hypothecation of book debts vide Hypothecation- cum-Loan agreement (Plant & Machinery, Stocks and book debts) dated 29.07.2017, which isAnnexure A6to this OA;
b) Equitable mortgage of commercial property measuring 88.50
Sq. Yards situated at Main Budha Dariya Road, Street No.3,

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Basant Nagar near Gandhi Nagar Pully, Ludhiana owned by defendant No.4;

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c) Equitable mortgage of commercial property measuring 16.66 Sq. Yards situated at B-II-1931/78/4-A (Portion), near Street No.10, Abadi Gandhi Nagar, Shivpuri, Taraf Karabara, Ludhiana owned by defendant No.5; d) Equitable mortgage of commercial property measuring 16.66 Sq. Yards situated at B-II-1931/78/4-A (Portion) adjoining Street No.10, Abadi Gandhi Nagar, Shivpuri, Taraf Karabara, Ludhiana owned by defendant No.5; Above mentioned mortgaged immovable properties have been sold by the applicant bank under the SARFASESI Act, 2002.

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Documents executed:- Demand Promissory note, Bearer letter, Composite letter, Letters of declaration, undertaking and authority, Letters of undertaking, Declaration and undertaking, Marginal cost of fund based lending rate (MCLR) agreement and Deed of guarantee all dated 29.07.2017, which are Annexures A4, A5 and A7 to A14 to this OA ; Document(s) re:creation of security interest with CERSAI, which is Annexure A15 to this OA; Letter of Acknowledgment of debt and securities dated 05.06.2020, which is Annexure A16 to this OA; Notice U/s 13(2) of SARFAESI Act dated 04.02.2020 along with postal receipts, which is Annexure A17 to this OA and Statement of account with certificate, which is Annexure A18 to this OA.

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The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs.2,28,99,001.37p, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant bank 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 Defendant

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Nos.1, 3, 4 and 5 were proceeded ex-parte on 02.11.2023 and defendant No.2 was proceeded ex parte on 20.03.2024.

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In support of the OA, affidavit of Sh. Kailash Kumar Sagar, Chief Manager, Bank of India has been filed.

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Heard ex-parte arguments and perused record.

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It was argued by learned counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant bank had proved its case. From the perusal of all the Annexures A1 to A18 to this OA, it is proved that the defendants approached applicant bank for availing of the loan facility which was granted to them and for that they had executed all the relevant documents in favour of the bank. Defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.2,28,99,001.37p (Rupees Two Crores Twenty Eight Lacs Ninety Nine Thousand One and Thirty Seven Paisa only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the account.

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In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest @15.30%p.a. with monthly rests from 03.11.2022 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

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the loan account 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.2,28,99,001.37p (Rupees Two Crores Twenty Eight Lacs Ninety Nine Thousand One and Thirty Seven Paisa only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in the loan account from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant bank 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 bank 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 24.05.2024. 15. Copy of this order be given dasti to the applicant bank 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: 17.05.2024

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

Bank of India v. M/s Green Bird and Others

Case brief

What is this about?

What did the court decide?

Bank of India v. M/s Green Bird and Others

Case brief

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