Allowed

Canara Bank v. Messers Eashan Enterprises

DRT18 Apr 2024OA/198/2023

Case brief

AI extract

What is this about?

In this recovery proceedings, the DRT allowed the bank applicant's application for a Recovery Certificate. The Court held that the defendants' vague denial amounting to admission and their contention of blank signing raised no triable issue, establishing the bank's claim for recovery of dues. Waste 2024.

What did the court decide?

Recovery Certificate issued for Rs. 26,48,533.00 with interest at 10.50% p.a. from 09.05.2023. Defendants jointly and severally liable; bank entitled to proceed against secured and personal assets.

Canara Bank versus Messers Eashan Enterprises — Banking and Recovery | DRT (2024)

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o.A 198/2023i/DRT-Gueahati

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(North Eastern Region)

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(Tribunal of Assam, Nagaland, Meghalaya, Manipur, Mizoram, Arunachat pradesh & Tripura) Beforc Shri Shiv Shqran Duqev. pr$idino Officer

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O.A. No.^,t98/2023

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ln tho mattor of -

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CANARA BANK Kharupetia Branch, Chandra Complex, I Floor, M. B. Road, Kharupetiaghat, Kharupetia, Assam-704.t 1 5.

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Applicant

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Vs.

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M/S EASHAN ENTERPRISE, Village- Latpoot, P.O.- Latpoot, District- Darrang, Assam, pin- 794114.

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MAZEDA KHATUN, Wife of Eaharul lslam, Village- Lalpool,^p.O.- Latpoot,

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District- Darrang, Assam, pin_ 784.114

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.,,, .,. ,,, ',, ,,, .. ' ,,, ,,, Defendants

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Prosence of the Counsol:

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For the Applicant Mr. Akhtar Parvez Mr. Sanjit Singha, Mr. Dipanka Gogoi, Mr. Bidul Roy, Advocates

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For the Defendants

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Mr. Abhijeet Kakoti, Advocate

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Dated :1810412024

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JUOGMENT

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This is an apprication under section 19 of the Recovery of Debts Due to Banks and Financial lnstitutions Act, 1993 filed by the CANAM BANK, Kharupetia Branch, Chandra Complex, I Floor, M. B. Road, Kharupetiaghat, Kharupetia, Assam_784115, with a prayer to issue Recovery Certificate for the sum of R3. 2O,4g,S33.OO (Rupoes Twenty-Six Lakhs Forty-Eight Thousand Five Hundr€d Thirty-Throe) onty as on 08 05.2023 against the detendants with pendentelite and future interest thereon at the contractual rate tilt realization along with cost and other relief.

¶21

Sl".rJrO,r4&. "."oo,nn DRT Guwstral^oloflo 4*r

¶22

O A t 982023/ORT-Gus.na0

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A few facts giving rise to the present application are as under.

¶24

Vide loan application dated 21-09-2019 the defendant No.2 being^proprietor of defendant No.1 had approached the applicant bank^interalia applying^for ,inancial assistance to expand her business. Considering^{ihe loan application, the} compelent authority of the applicant bank had sanctioned^{a sum of Rs. 10.00Lacs} only to the detendants as OCC^(Open Cash Crsdil)^{loan videSanction} Memorandum dated 21-09-2019. As^per the Sanction^{Memorandum, the applicable} rale of interest for the sanctioned^{loan was fixed at MCLR+215 % p a. with} monthly rests. The^primary sacurity^{for the sanctioned loan was Hypothecationof} stock in trade. The sanctionod^{loanwas further covered under CGFMU coverage.} The defendant No.2 had accepted^{all the termsand conditions of sanctionby} putting her signatures on the foot of the Sanction Memorandum.

¶25

ln order to avail ths sanctioned^{OCC limit of Rs.10.00Lacs only, on} 21-09-2019 itself the detendant^{No.2 had executedsecurity documentsviz.'} Pronote for Rs.'lO.OO Lacs only, Cash^{Credit Agreement (NF 795), Letter} requesting Overdraft^{Facilities (NF 372) and Letter of Undertaking(NF 721)}

¶26

Subsequently vide Loan^{application dated 28-08-2020 the defendantNo 2} had requssted the^{applicant bank for enhancementof the existing OCClimit'} Considering the^{apPlication,the competentauthority of the applicant bankhad} enhanced the existing^{OCC limit of the defendantsfromRs l0 00 Lacs only to} Rs.'lg.OO Lacs^{only vide Sanction memorandumdated 28-08-2020As per the} Sanction memorandum^{dated 28-0S-2020the applicablerate of interestfor the} enhancedocclimitwasfixedatlo.os%p,a.withmonthlyresis.Theenhanced [email protected] accepted^{all the termsof sanction by puttingher signature on the foot of the} Sanction memorandum.

¶27

ln order^{to avail the enhanced limit of Rs'l9 Oo Lacs only' on 28-08- 2020} Itself the defendant^{No.2 had executed security documentsviz ' Pronote'iLink} d^a^a^,A.Jq ;;;,Js,J.&\o+f:'1 '..t DRT Guwahali

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O.A 1 98/2023lDRT-Cwahatr

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Letter (NF 719), Letter of Renewal and Supplemental Agreement inter alia agreeing to the terms and conditions mentioned therein.

¶31

The competenl authority of the applicant bank had renewed the OCC toan account of the defendant with the existing limit vide Sanction memorandum dated 02]12-2021 and the defendant No.2 had acknowtedged the same by putting her signatures on the foot of the Sanction memorandum. As per the Sanction memorandum the loan was covered under CGTMSE Coverage. The defendant No.2 funher had executed Letter of Renewal and Link Letter, both dated 02-'12-2021.

¶32

Vide another loan application dated 02_12_2021 the defendants had further requested the applicant bank for sanction of another credit facility. Being pleased, the competent authority of the applicant bank had sanctioned a sum of RS.S.4O Lacs only to the defendants as GECL-t (Exension) loan vide Sanction Memorandum daled 02-12-2021. As per the Sanction memorandum, the rate of interest for the sanctioned loan was fixed at 7 .SOo/o p.a. with monthly rests and the loan was covered under 100% NCGTC Coverage. The defendant No.2 had accepted all the terms of sanc-tion by putting her signatures on the foot of the Sanction memorandum. ln order to avail the sanctioned loan, on O2-i2-2OZ,l ilself the defendant No.2 had executed security documents viz., pronote, Link Letter and Term Loan Agreement interalia agreeing to the terms and conditions mentioned therein-

¶33

The defendants availed the credit facilities from the applicant bank by opening and operating OCC (Open Cash Credit) Loan Account No. 4159201000146, and GECL-1 (Extension) Loan Accounl No. 170002568546 with the applicant bank. At the very lnitial stage the loan accounta were running smoothly as the defendants were making regular repayments towards their loan accounts. Subsequently the defendants started committing default in making repayments towards the loan accounts due to irregularity committed by the defendants in repayment of the loan amount, the loan Accounts have beqome N9n-

¶34

.1,1,t fiaru^Q,^},-t "*,o^no oRT. Guwahali^Wfo',r4/

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¶36

performing Assets on 2g_ After declaring th" ,o"ro^^"o'"'"'"'n"' appricant bank " ..r"r:110'3 accounts NPA' the notice dated ,;r;;;'., the derendants within askins them to pay the "",,,:::1'l receipt or the noti"". Ho"r""- 1ibts "^*r., ";;;;upon er' thedefendants'"'";;;r:;;'ili]l applicantbank,snotice.

¶37

The appltcant bank th Apprication constrained to fire rhr ::'" present orisinar "," ", , ": Eisht rhousand ,r" ,rro.lj'11'ls'53s'oo ***" ,'.""oi Th'rtv-Three) ";;^{r" ;:r#:ff} interest and cosr of th" "**,.j.0 #;

¶38

After iiting of the OA the l issued notices upon the del registered post and " throush "or,,""n,tl'olnal fi'". ""'' ,o"n on record the poslar,""",0o ""^{,rr;;fendants} ":"'k wh hack ""'.rr;";:;::tt;:,# counserfor defendants n". "o:o': the same dav ie on 03.08.2023 and fired their written statement ", ;;:"t'on on afiidavit on og 1o2o23 to which reamed counserfor the applicant bank has that thev do not want to nle its reioinder. rhereafter the matte, *. *** .:::;::

¶39

supponing t," daim of the appricant bank sri prakash sharma, Branch Manager of the Applicant Bank has filed evidence on afiidavit coupled with the security documents marked as Exhibit Aw_li1 to AW_1f25 & A supporting the ctaim of the appticant bank details of whi:h are: -

¶40

Sl.No.	Name of tireaocuments--	Ehibit
1 2 3	Loan ApplicationdateaTtog:Ots^_-- SanctionMemoiindu;diidr,21092b19- Pronote dated2i.09.2-tt-	xNo. AW-1t2 AW-1t3
4	@
	RequestforOverdraft tacititiesaateAZ-OS2019-	AW-1/5
6	LetterofUndertakins a,t,eAZ1-092019	AW-1/6
7	Loan Applicatiqn dated28.08.2020
8	Sanction Memorandum dated28.08:020	AW-1/8
I	Pronote dated28.08.2020	AW-'1/9
'10	Link LetterinrespectofenhancementofCredit Facilities dated 28.08.2020	AW-1/'10
11	LetterofRenewal dated 28.08.2020
12	SuDDlementalAoreement dated 28.08.2020	AW-1112
13	Sanctionl.4emorandumdaled02.12.2021	AW-'l/'t3
14	LetterofRenewaldaled02j22021

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ldN.a'Lb,,Q"J-r +1"r1 / ""0.s^o*LFld

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O A 1g8l2o23/ORT-Guwahal

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15	LinkLetter daled02.122021w.r.t. OCC Account	Loan AW-1/15
16	LoanADD	icationdaled02.12.2021
17	Sanction Memorandum daled 02.12.2021
18	Pronotedated02.12.2021	AW-1/18
19	Link Letterdated02.'12.2021	AW-1/19
20	TermLoanAqreemenldaled02.122021	AW-1/20
21	RecallNoticedated01.03.2023w.r.t.OCC AccountNo.4'159261000146	Loan AW-1121
	RecallNoticedated01.03.2023w.r.t.GECL-I Account No.170002568546	Loan AW-1122
	StatementofOCCLoanAccoun 4159261000't46	tNo. AW-1D3
24	StatementofGECL-ILoanAccoun 170002568546	l^No. AW-1t24
25	Details of claim	AW-1/25
	General Power of Attorney Sl. No.893/2023 12.O5.2023	dated

¶44

The defendants have appeared and contested the claim^{of the applic€ntbank by} filing written statemont and evirenca^{on affidavitstalinginteraliathat the original} application is not at all maintainable under^{law and facts.The Statements of Account are} not propetty certified as^per the Bankers Books^{EvidenceAcl. The details of the debts} as sho,vn are inconect and vague.^{The original application is also baned by limitation.} The ansl €ring defendants have^{also statedthat they had signedthe documents,but} later on it was filled up by the^{bankofficialswithout their knowledgeand consenl. The} classification of NPA^{of the loan account of the Defendant No. 2 is wrong and it violates} the guilelines ftarned by the^{Res€rve Bankof lndia. lt is alsostated by these answering} defendants that they^{had iniEallypaidtheir EMlsregularly againsttheloantakenby} them from the appli:ant^{bank and never defaulted their loan repaymentbutfrom} lockdorwr arising out^{of co,id.lgpandemic in the year2020 !,vhichcontinued till the end} oftheyear2O2l.Thedeiendantsufferedhugelossintheirbusinessand'vereunabl€to regularize their^{account. The anslrering defendants are ready to go for One Time} Settlement^(OTS) wfi^{the applicant Bankas per the provisions of OTS Lastly' it has} been^prayed that^{the applicant is notentiiled for any kind of relief as prayedfor.}

¶45

Hsard the leamed^{counsel for theapplicant bank whoprayed for issuance of} Recovery Certificate^{against the defendants as per pleadings made in the} Apptication, supporbd^{by evidenceon affidavitof their witness who affirmed.r^} #)r*^qrb, e."ii,eoffio4-f^zq 67

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¶47

oA 19&2023/DRT-Guw.hati

¶48

the execution of the security and other documents by the defendants and also execution of their own documents relied upon, which have been marked exhibits.

¶49

No one has appeared for the defendants to put fo(h their arguments.

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I have carefully perused the documents on record including original application, evidence on afiidavit and exhibited documents as well as written statement and evidence on affidavit tiled by the defendants.

¶51

It is observed that the defendants have not denied execution of documents and their signature on the same.

¶52

ll is observed that the ansr,vering defendanB have made general denial in their written stiatement. lt is wsll settl€d law that the written statement must specifically deal with each of the allegation of fad made in the plaint. The failure to make specific denial amounts to an admission. ln the^present case, the defendants have made a^geneEl denial that amounb to admission on the^part of the defendants of the fac{s^pleaded in the original application by the applicant. Moreover, the defendants have not liled any document in support of lheir^pleadings and failed to^justify and^prove the statements made in their Mitten stabrnent aM evidence on affdavit.

¶53

The only contentjon of the defendants is that atthough they had signed the documents, but the sarne were filled up by the bank officials later on^without their knowledge and consent.

¶54

The above contantion of the defendants is not only untrust-worthy^{but also} does not raise any triable issue. Under Section 20 of the^{NegotiablelnstrumentsAct,} 1981, it is provided that when a^person signs and delivers to^{anothera paper stamped} in accordance with the law relating to negotiable^{instruments eitherwholly blankor} having written thereon an incomplote^{instrument he gives primafacieauthorityto the} holder of such an instrumanl to complete^{upon it a negotiable instrumentfor any} amount which may be covered by the^{stamp aflixedon it. Thepersonso signingis} made liable upon such an instrument^{in the capacity in whichhe signed it to any} holder in due course. The defendants did^{not raisetheir littlefingerto point-outif their} sMdM

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O A 198/2o23loRT-Guwahatr

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signatures were obtained on any blank documents by the then Manager of the applicant bank or under duress. lf the signatures had been obtained in blank documents under duress by the Manager of the Bank, the defendants could have filed FIR or Complaint before tha Competent Authority. But no FIR has been lodged by the defendants.

¶57

ln view of the above, the^plea sought to be raised by the defendants is devoid of any force. Hence the contention of the defendants is negated.

¶58

It is evident from the siabment of account tiled by the applicant bank that the defendants have deiaulted in repayment of the loan. lf there is default^{in repaymentof the} loan the applicar bank has every right to^proceed against^{the defendants forrealization} of the oubtanding dues. Hence,^I ha\re no hesitation to^{hold that this original applicalion is} maintiainable.

¶59

The applicar bank has^prcduced on record the copies of^{the statement of account} in respecl of the defendants, duly certifed under^{Bankers' BooksEvidenceAcl. The} applicant bank by the eviJence-on-affidavit^{of Sri PrakashSharma,Branch Managerof} the applicant bank hd d€PG€d the^{coflechess of the affidavit and c€rtified mpyof the} account. Beyond that noih&rg more^{has to be deposedby an ofiicerof the bank. lt is thus} obvious that apart from the entries of the^{Booksof account there are ample evidence on} the record to conoborata the said enlries.

¶60

The documen6 executed by the^{defendants are duly proved by theapplicant} bank and the witness of the^{applicant. Theapplicant hassufficient causeof action for} filing the instant application due lo^{disbursemenuavailmentof loan to/bythe} defendants and on default^{in repaymentof the loan by the defendants,inspite of} demands made, as^per exhibited^{documentsfiled by the applicant bank.}

¶61

Considering tho hcts and^{circumstancesof the case, I am of the considered} view that the documsnts^{filad by tha epplicant bank are supporting the claim of} the applicant bank^{and establishingtheliability of the defendants.lt is proved that} the defendants are liable^{to pay lo the applicant bank the claim madein the 0r9}

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Pre6iding DRT, Guwahali

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¶64

o.A. i^{g6tzo2aDRl€u*.hati} -r!l-EF-

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Application. The loans were obtained and documents have been executed on 21.09.2019, 28.OA.2O2O, 02jt2.2)21. The accounrs became NpA on 28.02.202g and the OA has been filed on [email protected]. Hence, the OA is filed urell within the period of limihtion and lhis Tribunal having a jurisdiction to ad,iudicate the Originat Application.

¶66

Considering the version of by Sri prakash Sharma, the applicant,s witn€ss and all the documents marked as exhibits, including duly certified copy of the statement of account along with ir ffe.t celculation sheet maintained by the applicant Bank in it,s regular course of business, I hold that the applicant is entifled to gsl the Recovery Certiticate as prayed for.

¶67

rn the resurt, the p.es6nt originar Apprication No. 1g8 0f 2023 is aflowtsd with cost as undar: -

¶68

i) The defendants No. 1 & 2 are joinfly and severalty liabte to pay to the applicant bank a sum of Rs. 26,48,S33.00 (Rupe€3 Twenty-Six Lakhs FortyEight ThoGand Flve Hundrcd Thirty-Thre€) only with pendentetite and future interest @1o.ssvo p.a. with monthry rests from 09.05.2023 ti the date of full paymenurealization and also cost of the application.

¶69

iD The applicant bank is entifled to proceed against the secured items lowards recovery of the debts.

¶70

iii) The applicant bank is also entifled io proceed against the personal assets and properties of the defendants towards recovery of the dues.

¶71

iv) The applicant bank is entited to the costs of tha O.A. which includes the advocate fees of the applicant bank. Applicant is directed to file the cost memo within 2 weeks from today.

¶72

v) lssue Recovery Cortificate accordingty for a sum R3. 26,48,533.00 (Rupees Twenty€ix L.kb Forty-Eight Thousand Five Hundred Thirty-Three) onty in favour of the applicant bank against the defendants No. 1 & 2.

¶73

vi) Communicate copy of this order to the concemed parties.

¶74

sL^ld^ara^hl,q"*,o,"nJ#1oa]4dORT, Guwahati I

¶75

O.A. lg&Z02lDR]€ullan.i

¶76

This order is dictated and conected by the undersigned.

¶77

Judgment dated rgn Aprir 2024, signed and pronounced in the Tribunar today under my signature.

¶78

copy of the JudgmenuFinar order be uproaded in the Tribunars website and ,ile be consigned to Record Room.

¶79

d^;,, slo,l,ii^^,dqt^q, 1st i, st "."n DJF"flt'9d Presiding Officer'

¶80

DRT, Guwahati.

Canara Bank v. Messers Eashan Enterprises

Case brief

What is this about?

What did the court decide?

Canara Bank v. Messers Eashan Enterprises

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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Case details

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