Allowed

Canara Bank v. M/s Sharma Plastic and Others

DRT7 May 2024OA/2092/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's application for recovery of Rs.65,68,961.45 against borrowers and guarantors defaulting on credit facilities. The court directed uniform simple interest at 8% per annum and ordered issuance of a Recovery Certificate for execution.

What did the court decide?

Recovered Rs.65,68,961.45 jointly and severally with simple interest @8.00% p.a. and issued Recovery Certificate.

Canara Bank versus M/s Sharma Plastic and Others — Banking and Recovery | DRT (2024)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

¶2

ORIGINAL APPLICATION NO.2092/2022

¶3

PRESIDED OVER BY MRIDULESH KUMAR SINGH

¶4

	DATE OF INSTITUTION: 04.10.2022 DATE OF DECISION: 07.05.2024
Ca	nara Bank, a body corporate and nationalized bank under the
pr Un an its	ovisions of The Banking Companies (Acquisition and Transfer of dertakings) Act of 1970, with its Head Office at JC Road, Bangalore d amongst other a Branch Office at Sunder Nagar, Ludhiana through Principal Officer, General Attorney and Manager Smt. Pratima Singh ……..Applicant Versus
1.	M/s Sharma Plastic, a sole proprietorship concern situated at B-34, Preet Vihar, Kalash Nagar Road, Ludhiana through its sole proprietor Sh. Manmohan Kumar S/o Sh. Kashi Ram (Borrower)
2.	Sh. Manmohan Kumar Sharma S/o Sh. Kashi Ram, R/o H.No.B-34- 7657/10/A, Street No.3, Jassian Road, Gokul Vihar, Naveen Nagar, Haibowal Kalan, Ludhiana, Punjab (Sole Proprietor/Borrower)
3.	Smt. Sunita Sharma W/o Sh. Manmohan Kumar Sharma, R/o H.No.B-34-7657/10/A, Street No.3, Jassian Road, Gokul Vihar, Naveen Nagar, Haibowal Kalan, Ludhiana, Punjab (Guarantor/Mortgagor) ………Defendants
Ad Ar De	vocates: gued by Sh. Rajnish K. Jindal, Advocate for the Applicant fendants are ex-parte FINAL ORDER
1.	Present Original Application was instituted by the applicant bank
un	der Section 19 of the Recovery of Debts Due to Banks and Financial
In	stitutions Act, 1993, against the defendants for recovery of
Rs Hu	.65,68,961.45p (Rupees Sixty Five Lacs Sixty Eight Thousand Nine ndred Sixty One and Forty Five Paisa only). The Original Application

¶5

¶6

has been filed through Smt. Pratima Singh, Manager o f the applicant bank, who is competent to institute the Original Application vide Authority Letter dated 31.05.2022, which is Annexure A1 to this OA. 2. The brief facts of the OA are that the defendant No.1 through its proprietor defendant No.2 was already availing credit facilities i.e. CC limit of Rs.37.00 Lacs, Term Loan-I of Rs.10.75 Lacs and Term LoanII(GECL) of Rs.10.00 and later approached the applicant bank for the enhancement of CC Limit to Rs.49.00 lacs. Thereafter the defendant No.1 through its proprietor defendant No.2 had approached the applicant bank for the renewal of CC Limit of Rs.49.00 Lacs vide Renewal Letter dated 16.08.2020, which is Annexure A24 to this OA. Further, defendants approached for the grant of working capital Term Loan under GECL of Rs.6.50 Lacs vide Loan Application dated 09.11.2021, which is Annexure A26 to this OA and thereafter for the renewal of CC Limit vide Application dated 21.09.2021 and Letter of renewal dated 10.12.2021, which are Annexures A33 and A35 to this OA. 3. The applicant Bank sanctioned/renewed the credit facilities i.e. CC limit of Rs.49.00 Lacs vide Sanction Letter dated 17.08.2020, which is Annexure 22 to this OA and working Capital Term Loan under GECL of Rs.6.50 Lacs vide Sanction Letter dated 09.11.2021, which is Annexure A27 to this OA; and the terms and conditions were duly accepted by the defendants. 4. Defendant No.3 had mortgaged her immovable properties i.e. Plot No.276 measuring 160-4/9 Sq. Yards situated at Village Bajra, H.B. No.76, Preet Vihar Colony, Kailash Nagar Road, Tehsil and District Ludhiana through equitable mortgage vide Registered Sale Deed bearing Vasika No.27861 dated 29.03.2012 with its translation, Letters evidencing deposit of title deeds dated 23.08.2014, 08.09.2015 and 10.04.2017 and Letters of extension of mortgage dated 24.01.2017, 10.04.2017 and 17.08.2019 , which are Annexures A7 to A11 and A15 to this OA;

¶7

¶8

Documents executed: - Deed of hypothecation Re:Machinery, Agreement Re:Collateral security:Machinery/Vehicles, Letter of undertaking re:Loans/advances, Declaration from borrower re:value of investment on plant and machinery and Guarantee agreement accompanied with guarantee covering letter all dated 10.04.2017, which are Annexures A2 to A6 to this OA; Valuation report dated 27.06.2019, which is Annexure A12 to this OA; Supplemental agreement and Guarantee agreement both dated 17.08.2019, which are Annexures A13 and A14 to this OA; D.P. note, Take delivery letter to DPN, Letter and Letter executed by defendant No.3 reiterating the factum of execution of guarantee and Common hypothecation agreement all dated 09.06.2020, which are Annexures A16 to A18, A20 and A21 to this OA; Undertaking letter, which is Annexure A19 to this OA; Letter of proprietorship and Letter executed by defendant No.3 reiterating the factum of execution of guarantee both dated 17.08.2020, which are Annexures A23 and A25 to this OA; Letter of proprietorship, DP note, Supplemental common hypothecation agreement, Letter of undertaking re:loans/advances, and Undertaking from the borrowers all dated 09.11.2021, which are Annexures A28 to A32 to this OA; Letter of proprietorship and Letter executed by defendant No.3 reiterating the factum of execution of guarantee both dated 10.12.2021, which are Annexures A34 and A36 to this OA; Letters of acknowledgment of debt and security dated 17.08.2019, 17.08.2020 and 10.12.2021, which are Annexures A37 to A39 to this OA; Notice dated 20.09.2022 with postal receipts, which is Annexure A40 of this OA and Statements of Accounts along with certificate dated 02.11.2022, which are Annexures A41 to A44 to this OA. 5. The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.65,68,961.45p, 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.

¶9

¶10

6. The defendants were served notices to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded
ex-parte on 19.03.2024.
7. In support of the OA, affidavit ofSmt. Pratima Singh, Manager,
Canara Bankhas been filed.
8. Heard ex-parte 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
bank had proved its case. From the perusal of all theAnnexures A1 to A44to this OA, it is proved that the defendants approached applicant
bank 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 bank. The defendants failed to pay back the loans as per terms and
conditions of the agreement between the parties. Subsequently,
accounts of the defendants were classified as NPA. From the
documentary evidence brought on record, it is proved that applicant
bank is entitled to recover a sum of Rs.65,68,961.45p (Rupees Sixty
Five Lacs Sixty Eight Thousand Nine Hundred Sixty One and Forty Five
Paisa only) along with interest from the defendants, jointly and
severally, from the date of filing of the present Original Application till realization of all the accounts.
10. In so far as pendent elite and future rate of interest is concerned,
the applicant bank in relief clause has claimed interest;
(i) @15.30%p.a. plus penal interest @2%p.a. in respect of CC Limit;
(ii) @10.65%p.a. plus penal interest @2%p.a. in respect of Term Loan-
I facility; and (iii) @8.90%p.a. in respect of GECL facilities. with monthly rests from 01.08.2022 in all facilities till the realization. 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

¶11

¶12

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 all 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.

¶13

In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.65,68,961.45p (Rupees Sixty Five Lacs Sixty Eight Thousand Nine Hundred Sixty One and Forty Five Paisa only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in all the loan accounts 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.

¶14

Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 14.05.2024. 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.

¶15

Dated:07.05.2024

¶16

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

Canara Bank v. M/s Sharma Plastic and Others

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s Sharma Plastic and Others

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

Coram

Case details

Similar cases

Punjab & Sind Bank versus Sh. Gursahib Singh Gill and Another

Punjab National Bank versus Smt. Harjeet Kaur

Punjab National Bank versus M/s New Kabir Knitwears and Another

Punjab National Bank versus Sh. Sakatter Singh

Union Bank of India versus M/s Tool Tex Industrial Corporation and Others

Punjab National Bank versus Sh. Gurdeep Singh and Another