Allowed

Canara Bank v. M/s Nirmal Industries and Others

DRT6 Dec 2024OA/215/2024

Case brief

AI extract

What is this about?

The DRT allowed Calia Bank's application for recovery of a debt of Rs. 53.59 Lakhs from industrialists. The court granted a Recovery Certificate, directed recovery from mortgaged properties via SARFAESI Act, and reduced interest to 8% p.a.

What did the court decide?

Recovery of Rs. 53,59,693.75p with simple interest at 8% p.a.; Issue of Recovery Certificate; Recovery via sale of mortgaged/attached assets.

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

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.215/2024 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 19.12.2023

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DATE OF DECISION: 06.12.2024

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Canara Bank, Body Corporate Constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at Plot No.112, J.C. Road, Town Hall Junction, Bengaluru, Karnataka and One of its Branch Office at 4147, Abohar Road, Near New Grain Market, District Muktsar-152026, through its Senior Manager Sh. Rakesh Kumar, duly authorized signatory of the Bank, being Principal Officer and duly constituted Attorney of applicant Bank.

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……..Applicant

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Versus

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M/s Nirmal Industries, Goniana Road, Muktsar Punjab 152026, through its Proprietor Sh. Baldev Singh

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Sh. Baldev Singh s/o Sh. Chanan Singh, Resident of H.No.1614, Shaheed Lal Singh Street, Thande Wala Road, Muktsar, Punjab.

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2^nd Address:- Sh. Baldev Singh s/o Sh. Chanan Singh, Resident of H.No.10228, Lal Singh Wali Gali No.2, Near Everest Public School, Thande Wala Road, Muktsar, Punjab-152026.

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Smt. Sushma Rani w/o Sh. Baldev Singh s/o Sh. Chanan Singh Resident of H.No.1614 Shaheed Lal Singh Street, Thande Wala Road, Muktsar, Punjab.

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2^nd Address:- Smt. Sushma Rani w/o Sh. Baldev Singh s/o Sh. Chanan Singh, Resident of H.No.10228, Lal Singh Wali Gali No.2, Near Everest Public School, Thande Wala Road, Muktsar, Punjab152026.

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………Defendants

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Advocates: Argued by Sh. Randeep Singh, Advocate counsel for the applicant Defendants are ex-parte

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FINAL ORDER

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Present Original Application was instituted by the applicant under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.53,59,693.75p (Rupees Fifty Three Lacs Fifty Nine Thousand Six Hundred Ninety Three and Seventy Five Paise only). The Original Application has been filed through Sh. Rakesh Kumar , Senior Manager of the applicant, who is competent to institute the Original Application vide General Power of Attorney dated 19.01.2015, which is Annexure A1 to this OA. 2. The brief facts of the OA are that the defendant No.1 through its Prop. i.e. defendant nos.2 h ad approached the applicant for the grant of Cash Credit Limit of Rs.10.00 Lacs and Term Loan of Rs.05.00 Lacs vide Loan Application & Request Letter dated 21.06.2013, which are Annexures A2 & A3 to this OA and further approached the applicant for enhancement of CC Limit up to Rs.30.00 Lacs vide Loan Application dated 14.05.2014, which is Annexure A14 to this OA. Later, approached the applicant from time to time for renewal of CC limit of Rs.30.00 Lacs vide Letter of Renewal dated 23.05.2014, 09.08.2016, 28.03.2018 and 15.06.2019, which are Annexures A15, A21, A26 & A32 to this OA. 3. The applicant sanctioned the Cash Credit Limit of Rs.10.00 Lacs and Term Loan of Rs.05.00 Lacs vide Sanction Letter dated 21.06.2013, which is Annexure A11 to this OA and further sanctioned the enhancement upto Rs.30.00 Lacs and renewals of the same from time to time vide Sanction Letters dated 09.08.2016, 28.03.2018 and 15.06.2019, which are Annexures A24, A28 & A36 to this OA and the terms and conditions were duly accepted by the defendants. 4. Defendants had mortgaged their immovable properties detailed as under:-

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a) Hypothecation of Stocks and Machinery and Book debts. b) Land measuring 15 Marlas situated at Goniana Road, Hadbast No.54, Muktsar, Punjab vide Equitable Mortgage of Sale Deed bearing vasika No.10 dated 01.04.1997 along with its translation, which is Annexure A9 to this OA owned by Defendant No.3. c) Land measuring 7½ Marlas situated at Kacha Thandewala Road, Hadbast No.54, Muktsar, Punjab vide Equitable Mortgage of Sale Deed bearing vasika No.3073 dated 28.08.2001 along with its translation, which is Annexure A10 to this OA owned by Defendant No.3. d) Land measuring 10 Marlas situated at Kacha Thandewala Road Hadbast No.54, Muktsar, Punjab vide Equitable Mortgage of Sale Deed bearing vasika No.3626 dated 17.03.1989 along with its translation, which is Annexure A14 to this OA owned by Defendant No.2. And Jamabandi for the years 1995-96 & 2010-11 along with their translations, which is Annexure A19 to this OA. Documents executed:- Cash Credit Agreement, Agreement regarding Collateral security of Machinery and Vehicles, Deed of Hypothecation, Guarantor Agreement, Pronote and DP Note all dated 21.06.2013, which are Annexures A4 to A8, A12 & A13 to this OA; Supplemental Agreement, Guarantor Agreement, Letter for deposit of Title Deeds and Pronote all dated 23.05.2014, which are Annexures A16 to A18 & A20 to this OA; Guarantee Agreement and Particulars of the Guarantor/co-obligant dated 09.08.2016 which are Annexures A22 & A23 to this OA; Letter for Extension dated 07.02.2018, which is Annexure A25 to this OA; Guarantee Letter dated 28.03.2018, which is Annexure A27 to this OA; Application Form for Loans to MICRO Small & Medium Enterprises dated 15.06.2019, which is Annexure A29 to this OA; Debt Restructuring Agreement and Debtor Creditor Agreement both dated 29.06.2019, which are Annexures A30 & A31

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to this OA; Guarantor Agreement dated 15.06.2019, which is Annexure A33 to this OA; Letters from Guarantor both dated 29.06.2019, which are Annexures A34 & A35 to this OA; DP Note, Debt Restructuring Agreement, Debtor Creditor Agreement and DP Note all dated 29.06.2019, which are Annexures A37 to A40 to this OA; Debt Restructuring Agreement, Debtor Creditor Agreement, Guarantor Letter, Letter of Undertaking and DP Note all dated 27.09.2019, which are Annexures A41 to A45 to this OA; Acknowledgement of Debts dated 08.08.2015, 09.08.2016 & 23.07.2018, which are Annexures A46 to A48 to this OA; Notices U/s 13(2) dated 19.10.2021, along with postal receipt which are Annexures A49 & A50 to this OA; Possession Notice dated 25.03.2022, which is Annexure A51 to this OA and Statements of accounts along with the certificate which are Annexures A52 to A54 to this OA.

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The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in both the loan accounts there was a debit of Rs.53,59,693.75p, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant 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 they were proceeded ex-parte on 04.12.2024.

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In support of the OA, affidavit of Sh. Rakesh Kumar , Senior Manager , Canara Bank has been filed. 8. Heard 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 had proved its case. From the perusal of all the Annexures A1 to A54 to this OA, it is proved that the defendants approached applicant for availing of the loan facilities which were

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granted to them and for that they had executed all the relevant documents in favour of the applicant. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, all the accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.53,59,693.75p (Rupees Fifty Three Lacs Fifty Nine Thousand Six Hundred Ninety Three and Seventy Five Paise only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of both the accounts.

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In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @11.45%p.a. including penal interest @2.00%p.a. with monthly rests in both from 04.09.2023 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 both 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.

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In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.53,59,693.75p (Rupees Fifty Three Lacs Fifty Nine Thousand Six Hundred Ninety Three and Seventy Five Paise only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in both the loan accounts from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant shall be entitled to recover aforesaid amount from the sale of hypothecated/mortgaged

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properties of the defendants in execution proceedings if not sold earlier under the provisions of the SARFAESI Act, 2002. If the dues of the applicant 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.

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Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 18.01.2025. 15. Copy of this order be given dasti to the applicant 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 .

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Dated: 06.12.2024 (MRIDULESH KUMAR SINGH) Presiding Officer,

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DRT-III, Chandigarh

Canara Bank v. M/s Nirmal Industries and Others

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s Nirmal Industries and Others

Case brief

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