Debts Recovery Tribunal allowed an original application by Canara Bank against legal heirs of a deceased borrower for recovery of outstanding loan dues secured by mortgage, determining liability is limited to the inherited estate.
Recovery Certificate issued directing payment of Rs.25,52,025.69 plus 5% p.a. simple interest from filing date.
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. 2163/2022
DATE OF INSTITUTION: 22.11.2022
DATE OF DECISION: 15th DAY OF JANUARY, 2024
Canara Bank , a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Head Office at JC Road, Bangalore, Karnataka and Branches, amongst others at Mohan Nagar, Kurukshetra through the Manager, Power of Attorney holder
…..Applicant
Versus
.....Defendants
Argued by: Sh. R.S. Bhatia counsel for the applicant bank Defendants ex parte vide order dated 25.08.2023
FINAL ORDER
Present Original Application was instituted by the applicant
bank under Section 19(1) of the Recovery of Debts due to Banks
OA/2163/2022 CANARA BANK VS RANJEET SINGH AND OTHERS 2
and Financial Institutions Act, 1993 (hereinafter referred to as ‘the Act’ for brevity), against the defendants for recovery of Rs.25,52,025.69/- (Rupees Twenty Five Lakh Fifty Two Thousand Twenty Five and Sixty Nine Paisa Only) . It has been filed through Sh. Sandeep Garg, Branch Manager of the applicant bank stated to be competent to institute the Original Application vide Gazette notification dated 04.03.2020, Annexure-A1 (copy) and General Power of Attorney dated 21.10.2016, Annexure-A2 (copy).
OA/2163/2022 CANARA BANK VS RANJEET SINGH AND OTHERS 3
(copy), deed of guarantee dated 10.12.2019, Annexure-A8 (copy) and guarantee agreement dated 10.12.2019, Annexure-A9 (copy). 5. The aforesaid facilities were further secured by creation of mortgage by defendant No.1 and late Sh. Joginder Singh in respect of agricultural land measuring 80 Kanal 17 Marla situated in the revenue estate of Kirmach, Tehsil Thanesar, District Kurukshetra, Haryana, fully detailed in para No. 5.8 of the Original Application.
The documents relating to the mortgage are as under:
It is further the case of the applicant bank that after adjusting debit and credit entries in the loan accounts, a sum of Rs.25,52,025.69/- (Rupees Twenty Five Lakh Fifty Two Thousand Twenty Five and Sixty Nine Paisa Only), is recoverable against the defendants as per statements of accounts, duly certified under Bankers’ Books Evidence Act, 1891,
Annexures-A13 and A14 (copy).
OA/2163/2022 CANARA BANK VS RANJEET SINGH AND OTHERS 4
Since defendant No.1 and Sh. Joginder Singh (deceased borrower) did not repay the outstanding amount, therefore, the applicant bank preferred the present Original Application for issuance of Recovery Certificate.
OA/2163/2022 CANARA BANK VS RANJEET SINGH AND OTHERS 5
executed between the parties. Sh. Joginder Singh had died, leaving behind defendant Nos. 1 to 3 as his legal heirs who have been impleaded as defendants. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.25,52,025.69/- (Rupees Twenty Five Lakh Fifty Two Thousand Twenty Five and Sixty Nine Paisa Only) from the defendants.
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 mortgaged property, purpose of loan, i.e. agricultural , present condition of economy based on agriculture, quantum of loan, prevalent market rates of interest which have gone drastically downhill in yesteryears and death of the borrower, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @5% per annum from the date of filing of the OA till realisation of the amount ordered vide this order. It is ordered accordingly.
OA/2163/2022 CANARA BANK VS RANJEET SINGH AND OTHERS 6
Thousand Twenty Five and Sixty Nine Paisa Only) with current and future simple interest @5% per annum w.e.f. 22.11.2022 , till the date of realisation of the amount. The liability of the defendants shall be joint as well as several. Accordingly, the applicant bank shall be at liberty to recover aforesaid amount from the sale of mortgaged/hypothecated property of the defendants in execution proceedings, if not sold earlier under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 or otherwise. If the dues of the bank still remain unsatisfied, the applicant bank shall be at liberty to recover the same by attachment and sale of personal assets of the defendants. The applicant bank is at liberty to enforce the claim through due process of law. However, it is clarified here that there should not be any ambiguity that the liability of the defendants by virtue of their being the legal heirs of the deceased borrower shall remain confined only to the extent of the estate of the deceased borrower if it is inherited by legal heirs and not beyond that. The recovery proceedings shall proceed only after the Recovery Officer is fully satisfied on the aspect of the estate being inherited by the Legal Representatives/Heirs and the liability being incurred accordingly .
OA/2163/2022 CANARA BANK VS RANJEET SINGH AND OTHERS 7
Pronounced in the open Tribunal (M.M. Dhonchak) Presiding Officer DRT-2, Chandigarh
2 issues framed by the court
Whether the Recovery Tribunal should grant relief for recovery of dues against legal heirs liable only up to the extent of the estate inherited.
Whether uniform simple interest at 5% per annum is appropriate considering the pandemic and agricultural nature of the loan.
2 provisions across 2 enactments
Canara Bank
Sh. Ranjeet Singh
Sh. Jasbir Singh
Sh. Lakhwinder Singh
Sh. Mangat Ram
M.M. Dhonchak
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
