Allowed

Canara Bank v. M/S. Blue Max Impex (India) Private Limited

DRT28 Feb 2024OA/243/2023

Case brief

AI extract

What is this about?

The DT allowed the OA filed by ARCIL against pharmaceutical company and guarantors for recovery of Rs. 3.51 cores, deducting payments made post-filing, and directed realization from mortgaged properties.

What did the court decide?

Application allowed; Defendants liable to pay Rs. 3,51,46,424/- with interest; direction to deduct post-filing payments; permission to proceed against mortgaged properties.

Canara Bank versus M/S. Blue Max Impex (India) Private Limited — Banking and Recovery | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL-I AT HYDERABAD DATED THIS THE 28rH DAy OF FEBRUARY, 20,24

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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o.A.243l2OO3

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Asset Reconstruction (India) Ltd.(ARCIL) The Ruby, 10,h Floor, 29, SenapatiBapalMarg, Dadar(W), Mumbai-4OO O2g& Local Office at Office No.2O7, Bhuvana Tower, Besides Manju Theatre, Above CMR Exclusive, Patny, Secunderabad-S0O 003. (Amended as per orders in I.A.Tg4 l2Ot2 dt.04. 12.2Ol2)

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... Applicant

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VERSUS

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l.Smith And Kenner pharmaceuticals (p) Ltd., Rep. by its Managing Director Smt.S. sobha, _^{16-2-758I F / 4, Asmangadh,} Malakpet, Hyderabad-36. 2. Smt. S. Sobha, ^ W l" S. Jaya Swamy, Major, Occ:Managing Director, M/s Smith And Kenner pharmaceuticals (p) Ltd., _ _^{1:6-2-738/F/4, Asmangadh,} Malakpet, Hyderabad_36

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Dr. S. Jayasw?ffiy, S/o S. Venkaiah, Occ:Director

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M/s Smith And Kenner pharmaceuticals (p) Ltd., -^{_ \6.-2-738 /F / 4, Asmangadh,} Malakpet, Hyderabad_36 Defendants

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Counsel for the parties:

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For the Applicant For the Defendants P.S. Sujatha y Singh

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oA243/2OO3

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ORDER

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The Applicant filed the present OA against Defendants No. 1 to 3 for recovery of a total sum of Rs.3,51,46,424/ - (Rupees Three crores fifty one lakhs forty six thousand four hundred and twent5r four only) i.e.

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(a) A sum of Rs.96,55,638/- being debt due under Cash Credit Hypothecation account with 72.75o/o p.a. with quarterly rests;

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(b) A sum of Rs. 1,59,10,629 l- d:ae under Term Loan-I with future interest @ 73.25o/o p.a. with quarterly rests;

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(d) A sum of 34,88,693/- being debt due under Term Loan_lII account with future interest @ 13.25% p.a. with quarterly rests

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from the date of application till the date of realization and in case of default, for sale of the mortgaged schedule properties described in schedules A to C to the O.A.

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The case of the Applicant is that the lst Defendant enjoyed credit facilities from 1981 to 1995 from State Bank of India. In the year 1995, at the request of the r"t Defendant, the Isamia Bazar branchof the Applicant Bank had sanctioned Rs. 1,67,40,000/_ under Cash Credit Mundy Tlpe, Cash Credit Bills Receivables, Medium Term loan-l and Medium Term Loan-II fac ities to the rst defendant. In the year 1998, the loan a 'endant was transferred to branch and the above the request of the the following credit

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oA243/2003

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facilities to the lstDefendant company vide Sanction Letter

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dt.10.04.2000:

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S.No.	FaciliW	Existins	Proposed(Rs.lakhs)
1	Term Loan-I	t29.OO	t29.OO
2.	TermLoan-ll		51.00
3.	Termloan-lll		40.00
4.	CashCreditHyp	28.75	163.00
		Total	38s.00

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The terms and conditions mentioned in the Arrangement Letter were accepted by the defendants and they have subscribed their signatures in the said arrangement letter. To secure the repayment of the loan facilities sanctioned, the 1"t defendant executed Agreement of Loan for overall limit, Agreement of Hypothecation of Goods and Assets, Agreement of Pledge of Goods and Assets on 02.0s.2000. The Defendants No.2 & 3 also executed Guarantee Agreement on the same date. Smt. Ananthalakhsmi Devi, mother of the 3.d Defendant also executed Guarantee Agreement. However, the Revival Letter for all the facilities was executed on 24.o4.2oo3 by Defendants No.1 to 3 only. smt. Anantha Lakshmi Devi expired leaving behind the defendant No.2 as her legal heir who is her son.

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As a security for the credit facilities sanctioned by the Isam ia Bazar branch of the Applicant Bank, the 1st defendant created equitable mortgage in favour of the Bank on 06.07.l99s by deposit of title deeds in respect of the Application A schedule property. subsequently, on 02.o5.2ooo, the 1"t defendant extended the said mortgage to secure the repayment of the overall credit facilities of Rs.383 lakhs and confirmed the same vide retter dt.og.0s.200o. ..t' -r..:.=.'r?feqir:..' ...-:',',.' aT tll:Fl*.j-\

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by the Isamia Bazar created equitable 1994 by deposit of title

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deeds in respect of the Application B schedule property. Subsequently, on O2.O5.2O00, the 3.d defendant extended the said mortgage to secure the repayment of the credit facilities of Rs.3g3 lakhs and confirmed the same vide letter dt.O3.0S.20OO. After availing the above loan facilities, the lstdefendant failed to repay the dues in spite of several demands made by the Applicant Bank. Hence the O.A.

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Defendants No. I to 3 liled their Written statement denying the averments made by the Applicant viz., execution of documents, creation of mortgage and acknowledgement of liability. It is contended by the defendants that lstdefendant is having banking facilities with the Isamia Bazar branch of State Bank of India. Even though, the rst Defendant requested for sanction of Rs.202 lakhs, the Applicant Bank sanctioned onry Rs. 129 lakhs. The lst Defendant addressed several letters for release of sanctioned amount but there was delay on the part of the Appricant Bank and on 24.r2.rggg, the Bank rejected the application for additional Term loan. On 10.04.2000, after a long period of delay and after causing huge damage and loss to the Defendant No.1, the Applicant Bank sanctioned credit limits to the tune of Rs.3g3 lakhs, however, the Applicant has not disbursed the additionar rimits but chosen to adjust the limits sanctioned towards interest. In view of the delay in release of the credit limits, the lst defendant sustained loss to a tune of Rs.25 crores and in view of the same, the Applicant is not entitled to claim any amounts from the defendants.

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Initially, an exparte order was passed in O.A. vide orders dt. 15.03.2005 and on the the Applicant herein had approached erstwhile H Pradesh under Companies Act, Petition vide C.P.No.150/2011 was given to the 1^.t defendant Rs" crore and the said

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oA243/2003

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amount was paid by the 1st defendant company and also another sum of Rs.6O lakhs was paid by the lst defendant and thus the entire principal amount and part of interest was paid by the defendants. Accordingly, defendants prayed to dismiss the O.A.

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During the course of trial, the original lender State Bank of India assigned the debt along with underlying securities to ARCIL vide Assignment Agreement dt.30.03.2005. ARCIL was substituted as Applicant in O.A. vide order dt.O4.12.2O12 passed inl.A.No.Z84l12.

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In order to prove its case, the Applicant Bank examined its official Sri, A. Krishna Das, Dy.Manageras AW. 1 and marked the relevant documents which are exhibited as Ex.A. 1 to A.27 .

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As against the evidence of the Applicant bank, Defendants No.2&3filed their Evidence Affidavits and marked Ex.Bl to 824 and, subsequently marked Ex.B2S as per orders in I.A.SS2l23.

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Heard both the Ld. Counsel for the Applicant and Defendants and perused the documents exhibited by both the parties.

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Nott, tlte pointfor consid.eration is uheth.er the Appricant Bankhas proued the oA cloim against the Defendants and. as u.tefi as *e oA schedule properties?

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During the course of arguments, Ld. Counsel for the Applicant and

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ld. Counsel for the Defendants reiterated their respective versions as stated supra.

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Ld. Counsel for the defendants further argued that the evidence

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adduced on behalf t cannot be taken into

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consideration as no adduced after exparte order dt. 15.O3.2OOs * r"; \i

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As per the version iltr,. 3.8.[ffi',t3pfi1 ;* u,iry "1.". that they are not disputing the have availed credit

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facilities from the erstwhile SBI. As per the evidence of AW-1 and the documentsexhibited by him, it is clear that defendants are liable to pay the OA claim.

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In the written arguments submitted by the Applicant, there isa clear mention about the fact that after filing of O.A., Defendant No. 1 company admittedly has remitted a total amount of Rs. 1.74 crores directly to ARCIL , the Applicant herein, whereby they admitted their liabilities as per OA order dt. 15.03.2005 as Cp.No. lS0/11 admittedly was filed on the basis of the said order of the Hon,ble Tribunal and RC only. The Defendant No. t herein in total has paid an amount of Rs.3,24,00,000/- including the aforesaid amount of Rs. 1.50 crores transferred by SBI to ARCIL. It is not the case of the defendants that they have not paid any additional amount apart from the said amount.

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As per the evidence of AW- 1 and documents No.Ex.Al to A2T exhibited by the official of the Applicant Bank, it is made clear that the schedule properties were mortgaged in favour of the Applicant Bank towards security for the loan facilities ava ed by rst Defendant company. The evidence adduced by the defendants is in no way helpful to them to substantiate their defense that they are not riable to pay the OA claim.

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So, considering all the circumstances, I am of the opinion that the Applicant is entitled to the O.A. claim as made for, however, the amount of Rs.324 lakhs which was paid by the defendants subsequent to filing of o.A. shall be deducted from the o.A claim with proportionate rate of interest. In the O.A., the Applicant claimed the OA amount with future i quarterly rests however, considering the above payments made by the defendants after of O.A., I am opinion that future interest can be a with simole Accordingly, theOA deserves to be 2 S riB z'CA

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oA24312003

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In the result, the present OA is allowed with costs, as under:

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(i) Defendants No.l to 3 are liable to pay a total sum of Rs.3,51,46,424/ - (Rupees Three crores fifty one lakhs forty six thousand four hundred and twenty four only) i.e.

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(a) A sum of Rs.96,55,638/- being debt due under Cash Credit Hypothecation account with 12.7 5o/o p.a. simple from the date of application till the date of realization;

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(b) A sum of Rs. 1,59,10,629 l- due under Term Loan-I with future interest @ 13.25o/o p.a. simple from the date of application ti11 the date of realization;

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(c) A sum of Rs.6O,91,4641- being debt due under Term loan-ll with future interest @ 13.25%o p.a. simplefrom the date of application till the date of realizationand

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(d) A sum of 34,88,6931- being debt due under Term Loan-lll account with future interest @ 13.25o/o p.a. simple from the date of application till the date of realization.

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iil The Applicant is directed to deduct the amount oJ Rs.3,24,OO,OOO/- uthlch utas paid bg the deJend.ants ajter

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Jiling^{oJ O.A. with proportlondterate} of interest.

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i ii) The Applicant is entitled to proceed against the mortgaged properties described in Schedules A to C to the O.A, towards realization of the debt due.

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iv) The Applicant is against the person and properties of dants No.2fi3 and of defendant No. 1 company

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oA24312003

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v) The Applicant is entitled to the costs of the OA

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vi) The Applicant shall file a cost memo within two weeks from the date of order.

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Issue Recovery certificate accordingly.

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Communicate a copy of the order to the parties concerned.

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(Dictated to the P.A., transcribed by her, corrected, signed ald pronounced by me in the open court on this the 28th day of February,2O24l

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sd/-

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(c. coPr CHANDI PRESIDING OFFICER

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.5-A
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E; "ft ?ort8u4:

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Canara Bank v. M/S. Blue Max Impex (India) Private Limited

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/S. Blue Max Impex (India) Private Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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