Allowed

Canara Bank v. M/s Golden D Lite Restaurant

DRT26 Aug 2024OA/248/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the application for a Recovery Certificate under Section 19 of the RDBFI Act 1993. Finding the defendants jointly and severally liable based on unchallenged documentary evidence and affidavits, the court issued a certificate for Rs. 1,37,38,059.12 with future interest and authorized proceedings against secured and personal assets.

What did the court decide?

Issued Recovery Certificate for Rs. 1,37,38,059.12 with future interest at 15.50% per annum; authorized recovery proceedings against secured and personal assets.

Canara Bank versus M/s Golden D Lite Restaurant — Banking and Recovery | DRT (2024)

¶1

¶2

o.a. 24El2o2zDRT6u$haii

¶3

IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

¶4

(North Eastern Region)

¶5

(Tnbunal ofAssam, Nagaland, Meghalaya, lvanipur, Mizoram, Arunachal Pradesh & Tripura)

¶6

Before Shri Shiv Sharan Dubov. Presidinq Officer

¶7

O.A. No.24812022

¶8

ln the mattar of -

¶9

CANARA^gANK (EEtwhilo Syndicate Bank) Dimapur Branch First Floor, Near Plaza Bakery, Nyamo Lotha Road (Church Road), Oimapur, Nagaland-7971 12.

¶10

..Applicant

¶11

Vs.

¶12

M/S. GOLDEN D'LITE RESTAURANT Proprietorship firm of Mrs. Sushma Sharma Wo Sri VUay Sharma. C/o Golden Palace, Circular Road,

¶13

DimapurT 97 1 12, Nagaland.

¶14

i,IRS. SUSHMA SHARMA W/o Sri Vijay Sharma. Ryo Fellowship Colony, Circular Road, OimapurTgT 1 12, Nagaland.

¶15

SRI VIJAY SHARMA S/o Banarsilal Shama. R/o Fellowship Colony, Circular Road, OimapurT 97 1 12, Nagaland.

¶16

Oefendants

¶17

PrGenca of tho Counsel :

¶18

For the Applicant : Mr. Mukesh Sharma, Ms. Ellora Bharali, Advocates For the Defendants : None (Ex-parte)

¶19

Oaled :2610812024

¶20

JUOGi,lENT

¶21

This is an application under seclion^'19 of the Recovery of Debts Oue to Banks and Financial lnstitutions Act, 1993 fited by the Canara Bank (Erstwhile Syndicate Bank), Dimapur BEnch, First Floor, Near plaza Bakery, Nyamo Lotha Road (Church Road), Dimapur, Nagatand - 7971'12-, vtith a prayer to issue

¶22

Sl^ns-lro!-.^ b"fr^r ,,"",0'"n#J9{? [ DRT Guwahalr

¶23

O.A. 248r022lDRT-Gfl ahali

¶24

Recovery Certiflcate for the sum of Rs. '1,37,38,059.12 (Rupee3 One Crore

¶25

Thirty-Soven Laca Thirty-Eight ThoGand Fifty-Nine 8nd Paisa Tw6lvo) only as on 3'1.05.2022 against the defendants with pendentelita and future interest at contractual rates lill realization along with cost and other relief.

¶26

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

¶27

The Oefendant No.'l is the proprietorship firm of Oefendant No.2 as wett as the borrower and Defendant No.3 was the guarantor to the loan availed by the defendant No.1 firm.

¶28

The Defendant No. 2 as proprietor had approached the Applicant Bank and applied for financial assistance by submitting a Loan Application dated 06.08.2008 for its business and afrer considering the said Application, the Applicant Bank vide ita Sanction Memorandum dated 16.08.2008had sanctioned an Overdrafl Cash Credit (OCC) of Rs.20.00 Lacs to the Defendant firm, with interest 2b% per annum compounded monthly subject to changes from time to time as per Banks guidelines. The cash credit limit is payable on demand. ln the event of default. the bank shall also be entitled to charge at its own discretion and the borrower shall be liable to pay such enhanced rate of interest on the said cash credit account. The Defendant had signed on the said Sanction Memorandum, thereby agreeing to the terms and condition laid down therein. The Oefendant No. 2 as the^proprietor of the firm had also execuled a Request for overdraft facilities dated^'16.08.2008 thereby confirming lhe availing of lhe loan facility from the applicant bank and also accepted the terms and conditions contained therein.

¶29

ln conneclion with the sanction of the Ovardraft Cash Credit Facility of Rs. 20.00 Lacs, sanctioned by the Applicant Bank and availed of by the Defendant firm, a Oemand Promissory Nots dated 16.08.2008, Composite Hypothecation Agreement dated 16.08.2008 has been signed and executed by the Defendant No. 2 as the Proprietor of the tirm in favour of the Applicant Bank as security for repayment of the loan, thereby agreeing to all the terms and conditions laid down in the said Agreement and also charged/ hypothecation of present and future stocks, furniture

¶30

Sh,

¶31

ORT. Guwahati

¶32

O A z4€l2o2zoRT-G'rwahati

¶33

and fixtures etc. in iavour of the Applicant Bank. lt is^pertinent lo^{mention herein ihat} at present there are no stocks available as the business has become defunct.

¶34

ln connection with the sanctioning of the cash credil facility of Rs. 20.00 Lacs sanction by the applicant bank and availed off by the defendant no.'l firm, Guarantee Agreement daled 16.08.200E was signed and executed by the defendant no. 2 as the proprietor of the firm as borrower and defendant no. 3, who stood as the personal guarantor to the said loan facility availed by the defendant no.1 firm. The said Guarantee Agreement was duly signed and executed by the defendant no. 3, whsroby in his capacity as the personal guarantor had not only confirmed the signing and execution of the Guarantee Agreement dated 16.08.2008 but also acknowledged its obligation as the personal guarantor to the loan facility availed by the defendant no. 1 firm.

¶35

The Oefendant no. 2 as the Proprietor of the defendant no.'l firm had again approached lhe applicant Bank for renewal of the cash credit facility and after considering the said request, the Applicant Bank had renewed the existing cash credit facility of Rs. 20.00 Lacs only. The defendant no. 2 as the Proprietor of the defendant no. 1 firm had signed and executed a Lefter of Renewal dated 12.03.2010, thereby agreeing to ihe tarms and conditions contained therein.

¶36

The Oefendant No. 2 as proprietor of Defendant No.1 had confirmed and acknowledged its indebtedness lowards the bank by signing and executing Acknowledgament of Oebt and Security dated 17.03.2010, 10.02.2013, 08.02,2016, 16.01.2019 and 05.01.2022 also confirmed the axecution of loan documents and the relative securities in connection with the said loan facility availed of by the Oefendanls.

¶37

The Defendants had availed of the said loan facility from the Applicant Bank, but have not paid the loan amount as per the terms and conditions as agreed upon with the Applicant Bank, inspite of repeated demands and requests by the Applicant Bank. Thereafter, the Applicant lhrough ils Counsel has sent a legal notice of demand dated 02.11.2021 wheroby it was demanded and requested the Oefendants

¶38

*,,k".Ffry

¶39

¶40

o . 2a6l2022lDRT€ur.h.ti

¶41

to repay the total outstanding amount of Rs. 1,23,97,640/- under Loan Account No. 79801250000490 being the amounl due in the loan account along with interest charges (as per Loan Agreement) within 30 (Thirty) days from the date of the notice, bul the defendants failed to comply with the same.

¶42

The Statements of Account maintained by the Applicant Bank in the usual and ordinary course of business shows that there is an outstanding balance of Rs. 1,37,38,059.'12 calculated as on 3i.05.2022 only in lhe Open Cash Credit Account (AJc No. 79801250000490). The account became N.p.A. on OO.Og.2O.t 1. Therefore, the Detendants No. 1 to 3 are legally bound and join y and severally liable to repay the said amount to the Applicant Bank with interest till realization with cost and charges. As such, it is certified that the applicant bank has not capiialized penal interest in the loan account.

¶43

The applicant bank thus became constrained to fle the present Original Application for the rEcovery of Rs. 1,37,38,059.,12 (Rupoos Ono Crore Thirty€ev6n Laca Thirty-Eight Thousand Fifty-Nino and paisa Twelvs) only as on gi.05.2022 along with interest and cost of the application.

¶44

After filing of lhe OA the Tribunal issued notices upon the defendants through registered post and the applicant bank fited service report on 30.08.2022 and brought on record the postal receipts along with track consignment report which shows that the notices have not been served upon the defendants. Thereafler the Tribunal ordered paper publication of notice upon the defendants and the applicant bank issued notice to the defendants through paper publication in two newspapers namely "Nagalad Post' and 'Morutg Ex@ss,,both dated M.11.2O22. Even after issuing notice through paper publication upon the defendants there has been no representation on behalf of the defendants either by the counsel or the person and hence the defendants r,vere set ex-parte on OZ.02.2029 and lhe matter was posted for ex-parte hearing on behatf of the applicant bank.

¶45

Supporting the claim of the applicant bank purtoshi A.O., Senior Manager of the Applicant Bank has fl€d evidence on affidavit coupled with the security documenb

¶46

*"ffirrr

¶47

¶48

0.A. 2,t8ro22loRr-Guwahati

¶49

marked as Exhibit No.P, Exhibit-AM/1 to AW-U14, supporting the claim of the applicant bank.

¶50

Heard lhe learned counsel for the applicant bank who prayed for issuance of Recovery Certificate against the defendants as per pleadings made in the Application, supporled by evidence on affidavil of their witness who afiirmed on oath the execution of the security and oth6r documents by the defendants and also execution of their own documents relied upon, which have bsen marked exhibits.

¶51

Considering the facls and circumstances of the case, I am of the considered view that the document filed by the appticant bank are supporting lhe claim of the applicant bank and establishing the liabitity of the defendants. lt is proved that lhe defendants arc jointly and severally liable to pay to the applicant bank the claim made in the Original Application. The loan was obtained and documonts have been executed on 16.08.2008 & 12.03.2010. Acknowledgement of Debt are dated 't7.03.2010, 10.02.2013, 08.02.2016, 16.01.2019 and 05.01.2022. The acmunt became NPA on 06.08.2011 and the OA has been fil6d on 28.06.2022. Hence, the OA is filed well within the period of limitation and this Tribunal having a jurisdiction to adjudicate the Original Application.

¶52

Considering the unchallenged/unrebutted version of^purtoshi A.O., the applicant's witness and all the documents marked as exhibits, including duly certified copy of the statement of account along with interest calculation sheet maintained by the applicant Bank in il's regular course of business, I hold that the applicant is entifled to get the Recovery Certificate as prayed for.

¶53

ln the result, the presant Original Application No. 248 ol 2022 is allowed with cost as under i

¶54

i) The defendants No.^'1, 2 & 3 are jointly and severally liable to pay to the applicant bank a sum of Rs. 1,37,38,059.12 (Rupsg3 Ono Croro ThirtySevsn Laca Thirty-Eight Thousand Fifty-Nine and P8isa Twslve) only with pendentelite and future interest @15.50% per annum with monthly rests from 01.6.2022 till the date of full paymenurealization and also cost of the application. dr,wtr?

¶55

¶56

o.A. 24al2o2zDRT€u$hrti

¶57

ii) The charge of the certificated amount be kept alive on hypothecated properties,

¶58

as described in Schedule-A of the OA till the amount is realized in full.

¶59

nl) The applicant bank is entitled to proceed against the secured items towads recovery of the debtS.

¶60

iv) Th€ applicant bank is also entrued to proceed against the personal assets and properties of the debndants towards recovery ofthe dues.

¶61

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

¶62

yi) lssue Recovery Certmcate accordingty for a sum RE. t,37,38,069.12 (Rupe.. One Croro Thirty€ovon L.ca Thirty-Eight Thou3and Fifty-Nino and peise Twolv.) only in favour of the applicant bank against the defendants No. 1, 2 & 3.

¶63

vll) Communicate copy of this order to the concerned parties.

¶64

This order is diclated and conecled by the undeGigned.

¶65

Judgment dated 26t August 2024, signed and pronounced in the Tribunal

¶66

today under my signature.

¶67

Copy of the JudgmenuFinal Order be uptoaded in the Tribunal,s Website and

¶68

tile be consigned to Record Room.

¶69

,.r,,**ffi?*?" Presiding Ofrlcer DRT, Guwahatl.

Canara Bank v. M/s Golden D Lite Restaurant

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s Golden D Lite Restaurant

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

Canara Bank versus Messrs Biswakarma

Canara Bank versus Messers Rehan Store

Bank of Baroda versus Mr Dibyajyoti Bora

Uco Bank versus M/ s Mahali Agro Farm

State Bank of India versus Messers Ganapati Trading Co.

Punjab National Bank versus Pioneer Trading