The DRT allowed the bank's application under Section 19 of the RDBFI Act for recovery of Rs. 45,61,749.00 and interest, declaring the respondents jointly and severally liable and issuing a Recovery Certificate.
Recovery of Rs.45,61,749.00 jointly and severally with simple interest at 10% p.a.; issuance of Recovery Certificate.
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-III, CHANDIGARH
ORIGINAL APPLICATION NO.250/2022
PRESIDED OVER BY MRIDULESH KUMAR SINGH
DATE OF INSTITUTION: 28.01.2022
DATE OF DECISION: 14.02.2024
Axis Bank Ltd. (earlier known as UTI Bank Ltd.), a banking company, carrying on the banking business under the Banking Regulation Act, 1949, incorporated under The Companies Act, 1956 and having its Registered Office at ‘Trishul’, 3rd Floor, Opposite Samartheshwar Temple, Law Garden, Ellis Bridge, Ahmedabad-380006, Gujarat and one of its Branch Offices amongst other places known as Axis Bank Ltd. situated at SCO No.367-368, 3rd Floor, above Akash Education Institute, Sector 34-A, Chandigarh through its Deputy Manager, Ms. Khushpreet Bains
……..Applicant
Versus
………Defendants
2
Advocates: Argued by Sh. Rahul Garg, counsel proxy for Sh. D.K. Singal, counsel for the applicant Defendants are ex-parte
FINAL ORDER
3
argued that that initially the loan was granted by HDFC Bank Ltd. and thereafter applicant bank disburshed an amount of Rs.4,68,00,000/- in the account of the defendant No.1 in order to repay the outstanding amount of the loan facilities due towards HDFC Bank. It was further submitted that the applicant bank also disbursed an amount of Rs.6,61,93,189.40p in the loan account of defendant No.1 for taking over the cash credit facility running with HDFC Bank on 30.06.2018. It was further argued that defendant No.1 repaid the amount of the aforesaid availed facilities to the applicant bank only after lapse of 12 days on 12.07.2018. Thus applicant bank became entitled to recover pre-payment charges as per clause 9 of Para V of Sanction Letter dated 28.06.2018 and other incidental charges for which this OA was filed. Defendant No.1 through its director i.e. defendant No.2 had hypothecated its movable properties i.e. Current assets and receivables and movable properties situated at Sharman Rattan Enclave, Bahadur Ke Road, Village Bahadurke, Ludhiana, Punjab-141008 and Unit at 1 E- 14/736/2-B, Dyeing Complex, Bahadur Ke Road, Village Bahadurke, Ludhiana, Punjab-141001 vide Deed of Hypothecation dated 28.06.2018, which is Annexure A8 to this OA. Documents executed:- Certificate of incorporation, which is Annexure A2 to this OA; Memorandum of association and Article of association, which are Annexures A3 and A4 to this OA; Board resolution, Working capital loan agreement, D.P. notes, D.P. note delivery-cum-waiver letters, Loan agreements and Deeds of guarantee all dated 28.06.2018, which are Annexures A6, A7 and A9 to A19 to this OA; Modification letter dated 30.06.2018, which is Annexure A20 to this OA; Legal notice dated 03.01.2022, which is Annexure A21 to this OA and Statement of account, which is Annexure A22 to this OA. 5. The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.45,61,749.00, which is recoverable and the defendants were
4
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. 6. The defendants were served notices to appear before this Tribunal but no one appeared on behalf of defendants and were proceeded exparte on 27.07.2023. 7. In support of the OA, affidavit of Ms. Khushpreet Bains, Deputy Manager, Axis Bank Ltd. has been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned proxy 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 the Annexures A1 to A22 to this OA, it is proved that the defendant No.1 through its directors 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, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.45,61,749.00 (Rupees Forty Five Lacs Sixty One Thousand Seven Hundred and Forty Nine only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of 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 @13.15%p.a. with monthly rests from 09.11.2021 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
5
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 @10.00%p.a. in the loan account from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.45,61,749.00 (Rupees Forty Five Lacs Sixty One Thousand Seven Hundred and Forty Nine only) jointly and severally, with costs, current and future simple interest @10.00%p.a. in the loan account 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. 12. Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 07.03.2024. 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. Dated: 14.02.2024
(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh
3 issues framed by the court
Whether the applicants are entitled to recover the outstanding loan amount of Rs.45,61,749.00 jointly and severally from the respondents.
Whether simple interest at 10% per annum is appropriate in the circumstances.
Whether the order should be directed to issue a Recovery Certificate.
2 provisions across 2 enactments
Axis Bank Ltd.
M/s Viney Knitwear Pvt. Ltd.
Sh. Vinay Jain
Smt. Neelam Jain
Smt. Anjali Jain
MRIDULESH KUMAR SINGH
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
