Allowed

Bank of India, v. M/s Gold Shine Knitwears and Another

DRT3 Jan 2024OA/312/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's application for recovery of dues alleging default on a cash credit facility. The court modified the interest rate from the claimed rate to 10% p.a. and ordered the issuance of a Recovery Certificate.

What did the court decide?

Recovery Certificate issued; Defendants directed to pay Rs.1,55,13,164.12 with interest at 10% p.a., recoverable via sale of hypothecated or personal assets.

Bank of India, versus M/s Gold Shine Knitwears and… — Contract and Commercial Disputes | DRT (2024)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

¶2

ORIGINAL APPLICATION NO.312/2022

¶3

PRESIDED OVER BY MRIDULESH KUMAR SINGH

¶4

DATE OF INSTITUTION: 01.02.2022

¶5

DATE OF DECISION: 03.01.2024

¶6

Bank of India, a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Act No.5 of 1970), having its Head Office at Star House, Plot No. C-5, G- Block, Bandra-Kurla Complex, Bandra (East), Mumbai-400051 and a Branch Office amongst other places known as Ludhiana Branch, Guru Teg Bahadur Market, Near Clock Tower, First Floor, Ludhiana, Punjab141008, through Sh. Kailash Krishna Bhatt, its constituted attorney and Principal Officer

¶7

……..Applicant

¶8

Versus

¶9

M/s Gold Shine Knitwears, a Proprietorship firm situated at Second Floor, B-VII/279, Pindi Street, Ludhiana, Punjab, through its Sole Proprietor, Sh. Sham Sunder S/o Sh. Vaasdev

¶10

Sh. Sham Sunder S/o Sh. Vaasdev R/o House No.110, KVM Colony, Rishi Nagar, Ludhiana, Punjab

(Borrowers)

….……Defendants

Advocates:

Argued by Sh. Mohan Prasad, counsel for the applicant Defendants are ex-parte

¶15

FINAL ORDER

¶16

Present Original Application was instituted by the applicant bank under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993, against the defendants for recovery of Rs.1,55,13,164.12p (Rupees One Crore Fifty Five Lacs Thirteen Thousand One Hundred Sixty Four and Paisa Twelve only). The Original Application has been filed through

¶17

¶18

Sh. Kailash Krishna Bhatt, Chief Manager o f the applicant bank, who is competent to institute the Original Application vide Power of Attorney dated 24.10.2018, which is Annexure A1 to this OA.

¶19

The brief facts of the OA are that the defendant No.1 i.e. firm through its proprietor defendant No.2 had approached the applicant bank for the grant of Cash Credit Limit of Rs.145.00 Lacs under CGTMSE scheme vide Loan application dated 20.12.2017, which is Annexure A2 to this OA.

¶20

The applicant Bank sanctioned the Cash Credit Limit of Rs.145.00 Lacs under CGTMSE scheme vide Sanction Letter dated 27.12.2017, which is Annexure A3 to this OA and the terms and conditions were duly accepted by the defendants.

¶21

Defendants had hypothecated their movable properties i.e. Stocks, Book Debts, Plant and Machinery vide Hypothecation-cum-loan agreement dated 27.12.2017, which is Annexure A5 to this OA. Documents executed:- Bearer letter and Demand Promissory Note, Letter of Declaration, Undertaking and Authority, Composite letter, Letters of undertaking, Declaration & Undertaking and MCLR agreement all dated 27.12.2017, which are Annexures A4 and A6 to A12 to this OA; Documents re: creation of security interest with CERSAI, which is Annexure A13 to this OA; Letter of acknowledgement dated 02.11.2020, which is Annexure A14 to this OA; Notice dated 17.10.2021 along with postal receipts, which is Annexure A15 to this OA and Statement of account duly certified, which is Annexure A16 to this OA.

¶22

The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs.1,55,13,164.12p, which is recoverable and the defendants were 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.

¶23

¶24

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 31.07.2023.

¶25

In support of the OA, affidavit of Sh. Kailash Krishna Bhatt, Chief Manager, Bank of India has been filed.

¶26

Heard ex-parte arguments and perused record.

¶27

It was argued by learned 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 A16 to this OA, it is proved that the defendants approached applicant bank for availing of the loan facility which was 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 loan 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.1,55,13,164.12p (Rupees One Crore Fifty Five Lacs Thirteen Thousand One Hundred Sixty Four and Paisa Twelve only) along with interest from the defendants, jointly and severely, from the date of filing of the present Original Application till realization of the accounts.

¶28

In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest @12.05%p.a. with monthly rests from the date of institution of this OA till the realization.

¶29

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

¶30

¶31

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.1,55,13,164.12p (Rupees One Crore Fifty Five Lacs Thirteen Thousand One Hundred Sixty Four and Paisa Twelve only) 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 property 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 29.01.2024. 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 Open Tribunal. Dated: 03.01.2024 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Bank of India, v. M/s Gold Shine Knitwears and Another

Case brief

What is this about?

What did the court decide?

Bank of India, v. M/s Gold Shine Knitwears and Another

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

Vikrant Gupta versus Central Bank of India

Hdfc Bank Limited, versus Sh. Harnath Singh

Hdfc Bank Ltd., versus Sh. Ranjeet Singh

Punjab National Bank, versus Sh. Rahul Sharma

Punjab National Bank, versus M/S Nirmal Singh & Co. and Another

Punjab National Bank, versus M/S Kumar Fastners and Another