Allowed

Canara Bank v. Smti Purabi Sonowal

DRT21 Jun 2024OA/315/2023

Case brief

AI extract

What is this about?

The DRT Guwahati considered an application by Canara Bank for issuance of Recovery Certificate against a defendant for loans availed for hardware, restaurant, poultry, and stone crushing businesses. Finding the documentation unchallenged and the OA within limitation, the court allowed the application.

What did the court decide?

Issuance of Recovery Certificate for Rs. 29,69,773.33 with pendentelite interest; charge kept alive on hypothecated properties; entitlement to proceed against secured and personal assets.

Canara Bank versus Smti Purabi Sonowal — Contract and Commercial Disputes | DRT (2024)

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6 A. 31r2o23voRT-Guwahat,

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(North Eastern Region) (Tribunal of Assam, Nagatand, Meghalaya, Manipur, Ml-zoram, Arunachal pradesh & Tripr.rra) d

O.A. No. 315/2023

ln the mattar of -

CANARA BANK

North Lakhimpur Branch N. T. Road, Near Police Station, North Lakhimpur Bazar, Pin-787031, Assam

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.Applica nt V3.

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I. SI'T PURABI SONOWAL C/o Uma Sonowal

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Village- Kadam Kachari, P.O.- Charaimara, Oishict- Lakhimpur, North Lakhimpur -787031, Assam.

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Also at :-

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SMT PUMBI SONOWAL W/o Gunajit Das

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Village- Rampur Rajgarh, P.O.- Rampur Deori, Rajgarh Rampur, Oistrict- Lakhimpur, North Lakhimpur -78703'1, Assam.

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Defendant

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Presence of the Counsel :

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For the Applicant : Mr. Manoj Kumar Roy, Advocate

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For the Defendant : None (Ex-parte)

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Oaled :2110612024

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JUDGMENT

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This is an application under section lg of the Recovery of Debts Due to Banks and Financial lnstitutions Act, 1993 filed by the CANAM BANK, North Lakhimpur Branch, N. T. Road, Near Police Station, North Lakhimpur Bazar, pin787031, Assam, with a prayer to issue Recovery Certificate for the sum of Rs. 29,69,773.33 (Rup6es Twonty-Nine Laca Sixty-Nino Thousand Soven Hundred Seventy-Three and Paba Thirty-Three) only as on 31.07.2023 against the defendant with^pendentelite and future interest at contractual rate till realization along with cost and other relief.

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A few facts^givins rise ro rhe^present apptication are as under. jk$pL 4Y

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DRT, Guwahali

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oA 315/2O23rORT-Guwah.ti

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The Defendant as the proprietor of M/s Brahmaputra Group and Enterprise had approached the Applicant Bank and applhi for Financial assistance for its Hardware retail business by submitting a Loan application daled 30j22017. The applicant bank after considering the said application vide Sanction Memorandum dated 30.i2.2017, sanclioned a c€sh credit limit of Rs.6.00 Lacs with interest charged at 10.80% per annum calculated on daily^product at monthly rest. The cash credit was repayable on demand. The said Sanction was duly accepted by the Detendant, thereby agreeing to all the terms and conditions contained therein, Further, the defendant had signed a Request for Overdrafr Facilities dal€d 30.12.2017, thereby conrirming the availing of the loan facility and also accepting the terms and conditions contained therein.

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ln connection with the sanction of the cash credit facilrty of Rs. 6.00 Lacs, sanclioned by the Applicant Bank and availed of by the Defendant, a Cash Credit Agreement dated 30.12.2017 has been signed and executed by the Defendant in favor of the Applicani Blank as security for repayment of the loan tacility, thereby agreeing to all the terms and condition laid down in the said Agreement and alto, hypothecated the stocks of hardware materials etc. (more specirically described in schedule A of the OA) in hvor of the Applicant Blank Further the defendant had and signed and executed a Letter of Undertaking re: Loans/Advances dabd 30j22017 and pronole daled 30.12.2017, thereby promising to pay the Applicant Bank the entire loan amounl on demand.

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The Defendant being the proprietor of l\ills North East Pavallion had again approached the Applicant Bank and applied for financial assistance for its resiaurant business by submitting a Loan application dated 18.03.2019. The applicant bank after considering the saiJ application vide Sanclion Memorandum dated 18.03.2019, sanclioned a Term Loan facility of Rs. 5.95 Lacs to the Defendant with interest charged at 10.60% per annum calculated on daily^product at monthly rasts. The Term Loan was to be repaid in 60 Equal monthly lnstallments of Rs. 13,237.00^{per month.} The applicant bank had also sanctioned a cash credit^{faciltyof Rs.1.90lacs to the D€fendantwith} interest charged al 11.600/o^per annum calculated on daily^{product at monthlyrests.The} Cash Credit loan was repayable^{on demand.The saidSanclionMemorandum was duly}

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O A. 315/2023/DRT-GiJwahal

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accepted by the Defendant, thereby agreeing to all^the terms^and conditions contained therein. Further, the defendant had signed a Request for Overdraft^Facillties dated 18.03.2019, thereby confirming the availing of the loan facility and also accepting the terms and conditions contained therein.

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As security for repayment of the aforesaid loan^facilities Le^{Rs.5.95 Lacs} OL)^and Rs.1.9o Lacs^(CC) and overall facility of^{Rs.7.85 Lacs, the Defendanthad signedand} executed an Agreement cum Deed^{of Hypothecation dated 18.03.2019thereby not only} hypothecating the fumiture and fixtures,^{Book Debts,receivables,cunent assets etc.} (more specmcally described in schedule B of the OA) in favour of the applicant bank but also agreeing to all the terms and^{conditions contained therein. Fu]ther,the defendant} had also signed and executed a Letter of Undertaking^{re: Loans/ Advancesdated} 18.03.2019 and^pronote dated 18.03.2019,^{thereby promising to pay the ApplicantBank} the entire loan amount on demand.

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Thereafter during the Covid 19^{pandemic, pre-approved loan wasofferedto the} defendant vide letter dated 10.06.2020^{and the defendant acceptedlhal offerand} accordingly the applicant bank^{videSanclion Memorandumdated10.06.2020,had} sanclioned Rs. 1.14 Lacs to the defendant^{under GuaranteedEmergency CreditLinewith} interBst charged @ 7.55o/o^per annum^{with monthly rests.The Term Loanwas to be} repaid in 36 monthly installment of Rs.3,143.00 and^{the frst of such installmentshall be} paid on^'10.07.2021 after 12 months moratorium period^(interest to be^paid monthly). The Defendant had signed on the said Sanclion^{Memorandumthereby agreeingto all the} terms and conditions contained therein.^{Thereafterthe defendanthad also signed and} executed an Agreement cum Deed of^{Hypothecation dated 10.06.2020,TakeOelivery} Letter to DPN dated 10.06.2020 and Pronote dated^{'10.06.2020as securityforrepayment} of the loan and thereby agreeing to all the terms^{and conditionscontainsd therein in} favour of the applicant Bank.

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Thereafrer again the defendant approached the^{applicantbank and applied for} financial assistance for^poultry farming i.e.^piglet by^{submittinga loan application dated} 29.08.2020 along with the foMarding^{letterof the govemment.Theapplicant bank} after considering the said application^{vide Sanclion Memorandumdated 29.08.2020,}

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s\i,lr&a"U*r, )1.tfr.2.,t4 0 Pr$iding Officer DRT, Guwaheti

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9.a 31 5,2o23,DRr-cueah.tl

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sanc'tioned a Term Loan facility of Rs. 3.60 Lacs to the oefendant with interest charged at 9.65% per annum calculated on daily product at monthly rests. The Term Loan was to be repaid in Half yeady lnstallments of Rs.47,572.00 for sixty months. The Dofendant had signed on the said Sanction Memorandum thereby agreeing to all the terms and condilions contained therein. Thereafrer the Defendant had sEned and executed an Agre€ment of Hypothecation for Agricultural Loan dated Z9.O1.2O2O thereby not onty hypothecating the piglets etc. (more specifica y described in scfiedule C of the OA) but also agreeing to allthe terms and conditions contained therein.

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The Oefendant had again approached the Applicant Bank and applied for financial assistance under PMEGP by submitting a Loan apptication dated i7.08.2021. The applicant bank afrer considering the said application vide Sanction Memorandum dated 17.08.2021, sanctioned a Term Loan facitity of Rs. l9,92,5OO.OO to the Defendant with interest charged at 9.40% per annum calculated on daily producl at monthly rests. The Term Loan was to be repaid in 78 Equal monthly lnstiallments of Rs.2S,544.97 per month. The applicant bank had also sanctioned a cash credit facility of RS.3.OO lacs to the Defendant with interest charged at 9.40o/o per annum calculated on dally product at monthly rests. The Cash Credit loan was repayable on demand. The said Sanclion Memorandum was duly accepted by the Defendant, thereby agreeing to all the terms and conditions contained therein. Thereafrer, as security to the financial facilities the Defendant had signed and executed a Composite loan agreement daied 17.09.2021 thereby not only hypothecating the plant, machineries stocks of stone and gravels, Book Debts, receivables, current asseb etc. (more specifically described in schedule D of the OA) in favour of the applicant bank but also agreeing to all the terms and conditions contained therein. Further, th6 defendant had also signed and executed a Letter of Undertaking re Loans Advances dated 18.03.2019 and pronote dated 15.03.2019. thereby promising to pay the Applicant Bank the entire loan amount on demand.

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The Defendant had availed of the said loan facilities from the Applicant Bank, but have nol repay the installmenb in the term loan accounts and interest in the cash credit a@ounts as^per the terms and conditions as agreed upon with the Applicant Bank, inspite

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of repeated demands and requests by the Applicant Bank. Thereafter, as the Oefendant

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slilo{qr^q"L421.M.2.u [l Prasding omcel ' v ORT. Guwahati

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o a. 315t2o2uDRT-Gu*.hati

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had failed to repay the ovedue amount in the loan accounts, the Applicant Bank vide Demand Letters dated 01.03.2023 and 03.03.2023 had demanded and requested the Defendant lo regularize the loan accounts by paying tha overdue amount in the loan accounts lncluding the accrued interest thereon but the Defendant failed to rcspond to the sail demands and request even afrer receipt of the same. Hoy,,/ever, lhe defendant had signed and executed Acknowledgement of Debt and Security dated 06.08.2019, 02.08.2021, 01.09.2021 and 09.09.2021 thereby confirming and acknowl€dging the availing of the credit facility from the applicant bank.

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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. 7,5'1,736.00 in the cash credit Account (A"/c No. 424826'100@9) as on 31.07.2023 and afrer deduc{ion of the charged penal interest I Rs.7,51,736.00 Rs.4,332 (penal tnterest) I the amount comes to Rs 7,47,404.00 and an outstanding balance of Rs.4,38,792.89 in the Term Loan Account (A,/c No. 4248768000158) as on 31 .07 .2023 and afrer deduclion of the charged penal interest I Rs. 4.38,792.89 - Rs 2,370.00 (Penal lnterest) ], the amount comes to Rs. 4,36.422.89 and an outstanding balance of Rs. 1,78,282.00 in the cash credit Account (4"/c No. 424826100070) as on 3'l . 07 .2023 and affer deduciion of the charged penal interest I Rs. 1,78,282.00 - Rs. 875.00 (Penal lnterest) ], the amount comes to Rs. 1,77,407.00 and an outstanding balance of Rs. 94,548,60 in the GECL Account (A,/c No. 4248755000034) as on 31.07.2023 and aier deduction of the charged penal interest I Rs. 94,548.00 - Rs. 279.00 (Penal lnterest) ], the amount comes to Rs. 94,269,60 and an outstanding balance of Rs. 2.98,146.91 in tha Term Loan Account (A/c No. 424886400023) as on 31.07.2023 and afrer deduction of the charged penal interest I Rs. 2,98,146.91 - Rs. 509.00 (Panal lnterest) l, the amount comes to Rs. 2.97,637.91 and an outstanding balance of Rs. 265.98 in the cash Cr6dit. Account (A/c No. '125000486392) as on 31.07.2023 and afrer deduction of the charged penal interest I Rs. 265.98 -Rs.460.00 (Penal lnterest) l, the amount crmes to Rs. 195.00 and an outstanding balance of Rs. 15,17,916.84 in the Term Loan Account (A,/c No. 170000580557) as on 31.07.2023 and afler deduclion of the charged penal interest I Rs. 15,17,916.84 - Rs. 3,842.00 (Penal lnterest)], the amount comes to: Rs 15,14,074.84.

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*,kh'?oRT, Guwahati

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6 o A. 3i r2o23lDRT-GuMhlri

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The account was classified as N.p.A on 24.02.2023 and the total outstanding in all the loan accounts comes to Rs. 7,47,404.00 (CC) + 6 4,36,4rr.89 OLI) + Rs. 1,77 ,4O7.OO (CC-1) +^ps.94,269.60 (GECL) + Rs.2,97,637.91 OL-2) + Rs. 195.00 (CC-2) + Rs.15,14,074.84 CrL-31 = p". 29,69,773.33 and the Defendant is tega y bound and severally liable to repay the said amount to the Applicant Bank with pendentelite interest al contractual rales with mst and charges till realization.

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The applicant bank thus became constrained to file the presant Original Application for the remvery of Rs. 29,69,773.33 (Rupee3 Twenty-Nine Laca Sixty_ Nina Thousand Soven Hundrod Seventy_Thrgo and paba Thirty-Th.9o) only as on 31.07.2023 along with interest and mst of the application.

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After filing of the OA the Tribunal issued nolice upon the defendant through regislered post and the applicant bank filed service report on i6.10.2023 and brought on record the postal receipt along with track consignment report which shows that noiice has not been served upon the sore defendant. Thereafter the Tnbunar ordered paper publication of notice upon the sole defendant and the applicant bank issued notice to the sole defendant on 1Z122029 through paper publication in two newspapers namely "Ihe Times of lndia" and "Dainik Assam". Even after issuance of notice through paper pubrication arso there was no representarion on behalf of the sole defendant either by the counser or the person and hence the defendant was set ex-parte on 05-03-2024 and her right to file written statement cum evidence on affidavit was closed and the mafter was listed for hearing on behalf of the applicant bank.

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supportang the craim of the appricant bank sri Bikash prasad, Manager of the Applicant Bank has ,iled evidence on affidavii coupled with the security documents marked as Exhibit AW-.l to AW_39, supporting the claim of the appticant bank.

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Heard the learned counsel for the applicant bank who prayed for issuance of Recovery Certificate against the defendant as per pleadings made in lhe Application, supported by evidence on affidavit of their witness who affirmed on oath ths execution of the security and other documents by the defendant and also execution of their own documents retied upon, ,rhich have been marked exhibits.

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SLirf dOMrq"&/# P,"ddt^s*!",ac^ul U DRT, Guwahati

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g.a. 31f/2023r/DRr€uw.hrti

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Considering the facts and circumstances of the case, I am of the considered view that the documenl filed by the applicant bank are supporting the claim of the applicant bank and establishing the tiability of the defendant. tt is proved that the defendant is liable to pay to the applicant bank the ctaim made in the Original Application. The loans were obtained and documents have been executed on 30j2.2017,18.03.2019, 10.06.2020, 21.OB,2O2O, 17.08.2021. Acknowtedgement of Debl and Security are dated 06.08.2019, O2.OB.2O2,|, 01.O1.2OZ1 and 09.09.202.1. The accounts became NPA on 24.02.2023 and the OA has been filed on 28.08.2023. Hence, the OA is fited well within the period of lamitation and this Tribunal having a jurisdiction to adludicate the Originat Apptication.

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Considering the unchallenged/ unrebutted version of Sd Bikash prasad, the applicant's witness and all the documents marked as exhibits, including duly certified copy of the statemenl of account along with interest calculation sheet maintained by the applicant Bank in it's regular course of business, I hold that the applicant is entifled lo get the Recovery Certiricate as prayed for.

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ln the r6sult, the present Original Application No. 31S of 2023 is allowed with cosl as under :-

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i) The sole defendant is liable to pay lo the applicant bank a sum of RB. 29,69,773.33 (Rupo68 Twenty-Nino Laca Sixty_Nin6 Thous.nd Sevon Hundrod Seventy-Th.ee and^pai3a Thirty-Thr6e) only with pendentelite and future interest @10.80% per annum with monthty rests from 01.08.2023 till the date of full paymenurealization and also cost of the application.

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ii) The charge of the certmcated amount be kept alive on hypothecated properties, as described in Schedule A of the OA iill the amount is realized in full.

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iii) The charge of the certiricated amount be kept alive on hypothecated properties. as described in Schedute B of the OA till the amount is reatized in fult.

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iv) The charge of the certificated amount be kept alive on hypothecated properties, as described in Schedule C of the OA till the amount is realizad in fu .

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v) The charge of the certmcated amount be kept alive on hypothecated properties,

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

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slrrreforc"g'^U*' zl.tc.tU U Proaiding Offcer DRT, Gu\oahati

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64 315/2023/DRr-curr.hati

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vl) The applicant bank is entiued to proceed againsl the secured items towards

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recovery of the debts.

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vil) The applicant bank is also entifled to proceed against the personal assets and properties of the defendant towards recovery of the dues.

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viii) The applicant bank is entifled to the costs of the O.A. which includes the advocate fees of the applicant bank. Applicant is directed to file the cost memo within 2 weeks from today.

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ix) lssue Recovery Certificate accordingly for a sum Rs. 29,09,723.33 (Rupeeg

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Trventy-Nins Laca Sixty-Nins Thousand Sovgn Hundred Seventy-Three and Paba Thirty-Thro6) only in favour of the applicant bank against the sole defendant.

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

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This order is dictated and corrected by the undersigned.

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Judgmenl dated 21.rJune' 2024, signed and pronounced in the Tribunal today

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under my signature.

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Copy of the JudgmenuFinal Order be uploaded in the Tribunal's Website and

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file be consigned to Record Room.

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.Ck-,re{,ua.,}'*rytsr,irst"r"n)ol.,LEi1^(/ Presiding Officer ORT, Guwahati

Canara Bank v. Smti Purabi Sonowal

Case brief

What is this about?

What did the court decide?

Canara Bank v. Smti Purabi Sonowal

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

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