Allowed

Indian Overseas Bank v. Messrs Sri Bhikshu International and Another

DRT19 Oct 2024OA/318/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an ex-parte application filed to recover Rs.90.28 Lakhs. The court declared defendants liable to pay principal plus 8% annual interest and enabled recovery through hypothecated properties or personal assets if dues remain unsatisfied.

What did the court decide?

Declaration of liability to pay Rs.90,28,677.00 plus 8% annual interest; entitlement to recover via sale of hypothecated/personal assets.

Indian Overseas Bank versus Messrs Sri Bhikshu International… — Banking and Recovery | DRT (2024)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.318/2023 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 20.02.2023

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DATE OF DECISION: 19.10.2024

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Indian Overseas Bank, a body corporate, duly constituted under the Banking Companies (Acquisition and Transfer of Undertakings) act, 1970 having its Central Office at 763, Anna Salai, Chennai-600002 and one of its branches at Sunder Nagar, Ludhiana through Sh. Deepak Kumar Jha, Chief Manager, its Principal Officer and Constituted Attorney.

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……..Applicant

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Versus

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M/s Sri Bhikshu International, House No. 1284/24/E, Street No. 6, Guru Nanak Dev Nagar, Rahon Road, Ludhiana through its Proprietor Sh. Jitendra Mahanot.

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Sh. Jitender Mahanot, Proprietor House No. 1284/24/E, Street No. 6, Guru Nanak Dev Nagar, Rahon Road, Ludhiana.

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2^nd Address : House no.514/1096, Chowni Mohalla, Ludhiana

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………Defendants

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Advocates:

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Argued by Sh. R.V. Mehra, Advocate for the applicant (through VC) Defendants are ex-parte

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FINAL ORDER

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Present Original Application was instituted by the applicant under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.90,28,677.00 (Rupees Ninety Lacs Twenty Eight Thousand Six Hundred and Seventy Seven only). The Original Application has been filed through Sh. Deepak Kumar Jha, Chief Manager o f the applicant, who is competent to institute the Original Application vide Power of Attorney dated 28.01.2012, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant No.1 through its proprietor i.e. defendant no.2 had approached the applicant for the grant of Cash Credit Limit of Rs.20.00 Lacs and Term Loan of Rs.5.00. time to time approached the applicant bank for its enhancement to Rs. 50.00 Lacs and Term Loan of Rs.5.00 Lacs under CGTSME scheme and further for the grant of SME Debit Card Limit of Rs.4.00 Lacs. The defendant again approached the applicant bank for Working Capital Term Loan (WCTL) of Rs. 13.66 Lacs, Funded Interest Term Loan (FITL) of Rs. 6.15 Lacs and GECL of Rs.6.80 Lacs under ECLGS1.0 scheme vide Loan Application dated 30.12.2020 and 27.05.2021, which are Annexures A51 & A57 to this OA

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The applicant sanctioned the Cash Credit Limit of Rs.20.00 Lacs and Term Loan of Rs.5.00 Lacs vide sanction letter dated 23.07.2011, which is Annexure A2 to this OA and further from time to time enhanced the CC Limit Upto Rs.50.00 Lacs and sanctioned various credit facilities from time to time i.e. Term loan of Rs.4.00 Lacs under CGTSME scheme, SME Debit Card Limit of Rs.4.00 Lacs, Working Capital Term Loan (WCTL) of Rs.13.66 Lacs, Funded Interest Term Loan (FITL) of Rs.6.15 Lacs and GECL of Rs.6.80 Lacs under ECLGS1.0 scheme vide Sanction Letters dated 07.09.2012, 02.01.2014, 30.05.2017, 30.12.2020, 31.05.2021 and 02.12.2021, which are Annexures A8, A17, A18, A25, A52, A53, A58, A59 & A63 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant no.1 had hypothecated its movable properties i.e. Hypothecated the entire Stocks, machineries, vehicles, goods and book debts vide Letter of Hypothecation dated 23.07.2011, 07.09.2012, 02.01.2014, 06.06.2017, 30.12.2020, and 02.12.2021, which are Annexure A5 to A7, A12 to A14, A21 to A24, A29 to A31, A37, A38, A56 and A65 to this OA.

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Documents executed:- Letter of Acknowledgement, Demand Promissory Note both dated 23.07.2011, which are Annexures A3 & A4 to this OA; Letter of Acknowledgement, Demand Promissory note, Letter of Undertaking all dated 07.09.2021, which are Annexures A9 to A11 & AA16 to this OA; Demand Promissory Notes dated 02.01.2014, which are Annexures A19 & A20 to this OA; Letter of Acknowledgement, Demand Promissory notes all dated 06.06.2017, which are Annexures A26 to A28 to this OA; Letter of Consent regarding charging of interest, Letter of Undertaking, Letter of Assurance, Letter of Undertaking in respect of maintaining unsecured loans, letter of Acknowledgment all dated 06.06.2007, which are Annexures A32 to A35(a) to this OA; Demand Promissory Notes, Letter of continuity for DPN in respect of operative credit limit/ working capital facilities, Letter of floating rate of interest linked to RLLR all dated 30.12.2020, which are Annexures A36, A39 & A40 to this OA; Revival Letters dated 07.04.2014 and 05.05.2015, which are Annexures A41 & A42 to this OA; Letter of Balance Confirmations dated 03.04.2017, 30.12.2020 and 02.12.2021, which are Annexures A43 to A45 to this OA; Demand Promissory Note, Letter of consent regarding charging of interest, Letter of Undertaking, Letter of Authority to transfer of funds from cash credit account to sme card account all dated 06.06.2017, which are Annexures A46 to A50 to this OA; Demand Promissory Note, Term Loan Agreement both dated 30.12.2020, which are Annexures A54 & A55 to this OA; Demand Promissory Note, Term Loan Agreement, Letter of Undertaking for Repayment in installment all dated 31.05.2021, which are Annexures A60 to A62 to this OA; Demand Promissory Note, Letter of Declaration/Undertaking, Term Loan Agreement, Letter of Undertaking of Repayment in installment, Letter of Undertaking from the new Borrowers after introduction of interest linked with RLLR instead of MCLR/Base Rate all dated 02.12.2021, which are Annexures A64,

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A66 to A69 to this OA; Legal Notices dated 10.06.2022 with Postal Receipts, which are Annexures A70 & A71 to this OA and Statements of accounts along with the various credit and debit entries therein bearing certificate of the branch manager under section 4 read with section 2 (8) of the Banker’s Book Evidence Act with Certificate, which are Annexures A72 to A76 to this OA.

¶24

The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in all the loan accounts there was a debit of Rs.90,28,677.00, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant requested to accept the application and to issue Recovery Certificate accordingly.

¶25

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 14.10.2024.

¶26

In support of the OA, affidavit of Sh. Deepak Kumar Jha, Chief Manager, Indian Overseas Bank has been filed.

¶27

Heard arguments and perused record.

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It was argued by learned counsel through Video Conferencing that in view of the documentary evidence brought on record which had gone unrebutted, the applicant had proved its case. From the perusal of all the Annexures A1 to A76 to this OA, it is proved that the defendants approached applicant 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 applicant. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, all the accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.90,28,677.00 (Rupees Ninety Lacs Twenty Eight Thousand Six Hundred and Seventy Seven only)along with interest

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from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of both the accounts. 10. In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @15.15%p.a. in Cash Credit Limit, interest @11.25%p.a. in Cash Credit SME Debit Limit and interest @11.90%p.a. in FITL from 11.02.2023 till the realization.

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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 exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @8.00%p.a. in all the loan accounts from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly.

¶32

In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.90,28,677.00 (Rupees Ninety Lacs Twenty Eight Thousand Six Hundred and Seventy Seven only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in all the loan accounts from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant 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.

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Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 30.10.2024.

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Copy of this order be given dasti to the applicant 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.

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Pronounced by me in the open Tribunal .

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Dated: 19.10.2024

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(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Indian Overseas Bank v. Messrs Sri Bhikshu International and Another

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. Messrs Sri Bhikshu International 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

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