Allowed

Hdfc Bank Limited v. M/S Nikhil Knitwear and Others

DRT29 Aug 2024OA/330/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's application for recovery of Rs. 46.99 lakhs from a proprietorship firm and its guarantors. The Tribunal deems it just to award a uniform simple interest rate of 8% per annum instead of the claimed rates.

What did the court decide?

Recovery of Rs. 46,99,690.84 jointly and severally with costs and simple interest @8% p.a. Recovery Certificate issued.

Hdfc Bank Limited versus M/S Nikhil Knitwear and Others — Company and Corporate | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.330/2022 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 02.02.2022

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DATE OF DECISION: 29.08.2024

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HDFC Bank Ltd., a banking company, incorporated under Companies Act, 1956, having its Registered Office at HDFC Bank House, Senapati Bapat Marg, Lower Parel (West), Mumbai-400013, Maharashtra having one of its branch at Ludhiana, Punjab and Chandigarh, through its duly Authorized Signatory and Authorized Officer Sh. Sunil Kalra, working as Legal Manager currently posted at Plot No. 28, Phase-1, Industrial Area, Chandigarh-160002.

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……..Applicant

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Versus

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M/s Nikhil Knitwear, a Proprietorship Firm being represented through its Proprietor Mr. Surinder Malhotra S/o Sh. Sunder Dass Malhotra, having its Place of Business situated at Factory No. 6033, Street No. 14, Hargobind Nagar, Near Hanuman Mandir, Ludhiana, Punjab. (Borrower )

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Sh. Surinder Malhotra S/o Sh. Sunder Dass Malhotra, C/o Factory No. 6033, Street No. 14, Hargobind Nagar, Near Hanuman Mandir, Ludhiana, Punjab. (Borrower and Guarantor)

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Sh. Rahul Malhotra S/o Sh. Surinder Malhotra C/o Factory No. 6033, Street No. 14, Hargobind Nagar, Near Hanuman Mandir, Ludhiana, Punjab. (Guarantor)

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………Defendants

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Advocates:

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Argued by Sh. Harinder Kumar, counsel for the applicant Defendants are ex-parte

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FINAL ORDER

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1. Present Original Application was instituted by the applicant bank under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of

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Rs.46,99,690.84p (Rupees Forty Six Lacs Ninety Nine Thousand Six Hundred Ninety and Paisa Eighty Four only). The Original Application has been filed through Sh. Sunil Kalra, Legal Manager o f the applicant bank, who is competent to institute the Original Application vide Board Resolution dated 16.10.2021, 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 bank for the grant of Cash Credit Limit of Rs.40.00 Lacs vide Loan Application, which is Annexure A2 to this OA. and further for the grant of Term Loan-I of Rs.10.00 Lacs vide Request Letter dated 16.06.2017, which is Annexure A14 to this OA The defendant No.1 again approached the applicant bank for grant of Term Loan-II of Rs.2.89 Lacs vide Request Letter dated 01.11.2017, which is Annexure A27 to this OA and from time to time approached the applicant for the renewal of the Credit Facilities i.e. CC Limit of Rs.40.00 Lacs, Term Loan-1 of Rs.4.00 Lacs and Term Loan II of Rs.2.89 Lacs vide Request Letters, which are Annexures A39 and A41 to this OA .

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Later, Defendants requested the applicant bank for restructuring of CC Limit by converting the overdue interest into WC-TL (Term LoanIII) of Rs. 1,85,791.00 and for renewal of Credit Facilities i.e. CC Limit of Rs.40.00 Lacs, Term Loan-1 of Rs.4.00 Lacs, Term Loan II of Rs.2.89 Lacs and Term Loan III of Rs.1,85,791.00 vide Loan Request Letter dated 25.03.2021, which is Annexure A46 to this OA

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The applicant Bank sanctioned the Cash Credit Limit of Rs.40.00 Lacs vide Sanction Letter dated 07.03.2017, which is Annexure A3 to this OA and later sanctioned a Term Loan-I of Rs.10.00 vide Sanction Letter dated 01.07.2017, which is Annexure A15 to this OA. The applicant bank sanctioned the Term Loan-II of Rs. 2.89 Lacs vide Sanction Letter dated 14.11.2017, which is Annexure A28 to this OA and also from time to time sanctioned the renewal of Credit Facilities i.e. CC Limit of Rs.40.00 Lacs, Term Loan-1 of Rs.4.00 Lacs and Term Loan II of Rs.2.89 Lacs vide Sanction Letter dated 09.03.2018,

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13.03.2019 and 07.03.2020, which are Annexures A40, A42 and A43 to this OA.

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Later The applicant bank once again sanctioned the restructuring of CC Limit by converting the overdue interest into WCTL (Term Loan-III) of Rs. 1,85,791.00 vide Moratorium Letter, which is Annexure A45 to this OA and also sanctioned the renewal of Credit Facilities i.e. CC Limit of Rs.40.00 Lacs, Term Loan-1 of Rs.4.00 Lacs, Term Loan II of Rs.2.89 Lacs and Term Loan III of Rs.1,85,791.00 vide Sanction Letter dated 30.03.2021, which is Annexure A47 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant no.2 had mortgaged his immovable measuring i.e. Commercial property measuring 100 Sq. yards situated at Street no. 14, near Hanuman Mandir, Ludhiana, Punjab-141008 vide Equitable Mortgage of Title Deed bearing vasika no. 28655 dated 11.02.1994, which is Annexure A12 to this OA. Documents executed:- Master facility Agreement, Power of Attorney, Amendment Agreement, Deed of Hypothecation, Letter of Continuing Guarantee, Deed of Indemnity all dated 08.03.2017, which are Annexures A4 to A8 and A10 to this OA; Memorandum recording equitable mortgage dated 18.05.2017, which is Annexure A9 to this OA; Undertaking cum Indemnity dated 22.06.2017, which is Annexure A11 to this OA; Valuation Report dated 03.03.2017, which is Annexure A13 to this OA; Amendment Agreement, D.P. Note, Letter of continuing Security, Supplementary Agreement, Term Loan Agreement, Supplementary letter of Hypothecation, Power of Attorney, Memorandum recording equitable mortgage, Deed of Indemnity, Supplementary Letter of Continuing guarantee all dated 01.07.2017, which are Annexures A16 to A26 to this OA; D.P. Note, Letter of continuing Security, Supplementary Agreement, Term Loan Agreement, Supplementary letter of Hypothecation, Power of Attorney, Memorandum recording equitable mortgage, Declaration Cum Indemnity, Deed of Indemnity, Supplementary Letter of Continuing

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guarantee all dated 14.11.2017, which are Annexures A29 to A38 to this OA; Addendum dated 06.03.2020, which is Annexure A44 to this OA; Statements of CC account, Statement of Term Loan-I, II and III, Calculation Chart Certified under Banker Books Evidence Act, 1891 and Memoranda of Interest, which are Annexures A48 to A52 to this OA and Loan Recall Notice dated 24.09.2021, which is Annexure A53 to this OA and.

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The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in both the loan accounts there was a debit of Rs.46,99,690.84p, 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.

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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 27.07.2024.

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In support of the OA, affidavit of Sh. Sunil Kalra, Legal Manager, HDFC Bank Ltd. has been filed.

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Heard arguments and perused record.

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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 A53 to this OA, it is proved that the defendants 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 loan as per terms and conditions of the agreement between the parties. Subsequently, both the accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.46,99,690.84p (Rupees Forty Six Lacs Ninety Nine Thousand Six Hundred Ninety and Paisa Eighty Four only) along with interest from

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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 bank in relief clause has claimed interest @18.00%p.a. in Cash Credit Limit and @24.00%p.a. in Term Loan-I, II & III with yearly interest from 01.01.2022 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 both 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.

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In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.46,99,690.84p (Rupees Forty Six Lacs Ninety Nine Thousand Six Hundred Ninety and Paisa Eighty Four only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in both the loan accounts 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.

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Any other application pending stands disposed of.

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 21.09.2024. 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: 29.08.2024 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Hdfc Bank Limited v. M/S Nikhil Knitwear and Others

Case brief

What is this about?

What did the court decide?

Hdfc Bank Limited v. M/S Nikhil Knitwear and Others

Case brief

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What did the court decide?

What the court decided

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