Allowed

Union Bank of India v. Ms Sunita Enterprises

DRT19 Sept 2024OA/332/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by Union Bank of India to recover Rs. 50,31,799.65 plus interest against three respondents from a proprietorship firm and a guarantor. The Tribunal found Demand and confirmed jurisdiction based on cause of action and jurisdiction, holding the claim was within the limitation period. A recovery certificate was issued directing the sale of atta

What did the court decide?

Debt determined jointly and severally along with pendent lite and future interest; recovery certificate issued for realisation of sum due via sale of mortgaged/hypothecated assets.

Union Bank of India versus Ms Sunita Enterprises — Banking and Recovery | DRT (2024)

OA 332 of 2023 IJl

DRT, PATNA

Debts Recovery Tribunal, Patna

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Karpuri Thakur Sadan, Aashiana Digha Road Patna-800025

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Presiding Officer : Shri Kaushalendra Yadav OA Case No. 332of 2023

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Union Bank of India, Dharampur Branch, Samastipur-848101

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. . . . . . . Applicant

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Vs.

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M/s Sunita Enterprises Shop No. 62, Bazar Samiti Prangan, Mathurapur, District-Samastipur-8481 14

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Smt. Sunita Devi W/o Sri Raja Ram Ray, R/o Ward No. 7, Village-Sari, Anchal-Warisnagar, Behind Bazar Samiti, District-Samastipur-848301.

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Sri Raja Ram Ray S/o Sri Ram Jeevan Ray R/o Ward No. 7Village-Sari, Anchal-Warisnagar, Behind Bazar Samiti, District-Samastipur-848301.

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Defendants

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Present:

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For the Applicant : Shri Anup Kumar Sinha, Advocate For the Defendants : None

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Dated: 19.09.2024

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JUDGMENT

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The Applicant bank has made this application u/s 19 of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on30.6.2023 against the defendants to recover its debts from defendants of Rs. 50,31,799.65as on26.5.2023 along with pendente-lite and future interest @9.90% p.a. with monthly rests from 27.5.2023 with costs till realization.

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The application has been filed with the contention that the applicant bank, is a body corporate, constituted under the banking companies (Acquisition and Transfer of Undertakings) Act V of 1970, having its Head Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai-400021 and Branch Office at Dharampur Branch, Samastipur-848101

¶20

Defendant no. 1 is a proprietorship firm and defendant no. 2 is proprietor and defendant no. 3 is guarantor. Defendant no. 1 through proprietor defendant no. 2 approached the bank for grant of cash credit loan of Rs.40 lakh, which was sanctioned by the bank on 23.8.2018. Defendants executed the various loan documents in favour of the bank and defendant no. 2 also create equitable mortgage of property details given at page 14 in schedule-B of OA.

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OA 332 of 2023 1 Jl

DRT, PATNA

After availing the sanctioned credit facilities defendants became irregular in repayment of their dues as per agreed terms and failed to adhere to the financial norms of the bank and avoiding the repayment of its dues to the bank, in spite of several assurances given by it to the applicant bank resulting in the account turning as NPA on28.7.2021

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Since, the defendants failed and neglected in spite of several reminders to make payment of the dues recoverable to the bank, hence this application has been filed by the bank.

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The total liability in the loan account is Rs.50,31,799.65with pendentelite and future interest @ 9.90% p.a. with monthly rests from 27.5.2023 till the realization.

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This Tribunal issued summons/notices copies of application & paper book to the defendants by registered/speed post on 3 1.7.2023, requiring them to show-cause within 30 days of the service U/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993. The defendants have appeared.

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In response of defendants have filed rebuttal evidence stated that the defendant no. 1 is a proprietary firm, run by its proprietress i.e. Mrs. Sunita Devi who is the wife of defendant no. 3. The proprietress in order to run her business of wholesale in grocery items approached the bank for sanction of cash credit loan of Rs.40 lakh against primary security of hypothecation of stocks and equitable mortgage of immovable property. The residential house of the defendant is constructed on 18 dhur of the land while other plots are vacant being used for agricultural purposes. During Covid-19 epidemic in the year 2020 and also up to first half of the year 202 1. Despite unfavourable conditions, the defendant no. 2 maintained financial discipline and conducted the account as per terms and conditions embedded in the loan documents. It is further stated that the demand notice issued without disclosing the date of classification of the loan account as NPA. Bank thereafter without personal service of possession notice as mandated under rule 8(1) of the Rules affixed possession notice dated 28.10.2021 on the conspicuous part of the residential house. Bank thereafter published possession notice in Hindi daily Dainik Jagaran also English daily newspaper. It is further stated that the highest rate of interest has been charged against the defendants. It is further stated that the defendants were trying to their best to repay the overdue amount. In view of

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OA 332 of 2023 IJl

DRT, PATNA

the above fact and circumstances the present OA filed by the bank is fit to be dismissed.

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To prove its case, the applicant Bank has referred various certified photocopies of documents before this Tribunal. The applicant bank has also given evidence on affidavit by way of affidavit by Shri Kishore Kunal, Branch Manager of the applicant bank. The details of documents are as follows:

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SI.No	1Description Documents Photocopies of	1Dateof Execution	I Amount 1(inLakh)	Signature of Executants	Ex./ Ann No
r		s		Defendantno. 1 &2	1
2			Rs.40 lakh	Defendantno. 1 &2	2
3	Hypothecation agreementforgoods anddebts	23.8.2018	Rs.40lakh	Defendantno. 1 &2	3
4	Letter of negative lien	23.8.2018		e 1 &2
5	Interestagreement	23.8.2018		e 1 &2
6	Letter ofguarantee	23.8.2018	Rs.40 lakh	e 3
7	Memorandum	23.8.2018		k
8	Copyof titledeed				8
9	Landrevenuereceipt				9
10	LPC				10
11	e			Defendant no. 2	11
	Affidavit
	Letter confirmation o			Defendantno. 2
14	DPnote	s		Defendantno. 2	14
	o			Bank
	r			Bank
	r	o 26.5.2023		Bank

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Heard arguments and perused the case record.

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Ld. Counsel of applicant bank submitted that the defendants have taken the loan and utilized the same and also executed the various loan documents to secure the loan. Further, submitted that the claim of the bank has been proved by documentary evidence. All the transactions were entered in the ledger of the loan accounts in the name of the defendant duly maintained by the applicant bank in its usual course of business. The interest /compound interest has been

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OA 332 of 2023 IJ I

DRT, PATNA

charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

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It is further submitted by Id. Counsel of applicant bank that there is no stay granted by any Higher Court, in respect of the proceedings of the present OA and requested to issue recovery certificate, as claimed for, in OA.

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It has been established that defendants are living and carrying on their business in the state of Bihar. Cause of action also arose in the State of Bihar. The said claim on the date of filing of application exceeded Rs.20 lacs. The applicant bank is functioning within the jurisdiction of this Tribunal. Therefore, this Tribunal has territorial as well as pecuniary jurisdiction to adjudicate upon the present application.

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On the issue of Limitation, to prove it, the applicant bank has submitted that the applicant bank has declared the account as NPA on 28.7.202 1, whereas the present application has been filed on 30.6.2023 Even, it is counted for the purpose of Limitation, then it is established that the applicant bank has filed the case within the limitation period. As such, it is established that the present application has been filed well within the period of limitation.

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Shri Kishore Kunal, Branch Manager of the applicant bank, has filed the affidavit in support of contents of application and the documents as evidence and proved on oath the pleadings and documents of the applicant bank as stated above.

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Section 19(3) of the Recovery of Debts and Bankruptcy Act, 1993 provides that the application u/s S.19 (1) shall be accompanied with true copies of all the documents relied on in support of the claim.

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The rule 12 (10) of the Debt Recovery Tribunal (Procedure) Rules, 1993, provides that if the defendant denies his liability to pay the claim made by the applicant, the tribunal may act upon the affidavit of the applicant who is acquainted with the facts of the case or who has on verification of the record sworn the affidavit in respect of the contents of the application and the documents as evidence.

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The rule 12 (11) of the aforesaid Rules, provides that the provisions contained in section 4 of the Banker’s Books evidence that Act, 1891 (18 of 1891) shall apply to a certified copy of an entry in a Banker’s Books furnished along with application filed under sub section 1 of section 19 by the applicant.

DRT. PATNA

OA 332 of 2023 IJl

Section 4 of Banker’s Books evidence Act, 1891 runs as underS.4. Mode of proof of entries in bankers’ books.–-4ubject to the provisions of this Act, a certifIed copy of any entry in a banker's book shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise,

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As such the certified true copies of the documents are admissible in evidence. The statement of account maintained in the ordinary course of business is not only admissible but shall be taken as the correct statement of account, more so since the entries in the statement of account have not been challenged.

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On perusal of the application, documents, affidavit and on consideration of the arguments, it is proved that the defendants have applied for loan and the bank had sanctioned the loan and to secure the loan and for repayment of loan amount with interests etc., the defendants have executed various loan documents, as stated in the application and proved by aforesaid evidence. Defendants have neither denied the utilization of funds advanced by applicant bank nor have pointed out any specific error and discrepancy in the Statement of Account.

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The evidence discussed above goes to establish that the amount of loan as mentioned in the O. A., was availed by the borrower under the agreed terms and conditions for repayment with interest. The balance amount till 26.5.2023 has been proved to be Rs.50,31,799.65 only by way of statement of account. There is nothing to prove the amount more than that disclosed in the aforementioned statement. As such this amount is recoverable till full and final realization of the claim.

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In my view, facts of the case stand proved by evidence of the applicant bank. Accordingly, the applicant bank is entitled to recover from defendants jointly and severally of Rs.50,31,799.65along with pendente-lite and future interest @9.90% p.a. with compounded monthly rests from 30.6.2023(The date of filing of this OA) till realization. So the final order may be passed accordingly, to meet the ends of justice.

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ORDER

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In the result, the application of the applicant bank is allowed and debt is determined with costs against the defendants. The defendants are hereby jointly

IH$

OA 332 of 2023 IJI

DRT, PATN A

and severally, ordered to pay the applicant bank its debt amounting toRs.50,31,799.65along with pendente-lite and future interest @ 9.90% p.a. with compounded monthly rests from 30.6.2023(The date of filing of this OA) till realization of the entire sum due and recoverable with costs.

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It is made clear that any amount deposited by the defendants, be deducted in the claim amount, if not deducted.

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Defendants are debarred from transferring, alienating encumbering or otherwise dealing with or disposing of the mortgaged or hypothecated or any other properties and assets without paying the aforesaid adjudicated dues to the applicant bank to secure the ends of justice. The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to the final order under the recovery proceedings in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993. The applicant may submit the certified copy of this Judgment and the Recovery Certificate before the Registrar/Sub- Registrar to endorse the charge over the secured assets.

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Let a certificate of recovery be drawn up forthwith and put up for signatures in terms of provisions contained in Section 19(22) of the Act to be issued, on the basis of the order of the Tribunal to the Recovery Officer. The Recovery Officer shall realize the amount as per the certificate in the manner and mode prescribed under the Act from the defendants, by sale of mortgaged/ hypothecated assets as well as other personal movable/immovable assets of the defendants.

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Parties are directed to appear before the Recovery Officer, DRT, Patna on 4.11.2024. The order be communicated accordingly.

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Judgment signed, sealed, dated and pronounced in the open court on 198lday of September, 2024.

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Dictated &corrected by me.

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[KaushalendraYadav] Presiding Officer Debts Recovery Tribunal, Patna

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FORNI NQ, 9 [See Regulation 24( 1 )]

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DEBTS RE(-'O-ER\ TRIBL'N AL PATh A

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2nd Floor, ( A. B & F Wing) Karpuri Thdkur Sadan. Kendriya Karamchari Parisar (GPOA), Ashland Digha Road, Patna-800025,

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RECOVER)' CERTIFICATE UNDER SECTION 19(Z) READ WITH SECTION 19(B) OF THE RECOVERY OF DEBTS & BANKRUPTCY ACT, 1993, AS AMENDED FROM TIME TO TIME.

RC No. 227/2024

Case No: OA/332/2023

In the Matter of (CH- 1) UNION BANK OF INDIA DHARAMPUR BRANCH SAMASTIPLJR .BIHAR -848 IOI

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Applicant(s)

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(CD- 1) MS SUNTTA ENTERPRISES through its Proprietor Smt. Sunlta Devi Shop No. 62, Bazar Samltl Prangan. Mathurapur. Samastipur ,BIHAR -848301

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(CD- 2) SMT. SUNITA DEVI WIFE OF SRI RAJA RAM RAY. RESIDENT OF WARD NO .07 VILLAGE - SARI ANCH AL - WARISN AGAR, BEHiND BAZAR SAMITI. DISTRICT- SAM ASTIPUR. PIN- 84830 1

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Defendant( s )

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(C’D- 3) SRI RAJA RAM RAY SON OF SRI RAM JEEVAN RAY RESIDENT OF WARD NO. 7.VILLAGE - SARI ANCH AL - WARISNAGAR. BEHIND BAZAR SANIITI,

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DISTRICT- SAMASTIPUR, PIN- 848301

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Recovery Certificate for Rs 5031799.65 1 Rupees Fifty I,aklrs Thirty One Thousands Seven Hundred Ninety Nine And Paise Sixty Five (InI\

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In terms of final order dated 19/09/2024 passed by this Tribunal in the above mentioned case. it is ordered that the Applicant CertifIcate Holder Bank is entitled to recover a sum of Rs. 5031799.65 along with cost, expenses and interest from the 30/06/2023 i.e. date of filing / with effective date of the OA/332/2023 and future interest from order date till the date of realisation in full, jointly or severally from the Certificate Debtors, hereinafter referTed to as:-

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CDName ()
SSUNITA PRISES
;MT. SUNITA 2 IEVI
RI RAJA RAM Y

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In case of failure to pay the aforementioned adjudicated amount within 30 days. same shall be recovered from the sale of the mortgaged/hypothecated assets as well as other personal movable/ Immovable assets of the certitlcate debtors.

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The mollgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to the final order under the recovery proceeding in pursuance of the Recovely certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993.

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Ponies are directed to appear before MANOJ KUMAR . Recovery OHlcer, DEBTS RECOVERY TRIBUNAL PATN A on 04/ 11/2024.

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The Recovery OffIcer shall realize the amount as per this CertiHcate in the manner and mode prescribed under Sections 25 to 28 of the Recovery of Debts Due to Banks and Financial Institutions Act. 1993 (as amended nom time to time) from the above named Certitlcate Debtors.

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This Certincate has been issued under luV signature and seal of the Tribunal on this 20/09/2024

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PRESIDrNG OFFICER DEBTS RECOVERY TRIBUNAL PATN A

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Debts ReecE IseT{dbaMt Patn8

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FORM NO. 10

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[See Regulation 24(2)]

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DEBTS RECOVERY TRIBUNAL PATNA

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2nd Floor, ( A. B & F Wing) Karpuri ’Fhakur Sadan, Kendriya KaramchaN Parisar (GPOA),

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Ashiana Dlgha Road. Patna-800025 .

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SCHEDULE TO RECOVERY CERTIFICATE

MENIO OF COSTS

RC No. 227/2024

Case No: OA/332/2023

Applicant(s): UNION BANK OF INDIA

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Versus

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Defendant(s): MS SUNITA ENTERPRISES

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	Item of Costs	.mount inRs
	Feeon the application	{53000
	r	Fil
3	!AdvocateFees	b
4	o	[0
5	iMiscellaneousCharges	[0
	o	m5

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Place: PATNA

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Date: 20/09/2024

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PRESIDING OFFICER DEBTS RECOVERY TRIBUNAL PATNA

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Note: Strike out whichever is not applicable

Union Bank of India v. Ms Sunita Enterprises

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Ms Sunita Enterprises

Case brief

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