Allowed

Hdfc Bank v. Ms Khiangte Trade Center

DRT16 Jul 2024OA/359/2022

Case brief

AI extract

What is this about?

This DRT application was filed by HDFC Bank Ltd. for issuance of a recovery certificate under the RDDBFI Act against a proprietorship firm and its guarantors. The bank alleged default on a secured credit facility. The Tribunal found the application was filed within the limitation period and admitted the bank's evidence as unchallenged.

What did the court decide?

Issuance of Recovery Certificate for Rs. 1,59,27,553.60 with interest and costs against the Defendants.

Hdfc Bank versus Ms Khiangte Trade Center — Company and Corporate | DRT (2024)

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O A 359/2022lDRT-cuwahatr

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(North Eastern Region)

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(Tribunal of Assam, Nagaland, Meghalaya, N,lanipur Mizoram, Arunachal Pradesh & Tripura) Before Shri Shiv Sharan Dubev. Presidinq Officer

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O.A. No. 359i2022

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ln the matter of -

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HDFC BANK LIMITEO, Aizawl Branch, E-2'l, Darpui Veng, Burra Bazar, Aizwal, Mizoram- 796001.

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. Ap plica nt

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Vs.

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M/S KHIANGTE TRADE CENTRE A Proprietorship Firm,

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Rep. By lts Proprietor Mr. Hmingdailova Khiangte, New Street Mission Veng, Chaltang, Near Zohandco, Aizwal, Mizoram-796001.

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MR. HMINGDAILOVA KHIANGTE Son of Late Bule

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Resident of ChaitlangLly Veng, Aizwal. Mizoram-796014.

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MRS. SANGKIMI

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Wife of Mr. Hmingdailova Kharangte, Resident of ChaitlangLly Veng, Aizwal. Mizoram- 796014.

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Defendants

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Presence of tho Counsel :

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For the Applicant : Sri Mukesh Sharma, Ms Ellora Bharali, Advocates

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For the Oefendants : None (Ex-parte)

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oated :1610112024

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JUDGMENT

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This is an application under section¹⁹ of the^{Recoveryof DebtsDue} to Banks and Financial lnstitutions Act,^{1993Iiled by the HDFCBank Limited, Aizawl} Branch, E-21, Darpui Veng, Burra Bazar,^{Aizwai, Mizoram- 796001, with a prayerto} issue Recovery Certificate for the^sum of^{Rs. 1,59,27,553.60 p (Rupees one} Croro Fifty- Nine Lacs Twenty- Seven Thousand Five^{HundredFifty-Three} and

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DRT, Guwahati

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o A. 359,2022DRr-Guwshari

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Paisa Sixty) only as on 30.06.2022 against the defendants join y and severalty with interest @180/0 per annum at monthly rests from 01.O7.2022 till realization with cost along with other relief.

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A few facts giving rise to the present application are as under.

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The defendant no.1 is the proprietorship firm situated at the address mentioned above and the defendant No. 2 is the proprietor as well as guarantor. The defendant no. 3 is the guarantor as well as mortgagor to the credit facility availed by the defendant no. I firm.

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The defendant no. 2 as the proprietor of the defendant no. 1 firm had approached the applicant bank and applied for financial assistance for its business by submitting a loan application dated 10.06.2013 and after considering the said application, the applicant bank vide sanction letter dated 29.07.2013 had sanctioned a cash credit facility of Rs. 1,60,00,000/- with rate of interest @ 13.00% (Base Rate + 3.40olo) [Base Rate 9.60%l per annum with monthly rests. ln the event of default in payment or any irregularity in account the book reserved the right to charge additional intersst @^'18.00 %^per annum on the overdue/ delays/ default of any monies payable. The credit facility was repayable on demand. The defendant no. 2 as proprietor of defendant no. t had signed on the said sanction lettar thereby agreed to allthe terms and condition mentioned therein.

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ln connection with the sanction of the overdraft facility of Rs. 1,60,00,000/- as aforesaid, the defendants in order to availed and on order to secure^the said^{loan in} favour of the applicant bank, entered inio an agreement being master facility agreement dated 02.08.2013^with the^{applicant bank. The defendant no. 2 as the} proprietor of the defendant no.1 firm had signed and executed the same thereby accepting to the lerms and conditions^{contained therein.}

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ln order to secure the repayment^{of the credit facility, the defendant no. 2 as} the^proprietor of the defendant^no. I^{firm had executeda letterof hypothecationand} power of attorney for hypothecated book debts both dated 02.08.2013^{at Aizawl,} thereby hypothecated by^{way of firstcharge all the movablea} ssets of the firm

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Sl^i, P€sidi69 DRT,

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oa 359,2022lDRl-cuwrhan

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including current assets, stocks book debts, both present and future and other which are more particularly described in the Schedule - A of this Original Application and also authorizing, nominating, constituting and appointing the applicant bank lo recover and realize all present and future book debts, receivables owed or becoming owed to defendants in their course of business.

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ln order to further secure the repayment of the said loan with interest, the defendant no. 2 as the proprietor of the detendant no. 1 firm had also signed and executed a demand promissory note on 02.08.2013, thereby undertaking to pay a sum of Rs. 1,60,00,000/- with interest due thereon to the applicant bank on demand. The defendant no. 2 as the proprietor of the defendant no. I firm had also signed and executed a letter of continuing security and an undertaking cum indemnity both dated 02.08.2013 agreeing thereby that the security shall be a continuing security at all times for the said facility or any other facility obtained and payable to the applicant bank.

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ln consideration of the application bank agreeing to grant the said loan, the defendants no.2 & 3,had execuled a letter of continuing guarantee dated 02.08.2013 in favour of the applicant bank on the terms and conditions contained herein. By the said agreement, the defendants no. 2 & 3 had, inter-alia, guaranteed the due repayment to the applicant bank at any branch of applicant bank on demand and without demur, protest and/ or contestalion in any manner whalsoever and notwithstanding any dispute between applicant and defendants of all the amounts including the^principal sum towards the said facilities and indebtedness due and payable by the defendant no.1 firm to the applicanl under lhe facility either jointly or severally or any part thereof for the time being outstanding under the facility granted/ agreed to the granted by the applicant and all interest, commission, costs, charges and expenses and all other monies whatsoever due owing and payable by the defendants to the applicant there under, in the event of failure to repay and/ or discharging of liability. The said guarantee is a continuing guarantee.

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Further the credit facility was secured by creation of equitable mortgaged of

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the immovable^properties of defendant no. 2 described in Schedule- B of the original

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l" _shro AJ,4 qq

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O A^{359/2022loRT_Guwahatr}

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application.^{The defendantno' 2 had signedand executeda declaralioncum} indemnity and^{a memorandum recording pasttransaction both dated03'092013in} connection^{with creation o, security by equitable mortgage by deposit of title deeds} as security.^{Accordingly' the detendantno 2 depositedto the applicant bank' all the} title deeds^{in respect of the Schedule-B property'}

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Again on the^{request of the defendants' the applicant bank vide renewal} Sanctionletterdaled24.ll.2ol4hadrenewedtheexistingcashcreditlimitofRs. 1,60,00,000^tothedefendantno.lwiththerateofinterest@BaseRate+spread' i.e. lO+3.1='13.40%^{per annumwith monthlyrest. ln the event of defaultin payment} or any irregularity^{in accountthe bank reserved the right to charge additionalinteresl} @^{18.00% per annum on the overdue/delays/ repayable on demandThe defendant} no. 2 as^proprietor of^{defendantno. t had signed on the said sanction letter thereby} agreed to all the terms^{and condition mentioned therein.}

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Again on the request of the defendants,^{the applicant bank vide renewal} sanction letter dated 05.10.2015 had^{renewedthe existingcash credit limit of Rs.} 1,60,00,000/- to the defendant no.^'l with^rate of^interest @^{12.75 Vo (Base Rate+} 3.40%) lBase rate 9.35%]^per annum with monthly rests. ln the event of defaultⁱⁿ payment or any irregularity in accounl the bank reserved the right to charge additional interest @18.00 7o^per annum on the overdue/ delays/ default of any monies payable. The Credit facility was repayable on demand. The defendant no. 2 as^proprietor of defendant no. t had signed on the said sanction letter thereby agreed to all the terms and condition mentioned therein.

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Again on the request of the defendants, the applicant vide renewal sanction letter dated^'13.10.2016 had sanctioned a credit limit of Rs. 1,20,00,0001 with the rate of interest @12.45Yo i.e., MCLR⁺ 3.40%, MCLR = 9.05%^per annum with monthly rest. ln the event of default in^payment or any irregularity in account the bank reserved the right to charge additional interest @ 18.00% per annum on the overdue/ delays/ default of any monies payable. The Credit facility was repayable on demand. The defendant no. 2 as^proprietor of defendant no. t had signed on the said sanction letter thereby agreed to all the terms and condition mentioned therein.

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OA 359/2022loRl-Guwahati

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Again on the request of the defendants, the applicant vide renewal sanction letter dated 23.07 .2019 had sanctioned a credit limit of Rs. 1,20,00,000^ with the rate of intereBt @13.050/.^per annum with^{monthlyrest. ln the event of default in} payment or any irregularity in account the bank reserved the right to charge additional interest @ 18.00%^per annum on the^{overdue/ delays/ default} of^any monies^payable. The Credit facility^{was repayable on demand.The defendant no.2} as proprietor of defendant no. t had signed^{on the said sanction letter thereby} agreed to all the terms and condition^{mentioned therein.}

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On 25.09.2020, the defendants have^{further requestedfor sanction of} guaranteed emergency credit line facility of Rs. 24,00,000/- to the defendant no.^'l with rate of interest @ 8.25Yo^per annum. The aforesaid term^{loan was repayablein} 48 months from the date of disbursement after the expiry of^{themoratorium period.} The defendants were^provided moratorium of^'12 months on^{principal amount, during} which interest will continue to accrue and become^{payable duringthe moratorium} period. The defendants in order to avail and in order to secure the said loan in favour of the applicant bank, entered into a^Facility cum^{hypothecation agreement,} declaration cum undertaking, undertaking,^{memorandum recording past transactions} of creation of mortgage all dated 29.09.2020, at Aizawl.^{Thedefendant no. 2 as the} proprietor of the defendant no. I firm had signed and executed the same lhereby accepting to the terms and conditions contained therein.

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As the t!€fendants have lailed to repay the outstanding amount in the loan accounb, the loan accounts of the defendants were classified as^{Non-Performing Asset} (NPA) on 07.03.2022 in accordance with the direclives and guidelines of Reserve Bank of lndia.

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The Defendants had availed of the said loan facilities from the Applicant Bank, but have not paid ths loan amounts in the Loan accounts as^per the terms and conditions as agreed upon with the Applicant Bank, inspite of repeated demands and requests by the Applicant Bank. Thereafter the Applicant Bank through its counsel issued a Loan Recall Notice dated 20.08.2022 to the Defendants through speed^post A/D, damanding the repayment of the outstanding loan amount. slr)

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slr) Presidjng DRT, G

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6 o A 359/2022loRI,c!wahai

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The statements of account maintained by the Applicant in the usual and ordinary course of business shows that there is a total outstanding balance oI Rs. 1,59,27,553.60 as on 30.06.2022 (i.e. Rs.1,34,26,801.60 in the Cash Credit Acmunt No. 518142790000017 and Rs.25,00,752.00 in the GECL Account No.9789145). The Loan Accounts became NPA on 07.03.2022 in accordance On with the directives and guidelines of Reserve Bank of lndia, As such defendants No. 1, 2 and 3 are legally bound,^jointly and severally liable to repay the said amount to the applicant bank along with further interest at the rate of 18% with monthty rests from 01.07.2022 till realization of the entire debts due to the applicant.

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The applicant bank thus became constrained to tile the present Original Application for the recovery of Rs. 1,59,27,553.60 p (Rupoos One Croro Fifty-Nine Laca Twenty-S€ven Thousand Five Hundred Fifty-Th106 8nd PaEa Sixty) only as on 30.06.2022 along with interest and cost of the application.

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Atter filing of the OA, the Tribunal issued notices upon the defendants through registered post and the applicant bank filed service report on '11.'11.2022 and brought on remrd the postal receipts along with track consignment report which shows that the notice has nol been served upon the defendants by name, hence the service was not completed upon the defendants. Thereafter, the Tribunal ordered paper publication of notice upon the defendants and the applicant bank issued notice to the defendants through Paper Publication in two newspapers namely "News Lrhk " and "Aizawl Posf" both dabd 17.05.2023. Even after issuing notice through paper publication upon the defendants, there has been no representation on behalf of the defendants No. l, 2 & 3 either by the counsel or the person and hence the defendants No. 1,2 & 3 were set ex-parte on 25.07.2023 and the matter was posted for ex-parte hearing on behalf of the applicant bank. Argumenl heard by the ld counsel for the applicant bank.

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Supporting the claim of the applicant bank Jinti Sarma, Legal Manager of the Applicant Bank has filed evidence on affidavit coupled with the security documents marked as Exhibit -P, Exhibit AM/1 to AM/28, supporting the claim of the applicant bank. c'l : , n0 -., n0 -.n0 -.-.

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c'l : , n0 -., n0 -.n0 -.-.

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O A 359/2022loRT-Guwahati

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Heard the learned counsel for the^{applicant bank who prayed for issuance of} Recovery Certificate against the defendants^{as per pleadings madein the Application,} supported by evidence on affidavit^{of their witnesswho affirmed on oath lhe execution} of the security and other documents^{by the defendants and also executionof their own} documents relied upon,^{which have been marked exhibits.}

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Considering the facts and circumstances^{of the case, I am of the considered} view that the documents^{filedby theapplicant bankare supporting theclaimof the} applicant bank and^{establishingthe liabilityof thedefendants.lt is provedthat the} defendants are^liable to^{pay to the applicantbank the claim made in the} Original Application. The^{loanswereobtained/renewedand documenls have been} executed on 02.08.2013,^{03.09.2013,2411 2014,05.10.2015' 13.'10.2016'} 29.07.2019,25.09.2020^{& 29.09.2020. The accountsbecame NPA on 07.03.2022and} the OA has been filed on^{12.09.2022. Hence, the OA is filed well within the periodof} limitation and this Tribunal having^{a jurisdiction to adjudicate the Original Application.}

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Considering the unchallenged/^{unrebuttedversion of Jinti Sarma,Legal} Manager, the applicant's^{witness and all the documents marked as exhibits, including} duly certified copy of the^{statementof account along with interest calculationsheet} maintained by the applicant Bank^{in it's regular courseof business,I holdthat the} applicant is entitled to^get the^{Recovery Certificate as prayed for.}

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ln the result, the^present Original^{Application No. 359 of 2022is allowed with} cost as under :-

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i) The defendants No.1, 2 & 3^{are jointly and severally liable to pay to the} applicant bank a sum of^{Rs. 1,59,27,553.60 p (Rupsos One Crore Fifty'} Nine Lacs Trventy€oven^{ThousandFivo Hundred Fifty-Threeand Paba} Sixty) only with^{pendentelite and future interest} @18%^{per annumwith} monthly rests lrcm 01.07 .2022 till the^{date of full paymenu realization and} also cost of the aPPlication.

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ii) The charge of the certificated^amount be^{kept alive on hypothecated} properties as described in Schedule-A of the OA till the amount is realized in fu ll. Sl^Lo

Sl^Lo

Presiding ORT,

o.A. 35gzo22lDRl-Guwrhati

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ii0 The charge of the ce(ificated amount be kept alive on mortgaged property i.e. all that piece and parcel of a plot of land measuring 176.45 sq.mt bearing LSE No. 265 of^'1981 dated 14.06.1981 along with c+4 stories RCC Building being House no. E-52 standing thereon situated at Chandmary Venge, Aizawl_ 796007, Oistrict- Aizawl, State- Mizoram, which is bounded by North_ Main Road, South- Approach Road, East- R.L.Kappa's site, Wes! Boundary WaI, standing in the name of defendant no. 3,as described in Schedule-B of the OA till the amount is realized in full.

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iv) The applicant bank is enti ed to proceed against the secured items towards recovery of the debts.

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

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vi) The applicant bank is entitled 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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vii) lssue Recovery Certificate accordingly for a sum Rs. 1,59,27,553.60 p (Rupees Ono Crore Fifty-Nine Laca Twenty€eyon Thou3and Five Hundred Fifty-Three and^paisa Sixty) only in favour of the applicant bank against the defendants No. 1, 2 & 3.

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vlii) 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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Judgment dated 16th July 2024, signed and pronouncBd 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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sldrptas* e&l rsnivsr,aranHrHs! d Presiding Oflicer DRT, Guwahati.

Hdfc Bank v. Ms Khiangte Trade Center

Case brief

What is this about?

What did the court decide?

Hdfc Bank v. Ms Khiangte Trade Center

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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Statutes considered

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