Allowed

Canara Bank v. Sh. Kulwant Singh and Others

DRT29 Jul 2024OA/369/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an application filed by Canara Bank for recovery of dues against three defendants. The court found evidence of fraud regarding mortgaged property but proceeded with the recovery claim. It allowed the principal amount and granted simple interest at 8% per annum.

What did the court decide?

Recovery of Rs. 26,52,614.43 with simple interest at 8% p.a.; issuance of Recovery Certificate; liberty to enforce through execution proceedings.

Canara Bank versus Sh. Kulwant Singh and Others — Contract and Commercial Disputes | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.369/2022

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 23.12.2021

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DATE OF DECISION: 29.07.2024

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Canara Bank, a bank constituted by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, with its Head Office at 112, JC Road, Bangalore and Branches amongst other places, one at Personal Banking Branch at Samrala, through its Attorney and Principal Officer Sh. Sachin Kumar, Senior Manager

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……..Applicant

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Versus

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Sh. Kulwant Singh S/o Sh. Gajan Singh, R/o Village Feror, Tehsil Khamano, District Fatehgarh Sahib

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Smt. Kuljit Kaur W/o Sh. Kulwant Singh, R/o Village Feror, Tehsil Khamano, District Fatehgarh Sahib

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Sh. Gurjit Singh S/o Sh. Gajan Singh, R/o Village Feror, Tehsil Khamano, District Fatehgarh Sahib

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………Defendants

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Advocates: Argued by Sh. Binny Baweja, counsel 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 bank under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.26,52,614.43p (Rupees Twenty Six Lacs Fifty Two Thousand Six Hundred Fourteen and Forty Three Paisa only). The Original Application has been filed through Sh. Sachin Kumar, Senior Manager o f the applicant bank, who is competent to institute the Original Application vide General Power of Attorney dated 22.07.2014, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant Nos.1 and 2 had approached the applicant bank for the grant of KCC Limit of Rs.20.00 Lacs vide Loan Application dated 22.05.2017, which is Annexure A7 to this OA. Defendant no.3 stood as guarantor. 3. The applicant Bank sanctioned the KCC of Rs.20.00 Lacs vide Sanction Memorandum dated 08.06.2017, which is Annexure A8 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant No.1 had mortgaged his immovable properties i.e. total land measuring 52 Kanal 01 Marla situated at Village Farour, H.B. No.299, Tehsil Khamano, District Fatehgarh Sahib, Punjab vide , Letter to sub-Registrar for creation of charge bearing vasika no.85 dated 02.06.2017 and Declaration u/s 4(1) dated 01.06.2017, which is Annexure A13 to this OA.

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As per Jamabandi for the year 2011-12 issued on 18.11.2020 along with its translation, which are Annexures A14 and A15 to the OA, the said above land is not owned by defendant No.1 and they caused a fraud with the bank, hence bank lodged an FIR on defendants on 14.07.2021 along with its translation, which are Annexures A21 and A22 to this OA.

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Documents executed:- Legal search report dated 30.05.2017, which is Annexure A2 to this OA; Affidavit of ownership dated 01.06.2017, which is Annexure A3 to this OA; Non-encumbrance certificate dated 31.05.2017 along with its translation, which are Annexures A4 and A4A to this OA; Jamabandi for the year 2011-12 along with its translation, which are Annexures A5 and A6 to this OA; Link letter, Undertaking letter, Consent letter, Hypothecation agreement, Guarantee covering letter and Guarantee agreement all dated 08.06.2017, which are Annexures A9 to A12, A16 and A17 to this OA; Jamabandi for the year 2016-17 along with its translation, which are Annexures A18 and A19 to this OA; Application to SSP, which is

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Annexure A20 to this OA and Statement of account along with certificate, which is Annexure A23 to this OA.

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The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs.26,52,614.43p, 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. Ms. Rajvinder Kaur, Advocate appeared and filed her Memo of Appearance on behalf of defendants but did not filed Power of Attorney. Since no one appeared on behalf of defendants, they were proceeded ex-parte on 22.05.2024.

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In support of the OA, affidavit of Sh. Sachin Kumar, Senior Manager, Canara Bank has been filed.

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Heard ex-parte arguments and perused record. 9. 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 bank had proved its case. From the perusal of all the Annexures A1 to A23 to this OA, it is proved that the defendants approached applicant bank for availing of the loan facility which was 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, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.26,52,614.43p (Rupees Twenty Six Lacs Fifty Two Thousand Six Hundred Fourteen and Forty Three Paisa only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the account.

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In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest @11.95%p.a. with half yearly rests from 19.12.2021 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 the loan account 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.26,52,614.43p (Rupees Twenty Six Lacs Fifty Two Thousand Six Hundred Fourteen and Forty Three Paisa only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in the loan account 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 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

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Tribunal on 20.08.2024

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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.

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Pronounced by me in the Open Tribunal .

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Dated: 29.07.2024

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

Canara Bank v. Sh. Kulwant Singh and Others

Case brief

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Canara Bank v. Sh. Kulwant Singh and Others

Case brief

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