Allowed

Canara Bank v. M/S Vinjul Enterprises and Another

DRT21 Mar 2024OA/386/2023

Case brief

AI extract

What is this about?

The DRT allowed the bank's application for recovery of Rs.48 lakhs plus interest. The tribunal endorsed a uniform simple interest rate of 7.50% per annum instead of the claimed rates and ordered recovery via sale of mortgaged properties.

What did the court decide?

Recovery of Rs.48,52,836.00 with simple interest at 7.50% p.a.; issuance of Recovery Certificate; liberty to enforce via sale of assets.

Canara Bank versus M/S Vinjul Enterprises and Another — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.386/2023

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 18.03.2023

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DATE OF DECISION: 21.03.2024

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Canara Bank having its Head Office at J.C. Road, Bangalore-560002 (Karnataka) and having its Branch Office at Lalru, Dera Bassi, SAS Nagar, Mohali through its Attorney holder, Sh. Kamaljeet Singh

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……..Applicant

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Versus

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M/s Vinjul Enterprises through its proprietor, Sh. Jang Bahadur S/o Sh. Roor Singh, Lalru, Dera Bassi, SAS Nagar Mohali-140501

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Sh. Jang Bahadur S/o Sh. Roor Singh R/o Lalru, Dera Bassi, SAS Nagar Mohali

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….……Defendants Advocates: Argued by Sh. Karan Yuvraj, Advocate proxy for Sh. Amit Rishi, Advocate for the applicant 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.48,52,836.00 (Rupees Forty Eight Lacs Fifty Two Thousand Eight Hundred Thirty Six only). The Original Application has been filed through Sh. Kamaljeet Singh, Manager of the applicant bank, who is competent to institute the Original Application vide General Power of Attorney dated 16.11.2017, which is Annexure A1 to this OA. 2. 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 OCC/ODBD Limit of Rs.16.00 Lacs under CGTMSE Scheme,

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Working Capital Term Loan Facility under Emergency Credit Line Guarantee Scheme (ECLGS) of Rs.6.50 Lacs, Fresh Term Loan of Rs.11.00 Lacs and Working Capital Credit under GECL Scheme of Rs.2.60 Lacs vide Loan applications dated 11.06.2020 and 27.10.2021, which are Annexures A4 and A8 to this OA.

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The defendants, later requested the applicant bank for enhancement of OCC/ODBD Limit to Rs.32.00 Lacs and further for its several renewals vide Loan applications/Request letters vide Request letter dated 08.02.2019, 20.01.2022 and 05.02.2019, which are Annexures A3, A11 and A14 to this OA.

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The applicant Bank sanctioned the OCC/ODBD Limit under CGTMSE Scheme of Rs.16.00 Lacs, Working Capital Term Loan Facility under Emergency Credit Line Guarantee Scheme (ECLGS) of Rs.6.50 Lacs, Fresh Term Loan of Rs.11.00 Lacs and Working Capital Credit under GECL Scheme of Rs.2.60 Lacs vide Sanction Letters dated 26.08.2016, 24.09.2020 and 27.10.2021, which are Annexures A2, A7 and A9 to this OA; and the terms and conditions were duly accepted by the defendants.

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The applicant bank later; on request of the defendants enhanced the OCC/ODBD Limit to Rs.32.00 Lacs and further renewed the same several times vide Sanction letters dated 24.09.2020 and 20.01.2022, which are Annexures A6 and A10 to this OA.

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Defendant No.2 had mortgaged his immovable property i.e. Plot measuring 30’ X 60’= 200 sq. yds. (04 Biswa) situated at Dharamgarh Road, Village Lalru/218, Tehsil Dera Bassi, District SAS Nagar (Mohali) Punjab vide Sale Deed no.3516 dated 02.11.2017 and Title Search Report dated 14.01.2019, which are Annexures A22 and A23 to this OA.

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Documents executed: - Offer Letter with Annexure/Appendix dated 11.06.2020, which is Annexure A5 to this OA; Cash Credit Agreement and Pro-Note dated 26.08.2016, which are Annexures A12 & A13 to

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this OA; Supplementary Agreement and Link Letter dated 08.02.2019, which are Annexures A15 & A16 to this OA; Agreement Cum Deed of Hypothecation (GECL) and Pro-Note dated 11.06.2020, which are Annexures A17 & A18 to this OA; Deed of Hypothecation (Term Loan) dated 29.09.2020, which is Annexure A19 to this OA; Agreement Cum Deed of Hypothecation (GECL 1.0 Covid-19) dated 27.10.2021, which is Annexure A20 to this OA; Letter Evidencing deposit of Title Deed dated 07.02.2019 & 11.06.2020, which is Annexure A21 to this OA; Letter of marking of LIEN as per Advocate Report dated 08.02.2022, which is Annexure A24 to this OA; Acknowledgment of Debt and Securities dated 23.08.2021, which is Annexure A25 to this OA; Recall Notice dated 06.09.2022, which is Annexure A26 to this OA and Statements of Account(s) along with copy of Certificate under Bankers Book of Evidence, which are Annexures A27 to A30 to this OA.

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The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.48,52,836.00, 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 20.02.2024.

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In support of the OA, affidavit of Sh. Kamaljeet Singh, Manager, Canara Bank h as been filed.

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Heard ex-parte arguments and perused record.

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It was argued by learned proxy 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 A30 to this OA, it is proved that the defendants

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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 loans as per terms and conditions of the agreement between the parties. Subsequently, 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.48,52,836.00 (Rupees Forty Eight Lacs Fifty Two Thousand Eight Hundred Thirty Six 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 has claimed interest @9.35%p.a. in OCC limit; @7.50%p.a. in GECL facility; @9.55%p.a. in Term Loan and @9.15%p.a. in GECL 1.0 facility along with @2.00%p.a. additional interest from the date of filing of the OA 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 @7.50%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. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.48,52,836.00 (Rupees Forty Eight Lacs Fifty Two Thousand Eight Hundred Thirty Six only) jointly and severally, with costs, current and future simple interest @7.50%p.a. in all the loan accounts from the

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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. 12. Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 01.04.2024. 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: 21.03.2024

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(MRIDULESH KUMAR SINGH) Presiding Officer,

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DRT-III, Chandigarh

Canara Bank v. M/S Vinjul Enterprises and Another

Case brief

What is this about?

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Canara Bank v. M/S Vinjul Enterprises and Another

Case brief

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What did the court decide?

What the court decided

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