Allowed

State Bank of India v. M/s. M.G Precisions and Tools

DRT2 Jan 2024OA/415/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application under Section 19 of RDB Act filed by State Bank of India for recovery of approximately Rs. 22.75 lakhs outstanding dues from M/s M.G. Precisions and Tools and its partners who remained absent in ex-parte proceedings.

What did the court decide?

Application allowed with interest and costs; liberty to sell hypothecated properties; directive to issue Recovery Certificate.

State Bank of India versus M/s. M.G Precisions and Tools — Banking and Recovery | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL - I, KARNATAKA AT BENGALURU

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Dated this the 2nd day ofJanuary,2024

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Present: Sri Imtiaz Ali

Presiding Officer

OA No.4t5l2022

BETWEEN:

State Bank of India

SME Centre, Banasawadi

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No.13, 2A Munireddy Layout

Horamavu Main Road

Ba nasawad i

Bangalore- 560 113

Represented by its Chief Manager Sri Avinash Kumar

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.. APPLICANT

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AND:

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M/s M.G. Precisions and Tools No.6/t24-L4,6th Cross

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6th Block, Rajajinagar Bangalore- 560 O1O

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Represented by its^partners

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a) Sri Manjunatha M

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b) Smt Pavithra R

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2.Sri Manjunatha M S/o Sri Munirajanna Aged about 41 years

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Smt Pavithra R

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Wo. Sri Manjunatha M Aged about 34 years

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Both are Residino at - R/at No.120, Lakshmi Sagar Layout, 3'd Main, Whitefield Road, Mahadevapura

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Bangalore-56O 048 Counsels on record/appeared for: Applicant : Sri Vachanna G. K. Defendants : Ex-parte

DEFENDANTS

oa No.415/2022

FINAL ORDER

The^{present OA has been filed by the ApplicantBank} under Section^{19 of theRecovery of Debts and Bankruptcy} Act, 1993,^{seeking recovery of money of Ris'22t75'L721'} (Rupees twenty-two^{lakhs seventy-five thousand one} hundred seventy-two^{only) togetherwith costs'} 'interest' etc.

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The case^{of the Applicant Bank is that' the Defendant} No.1-M/s^{M G PRECISIONS& TOOLS representedby its} Proprietor-^{Sri Manjunatha 14- the Defendant No 2had} approached^{the Applicant Bank for various CreditFacilities} Accordingly,^{the ApplicantBank hasconsidered the requestof} the Defendant^{No.1 and sanctioned the CashCredit Facilityof} Rs.1O,OO,OOO/-^{infavour ofthe first Defendanton} 13.72-2012.^{Further,at the request of Defendant No 1' the} Applicant^{Bank has renewed and enhancedtheCash Credit} Facilities from^{Rs.1O,OO,OOO/-to 15,00'000/-and again} renewed^{on various datesi e on 15 04 2013' on 10 01 2014'} on 28.01.2016,^{on18 05 2016, on02'02'2017} ' on zlj.Z.z}la,^{and on O8.O52O2O Further' at the request of} the Defendant^{No.1,the Applicant Bank has sanctioned the}

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oA No.415/2022

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CCECL Loan Facility of Rs.1,50,000/- on 08.05.2020. Further, the Defendant No.1 represented by its partners have approached the Applicant Bank for enhancement of existing Cash Credit Facility. Accordingly, the Applicant Bank considered the request of the Defendant No.1 and enhanced the Cash credit facility up to the timit of RS.2O,OO,OOO/- on 23.1O,2O2O, in terms of the loan agreement, whereas Defendants No.2 and 3 being the^partners of the Defendant No.1 and also stood as guarantors for the above said loans, In order to secure the loans, the Defendants have executed various documents viz,, Letters of Arrangement, Agreements of Loan-cum Hypothecations,^partnership Re-Constitution Deed, cuarantee Agreements, Supplemental Agreements of Loan-cum-Hypothecation, Letter of Revival and Balance Confirmation Letter etc.,

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Further, the Applicant Bank Submitted that, the Defendants have agreed to repay the Cash Credjt Facility renewed from 10,00,000/- to 20,00,000/- from 13.12,2012 to 23.10.2020 with interest at the rate of 12olo per annum to10.25olo per annum compounded monthly and CCECL Loan Facility of Rs.1/50,000/- with interest at the rate of 7.4Oo/o per annum compounded with monthly rests revised by the

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oA No.415/2022

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Bank from time to time as^per sanction^letter.

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Further, the Defendants have^agreed to^repaythe above loans with variable^{rate of interest,as applicable from} time to time as^per the directions^{of the HeadOffice/Central} Office of the Applicant Bank^{and penal interest in case of} default and keep the accounts^{regular by paying installments} as and when due to the^{satisfaction of the Applicant Bank, as} detailed in the OA by^{the ApplicantBank}

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The Defendants after utilising the^{said loans have} failed and neglected to^{make the repaymentof the loans due} as agreed and Defendants^{have not servicedthe interest} thereon as^per the terms^{and condition agreed by the} Defendants. The^{Defendantshave neither responded nor} attempted to clear the^{outstandingamount in spite of} repeated requests and^{demands made by the Applicant Bank} Thereafter, the Applicant^{Bankhas sent Legal Noticeon} 23.1,2.2O2L to the^{Defendants,calling uponthemto paythe} outstanding dues. In^{spite of receipt of Legal Notice, the} Defendants have^failed to^{pay the outstanding duesand} hence the recovery^{process is initiated to recover the dues.}

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OA No.41sl2022

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In the light of these factors, it is contended by the Applicant Bank that Defendants are liable to pay a total sum of Rs,22,75,172/- (Rupees twenty-two lakhs seventyfive thousand one hundred seventy-two only).

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After filing this OA, Summons were sent to the Defendants through RPAD, remained unserved and returned with postal remarks^rtNo such Pelson". Thereafter, the Applicant Bank has published the summons to the Defendants on 06.04.2023 in English and vernacular languages in Local newspapers, viz., - "The New Indian Express" and "Kannada Prabha". When the Defendants were called out, the Defendants rema:ned absent and placed ex pa rte.

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L To prove the case of the Applicant Bank, it,s Chief lYanager, Sri Avinash Kumar, has filed his affldavit by way of evidence the same was considered as evidence of AW.1 and marked at Ex.A1 and list of documents came to be marked at Ex.A2 and 34 documents came to be marked at Ex.A3 to 436.

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No evidence on behalf of the Defendants.

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OA No.475/2022

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Arguments of Learned Counsel for the plaintiff/ Applicant Bank heard and perused the records ofthe case.

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Following points arise for my consideration:

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1. Whether Plaintiff/Applicant Bank proves its case as contended in the plaint/application?

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1. What Order?

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For the following reasons, I answer the abovereferred points in the following manner:

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REASONS

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The Chief Manager of the Applicant Bank came to be examined as AW.1. His affidavit by way of evidence reiterated the facts pleaded in the plaint and his affidavit is also corroborated by the above-referred Ex.A3 to A36 which clearly establish the case of the Applicant Bank to allow the present OA. Added to this, the Defendants have remained absent, hence it is to be construed that Defendants have admitted the entire case pleaded by the Applicant Bank in the present OA.

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f4, Therefore, for these reasons, present OA is to be allowed with costs as sought by the Applicant Bank.

OA No.415/2022

ORDER

Present OA stands allowed^{as prayed for with interest} and costs.

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In the event of failure of the Defendants^{to pay the said} OA amount, the Applicant^{Bank is at libertyto sell the} hypothecated Properties^{as mentionedin the Agreementof} Loan Cum Hypothecation^{in accordancewith law as sought by} the Applicant Bank^{in the OA.}

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In spite of sale of the hypothecated^{properties as} mentioned in the Agreement of^{Loan-Cum-Hypothecation,if} the OA amount is not^{fully realised, thenthe Applicant Bank is} at liberty to^proceed agalnst^{the persons and other properties} of the Defendants as^{required underlaw and alsoas advised.}

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Applicant Bank shall flle^{latest Memo} of^{Calculation of} OA amount together with^{interest,costs etc., to be paid by} Defmdants duly taking into^account the^{amount/s, if any,} paid by the Defendants and/or amount realised by sale of assets, etc., during the^{intervening period afterfiling the OA,} to enable the office to^{prepareRecoveryCertificatefor the} amount to be^paid by the^{Defendantsto the Applicant Bank}

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OA No.415/2022

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Office is directed to issue^{RecoveryCertificate as sought} by the Applicant Bank in the^{OA and do the needfulas} required under the law forthwith.

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The Office is directed to lssue, as far^{as possible, free} copy of this order to the^{parties concerned.}

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(Dictated to the Stenographer, after its transcription and necessary^corrections, signed and^pronounced by^{mein theOpenCourt on thisthe 2nd day of lanuary,2024)}

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/. (Imtiap Ali) Presidingi Officer DRT-!, Bengaluru

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ANNEXURES

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Witness Examinqd for the ADDlicant^Bank: AW-1 : Sri Avinash Kumar

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The Chief Manager of the Applicant Bank List of Documents Exhibited for the Aoolicant^Bank: Ex.A-1 : Affidavit of AW-1 Ex.A-2 : List of Docu ments Ex.A-3 to A-36 : 34 documents

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witness Examined for the Defendants:

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Nil -

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List of Documents Exhibited for the^Defendants:

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Nil -

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*" ^ (rmtiJz'hti) Presiding Officer DRT-I, Bengaluru

State Bank of India v. M/s. M.G Precisions and Tools

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/s. M.G Precisions and Tools

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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