Allowed

State Bank of India v. Mr John L Hlychho

DRT24 Sept 2024OA/424/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant bank's application to issue a Recovery Certificate. The court held that the defendant was liable for the outstanding loan amount of Rs. 39,39,755.69 with interest and costs. The Judgment pronounced the order dated 24th September 2024 declaring the defendant liable for the secured and personal assets towards recovery of dues.

What did the court decide?

Recovery Certificate issued for Rs. 39,39,755.69 with pending interest at 10.40% per annum, along with cost of the application to be realized from the defendant's secured and personal assets.

State Bank of India versus Mr John L Hlychho — Contract and Commercial Disputes | DRT (2024)

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OA 424l2023/DRT-Guw.haii

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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 Manipur lV zoram ArunachalPradesh & Tripura)

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Before Shri Shiv Sharan Dubev. Presidinq Officer

O.A. No. 42412023

ln the matter of -

STATE BANK OF INDIA

Stressed Assets Recovery Branch (SARB), 2nd Floor, Siganture Square, IVRD Road, Bamunimaidam, Distric! Kamrup (lvl), Guwahati-781 021, Assam.

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.Applicant

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Vs.

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MR. JOHN L HLYCHHO

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S/o HC Lalthansanga

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R/o House No. B5/11, LT Tluanga Building, Bishop Road, Near Presbyterian Church, Sihpui Piah, Ramthar Veng, Aizawl, l,4izoram, Pin-796001.

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Defendant

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Presence of the Counsel :

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For the Applicant : l,1r. Gitartha Das, l,1r. Nurul lslam, Advocates For the Defendant : None (Ex-parte)

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Oated :2410912024

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JUDGMENT

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This is an application under section 19 of the Recovery of Debts Due to Banks and Financial lnstitutions Act, 1993 filed by the STATE BANK OF lNDlA, Stressed Assets Recovery Branch (SARB),2nd Floor, Siganture Square, MRD Road, Bamunimaidam, District- Kamrup (M), Guwahati-781021, Assam, with a^prayer to issue Recovery Certificate for the sum of Rs. 39,39,755.69 (Rupees Thirty-Nine Lacs Thirty-Nine Thousand Seven Hundred Fifty-Five and Paisa Sixty-Nino) only as on 30.11.2023 against the defendant with^pendentelite and future interest @ contractual rate till realization, along with cost and other relief.

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

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Pursuant to Application for MSME loan dated 03.05.21 by the defendant,

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the applicant after considering his request issued Letter of Arrangement dated 05.05.21

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su r."";"r'"fJnh

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O A 424l2023/ORT-Guwahal

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granting a term loan of Rs.^{5O.OOLakhsonly' subjecl to his accephnceof ihe terms and} conditions set forth^{therein.As per the saidLetter of Anangement,the bonoweris} required to^pay interest @10.40lo^{p.a. (at that relevanl period)calculatedon daily prcducl} at monthly rests.^{Thetermloan wasrequired to be repaidin 59 monthly insiallmentof} Rs.1,08,994/- each^{and the last installmentof Rs.47,8131with the firstinstallment} mmmencing on 05.07.2021^{and the last installment fall due on 05 06'2023 The} defendant accepted^{the terms and conditions of the said Letter of Anangemenusanclion} by duly signing and^{retuming the duplicale copyof the said Letter of Anangement}

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ln order to avail the term loan of Rs. 50.00 Lakhs,^{the defendant executedthe} following loan document- Agreement of^{loan-cum-Hypothecationdated05.05.202'l} executed by the defendant whereby^{he hypothecatedthe Plant& Machinery, etc craated} out of bank finance^(fully described^{in Schedule-A of the OA).}

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After executing the above loan documenls^{the defendant availed the TermLoan of}

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Rs. 5o.OO Lakhs by opening^{and operatingTerm loan AccountNo.40167969759 with the} Applicant Bank. The defendant^{also purchased the Plantand Machineryetc. out of the} Applicant finance and lhe same^{wasalso hypothecatedto the Applicant Bank. The said} plant and machinery were also insured till 07.09.24 with SBI General lnsurance^Company Limited. The applicant has also^{registeredthecharge created on thesaid Plant and} Machinery with the Central Registry of Securitization^{Asset Reconstruclion andSecurity} lnterest of lndia. Copies of receipt of Registration^{of Charge with the Central Registryof} Securitization Asset Reconstruction^{and Security lnterest of lndia, lnsurancepolicy of} Plant and Machinery and Valuation report dated^{'15.09.2023are filledherewithas} Applicant's documents forming^part of^{this applicationas Annexures-s, 6 and 7} respectively.

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The defendant enjoyed the benefits of the Term loan but v,/ere nevel sincere tonards repayment of loan^procured under the^{relevantloan document executed by him.} on 03.01.23 the Term loan Account No. 40'167969759 of the detendant became NPA. On 22.06.23 the applicant Bank^{lssued legal Noticethoughtits Counseltothe defendant} demanding^payment ofthe outstanding duesⁱⁿ the^{Loan Account, butthe same\ €nlin}

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S[;ilaa^n"a,*".^"f,n1,41\ 0 DRT Guwahali

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o.A 424l2oa3lDRT-cuwahsti

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vain as the defendant paid deaf ears to the tegal notice. On 04.08.23 the Applicant issued notice L/s 13(2) of the SARFAEST Act.

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As on 30.11.23 there is an outstanding due of Rs. 39,39,755,69 in the Term Loan Account no. 40167969759 of the defendant. Duty certilied copy of the Statement of Aclount and lnterest Calculation Sheet of the defendant upto 30.1.1.23 maintained by the applicant Bank in its usuar and odinary course of business are fiH herewith as Applicant's documents which form part Annexures_iO and 1OA ofthis application.

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On 20.09.2023 the defendant executed Revival Leter, for the purpose of Section 18 of Limitation Act. lt is submitted that interests/compound interests have been charged at such rates as are permitted by and do not run counter to the directives of the Reserve Bank of lndia.

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These facts as well as the gross irregularities in operating the aforesaid account by the defendant has prejudiced the appticant Bank,s lnlerest involving huge amount of public money and as such the Applic€nt Bank has been compelled to bring this Application for adjudication by this Hon'ble Tribunal. The defendant term roan is covered under a Scheme known as the Credit Guarantee Funds Scheme For Micro and Small Enterprises and accordingly after NpA the applicant had invoked the guarantee in respect of the said Loan. The Applicant further states that merely receiving any guarantee claim ftom the said Trust will not absolve the liability of the defendant under the said scheme since the applicant has to recovery the entire outstanding amount from the defendant and retum back to the said trust.

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The applicant bank thus became constrained to file the present Original Application for the remvery of tu. 39,39,785.69 (Rupees Thirty_Nine Lacs ThirtyNine Thousand Soven Hundred Fifty-Five and paisa Sixty_Nine) only as on 30.1'1.2023 along with interest and cost of the apptication.

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After filing of the OA the Tribunal issued notice upon the defendant through registered post and the applicant bank filed service report on 21.02.2024 and brought on record the postal receipt along with track consignment report which shows that notice have been served upon the defendant. Hence service is compl€ted upon the defendant. Even afrer issuance of notice upon the sole defendant there was no

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SWd4r,o"^2"t" r, 24ln Presidinq Oflider^I l"t I ORT, Guwahali

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O A 424l2023/ORT-Guwahati

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represenlation on behalf of the defendant either by the counsel or the person and hence the sole defendant was set ex-paie on 23-0/-2024 and his right to file written statement cum evidence on affidavit was closed and the matter was posted for hearing on behatf of the applicant bank.

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Supporting the claim of the applicant bank Sri Nijananda Badir, Chief Manager of the Applicant Bank has filed evidence on affidavit coupled wilh the security documents marked as Exhibit AW-'l/1 to AW-1/11, supporting the claim of the applicant bank.

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Heard the learned counsel for the applicant bank who prayed for issuance of Recovery Certificate against the defendant as per pleadings made in the Application, suppo(ed by evidence on affldavit of their witness who affirmed on oath the execution of the security and other documents by the defendant and also execution of their own documents relied upon, which have been marked exhibits.

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Considering the facts and circumslances of the case, I am of the considered view that the documents tlled by the applicant bank are supporting the claim of the applicant bank and establishing the liability of the defendant. lt is proved that the defendant is liable to pay to the applicant bank the claim made in the Original Application. The loan was obtained and documents have be€n executed on 05.02.2021. Revival Letter is dded 20.09.2023. The account became NpA on 03.01.2023 and the OA has been filed on 19.'12.2023. Hence, the OA is fited welt within the period of limitation and this Tribunal having a jurisdiction to adjudicate the Original Application.

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Considering the unchallenged/ unrebutted version of Sri Nijananda Badir, the applicant's witness and all the documents marked as exhibits, including duly certified copy of the statement of account along with interest calculation sheet maintained by the applicant Bank in it's regular course of business, I hold that the applicanl is entitled to get the Recovery Certificate as prayed for.

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ln the result, the present Original Application No. 424 of 2023 is allowed with

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cost as under :-

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slrd"^,dr n^Xrl*, >A Pr6siding ,**141"{ Officerl^d ORT, Guwahati

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oA^{424l2023/DRT_Guwahatr}

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The sole^{defendant is liable to pay to the applicanlbank asum of Rs'} 39,39,755.69^{(Rupse3Thirty'NineLaca Thirty-NinsThou3andSevsn} Hundred^{Fifty'Five and Paisa Sixty-Nine)onlywith pendentelite and future} interest @10^{4% per annumwith monthly rests from 01 12 2023 till the dateof} full^{paymenurealization and also cost of the application'}

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ii) Thecha'geofthecertificatedamountbekeptaliveonhypothecatedproperties i.e.^{(Hypothecatedof Plant & Machinery): Heavy Equipmentin the form of} Primax^{Fully AutomaticDrum Mix Asphalt Plant Model PMD-50 Capacitv60-90} TPH and^{Primaz CombineAsphalt & Wet Mix Super Paver Finisher Machine} (Semi Hydraulic),^{as described in Schedule-Aof the OA till the amount is} realized in^lull

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iii) The applicant^{bank is entitledto proceed against the secured items towards} recovery^{oI the debts}

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iv) The applicant^{bankis also entitled to proceedagainst the personal assets and} properties of the defendant^{towards recovery of the dues'}

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v) The applicant^{bank is entitled to the costsof the O A which includes the} advocate^{fees of the applicantbank' Applicant is directedto Iile the cost memo} within 2 weeks from^today.

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vi) lssue Recovery^{Certificate accordinglyfor a sum R3'39,39'755'69 (RuPess} Thirty-Nine Lacs^{Thirty'Nino Thousand Seven Hundred Fifty-Five and} Palsa Sixty-Nine)^{only in favourof the applicant bank againstthe sole} defendant.

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yli) 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 24th September'^{2024, signed and pronounced in the Tribunal}

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today under my signature.

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Copy of the JudgmenuFinal^{Order be uploadedin the Tribunal's Website and file}

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be consigned to Record^Room.

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Slirt il"r,^a^Arl-'rsnivsrrari$LE&l4 0 Presiding Officer DRT, Guwahati.

State Bank of India v. Mr John L Hlychho

Case brief

What is this about?

What did the court decide?

State Bank of India v. Mr John L Hlychho

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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