Allowed

Canara Bank v. M/S Revo Polytech Private Limited

DRT25 Jul 2024OA/43/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the bank's application for recovery of Rs.56,11,769/- plus future interest at 9% p.a., securing the debt against hypothecated machinery, book debts, and mortgaged land after the defendants failed to appear.

What did the court decide?

Respondents directed to pay Rs.56,11,769/- plus future interest at 9% p.a.; recovery certificate issued; sale of mortgaged property ordered.

Canara Bank versus M/S Revo Polytech Private Limited — Banking and Recovery | DRT (2024)

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Presented on: 30.08.2022 Registered on: 20.03.2023 Decided on: 25.07.2024 Duration: Y M D 01 10 26

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IN THE DEBTS RECOVERY TRIBUNAL AT AURANGABAD (Before Shri Dilip G. Murumkar, I/c- Presiding officer)

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TOTAL CLAIM AMOUNT – Rs.56,11,769/-

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ORIGINAL APPLICATION No.43/2023

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Canara Bank, A body corporate duly constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Head Office at 112 JC Road, Banglore - 560002 and branch amongst the other places as at SME Branch Jalna Road, Aurangabad-431001 through Power of Attorney Holder and Chief Manager, Mr. Bharath Raj KA s/o A. Keshav-Bhat, Age:33 Years, Occu: Service as Chief Manager, SME Branch, Jalna Road, Aurangabad, R/o Jalna Road, Aurangabad431001.

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… Applicant

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Versus

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M/s. Revo Polytech Pvt. Ltd., A Company registered under the Companies Act having its registered office at Gut No.42, at Karodi, Taluka and District Aurangabad-431136 Through tis Director Mr. Vinod Ramsing Mali.

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[SBJ] (OA No.43/2023) Page 1 of 9

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Mr. Vinod Ramsing Mali, Age : Major, Occupation : Business, Director of M/s. Revo Polytech Pvt. Ltd. Gut No.42, at Karodi, Taluka and District Aurangabad. And R/o Main Road, Behind Wipro Company At Village Vitava, MIDC Waluj, Aurangabad. 3. Mrs. Vidya Vinod Mali, Age : Major, Occupation : Business, Director of M/s. Revo Polytech Pvt. Ltd. Gut No.42, at Karodi, Taluka and District Aurangabad. And R/o Main Road, Behind Wipro Company At Village Vitava, MIDC Waluj, Aurangabad. … Defendants APPEARANCES For the Applicant Mr. P.N. Kapadia - Advocate For Defendant Nos.1 to 3 Ex-parte

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JUDGMENT (Delivered on 25^th July, 2024)

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The Applicant Bank has filed the present application for recovery of the sum of Rs.56,11,769/- (Rupees Fifty-Six Lacs Eleven Thousand Seven Hundred and Sixty-Nine only) together with further interest thereon @12% p.a. with

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[SBJ] (OA No.43/2023) Page 2 of 9

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monthly rests till the full realization of the entire dues from the defendant nos.1 to 3.

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Brief facts of the application are as under :

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As per the loan application dated 08^th February, 2020 of the defendant no.2 on behalf of defendant No.1 Company, the applicant Bank sanctioned the Cash Credit facility of Rs.145.00 Lacs (Rupees One Hundred Forty-Five Lacs only) as and by way of working capital requirement against hypothecation of book debts for running the business of manufacturing of molding water tanks / storage conveyers of different capacities and other plastic household items and Term Loan of Rs.310.00 Lacs (Rupees Three Hundred Ten Lacs only) for purchase of new equipments and machineries vide Sanction Letter dated 22^nd June, 2020.

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Further the applicant bank submitted that though credit facilities were sanctioned but the loan facilities were not availed nor the work of company was completed. The defendant again approach the applicant bank on 03^rd December, 2020 for seeking modification in the sanction terms and conditions conveyed ide letter dated 22.06.2020. The applicant bank was pleased to modify and sanction the

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[SBJ] (OA No.43/2023) Page 3 of 9

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above limits under sanction letter dated 10.12.2020.

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In order to secure the aforesaid loan facilities, the defendant Nos.2 and 3 on behalf of defendant No.1 company executed necessary loan and security documents mentioned in Paragraph No.5.4 of the O.A. In consideration of availment of Open Cash credit of Rs.145 Lacs by the defendant No.1 Company, the defendant Nos.2 and 3 have executed personal guarantee in their personal capacity vide Letter of Guarantee on 04^th June, 2021.

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The applicant bank submits that at the time of availment of the Open cash credit facility the defendant agreed to repay the same within one year or on demand alongwith interest @10% p.m. monthly rest and also agreed to pay penal interest in case they fail to operate the Open Cash Credit Account satisfactorily.

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The applicant bank further submitted that at the time of availment of the Term Loan facility of Rs.310.00 Lacs, the defendant agreed to pay the said amount by 84 equated monthly installments with three month moratorium period of Rs.6,61,443/- alongwith interest @10.85% p.a.

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The applicant bank further submitted that though the Open

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[SBJ] (OA No.43/2023) Page 4 of 9

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Cash Credit loan of Rs.145.00 Lacs and Term Loan of Rs.310.00 Lacs was sanctioned, but after verification of the unit and progress of the work an amount of Rs.50,04,124/(Rupees Fifty Lacs Four Thousand One Hundred TwentyFour only) was disbursed and it was understanding between the bank and the borrowers that after seeing the performance, the balance amount will be disbursed but as no performance was shown the balance was not disbursed.

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In order to secure the aforesaid loan facilities, the defendants executed necessary loan and security documents mentioned at Paragraph No.5.4 of the O.A. To secure the repayment of the Open Cash Credit facility and the Term Loan facility, the defendant No.2 executed Equitable Mortgage Deed of his immovable property bearing Land Gut No.42, situated at Village Karodi, Taluka and District Aurangabad admeasuring 24 R (1960 Square Meters) on 24^th June, 2021 registered with Sub Registrar Aurangabad under Day Book No.866/2021 more specifically described in Para No.5.8 of the Original Application.

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The applicant bank contended that the defendant committed defaults in payment of installments and failed to pay interest as accrued over the same and also failed to

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[SBJ] (OA No.43/2023) Page 5 of 9

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abide by terms and conditions of the sanction and also failed to regularize the accounts and as such Term Loan account of the defendants classified as Non-Performing Asset on 09^th January, 2022. Therefore the applicant bank initiated the action under the Securitization Act and issued notice under section 13(2) of the Securitization Act on 16^th April, 2022.

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Thereafter the applicant bank has also initiated action under section 13(4) of the Securitization Act and taken the symbolic possession of the mortgaged properties on 27^th June, 2022 and further put the properties for sale.

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Despite assurance given finally the cause of action arose on 27.08.2022 when the defendants have failed to regularize the credit facility. Hence, this application is filed

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The defendant Nos.1 to 3 failed to appear despite service of summons. As per Court Commissioner Report (Exhibit-10) defendant Nos.1 to 3 served by way of affixation. Hence the application proceeded ex-parte and the right to file written statement to the defendants stand closed as per Order dated 09^th May, 2024.

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The applicant Bank has filed Claim Affidavit of Evidence

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[SBJ] (OA No.43/2023) Page 6 of 9

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(Exhibit-06) of Mr. Bharat Raj KA s/o A. Keshav-Bhat, Chief Manager of the applicant Bank, and has produced on record the original loan documents at Sr. Nos.AW-1 to AW-16 alongwith List (Exhibit-07), which corroborates the case of the applicant Bank.

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I have heard arguments of the learned Advocate for the applicant bank.

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Since the defendant failed to appear and contest the application, I find no reason to disbelieve evidence of the applicant bank. Therefore, the applicant Bank is entitled for reliefs as claimed.

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The applicant Bank has claimed future interest for the Open cash Credit facility @12% per annum with monthly rests till payment and / or realization in the loan account. However, considering the facts of the case, I am of the opinion that if future interest is granted @9% per annum (simple), it would be just and reasonable rate of interest.

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Hence, I pass the following order.

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ORDER

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(A) Original Application No.43/2023 is allowed with cost.

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[SBJ] (OA No.43/2023) Page 7 of 9

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(B) Defendant Nos.1 to 3 are ordered and directed to pay jointly and severally to the applicant the aggregate sum of Rs.56,11,769/- (Rupees Fifty-Six Lacs Eleven Thousand Seven Hundred and SixtyNine only) along with future interest @9% per annum from the date of filing of the original application i.e. 30^th August, 2022 till full payment/realization of the amount mentioned in this operative order.

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(C) The aforesaid adjudicated amount is secured by the hypothecation of machinery and book debts as is disclosed in Para No.III-A of the OA.

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(D) The aforesaid adjudicated amount is secured by the mortgage property owned by defendant no.2. All the piece and parcel of Land at Gut No.42, situated at Village Karodi, Taluka and District Aurangabad admeasuring 24 R (1960 Square Meters), boundaries of which are as under:

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East : Road West : Nala South : Remaining land of Bhausaheb Dane North : Road and remaining land of Vimalbai Dane.

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[SBJ] (OA No.43/2023) Page 8 of 9

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As is disclosed in Para No.5.8 of the Original Application.

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(E) The applicant Bank is entitled to sell the hypothecated and mortgaged properties to recover its dues.

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(F) Issue Recovery Certificate.

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(G) The Registrar is directed to send the copy of Judgment and Recovery Certificate to the applicant and defendants.

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Place : Aurangabad. Date :25.07.2024.

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(Dilip G Murumkar) I/c Presiding Officer, at PUNE Debts Recovery Tribunal, Aurangabad

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[SBJ] (OA No.43/2023) Page 9 of 9

Canara Bank v. M/S Revo Polytech Private Limited

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/S Revo Polytech Private Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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