Allowed

Canara Bank v. Messers Rajiv Enterprise

DRT5 Jan 2024OA/462/2022

Case brief

AI extract

What is this about?

The Tribunal allowed an application filed by Canara Bank for issuing a Recovery Certificate against three defendants for an outstanding loan of Rs. 31,45,935.00 with interest, based on unchallenged documentary evidence and affidavits of bank officials.

What did the court decide?

Issuance of Recovery Certificate for Rs. 31,45,935.00 with pendent Interest @9.40% p.a., and charges kept alive on mortgaged property.

Canara Bank versus Messers Rajiv Enterprise — Execution and Attachment | DRT (2024)

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g.A. 452022lDRT-GBahat

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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, Meghataya, Manipur, Mizoram, Arunachal pradesh & Tripura)

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Beforo Shri Shiv Sharan Dubev. Presldino Officer

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O.A. No.46212022

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ln the matter ot -

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Canara Bank Silchar^'l Branch, Situated at Sobhana Super Market, Rangirkhari, N.S.Avenue, Silchar.788005 ln the District of Cachar, Assam.

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applicant

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vs.

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l. M/s Rajiv Entorprise

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Village West Kachudharam, Bhajantipur Part-1 (Tiniali), P.O.Chincoorie P.S.Silchar, Oistrict Cachar, Assam, Pin-788007

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Represented by its Proprietor Sri Rajiv Sinha.

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Sri Rajiv Sinha Son of Sri Sukumar Sinha Village West Kachudharam, Bhajantipur Part-l Cfiniali), P.O. Chincoorie P.S.Silchar, District Cachar, Assam, Pin-788007.

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Sri Sukhamoni Sinha Son of Monikumar Sinha Village Nowaraj, P.O. Singari. P.S.Silchar, District Cachar, Assam, Pin-788007

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Defendants

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Presence of the Counsel:

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For the Applicant : Ms Aparna Dev, Mr.DJNath,Advocates For the Defendants : None (Ex-parte).

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Dated:05/01/2024

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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 CanaraBank,} Silcha I^Branch, Situated at Sobhana Super^{Market, Rangirkhari, N.S.Avenue, Silchar-788005 in the} District of Cachar, Assam, with a^prayer to^{issue Recovery Certificate for the sum of}

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Rs. 31,45,935.00 (Rupees Thirty-One Laca Forty-Five Thousand Nine Hundred

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Thirty-Five) only as on 31.'10.2022 against the defendants jointly and severa y with pendentelite and future interest @9.40% per annum lrcm 01.1'1.2022 till realization along with cost and other relief.

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

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The defendant No.^'1 is a proprietorship unit which is running under the name and style of M/s. Rajiv Enterprise. The defendant no. 2 is the proprietor of defendant no.1. On the^prayer of defendant no.2 the applicant bank sanctioned the cash credit facility of Rs. 10,00,000.00 on 31-12-2016 in the name of defendant no.1 on the terms and conditions as embodied in the various documents executed by the defendants in favor of the applicant bank. The applicant bank charged interest 10.70% per annum compounded monthly as and when due and in case of default the defendants were liable to pay overdue interest 21. The rate of interest stipulated was subject to change as^per HO/ RBI^guidelines from time to time. An accounl was open in the name ot the defendant no. 1 bearing OCC Loan Account No. 305026'1000013. ln respect of the cash credit facility the defendant no.2 was to operate the account regularly and liquidate the loan amount.

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ln respect of the cash credit facility the defendant no.2 executed Request for overdraft facilities and cash credit agreement both dated 31-12- 2016 in favor of the applicant bank. The defendant no.2 also executed^pronote dated 3'l-12-2016 valued of Rs. 10,00,000.00 in favor of the applicant bank.

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The defendant no.3 stood as^{personal guarantor} for due repayment of loan of Rs. 10,00,000.00 of defendant No.1 and 2. Defendant^no.3 agreed to repay all amounts due by the borrower^(defendant No.1 and 2) to the applicant Bank. Defendant no.3 executed Guarantee covering Letter and Guarantee Agreement both dated 31-12-2016.

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On request of the defendant no.2 the applicant bank enhanced the open cash credit limit from Rs.^{'10,00,000,00} to Rs.24,00,000.00 on 06-04-2018. The applicant bank charged interest 8.4yo^per annum compounded monthly. The

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defendant no.2 execuled letter of renewal, Supplemental agreement and pronote of Rs. 14,00,000.00 att dated 06-04-2018 in favor of the applicant bank. The defendanl no.2 also executed Link letter in respect of enhancement of credit facilities dated 06-04-2018 in favor of the appticant bank.

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The defendant no.3 stood as personal guarantor for due repayment of loan of Rs.24,00,000.00 of defendant No. 1 and 2. Defendant no.3 agreed to repay all amounls due by the borrower (defendant No.1 and 2) to the applicant Bank. Defendant no.3 executed Guarantee covering Letter and Guarantee Agreemenl both dated 06-04-2018.

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ln respect of the cash credit facility the defendant no.2 created equitable mortgage as security in favor of the applicant bank with respect to a plot of land measuring 3 katha covered by dag no. 245, 2 RS^patta no. 83 Mouza Bhajantipur part 1, Porgona Barakpur Cachar Assam falling under Silchar Development Authority Silchar, Cachar Assam and Bhajantipur. The description of the mortgaged property/land is described in the schedule of the OA. The defendant No.2 executed one document namely Letter evidencing deposil of tifle deeds dated 06-04-2018 with the applicant bank to create security by way of equitabte mortgage and deposited original Registered sate deed no. i546 dated 31-03-2007, lnformation regarding Land Mutation and occupation dated^.19-09-2017, lnformation regarding Land Mutation, occupation and status dated 15-03-2019 and non-encumbrance certificate dated 1 3-03-201 8.

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The empaneled valuer of the applicant bank has taken valuation of the mortgage land mentioned in the schedule of the original application and as per the valuation report dated 08-10-2022 the present market value of the mortgage land is Rs. 12,00,000.00 (Rupees twelve lakh) only.

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On request of lhe defendant no.2 the applicant bank renewed the open cash credit limit of Rs. 24,00,000,00 on 06-07-20'19. The defendant no.2 executed tetter of renewal dated 06-07-2019 in favor of ihe applicant bank. On 06-07-2019 the defendant no.2 executed acknowledgement of debt and security acknowledging that a sum of Rs. 23,86,653.84 is due to the applicant bank. The defendant no.3

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S[rrtelata^Q"L"+ o5.01'2 l, (l Presiding Officer^{I !} DRT, Guwahali

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executed letter from the guarantor whenever limits are to be renewed dated 06-07-2019 in favor of the appticant bank.

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The defendants have availed the cash credit facility but were irregular in operating the loan account. On 01-09-2020 the applicant bank issued a notice to defendant no.'l asking the defendant no. 1 and 2 to increase the transaction in the OCC loan account.

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During Covid-19 pandemic in terms of Government of lndia's Emergency Credit Line Guarantee scheme the applicant bank offered defendant no.1 a Guaranteed Emergency Credit line (GECL) by way of working capital (Term Loan) of Rs. 4,80,000.00 on 31-10-2020. The defendant no.2 accepted the working capital (Term Loan) of Rs.4,80,000.00. Accordingly the applicant bank sanctioned the Guaranteed Emergency Credit tine (GECL) by way of working capital (Term Loan) of Rs.4,80,000.00 on 31-10-2020 in the name of defendant no.1. The tenure of repayment of the loan was 48 forty-eight) months. An account was opened in the name of defendant no.1 bearing loan accounl no. 3050755000058,

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ln consideration of the loan sanctioned of Rs.4,80,000.00 in the name of defendant no.1 , the defendant no.2 executed pronote of Rs. 4,80,000.00 and Letter of Undertaking re: Loans/advances both dated 31-10-2020 in favor of the applicant bank.

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On 01-08-2021 the defendant no.2. executed acknowledgement of debt and security acknowledging that a sum of Rs.25,61,986.00 is due to the applicant bank.

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The defendants had availed the said credit facilities from the applicant bank but have not paid the outstanding loan amount as per terms and conditions as agreed upon with the applicant bank, in spite of repeated demands and request by the applicant bank. As the defendants failed to repay the loan amount, lhe loan accounts became NPA on 23.06.2022. After the accounts became NPA the applicant bank issued notices for repayment of the due amount, but the defendants failed to repay the loan amounl.

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The applicant bank thus became constrained lo file the^present Original Application for the recovery of Rs. 31,45,935-00^(Rupees Thirty-One Lacs Forty-Five

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SL.uskra-A/.'r ,n".o'* 3^*,ol² \ I DRT, Guwahati

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Thousand Nine Hundred Thirty-Five) only as on 31j0.2022 along with interest and cost of the application.

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Afrer filing of the OA the Tribunal issued notices upon the defendants through registered post and the applicant bank filed service report on 18.01.2O2g and brought on record the postal receipts along with lrack consignment report which shows that notices have not been served upon the defendants. Thereafter the Tribunal ordered paper publication of notice upon the defendants and the applicant bank issued notice to the defendants on 11.02.2023 through Paper Publicaiion in two newspapers namely "Prantojyoti Dainik" and 'Northeast Express". Even after issuance of notice through paper publication also there was no representation on behalf of the defendants either by the counsel or the person and hence the defendants were set ex-parte on 2'l-04-2023 and their right to file written statement cum evidence on affidavit was closed and the matter was listed for hearing on behalf of the applicant bank.

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Supporting the claim of the applicant bank Mr David Lalramlien Songate, Senior Manager of the Applicant Bank has filed evidence on affidavit coupled with the security documents marked as Exhibit AW-1/'l to AM/36 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 defendants as per pleadings made in the Application, supported by evidence on affidavit of their witness who affirmed on oath the execution of the security and other documents by the defendants and also execution of their own documents relied upon, which have been marked exhibits.

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Considering the facts and circumstances of lhe case, I am of the considered view that the documents liled by the applicant bank are supporting the claim of the appllcant bank and establishing the liability of the defendants. lt is proved that the defendants are^jointly and severally liable to pay to the applicant bank the claim made in the Original Application. The loans were obtained and documents have been executed on 31.'12.2016,06.04.2018, 06.07.201 & 31.10.2020, Acknowledgement of Debts and Security are dated 06.07.2019 & 01.08.2021. Both the accounts became NPA on 23.06.2022 and the OA has been filed on22.11.2022. Hence, the OA is filed

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St"rd^ua-A"L", Prcsidinso#t o l'2 \ I ORT, Gu\uahati

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9.A. 462n02zDRT€uMhari

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werr within the period of rimitation and this Tribunar having a iurisdiction to adjudicate the Original Application.

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Considering the unchallenged / unrebutted version of Mr David Lalramlien Songate, lhe applicant's witness and allthe documents marked as exhibits, including duly certilied copy of the statement of account along with interest carcuration sheet maintained by the applicant Bank in it,s regular course of business, I hold that the applicant is entitled to get the Recovery Certificate as prayed for.

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ln the result, the present Originat Apptication No. 462 of 2022 is allowed with cost as under: -

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i) The defendants No.^'1, 2 & 3 are joanfly and severa y liable to pay to the applicant bank a sum of Rs.3r,45,935.00 (Rupeos Thirtyono Laca ForlyFive Thousand Nine Hundred Thirty-Five) only with pendentelite and future interest @9.40% per annum with monthly rests from 01.11.2022 till the date of full paymenurealization and also cost of the application.

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ii) The charge of the certilicate amount be kept alive on mortgaged property i.e. A plot of land measuring 3 katha covered by dag No. 245, 2nd RS patta No. 83 Mouza Bhajantipur Part 1, Porgona Barakpur, Cachar, Assam falling under Silchar Development Authority Silchar, Cachar, Assam and Bhajantipur G.p. bounded by East: 12 ft Breadth Road: West: Land of^phulendra Singha: South: 12 ft Breadth Roadi North: Balance land of Vendor, as described in Schedule of the Original Application till the amount is realized in full.

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iiD The applicant bank is entitled to proceed against the secured items towards recovery of the debts.

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iv) The applicant bank is also entitled to proceed against the personal assets and properties of the defendants towards recovery of the dues.

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v) The applicant bank is entitled to the costs of the O.A., which includes the advocate fees of the applicant bank. Applicant is directed to file the cost memo within 2 weeks from today.

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vi) lssue Recovery Certificate accordingly for a sum Rs. 3,1,45,935.00 (Rupses Thirty-One Laca Forty-Five Thousand Nine Hundred Thhy-Five) only in favour of the applicant bank against the defendants No.'1, , & r. djrilo*_ N^!_* e,".ioing om8f'^{oJ ) L{ /} DRT, Guwahati

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vii) Communicate copy of this order to the concemed parties.

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This order is dictated and corrected by the undersigned.

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Judgment dated 5rh January 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 uploaded in the Tribunal's Website and

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file be consigned to Remrd Room.

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Sl",'t ilo^"- A"L-,-oJ-, at.24- rt (Shiv Sharan Dubey)^{</sup> Presiding Officer DRT, Guwahati.}

Canara Bank v. Messers Rajiv Enterprise

Case brief

What is this about?

What did the court decide?

Canara Bank v. Messers Rajiv Enterprise

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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