Allowed

Bank of Baroda v. Messers N E Infratrade

DRT15 Jul 2024OA/469/2022

Case brief

AI extract

What is this about?

In an application under Section 19 of the RDBFI Act, the Guwahati DRT granted a recovery certificate to Bank of Baroda against a proprietorship firm and two individuals for a defaulted loan and overdraft facility amounting over one crore rupees, along with interest and costs.

What did the court decide?

Recovery Certificate issued against Defendants jointly and severally liable to pay Rs. 1,14,62,946.96 with pendentelite and future interest at 9.90% per annum; charge kept alive on mortgaged property.

Bank of Baroda versus Messers N E Infratrade — Contract and Commercial Disputes | DRT (2024)

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oA.^{rt69,[email protected]}

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(North Eastern Region)

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(Tribunat of Assam, Nagatand, Meghalaya, Manipur, Mizoram, Arunachal pradesh & Tripura)

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Before Shri Shiv Sharan Dubev.^prssidino Officor

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O.A. No.469/2022

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ln the matter of -

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Bank of Baroda Beltola Jayanagar Branch, Opposite Agile Hospital, Jayanagar Chariali, Beltola, Guwahati, Pin-781028, Assam.

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"Applicant vs.

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M/S N. E. lnfratrade

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A proprietorship firm represented by lvtr. Neeraj Deka Office at RGB Road, Lakhimi Nagar

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Guwahati- 781005

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Mr. Neoraj Doka

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Son of Kripanath Deka Resident of H No 20, Lakhmi Nagar P.O. Japorigog, P.S. Dispur

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Guwahati, Pin-781005. Assam

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Mr. Kripa Nath Deka

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Son of Late Kali Charan Deka Resident of H No 20, Lakhmi Nagar P.O. Japorigog, P.S. Dispur

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Guwahati, Pin-781 005, Assam.

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Defe n da nts

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Presance of the Counsel ;

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For the Applicant : Mr. Mukesh Sharma, Ms Ellora Bharali, Advocates

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For the Oefendants : None (Ex-parte)

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Oated :1510712024

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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 Bank of Baroda, Beltola Jayanagar Branch, Opposite Agile Hospital, Jayanagar Chariali, Beltola, Guwahati, Pin-781028, Assam, with a prayer to issue Recovery Certificate for the sum of

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Sl^dt*orfd^er"+ Presidng Olfcer I I U DRT. Guwahali

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0.A 4692022/DRT-Guw.hrI

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Rs. 1,14,62,946.96p (Rupees One Crore Fourteon Lakh Sixty Two Thousand Nine

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Hundred Forty Six and Paisa Ninety Six) only as on 21.09.2022 against the defendants with pendentelite and future interest at conlractual rates per annum with monthly rests 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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The Defendant No.1 and 2 had approached the applicant Bank vide Loan application dated 18.11.2019 and apptied for Baroda Overdraft Facitity of Rs.99,00,000.00 vide loan Application. ln consideration of the said Loan application, the applicant Bank vide Sanction Letter dated 07.12.2019 had sanctioned a Overdraft Facility of Rs.99,00,000.00. The appticant bank had sanctioned the Overdraft facility to the Defendants, upon their agreeing and unde(aking to comply with and abide by the terms and conditions stipulated therein. The loan was secured by various Security Documents exhibited by Defendants with rate of interest 9.90% per annum with monthly rests, [i.e. under floating option, 1 year MCLR g.2O% + Normal Spread 1.20% + Additional Risk premium O.5O%, At present MCLR is 8.25yol subject to changes as per the Directives of RBI/Bank policy from time to time.

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ln consideration of granting and sanctaoning the said financial accommodation of Rs.99,00,000.00 the Defendant no.1 and 2 had executed a Demand promissory Note and Letter of Continuing Security both dated 07.12.2019 in favour of tha Applicant Bank.

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ln connection with the sanctioning of the Overdraft facility of Rs. 99.00 Lacs sanction by the applicant bank and availed off by the Defendants no.1, Guarantee Agreement daled 07 .'12.2019 was signed and executed by the Defendants no. 3 as Guarantor, who stood as the personal guaranlor to the said loan facility availed by the Dafendants no.'I. The said Guarantee Agreements was duly signed and executed by the Defendants no. g, whereby in her capacity as the personal guarantor had not only confirmed the signing and execution of the Guarantee Agreement daled 07.12.2019 but also acknowledged its obligation as the personal guarantor to the loan facility availed by the Defendants no. 1.

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The aforesaid Overdraft Facility of Rs.99.00 Lacs was further secured by

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creation of equitable mortgage of the immovable properly by Oefendant no.3, being the morigage property (morefully described in Schedule-A of the Original Application). Accordingly, the Oefendant No.3 had deposited all the documents of title relating to the immovable property as security for repayment to the Applicant for all the amounts advanced or to be advanced under loan facilities granted or to be granted by the applicant bank. Further, the Oefendant No.3 vide Letter confirming deposit of Title Deeds dated 07.12.2019 confirmed the deposit of titles deeds in favor of the Applicant Bank.

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ln terms of the Government of lndia "Emergency Credit line Guaranteed Scheme' (ECLGS), Applicant Bank vide its Letter dated 06.06.2020^pre-approved the loan facility under BOB Guaranteed Emergency Credit Line of^{Rs.19,00,000/-} only to the defendant no.2 with the rate of interest @^{10.25o/oper annum(RBl Repo} rale 4.4Oo/o^{(at present),} Mark up of^{2.85%(at presenl), Strategic Premiumof 0.25%} (at present), Credit Spread ol 2.75o/o^{(at present)) with monthly rest. Theaforesaid} loan was repayable in 36 monthly^{installments after moratorium period of 12 Months'} ln connection with the sanction of^{working capital term loanunderlhe} Emergency Credit Line Guarantee^{Scheme Loan of Rs. 19,00,000/- as aforesaid, the} Defendant no. I and^{2 in order lo availand in orderto securethe said loanin tavour} of the Appticant bank,^{executed aDemand PromissoryNote, Loancum} Hypothecation^{Agreement,DeclarationcumUndertakingcum Authority,Request} cum Undertaking^{letter for disbursemenlof Loan and Undertakingall dated} 31.07 .2020^{in favor of the Applicant Bank.}

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ln conneciion^{with the sanctioning of the working capital term loan under the} Emergency Credit^{Line Guarantee Scheme Loanof Rs 19,00,000/'bytheapplicant} bank and availed^{off by the Defendantsnol, Guarantee Agraementdated} 91.07.2020^{was signedand executedbytheDefendants no 3 as Guarantor'who} stood as the^{personal guarantor lo the said loan facility availed by the Defendants} no.1. The said^{Guarantee Agreementswas duly signedand executed by the} Defendants^{no. 3, wherebyin her capacity as the personal guarantor had not only} confirmed the^{signing and execution of the Guarantee Agreement dated 31 07 '2020}

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as the^{personal guarantor to the loan facility} but also acknowledged^{its obligation}

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availed by^{the Defendantsno 1'}

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ln connsction^{of the Term Loanlacility of Rs 19'OO'OOO/- ' the loanwas further} secured^{by extension of equitable mortgageof the immovableproperty Accordingly'} the Defendant^{no. 3 have confirmedthe extensionof equitable mortgage by deposii} of titl6^{deed dated 31 07 2020 to cover the aforesaidTermLoan facilitythe} delendant^{no 2 and 3 had executing a Letterof Confirmation of creation/extensionof} mortgage^{dated 31 07 '2020'Letterof Authorityfor creation/extension of mortgage} dated^{31 O7.2O2Olt is furtherstated that the TitleDeeds of theaforesaid properties} originally^{depositedfor various financialfacilities availedby them'} The^{De'endant No 2 and 3 had confirmedand acknowledgedits} indebtedness^{towards the bank by signing and executing AcknowledgBmentof Debt} and Security^{of Overdraft Facility dated 24 02'2022 and Acknowledgement of Oebt} and^{Security of Term Loan Facilitydate d 24'02 2022ar3o confirmedthe executionof} loan^{documents and ths relative securities in connection with the said loan facility} availed^{of bY the Defendants'}

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As^{per the terms of RBI Guidelinesdated 23 03 2020' theapplicantbank had} sanctioned^{a Funded lnterestTerm Loan of Rs 4'49'OOO/-on 25 09 2020'}

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As^{the Defendants have failed to repay the outstanding amountin the loan} account,^{the ApplicantBank on 23 03 2022 had issueda notice under Section13(2)} of the^{Securitizationand Reconstructionof Financial Assets and Enforcementof} Security^{lnterest Act'2002(SARFAESIAcT' 2Oo2) to the Defendant no 2 as} proprietor^{of detendantno land defendantno 3 demanding the repayment of the} outstanding^{loan amount in the loan accountwithin 60 daysfrom the date of receipt} of the^{noticeBut theDefendantsfailed to discharge their liabilitieswithin the} stipulated As^Period'

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stipulated As^Period' the^{Oefendants have tailed to repay the outstanding amountin the loan} account,^{lhe Applicant Bank on 2'1'092022 had issueda noticeunder Section13(4)} of^{the Securitizationand Reconstruction ol FinancialAssets and Enlorcementof} security^{rnterest Act_2002(SARFAESI Acr, 2002) to the Defendants demanding the} stil*S$

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repayment of the outslanding loan amount in the loan account. But the Defendants failed to discharge their liabilities within the stiputated period.

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The Defendants had availed of the said loan facilities from the Applicant Bank, but have not paid the loan amounts in the Loan accounts as per the lerms and conditions as agreed upon with the Applicant Bank, inspite of repeated demands and requests by the Applicant Bank. Thereafter the Applicant Bank through its counsel issued a Loan Recall Notice daled 05.11.2022 to the Defendants through speed post A,/D, demanding the repayment of the outstanding loan amount within 7 days from the date of the notice. But the defendants failed to repay the outstanding amount within the stipulated time.

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The Statements of Account maintained by the Applicant Bank in the usual and ordinary course of businass shows that there is an outstanding balance of Rs. '1, 14,62,946.96/- in the Overdraft Account No. 63470400000011 of Rs. 98,99,'103.97, Term Loan Account No. 63470600000060 of Rs.15,36,211.65. Funded lnterest Term Loan Account No. 63470600000570 of Rs.27,631.34 as on 2'1.O9.2O22. The account was classified as N.P.A. on 23.02.2022in adherence to lhe^guidelines and norms as prescribed by the Reserve Bank of lndia. Therefore, the claim amount in the Loan Account is Rs. 1,14,62,946.961- as on 21.09.2022^{and the Defendants are legally} bound and liable^jointly and severally to repay the^{said amount of Rs.} 1,14,62,946.96/- to the Applicant Bank with^{interesttill realization with pendentelite} and future interest, cost and charges.

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The applicant bank thus became^constrained to^{tile thepresentOriginal} Application for the recovery of^{Rs. 1,14,62,946.96p(Rupee3One crore Fourteen} Lakh Sixty Two Thou3and^{NineHundred Forty Six and Paisa NinstySix) onlyas} on 21.09.2022 alor|g^{with interest and mst of the application.}

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After filing of the OA the Tribunal issued^{notices uponthe defendants through} registered^post and the applicant bank^{filed service reporton 20.01.2023 and brought} on record the^postal receipt^{alongwith trackconsignment reportwhich shows that the} notice has been served upon the defendants.^{On 20 01.2024, Leamed counsel for the} Oefendant No 3 had appeared^{by liling vakalatnama and sought time for filing written}

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statement cum evidence on affidavit, thereafter the matter was listed on 14.02.2023, 30.03.2023, but he has not filed written statement cum evidence on affidavit. Hence right of the defendant No 3 to file written statement cum evidence on affidavit is forfeited on 08.05.2023. lt is also observed from the record that even after issuance of nolice upon the defendants No. 1 & 2 there was no representation on behalf of the defendants No 1 & 2 either by the counsel or the person and hence the defendants No. 1 & 2 were set ex-pade on 08.05.2023 and their right to file written statement cum evidence on affidavit was closed and the matter was posted for hearing on behalf of the applicant bank.

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Supporting the claim of the applicant bank Mr. Surendra Kumar, Branch Manager of the Applicant Bank has tiled evidence on affdavit coupled with the security documents marked as Document -P, Exhibit AW-,U1 to AW-1/36, supporting the claim of the applicant bank.

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Heard the learned counsel for the appticant bank who prayed for issuance of Recovery Certiticate 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 circumslances of the case, I am of the considered view that the document filed by the applicant bank are supporting the claim of the applicant bank and establishing the liability of the defendants. lt is proved that the defendants are liable to pay to the applicant bank the claim made in the Original Application. The loan was obtained and documents have been executed on 07.12.2019, 31 .07 2020. Defendant No. 2 and 3 had confirmed and acknowtedged its indebtedness towards the bank by signing and executing Acknowledgement of Debt and Security of Overdraft Facility dated 24.O2.2022 and Acknowtedgement of Debt and Security of Term Loan Facility dated 24.02.2022 also confirmed the execution of loan documents. The account became NpA on 23.02.2022 and the OA has been filed on23.11.2022. Hence, the OA is filed we within the period of limitation and this Tribunal having a jurisdiction to adjudicate the Original Apptication.

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sLir_fuffi

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ORT. Guwaheti

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

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ln the result, the present Original Application No. 469 of 2022 is allowed with cost as under i

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i) The defendants No. 1, 2 & 3 are joinfly and severa y liable to pay to the applicant bank a sum of Rs. 1,j4,62,946.96p (Rupees One Crore Fourteen Lakh Sixty Two Thou3and Nino Hundrod Forty Six and paisa Ninoty Six) only with pendentelite and future interest @9.90% per annum with monthly rests from 22.09.2022 till the date of full paymenurealization and also cost of the application.

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ii) The charge of the certificated amount be kept alive on mortgaged property i.e. Equitable mortgage of land and building measuring 4.4i Are covered by Dag no.1137(Oy'1780(N) K.p^patta No.aO(O)/336(N) under revenue viflage no 1 Japorigog under mouza Beltola Dispur revenue Circle situated at H no 20, Lakhinagar, Japorigog, Guwahati-781005, which is bounded by _ On the East : Road, On the West : Land of Oag no 1779(new), On the Norlh : Land of Dag no 1777(new), On the South : Road as described in Schedule-A of the OA tifl the amount is realized in full.

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

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iv) The applicant bank is also entifled 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 entifled to the costs of the O.A. which includes the advocate fees of the appticant bank. Applicant is directed to tite the cost memo within 2 weaks from today.

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vi) lssue Recovery Certificate accordlngly for a sum Rs. 1,14,62,946.96p

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(Rupees Ono Crore Fourtoen Lakh Sixty Two Thousand Nine Hundrod

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Forty Six .nd Pal.. Ninoty Sir) only in favour of the applicant bank against

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the defendants No. i,2 & 3.

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vli) Communicate copy of this oder to the concemed parties.

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This order is dictated and corrected by the undarsign€d.

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Judgment dated 1Ss Juty 2024, signed and pronounced in the Tribunal today

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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 Record Room.

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,**.tffi,W? Presiding Officer DRT, Guwahati

Bank of Baroda v. Messers N E Infratrade

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. Messers N E Infratrade

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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