Allowed

The Federal Bank Limited v. Kulwant Singh and Others

DRT16 Aug 2024OA/475/2023

Case brief

AI extract

What is this about?

Debt Recovery Tribunal allowed an Original Application filed by The Federal Bank Limited against four respondents ( proprietors) for recovery of outstanding dues. The court reduced the claimed interest rate to 8% per annum and ordered a Recovery Certificate.

What did the court decide?

Recovery of Rs.82,09,000.64p with costs and simple interest @8.00% p.a.; issuance of Recovery Certificate.

The Federal Bank Limited versus Kulwant Singh and Others — Execution and Attachment | DRT (2024)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.475/2023 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 05.04.2023

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DATE OF DECISION: 16.08.2024

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The Federal Bank Limited, a Banking Company registered under the Companies Act and having its Registered Office at Alwaye, Ernakulam, District and having one of its branches amongst other places at Ground Floor, corporate park, Banga Road, Nawanshahr District SBS Nagar (Punjab) 144514 through its General Power of Attorney holder/ Authorized signatory Sh. Amit Rai.

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……..Applicant

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Versus

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Sh. Kulwant Singh S/o Sh. Jhalman Singh, self and being proprietor of M/s Sagar Poultries, which is a Proprietorship Firm R/o House No. B1/342, Street No. 1, New Friends Colony, Nawanshahr, District Shahid Bhagat Singh Nagar 144514

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2^nd Address:- Palika Bazar, Nawansharhr, District Shahid Bhagat Singh Nagar 144514 (Punjab)

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Smt. Kiran W/o Sh. Kulwant Singh R/o H.NO. B1/342, Street No. 1, New Friends Colony, Nawanshahr, District Shahid Bhagat Singh Nagar 144514

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Also At:- H.NO. 19A, Umta Mohalla Nawanchahr, District Shahid Bhagat Singh Nagar 144514 (Punjab)

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Smt. Neelam Kumari W/o Sh. Makhan Ram R/o H.NO. B1/342, Street No. 1, New Friends Colony, Nawanshahr, District Shahid Bhagat Singh Nagar 144514

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Also At:- H.No. 55/2, Block No. 7, Umta Mohalla Nawanchahr,

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District Shahid Bhagat Singh Nagar 144514 (Punjab)

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1. Sh. Makhan Ram S/o Sh. Jhalman Singh R/o H.NO. B1/342, Street No. 1, New Friends Colony, Nawanshahr, District Shahid Bhagat Singh Nagar 144514 Also At:- H.NO. 10/55/2, Block No. 7, Umta Mohalla Nawanchahr, District Shahid Bhagat Singh Nagar 144514 (Punjab)

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………Defendants

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Advocates:

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Argued by Sh. S.C. Prajapati, counsel proxy for Sh. Nitin Grover, counsel for the applicant Defendants are ex-parte

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FINAL ORDER

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Present Original Application was instituted by the applicant bank under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.82,09,000.64p (Rupees Eighty Two Lacs Nine Thousand and Paisa Sixty Four only). The Original Application has been filed through Sh. Amit Rai, Attorney holder/ Authorized signatory o f the applicant bank, who is competent to institute the Original Application vide Power of Attorney dated 24.03.2022, which is Annexure A1 to this OA. 2. The brief facts of the OA are that the defendant No.1 proprietor in the name and style of M/s Sagar Poultries had approached the applicant bank for the grant of Cash Credit Limit of Rs.22.00 Lacs and further for its enhancement to Rs.30.00 Lacs. Later Defendant approached the applicant bank for renewal of CC Limit of Rs.30.00 Lacs. Thereafter for the grant of Term Loan (Housing Loan) of Rs.19.00 Lacs and Home Plus top up equity Loan of Rs. 25.00 Lacs. The defendants time to time approached the applicant bank for the renewal of existing Cash Credit Limit. Later, defendant no.1 once again approached the applicant bank for the Renewal cum reduction Cash Credit Limit to Rs. 25.00 Lacs vide Loan Application dated 18.06.2019 and 02.09.2019, which are Annexures A40, & A48 to this OA and further requested for fresh

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GECL (Guarantee Emergency Credit Line) of Rs. 4.57 Lacs vide Application for GECL (Guarantee Emergency Credit Line) dated 06.07.2020, which is Annexure A50 to this OA

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The applicant Bank sanctioned the Cash Credit Limit of Rs.22.00 Lacs and further for its enhancement to Rs.30.00 Lacs sanction letter dated 31.05.2016, which is Annexure A28 to this OA. Later the applicant bank renewed the CC Limit of Rs.30.00 vide Sanction Letter dated 01.11.2017, which is Annexure A34 to this OA. Thereafter, sanctioned a fresh Term Loan (Housing Loan) of Rs.19.00 Lacs and further Home Plus top up equity Loan of Rs. 25.00 Lacs vide sanction letter dated 29.08.2016, which is Annexure A19 to this OA.

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Later, Applicant bank sanctioned the renewal and reduced the Cash Credit Limit to Rs. 25.00 Lacs. The applicant bank also sanctioned the GECL (Guarantee Emergency Credit Line) of Rs. 4.57 Lacs vide sanction letter dated 06.07.2020, which is Annexure A51 to this OA and the terms and conditions were duly accepted by the defendants.

¶26

Defendants No.1 and 3 had mortgaged their immovable properties detailed as:-

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a) Land measuring 02K-03M-3-3/4 Sarshai situated at Village Sujjawalpur, Hadbast No. 154, Tehsil and District SBS Nagar (Punjab) vide Registered Mortgaged Deed bearing vasika No.1703 dated 16.07.2013, which is Annexures A7 to this OA

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b) Land measuring 02K-11M-5-1/4 Sarshai situated at Village Langgroya, Hadbast No. 137, Tehsil and District SBS Nagar (Punjab) vide Registered Mortgaged Deed bearing vasika No.2612 dated 12.01.2015, which is Annexures A13 to this OA and

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c) Residential Land measuring 10 Marla with building situated at House no.B-1/342, Street No.1, New Friends Colony, (Jaswant Nagar) Saloh Road, Village Nawanshahr, Tehsil Nawanshahr, District SBS (Punjab) vide Equitable Mortgaged of Sale Deed

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bearing vasika No.3743 dated 05.11.2012 and Letter deposit of Title deed dated 09.09.2016 along with their Translations, which are Annexures A26 & A27 to this OA. Documents executed:- Cash Credit Agreement, Security Delivery letter, Demand Promissory Note, Undertaking Letter all dated 18.07.2013, which are Annexures A2, A3, A4 and A6 to this OA; Letter of set-off, which is Annexure A5 to this OA; Cash Credit Agreement, Security Delivery letter, Demand Promissory Note, Letter of set-off and Undertaking Letter all dated 29.01.2015, 31.05.2016 and 21.11.2017 which are Annexures A8 to A12 to this OA; Federal Housing Loan Agreement, Security Delivery Letter, Demand Promissory Note, Undertaking, Agreement all dated 05.09.2016, which are Annexures A14 to A18 to this OA; Loan Agreement for Home Plus Top up Equity, Letter of Set-off, Security Delivery Letter, Demand Promissory Note, Undertaking cum Declaration, Indemnity Bond all dated 08.09.2016, which are Annexures A20 to A25 to this OA; Cash Credit Agreement, Security Delivery letter, Demand Promissory Note, Letter of set-off and Undertaking Letter all dated 31.05.2016 and 21.11.2017 which are Annexures A29 to A33 & A35 to A39 to this OA; Agreement of overdraft, Security Delivery letter, Demand Promissory Note, Undertakings, Letter of set-off, Undertaking/ Declarations all dated 02.09.2019, which are Annexures A41 to A47 to this OA; Said Letters dated 03.09.2019 and 07.07.2020, which are Annexures A49 and A53 to this OA; Agreement for GECL (Guarantee Emergency Credit Line) dated 06.07.2020, which is Annexure A52 to this OA; Acknowledgement of Debt and Security dated 21.10.2020, which is Annexure A54 to this OA; Letter of Continuance dated 21.10.2020, which is Annexure A55 to this OA; Demand Notices U/s 13(2) of SARAFESI Act dated 23.02.2022, which is Annexure A56 to this OA and Statements of accounts with certified under the Banker’s Book Evidence dated 20.03.2023, which are Annexures A57 to A60 to this OA.

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The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in both the loan accounts there was a debit of Rs.82,09,000.64p, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant bank requested to accept the application and to issue Recovery Certificate accordingly.

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The defendants were served notices to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte on 02.07.2024.

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In support of the OA, affidavit of Sh. Amit Rai, Attorney holder/ Authorized signatory, The Federal Bank Limited has been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned proxy counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant bank had proved its case. From the perusal of all the Annexures A1 to A60 to this OA, it is proved that the defendants approached applicant bank for availing of the loan facilities which were granted to them and for that they had executed all the relevant documents in favour of the bank. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, both the accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.82,09,000.64p (Rupees Eighty Two Lacs Nine Thousand and Paisa Sixty Four only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of all the accounts.

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In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest detailed as:

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a. Interest @17.75%p.a. in CC Limit with monthly rests from 21.03.2023 till the realization.

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b. Interest @10.55%p.a. in Housing Loan with monthly rests from 21.03.2023 till the realization c. Interest @11.95%p.a. in Top Up Equity Loan with monthly rests from 21.03.2023 till the realization d. Interest @11.25%p.a. in GECL with monthly rests from 21.03.2023 till the realization The Tribunal is of the considered opinion that sometimes in appropriate cases the prerogative of mercy is the brightest jewel in the crown of the Judge. Keeping in view the facts and circumstances of the instant case including nature of the mortgaged property, undertaking of the defendants, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yester years, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @8.00%p.a. in all the loan accounts from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.82,09,000.64p (Rupees Eighty Two Lacs Nine Thousand and Paisa Sixty Four only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in all the loan accounts from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant bank shall be entitled to recover aforesaid amount from the sale of hypothecated/mortgaged properties of the defendants in execution proceedings if not sold earlier under the provisions of the SARFAESI Act, 2002. If the dues of the bank still remain unsatisfied, it shall be entitled to recover the same by attachment and sale of personal assets of the defendants. The applicant is at liberty to enforce the claim through due process of law.

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12.	Any other application pending stands disposed of.
13.	Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 06.09.2024. 15. Copy of this order be given dasti to the applicant bank and be sent to defendants through registered/speed post and this order be also uploaded on the official website of this Tribunal and record be consigned. Pronounced by me in the open Tribunal . Dated: 16.08.2024 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

The Federal Bank Limited v. Kulwant Singh and Others

Case brief

What is this about?

What did the court decide?

The Federal Bank Limited v. Kulwant Singh and Others

Case brief

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What did the court decide?

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