Allowed

Canara Bank v. Messers Maa Kali Bricks Industries

DRT9 Jan 2024OA/483/2022

Case brief

AI extract

What is this about?

In this debt recovery application, the Canara Bank sought issuance of a Recovery Certificate against a proprietorship and its proprietor for outstanding loans. Finding unchallenged evidence supporting the claim and limitation compliance, the Tribunal issued the certificate and directed recovery from secured and personal assets.

What did the court decide?

Recovery Certificate issued for Rs. 24,09,024.12 with interest; charge kept alive on hypothecated properties; entitlement to proceed against secured and personal assets.

Canara Bank versus Messers Maa Kali Bricks Industries — Banking and Recovery | DRT (2024)

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O A .8320220RT-Guwahati

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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, Mizoram,} Arunachal^{Pradesh& Tripura)}

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Before Shri Shiv Sharan Dubev, Presidinq^Officer

O.A. No. 483/2022

ln the matter of -

Canara Bank

Jirania Branch, Situated at Block Road,^{P.O. Birendranagar,} District West Tripura, Jirania-799045,^Tripura.

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Applicant

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Vs.

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l- M/s Maa Kali Bricks lndustries Sachindra Nagar Colony, Jirania, P.O. & P.S. Jirania, District West Tripura, Pin-799045,

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Tripura, Represented by^{its ProprietorSriAjitDebnath.}

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Sri Ajit Debnath

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Son of Lt Arjun Chandra^Debnath Sachindra Nagar Colony, Jirania, P.O. & P.S. Jirania, District West Tripura, Pin-799045,Tripura.

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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 :0910112024

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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 lnslitutions Act, 1993^filed by the^{Canara Bank,JiraniaBranch, situated} at Block Road, P.O. Birendranagar,^{Districl West Tripura,Jirania-799045,Tripura,} with a^prayer to issue Recovery Certificate^for the sum of^{Rs. 24,09,024.12 (Rupees} Twenty-Four Lacs Nine Thousand Twenty-Four and Paisa Twelve) only as on 30.11.2022 against the defendants^jointly and severally with^pendentelite and tuture interest @11.35% per annum compounded monthly from 01.'12.2022 till realization along with cost and other relief. <)"ut

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<)"ut^{grAtar^h"Lr,1.} 6q 0lz\ I Presiding Officer DRT, Guwahali

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OA,1832022rDRT Guwahal

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

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The defendant. No. 1 is a^{proprietorship} unit which is running^underthe name and style of M/s. Maa Kali Bricks industries, Sachindra^{Nagar Colony Jirania,} P.o & P.S. Jirania District West Tripura,^{Tripura dealing in manufactureof bricks} The defendant no. 2 is the^proprietor of^{defendantno.1. On 27-11-2019the} defendant no.2 applied for cash credit^{facility of Rs.20,00,000.00to the applicant} bank for the^purpose of^{manufactureof bricks. The applicant bank sanctioned the} cash credit facility of^{Rs. 20,00,000.00 on 27-11-2019 in the name of defendant} no.1 on the terms and conditions^{as embodiedin the various documents executed} by the defendants in favor^{of the applicant bank. The applicant bankcharged} interest @ 8.05^{o/o per} annum^{compounded monthlyas and when due and in case} of defauli the defendants^{wereliableto pay overdue interest} @27o.^{The rate of} interest stipulated was subject^{to change as per HO/ RBI guidelines from time to} time. An account was^{openin the name of the defendant no.1 bearing OCCLoan} Account No.^{'1248261000029.Thetenability of the cash credit facility was for one} year. ln respect of the cash credit facility^{the defendant no.2 was to operate the} account regularly and^{liquidatethe loan amount.}

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ln respect of the cash credit^{facility the defendantno 2 executed Request for} overdraft facilities and cash^{credit agreementboth daled27-'l'l-2019in favor of the} applicant bank. The^{defendant no.2 also executedother loan documentsnamely} Pronote valued of Rs. 20,00,000.00,^{Letter of UndertakingRe: loans/Advances'} Letter of Undertaking^{not to availOCCfacility elsewhereall dated 27-1'l-2019in} favor of the applicant bank.

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The applicant bank sanctioned^{another loanof Rs.97.106.00 in thename of} defendant no.1 under the^{Covid FITL(CFITL)accountno. 3248710000005on} 01-09-2020 which^was disbursed^{on 03-09-2020. The tenureof repaymentof the} loan was 7 months.

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The defendant no.2 through letter dated^{24-11-2020 requestedthe applicant} bank to extend his cash credit^{limit period for another 3 months for renewal of the}

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Nffih]yrw

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Presiding Officer DRT Guwahali

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3 0.a. 48y2022/DRr-Guu6h.li

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cash credit limit. On 06-02-202'l the applicant bank renewed the cash credit limit for 3 months till 25-02-2021.

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The defendanis no. 1 and 2 have availed the cash credit facility but were irregular in operating the loan account and were irregular in repaying the dues to the applicant bank. The defendants also failed to repay the loan in Covid FITL(CFITL) account. On 09-02-2021, 19-02-2021 the applicant bank issued notice to defendant not asking the defendants to deposit the overdue amount of the^loan account within 10 days. But the defendants failed to repay the overdue amount. The defendant no. 2 through letier dated 27-02-2021 requesled the applicant bank to extend his cash credit limit^period for another 3 months for renewal of the cash credit limit. On 02-03-2021,17-O3-2O21 and 29-03-2021 the applicant bank issued notice to defendant no. 1 asking the defendants to deposit the overdue amount of the loan account within 10 days. But the defendants failed to repay ihe over dues. On 16-04-2021 the applicant bank issued notice of expiry of limits informing the defendants ihat credit facilities extended to defendant no. 1 already expired on 25-02-2021 and therefore asked the defendants to submit the renewal documents. On 04-05-2021 the advocate for the applicant bank issued notice to defendant no.1 which was sent by registered post on 12-05- 2021 asking the defendants to pay Rs. 19,90,918.00 along with future interest to the applicant bank within 15 days from the date of notice. But the defendants failed to repay the dues to the applicant bank. On 24-05- 2021 the defendant no.2 executed acknowledgement of debt and security acknowledging thal a sum of Rs. 19,99,668.00 is due to the applicant bank in OOC account no. 3248261000029. On 24-05-2021 the defendant no.2 executed acknowledgement of debt and security acknowledging that a sum of Rs. 91,057.68 is due to the applicant bank in CFITL, account no. 3248710000005.

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On the prayer of the defendant no.2 on 24-09-2021 the applicant bank renewed the cash credit limit for Rs. 20,00,000.00 in the name of defendant no. 1. The applicant bank charged interest @ 9.15 %^per annum compounded monthly as and when due. The defendant no. 2 executed Pronote, Letter of Renewal and

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Letter of Undertaking Re: Loans/Advances att dated 24-05-2021. {t l.d.A,tA,r^A"L,,q I oq ol )b Presid'ns olficel^! \l DRT. Guwahati

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O A 4832022yDRT-Guwahatr

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On 29-06-2021 the defendant no. 2 applied to the applicant bank for restructuring of the loan accounls in the name of defendant No. 1. On 29-06-2021 the applicant bank as per Reserve Bank of lndia guidelines restructured the CFITL account no. 3248710000005 with extension of repayment, period and the applicant bank sanctioned one loan for an amount of Rs. 26,866.00 on 29-06- ZO2,l undet RFITL 2.0.1 account no.3248757000001 in the name of defendant no.1 for existing OCC interest. The tenure of repayment of the loan was 24 months. Another loan amount of Rs. 91,500,00 was sanctioned on 29-06-2021 under RFTTL 2.0.2 account no. 3248758000001 in the name of defendant no.1 for future interest. The lenure of repayment of the loan was 24 months. Thus as per the restructuring of loan the defendant no. 2 execuled draft letter of undertaking from the borrower for Restructuring of loan on 29-06-2021 for the following nature of facility sanctioned to defendant no. 1.

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'1. OCC limit of Rs.20,00,000.00

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CFITL loan amount of Rs. 97106.00

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RFITL 2.0.1 loan amount of Rs. 26,866.00

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RFITL 2.0.2loan amount of Rs. 91,500.00

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For the restructure of loan the defendant no.2 also executed Detitor creditor agreement and debt restructuring agreement both daled 29-06-2021.

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Even afrer restructure of the loan accounts the defendants failed to repay the loan amount regularly to the applicant Bank. Due to lrregularity committed by the defendants in operation of the loan account, on 23-06- 2022 all four loan accounts in the name of defendant no.1 was classified as NpA (Non_performing Asset) in accordance with the Reserve bank of lndia guidelines. When the loan account of defendanl no.1 became NpA the applicanl bank requested the defendants lo clear the entire liability with up to date interesl immediately. But the defendants failed to clear the same. On 12-07-2022 the advocate for the applicant bank issued notice to defendant no. 1 which was sent by registered post on 14-07-2022 asking the defendants to pay Rs. 2O,SO,394.OO atong with future interest in OCC Loan Account No. 324826i000029 with the applicant bank within 7

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sbild.a^o^-hrL'* Oq.ol.2l,^(l Prosiding Ofi'cer ' DRT, cuwahali

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O A 483/2o22]ORT'Guwahali

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days from the date of nolice. On 12-07-2022 the advocate for the applicant bank issued notice to defendant no. 1 which was sent by registered posl on 14-07-2022 asking the defendants to^pay Rs. 23,480.00.00 along with future interest in RFITL 2.0.1 account no.3248757000001 with the applicant bank within 7 days from the date of notice. On 12-07-2022\he advocate for the applicant bank issued notice to defendant no. 1 which was sent by registered post on 14-07-2022 asking the defendants to pay Rs. 92,815.00.00.00 along with future interest in COVID FITL(CFITL) account no. 3248710000005 with the applicant bank within 7 days from the date of notice. But the defendants failed to repay the dues. On 18-08-2022 the defendant no.2 executed acknowledgement of debt and security acknowledging that a sum of Rs. 20,70,750.00 is due to the applicant bank in OCC Loan Account No.3248261000029. On 18-08-2022 the defendant no.2 executed acknowledgement of debit and security acknowledging that a sum of Rs. 24,88S.00 is due in RFITL 2.0.1 account no.3248757000001 . On 18-08-2022 the defendant no.2 execuled acknowledgement of debt and security acknowledging that a sum of Rs. 96,096.00.00 is due to the applicant bank in RFITL 2.0.2 account no. 324875800000't.

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The applicant bank submitted that at present the production of unit M/s. Maa Kali Bricks lndustries production has totally stopped and the stock of goods could not be found and as such valuation of the hypothecated goods could not be taken. The manager of the applicant bank went for visit of the unit on 30-11-2022 and could not found any stock of goods.

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The defendants failed to operate regularize the cash credit loan account. The defendant no. 1 and 2 also failed to repay the loan in COVID F|TL(CF|TL) account, RFITL 2.0.1 account and RFITL 2.0.2 account to the applicant bank. The defendants no.'l and 2 are liable to pay Rs.21,90,278,44 in OCC Loan Account No. 3248261000029 with interest and other charges to the applicant bank, which they have failed and neglected to pay in spite of repeated reminders, requesls and approaches from applicant bank. The defendants no. 1 and are joinfly and severally liable to pay Rs.21,90,278.44 to the applicant bank. The defendant no.1

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<'", cl,am- A"Lo6..1^.o1.2_tl ( Presiding Ofrcel DRT. Gu*ahati

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O A 403/2022lDRT-G!wahali

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and 2 are^jointly and severally liable to^{pay the applicant bank also another sumof} Rs. 93,287,68 in CFITL account no. 3248710000005,^{Rs. 25,799.00 in RFITL} 2.0.1. account no. 3248757000001^{and Rs. 99,659.00 in RFITL2.0.1. account no.} 324875800000'l -. All total the defendants^{no. 'l and} 2^{are jointly and severally} liable to^pay Rs.24,O9,O24.12^{(Rupees twenty-four lakhs nine thousandtwenty-four} and twelve^paisa) only to the applicant^bank.

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The defendants have not^paid the^{said amount or any part thereof in spite of} repeated requests and demand^{made in this behalf.The applicant bank requested} the defendants asking them^{to paythe balance amount but the defendantsshowed} deaf ear to such demand.^{Thus non-paymentof the outstanding liabilities by the} defendants to the^{applicantbank have prejudiced lhe applicantbank interest} involving the^public money^{and the applicant bank has been compelled to lile the} application before this^{Tribunal for issuance of certificatefor recovery of} Rs.24,09,024.12^{(Rupeestwenty-four lakhs ninethousand twenty-four and twelve} paisa) only. as on 3O-'11-2022 lrom the defendants.^{The defendantsare also liable} to^pay interest at the^{rate of 11.35o/oon Rs. 24,09,024.12from 01'12-2022 till the} date of realization of^{the amountin full. 5.13. The applicant bank maintained books} of accounts of the^{loans in the nameof defendant no.1in the usual and ordinary} course of business. A^{sum of total Rs. 24,09,024.12is due and payable by the} defendants to the^{applicant bank After date of NPAthe applicantbank did not} capitalize the^{penal Interest in OCCLoanAccount No.3248261000029 and COVID} FITL(CFITL) account^{no. 3248710000005.As such it can be said that the applicant} bank did not capitalize^{the penal interest in OCC Loan Account No'} 3248261000029 and^{COVIDFITL(CFITL)account no. 3248710000005 Thepenal} interest charged in^{in RFITL2.0.'1.accountno. 3248757000001 comes to} RS.1O8.OO as on^{29-11-2022 and this amounthas been deducledfrom the total} claim of the applicant^{bank at the time of filingthe present application As such it} can be said that^{the applicant bank did not capitalize the penal interest in RFITL} 2.0.1. account no. 3248757000001.^{The penal interest charged in in RFITL2 0 2'}

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ek -Qtollo,,4,1'+ og 0l'21/⁽ Presidrno Oftcer DRT, Guwahati

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O.A 483U2o2ZORT-Guwahati

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account no. 3248758000001 comes to^Rs.264.00 as on^{27-11-2022 and this} amount has been deducted^{from the total claim of the applicant bank at the timeof} filing the^present application.^{As such it can be said that the applicant bank did not} capitalize the^penal interest^{in RFITL 2.0.2. account no. 3248758000001.}

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The defendants had availed the said^{credit facilities from the applicant bank but} have not^paid the outstanding^{loan amountas per terms and conditionsas agreed} upon with the applicant^{bank, in spite of repeateddemandsand request by the} applicant bank. As the^{defendantsfailed to repay theloan amount, the loan accounts} became NPA on 23.06.2022.^{Afterthe accountsbecame NPA the applicantbank} issued notices for repayment^{of the due amount, but the defendants failedto repaythe} loan amount.

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The applicant bank^{thusbecame constrained to file the present Original} Application for the^{recovery of tu. 24,09,024'12(Rupc$Twenty-FourLacs Nine} Thousand Twenty-Four^{and Paisa Twelve)only as on 3O.11.2022 alongwith interest} and cost of the application.

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After filing of the^{OA theTribunal issued notices upon thedefendants through} registered^post and^{the applicant bank filed service reporton 25 01 2023 and brought} on record the^{postal receipts alongwith track consignment report which shows that} noticeshavenotbeenserveduponthedefendants.ThereafierlheTribunalordered paper publication of notice^{uponlhe defendants and the applicant bank issued notice} to the defendants on^{'11.02.2023through Paper Publicationin two newspapers namely} "Ttipun Observef and "Dainik^{Ganadoof'.Even afier issuance ofnotice through} paper pubtication also there^{was no representationon behatf of the defendantseither} by the counsel or^{the person and hence the defendantswere setex-parteon} 12-06-2023 and^{their right to file writtenstatementcum evidence on affidavit was} closed and the^{mafter was listed for hearing on behalf of the applicantbank'}

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Supporting the^{claim of the applicantbank Sri Suman Gupta'Managerof the} Applicant Bank^{has filedevidenceon aflidavit coupledwith the securitydocuments} marked as Exhibit^{AW-'l/1 to AW-1/44 supportingthe claimof the applicantbank'} Heard the learned counsel^{for the applicant bank who prayed for issuanceof}

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r-[.c-,,daza-A"t'^t .]9,ol.2q 0 Presiding Oflicer DRT, Guuahati

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o.A^{ur83a2o22lDRrcuwahat}

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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 circumstances of lhe case, I am of the considered view that the documents 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^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 27.11.20'l.9, 24.11.2020, 24.05.2021 & 29.06.2021. Acknowledgement of Debts and Security are daled 24.05.2021 & 18.08.2022. The accounts became NPA on 23.06.2022 and the OA has been filed on 06j22022. Hence, the OA is filed well within the period of limitation and ihis Tribunal having a iurisdiction to adjudicate the Original Application.

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Considering the unchallenged / unrebutted version of Sri Suman Gupta, the applicant's witness and all the documenis 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 applicant is entitled to get the Recovery Certificate as prayed for.

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ln the result, the present Original Application No. 483 of 2022 is allowed with cost as under: -

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i) The defendants No. 1 & 2 are^jointly and severally liable to pay to the applicant bank a sum of Rs. 24,09,024.12 (Rupees Twenty-Four Laca Nine Thousand Twenty-Four and Paisa Twelve) only with pendentelite and future interest @11.35%^per annum wilh monthly rests from 01.12.2022 tlll lhe dale of full^{paymenurealization} and also cost of the application.

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iD The charge of the certificate amount be kept alive on hypothecated properties, as described in Schedule of the Original Application till the amount is realized in full.

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sl^;Cua^,furLu,-' o1'0 l'2 \ r Presiding Ofrcel DRT, Guwahati

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o.a. a63/2o22oRT4iJsahiri

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ii0 The applicanl 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 costsof ihe O.A., whichincludes the} advocate fees of the^{applicant bank. Applicantis directed to file the cost} memo within 2 weeks from today.

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vi) lssue Recovery^{Cedificateaccordinglyfor a sum Rs' 24,09,024.12 (Rupees} Twenty-Four^{Lacs Nine Thousand Twenty-Four and Paba Twelve)onlyin} favour of the applicant^{bank against the defendants No l & 2'}

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vii) Communicate^{copyof this orderto the concernedparties'}

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This order is dictaled^{and corrected by the undersigned'}

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Judgment dated^{9th January 2024, signedand 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 Websiteand}

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file be consigned^{to Record Room}

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Jt"d#fiW[ (Shiv Sharan butiey)^{' "} Presiding Officer DRT, Guwahati.

Canara Bank v. Messers Maa Kali Bricks Industries

Case brief

What is this about?

What did the court decide?

Canara Bank v. Messers Maa Kali Bricks Industries

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

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Case details

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