Allowed

Central Bank of India v. Messrs J K Traders and Others

DRT25 Sept 2024OA/501/2024

Case brief

AI extract

What is this about?

The DRT-III, Chandigarh allowed an original application filed by Central Bank of India against borrowers for recovery of Rs.54,61,326.47. The tribunal confirmed the loan default and accrued interest but reduced the claimed interest rate to 8% per annum.

What did the court decide?

Recovery certificate issued; defendants liable to pay principal with costs and simple interest at 8% p.a.

Central Bank of India versus Messrs J K Traders and Others — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.501/2024

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 01.04.2024

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DATE OF DECISION: 25.09.2024

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Central Bank of India, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at Chander Mukhi Building, Nariman Point, Mumbai 400021 and having one of its Branch situated at Central Bank of India, Brown Road, Near Subhani Building, District Ludhiana, Punjab through Mr. Ankur Gandhi who is presently working as Senior Manager, Central Bank of India, Brown Road, Near Subhani Building, District Ludhiana, Punjab constituted Power of Attorney Holder of the Bank and Principal Officer.

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……..Applicant

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Versus

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M/s J.K. Traders, through its Proprietor Mr. Jatinder Kumar @ Jatinder Sahota Address: H.No.485, Street No.1, Sham Nagar Military Area, Near Diesel Engine Shed, Village Gahlewal, District Ludhiana, Punjab.

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Sh. Jatinder Kumar @ Jatinder Sahota (Proprietor) M/S J.K.

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Traders, S/O Mr. Bashira, Address:

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(i) H.No.485, Street No.1, Sham Nagar Military Area, Near Diesel Engine Shed, Village Gahlewal, District Ludhiana, (Punjab).

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(ii) House No.213-A, Tagore Nagar, Civil Lines, Ludhiana, Punjab.

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Smt. Raj Rani W/o Sh. Jatinder Kumar @ Jatinder Sahota R/o House No.213-A, Tagore Nagar, Civil Lines, Ludhiana, Punjab.

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………. Defendants

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Advocates: Argued by Ms. Ritika Kansal, Advocate proxy for Sh. Surinder Nath Sharma, Advocate 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 under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.54,61,326.47p (Rupees Fifty Four Lacs Sixty One Thousand Three Hundred Twenty Six And Paise Forty Seven Only). The Original Application has been filed through S h. Ankur Gandhi, Senior Manager of the applicant, who is competent to institute the Original Application vide General Power of Attorney dated 13.02.2020, which is Annexure A1 to this OA. 2. The brief facts of the OA are that the defendant no.1 through its proprietor defendant no.2 had approached the applicant for grant of CC Limit of Rs.35.00 Lacs vide Loan Application dated 16.07.2018, which is Annexure A2 to this OA. Further, defendant no.1 through its proprietor defendant no.2 had approached the applicant for grant of FITL Loan of Rs.2.21 Lacs. Thereafter, defendant no.1 through its proprietor defendant no.2 had again approached the applicant for grant of WCTL under Cent GECL of Rs.7.04 Lacs & Rs.3.46 lacs vide loan applications to this OA. 3. The applicant sanctioned CC Limit of Rs.35.00 Lacs vide Sanction Letter dated 25.07.2018, which is Annexure A3 to this OA. Later, applicant bank again sanctioned the FITL under Restructuring of MSME of Rs.2.21 Lacs vide Sanction Letter dated 02.03.2021, which is Annexure A21 to this OA. Thereafter, applicant again sanctioned the WCTL under Cent GECL of Rs.7.04 Lacs & Rs.3.46 Lacs vide Sanction Letters dated 29.012.2024 & 18.01.2023, which are Annexures A25 & 29 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant No.3 had mortgaged her immovable property i.e. total property/plot measuring 140-3/4 Sq. yards situated at taraf Gehlewal, H.B. No.166, Abadi Known as Sham Nagar, Tehsil & District Ludhiana, (Punjab) vide Equitable Mortgage of Sale Deed bearing vasika No.6922 dated 29.07.2015 along with its translation, which are Annexures A4 & A4-T to this OA.

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Documents executed:-Letter by borrower to the bank declaring deposit of the Title Deed & Memorandum of Entry both dated 26.07.2018, which are Annexures A5 & A6 to this OA; Hypothecation Agreement, Supplementary Agreement, D.P. Note Single, Form of Declaration to be taken from sole proprietors, Letter of Waiver, Letter of Interest Variation, Letter of Undertaking not to encumber Assets And letter declaring acceptance of consent clause by the borrower all dated 30.07.2018, which are Annexures A7 to A14 to this OA; Guarantor’s consent letters dated 16.07.2018, which are Annexures A15 & A17 to this OA; Letters declaring acceptance of consent clause by the Guarantor, Declaration and undertaking by defendant no.3 & Letter of Continuity all dated 30.07.2018, which are Annexure A16, A18, A19 & A20 to this OA; Agreement for funded Term Loan & Debtor-CreditAgreement both dated 03.03.2021, which are Annexures A22 & A23 to this OA; Acknowledgement of Debt dated 20.05.2021, which is Annexures A24 to this OA; Affidavit cum Undertaking, WCTL Loan Agreement & Letter of Interest Variation all dated 29.12.2021, which are Annexures A26 to A28 to this OA; WCTL Loan Agreement, Form of Guarantee for advances and credits generally, D.P. Note Single, Letter of Waiver, Letter of Interest Variation, Letter by borrower to the bank (regarding understanding of the loan documents and willfully executing the loan documents/undertaking to inform incase of any change in the constitution of the said concern), Hypothecation Agreement, Letter of Interest Variation, Form of Guarantee for advances and credits generally & Letter of Continuity all dated

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18.01.2023, which are Annexures A30 to A40 to this OA; Notice under Section 13(2) of SARFAESI Act, 2002 dated 10.05.2023, which is Annexure A41 to this; Possession Notice dated 05.08.2023, which is Annexure A42 to this OA and Statement of Accounts along with Certificate under Banker’s Book Evidence Act, which are Annexures A43 to A46 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 all loan accounts there was a debit of Rs.54,61,326.47, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant 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 06.09.2024.

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In support of the OA, affidavit of S h. Ankur Gandhi, Senior Manager, Central Bank of India h as been filed. 8. Heard 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 had proved its case. From the perusal of all the Annexures A1 to A46 to this OA, it is proved that the defendants approached applicant for availing of the loans 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 loans as per terms and conditions of the agreement between the parties. Subsequently, accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.54,61,326.47 (Rupees Fifty Four Lacs Sixty One Thousand Three Hundred Twenty Six And Paise Forty Seven Only) along with interest from the defendants,

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jointly and severally, from the date of filing of the present Original Application till realization of the accounts.

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In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @9.25%p.a. along with penal interest @2%p.a. with monthly rests in all from 21.03.2024 till the realization.

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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 loans 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 @08.00%p.a. in 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.

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In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.54,61,326.47(Rupees Fifty Four Lacs Sixty One Thousand Three Hundred Twenty Six And Paise Forty Seven Only) jointly and severally, with costs, current and future simple interest @08.00%p.a. in the loan accounts from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant 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 applicant 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. 12. Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly.

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6 14. Parties to appear before Learned Recovery Officer of this Tribunal on 17.10.2024. 15. Copy of this order be given dasti to the applicant 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: 25.09.2024 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Central Bank of India v. Messrs J K Traders and Others

Case brief

What is this about?

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Central Bank of India v. Messrs J K Traders and Others

Case brief

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