Allowed

Canara Bank v. Sameer Khan Furnitures

DRT21 Mar 2024OA/521/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the Applicant Bank's Original Application for recovery of dues and interest against the Defendants for unrepaid loans sanctioned under OCC and MSME schemes, including sanctuary of future interest and costs.

What did the court decide?

Directed respondents to pay Rs. 24,19,509.30 along with future interest and 2% penal interest; liberty to recover via sale of schedule properties and personal assets.

Canara Bank versus Sameer Khan Furnitures — Contract and Commercial Disputes | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 21^st day of March 2024

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Present: SMT. S. V. GOWRAMMA Hon’ble Presiding Officer

OA NO.521/2022

BETWEEN:

Canara Bank

Vishwanathapura Branch, I Floor, Premises of M/S Vishwanathapura Co – Operative Milk Producers, Society Ltd, Vishwanathapura, Devanahalli Taluk – 562 110. Represented by its Manager & PA Holder Smt. Rashmi.M

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…APPLICANT

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AND

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Sameer Khan Furnitures, A proprietary concern having its

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Office at Devanahalli to Doddaballapura Main Road, Vishwanathapura, Devanahalli Taluk –562 110. Represented by its Proprietor,

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SRI. Sahul Hameed Ravat, S/o Muttu Mohamed Ravat,

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Sri. Sahul Hameed Ravat, S/o Muttu Mohamed Ravat, Residing at: No.101, Vishwanathapura, Devanahalli Taluk – 562 110.

...DEFENDANTS

OA No.521/2022

Counsel on record/appeared for:

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Applicant : Sri. T.Yugandhar

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Defendants Nos. 1 & 2 : Ex-parte.

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FINAL ORDER

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The present Original Application (OA) is filed on 02-02-2022, under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act 1993 for recovery of a sum of Rs.24,19,509.30/-(Rupees Twenty Four Lakhs Nineteen Thousand Five Hundred and Nine and Thirty Paisa Only) with further interest thereon from the date of filing till realization from defendants.

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The Application filed is within the period of limitation as prescribed under Section 24 of the Recovery of Debts Due to Banks and Financial Institutions Act 1993 and the subject recovery claim falls within the jurisdiction of this Tribunal.

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Brief facts of the case:

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The Application filed is within the period of limitation as prescribed under Section 24 of the Recovery of Debts Due to Banks and Financial Institutions Act 1993 and the subject recovery claim falls within the jurisdiction of this Tribunal.

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OA No.521/2022

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Brief facts of the case:

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The Applicant Bank submits that upon the request of the Defendants, the Applicant Bank has sanctioned financial assistance/Overdraft facility upto the tune of Rs.16,00,000.00 (Rupees Sixteen Lakhs only) on 10.08.2017, in favour of the Defendant, under OCC Scheme, to conduct his furniture’s business with respect to Loan. The Defendants have accepted the terms and conditions of the Sanction. As per the sanction, the Defendants have agreed to repay the said Loan amount, along with an interest at the rate of 10.35% p.a, subject to change from time to time. The Defendant has executed a Pro-Note for Rs.16,00,000.00 (Rupees Sixteen Lakhs only) and a Cash Credit Agreement on 10.08.2017 in favour of the Applicant Bank, thereby hypothecating his machineries, goods, stocks, etc., and reiterating the repayments as mentioned.

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The Defendant No.2 has provided personal guarantee to all the repayments to be made by the Defendant No.1. The defendant No.2 has executed Guarantee Covering Letter and Guarantee Agreement in favour of the Applicant Bank on 10.08.2017. The Defendants have again approached this Applicant Bank seeking for a financial assistance to conduct his furniture’s business. The Defendants have submitted a Loan Application form on 15.11.2017 to this Applicant Bank, requesting a Loan amount of Rs. 5,00,000.00 (Rupees Five Lakhs only).

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The Applicant Bank submits that upon the request of the Defendants, the Applicant Bank has sanctioned financial assistance/Term Loan upto the

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OA No.521/2022

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limit of Rs. 5,00,000.00 (Rupees Five Lakh only) on 15.11.2017, in favour of the Defendant, under MSME Scheme, to conduct his furniture’s business. The Defendants have accepted the terms and conditions of the Sanction. As per the sanction, the Defendants have agreed to repay the said Loan amount, along with an interest at the rate of 11.20% Per Annum, subject to change from time to time and in 60 EMIs.

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7 The Defendant has executed a Deed of Hypothecation regarding Machineries on 15.11.2017 in favour of the Applicant Bank, thereby hypothecating his machineries, goods, stocks, etc., and reiterating the repayments as mentioned. The Defendants have also executed particulars of machineries hypothecated and Letter of Undertaking regarding Loans/Advances in favour of the Applicant Bank on 15.11.2017.

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8 The OCC facility was renewed on 30.12.2019 by the Applicant Bank upon the requests of these Defendants and accordingly the Defendants have executed a Letter of Renewal and a Letter of revival on 30.12.2019 in favour of the Applicant Bank. Further the Defendants have also executed a Link Letter for renewal and particulars of stocks, etc., on 30.12.2019. Further, the Defendants have also executed a Letter of Revival on 10.10.2020, in favour of the Applicant Bank with respect to the MSME Loan facility.

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9 The Applicant Bank further submits, the interest amount due from the OCC loan account during the COVID-19 crisis excluding the moratorium period which came upto Rs. 71,946.00 was pooled in as COVID FITL, on

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OA No.521/2022

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01.09.2020 as per the request of the Defendants and the Defendants have agreed to repay the said loan amount within seven months time along with the same rate of interest of 8.30% p.a. The Applicant Bank submits that the Defendant had become chronic defaulter in the matter of repayment of the installments. Hence the Accounts of the Defendant have been classified as a Non Performing Asset (NPA) on 01.12.2020.

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The Applicant Bank submits that the Applicant Bank has issued several remainders to the Defendants to repay the interest and the loan amount, but the Defendants have not repaid the same. Hence, without any alternative, the Applicant Bank has issued a Notice to the Defendants on 26.10.2021, thereby recalling all the loans entirely and asking the Defendants to clear the total outstanding amount. The Applicant Bank submits that the Defendants, after availing the loans, failed to repay the loan amount and committed default. However, there was no positive response from the defendant. Hence, this Original Application (OA) has been filed to recover the dues from the defendant.

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After the filing of the OA, summons was sent to the Defendant No. 2 by RPAD, on 31.05.2022. D2 is the proprietor of D1 hence served of D2 held sufficient. When OA was taken up on 19.07.2023, even after giving sufficient time, there was no appearance or representation from the defendants, hence, Defendants No.1 & 2 was placed ex-parte on 19.07.2023.

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Heard the submissions of Counsels and perused the records.

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OA No.521/2022

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To prove the case, Rashmi.M, W/o.Sri. Bommi Reddy.G.K., aged about 29 years, Manager of the Applicant Bank, has filed Affidavit by way of evidence and same was considered as evidence of AW.1 and marked as Ex.A1, and documents came to be marked as Ex.A3 to A24. As the defendants remained ex-parte, the OA claim remains unchallenged. There is no contra evidence available on record to repudiate the claim of the Applicant Bank.

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Having regard to the amount advanced, the interest applied, documents executed, the conduct and operations in the loan account and the default committed, this Tribunal comes to the conclusion that the applicant bank is entitled to a final order on the following terms:-

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: O R D E R:

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14. The OA is allowed with costs,

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(a) The Applicant bank is allowed to recover from defendants Nos.1 & 2 jointly or severally to pay a sum of Rs. 20,35,025.80 (Rupees Twenty Lakhs Thirty Five Thousand and Twenty Five and Eighty paisa only), as on 30.11.2021, along with future interest @ 10.35% Per Annum from 01.12.2021 to date of realization, with respect to Account No.0475261000182; Rs.3,02,161.24 (Rupees Three Lakh Two Thousand One Hundred and Sixty one and Twenty Four paisa only) as on 01.12.2021, along with future interest @ 11.20% Per Annum from 02.12.2021 to date of realization, with respect to Account

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OA No.521/2022

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No.0475768000117; and Rs. 82,322.26 (Rupees Eighty Two Thousand Three Hundred and Twenty two and Twenty Six paisa Only), as on 31.11.2021, along with future interest @ 8.30% Per Annum from 01.12.2021 to date of realization, with respect to Account No.0475710000164; totally amounting to Rs. 24,19,509.30 (Rupees Twenty Four Lakh Nineteen Thousand Five Hundred and Nine and Thirty paisa Only), with respect to both the Accounts; along with an additional Penal interest of 2% p.a, from the date of the filing of the OA till the date of realization.

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(b) In the event of failure of the defendants to pay the aforesaid amount, the bank is at liberty to recover the amount by sale of the schedule mentioned properties in the OA;

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d) If the sale proceeds of the schedule mentioned properties are not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to sell the personal assets of the defendants (both movables and immovables) to recover the balance dues as required under law;

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(e) The Applicant Bank shall file the latest memo of calculation of OA amount together with interest, costs etc., to be paid by the defendants duly considering the amounts, if any, paid by the defendants and/or amount realized by sale of assets etc., during the

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OA No.521/2022

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intervening period after the filing of the OA, enabling the Registry to

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prepare Recovery Certificate for the amount to be paid by defendants

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to the applicant bank.

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(f) The Applicant Bank shall file memo of costs within ten days from the date of this final order.

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(g) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

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A copy of this order be communicated to the parties concerned.

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[Dictated to the (GS), transcribed by him, corrected and signed by me on this the 21^st day March 2024].

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Sd/-

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PRESIDING OFFICER DRT-II, BENGALURU

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1, Vinod Kumar Negi, S/o. Sri. Himmat Singh Negi, Officer the

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Applicant Bank.

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Exhibits on the part of the Applicant:

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SL NO.	PARTICULARS OF DOCUMENTS	EXHIBITS
1.	Loan Application dated: 10.08.2017.	A3
2.	Pro-Note dated: 10.08.2017	A4
3.	Cash Credit Agreement dated: 10.08.2017	A5
4.	Guarantee Covering letter dated: 10.08.2017	A6

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OA No.521/2022

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5.	Guarantee Agreement dated: 10.08.2017	A7
6.	Loan Application Form dated: 15.11.2017	A8
7.	Sanction Memorandum dated: 15.11.2017	A9
8.	Deed of Hypothecation regarding Machineries dated: 15.11.2017	A10
9.	Particulars of Machineries Hypothecated dated: 15.11.2017.	A11
10.	Letter of Undertaking re: Loans/Advance, dated: 15.11.2017.	A12
11.	Letter of Renewal dated: 30.12.2019.	A13
12.	Letter of Revival dated: 30.12.2019.	A14
13.	Link letter to be obtained from Borrower/Guarantor dated: 30.12.2019.	A15
14.	Particulars of Machineries Hypothecated dated: 30.12.2019 – ANNEXURE – “A-14”	A16
15.	Letter of Revival dated: 10.10.2020.	A17
16.	Office copy of the said Notice dated: 26.10.2021	A18
17.	Postal Receipts (2 Nos.) dated: 26.10.2021	A19
18.	Acknowledgment Cards (2 Nos.)	A20 & A21
19.	Statement of Account with respect of Loan Account No. 0475261000182 for the period from 01.01.2017 to 25.10.2021	A22
20.	Statement of Account with respect of Loan Account No. 0475768000117 for the period from 01.01.2017 to 25.10.2021	A23
21.	Statement of Account with respect of Loan Account No. 0475710000164 for the period from 01.01.2020 to 25.10.2021 - ANNEXURE –	A24

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OA No.521/2022

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“A-22”, along with Certificate under the bankers Evidence Act.

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Witness Examined for the Defendants:

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-Nil –

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List of Documents Exhibited for the Defendants:

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-Nil –

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I - PARTICULARS OF PROPERTY BELONGING TO DEFENDANTS MORTGAGED IN FAVOUR OF THE APPLICANT BANK:

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STOCKS, MACHINERIES, FURNISHERS, etc.

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Sd/PRESIDING OFFICER DRT-II, BENGALURU

Canara Bank v. Sameer Khan Furnitures

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sameer Khan Furnitures

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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