Allowed

Canara Bank v. M/s Ahmad Automobiles

DRT19 Sept 2024OA/547/2023

Case brief

AI extract

What is this about?

In an ex-parte hearing, the DRT admitted a recovery application filed by Canara Bank against borrowers for dues totaling approximately Rs. 29.3 lakh. The court held the documentary evidence sufficient and granted a recovery certificate for the principal amount with future interest.

What did the court decide?

Recovery certificate issued for Rs. 29,30,709/- plus pendent-lite and future interest; assets attached and sale directed.

Canara Bank versus M/s Ahmad Automobiles — Banking and Recovery | DRT (2024)

¶1

DRT, PATNA

¶2

OA 547 of 2023 IJI

¶3

Debts Recovery Tribunal, Patna

¶4

Karpuri Thakur Sadan, Aashiana Digha Road Patna-800025

¶5

Presiding Officer : Shri Kaushalendra Yadav

¶6

OA Case No. 547 of 2023

¶7

Canara Bank, Darbhanga Branch, Delhi More, Darbhanga -846005.

¶8

. . . . . . . Applicant

¶9

Vs.

¶10

M/s Ahmad Automobiles at proprietorship concern represented through its proprietor Sarfaraz Ahmad NH-105, Khirma Pathra, At and P.O.-Khirma9 Darbhanga-847121 PAN no. AUAPA9139N.

¶11

Sarfaraz Ahmad S/o Basir Ahmad, Village Kothia Mirzapur Trimohan! P.S.-Kamtaul, P.O.-Jalwara, DArbhanga-847 121

¶12

. . . . . . . Defendants

¶13

Present:

¶14

For the Applicant Shri Manish Kishore, Advocate For the Defendants None

¶15

Dated: 19.09.2024

¶16

JUDGMENT

¶17

The Applicant bank has made this application u/s 19 of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 16.11.2023 against the defendants to recover its debts from defendants of Rs.29,30,709/- as on 30.8.2023 along with pendente-lite and future interest @12.05% +2% in cash credit account, @9.25% +2% in GECL account p.a. with monthly rests from 31.8.2023 with costs till realization.

¶18

The application has been filed with the contention that the applicant bank, is a body corporate, banking company under the provisions of the banking companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at 112, JC Road, Bangalore 560002 and Branch Office at Darbhanga Branch, Delhi More, Darbhanga -846005.

¶19

Defendant no. 1 is a proprietorship concern and defendant no. 2 is its proprietor. Defendant approached the bank for grant of loan of Rs.8.50 lakh on 18.7.2016, which was sanctioned by the bank on 18.7.2016. Defendants executed the various loan documents. The rate of interest as agreed by the

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Defendant in respect of Term Loan @9.85% per annum compounded monthly and liability being overdue additional interest of 296 shall also be payable as penal interest to the Bank. The said rate of interest being floating rate as per the Directives of the Reserve Bank of India is liable for increase and/or decrease. Defendants further approached the bank for grant of over draft facility of Rs. 15 lakh on 8.1.2018, which was sanctioned by the bank on 8.1.2018. Defendants executed the various loan documents. The rate of interest as agreed by the Defendants in respect of cash credit facility was 11.30 % per annum compounded monthly and liability being overdue additional interest of 2% shall also be payable as penal interest to the Bank. The said rate of interest being floating rate as per the Directives of the Reserve Bank of India is liable for increase and/or decrease. Defendants further approached the bank for enhancement of limit upto Rs.20 lakh on 20.2.2019, which was sanctioned by the bank on 20.2.2019. Defendants executed the various loan documents. Property details given at page 34 in schedule-C of OA. The rate of interest as agreed by the Defendants in respect of 10.05% per annum compounded monthly and liability being overdue additional interest of 2% shall also be payable as penal interest to the Bank. The said rate of interest being floating rate as per the Directives of the Reserve Bank of India is liable for increase and/or decrease. The Defendant was offered Rs.4 Lakh of credit facility by the Applicant Bank under pre-approved Guarantee Emergency Credit Line Scheme in order to meet out liquidity mismatch during covid on 03.06.2020. The said offer was accepted by the Defendants on 03.06.2020. The said facility under GECL as Working Capital Term Loan was duly sanctioned after appraisal on 03.06.2020 itself and in token of which the terms and condition of sanction was duly accepted and acknowledged by the Defendant. The said loan amount to be

K,,,Ll

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repaid in four years from the date of disbursement including one year moratorium period for principal amount and the interest to be served as and when fallen due @ 9.25% [RLLR + 0.60]. The Defendant No. 2 in order meet out the working capital requirement on 30.11.2021 approached before the Applicant Bank for working capital limit of Rs.2.40 Lakh since the firm was affected by COVID-19 pandemic under GECL Ext. component of (JECL Scheme. The Applicant Bank after due appraisal of the proposal of sanctioned Additional Working Capital Term Loan of Rs.2.40 Lakh to provide liquidity support on 30.11.2021 on the terms and conditions stipulated in the sanction memorandum dated 30.1 1.202 1

¶29

After availing the sanctioned credit facilities defendants became irregular in repayment of their dues as per agreed terms and failed to adhere to the financial norms of the bank and avoiding the repayment of its dues to the bank, in spite of several assurances given by it to the applicant bank resulting in the account turning as NPA on 18.3.2023 .

¶30

Since, the defendants failed and neglected in spite of several reminders to make payment of the dues recoverable to the bank, hence this application has been filed by the bank.

¶31

The total liability in the loan account is Rs.29,30,709/- with pendentelite and future interest @12.05% +2% in cash credit account, @9.25% +2% in GECL account p.a. with monthly rests from 31.8.2023 till the realization.

¶32

This Tribunal issued summons/notices copies of application & paper book to the defendants by registered/speed post on 8.12.2023 , requiring them to show-cause within 30 days of the service U/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993. But the defendants have not appeared, hence, the Registry of this Tribunal has ordered to publish the notice in newspaper and subsequently, substituted service by publication of notice by way of

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advertisement in newspaper was also made against the defendants on 8.2.2024 in “Prabhat Khabar” newspaper.

¶37

Despite the registered summons/notices and publication of notice in newspaper, the defendants have not appeared before this Tribunal to contest the case. The sufficient time has been given to the defendants to defend their case, but they failed to appear and to file WS, hence, the Tribunal has passed an order to proceed ex-parte against the defendants on 13.5.2024.

¶38

To prove its case, the applicant Bank has referred various certified photocopies of documents before this Tribunal. The applicant bank has also given evidence on affidavit by way of affidavit by Shri Anil Kumar, Law Manager of the applicant bank. The details of documents are as follows:

¶39

SI.No	Description of Documents Photocopies	Dateof Execution	Amount	Signature of Executants	Ex./ Ann No
1	Loan Application with Sanction	18.7.2016	Rs.8.50 lakh	Defendants	1
2	CanMobileAgreement	18.7.2016	Rs.8.50 lakh	Defendants	2
3	BPDRAgreement	18.7.2016	Rs.8.50 lakh	Defendants	3
4	Particulars ofvehicle hyDothecated	0		Defendants	4
5	Loan Application	8.1.2018–	Rs. 15 lakh	Defendants	5
6	SanctionLetter	8.1.2018	s	Bank	6
7	Letter ofProprietorship	8.1.2018		Defendants	7
8	Specimen Signature Card	8.1.2018		Defendants	8
9	Pronote	8.1.2018	Rs.15 lakh	Defendants	9
10	request foroverdraft facilit	8.1.2018	Rs. 15 lakh	e	10
11	cashcreditagreement	8.1.2018	Rs.15 lakh	Defendants	11
	BPDRAgreement	8.1.2018	Rs. 15 lakh	Defendants
	Loan Application	20.2.2019	Rs.20 lakh	Defendants
14	Sanction	20.2.2019	Rs.20 lakh	Bank	14
15	Letter ofRenewal	20.2.2019	Rs.20 lakh	Defendants	15
16	Pronote	20.2.2019	Rs.20 lakh	Defendants	16

'HER

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17	1Supplemental Agreement	20.2.2019	Rs.20lakh	Defendant	s 117
18	Link Letter inrespect of enhancement of creditfacilit'	20.2.2019	Rs.20lakh	e
19	acknowledgementof debt	18.5.2019		e
20	Letter	7.1.2020		Defendants	20
21	acknowledgement of debt	7.1.2020		Defendants	21
22	acknowledgement of debt	27.2.2020		Defendants	22
23	Offer Letter	3.6.2020	Rs.4 lakh	Bank	23
24	acceptanceletter	3.6.2020		Defendants	24
25	ProcessNote/Sanction	3.6.2020	Rs.4lakh	bank	25
26	Loan Application	3.6.2020	Rs.4lakh	Defendants	26
27	undertakingletter	3.6.2020	Rs.4lakh	Defendants	27
28	Letter ofProprietorship	3.6.2020		Defendants	28
29	Specimen Signature Card	3.6.2020		Defendants	29
30	Pronote	3.6.2020	Rs.4 lakh	Defendants	30
31	Agreement cumDeed ofHypothecation	3.6.2020	Rs.4 lakh	Defendants	31
32	BPDR Agreement	3.6.2020	Rs.4 lakh	Defendants	32
33	LoanApplication	15.9.2020	Rs.20 lakh	Defendants	33
34	Sanction Memorandum	15.9.2020	Rs.20 lakh	bank	34
35	Specimen Signature Card	15.9.2020		Defendants	35
36	Letter ofRenewal	15.9.2020	Rs.20lakh	Defendants	36
37	link letter	15.9.2020		Defendants	37
38	loanapplication	30.11.2021	Rs.2.40 lakh	Defendants	38
39	a	30.11.2021	Rs.2.40 lakh	Bank	39
40	Letter ofProprietorship	30.11.2021		Defendants	40
41	Signature Specimen Card	30.11.2021		Defendants	41
42	Pronote	30.11.2021	Rs.2.40lakh	Defendants	42
43 44	Agreement cumDeed ofHyDothecation	30.11.2021 30.1 1.2021	Rs.2.40 lakh Rs.2.40 lakh	Defendants Defendants	43 44

k\v\

DRT, PATN A

OA 547 of 2023 IJI

45	Particulars hynothecated of	130.11.2021	Rs.2.40 lakh	me a
46	e	30. 1 1 .202 1	s	m
47	BPDR Agreement	30.11.2021	s	m
48	acknowledgement debt o			e
49	loanapplication	I	Rs.20 lakh	Defendants	49
50	Sanction	6. 12.2021	Rs.20 lakh	bank	50
t	t			Defendants	51
)	1 Card			Defendants	52
e	\|	Rs.20 lakh	Defendants	53
54	t		s		54
55	e			Defendants	55
56	BPDR Agreement	6.12.2021	s		56
57	acknowledgement debt o			Defendants	57
58	acknowledgement debt o			Defendants	58
59	Overduenotice Recall Notices	5.3.2023 22.3.2023		bank	59
60	Statementofaccou=	Ason 30.8.2023	s		60to 63
61	copy of SaleDeed No.6280				64

¶50

Heard arguments and perused the case record.

¶51

Ld. Counsel of applicant bank submitted that the defendants have taken the loan and utilized the same and also executed the various loan documents to secure the loan. Further, submitted that the claim of the bank has been proved by documentary evidence. All the transactions were entered in the ledger of the loan accounts in the name of the defendant duly maintained by the applicant bank in its usual course of business. The interest /compound interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

¶52

It is further submitted by Id. Counsel of applicant bank that there is no stay granted by any Higher Court, in respect of the proceedings of the present OA and requested to issue recovery certificate, as claimed for, in OA.

DRT, PATN A

OA 547 of 2023 1 Jl

It has been established that defendants are living and carrying on their business in the state of Bihar. Cause of action also arose in the State of Bihar. The said claim on the date of filing of application exceeded Rs.20 lacs. The applicant bank is functioning within the jurisdiction of this Tribunal. Therefore, this Tribunal has territorial as well as pecuniary jurisdiction to adjudicate upon the present application.

¶57

On the issue of Limitation, to prove it, the applicant bank has submitted that the applicant bank has declared the account as NPA on 18.3.2023, whereas the present application has been filed on 16.11.2023. Even, it is counted for the purpose of Limitation, then it is established that the applicant bank has filed the case within the limitation period. As such, it is established that the present application has been filed well within the period of limitation.

¶58

Shri Anil Kumar, Law Manager of the applicant bank, has filed the affidavit in support of contents of application and the documents as evidence and proved on oath the pleadings and documents of the applicant bank as stated above.

¶59

Section 19(3) of the Recovery of Debts and Bankruptcy Act, 1993 provides that the application u/s S.19 (1) shall be accompanied with true copies of all the documents relied on in support of the claim.

¶60

The rule 12 (10) of the Debt Recovery Tribunal (Procedure) Rules, 1993, provides that if the defendant denies his liability to pay the claim made by the applicant, the tribunal may act upon the affidavit of the applicant who is acquainted with the facts of the case or who has on verification of the record sworn the affidavit in respect of the contents of the application and the documents as evidence.

¶61

The rule 12 (11) of the aforesaid Rules, provides that the provisions contained in section 4 of the Banker’s Books evidence that Act, 1891 (18 of 1891) shall apply to a certified copy of an entry in a Banker’s Books furnished along with application filed under sub section 1 of section 19 by the applicant.

¶62

Section 4 of Banker’s Books evidence Act, 1891 runs as underS.4. Mode of proof of entries in bankers’ books.–Subject to the provisions of this Act, a certified copy of any entry in a banker’s book shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case

OA 547 of 2023 IJI

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where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise.

¶68

As such the certified true copies of the documents are admissible in evidence. The statement of account maintained in the ordinary course of business is not only admissible but shall be taken as the correct statement of account, more so since the entries in the statement of account have not been challenged.

¶69

On perusal of the application, documents, affidavit and on consideration of the arguments, it is proved that the defendants have applied for loan and the bank had sanctioned the loan and to secure the loan and for repayment of loan amount with interests etc., the defendants have executed various loan documents, as stated in the application and proved by aforesaid evidence. Defendants have neither denied the utilization of funds advanced by applicant bank nor have pointed out any specific error and discrepancy in the Statement of Account.

¶70

The evidence discussed above goes to establish that the amount of loan as mentioned in the O.A., was availed by the borrower under the agreed terms and conditions for repayment with interest. The balance amount till 30.8.2023 has been proved to be Rs.29,30,709/- only by way of statement of account. There is nothing to prove the amount more than that disclosed in the aforementioned statement. As such this amount is recoverable till full and final realization of the claim.

¶71

In my view, facts of the case stand proved by evidence of the applicant bank. Accordingly, the applicant bank is entitled to recover from defendants jointly and severally of Rs.29,30,709/- along with pendente-lite and future interest @ 9.25% p.a. with compounded monthly rests from 16.11.2023 (The date of filing of this OA) till realization. So the final order may be passed accordingly, to meet the ends of justice.

¶72

ORDER

¶73

In the result, the application of the applicant bank is allowed and debt is determined with costs against the defendants. The defendants are hereby jointly and severally, ordered to pay the applicant bank its debt amounting to Rs.29,30,709/- along with pendente-lite and future interest @ 9.25% p.a. with

OA 547 of 2023 IJI

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compounded monthly rests from 16.11.2023 (The date of filing of this OA) till realization of the entire sum due and recoverable with costs.

¶78

It is made clear that any amount deposited by the defendants, be deducted in the claim amount, if not deducted.

¶79

Defendants are debarred from transferring, alienating encumbering or otherwise dealing with or disposing of the mortgaged or hypothecated or any other properties and assets without paying the aforesaid adjudicated dues to the applicant bank to secure the ends of justice. The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to the final order under the recovery proceedings in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993. The applicant may submit the certified copy of this Judgment and the Recovery Certificate before the Registrar/Sub- Registrar to endorse the charge over the secured assets.

¶80

Let a certificate of recovery be drawn up forthwith and put up for signatures in terms of provisions contained in Section 19(22) of the Act to be issued, on the basis of the order of the Tribunal to the Recovery Officer. The Recovery Officer shall realize the amount as per the certificate in the manner and mode prescribed under the Act from the defendants, by sale of mortgaged/ hypothecated assets as well as other personal movable/immovable assets of the defendants.

¶81

Parties are directed to appear before the Recovery Officer, DRT, Patna on 4.11.2024 The order be communicated accordingly.

¶82

Judgment signed, sealed, dated and pronounced in the open court on lgth day of September, 2024.

¶83

Dictated &corrected by me.

¶84

L/v):\r: [KaushalendraYadav] Presiding Officer Debts Recovery Tribunal, Patna

¶85

FORM NQ. 9 [See Regulation 24( 1 )]

¶86

¶87

DEBTS RECOVER\’TRIBUN AL PATNA

¶88

2nd Floor. ( A. B & F Wing) Karpuri Thakur Sadan. Kendriya Karamchari Parisar (GPO A). Ashiana Digha Road. Patna-800025.

¶89

RECOVER' CERTIFICATE UNDER SECTION 19(Z) READ WITH SECTION 19(B) OF THE RECOVERY OF DEBTS & BANKRUPTCY ACT, 1993, AS AMENDED FROM TIME TO TIME.

¶90

RC No. 221/2024 IN

¶91

Case No: OA/547/2023

¶92

In the Matter ot ( CH- I) CANARA BANK DARBHANGA BRANCH. DELHI MORE. DARBHANGA DARBHANGA .BTH AR -846005

Applicant(s)

-––- Versus --––-

(CD- 1) M/S AHMAD AUTOMOBILES Represented through its Proprietor Sarfal'az Ahmad. NH- 1 05, Khirma Pathra. At and P.O-Khirma. Darbhanga .BIHAR -847 1 2 1

¶97

Defendant(s )

¶98

(CD- 2) SARFAR AZ AHMAD

¶99

S/0- BASIR AHMAD VILLAGE KOTHIA

¶100

MIRZAPUR TRIMOHAN, P.S.- KAMTAUL. P.0.-

¶101

JALWARA. DARBHANGA 847121

¶102

RecQverv CertifIcate for Rs 2930709.00 1.^{Rupees Twenty Nine LaI ihs Thirty Thousands Seven Hundred Nine} Only]

¶103

In terms of final order dated 1 9/09/2024 passed by this Tribunal in the above mentioned case, it is ordered that the Applicant Certificate Holder Bank is entitled to recover a sum of Rs. 2930709.00 along with cost, expenses and interest from the 16/11/2023 i.e, date of tIling I with effective date of the OA/547/2023 and future interest from order date till the date of realisation in full. jointly or severally from the Certitlcate Debtors, hereinafter referred to

¶104

Interest
CD Name LoanType F Type/Mode IRatInt Int. Effective Date .I OrderDate .mount(Rs.) LiabilityType Order (as on ] Amount(Rs.)RC Remar
Date)
Interest
M/S AHMAD :ompound lointly on
UTON40BILES ntcrcst 1.25 f 16/ 1 1 /2023 :l 1 9/09/2024 :930709.00 !And Order :930709.00 :
.Monthly ) iSeverally Date
,ARFARAZ LP
HMAD lterest 1.25 } 16/ 11/2023 il 19/09/2024
:Monthly )

¶105

In case of failure to pay the aforementioned adjudicated amount within 30 days, same shall be recovered from the sale of the mortgaged/hypothecated assets as well as other personal movable/ Immovable assets of the certitlcate debtors

¶106

The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to the anal order under the recovery proceeding in pursuance of the Recovery certificate issued under Section 1 9(22) of Recovery of Debts and Bankruptcy Act 1 993.

¶107

Panics are directed to appear before MANOJ KUMAR . Recovely Officer. DEBTS RECOVERY TRIBUNAL PATNA on 04/ 1 1/2024

¶108

The Recovery Oftlcer shall realize the amount as per this Certitlcate in the manner and mode prescribed under Sections 25 to 28 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (as amended from time to time) from the above named CcrtiHcate Debtors.

¶109

This Certificate has been issued under my signature and seal of the Tribunal on this 20/09/2024

¶110

PRESIDWG OFFICER DEBTS RECOVERY TRIBUNAL PATNA

¶111

UK' tiPSbp is tY :lp DebtS P ' -CV : } I,rI..i':HI

¶112

FORM NO. 10

¶113

[See Regulation 24(2)]

¶114

DEBTS RECOVERY TRIBUNAL PATNA

¶115

2nd Floor, ( A. B & F Wing) Karpuri Thakur Sadan, Kendriya Karamchari Parisar (GPOA), Ashiana Digha Road. Patna-800025.

¶116

SCHEDULE TO RECOVERY CERTIFICATE MEMO OF COSTS

¶117

RC No. 221/2024 IN Case No: OA/547/2023

¶118

Applicant(s): CANARA BANK Versus

¶119

Defendant(s): M/S AHMAD AUTOMOBILES

¶120

Item of Costs	1r
1'eeon the application	m
r	[0
AdvocateFees	b
(	[0
Miscellaneous Charges	ro
’otal Costs: Rs	m3

¶121

Place: PATNA

¶122

Date: 20/09/2024

¶123

PRESIDING OFFICER DEBTS RECOVERY TRIBUNAL PATNA

¶124

Note: Strike out whichever is not applicable

Canara Bank v. M/s Ahmad Automobiles

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s Ahmad Automobiles

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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