Allowed

Canara Bank v. M/s Maa Stone Crusher

DRT23 Sept 2024OA/56/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's application for a Recovery Certificate of Rs. 1.82 Crores against three respondents who failed to repay loans. The court held that the bank's documents and certified accounts proved the liability despite generalized denials.

What did the court decide?

Issuance of Recovery Certificate for Rs. 1,82,16,946.42 with interest and costs; charge kept alive on mortgaged/hypothecated properties.

Canara Bank versus M/s Maa Stone Crusher — Contract and Commercial Disputes | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(North Eastern Region)

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(Tribunal ofAssam Nagaland, Meghalaya, iranipur, Mizoram, Arunachal pradesh & Tripura)

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Before Shri Shiv Sharan Dubey. Presidinq Ofricer

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O.A. No.56/2022

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ln the matter of -

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CANARA BANK Nowgong Branch Situated at VIP Road, Nagaon-782001, Assam.

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Appticant

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Vs.

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M/S. MAA STONE CRUSHER Proprietor Mr. Bhaskar Sarmah S/o Late Golok Sarmah Rangagora, Near Amoni,

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District- Nagaon, Pin-782003, Assam.

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MR. BHASKAR SARMAH S/o Late Golok Sarmah

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Chakarigaon, P.O.- Dimoruguri, Near N.H.-37, District- Nagaon, Pin-782003. Assam.

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MR. BHABAJIT SARMAH S/o Late Golok Sarmah Chakarigaon, P.O.- Dimoruguri, Near N.H.-37, District- Nagaon, Pin-782003. Assam

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Defendants

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Pre3onco of the Counsel:

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For the Applicant : Mr. Vishal Kumar Dewan, Advocate

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For the Defendants : Mr. Anannya Gogoi, Advocate

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Oaled :2310912024

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JUDGMENT

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This is an application under section 19 oI the Recovery of Debts Due to Banks and Financial lnstitutions Act,^'1993 filed by the Canara Bank, Nowgong Branch, situated at VIP Road, Nagaon-782001, Assam, with a prayer to issue Recovery Certificate for the sum of Rs. '1,82,16,946.42 (Rupees One Crore Eighty-Two Lakhs

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Sixteen Thousand Nino Hundred Fofi-Six and^paba Forty-Two) only as on 31.122021 against the defendants jointly and severally with pendentetite and future interest thereon at th6 rate ol 12.75o/o per annum at monthly rests in the cash credit account and at the rate of 9.90% per annum at monthly rests in the Term Loan Account from 01.01 .2022lill^.ealizalion along with cost and other relief.

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

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On'13.02.2012, the Defendant No. I represented by its proprietor had requested and applied to the Applicant Bank for financial assislance by way of Cash Credit Limit to the tune of Rs. 15,00,000^ and Term Loan of Rs 5,00,000/- for the^purpose of expaneion of stone crushing unit, giving all necessary details to the Applicant Bank.

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The Applicant Bank considered the proposal given by the Defendant No.2 and on 13.02.2012 sanctioned a Cash Credit Limit of Rs 15,00,000/- and Term Loan of Rs 5,00,000/- to the Defendant No.^'l in the name of his proprietorship concern for the^purpose of expansion of stone crushing unit for a period of one year, on the various terms and conditions.

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The Cash Credit Limit was to be repayable on demand and the Term Lean was to be repaid in 60 EMI of Rs 8,500/-^per month. The rale of interest was to be charged at the rate of^'13.25o/o pq annum at monthly resls in the Cash Credit Account and at the rate ol 14.5Oo/o^per annum at monthly rests in the Term Loan Account, subiect to changes from time to time. Both the limits^were to be^plimarily secured by way of hypothecation of stocks, machinery and equitable^mortgageof faclory land. The limit was also to be covered under the^guarantee of CGTMSE. The terms and conditions were accepted and acknowledged by the oefendant^No: 1.

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The following are the documents for the Cash^{Credit Limitof Rs 15,00,000^} and Term Loan of Rs 5,00,0001 :-

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(a) Loan Application daled 13.02.2012 submitted by the Defendant No 1 to the Applicant Bank for Cash^{Credit Limit uptoRs 15,00,000/- and Term} Loan of Rs 5,00,000/-

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(b) Sanction Letter dated 13.02.2012 issued by the Appticant Bank for Cash Credit Lamit of Rs 15,00,000/- and Term Loan of Rs 5,00,000/acknowledged by the Borrower.

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(c) Letter of Request for Overdraft. Facilities dated 13.02.2012 for Rs '15,00,000/- executed by the Defendant Noc 2 being the proprietor of the Defendant No. 1 in favour of the Applicant Bank.

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(d) Demand promissory note dated 13.02.2012 for Rs 15,00,000/. executed by the Oefendant No: 2 being the proprietor of the Defendant No:^'l in favour of the Applicant Bank for value received together with interest @ '13.2570 per annum with monthly rests for value received.

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(e) Cash Credit Agreement daled '13.02.2012. for Rs 15,00,000/- executed by the Defendant No: 2 being the proprietor of the Defendant No: I in favour of the Applicant Bank.

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(f) Agreement cum Deed of Hypothecation dated 13.02.2012 for Cash Credit Limit of Rs 15,00,000/- and Term Loan of Rs 5,00,000/-executed by the Defendant No: 2 being the proprietor of the Defendant No: 1 in favour of the Applicant Bank.

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(g) Letter of Undertaking regarding Loans and Advances dated 13.02.20'12 executed by the Defendant No: 2 being the proprietor of the Defendant No: 1 in favour of the Applicant Bank.

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Apart from the above, in order to secure the said credit facility the Defendant No: 2 on 13.02.2012 had also created equitable mortgage by the deposit of original title documents in favour of the Applicant Bank in respect of the factory land measuring 2 bigha 4 katha 16 1/2 lecha situated at Kissam Rangagora, under mouza- Rangagora Kaliabor, district- Nagaon, Assam standing in the name of Defendant No. 2, as more particularly described in the Schedule-B of the OA. The Defendant No: 2 had submitted the following documents to the Applicant Bank for creation of equitable mortgage and confirmed the same on 13.02.2012 i

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(a) Letter Evidencing Deposit of Title Deed daled 13.02.2012 executed by the Defendant No: 2 in favour of the Applicant Bank to secure the credit facility of lhe Defendant No: 1.

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(b) Registered Sale Deed No: 53/201 1 dated 05.03.20'1 1 execuled in favour of Defendant No: 2 in respect of land measuring 2 kalha 6yz lecha with registration receipt.

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(c) Registered Sale Deed No: 1096/08 dated 17.04.2008 executed in favour of Defendant No: 2 in respect of land measuring I katha 10 lecha with registration receipt.

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(d) Registered Sale Deed No. 1878/07 dated 16.08.2007 executed in favour of Defendant No: 2 in respect ol land measuring 1 katha with registration receipt.

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(e) Registered Sale Deed No: 20'l dated 1'1.06.2004 executed in favour of Smti Jill Devi in respect of land measuring 2 bigha.^(now in the name of Defendant No: 2 and 3).

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ln pursuance of execution of the loan documents and security documents by

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the Defendant No. 2, equitable mortgage created by the Defendant No: 2 and other

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terms and conditions accepted by the Defendants, the disbursement of loan amounls were made to the Borrower/Defendant No. 1 by the Applicant Bank.

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A Cash Credit Account was opened in the name of M/s Maa Stone Crusher, Proprielor Mr. Bhaskar Sarmah the Defendant No.^,l vide OCC Account No: 1153261010279 and the said account was being operated by the Defendant No. 2 Another Term Loan Account No:^,l 153766000001 was opened in the name of M/s Maa Stone Crusher, Proprietor Mr. Bhaskar Sarmah the Defendant No. 1 and the said account was being operated by the Defendant No.2. The Borrower/ Defendant No. 2 availed the credit facilities from time to time and such transaclions were duly recorded in the books of account mainiained by the Applicant Bank in the usual and ordinary course of their banking business

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The Defendant No. 1 on 1.t.02.2014 acknowledged the debt and security in the aforesaid Cash Credit Account thereby confirming the correctness of balances and securities

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Subsequenfly at the request of the Defendant No: 2 the Applicant Bank on 02.03.2015 allowed the renewal and enhancement of Cash Cradit Limit of Rs 90,00,000/- to the Oefendant No.^.t for the purpose of his business, on the various terms and conditions. The said limit was to be repayable on demand. The rate of interesl was to be charged at the rate of .lO.55% per annum at monthly rests. The limit was to be secured by way of hypothecation of stocks of raw materiars, stocks in process, consumable stores of spares and finished goods. The limit was also to be collaterally secured by way of and equitable mortgag€ of factory tand and the residential landed property. The terms and conditions were accepted and acknowledged by the Defendant No: L

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ln order to avail the Cash Credit Limit upto Rs 90 lakhs, the Detendant No. 2 had executed the following documents on 02.03.20.15 ;_

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(a) Link Letter dated 02.03.2015 executed by the Defendant No. 2 being the

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proprietor of the Defendant No: 1 in favour of the Applicant Bank for

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enhancemenl of Cash Credit Limit from

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Rs 15 lakh to Rs^g0 ;,.ffie9takhs.

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.-,^{tavourof the Applicant} I idr?;H:f ,"i::T:r ,c,^.uarantee Aqreemen, ;[;efuifialf:i:ft ovrn"o"i",i:"iir.i:l:flilli#&,;f 3l';?:*:J",,??",".","rJ;ffi [,lil

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Apart from the above, in order to secure the said credit facility, the Defendant Nos. 2 and 3 on 25.06.20iS had also created equitable mortgage in respecl of land measuring 2 bigha 2 katha 19 lecha by the deposit of original tifle documents in favour of the Appricant Bank in respect of residentiar rand and building situated at Chakorigaon under mouza_ Nij Sahar, District_ Nagaon, Assam standing in the name of Defendant No. 2 and 3, as more particularly described in the Schedule-C of the OA.

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ln pursuance of execution of letter of renewal and other terms and conditions accepted by the Defendants, the Applicant Bank allowed the Defendant No: 2 to continue to avail the existing the credit facilities from time to time from Cash Credit Account No: 11532610'10279 and such transactions were duly recorded in the books of account maintained by the Applicant Bank in the usual and ordinary course of their banking business.

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Subsequently at the request of the Defendant^{No: 2 the ApplicantBankon} 29.08.2016 renewed the existing^{Cash Credit Limit of Rs 90,00,0001 to the} Defendant No.^'l for the^{purposeof his business,on the same terms and} conditions. ln order to^{continueto avail the Cash Credit Limitupto Rs 90 lakhs, the} Defendant No. 2 had executed^{the following documents on 29.08.2016:-}

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(a) Acknowledgment of Debt and Security dated 29.08.2016^{executedby the} Defendant No. 2 in favour of the Applicant Bank^{for the Cash Credit} Account.

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(b) Letter of Renewal dated 29.08.2016 executed by the Defendant No. 2 being the^proprietor of the Defendant is uplo^{favour of the Applicant Bank} for renewal Rs 90 lakhs. of Cash Credit^Limil.

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ln^pursuance of execution of letter of^renewal and^{other terms and} conditions accepted by the^{Defendants, the Applicant Bank allowedtheDefendant} No: 2 to continue to avail the existing the^{credit facilitiesfrom time to timefrom} Cash Credit Account No:^{1153261010279and such transactionswereduly} recorded in the books of account^{maintained by the Applicant Bank in the usual} and ordinary course of their banking^business.

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Subsequently again at the^{requestof the DefendantNo: 2 the Applicant} Bank on 30.03.2018^{renewedthe existing Cash Credit Limit of Rs 90'00,000/-to} the Defendant No.^{1 for the purposeof his business,on the same terms and} conditions. ln order to continue to^{avail the Cash Credit Limitupto Rs 90 lakhs,the} oefendant No. 2 had executed^{the following documenls on 30. 03. 2018:-}

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(a) Sanction Letter dated 30.03.2018 issued by the^{Applicant Bank for} renewal of Cash Credit Limit upto^{Rs 90 lakhs, acknowledgedby the} Borrower.

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(b) Acknowledgment of Debt and Security dated 30.03.2018^{executedby the} Defendant No. 2 in favour of the^{ApplicantBankfor the Cash Credit} Account.

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(c) Letter of Renewal dated 30.03.2018 executed by the Defendant^{No. 2} being the^proprietor of the Defendant^No: I^{in favour of the Applicant} Bank for renewal of Cash Credit^{Limit uptoRs 90 lakhs}

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ln pursuance of execution of^letter of^renewal and^{other terms and} conditions accepted by the Defendants,^{the ApplicantBank allowedtheDefendant} No: 2 to continue to avail the existing the^{credit facilitiesfrom time to timefrom} Cash Credat Account No:^{1'153261010279 and such transactionswereduly} recorded in the books of account^{maintained by the Applicant Eankin the usual} and ordinary course of their banking^business.

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Subsequently on 29.09.2018 the^{Oefendant No: 1 represented by its} proprietor had further requested and applied to the Applicant Bank for a Term Loan of Rs 20,00,0001 for the^purpose of^{purchasinga MahindraEa(hmaster Backhoe} Loader for his business requirements.^{TheApplicantconsideredthe proposal} given by the Defendant No: 2 and on 26.04.2019 sanctioned a Terr[ Loan- pf n r

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Rs 20,00,000/- on the terms and conditions which were accepted and acknowledged by the Defendant No: 2. As per the terms of sanction, the said Term Loan was to be repaid in 60 monthly installments of Rs 43,136.56/- commencing from 26.05.2019. The interest was to be charged at the rate of 10.65% per annum at monthly rests subject to changes from time to time. The aforesaid Term Loan was to secured against the hypothecation of the vehicle to the^purchased out of bank loan and was also to be secured under CGTMSE coverage. The following are the documents for the Term Loan of Rs 20 lakhs:

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(a) Loan Application dated 29.09.2018 submitted by the Defendant No: 2 to the Applicant Bank for Term Loan of Rs 20 lakhs.

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(b) Sanction Letter dated 26.04.2019 issued by the Applicant Bank in favour of the Defendant No:^'l and 2 tor Term Loan of Rs 20 lakhs.

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(c) Deed of Hypothecation dated 26.04.2019 for Rs 20 lakhs executed by the Defendant. No: 2 being the^proprietor of the Defendant No: 1 in favour of the Applicant Bank.

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(d) Letter of Undertaking dated 26.04.2019 for executed by the Defendant No; 2 being the^proprietor of the Defendant No: 1 in favour of the Applicant Bank.

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ln pursuance of execution of the loan documents and security documents by the Defendant No. 2, and other terms and conditions accepted by the Defendants, the disbursement of loan amounts were made to the Borrower Defendant No. 1 and 2 by the Applicant Bank. A Term Loan Account was opened in the name of Mis Maa Stone Crusher, Proprietor Mr. Bhaskar Sarmah the Defendant No. 1 vide Account No: 1153768000215 and the said account was being operated by the Defendant No. 2. The Borrower/Oefendant No.2 availed the credit facilities from time to time and such lransactions were duly recorded in the books of account maintained by the Applicant Bank in the usual and ordinary course of their banking business.

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After some time, it was observed that the Loan Accounts had become irregular. The Defendant No. 1 failed and/or neglected to operate the Loan Accounts^properly as^per the terms and conditions of sanction and the loan documents. The operations were very less and there were overdrawing in the Cash Credit Account, followed by non-submission of stocks as well as financial statements, non-submission of necessary documents for renewal of ,,td|li

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transactions in the account were not at all satisfactory, followed by non_deposit of outstanding dues in the account and the Borrower/Defendant No. 1 failed and/or neglacted to regularize the position in the accounts inspite of repeated requests, reminders of the Applicant and also on personal approaches made by the Bank.

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Various measures were initiated viz. site visits, personal discussions and through letters and phone, to recover the outstanding dues in rhe roan accounts. However, no payment came forth. The Applicant gave many opportunities and requested many times to the Defendant No. 2 for the repayment of the outstanding dues in the loan accounts but the Defendant No. 2 did not show any interest in keeping his own commitments to clear the dues in the Loan Account and all previous promises turned out to be false and on the other hand the interest load wele increasing day by day.

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However, on 22.02.202.1 the Defendant No: 2 had acknowledged the debt and security in the aforesaid Cash Credit Account thereby confirming the correctness of balances and securities.

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Despite of regular requests and follow ups by the Applicanf Bank, the Oefendant No. 2 was neither operating the accounts properly nor was he regularizing the overdue amouni in the Loan Accounls. The Defendant No. 2 every timo gave false assurances and did not keep his words. The Defendant No. 2 did not take any initiative to make lhe account performing and moreover the stocks were not available to cover up the entire liability. As a result, thereon the Term Loan Account No:^{.115376g000215} was classified as Non_performing Asset on 01.03.2021 and the Cash Credit Account No: 1153261010279 was ctassified as NPA on 0.1.03.2021 as per the Guidelines of RBI because of series of non_payment of interest and principal amount, non_regularization of excess amount in the Cash Credit Account.

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ln viow of such circumstances, the Applicant at first on several occasions requested the Defendanl No. 1 to regularize the loan accounts immediately. When

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the loan accounts had become NPA, the^{Applicant Bank later on recalled the entire} advances and requested the Borrower and the Guarantor to^{clear up the entire} liability with up to date interest immediately. The notices were duly served on the Oefendants but the Applicant failed to^{get any response from the defendants.}

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ln the Cash Credit Account No: 1153261010279^{the Applicant Bank is still} entitled to a sum of Rs 1,59,90,208.88 being^{the amountof balance outstandingas} on 31.12.2021 as^per lhe accounts^{maintainedby the ApplicantBankin theusual} and ordinary course of the Banking^{Business, whichtheDefendantsarejointly and} severally liable to^pay to the Applicant^{Banktogether wilh interest thereon at the} stipulated and or existing^{rate and as usually and customarily chargeable by the} Applicant Bank according to the variations^{of the ratesas fixed from time to timeby} lhe Reserve Bank of lndia and the^{Head Office of the ApplicantBank.The rateof} interest has been charged in the account according^{to the variations of the rates as} fixed from time to time by the Reserve Bank of lndia as reflecting in the accounts maintained by the Applicant Bank in the usual and ordinary^{course of theBanking} Business.

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ln the Term Loan Account No: 1153768000215 the Applicant Bank is still entitled to a sum of Rs. 22,48,021.54 being the amount of balance outstanding as on 08.12.2021 as^per the accounls mainlained by the Applicant Bank in the usual and ordinary course of the Banking Business, which the Oefendant No: 1 and 2 ate liable to^pay to the Applicant Bank together with interest thereon at the stipulated and or existing rate and as usually and customarily chargeable by the Applicant Bank according to the variations of the rates as fixed from time to time by the Reserve Bank of lndia and the Head Office of the Applicant Bank. The rate of interest has been charged in the account according to the variations of the rates as fixed from time to time by the Reserve Bank of lndia as reflecting in the accounts maintained by the Applicant Bank in the usual and ordinary course of the Banking Business. After reducing the^penal interest of Rs 21,284/- which was charged in

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the account the Oefendants are still liable to^pay a sum of Rs 22.26,737.54 as on 08.12.202',t.

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The Defendant No: 1, 2, 3 are therefore^jointly and severally liable to pay to the Applicant Bank a sum of Rs^{'1,59,90,208.88} as on 31.12.2021 in the Cash Credit Account and the Defendant No: 1 and 2 are^jointly and severally liable for a sum of Rs 22,26,737.54 as on 3'1.12.2021 in the Term Loan Account. Hence the total claim of the Applicant Bank is Rs 1,82,16,946.42 as on 3'l.12.202'1.

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The applicant bank thus became constrained to rile the present Original Application for lhe recovery of Rs. 1,82,16,946.42^(Rupees One Crore Eighty-Two Lakhs Sixteen Thousand Nine Hundrod Forty-Six and Paisa Forty-Two) only as on 31.12.2021 along with interest and cost of the application.

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After filing of the OA the Tribunal issued notices upon the defendants through registered post and the applicant bank filed service reporl on 06.05.2022 and brought on record the^postal receipts along with track consignment reporl. The learned counsel for defendants has appeared on the same day i.e. on 06.05.2022 and filed their written statement and evidence on affidavit on 08.06.2022 to which the learned counsel for the applicant bank has filed its rejoinder on 14.03.2023. Thereafter the matter was^posted for hearing.

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Supporting the claim of the applicant bank Sri Kumar Barua, Senior Manager of the Applicant Bank has filed evidence on aftidavit coupled with the security documents

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marked as A-1 to A-39 supporting the claim of the applicant bank details of which are: -.

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Sl.No.	Nameofthe documents	ExhibitNo.
1	LoanAppllcation DefendantNo.1 LimatuptoRs. 5,00,000/- dated13.02.2012submittedbythe to theApplicant BankforCashCredit 15,00,000/-andTerm LoanofRs	A-1
2	Sanction Applicant andTerm Borrower. Letterdated13.02.2012issuedbythe BankforCashCreditLimitof Rs15,00,000^ LoanofRs5,00,000/- acknowledgedbythe	A-2
3	LetterofRequestforOverdraftFacilitiesdated 13.02.2012forRs15,00,000/-executedbythe DefendantNo:2beingtheproprietoroftheDefendant No:1infavouroftheApplicantBank.	A-3

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4	DemandPromissoryNote dated13.02.2012forRs 15,00,000/- executed bytheDefendant No:2being the proprietoroftheDefendantNo:1infavourotthe Applicant Bankforvaluereceivedtogetherwithinterest @^{13.25Voperannumwithmonthly restsforvalue} received.
5	CashCreditAgreementdated13.02.2012forRs 15,00,000/- executedbytheDefendant No:2beingthe proprietorof iheDefendantNo;1infavourofthe ApplicantBank.	A-5
6	AgreementcumDeedofHypothecationdated 1302.2012forCash Credit Limitof Rs15,00,000/- and TermLoanofRs 5,00,000/-executedbytheDefendant No:2beingthe^proprietorof theDefendantNo:1in favour of theApplicantBank	A-6
7	LetterofUndertakingregarding Loansand^Advances daled13.02.2012executedbytheDefendantNo:2 beingthe^proprietoroftheDefendantNo:Iⁱⁿfavourof theApplicantBank.	A-7
8	LetterEvidencingDepositofTitleDeeddated 13.O2.2021executedbytheDefendant No: 2infavourof theApplicant Banktosecurethecredit facilityofthe Delendant No:1.	A-8
I	RegisteredSaleDeedNo:53/2011dated05.03.2011 executedinfavour ofDefendant No:2 inrespectofland measuring2katha6%lecha with registration receipt.	A-9
10	RegisteredSaleDeedNo:1096/08dated17.04.2008 executedinfavourofDefendant No:2^{in respect}ol^land measuring1kathal0lechawith registration receipt.	A-'10
1'l	RegisteredSaleDeedNo:1878/07dated16.08.2007 executed in favourDefendaniNo:2inrespectof^land measurinq1katha with reqistrationreceipt.	A-11
12	RegisteredSaleDeedNo: 201dated11.06.2004 executedinfavourofSmtiJiliDeviinrespectofland measuring 2 bigha. (nowinthename of DefendantNo:2 and3).	A-12
13	Acknowledgment ofOebt and Securitydated11.02.2014 executedbytheDefendantNo.2in^favourofthe ADolicant Bank for the Cash Credit Account.
14	LinkLetterdated02.03 2015 executed bytheDefendant No.2beingthe^proprietoroftheDefendantNo:Iin favour of theApplicant BankforenhancementofCash CrsditLimitfromRs^'15lakhtoRs 90lakhs.	A-14
15	LetterofRenewaldated02.03.2015executedbythe DefendantNo.2beingthe^proprietoroftheDefendant No: 1 infavourofthe ApplicantBankforCashCredit Limit upto Rs 90lakhs.	A-15
16	DemandPromissoryNote dated02.03.2015forRs 75,00,000/- executed bytheDefendantNo:2beingthe proprietoroftheDefendantNo:1infavourofthe ApplicantBankfor value received.	A-16
17	SupplementalAgreementdated02.03.2015forRs 90,00,000/- executed bytheDefendant No:2beingthe proprietoroftheDefendantNo:1infavourofthe ADolicantBankfor value received.	A-17
18	Guarantee Agreementdated02.03.2015for^Rs 1,00.00,000/-executedbytheDefendant No:3infavour ofthe ApplicantBanktosecuretheloan accounts oIthe DefendantNo:^'1and2.	A-18
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19	Letterdated02.03.2015evidencingdepositoftitle documentsinrespectofland measuring4 katia16% lechawhereadditionallimitisgranted executedby DefendantNo:2infavouroftheApplicantBankto securetheloan accountsoftheDefendantNo:1and2.	A-19
20	LetterEvidencingDepositofTitleDeeddated 25.06.2015 executedbytheDefendantNo:2and3in favour of the ApplicantBanktosecurethecreditfacility oftheDefendantNo:1.	A-20
21	RegisteredDeedofPartitionNo:141l07dated 21.01.2007 executedinfavourSriGolokChandra Sarma^(sincedeceasednow)inrespectofland measuring2bigha2katha19lechawithoriginal registration receipt. (This^propertyisnowmutatedinthe nameofDefendantNo:2 and3).	A-21
22	Acknowledgment ofOebt and Security dated 29.08.2016 executedbytheDefendantNo.2infavourofthe ApplicantBankfortheCash Credit Account.	A-22
	LetterofRenewaldated29.08.2016executedbythe DefendantNo.2beingthe^proprietoroftheDefendant No:1infavourof theApplicant Bankforrenewal of CashCreditLimit upto Rs 90lakhs.	A-23
24	SanctionLetter dated30.03.2018issuedbythe ApplicantBankforrenewalofCashCreditLimituptoRs 90lakhsacknowledgedbytheBorrower	A-24
	Acknowledgment ofDebt and Securitydated30.03.2018 executedbytheDelendantNo.2infavourofthe ApplicantBankfortheCash Credit Account.	A-25
	LetterofRenewaldated30.03.2018executedbythe DefendantNo.2beingthe^proprietoroftheDefendant No:1infavouroftheApplicant Bankforrenewalof CashCreditLimit upto Rs 90lakhs.	A-26
27	LoanApplicationdated29.09.2018 submittedbythe DefendantNo: 2to the ApplicantBankfor TermLoanof Rs20lakhs.	A-27
28	SanctionLetter dated26.04.2019issuedby^the Applicant Bank in favourof theDefendantNo:1and2 forTermLoanofRs20lakhs.	A-28
29	DeedofHypothecationdated26.04.2019forRs20 lakhsexecutedbytheDefendantNo;2beingthe proprietoroftheDefendantNo:1infavourofthe AoDlicantBank.	a_ro
30	LetterofUndertaking dated26.04.2019forexecutedby theDefendantNo;2beingthe^proprietorofthe Defendant No:^'linfavouroftheApplicantBank.	A-30
3'r	Acknowledgment ofDebt and Security dated 22.03.2021 executedbytheDefendantNo.2infavourofthe AoolicantBankfortheCash Credit Account.	A-31
32	DemandNoticedated1611.20'19issuedbythe ApplicantBank totheDefendantNo:1and2demanding the entire outstandinqduesinthe Term Loan Account.	A-32
JJ	DemandNoticedated18.01.2021issuedbythe ApplicantBankto theDefendantNo:1and2requesting themtoupqrade and reqularizetheaccount.	A-33
34	DemandNoticedaled12.04.2021issuedby ApplicantBanktotheDefendant No:2demanding entire outstandinq duesinthe Cash Credit Account. the the	A-34

¶120

Guwahati

¶121

¶122

o A 56/202ZDRT'Guwahan

¶123

	Statementofaccountof^{Cash Credit AccountNo:} 1153261010279 incorporatinq interest^{with certificate.}	A-35
36	StatementofaccountofTerm^{LoanAccountNo:} 1153768000215 incorporatinq interest with certificate.	A-36
	StatementofaccountofTerm^{LoanAccountNo:} 1153766000001incorporatinq^{interest withcertificate}	A-37
38	ValuationRepo(dated08.11.2021^{inrespectoffactor} land measuring2bigha3katha 16.50^lecha.	A-38
	of ValuationReportdated08.11.2021in^respect residential land measuring 2 bigha 2 katha^19lecha.	A-39

¶124

The defendants have appeared and contested^{the claim of the applicant bank by} filing written statement and evidence^{on affidavit statinginteraliatherein that the} original Application is not at all^{maintainable under law and facts The Applicant bank} has failed to disclose true and^{proper account of the alleged lransaction.The} Statement of Account is not^properly certified^{as per theBankers BooksEvidence} Act. The original application is also barred^{by limitation.lt is deniadby the answering} defendants that the defendant No 2 as^{proprietor of Defendant no.ltirm accepted} the terms and conditions of the^{said sanction letterdated 13.02.2012and had never} executed Letter of Request^{for Overdraft Facilities,Demand Promissory Note, Cash} Credit Agreement, Agreement cum^{Deed of Hypothecationand Letterof Undertsking} regarding Loans and Advanc€s all dated^{13.02.2012.The delendantno. 2 as} propriator of Oefendant no.1 firm had never mortgaged any^property in favour of the applicant bank and had never executed^{any Letter Evidencing Deposit of Title Oeeds} dated 13.02.2012. The answering^defendant No 2^{had never executed} Acknowledgement of Oebt and Security in favour of the applicant bank^{for the Cash} Credit Account. lt is also denied that the defendant^{No 2 as proprietor of Defendant} no.l firm had executed Link Letter, Letter of Renewal, Demand^{PromissoryNote,} Supplemental Agreement and Letter^{evidencing deposit of title documents all dated} 02.03.2015 in favour of the applicant bank.^The defendant^{no. 3 had never stoodas} guarantor. The defendant no.2 and 3 had never executed Letter Evidencing Deposit of Title Deed dated 25.06.2015^{in favour of the applicant bank.The defendant No 2} had never executed Acknowledgement of Debt and Security^{dated 29.08.2016 and} Letter of Rena^,al dated 29.08.2016 in favour of the Cash Credit Account.^The defendant No 2 had never acknowledged the Sanction^{Letter dated 30.03.2018 and}

¶125

s|ri)gfatar "ffi+1g'gsYl4l\l^'rh.

¶126

I.l

¶127

O A 56/2022lDRI-Guwahati

¶128

had not executed Acknowledgement of Debt and Security dated 30.03.2018 and Letter of Renewal dated 30.03.2018 in favour of the applicant bank for the Cash Credit Account. The defendant No 2 as proprietor of Oefendant no.1 firm never accepted the terms and conditions of the said sanction letter dated 26.04.2019 and had never executed Oeed of Hypothecation and Letter of Undertaking both dated 2ts.U.2019. Further it is denied by the answering defandants that the cash credit account was not at all running irregular but due to creation of artificial contingency and pressure by the Applicant Bank that the position of the account has started showing signs of stress. The answering Defendants had many times requested the Applicant Bank to renew and reslructure the loan account but to no avail. The Applicant Bank had never issued any demand letters lo the answering Oefendants. lt is further stated that the amount claimed under Applicant Bank is specifically put under challenge as the calculations arrived at bolh in the statements of accounts as well as in the lnterest Calculation Sheet are not al all correct as the same do not reflect the correct entries and no specific rate of interesl as shown to have been charged at a^particular rate. On^perusal of the statement of accounts it is clearly visible that the applicant bank has done bundle of irregularities, illegalities, manipulation and falsification in both the accounts, the applicant bank has charged rate of interest much higher than agreed by the defendant No. 2 as proprietor of Defendant no.1 firm. The Applicant is not entitled for any kind of relief as prayed.

¶129

The leamed counsel for the applicant bank has filed its rejoinder against the written statement tiled by the defendants in .yhich it has been stated that the entire written statement is vague and the Defendants have made general denials without any basis. The Defendants have not liled any document with the written statement or counter evidence and failed to^justify and prove the statements and allegations made by them against the Applicant. The answering Defendants in para no: 9, 10 & 20 of the written statement have admitted the loan availed from the Applicant Bank. The other terms of the written statement are vague and are baseless. Tha answering Defendants have not^justified the statements made in the concerned paras and failed

¶130

to prove the same in evidence. The documents annexed in the Original ADDlicatian - Shr/d,a/qQ"r]., .**#lnlKl

¶131

¶132

O A 56/202ZDRT-Guwehati

¶133

and exhibited by the Appricant in the Evidence and the signatures of the Defendants therejn shall prove the statements made by the Applicant in the Original Application. The Defendants have not denied their signatures in the loan documents. The Defendant No: 2 and 3 had put lheir signatures in the loan documents after going through the contents of each and every document. The Oefendants have made general denials and false stalements in the Counter Evidenca on Affidavit. The Daiendants are defaulters in the eye of law and they are joinfly and severally liable for a sum of Rs 1,82,16,946.42 as on 3,1:122021 with further interest from 01.01.2022 and cost thereon as ctaimed in the Original Application.

¶134

Heard the learned counsel for the applicant bank who prayed for issuance of Recovery Certificate 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 lhe security and other documents by the defendants and also execution of their own documents relied upon, which have been marked exhibits.

¶135

Heard the learned counsel for the defendants who prayed for dismissal of the original application.

¶136

lhave carefully perused the documents on record including original application, evidence on affidavit and exhibited documents as well as written siatement and evidence on affidavit filed by the defendants.

¶137

It is observed that the defendants have not denied the availment of loan, execution of documents and their signature on the same.

¶138

It is observed that the answering defendants have made general denial in their written statement. lt is well settled law that the written statement must specitically deal with each of the allegation of fact made in the plaint. The failure to make specnc denial amounts to an admission. ln the present case, the defendants have made a general denial that amounts to admission on the part of the dafendants of the facts pleaded in the original application by the applicant. Moreover, the defendants have not filed any

¶139

Presiding DRT, Guwahali

¶140

¶141

oA 56/2o22roRT-Guw.hatr

¶142

document in support of their pleadings and failed to justrfy and prove the statements made in their written statement and evidence on atfidavit.

¶143

The defendants have contended that the applicant bank has charged rate of interest much higher than agreed by the defendant No. 2 as proprietor of Defendant no.1 firm

¶144

It is observed that the statement of account has been filed by the applicant bank, which is maintained in the Bank in the Books of the Bank in the usual and ordinary couGe of business and is admissible as per Section 4 of the Banker's Books of Evidence Act. lt is also observed that the defendants have failed to shodpin-point about any particular entry which is wrong or which should not have been there or which should have been there. ln the absence of the same, the contention of the defendants has no force and is negated.

¶145

Moreover, as per Section 21-A of the Banking Regulation Act, 1949 a transaction between a banking company and its debtor cannol be reopened by any Court on the ground that the rate of interest charged by the banking company in respect of such lransaction is excessive. Section 21-A of the Act read as under: -

¶146

'Rales of inreresl charged by banking companies not to be subiect to scrutiny by Coutts. -Notwithstanding anything containod in the Usurious Loans Act, 1918 (10 of 1918) or any other law relating to indebtedness in force in any State, a transaction between a banking company and its debtor shall not be rcopened by any Coud on the grcund that the^.ate of interest charged by tho banking company in rospect of such transaction is excessive. "

¶147

ln the case of State Bank of Hyderabad and etc. Vs. Advath Sakru and anolher etc. reported in AIR 1994^(full bench), the Hon'ble Andhra Pradesh High Court has held in^para 91 that^"a transaction between a banking company and its debtor cannot be roopened on the^ground that the rate of interest claimed is usuious notwithstanding lhe^provisions ol Act 10 of 1918 or the other provisions of Debt Laws preveitins inthe state

¶148

ShrrtAl44h4r/, *"".,"nk}llryl'ly I DRT, Guwahati

¶149

¶150

o.A. 56/2022loRT-Guw.hati

¶151

ln view of the above, there is no force in the contention of the defendanb and is negatd. I

¶152

It is evident from the statement of account filed by the applic€nt bank that the defendants have defaulted in repayment of the loan. lf there is default in repayment of the loan the applicant bank has every right to proceed against the defendants for realization ofthe outstanding dues. Hence, I have no hesitation to hold that this original application is maintainable.

¶153

The applicant bank has produced on record the copies of the statement of account in respecl of the defendants, duly certilied under BankeG' Books Evidence Act. The applicant bank by the evidence-on-affidavit of Sri Kumar Barua, Senior Manager of the applicant bank had deposed the conectness of the afiidavit and certified copy of the account. Beyond that nothing more has to be deposed by an officer of the bank. lt is thus obvious that apart from the entries of the Books of account there are ample evidence on the record to coroborate the said entries.

¶154

The documents executed by the defendants are duly proved by the applicant bank and the witness of the applicant. The applicant has sufficient cause of action for flling the instant application due to disbursemenuavailment of loan to/by the defendants and on default in repayment of the loan by the defendants, inspite of demands made, as per exhibited documents filed by the applicant bank.

¶155

Considering the facts and circumstances of the 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 13.02.2012. 02.03.2015, 29.08.2016 & 26.04.20'19. Acknowledgment of Debt and Security are aatea fi.OZ.ZO'|C,29.08.2016, 30.03.2018 & 22.03.2021 . The accounts became NPA on 01.03.2021 and the OA

¶156

Slt-ldatu"%r)"{!d&a, vl Pr€siding Oflic+ ".^",",^{>^ilf.lv (l} oRT, Guwahati

¶157

¶158

O A 56/2022loRT,Guwahsti

¶159

has been ftei on 17.02.2022. Hence, the OA is fited wefl within the period of limitation and this Tribunal having a jurisdiction to adjudicate the Original Application.

¶160

Considering the version of by Sri Kumar Barua, the applicant,s witness and all the documents 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 enti ed to get the Recovery Certiticate as prayed for.

¶161

ln the result, the present Original Apptication No. 56 of 2022 is allowed with cosl as under: -

¶162

i) The defendants No 1, 2 & 3 are jointly and severally liable to pay to the applicant bank a sum of Rs. '1,82,16,946.42 (Rupees One Crore Eighty-Two Lakhs Sixteen Thousand Nin6 Hundred Forty-Six and^paisa Forty-Two) only wilh pendentelite and future inlercsl @'12.75o/o per annum at monthly rests in the Cash Credit Accountl.om 01.012022 and @9.90% per annum at monthly rests in the Term Loan Account trcm 01.O1.2022 ti the date of full paymenurealizatjon and also cost of the application.

¶163

ii)

¶164

The charge of the certificated amounl be kept alive on hypothecated properties, i.e. Stone Crushing Unit, Civil Works, Transformer, Stone Boulders, Chips etc. Mahindra and Mahindra Earth Master SX Backhoe Loader bearing Engine No: NJHSWAEo817, Chassis No; MOZAL4BFAJ6L49581, as described in Schedule-A of the OA till the amount is realized in full.

¶165

iii) The charge of the certificated amount be kept alive on mortgaged properties, i.e. Total land measuring 2 bigha 4 katha 16.5 techa of Patta No: 105, 135, 137 covered by Dag No: 287, 288. 290 with Assam Type Building thereon situated at Rangagara, Nagaon standing in the name of the Defendant No: 2 and 3, valued at Rs 1,48,55,000/- and the total land is bounded by:- NorthNH-37; South-Pawan Agarwallat East-Moniram Bhuyan; West: Garubat

(Village-Road)-

s{r;,,.#Hffiw

DRT Guwahali

O a 56/2022/ORT Guwahal

¶171

The aforesaid total land measuring2 bigha^{4 katha16.5 lecha comprise} of :-

¶172

(i) Land measuring 2 katha 6 % lecha covered^{by Registered Sale Deed} No: 53 dated 05.03.2011 of^{PattaNo: 105 coveredby Dag No: 287} situated in the village Rangagora Kissam,^{mouza- Rangagora, District-} Nagaon, Assam in the name of Defendant^{No: 2 (Sri Bhaskar Sarmah).} Boundary:- North:- Rautiai South Bogai Urang;^{East:- Narayan} Debnath; West:- Gorubat^(village road);

¶173

(ii) Land measuring 1 katha^'10 lecha covered by Registered Sale Deed No: 1096/ 08 dated 17.04.2008 of Patta No: 135 covered by Dag No: 288 situated in the village- Rangagora Kissam, mouza- Rangagora, District- Nagaon, Assam in the name of Oefendant No: 2^(Sri Bhaskar Sarmah). Boundary- North:- Hotel; South- Crusher Mill; East: Moniram Bhuyan; West:- Bhaskar Sarma.

¶174

(iii) Land measuring I katha covered by the Registered Sale De€d No: 1878/07 dated 16.08.2007 of Patta No: 135 covered by Oag No: 288 situated in the village Rangagora Kissam, mouza Rangagora, District Nagaon, Assam in the name of Oetendant No: 2 (Sri Bhaskar Sarmah). Boundary: -North Dipak Debnath; South-Paban AgaMalla; East:Pradip Bhuyan; West: Narayan Debnath;

¶175

(iv) Land measuring 2 bigha covered by the Registered Sale Deed No: 201 dated 11.06.2004 of Patta No: 137 covered by Dag No: 290 situated in the village- Rangagora Kissam, mouza- Rangagora, District- Nagaon, Assam in lhe name of Smti Jili Devi (Now it stands in lhe name of Defendant No: 2 and 3). Boundary- North;- Dipak Debnath; South: Paban AgaMalla; East:- Pradip Bhuyan; West:- Narayan Debnath, as described in Schedule-B of the OA till the amount is realized in full.

¶176

iv) The charge of the certificated amount be kept alive on mortgaged property i.e. Land measuring 2 bigha 2 katha 19 lecha covered by the Registered Deed of Partition No: 141107 daled 21.0'l.20O7 of Patta No: 74 covered by Dag No:

¶177

208 situated in the vallage- Chakorigaon, mouza- Nij Sahar, District- Nagaon,

¶178

:S},irPqou.. f,uLu,rylqlV (

¶179

O A 56/2022loRT-Guwahatr

¶180

¶181

Assam in the name of Defendant No: 2 and 3 valued at Rs 2,85,78,576/- and the land is bounded by:- North:-NH-37 South:- Bhadreswar Bora East:Lakhidar Kalita West:- Phanidhar Sarma, as described in Schedule-C of the OA till the amount is realized in full.

¶182

v) The applicant bank is entitled to proceed against the secured items towards recovery of the debts.

¶183

vD The applicant bank is also entitled to^proceed against the^personal assets and properties of the defendants towards recovery of the dues.

¶184

vii) The applicant bank is entitled to the costs of the O.A. which includes the advocate fees of the applicant bank. Applicant is directed to file the cost memo within 2 weeks from today.

¶185

viii) lssue Recovery Certificate accordingly for a sum tu. '1,82,16,946.'12 (Rupee3 Ons Crore Eighty-Two Lakhs Sixteen Thousand Nin6 Hundrod Forty€ix and Paisa Forty-Two) only in favour of the applicant bank against the defendants No. 1,2 & 3.

¶186

ix) Communicate mpy of this order to the concerned^parties. This order is dictated and corrected by the undersigned.

¶187

Judgment dated 23d September'2024, signed and^pronounc€d in the Tribunal

¶188

today under my signature.

¶189

Copy of the JudgmenuFinal Order be uploaded in the Tribunal's Website and filo be consigned to Record Room.

¶190

sl",loxuf;-*"f (Shiv SharanlDubby)^- Presiding Officer DRT, Guwahati.

Canara Bank v. M/s Maa Stone Crusher

Case brief

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Canara Bank v. M/s Maa Stone Crusher

Case brief

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