Allowed

Bank of Baroda v. M/S Nanak International and Others

DRT6 Sept 2024OA/608/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application by Bank of Baroda for recovery of Rs. 52,58,883.54 against borrowers. The court modified the claimed interest rate to 8% per annum and directed the issuance of a Recovery Certificate.

What did the court decide?

Directing defendants to pay Rs. 52,58,883.54 plus 8% p.a. simple interest; Recovery Certificate issued; permission to sale assets under SARFAESI Act.

Bank of Baroda versus M/S Nanak International and Others — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.608/2023 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 06.04.2023

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DATE OF DECISION: 06.09.2024

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Bank of Baroda, a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its head office at Alkapuri Baroda and branch, amongst other places, at Sunder Nagar, Ludhiana, through Sh. Sourabh Kumar, Chief Manager, Bank of Baroda, Sunder Nagar branch, Ludhiana (erstwhile Vijaya Bank)

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……..Applicant

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Versus

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M/s Nanak International, # Plot No. 391, near Hira Lal, Village Ramgarh, Phillaur through its Proprietor Sh. Jagjeet Singh

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Sh. Jagjeet Singh, Proprietor M/s Nanak International, # Plot No. 391, near Hira Lal, Village Ramgarh, Phillaur.

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Sh. Swaran Singh S/o Sh. Sadhu Singh R/o # Plot No. 391, near Hira Lal, Village Ramgarh, Phillaur.

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………Defendants

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Advocates: Argued by Sh. Surinder K. Chawla, counsel for the applicant (through VC) Defendants are ex-parte

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FINAL ORDER

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Present Original Application was instituted by the applicant bank under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.52,58,883.54p (Rupees Fifty Two Lacs Fifty Eight Thousand Eight Hundred Eighty Three and Paisa Fifty Four only). The Original Application has been filed through Sh. Sourabh Kumar, Chief Manager of the applicant bank, who is competent to institute the Original

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Application vide Power of Attorney dated 21.07.2018, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant No.1 through its proprietor i.e. defendant no.2 approached the applicant bank for the grant of Cash Credit Limit of Rs.24.00 Lacs vide Loan Application which is Annexure A2 to this OA and further for its enhancement to Rs.35.00 Lacs. Defendant no. 3 stood as guarantor.

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The applicant Bank sanctioned the Cash Credit Limit of Rs.24.00 Lacs and further enhanced it to Rs.35.00 Lacs vide Sanction Letter dated 05.09.2019, which is Annexure A15 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant No.3 had mortgaged his immovable property i.e. land measuring 10 Marla at H. No. 391, Near Heera Lal Sheller, Ramgarh, Shani Mandir Road, Village Panjdhera, Tehsil Phillaur, District Jalandhar, Punjab vide Equitable mortgage of Sale Deed bearing vasika no. 587 dated 14.06.2004 along with it Translation, which is Annexures A14 to this OA.

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Documents executed:- Valuation Report dated 25.02.2021, which is Annexure AA to this OA; Demand Promissory Note, Agreement for Demand Cash Credit, Loan Agreement cum Hypothecation Deed for Priority/ Non- Priority Sector Advances, Letter of Description of Godown, Letter of Interest, Authority Letter, Letter of Repayment, Terms and Conditions, Letter of Guarantee & Memorandum all dated 15.12.2017, which are Annexures A3 to A7, A9, A10 to A13 to this OA; Letter of Undertaking, which is Annexure A8 to this OA; Demand Promissory Note, Composite Hypothecation Agreement, Letter of Continuing Security, Declaration Cum Undertaking Cum Authority, General Form of Guarantee, Declaration 90 C, Memorandum of Entry, Letter of Confirmation of Mortgage all dated 05.09.2019, which are Annexures A16 to A23 to this OA; Jamabandi for the year 2017-

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2018 along with its translation, which is Annexure A24 to this OA; Acknowledgement of Debt and Security dated 26.11.2020, which is

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Annexure A25 to this OA; Notice under Section 13(2) of SARFAESI Act dated 23.09.2020, which is Annexure A26 to this OA; Notice of Possession dated 27.01.2021, which is Annexure A27 to this OA; Legal Notice dated 13.03.2023 with postal receipts, which are Annexures A28 to A31 to this OA and Statement of account with certificate u/s 65B of Indian Evidence Act, which is Annexure A32 to this OA.

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The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in the loan account there was a debit of Rs.52,58,883.54p, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant bank 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 30.07.2024.

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In support of the OA, affidavit of Sh. Sourabh Kumar, Chief Manager, Bank of Baroda has been filed.

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Heard ex-parte arguments and perused record.

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It was argued by learned counsel (through Video

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Conferencing) that in view of the documentary evidence brought on record which had gone unrebutted, the applicant bank had proved its case. From the perusal of all the Annexures A1 to A32 to this OA, it is proved that the defendants approached applicant bank for availing of the loan facility which was 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 loan as per terms and conditions of the agreement between the parties. Subsequently, the account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.52,58,883.54p (Rupees Fifty Two Lacs Fifty Eight Thousand Eight Hundred Eighty Three and Paisa Fifty Four only) along

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with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the account.

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In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest @10.60%p.a. along with penal interest @2%p.a. with monthly rests from 01.02.2023 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 loan 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 @8.00%p.a. in the loan account 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.52,58,883.54p (Rupees Fifty Two Lacs Fifty Eight Thousand Eight Hundred Eighty Three and Paisa Fifty Four only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in the loan account from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant bank 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 bank 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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Parties to appear before Learned Recovery Officer of this Tribunal on 01.10.2024. . 15. Copy of this order be given dasti to the applicant bank 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: 06.09.2024 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Bank of Baroda v. M/S Nanak International and Others

Case brief

What is this about?

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Bank of Baroda v. M/S Nanak International and Others

Case brief

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