Allowed

Canara Bank v. Kohinur Timber House

DRT28 Aug 2024OA/62/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the banking company's application under Section 19 of the RDBFI Act for issuing a recovery certificate of nearly Rs. 47.80 lakhs against the borrower and guarantor, who failed to repay enhanced credit and GECL loans.

What did the court decide?

Issued recovery certificate for Rs. 47,80,721.75 against defendants jointly and severally liable; proceedings against secured and personal assets allowed.

Canara Bank versus Kohinur Timber House — Banking and Recovery | DRT (2024)

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oA 62l2024lDRl-Guwanat

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IN THE DEBTS RECOVERY^{TRIBUNAL,GUWAHATI}

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(North Eastern Region)

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(Tribunal of Assam, Nagaland, Meghalaya, Manipur,^Mizoram, Arunachal^{Pradesh& Tripura)}

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Betors Shri Shly Sharan Dubov. Pr$idinq^Officer

O.A. No. 622024

ln tho mattBr of -

CANARA BANK

Kharupetia Branch Chandra Complex, Mahabir Road, Kharupetia, District- Darrang, PIN-784115, Assam

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Applicant

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Vs.

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I. iI/S KOHINUR TIiIBER HOUSE

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Proprietor- Mr. Moinul Hoque Address- C/o- Kohinur Timber Products,

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N.H.-15, Dalgaon Town, P.O.- Dalgaon,

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P.S.-Dalgaon, PIN-7341 16, Kharupetia District- Darrang, Assam.

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illR. MOINUL HOQUE

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Son of Amzad Ali

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Address- Village No.2, Dhansiri Kash, P.O.- Shyamtilla, P.S.- Dhula, PIN-734190,

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Darrang, Districl- Darrang, Assam.

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itR tBRAHllri ALI

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Son of Huraun Ali

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Address- Village- Mousita Gasorgor, P.O.- Dalgaon, P.S.-Dhula, PIN-7841 90, Oarrang, Oistrict- Darrang, Assam.

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Oefendants

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Prg3once of the Counsol :

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For the Applicant : Mr. Ridip Kumar Dutta, Advocate For the Defendants : None (Ex-parte)

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Oaled :2810812024

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JUDGMENT

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This is an application under section 19 of the Recovery of Debts Oue to Banks and Financial lnstitutions Act, 1993 liled by the CANARA BANK, Kharupetia Branch Chandra Complex, Mahabir Road, Kharupetia, Distric!^{Darrang, PIN-784115,} Assam, with a^prayer to issue Recovery Certificate for the sum of R3.47,80,721.75

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'Mi'? DRT. Guwahat

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o.A 6m024,/oRI-Gu\iah.ti

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(Rup66s Forty-Seven Lac! Eighty Thou3and Soven Hundred Twentyono snd Paba Seventy-Flvo) only as on 08.01.2024 against the defendants with pendentelite and futuro interest at the contractual rate till rsalization, along with cost and other relief.

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

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the O6fendant No. 1 is the Proprietorship firm and Dofendant No. 2 is the Proprietor, and Oefendant No. 3 is the Guarantor of the loan facility availed by Defendant No. 2 in the name of Defendant No. 1 firm from time to time.

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The Defendant No. 2 being the Proprietor/Borrower to avail the loan had approached the Applicant Bank and applied for financial assistance for Cash Credit Loan of Rs.^'17.00 Lacs under Canara Trade Loan Scheme by submitting Loan Application dated 28.02.2018 and after considering the said application, the Applicant Bank vide its Sanction Memorandum dated 09.03.2019 had sanctioned the Defendant No. 1 a Cash Credit Loan of Ra. 17.00 Lacs with rate of interest A'l'l't..10o/o per annum. lt is further stated hsrein that the loan is repayable on demand subject to furthsr ranewaureview in a year, as well against Hypothecation of stocks in business described in Schedule-A, and EMTD of landed property more particulady described in Schedule-B of the Application as well as personal guarantee of Defendanl No. 3.

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ln connection with the sanction of the Cash Credit Loan limit of Rs. 17.00 Lacs, sanclioned by the Applicant Bank and availed of by tha Oefendant No. l, the Defendanl No.2 as tha Proprietor had signed and executod a Letter of Proprietorship dated 09.03.20'18, Pronote for Rs. 17.00 Lacs dated 09.03.2018, Cash Credit Agreement datgd 09.03.2018, Letter of Undertaking re: Loans/advances dated 09.03.2018, and lhareby agreeing to all the terms and conditions contained thargin in favour of the Applicanl Bank as security for repayment of the loan.

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The Oefendant ho. 3. stood as Guarantor of the loan facility availed in the name of Oefendant: No. 1 and thereby executed the Guarantee Agreement dated 09.03.2018.

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The Defendant No. 2 being also the mortgagor have created Equitable

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sld, )Bla Prcsiding DRT

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o A 62/2o2,voRT-Guwahal

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Mortgage of the landed^{propertyin his name to securethe loans availedand} according deposited^{beforethe Applicant Bank the Sale DeedNo' 64/2018dated} 30.01.2018, Jamabandi^{copy, Land Revenue rsceipt and an Affidavit, and hereby} availed the loan tacility.

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The Defendant^{No. 2 being the Proprietor/Borrower had again approached the} Applicant Bank and applied^{for enhancement of the earlier CashCredit Loan limit for} another^year from^{earlier Rs. 17.00 Lacsto Rs. 27 00 Lacs vide Loan Application'} And after considering^{the said application,the Applicant Bank vide its Sanction} Memorandum dated^{14.08.20'19had enhancedthe Cash Credit Loan limit of the} Defendant No.1 to^{Rs. 27.00 Lacswith rate of Interest : 10.55% per annumlt is} further stated that the^{loan is repayable in (1) One year, as against EMTDof landed} property described in Schedule-B of^{the Application.}

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ln connection^{with the enhancement of the Cash Credit Loan limit to Rs 27 00} Lacs, sanciioned^{by the ApplicantBankand availed of by the DefendantNo l, the} Defendant No. 2^{as the Proprietor/Borrowerhad signed and executedRequest For} Overdrafr Facilities^{dated14.08.2019, Pronoteof Rs. 27 00 Lacsdated14 08 2019,} Supplemental^{Agreementdated 14.08.2019,Link Letler to be obtainedwhen} Bnhancement is^{considereddated'14.08.2019,and thereby agreeingto all the terms} and conditions contained^{thereinin favour of the Applicant Bank as securityfor} repayment of the loan^{of the Applicant Bank.}

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The Defendant No. 2^{had againon 1006,2020 appliedfor enhancementof} earlier OCC Loan^limit of^{Rs.27OOLacsto further Rs. 35 50 LacsvideLoan} Application for enhancement^{The ApplicantBankafter verification had duly} anhanced the^{loan limit to Rs. 35.56 Lacs on 10.06.2020.The loan is repayable in} Two^{(2) years} subject^{to furtherrenewal,with interestat 10 05%as well is secured} by EMTD of landed^{property more particularly describedin the Schedula-B of the} Application.

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ln connection with the enhancement^{of the Cash Credit Loan limit to Rs. 35 50} Lacs, sanctionsd by ths^{APplicant Bankand availed of by the Defendant No l, the} Defendant No. 2 as the Proprietor/Borrower^{had signedand executed Pronote of}

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lliltlrus-"arl4, >glosf,q I Presidrng Otfcea ' DRT Guwahati

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O A 62/2024loRT-Guwahair

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Rs. 8.50 Laca dated 10.06.2020,^{Supplemental Agreementdated10.06.2020, Letter} of Renewal dated 10.06.2000,^{Link Lotter ln respect of Enhancementof Credit} Facilities dated^'10.06 2020,^{and thereby agreeing to all the terms and conditions} contained therein^{in favour of the Applicant Bank as securityfor repayment of the} loss of the Applicant Bank.

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The Defendant No.2 had on^{11.06.2020opted for a GECL Loanand} accordingly accepted the^{proposal made by the Governmentthrough the Bankand} signed sad executed the Offer^{Letter/Circular datedl'1.06.2023,Undertaking Letter} from the Borrower's datad^{11.06.2020, the ApplicantBank vide its Sanction} Memorandum deed^{11.06.2020had sanctioned the GECE'loan limit to Rs 500} Lacs. lt is further stated that^{the loan is repayable in 48 EMI'S at Rs 9,300/- with} interest at 7.5% and^is covered^{under CGFMU. The loanis as against hypothecation} of stocks and^goods described^{in Schedule-Aof the Application}

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ln connection with the GECL^{loan sanctionedby the Applicant Bankand} avaibd of by the Defendani^No. l,^{theDefendant No. 2 as theProprietor has signed} an Agreement cum^{Deedof Hypothecationdated '11.06.2020 and thereby agreeing} to all the terms and conditions^{containedthereinin favour of the ApplicantBank as} security for repayment of the^{loanof the Applicant Bank.}

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The Defandant No. 2 being Borrower^{to avail the loan had again approached} the Applicant Bank and^{applied for GECL-'I Extension Leanlimit of Rs. 5.00Lacs} vide Loan Application daled 01.12.2021.^{And'after considering the said application,} the Applicant Bank vide its Sanction^{Memorandumdaled 01.12.2021 had extended} (as fresh) the Loan limit. The loan is repayableⁱⁿ 60^{EMI'S alongwith24 months} moratorium^period, rate of interest al^{7.50o/o per annum The loan is as against} Hypoihecation of^goods describ€d in^{Schedule-A as well as EMTD of landed} property described in Schedule-B of the Application. The loan is fully covered under NcGTC scheme.

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ln connoclion with the extension ol the GECL^{ExtensionLean} of^{Rs. 5.00} Lacs, sanctioned by the Applicant Bank^{and availed of by the DefendantNo 2} as the Borrower has signed and executed^{Pronate dated 01.'12.2021,TermLoan}

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*,?'ffi,33

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DRT. Guwahali

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O A 62/2024lDRT-Guwahail

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Agreement dale 01.'12.202'1, Letter of Undertaking re : Loans/advances dated 01.12.2021, Letler of Undertaking from Borrowers and Link Letter to be obtained from existing Borrower, Guarantor dated 01.12.2021, and thereby agreeing to all the terms and conditions contained therein in favour of the Applicant Bank as security for repayment of the loan ofthe Applicant Bank.

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The Defendant No. 2 being the Borrower had again approached the Applicant Bank and applied for renewal of the earlier CC limit for another^year of Rs. 35.50 Lacs vide Loan Application daled 29.06.2022 under Canara Vyapar Scheme. And after considering the said application, the Applicant Bank vide its Sanction Memorandum dated 29.09.2022 had renewed the OCC of the Defendant. No. 1 to Rs. 35.50 Lacs with rate of interest at 9.05%^per annum. ll is further stated that the loan is repayable in (1) Ona year, as against hypothecation of stocks and^goods described in Schedule-A as well as EMTD of landed^property more^particularly described in Schedule-B of this Application.

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ln connection with the renewal of the OCC Loan limit of Rs. 35.50 Lacs, sanctioned by the Applicant Bank and availed of by the Defendant No. 1. the Oefendant No. 2 had signed and executed Letter of Renewal daled 29.06.2022 fo( Rs. 35.50 Lacs, the Oefendant No. 2 signed and executed Link Letter to be obtained from existing Borrower/Guarantot daled 29.06.2022 and thereby agreeing to all the terms and conditions contained therein in favour of the Applicant Bank as security for repayment of the loan of the Applicant Bank.

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The Defendants had availed of the said loan facility from the Applicant Bank, but have not paid the loan amount as^per the terms and conditions as agreed upon with the Applicant Bank, inspite of repeated demands and requests by the Applicant. Bank dated 2O.U.2023, 18.09.2023 the Defendants failed to respond to the same. However, the Defendant signed Acknowledgement of Debt and Security dated 02.06.2023. And accordingly the Applicant Bank through its Authorized Ofticer had issued notices under Seclion l3(2) of the SARFAESI Act 2002, dated 20.09.2023 to the Oefendant Nos. 1 and 2. Having failed to comply the same, the Applicant Bank

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Si, Presiding DRT Guwah

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O A 62/2024/ORT-Guw.hatr

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issued Possession Notice under Section 13(4) of SARFAESI Act, dated 15.12.2023. Also, the Applicant Bank through its empaneled Government Valuer had conducted a Land and Building valuation thereon and submitted its valuation report dated 05.07 .2022.

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The Statements of Accounts- 4159285000008^(OCC), 4159755000037 (GECL-1) and 170002544411 (GECL-1 Extnsn) maintained by the Applicant Bank in the usual and ordinary course of business shows that there is an outstanding balance of Rs. 38,95,328.51p in the OCC Loan^{Account as on 08.01.2024 andRs.} 3,57.938.3'l^p in the GECL Loan as on^{17 j2.2023after waiving Penal lnterestof Rs.} 1,5721-, as well Rs. 5,27,459.93p in the GECL-1^{Extension Loanas on 01.01.2024} atter waiving the Penal lnterest of Rs.^{458/-. Thus the total amount payable by the} Defendants comes to Rs. 47,80,721.75pl- as on^08.01.2024. The^accounts- 4159285000008, 4159755000037,'17000254441 1 became N.P.A on 15.09.2023 resp€ctively and the Defendant Nos. I and 2 are legally bound and^jointly and severally liable to repay the said amount to the Applicant Bank with^interest till realization with cosl and charges

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The applbant bank thus became constrained to file the^present Original Application for the recovery of RB. 47,E0,72'1.75 (Rup$s Forty-Soven Laca Eighty^Thousand Soyen Hundred Twenty-one and Pab. Seventy-Five) only^{as on 08.01.2024 along} wi0r interest and cost of the application.

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After filing of tha OA the Tribunal issued^notices upon^{the defendants through} registered post and the applicant bank filed service report on 22.03.2024 and brought on record the^postal receipts along with track consignment^{repolt which} shows^that notice have be6n served upon the defendants. Hence service^is complgted upon^the defendants. Even after^proper service ol^{notice upon the defendantsthare wasno} representalion on behalf of the defendants either by the counsal ot the^p€rsonand hence lhe defendants were set ex-parte on^{10-05-2024 and their rightto file written} statement cum evidenca on affidavit was closed and the^{matterwas postedfor} hearing on behatf of the applicant bank.

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Supporting the claim of the applicant bank Sri^{PrakashSharma, Senior Manager}

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-dirTl.arc^Q"&4 ,.,0"n#1{'{⁽ DRT, Guw€hati

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O A 62,2024oRT.cuwahrti

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of the Applicant Bank has filed evidence on affdavit coupled with the secunty documenb marked as Exhibit 1 to SO, supporting the claim of the applicant bank.

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Heard the laamed counsel for the applicant bank who prayed for issuance of Recovery Certiftcate against the defendants as per pleadings made in the Application, supported by evidence on afiidavit of their witness who aftirmed on oath the execution of the security and other documents by the defendant and also execution of their own documents relied upon, which have been marked exhibits.

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Considering the tacts and circumstances of the case, I am of the considered view that the documents filed by the appticant bank are supporting the claim of the applicant bank and establishing the liability of the defendants. I is proved that the defendants are^jointly and severally liabte to pay to the applicant bank the ctaim made in the Original Application. The loans were obtained and documents have been executed on 09.03.2018, 14.08.2019, 10.06.2020, 1,t.06.2020, 01.12.202i & 29.06.2020. Acknowledgement of Debt and Security is dated 02.06.2023. Moreover afrer perusing the documents on record and taking into consileration of the facb and circumstances of th€ case, Lind that the mortgage has been qeated by the defendant No.2 where the limitation available is for 12 years and as such taking into account of the creation of the mortgaga the application appears to have been filed well within the period of limitation. The accounts became NpA on^.15.09.2023 and the OA has been file,J on 12.02.2024. Hence, the OA is fited well within the period of limitation and this Tribunal having a iurisdiction to adjudicate the Original Apptication.

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Considering the unchallenged/ unrebutted version of Sri^prakash Sharma, the applicant's witness and all the documents marked as exhibits, inctuding 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 entifled to get the Recovery Certificate as prayed for.

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ln the result, the presenl Original Application No. 62 of 2024 is allowed with cost as under i

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i) The defendants No. 1, 2 & 3 are jointly and severally tiable to pay to the applicant bank a sum of Rs.47,80,721.75 (Rupee3 Forty-Seven Lacs Eighty

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stiie0arn r).lr{. d "*"".no#8P4'{ DRT, Guwahali

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OA 622024/DRl-Guwahao

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Thouland Seven Hundred Twontyone^{and Pabe Ssventy-Five)only with} pendentelite and future interest @11.10% per annum with monthly rests from 09.01.2024 till the date of full^{paymenurealizationand also cost of the} application.

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ii) The charge ofthe certmcated amount be kept alive on^{hypothecated properties,} as described in Schedule-A of the OA till the^{amount is realizedin full}

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iii) The charge oI the certificated amount be^{keptalive on mortgaged property i.e.} All that^part and^parcel of land measuring^{1 Bigha coveredby Dag No. 800,} P.P. No. 253 in Village- Dhansirikash, Mouza- Shyamabari,^{District- Darrang,} Assam, boundsd by- North: Moinul^{Hoque;South: lbrahimAli;East:AsharAli;} West: Road, as described in Schedule-B of the OA till the amount^{is realizedin} full.

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

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

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vl) 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^{tile the cost memo} within 2 weeks from today.

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vll) lssue Recovery Certilicate accordingly^for a sum R!.^{47,80'721.75 (Rupoo3}

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Forty-Soven Laca Elghty Thousand Seven Hundied Twontyone and Paisa Sovonty-Fivo) only in favour of the applicant bank sgainst the defendants No. 1, 2 & 3.

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vlli) Communicate copy of this order to the concerned^parties.

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This order is dictated and corrected by the undersigned.

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Judgment dated 28h August 2024, signed and^{pronounced in} the Tribunal today under my signature.

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Copy of the JudgmenuFinal Order be uploaded in the Tribunal's Website and file

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be consigned to Record Room.

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Sh,rQho'4i^A'dr^-/>sb&h.l ,( (Shiv Sharan Dutleylt^tU Presiding Officer DRT, Guwahati.

Canara Bank v. Kohinur Timber House

Case brief

What is this about?

What did the court decide?

Canara Bank v. Kohinur Timber House

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

Coram

Case details

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