Allowed

Canara Bank v. M/S Sai Traders and Another

DRT14 Nov 2024OA/684/2023

Case brief

AI extract

What is this about?

A Debt Recovery Tribunal allowed an interim application filed by Canara Bank to recover Rs. 21.20 lakhs from M/s Sai Traders and its proprietor. The court found defendants guilty of default and decreed recovery with simplified interest, while issuing a recovery certificate.

What did the court decide?

Decree for recovery of Rs.21,20,506 with costs and 8% simple interest; issuance of Recovery Certificate.

Canara Bank versus M/S Sai Traders and Another — Money Laundering | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.684/2023

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 27.04.2023

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DATE OF DECISION: 14.11.2024

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Canara Bank, a Body Corporate and nationalized Bank constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act 1970 having its head office at # 112 J.C. Road, Bangalore and amongst others one of its branch at Phase-VII, SAS Nagar Mohali, Punjab represented through its official cum General power of Attorney Smt. Rekha Mehra.

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……..Applicant

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Versus

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M/s Sai Traders through its Prop. Sh. Pawan Kumar, Shop No.1, Jashan Towers, near Dhillon Palace, Zimidara Enclave, Bhabat, Zirakpur, SAS Nagar Mohali, Punjab

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2. Sh. Pawan Kumar S/o Sh. Kimti Lal R/o House No.650, Ward No.10, Shiva Enclave, Zirakpur SAS Nagar, Punjab.

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….……Defendants

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Advocates:

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Argued by Ms. Hemlata Issar, Advocate for 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.21,20,506.00 (Rupees Twenty One Lac Twenty Thousand Five Hundred Six Only). The Original Application has been filed through Smt. Rekha Mehra, Power of Attorney Holder o f the applicant bank, who is competent to institute the Original Application vide Power of Attorney dated 10.01.2014, 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 had approached the applicant bank for

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the grant of CC Limit of Rs.20.00 Lacs vide Loan application dated 08.11.2021, which is Annexure A2 to this OA. 3. The applicant Bank sanctioned the CC Limit (covered under CGTMSE) of Rs.20.00 Lacs vide Sanction Letter dated 16.11.2021, which is Annexure A4 to this OA and the terms and conditions were duly accepted by the defendants. 4. Defendant no.1 had hypothecated its movable Asset i.e. Hypothecated the future Stocks of Raw materials, goods in process of Manufacture and all finished and manufactured goods and articles such as cement and other construction material and book debts vide Cash Credit Agreement dated 18.11.2021, which is Annexure A5 to this OA. Documents executed:- Registration Certificate 18.11.2021, which is Annexure A3 to this OA; Pronote, Letter of Undertaking both dated 18.11.2021, which are Annexures A6 & A7 to this OA; Notice dated 16.11.2021, 09.12.2022, & 27.02.2023, which are Annexures A8 to A11 to this OA; Legal Notice dated 21.03.2023 with postal receipts, which is Annexure A12 to this OA and Statement of Accounts along with certificate, which are Annexures A13 to this OA. 5. The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs.21,20,506.00, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant requested to accept the application and to issue Recovery Certificate accordingly. 6. 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 11.11.2024. 7. In support of the OA, affidavit of Ms. Smt. Rekha Mehra, Power of Attorney Holder, Canara Bank has been filed. 8. Heard arguments and perused record. 9. It was argued by learned counsel through video conferencing that in view of the documentary evidence brought on record which had

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gone unrebutted, the applicant bank had proved its case. From the perusal of all the Annexure A1 to A13 to this OA, it is proved that the defendants approached applicant 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, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.21,20,506.00 ((Rupees Twenty One Lac Twenty Thousand Five Hundred Six Only) along 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 @13.40%p.a. with monthly rests from 20.03.2023 till the realization. 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. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.21,20,506.00 ((Rupees Twenty One Lac Twenty Thousand Five Hundred Six 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 shall be entitled to recover aforesaid amount from the sale of

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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. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 10.12.2024. 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: 14.11.2024. (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Canara Bank v. M/S Sai Traders and Another

Case brief

What is this about?

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Canara Bank v. M/S Sai Traders and Another

Case brief

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