Allowed

Punjab National Bank v. Messrs Xenia India and Another

DRT21 Nov 2024OA/710/2022

Case brief

AI extract

What is this about?

Debt Recovery Tribunal adjudicated an original application filed by Punjab National Bank against a proprietorship concern and its proprietor for recovery of outstanding loans. The court allowed the petition, ordered a uniform interest rate, and directed the issuance of a Recovery Certificate.

What did the court decide?

Recovery Certificate issued; respondents liable to pay Rs. 93,29,010.40 with costs and 7.50% simple interest from the date of filing.

Punjab National Bank versus Messrs Xenia India and Another — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.710/2022

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 27.04.2022

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DATE OF DECISION: 21.11.2024

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Punjab National Bank, a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Head Office at Plot No.4, Sector-10, Dwarka, New Delhi110075 and amongst others one of its Branch at Phase 7, S.A.S. Nagar, Mohali through its constituted attorney Sh. Ravi Kumar, Chief Manager, presently working as SASTRA Head, Circle SASTRA Centre, SCF 43, 2^nd Floor, Phase 2, Sector 54, Mohali.

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……..Applicant

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Versus

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M/s Xenia India, a Proprietorship concern, C/o Urban Pind, SCO3, Sector 68, VPO Kumbra, SAS Nagar (Mohali)-160062 through its Sole Proprietor Ms. Sukhmani Sandhu.

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Smt. Sukhmani Sandhu D/o Sh. Narinder Singh, r/o H.No.4011, Sector 68, SAS Nagar, Mohali-160062.

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………. Defendants

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Advocates:

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Argued by Sh. Davis Jindal, Advocate proxy for Sh. Harsh Garg, Advocate 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 under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.93,29,010.40p (Rupees Ninety Three Lacs Twenty Nine Thousand Ten And Paise Forty Only). The Original Application has been filed through Sh. Ravi Kumar, Chief Manager of the applicant, who is competent to institute the Original Application vide General Power of

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Attorney along with Notification of Merger dated 17.11.2009, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendants had approached the applicant for CC Limit of Rs.2.5 Lacs and Term Loan of Rs.62.5 Lacs vide Loan Application dated 02.12.2014. Further, defendants had approached the applicant for enhancement of CC Limit to Rs.20.00 Lacs vide Request Letter dated 07.09.2017. Thereafter, defendants again approached the applicant for CECF of Rs.2.00 Lacs to this OA. Later, defendants had approached the applicant for WCTL under GECL Rs.18.63 Lacs vide Loan Application dated 02.06.2020. Thereafter, defendants again approached the applicant for GECL Term Loan of Rs.18.63 Lacs vide Loan Application dated 12.04.2021.

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The applicant sanctioned CC Limit of Rs.2.5 Lacs and Term Loan of Rs.62.5 Lacs vide Sanction Letter dated 26.12.2014, which is Annexure A2 to this OA. Further, applicant sanctioned the enhancement of CC Limit to Rs.20.00 Lacs vide Sanction letter dated 07.09.2017, which is Annexure A6 to this OA. Further, applicant sanctioned for CECF of Rs.2.00 Lacs vide Sanction Letter dated 30.04.2020, which is Annexure A8 to this OA to this OA. Later, applicant sanctioned WCTL under GECL Rs.18.63 Lacs vide Sanction Letter dated 05.06.2020, which is Annexure A9 to this OA to this OA. Thereafter, applicant sanctioned for GECL Scheme of Rs.11.32 Lacs vide Sanction Letter dated 11.05.2021, which is Annexure A13 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendants had hypothecated their movable properties, i.e.

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(i) Hypothecated the various raw materials viz manufacturing material, raw materials including excisable raw materials, stocks in process, semi-finished goods, finished goods (including bought out finished goods).

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(ii) Hypothecated the Book Debts, outstanding decrees, money receivables, Government subsidies, claims, bill contracts and

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investments, etc. vide Hypothecation of Goods and Books Debts to secure Cash Credit Facility dated 26.12.2014, which is Annexure A3 to this OA.

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Documents executed:-, Hypothecation of Goods to Secure a Demand Cash Credit & Hypothecation of Assets to Secure Term Loan all dated 26.12.2014, which are Annexures A4 and A5 to this OA; Hypothecation of Goods and Books Debts to secure Cash Credit Facility dated 13.10.2017, which is Annexure A7 to this OA; Agreement for WCTL for existing borrowers & Master Agreement dated 08.06.2020, which are Annexures A10 & A11 to this OA; Undertaking by the borrower dated 18.06.2020, which is Annexure A12 to this OA; Agreement for WCTL for existing borrowers & Master Agreement dated 12.05.2021, which are Annexures A14 & A15 to this OA; Balance and Confirmation Letters dated 20.07.2017, 15.06.2020 & 01.10.2020, which is Annexure A16 to this OA; Demand Notice dated 18.11.2021, which is Annexure A17 to this OA; Statement of Accounts along with Memoranda of Dues and Banker’s Book Evidence Act, which is Annexure A18 to this OA and Stock Statement, which is Annexure A19 to this OA.

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The loan accounts became irregular and was classified as NPA and after adjusting debit and credit entries in all the loan accounts there was a debit of Rs.93,29,010.40p, 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.

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The defendants were served notices to appear before this Tribunal. Sh. CK Jangra, Advocate appeared on behalf of defendants on 15.03.2024 and filed his Power of Attorney. Thereafter Ms. Ashtha Goel, Advocate appeared on behalf of defendants and filed her Memo of Appearance on 08.08.2024 but did not filed Power of Attorney. Since no one appeared on behalf of defendants, they were proceeded ex-parte on 18.11.2024.

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In support of the OA, affidavit of Sh. Ravi Kumar, Chief Manager, Punjab National Bank has been filed.

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Heard arguments and perused record.

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It was argued by learned proxy counsel through Video Conferencing that in view of the documentary evidence brought on record which had gone unrebutted, the applicant had proved its case. From the perusal of all the Annexures A1 to A19 to this OA, it is proved that the defendants approached applicant for availing of the loans 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, accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.93,29,010.40p (Rupees Ninety Three Lacs Twenty Nine Thousand Ten And Paise Forty Only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the accounts.

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In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @8.25%p.a. for Cash Credit, @11.4%p.a. for Term Loan & @7.5%p.a. for GECL with monthly rests from 01.04.2022 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 loans 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 @07.50%p.a. in all the loan accounts 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.93,29,010.40p (Rupees Ninety Three Lacs Twenty Nine Thousand Ten And Paise Forty Only) jointly and severally, with costs, current and future simple interest @07.50%p.a. in all the loan accounts 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 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 applicant 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.

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Any other application pending stands disposed of.

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 18.12.2024.

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Copy of this order be given dasti to the applicant 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.

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Pronounced by me in the open Tribunal . Dated: 21.11.2024

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(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Punjab National Bank v. Messrs Xenia India and Another

Case brief

What is this about?

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Punjab National Bank v. Messrs Xenia India and Another

Case brief

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What did the court decide?

What the court decided

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