Allowed

Canara Bank v. M/S Bombay Crockery House and Others

DRT23 Oct 2024OA/735/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant's original application for recovery of dues. The court fixed a uniform simple interest rate of 8.00% p.a. and issued a recovery certificate against the sant-hypothecated properties and personal assets of the respondents.

What did the court decide?

Recovery of Rs.49,71,514.61p jointly and severally with simple interest @8.00% p.a. from filing date till realization. Recovery certificate issued.

Canara Bank versus M/S Bombay Crockery House and Others — Money Laundering | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.735/2024

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 18.05.2024

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DATE OF DECISION: 23.10.2024

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Canara Bank, having its head office at: J.C. Road, Bangalore-560002 (Karnataka) having its branch office at: B.N.C., Ludhiana, Punjab through its Authorized Representative Sh. Parminder Singh.

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……..Applicant Versus 1. M/s Bombay Crockery House though its Proprietor: Jatinder Kaur Khurana # Lakkar bazar, Ludhiana, Punjab-141008 2. Smt. Jatinder Kaur Khurana W/o Sh. Gurinder Singh Khurana, R/o Hosue No. 250/25A, Block-D, Model Town Extension, Ward No. 45, Ludhiana-141003 3. Sh. Parminder Singh Khurana S/o Sh. Gurinder Singh Khurana, R/o B-VII, House NO. 673, Lakar Bazar, Ludhaina, Punjab-141008 4. Sh. Harmanjit Singh Khurana S/o Sh. Gurinder Singh Khurana, R/o B-VII, House NO. 673, Lakar Bazar, Ludhaina, Punjab-141008 ………Defendants Advocates: Argued by Sh. Amit Rishi, Advocate for the applicant Defendants are ex-parte FINAL ORDER 1. 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.49,71,514.61p (Rupees Forty Nine Lacs Seventy One Thousand Five Hundred Fourteen and Paisa Sixty One only). The Original Application has been filed through Sh. Parminder Singh, Authorized Representative of the applicant, who is competent to institute the Original Application

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vide Authority Letter dated 10.10.2022, which is Annexure A1 to this OA. 2. The brief facts of the OA are that the defendant No.1 through its proprietor i.e. defendant no.2 had approached the applicant for the grant of Overdraft Limit against Property (ODAP) of Rs.20.00 Lacs vide Loan Application dated 31.10.2014, which is Annexure A2 to this OA and Further approached the applicant for its enhancement upto Rs.35.00 Lacs vide Request Letter dated 18.08.2018, which is Annexure A3 to this OA. Thereafter from time to time defendants approached the applicant for the renewals of OCC Limit vide Request Letters dated 04.01.2016, 28.03.2017, 13.11.2020 & 30.03.2022 which are Annexures A9, A19, A15 & A20 to this OA. Later defendants once again approached the applicant for grant of the Term Loan (Guaranteed Emergency Credit Line GECL- Working Capital Term Loan-WCTL) of Rs.5.50 Lacs to this OA. 3. The applicant sanctioned the Cash Credit Limit of Rs.20.00 Lacs under CGTMSE scheme vide Sanction Letter dated 31.10.2014, which is Annexure A4 to this OA and further enhanced the OCC limit upto Rs.35.00 Lacs vide Sanction Letter dated 31.08.2018, which is Annexure A5 to this OA. Thereafter from time to time applicant sanctioned the renewals of OCC Limit of Rs.35.00 Lacs. Later applicant sanctioned a Term loan of Rs.5.50 Lacs under GECL-WCTL scheme vide Sanction Letters dated 18.06.2020, which is Annexure A6 to this OA and the terms and conditions were duly accepted by the defendants. 4. Defendant no.1 had hypothecated its movable properties i.e. hypothecated the stocks and book debts vide Supplemental Loan Agreement and Agreement-cum-Hypothecation dated 31.08.2018 and 18.06.2020, which are Annexures A11 and A16 to this OA. Documents executed:- Copy of Cash Credit Agreement and Pronote both dated 31.10.2014, which are Annexures A7 & A8 to this OA; Pronote, Link Letter in respect of enhancement of credit facilities and Subordinate Agreement all dated 31.08.2018, which are Annexures

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A12 to A14 to this OA; Term Loan Agreement, Take Delivery Letter to DPN and Letter of Proprietorship all dated 18.06.2020, which are Annexures A17 to A19 to this OA; Link Letter dated 30.03.2022, which is Annexure A21 to this OA; Guarantee Covering Letters dated 31.10.2014, which are Annexures A22 & A23 to this OA; Letters from Guarantors both dated 04.01.2016 & 28.03.2017, which are Annexures A24 & A25 to this OA; Acknowledgement of Debt and securities dated 04.01.2016, 28.03.2017, 31.08.2018 & 30.03.2022, which are Annexures A26 to A30 to this OA; Recall Notice dated 03.04.2023 with Postal Receipts, which is Annexure A31 to this OA and Statements of accounts along with the statement of uncharged interest, duly certified under Banker’s Books Evidence Act, 1981, which are Annexures A32 & A33 to this OA.

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The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in both the loan accounts there was a debit of Rs.49,71,514.61p, 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 but no one appeared on behalf of defendants and they were proceeded ex-parte on 19.10.2024. Today Sh. Akhilesh Vyas, Advocate filed an IA No.1705/2024 for setting aside the ex parte order dated 19.10.2024 and the same was dismissed.

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In support of the OA, affidavit of Sh. Parminder Singh, Authorized Representative, Canara Bank has been filed. 8. Heard arguments and perused record.

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It was argued by learned counsel 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 A33 to this OA, it is proved that the defendants approached applicant for availing of the loan facilities which were

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granted to them and for that they had executed all the relevant documents in favour of the applicant. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, both the 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.49,71,514.61p (Rupees Forty Nine Lacs Seventy One Thousand Five Hundred Fourteen and Paisa Sixty One only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of both 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 @11.25%p.a. in Cash Credit Limit and @9.40%p.a. in Term Loan plus penal interest @2%p.a. with monthly rests in both, from 13.05.2024 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 both 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.49,71,514.61p (Rupees Forty Nine Lacs Seventy One Thousand Five Hundred Fourteen and Paisa Sixty One only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in both 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

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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 04.11.2024.

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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 .

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Dated: 23.10.2024

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(MRIDULESH KUMAR SINGH) Presiding Officer,

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DRT-III, Chandigarh

Canara Bank v. M/S Bombay Crockery House and Others

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/S Bombay Crockery House and Others

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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