Allowed

Punjab National Bank v. Messrs Sunshine Fastech and Another

DRT12 Mar 2024OA/737/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an Original Application filed by Punjab National Bank for recovery of dues from M/s Sunshine Fastech and its proprietor. The court observed defendants were absent and upheld the bank's claim for principal, costs, and interest, modifying the interest rate to 7.50% per annum.

What did the court decide?

Declaration of liability to pay Rs. 1,10,12,208.63p with costs and simple interest at 7.50%p.a.; Recovery Certificate issued; filing of order ensured.

Punjab National Bank versus Messrs Sunshine… — Contract and Commercial Disputes | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.737/2022

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 28.02.2022

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DATE OF DECISION: 12.03.2024

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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 the successor of Oriental Bank of Commerce/United Bank of India, by scheme of amalgamation of Oriental Bank of Commerce/United Bank of India, passed by the Central Government under section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act 1980, through one of its Branch, having offices, one at Shaheed Bhagat Singh Nagar, Pakhowal Road, Ludhiana, (Punjab), through Sh. Vineet Dhingra, General Attorney and Principal officer of the bank

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……..Applicant

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Versus

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M/s Sunshine Fastech, 2043/2, Gobind Nagar, PAU Road, Ludhiana (Punjab), Through its Proprietor, Sh. Karan Maheshwari

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Factory Address : - Plot No.485/16, Street No.4, Giaspura Road, Ludhiana, (Punjab)

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Sh. Karan Maheshwari, S/o Sh. Rajesh Kumar, R/o H.No.1045, Street No.3, Panj Peer Road, Mandeep Nagar, Ludhiana, (Punjab)

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………Defendants

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Advocates:

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Argued by Sh. Arpit Chawla, counsel proxy for Sh. Rajan Chawla, counsel for the applicant 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

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Institutions Act, 1993, against the defendants for recovery of Rs.1,10,12,208.63p (Rupees One Crore Ten Lacs Twelve Thousand Two Hundred Eight and Sixty Three Paisa only). The Original Application has been filed through Sh. Vineet Dhingra, General Attorney and Principal Officer of the applicant bank, who is competent to institute the Original Application vide General Power of Attorney dated 05.12.2005, 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 the grant of Cash Credit Hypothecation Limit of Rs.67.50 Lacs and Term loan of Rs.22.50 Lacs for purchase of machinery for business of manufacture of Nuts, Bolts and Screws under the scheme of CGTMSE vide Loan Application, which is Annexure A2 to this OA.

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The applicant Bank sanctioned the Cash Credit Hypothecation Limit of Rs.67.50 Lacs, Term loan of Rs.22.40 Lacs and later a Working Capital Term loan under GECL scheme of Rs.13.00 Lacs vide Sanction Letters, which are Annexures A3 and A7 to this OA; and the terms and conditions were duly accepted by the defendants. The applicant bank subsequently renewed-cum-reduced the CC Limit to Rs.66.50 Lacs after considering the request of defendants vide Sanction Letter dated 11.11.2020, which is Annexure A11 to this OA.

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Defendant No. 1 through its proprietor i.e. defendant No.2 h ad hypothecated its movable properties i.e. Stocks, Book debts and receivables and Plant and machinery vide A greement of hypothecation of asset s, which is Annexure A4 to this OA.

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Documents executed:- Agreement of term loan, Common agreement both dated 14.12.2018, which are Annexures A5 and A6 to this OA; D.P. note, Master agreement & Agreement for working capital term loan all dated 26.08.2020, which are Annexures A8 to A10 to this OA; Balance confirmation letters dated 12.11.2020, which are

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Annexures A12 and A13 to this OA; Legal notice along with postal

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receipt dated 01.09.2021, which is Annexure A14 to this OA and Statements of accounts along with Certificate under Bankers’ Book of Evidence Act, which are Annexures A15 to A17 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 loan accounts there was a debit of Rs.1,10,12,208.63p, 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 12.05.2023.

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In support of the OA, affidavit of Sh. Vineet Dhingra, General Attorney and Principal Officer, Punjab National Bank has been filed.

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Heard ex-parte arguments and perused record.

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It was argued by learned proxy counsel 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 A17 to this OA, it is proved that the defendant No.1 through its proprietor i.e. defendant No.2 approached applicant bank for availing of the loan facilities which were 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 loans 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 bank is entitled to recover a sum of Rs.1,10,12,208.63p (Rupees One Crore Ten Lacs Twelve Thousand Two Hundred Eight and Sixty Three Paisa 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 bank in relief clause has claimed interest @9.40%p.a. in CC Limit, @8.40%p.a. in Term loan account and @7.50%p.a. in WCTL account with monthly rests, in all; from the date of filing of this OA 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 @7.50%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.1,10,12,208.63p (Rupees One Crore Ten Lacs Twelve Thousand Two Hundred Eight and Sixty Three Paisa only) jointly and severally, with costs, current and future simple interest @7.50%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 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.

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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 19.03.2024. 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: 12.03.2024 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Punjab National Bank v. Messrs Sunshine Fastech and Another

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. Messrs Sunshine Fastech and Another

Case brief

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