Allowed

Punjab National Bank v. Messers Bajrang Steel Furniture

DRT21 Oct 2024OA/74/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the application filed by Punjab National Bank seeking issuance of a Recovery Certificate against respondents who failed to repay secured loans and demand notices. The court found documents establishing joint and several liability unchallenged and issued the certificate with interest.

What did the court decide?

Issuance of Recovery Certificate for Rs. 28,24,599.68 with interest and costs; charge kept alive on hypothecated properties.

Punjab National Bank versus Messers Bajrang Steel… — Contract and Commercial Disputes | DRT (2024)

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O A 74l2o23loRl-Guwahal

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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, iranipur,^{Mizoram, Arunachal Pradesh& Tripura)}

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Bofore Shri Shiv Sharan Dubev.^{PresidinqOfficer}

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O.A. No.7412023

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ln the matter of - PUNJAB NATIONAL BANK^{(EBtwhileUnited Bank of lndia)} Lalganesh Branch, Lalganesh Tinali, Guwahati, Assam.

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. .APPlicant

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Vs.

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't. ii,S BAJRANG STEEL FURNITURE A. K. Azad Road, Back^{Side of Rolling Mill}

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Barsapara, Guwahati-781^{01 8.}

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SRI ARUN ROUT Proprietor of M/s Bajrang^{Steel Furniture} (Son of Late Subay Raut)

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A. K. Azad Road,^{Back Side of Rolling Mill}

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Barsapara, Guwahati-781^{01 8.}

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Def€ n da nts

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Prosence of the^Counsel:

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: Mr. Shafiqul Haque,^Advocate For the Applicant For the Defendants^: Mr. Abhijit Choudhury,^Advocate (Right to file WS cum EA closed)

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Oaled .211'1012024

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JUDGMENT

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under section 19 of the^Recoveryof This is an apPlication Oebts Due to^{Banks and Financial lnstitutionsAcl, 1993 filed by the PUNJAB} NATIONAL BANK^{(E6twhileUnited Bank of lndia), Lalganesh Branch'Lalganesh} Tinali, Guwahati,^{Assam, with a prayerto issueRecoveryCerlificate for the sum of} Rs. 28,24,599.68^{(RuP6os Twonty'Eight Laca Twonty-FourThousend Five} Hundred Ninety+{ino^{and PabaSixty-Eight)onlyas on 3101 2023 againsi the} defendants with^{pendentelileand futureinterestat contractual rate withmonthly rests} till realization,^{alongwith cost and other relief.}

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A few facts^{giving rise to the present application are as under'} $f drilAr^ >,rl.* p,""'o,no o?'f}lD'L!( oRT. Guwahali

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2 OA 7/U202:!ORT'GMahsti

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TheDefendantNo,2astheproprietorofDefendantNo.lfirmhadapproachedthe Applicant Bank^{and applied for linancial assisiance vide a Loan Applicationdated} 04.12.200g^{afrer consideringthe said application'the Applicant Bank vide its Sanclion} Letterdatedzg'lz.2ooshadSanclionedacashcredit(cc)ofRs.200,000/.tothe Defendants^{with interest chargedat 12.250lo per annumwith monthly rests along with penal} interest at applicable^{ratein case of default' Thecash credit limitwas to bs repaidon} demand. The^{Defendantno 2 as theproprietorof the defendant no l firm had signed on} the said Sanclion^{Letter thereby agreeing to all the terms and conditions containedtherein'}

¶24

ln conneclion^{with the sanclion of theaforesaidcredit facility sanciioned by the} Applicant Bank^{andavailed of by the Defendants'an Agreement of Hypothecation of Debts} and Movable^{Assets and an Agreement and Hypothecation MovablePlantandMachinery} both dated 2g:l2.2OOB^{have been signed and exeqrted by theOetendantNo' 2 as the} proprietor ot the Defendant^{No. 'l lirmin favourof theApplicant Bankas security for} repayment of^{the loan facility thereby agreeingto all the terms and conditionscontained} therein and^{thereby hypothecatedthe Tootsand Machineries'Stocks' BookDebts'} Receivables etc.^{(more specifically described in schedule-A of the oA) with the Applicant} Bank.

¶25

As security for^{repayment of the aforesaid loan facilities availed of by the Defendant} No.lfirm,theDefendantNo.2hadexecutedaOemandPromissoryNotedated 19'l2.2oosandLetterofcontinuitydated2g.l2.2ooS,therebypromisingtopaythe Applicant Bank the^{entire loan amountreceivedtogether with interest @1175o/o per} annum with monthly^{rests on demand}

¶26

The Defendant No. 2^{as the proprietor of OefendantNo llirm had again} approachedtheApplicantBankandrequestedforenhancementoftheexistingcfedit facility and afrer mnsidering^{the said request, applicantbank had enhanced the cash credit} limit of Rs.2.OO Lacs^{to Rs.5.OO Lacsvide Sanction Letierdated 26052009to the} Defendants with interest^{charged at 11.75% per annumwith monthly resbalong with penal} lnterest at applicable rateⁱⁿ case^{of detault.The Cashcredit limitwas to be repaid on} demand. The Deiendanl no. 2 as the^{proprietorof the defendant no.1 tirm had signed on}

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the said Sanclion Letter thereby agreeing^{to all the terms and conditions contained therein.}

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sl^;dde^a^W )t^,lo ,ul /t Presid'ngOtrcer' I t, DRT Guwahati I

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3 o A^{74l2o23uoRl_Guw.hali}

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ln conneciion with the^{sanction of the aforesaid Cash CreditLimitof Rs 5 00 Lcas} sanctioned by^{the Applicant Bank and availedof by the Defendants,an Agreementof} H)rpothecation of Debts^{and MovableAssetsand an Agreement and Hypothecationof} coods both dat6d^{26.05.2009havebeen signed andexecutedby the Defendant No' 2 as} the^proprietor of^{the DefendantNo. 1 firmin favourof the Applicant Bankas secunty for} repayment of the loan^{facility thereby agreeingto all the terms and conditionscontained} therein and also^{hypothecatedthe Tools and Machineries, Stocks' Book Debts'} Receivablesetc'(morespecificallydescribedinSchedule-AoftheoA)withtheApplicant Bank.

¶31

As security for^{repaymentof the aforesaid CashCredit Limitof Rs5 00 Lac6} availed of by the^{Defendant No. 1 firm, theDefendantNo. 2 had execuled a Demand} Promissory Note^{dated 26.05.2009 and Letter of Continuitydated 26052009,thereby} promisingtopaytheApplicantBanktheentireloanamountreceivedtogetherwithinterest @1^{1.75o/o per annum withmonthly rests on demand.}

¶32

The Oefendant No. 2^{as the proprietorof DefendantNo' 'l firm had again} appoached the^{Applicant Bankand requestedfor enhancement of the existing credit} facility and afrer considering^{the said request, applicantbank hadenhanced the cashcredit} limit of Rs. 5.OO Lacs^{to Rs. 7.50Lacs vide Sanclion Letter dated 23.122009 to the} DeiBndanb with interest^{charged at 1 1.75%per annumwith monthly rests along with penal} interest at applicable^{ratein case of default.The Cashcreditlimitwas to be repaidon} demand. The Defendant^{no. 2 as the proprietor of the defendant no 'l firm had signed on} the said sanction Letter^{thereby agreeing to all the terms and conditions contained therein.}

¶33

ln conneclion with the sanction^{of the aforesaid Cash CreditLimitof Rs 7 50 Lass} sanclioned by ths^{Applicant Bank and availed of by the Defendanb,an Agreementof} Hypothecation of^{Debts and MovableAssetsand an Agreement and Hypothecationof} Moveable and^{Plant and Machineryand Hypothecationof Goods all dat€d23'12'2009} have been signed and^{executed by the Defendant No2 as the proprietorof the Defendant} No. 1 firm in^{favour of the Applicant Bank as securityfor repaymentof the loan facillty} thereby agreeing to all^{the terms and conditions conlainedtherein and also hypothecated}

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x,^M*1

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O A 74l2o23/ORT-Guwahati

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the Tools and^{Machineries,Stocks, Book Oebts, Receivables etc (more specifically} described in ScheduleA^{of the OA)with the Applicant Bank.}

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The Defendant No. 2^{as the proprietor of OefendantNo 1 firm hadagain} approached the^{Applicant Bankand requestedfor enhancement of theexisting credit} facility and after considering^{the said request, applicantbank had enhanced the cash credit} limit of Rs. 7.50^{Lacs to Rs.14.00 Lacs vide Sanclion Letter dated 3'1 072010to the} Defendants with^{interest chargedat 10.75% per annumwith monthly rests along with penal} interest at applicable^{ratein case of default.The Cash credit limitwas to be repaidon} demand. The Defendant^{no. 2 as theproprietorof the defendant no 'l firm had signed on} the said sanction^{Letter thereby agreeing to all the termsand conditions contained therein.}

¶38

ln connection with the sanction^{of the aforesaidCash Credit Limitof Rs 14'00 Lass} sanclioned by the^{Applicant Bank and availed of by the Defendants,an Agreementof} Hypothecation of Debts^{and MovableAssetsand an Agreementand Hypothecationof} Moveable and Plant^{and Machineryand Demand PromissoryNote all dated3'l.07.2O1O} have been signed^{and executed by the OefendantNo 2 as the proprietor of the Oefendant} No. 1 frm in favour^{of the Applic€nt Bank as securityfor repaymentof the loanfacility} thereby agreeing^{to all the terms and conditions contained thereinand alsohypothecated} the Tools and Machineries,^{Stocks, Book Debts, Receivables etc. (morespeciflcally} described in Schedule-A^{ofthe OA) with theApplicant Bank}

¶39

The Defendant No. 2 as^{the proprietor of OefendantNo. 1 firm hadagain} approached the^{Applicant Bankand requestedfor enhancement of theexisting credit} facility and after considering^{the said request, applicantbank had enhanced the cash credit} limit of Rs. 14.00 Lacs^{to Rs. 16.00Lacs vide Sanclion Letterdated 12.06.2012 to the} Defendants with^{interest chargedat 13.450/oper annum with monthly rests along with penal} interest at applicable^{rate in case of default.The Cashcreditlimitwas to be repaidon} demand. The Oefendant^{no. 2 as the proprietor of the defendantno.'l Iirm had signed on} the said Sanclion Letter thereby^{agreeing to all the terms and conditions contained therein}

¶40

ln conneclion with the sanclion of^{the aforesaidCash Credit Limitof Rs.16.00 Lacs} sanclioned by the Applicant Bank^{and availedof by the Defendants, an Agreement} of Hypothecation of Debts and^{Movable Assets, an Agreement and Hypothecationof}

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9j,l*1,.0,0^^,,L1, ,,""'o.n&LJo^)a'l / DRT Glwahali

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O.A 7412023UDRT-Guwahatr

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Moveable and Plant and Machinery and Hypothecation of Goods all daled 12.06.2012 have been signed and executed by the Defendant No. 2 as the^poprietor of the Oefendant No. 1 firm ln favour of the Applicant Bank as security for repayment of the loan facility thereby agreeing to all the terms and conditions contained therein and also hypothecated the Tools and Machineries, Stocks, Book Debts, Receivables etc.^(more specifically described in Schedule-A ofthe OA) with the Applicant Bank.

¶44

The Oefendant No. 2 as the^proprietor of Defendant No.^'l firm had again approached the Applicant Bank and requested for enhancement of the existing credit facility and after considering the said request, applicant bank had enhanced the cash credit limit of Rs. 16.00 Lacs to Rs. 23.00 Lacs vide Sanclion Letter dated 29.08.2017 to the Oefendants with interest charged at 12.05%^per annum with monthly rests along with^penal interest at applicable rate in case of default. The Cash credit limit was to be repaid on demand. The Defendant no. 2 as the^proprietor of the defendant no.1 6rm had signed on the said Sanction Letter thereby agreeing to all the terms and conditions contained therein.

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ln conneclion with the sanclion of the aforesaid Cash Credit Limit of Rs. 23.00 Lacs sanclioned by the Applicant Bank and availed of by the Defendants, Agreement for charging interest under MCLR system dated 29.08.2017, Hypothecation Agreemenl dated 25.08.2017 and Lettar of Lien dated 29.08.2017 hava been signed and executed by the Defendant No. 2 as the propdetor of the Defendant No.^'l tirm in favour of the Applicant Bank as security for repayment of the loan facility thereby agreeing to all the terms and conditions contained therein and also hypothecated the Tools and Machineries, Stocks, Book Debts, Receivables etc. (more specifically described in Schedule-A of the OA) with the Applicant Bank.

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As security for repayment of the aforesaid Cash Credit Limit of Rs. 23.00 Lac.s availed of by the Defendant No. I firm, the Defendant No. 2 had executed a Demand Promissory Note dated 29.08.2017 and Letter of Continuity dated 29.08.2017, thereby pomising to pay the Applicant Bank the entire loan amount received together with lnterest @12.05^{% per annum with monthly rests on demand.}

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The Defendant No. 2 as the proprietor of Defendant No. '1 firm had again approached the Applicant Bank and applied for loan for an amount of Rs. 4.40 Lacs under

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sfu/da^r-h"J',,""r,"ntili|O')1't I DRT Guw.hrlr ,

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O A 7al2023r/ORT.Guw.hatr

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GECL scheme vide Loan Application dated 06.06.2020^{and afler consideringthesaid} application, applicant bank had sanclion a^{Working CapitalTermLoanof Rs. 4.40Lacs} vide Sanclion Letter daied 06.06.2020 to the^{Defendanb with interest chargedat 7.65%} per annum with monthly rests along with penal interest al applicable rate in case of default. The Term Loan was to be repaid within a^{period of 48 months.TheDefendant no. 2 as the} proprietor of the defendant no.l firm had signed on the said Sanction Letter thereby agreeing to allthe terms and conditions contained therein.

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ln conneclion with the sanclion of the aforesaid^{Working Capital Term Loan of Rs.} 4.40 Lacs sanctioned by the Applicant Bank^{and availed} of^{by the Defendants, an} Agreement for Working Capital Term^{Loandated 06.06.2020been signed andexecuted by} the Defendant No. 2 as the^proprietor of the^{Defendant No. '1 firmin favour of the Applic€nt} Bank as security for repayment ofthe loan facility.

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The Defendant No. 2 as the^proprietor of the Defendant^{No. 1 tirm hadconfirmed} the balance in the Cash Credit account as on^{27.08.2020by signing and executinga} Balance Confirmation Letter dated 25.03.2021. ll is^pertinent to^{mention herein that} Defendant no. 2 as the^proprietor of the defendant no. 1 requested for renewal of existing Cash Credit account for three months vide letter daled 11.08.2022 and applicant bank allo,t/ed the said request of the defendants.

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As the Defendants have failed to repay the outstanding amount in the loan accounts, the Applicant Bank had demanded and requested the Oefendanb lhough Letter daled 18.08.2022 to repay the loan by^paying the outsianding amounb in the loan accounb including the accrued interest thereon. But the Defendants failed to make any payment thereof. But the Defendants failed to pay the outstranding amounb in the loan accounb even after receipt of the aforesaid Letter and Notice.

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The Statemenb of Account maintained by the Applicant Bank in the usual and ordinary course of business shows that the accounts become NPA (Non-performing Asset) on 17.08.2022 and the total outstanding amounts as 31.01.2023 in the (two) nos. of loan accounb slood at Rs. 28,24,599.68 and the Defendants No.l and 2 are legally bound and join0y and severally liable to repay the said amount to the Applicant Bank with lnterest till realization with pendent-lite and luture interest, mst and charges

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Atr *fu DRT, Guwahati

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O A 74l2o23uoRT-Gwahati

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The applicant bank thus became^{constrainedto fle the present Original Application} for the recovery of^{R3. 2E,24,599.6E(RuPee3Twonty'Eight Laca Twenty'Four} Thou3and Five Hundred^{Ninsty'Nine and Pai3a Sixty-Elght)only as on 31.01 2023} along with interest and cost^{of the application}

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Afler filing of the OA^{the Tribunal issued notices uponthe defendants through} registered^post and the applicant^{bank filed service reporton 19.U.2024and brought} on record the^{postal receipts along with track consignment report. Leamedcounsel} for the delendants has appeared^{on the sameday i.e on 19.04 2024 and sought time} for filing writtan statement^{cum evidenceon affidavitwhich was duly permitted} Thereafter the matter was listed on several^{times, but written statement cum evidence} on affidavit has not been^{liledby the defendants. Hence,their right of the tile written} statement cum evidence^{on affldavitwas closedon 21.08.2023 Thereafter the matter} was^posted for hearing^{on behalfof the applicant bank}

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Supporting the claim^{of the applicant bank Sri RatneshKumar, Manager of the} Applicant Bank has filed evidence^{on affidavitcoupledwith the securitydocuments} marked as Exhibit AW-1 to^{AW-41, supportingthe claim of the applicant bank.}

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Heard the learned counsel^for the^{applicant bank who prayed for issuance of} Recovery Certificate against^{the defendants as per pleadings madein the Application,} supported by evidence on affidavit^{of their witnesswho affirmed on oath the execution} of the security and other documents^{by the defendants and also executionof their own} documents relied upon, which^{have been marked exhibits.}

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Considering the facts and^{circumstancesof the case, I am of theconsidered} view that the documents filed by the applicant^{bankare supportingthe claimof the} applicant bank and establishing^{theliabilityof the defendants.lt is proved that the} defendants are^jointly and severally^{liable to pay to the applicant bank the claim made} in the Original Application. The loan^{was obtainedand documentshave been} executed on 19.12.2008. 26.05.2009, 23122009,^{31.07.2010,12.062012,} 29.08.2017 & 06.06.2020. Balance Confirmation Letter^is dated^{25.03.2021 and a letter} is dated 11.08.2022 requesting the bank for renewal. The account^becameNPA oo 17.o8.2O22 and theOAhas been^{liled on 2'1.02.2023. Hence, the OA is filed well}

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SLliP0.a/&M,, ORT Guwahali "*,,";&Llo')-q^I

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¶64

o.A. 74r2o23loRT€uwahati

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within the period of limitation and this Tribunal having a^jurisdiction to adjudicate the Original Application.

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Considering lhe unchallenged/ unrebutted version of Sri Ratnesh Kumar, the applicant's witness and all the documents^{marked as} exhibits,^{includingduly 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 entitled to get the Recovery Certiticate as^prayed for.

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ln the rssult, the^present Original Application No. 74 of 2023 b allowed with cost as under :-

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i) The defendants No. 1 & 2 are^jointly and severally liable to^pay to the applicant bank a sum of Rs. 28,24,599.6E^(Rupees Twenty-Eight LaGs Twenty-Four ThoEand Five Hundred Ninoty-Nine and Paba Slxty-Eight) only with pendentelite and future interest @11.750lo per annum with monthly rests from 0'1.02.2023 till the date of full^{paymenurealization} and also cost of the application.

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ii) The charge of the cedmcated amount be kept alive on hypothecated^properties, as described in Schedule-A of the OA till the amount is realized in full.

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

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iv) The applicani bank is also entitled to proceed against the personal assets and properties of the defendants towards recovery of the dues.

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v) 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 file the cost memo within 2 weeks from today.

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vi) lssue Recovery Certificate accordingly for a sum Rs. 28,24,599.68 (Rupees Twenty-Eight Leca Twenty-Four Thousand Five Hundred Ninety-Nino and Paisa Sixty-Eight) only in favour of the applicant bank against the defendants No. 1&2.

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vii) Communicate copy of this order to the concemsd parties.

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M,qxDRT, Guwahali

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O.A. 7412023/ORT.Guwahatr

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This order is dictated and^{correctedby the undersigned.}

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Judgment dated^{213tOctober 2024, signed and pronoun@din the Tribunal}

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today under my signature.

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Copy of the JudgmenuFinal^{Order be uploadedin the Tribunal's Website and flle}

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be consigned to^{Record Room.}

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dild!ffiU+ (Shiv Sharan Dubey) U PreBiding Officer DRT, Guwahati.

Punjab National Bank v. Messers Bajrang Steel Furniture

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. Messers Bajrang Steel Furniture

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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