Allowed

Bank of India v. M/S Alive Knits and Prints and Others

DRT29 Aug 2024OA/762/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's application for recovery of Rs.1.07 Crores from the borrowers. The court directed repayment with modified interest at 8.00%p.a. and authorized enforcement through sale of mortgaged properties under SARFAESI Act.

What did the court decide?

Declaration of liability for Rs.1,07,87,235 with 8.00%p.a. interest; issuance of Recovery Certificate; liberty to enforce via SARFAESI sale or attachment of assets.

Bank of India versus M/S Alive Knits and Prints and Others — Cheque Dishonour | DRT (2024)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

¶2

ORIGINAL APPLICATION NO.762/2023 PRESIDED OVER BY MRIDULESH KUMAR SINGH

¶3

DATE OF INSTITUTION: 01.06.2023

¶4

DATE OF DECISION: 29.08.2024

¶5

Bank of India, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act No. V of 1970, having its Head Office at “Star House” C-5, Block-G, Bandra Kurla Complex, Bandra (East), Mumbai-400051 and Branch Office amongst other places, at Industrial Area, Ludhiana (Punjab) through its duly constituted attorney, Ms. Amandeep Kaur, presently posted as Chief Manager, at Bank of India, Bharat Nagar Chowk Branch, Ludhiana (Punjab).

¶6

……..Applicant

¶7

Versus

¶8

M/s Alive Knits & Paints, Plot No. 612-613, Village Phamra, Sanyas Nagar, Deep Vihar, Near Radha Soami Satsang Bhawan, Bahadur ke Road, Ludhiana (Punjab)-141008, through its Partners

¶9

(Borrower Firm)

¶10

Sh. Ashish Kumar Jain, S/o Sh. Mohinder Pal Jain, H. No. 77, Mahavir Enclave, Barewal Awana, Ludhiana (Punjab)-141012 (Partner of Defendant No. 1)

¶11

Sh. Adish Kumar Jain S/o Sh. Mohinder Pal Jain, H. No. 77, Mahavir Enclave, Barewal Awana, Ludhiana (Punjab)-141012 (Partner of Defendant No. 1)

¶12

………Defendants

¶13

Advocates:

¶14

Argued by Ms. Meena Malhotra, counsel for the applicant (through VC) Defendants are ex-parte

¶15

FINAL ORDER

¶16

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

¶17

¶18

Rs.1,07,87,235.00 (Rupees One Crore Seven Lacs Eighty Seven Thousand Two Hundred and Thirty Five only). The Original Application has been filed through Ms. Amandeep Kaur, Chief Manager o f the applicant bank, who is competent to institute the Original Application vide Power of Attorney dated 19.09.2019, which is Annexure A1 to this OA.

¶19

The brief facts of the OA are that the defendant No.1 through its then proprietor i.e. defendant no.2 was already availing credit facilities i.e. Term Loan-I of Rs.21.60 Lacs and Cash Credit Limit of Rs.15.00 Lacs. The defendant No.1 through its partners i.e. defendant nos.2 and 3 had approached the applicant bank for the renewal of Term Loan-I of Rs.21.60 Lacs, Cash Credit Limit of Rs.15.00 Lacs and for grant of a fresh Term Loan II of Rs.35.00 vide Loan Application dated 16.10.2013, which is Annexure A3 to this OA. Further The defendants again approached the applicant bank for enhancement of Cash Credit Limit to Rs.30.00 Lacs and review of Term Loan I of Rs.21.60 Lacs and of Term Loan-II of Rs.35.00 Lacs. Thereafter for the enhancement of Cash Credit Limit to Rs.55.00 Lacs and review of Term Loan-II of Rs.35.00 Lacs and grant of fresh Term Loan III of Rs.35.00. Later, defendants once again approached the applicant bank for Covid Emergency Support (CESS) of Rs. 5.50 Lacs vide Loan Application dated 09.04.2020, which is Annexure A43 to this OA and Guaranteed Emergency Credit Line Scheme (GECL) of Rs. 14.90 Lacs vide Loan Application, which is Annexure A53 to this OA. Later for Guaranteed Emergency Credit Line Scheme (Term Loan –IV) of Rs. 8.20 Lacs vide Loan Application dated 19.10.2021, which is Annexure A64 to this OA.

¶20

The applicant Bank sanctioned the renewal of Cash Credit Limit of Rs.15.00 Lacs, Term Loan I of Rs.21.60 Lacs and sanctioned a fresh Term Loan II of Rs.35.00 Lacs vide Sanction Letter dated 06.01.2014, which is Annexure A4 to this OA and further sanctioned enhancement of Cash Credit Limit to Rs.30.00 Lacs and review of Term Loan I of Rs.21.60 Lacs and of Term Loan-II of Rs.35.00 Lacs vide sanction

¶21

¶22

letter dated 29.06.2015, which is Annexure A14 to this OA. Thereafter, sanctioned the enhancement of Cash Credit Limit to Rs.55.00 Lacs and review of Term Loan-II of Rs.35.00 Lacs and sanctioned a fresh Term Loan III of Rs.35.00 Lacs vide sanction letter dated 26.05.2017, which is Annexure A31 to this OA The applicant bank also sanctioned Covid Emergency Support (CESS) of Rs. 5.50 Lacs vide sanction letter dated 01.05.2020, which is Annexure A44 to this OA and Guaranteed Emergency Credit Line Scheme (GECL) of Rs. 14.90 Lacs vide Sanction Letter dated 24.06.2020, which is Annexure A54 to this OA. Later sanctioned Guaranteed Emergency Credit Line Scheme (Term Loan –IV) of Rs.7.50 Lacs vide Sanction Letter dated 06.11.2021, which is Annexure A65 to this OA and the terms and conditions were duly accepted by the defendants.

¶23

Defendant no.1 had mortgaged its immovable properties i.e Plot measuring 200 Sq. Yards bearing No. 612-613 situated at Village Pharma, Hadbast no.79, Sanyas Nagar, Deep Vihar, Near Radha Soami Satsang Bhawan, Bhadur Ke Road, Ludhiana (Punjab) vide Equitable Mortgage of Title Deed dated 1 6.09.2013 along with its Translations , which is Annexure A12 to this OA.

¶24

Documents executed:- Partnership Deed dated 01.10.2013, which is Annexure A2 to this OA; Demand Promissory Notes, Agreement for Hypothecation Tangible Moveable Property, Consolidated Stamped Undertaking/ Agreements, Agreement of Hypothecation of Book Debts, Agreement for Hypothecation cum loan, Relevant page of Mortgage Register, Acknowledgement of Debt all dated 06.01.2014, which are Annexures A5 to A11, A12A, A13, A14 to this OA; Demand Promissory Notes, Bearer Letters, Supplemental Agreement for Hypothecation, Consolidated Stamped Undertaking/ Agreements, Supplementary Agreement of Hypothecation of Book Debts, Relevant page of Mortgage Register, Acknowledgement of Debt all dated 07.07.2015, which are Annexures A15 to A24 to this OA ; Demand Promissory Notes, Bearer Letters, Hypothecation cum Loan Agreement, Consolidated Stamped Undertaking/ Agreements, Relevant page of

¶25

¶26

Mortgage Register, Acknowledgement of Debt all dated 05.09.2016, which are Annexures A25 to A30 to this OA ; Demand Promissory Notes, Bearer Letters, Supplemental Agreement for Hypothecation, Consolidated Stamped Undertaking/Agreements, Hypothecation cum Loan Agreement, Relevant page of Mortgage Register, Acknowledgements of Debt all dated 31.05.2017, which are Annexures A32 to A42 to this OA ; Demand Promissory Notes, Bearer Letters, Hypothecation cum Loan Agreement, Consolidated Stamped Undertaking/Agreements, RBLR Agreement, Relevant page of Mortgage Register, Acknowledgements of Debt all dated 01.05.2020, which are Annexures A45 to A52 to this OA ; Demand Promissory Notes, Bearer Letters, Supplemental Agreement for Hypothecation, Hypothecation cum Loan Agreement, Consolidated Stamped Undertaking/Agreements, RBLR Agreement, Relevant page of Mortgage Register, Acknowledgements of Debt all dated 24.06.2020, which are Annexures A55 to A63 to this OA ; Demand Promissory Notes, Bearer Letters, Supplemental Agreement for Hypothecation, Hypothecation cum Loan Agreement, Consolidated Stamped Undertaking/Agreements, RBLR Agreement, Relevant page of Mortgage Register, Acknowledgements of Debt all dated 09.11.2021, which are Annexures A66 to A75 to this OA ; SARFAESI Notice U/s 13(2) dated 25.11.2022, which is Annexure A76 to this OA; Legal Notices dated 08.05.2023 with Postal Receipts, which are Annexures A77 to A80 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 A81 to A85 to this OA. 5. 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.1,07,87,235.00, 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.

¶27

¶28

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 22.07.2024. 7. In support of the OA, affidavit of Ms. Amandeep Kaur, Chief Manager, Bank of India 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 gone unrebutted, the applicant bank had proved its case. From the perusal of all the Annexures A1 to A85 to this OA, it is proved that the defendants 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 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 bank is entitled to recover a sum of Rs.1,07,87,235.00 (Rupees One Crore Seven Lacs Eighty Seven Thousand Two Hundred and Thirty Five 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. 10. In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest @13.75%p.a. in Cash Credit Limit, Term Loan-I and @9.35%p.a. in Term Loan-II, @9.25%p.a. in Term Loan-III & IV with monthly rests from 10.05.2023 till the realization.

¶29

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

¶30

¶31

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. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.1,07,87,235.00 (Rupees One Crore Seven Lacs Eighty Seven Thousand Two Hundred and Thirty Five 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 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. 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 21.09.2024. 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: 29.08.2024 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Bank of India v. M/S Alive Knits and Prints and Others

Case brief

What is this about?

What did the court decide?

Bank of India v. M/S Alive Knits and Prints 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

Similar cases

Messrs Amandeep and Brothers and Another versus Axis Bank Limited and Another

Indusind Bank Limited versus Sh. Amandeep Singh

Punjab National Bank versus Sh. Amritpal Singh

Punjab National Bank versus Raj Kumar

Bank of Baroda versus M/S Gur Kripa Distributors and Others

Punjab National Bank versus Kulwant Singh