Allowed

Canara Bank v. M/s Bhawani Dairy

DRT19 Sept 2024OA/78/2023

Case brief

AI extract

What is this about?

The Appellate Tribunal allowed the bank's application to determine the debt. It held that the defendants availed the loan and failed to repay. Relying on bank records and the absence of a denial of liability, the Tribunal determined the principal and interest and issued a Recovery Certificate for enforcement against the mortgaged assets and personal property.

What did the court decide?

Joint and several liability for Rs. 2,60,86,324/- plus interest; Recovery Certificate issued; Mortgaged and hypothecated assets attached for realization.

Canara Bank versus M/s Bhawani Dairy — Banking and Recovery | DRT (2024)

DRT. PATN A

OA 78 of 2023 IJl

Debts Recovery Tribunal, Patna

¶5

Karpuri Thakur Sadan, Aashiana Digha Road Patna-800025

¶6

Presiding Officer : Shri Kaushalendra Yadav

¶7

OA Case No. 78 of 2023

¶8

lnara Bank, Harrakh, Near Power House Chowk, P.S.- and Town Begusarai.

¶9

. . . . . . . Applicant

¶10

Vs.

¶11

M/s Bhawani Dairy a proprietorship concern through its proprietor Kumar Rosah S/o Late Dineshwar Prasad Verma Industrial Area Deona, Tilrath, P.S.-Barauni, District-Begusarai-85 1 1 12.

¶12

Kumar Roshan S/o Late Dineshwar Prasad Verma R/o Ward No. 33, Kachahari Road, Mungeriganj , Begusarai-851 101.PAN no. AGHPR4220N.

¶13

Kumar Arvind S/o Late Dineshwar Prasad Verma R/o Ward No. 33. Kachahari Road, Mungeriganj, Begusarai-851101. PAN no. BFFPAOO06K

¶14

Kumar Devanshu Verma S/o Late Sri Krishnajee R/o Ward No. 33, Kachahari Road, Mungerigan j, Begusarai-851 101. PAN no. ALJPV597 1

¶15

Kumar Rajesh S/o Late Dineshwar Prasad Verma, R/o Ward No. 33, Kachahari Road, Mungeriganj , Begusarai-85 1 101 . PAN no. AGOPR3 65 IE.

¶16

Ranju Verma W/o Krishnajee R/o Ward No. 33, Kachahari Road, Mungeriganj , Begusarai-85 1 101

¶17

. . . . . . . Defendants

¶18

Present:

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For the Applicant Shri Manish Kishore, Advocate For the Defendants Dr. B.K. Singh. Advocate

¶20

Dated: 19.09.2024

¶21

JUDGMENT

¶22

The Applicant bank has made this application u/s 19 of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 27.1.2023 against the defendants to recover its debts from defendants of Rs.2,60,86,324/- as on 15.1.2023 along with pendente-lite and future interest @11.40% p.a. with compounded monthly rest from 16.1.2023 with costs till realization.

¶23

The application has been filed with the contention that the applicant bank, is a body corporate, banking company under the provisions of the

OA 78 of 2023 IJl

DRT, PATN A

banking companies ( Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at 112, JC Road, Bangalore 560002 and Branch Office at Harrakh, Near Power House Chowk, P.S.- and Town Begusarai.

¶29

1. Defendant no. 1 is a proprietorship concern and defendant no. 2 is proprietor and defendant no. 3 to 6 are guarantors. Defendants approached the bank for grant of working capital of Rs.47.29 lakh and term loan of Rs.176.21 lakh for setting up a unit of Milk Processing and Manufacturing Milk products under Agriculture Food and Agro Processing Unit. The applicant bank sanctioned term loan of Rs.175 lakh and cash credit facility of Rs.25 lakh on 28.11.2014. Defendants further approached the bank for grant of GECL loan of Rs.35 lakh, which was sanctioned by the ban on 3.9.2020. Defendants executed the various loan documents. Defendants mortgaged the property in favour of the bank details given at page 30 in schedule-A of OA. Thereafter the transaction of mortgage was duly registered with CERSAI. The rate of interest as agreed by the Defendants in respect of Term Loan payable to the Bank is 11.65% per annum compounded monthly and in case of liability becoming overdue additional interest of 2% shall also be payable as penal interest to the Bank. The said rate of interest being floating rate as per the Directives of the Reserve Bank of India is liable for increase and/or decrease. Despite extension of commercial production as well as repayment period neither commercial production started nor there was any significant changes and on inspection other discrepancies were also found hence the Applicant Bank informed the Defendants that terms of sanction are being violated by not adhering to the same. The Defendants in spite of undertaking did not provide audited balance sheet, PIPR and ITR hence the Applicant Bank kept on asking the Defendant to submit the same. 4. The Defendant No.1 through Defendant No.2 approached before the Hon’ble High Court by filing CWJC No.8678 of 2022 for quashing Demand Notice dated 18.04.2022. The Hon’ble Court was pleased to pass an order 14.07.2022 by which the said writ application was disposed. Whereby the Bank was directed to dispose of the representation positively by taking decision on the representation. The Bank in response to letter dated 21.07.2022 and also decision arrived in meeting the Defendants were asked to clear the overdue amount of Rs.31,20,091/and thereafter working capital would be released,

OA 78 of 2023 1 Jl

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subject to unit is functioning as per terms and condition of sanction letter dated 30.08.2019 by letter dated 03.08.2022. The Defendants did not pay the overdue amount as agreed although on 28.08.2022 acknowledged their liability by executing letters of acknowledgement of debt in respect of term loan and GECL accounts with a promise to pay the outstanding due amount of loan but such promise went in vain. The Defendant No.1 through Defendant No.2 again approached before the Hon’ble High Court by filing CWJC No. 14883 of 2022 for quashing Demand Notice dated 03.08.2022 and sought other directions. The Hon’ble Court was pleased to pass an order 03.11.2022 by which the said writ application was disposed whereby the Bank was directed to dispose of the representation by a reasoned order. The Applicant Bank vide reply dated 12.12.2022 disposed of the representation dated 30.11.2022 reiterating the same versions which was duly communicating through reply through Advocate dated 11.06.2022. Further the Bank again mentioned that the account was classified as NPA strictly in accordance with RBI Guidelines and despite two reminders failed to repay the overdue amount hence the Applicant Bank is constrained to move ahead in accordance with law.

¶35

After availing the sanctioned credit facilities defendants became irregular in repayment of their dues as per agreed terms and failed to adhere to the financial norms of the bank and avoiding the repayment of its dues to the bank, in spite of several assurances given by it to the applicant bank resulting in the account turning as NPA on 15.4.2022.

¶36

Since, the defendants failed and neglected in spite of several reminders to make payment of the dues recoverable to the bank, hence this application has been filed by the bank.

¶37

The total liability in the loan account is Rs.2,60,86,324/- with pendentelite and future interest @11.40% p.a. with monthly rests from 16.1.2023 till the realization.

¶38

This Tribunal issued summons/notices copies of application & paper book to the defendants by registered/speed post on 27.2.2023, requiring them to

OA 78 of 2023 1 Jl

DRT, PATN A

show-cause within 30 days of the service U/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993.

¶43

Despite the registered summons/notices, the defendants have appeared before this Tribunal to contest the case. The sufficient time has been given to the defendants to file written statement, but they failed to file WS.

¶44

Ld. Counsel for the defendants argues the case without filing of written statement and has not denied the sanction of loan amount, its utilization and further to secure the loan, execution of relevant documents.

¶45

To prove its case, the applicant Bank has referred various certified photocopies of documents before this Tribunal. The applicant bank has also given evidence on affidavit by way of affidavit by Shri Chandan Kumar, Senior Manager of the applicant bank. The details of documents are as follows:

¶46

Sl.No	1 Description of Documents PhotocoDies	1 Dateof IExecution	Amount	Signature of Executants	I Ex./ IAnn No
n			CCRS.47.29 lakh TL176.21lakh	c
2	Sanction memorandum	30.8.2019	TL175lakh OCCRs.25 lakh	a
3	Copy of registered mortgagedeed				3
4	) Card				4
5	Memorandumof Agreement for AgricultureLoan	26.9.2019		e no. I &2
6	e Hypothecation			e no.1&2
7	GuaranteeCovering Letter	26.9.2019	Rs.200 lakh	e no.1&2
8	GuaranteeAgreement	26.9.2019	Rs.200 lakh	e no 2&3
e		26.9.2019	Rs.200lakh	e noI &2
10	1 Letter		Rs.200 lakh	Defendants noI &2	10
11	I		Rs.200 lakh	Defendants	11

Ljn

OA 78 of 2023 IJl

DRT. PATNA

e			Rs.200 lakh	Defendants no3	12
13	v Letter		Rs.200 lakh	Defendant no.5	13
14	r		Rs.200 lakh	Defendants noI, 2& 5	14
e			Rs.200 lakh	Defendants no5	15
16	o Letter		Rs.200 lakh	Defendants no6	16
17			Rs.200 lakh	Defendants noI, 2& 6	17
18	Declaration	26.9.2019	Rs.200 lakh	Defendants no6	18
19	Undertaking	26.9.2019		Defendant no. I &2	19
20	Consent			Defendant no.2	20
21	Sanction Memorandum	3.9.2020	Rs.35 lakh	Bank	21
22	copy of Mortgage Deed	18.9.2020			22
23	Sanction	16.9.2020		Bank	23
24	Application restructure 1\JI	28.6.2021		Defendants no. 3to6	24
25	Sanction Memorandum	29.6.2021		Bank	25
26	OverdueNotice	2.4.2022		Bank	26
27	Legal Notices			Bank	27
28	DemandNotice	18.4.2022		Bank	28
29	Objection	24.5.2022		Bank	29
30	Reply	11.6.2022		Defendants	30
31	PossessionNotice	30.6.2022		Bank	31
32	Order passed in CWJC No8678/2022	14.7.2022			32
33	. Letter	3.8.2022		Bank	33
34	Letter Acknowledgem' of nt	28.8.2022		Defendants	34
35	copy ofOrder In No.14883/2022 passed CWJC	3.11.2022			35

DRT, PATN A

OA 78 of 2023 IJI

ReplyLetter	12.12.2022		Bank
Statementofaccount	Ason	Rs.2,60,86,324/.	Bank
	15. 1.2023

¶57

Heard arguments and perused the case record.

¶58

Ld. Counsel of applicant bank submitted that the defendants have taken the loan and utilized the same and also executed the various loan documents to secure the loan. Further, submitted that the claim of the bank has been proved by documentary evidence. All the transactions were entered in the ledger of the loan accounts in the name of the defendant duly maintained by the applicant bank in its usual course of business. The interest /compound interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

¶59

It is further submitted by Id. Counsel of applicant bank that there is no stay granted by any Higher Court, in respect of the proceedings of the present OA and requested to issue recovery certificate, as claimed for, in OA.

¶60

It has been established that defendants are living and carrying on their business in the state of Bihar. Cause of action also arose in the State of Bihar. The said claim on the date of filing of application exceeded Rs.20 lacs. The applicant bank is functioning within the jurisdiction of this Tribunal. Therefore, this Tribunal has territorial as well as pecuniary jurisdiction to adjudicate upon the present application.

¶61

On the issue of Limitation, to prove it, the applicant bank has submitted that the applicant bank has declared the account as NPA on 15.4.2022, whereas the present application has been filed on 27.1.2023 Even, it is counted for the purpose of Limitation, then it is established that the applicant bank has filed the case within the limitation period. As such, it is established that the present application has been filed well within the period of limitation.

¶62

Shri Chandan Kumar, Senior Manager of the applicant bank, has filed the affidavit in support of contents of application and the documents as evidence and proved on oath the pleadings and documents of the applicant bank as stated above.

DRT, PATN A

OA 78 of 2023 1 Jl

Section 19(3) of the Recovery of Debts and Bankruptcy Act, 1993 provides that the application u/s S.19 (1) shall be accompanied with true copies of all the documents relied on in support of the claim.

¶67

The rule 12 (10) of the Debt Recovery Tribunal (Procedure) Rules, 1993, provides that if the defendant denies his liability to pay the claim made by the applicant, the tribunal may act upon the affidavit of the applicant who is acquainted with the facts of the case or who has on verification of the record sworn the affidavit in respect of the contents of the application and the documents as evidence.

¶68

The rule 12 (11) of the aforesaid Rules, provides that the provisions contained in section 4 of the Banker’s Books evidence that Act, 1891 (18 of 1891) shall apply to a certified copy of an entry in a Banker’s Books furnished along with application filed under sub section 1 of section 19 by the applicant.

¶69

Section 4 of Banker’s Books evidence Act, 1891 runs as underS.4. Mode of proof of entries in bankers’ books.–Subject to the provisions of this Act, a certifIed copy of any entry in a banker’s book shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise.

¶70

As such the certified true copies of the documents are admissible in evidence. The statement of account maintained in the ordinary course of business is not only admissible but shall be taken as the correct statement of account, more so since the entries in the statement of account have not been challenged.

¶71

On perusal of the application, documents, affidavit and on consideration of the arguments, it is proved that the defendants have applied for loan and the bank had sanctioned the loan and to secure the loan and for repayment of loan amount with rnterests etc., the defendants have executed various loan documents, as stated in the application and proved by aforesaid evidence. Defendants have neither denied the utilization of funds advanced by applicant bank nor have pointed out any specific error and discrepancy in the Statement of Account.

¶72

The evidence discussed above goes to establish that the amount of loan as mentioned in the O. A., was availed by the borrower under the agreed terms

OA 78 of 2023 IJI

DRT, PATNA

and conditions for repayment with interest. The balance amount till 15.1.2023 has been proved to be Rs.2,60.86,324/- only by way of statement of account. There is nothing to prove the amount more than that disclosed in the aforementioned statement. As such this amount is recoverable till full and final realization of the claim

¶78

In my view, facts of the case stand proved by evidence of the applicant bank. Accordingly, the applicant bank is entitled to recover from defendants jointly and severally of Rs.2,60,86,324/- along with pendente-lite and future interest @ 9% p.a. with compounded monthly rests from 16.1.2023 (The date of filing of this OA) till realization. So the final order may be passed accordingly, to meet the ends of justice.

¶79

ORDER

¶80

In the result, the application of the applicant bank is allowed and debt is determined with costs against the defendants. The defendants are hereby jointly and severally, ordered to pay the applicant bank its debt amounting to Rs.2,60,86,324/- along with pendente-lite and future interest @ 9% p.a. with compounded monthly rests from 16.1.2023 (The date of filing of this OA) till realization of the entire sum due and recoverable with costs.

¶81

It is made clear that any amount deposited by the defendants, be deducted in the claim amount, if not deducted.

¶82

Defendants are debarred from transferring, alienating encumbering or otherwise dealing with or disposing of the mortgaged or hypothecated or any other properties and assets without paying the aforesaid adjudicated dues to the applicant bank to secure the ends of justice. The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to the final order under the recovery proceedings in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993. The applicant may submit the certified copy of this Judgment and the Recovery Certificate before the Registrar/Sub- Registrar to endorse the charge over the secured assets.

¶83

Let a certificate of recovery be drawn up forthwith and put up for signatures in terms of provisions contained in Section 19(22) of the Act to be

hHUb

OA 78 of 2023 1 Jl

DRT, PATNA

issued, on the basis of the order of the Tribunal to the Recovery Officer. The Recovery Officer shall realize the amount as per the certificate in the manner and mode prescribed under the Act from the defendants, by sale of mortgaged/ hypothecated assets as well as other personal movable/immovable assets of the defendants.

¶89

Parties are directed to appear before the Recovery Officer, DRT, Patna on 4.11.2024 The order be communicated accordingly.

¶90

Judgment signed, sealed, dated and pronounced in the open court on lgth day of September, 2024.

¶91

0//

¶92

Dictated &corrected by me.

¶93

aH\”~

¶94

[KaushalendraYadav] Presiding Officer Debts Recovery Tribunal, Patna

¶95

FORM NO. 9 [See Regulation 24( 1 )]

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q=/

¶97

DEBTS RECOVER' TRIBUNAL PATN A

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B & F Wing) KarT)uri Thakur Sutton. Kenclrlyil Kararnchuri Parisilr (GPOA). Ashland Digha Road, Patnu-800025,

¶99

2nd Floor. ( A

¶100

RECOVER\ CERTIFICATE UNDER SECTION 19(Z) READ WITH SECTION 19( B) OF THE RECOVERY OF DEBTS & BANKRUPTCY ACT. 1993,

¶101

AS AMENDED FROM TIME TO TIN! E.

¶102

RC No. 234/2024

¶103

IN Case No: OA/78/2023

¶104

In the Matter of

¶105

(CI1- 1) CAN ARA BANK II ARR AKI I. NEAR I)OWI:R HOiJSE CHOWK PS AND TO \V N BE(iU SARA I BHAGALPL JR .BIHAR -(J

¶106

AppIIcant( s

¶107

¶108

(CD- 1) M/S BHAWANI DAIRY

¶109

a Proprietors;hip Concern Through its Proprietor Kumar Rosah S/o Late Dlnesh\var Prasad Verma Itldustrial Area DeoIIa, Till'ath. ,P.S.- Barduni

¶110

Bcgu$,ural ,BIHAR -85 IIII

¶111

(('D- 2) KUMAR ROSHAN

¶112

S/O LATE DINESHWAR PRASAD VERMA RESIDENT OF WARD NO 33. KACHAHARI ROAD MUNGERIGANJ

¶113

BEGUSARAI 8511 o I

¶114

(CD-3) KUMAR AR\’IND

¶115

S/O LATE DINESHWAR PRASAD VERb'1 A RESIDENT OF

¶116

\''ARD NO 33. KAC'HAHAR J ROAD MLINGERIGANJ BECiLISA RAI S5 1 1 o I

¶117

Detbndant( s )

¶118

(CD- 4) KUMAR DEVANSHU VERN'IA

¶119

S/Q LATE SRI KRISHNAJEE RESIDENT OF WARD NO 33

¶120

KA('HAHA RI ROAD M UNGERIGANJ, BEGUSARA 1 85 1101

¶121

(CD- 5) KUMAR RAJESII

¶122

S/C) LATE DINESHWAI{ PRASAD \rERNI A RESIDENT OF

¶123

\VARD NO 33. I< ACH AH ARI ROAD MUNGER IG AN’J

¶124

BF(]USAI iAI XSI I t) I

¶125

(CD- 6) RANJU VERM A

¶126

\V/0 KRISHNAJEE RESIDENT OF WARD NO 33,

¶127

KACHAHARI ROAD MUNGERIGANJ, BEGUSARAI 85 1 IOI

¶128

Recovery Cenin£atF for R$ ZOO$6324,DO [ RjIPPr i Two CrQrF $irFy !,nkhh biglUy Six ThQH$and$ Thr£e Hundred Twenty Four Onjy_I

¶129

In turns of final order dated 19/09/2024 passed by this Tribunal in the above mentioned case. it is ordered that the Applicant Certificate Ho]der Bank is entitled to recover a sum of Rs. 26086324.00 along with cost. expenses and interest from the 16/01/2023 i.e. date of filing / with effective date of the OA/78/2023 and future interest from order date till the date of realisation in full, jointly or severally from the C'ertincate Debtors, hereinafter referred to as:-

¶130

In case of failure to pay the aforementioned adjudicated amount within 30 days, same shall be recovered from the sale of the mortgage(I/hypothecated assets as well as other personal movable/ Immovable assets of the certificate debtors.

¶131

TIle mortgaged or hypothecated assets to secure the loan ill question are hereby attached and shall be subject to the fInal order under the recovery proceeding in pursuance of the Recovery certitlcate issued under Section 1 9(22) of Recovery of Debts and Bankruptcy Act 1993 Panics arc directed to appear bcforc ASHISH KUMAR . Rcco\’cry OftlCCL DEBTS RECOVERY TRIBUNAL PATN A on 04/ ll /2024 The Recc)'ery OHlcer shall realize tIle amount as per this Certificate in the manner and mode prescribed under Sections 25 to 28 of the Rccovel)’ of Debts Due to Banks and Financial Institutions Act. 1993 (as anlended fronr time to time) from the above named Certitlcate Dcbtt irs

¶132

This Certincdte has been issued under my signature and seal of the Tribunal on this 20/09/2024

¶133

ah I) e b t S ]t:cgiI ==aT r i b U !Ib1:[ 1 pat113 ,

¶134

PRESIDING QFFICER DEBTS RECOVERY TRIBUNAL PATNA

¶135

FORM NO. 10 [See Regulation 24(2)]

¶136

DEBTS RECOVERY TRIBUNAL PATNA

¶137

2nd Floor, CA. B & F Wing) Karpuri Thakur Sadan. Kendriya Karamchari Parisar (GPOA),

¶138

Ashiana Digha Road. Patna-800025.

¶139

SCHEDULE TO RECOVERY CERTIFICATE MEMO OF COSTS

RC No. 234/2024

Case No: OA/78/2023

Applicant(s): CANARABANK

¶144

Versus

¶145

Defendant(s): M/S BHAWANI DAIRY

¶146

	Item ofCosts	.mount inRs
	Feeon the application	m5
I	I	ro
	AdvocateFees	10
	Commissioner/Receiver/Valuation/SecurityFee	[0
5	s	ro
	TotalCosts:Rs	150000

¶147

Place: PATNA

¶148

Date: 20/09/2024

¶149

PRESID OFFICER DEBTS RECOVERY TRIBUNAL PATNA

¶150

Note: Strike out whichever is not applicable

Canara Bank v. M/s Bhawani Dairy

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s Bhawani Dairy

Case brief

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What did the court decide?

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