Allowed

Canara Bank v. Kumar Roshan

DRT19 Sept 2024OA/84/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed Canara Bank's application under Section 19 of the RDB Act to recover Rs. 1.11 crore from five defendants who defaulted on a housing loan. The court relied on documentary evidence and admitted certified copies of the bank's books as proof of the loan account balance and interest due, granting a recovery certificate.

What did the court decide?

Recovery certificate issued directing repayment of Rs. 1,11,79,449/- plus interest; attachment of mortgaged assets; sale of assets to recover dues if not paid within 30 days.

Canara Bank versus Kumar Roshan — Contract and Commercial Disputes | DRT (2024)

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OA 84 of 2023 IJl

Debts Recovery Tribunal, Patna

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Karpuri Thakur Sadan, Aashiana Digha Road Patna-800025

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Presiding Officer : Shri Kaushalendra Yadav

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OA Case No. 84 of 2023

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Canara Bank, Harrakh Near Power House Chowk, and Town Begusarai.

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. . . . . . . Applicant

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1. Kumar Roshan S/o Late Dineshwar Prasad Verma, R/o Ward no. PAN no.

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33,Kachahari Road, Mungeriganj , Begusarai-85 1 101 . AGHPR4220N.

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1. Kumar Arvind S/o Late Dineshwar Prasad Verma, R/o Ward no. 33,Kachahari Road, Mungeriganj , Begusarai-85 1 101 PAN no. BFFPAOO06K

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1. Kumar Devanshu Verma S/o Late Sri Krishnajee, R/o Ward no. 33,Kachahari Road, Mungeriganj , Begusarai-85 1 101 . PAN no. ALJPV597 IH

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1. 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

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

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Defendants

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Present:

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

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Dated: 19.09.2024

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JUDGMENT

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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.1911,79,448/- as on 26.12.2022 along with pendente-lite and future interest @ 7.60% p.a. with compounded monthly rests from 27.12.2022 with costs till realization.

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The application has been filed with the contention that the applicant bank9 is a body corporate, banking company under the provisions of the

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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.

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The Defendants No.1 to 3 approached the bank for grant of housing loan of Rs.90 lakh on 1.8.2018, which was sanctioned by the bank on 29.9.2018. Defendants executed the various loan document in favour of the bank and also executed the registered mortgage deed in favour of the bank, mortgaged land and building details given at page 21 in schedule – A of OA. The rate of interest as agreed by the Defendants in respect of Housing Loan payable to the Bank is 8.90% 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.

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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

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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.

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The total liability in the loan account is Rs.1,11,79,448/- with pendentelite and future interest @7.60% p.a. compounded with monthly rests from 27.12.2022 till the realization.

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This Tribunal issued summons/notices copies of application & paper book to the defendants by registered/speed post on 24.2.2023, requiring them to show_cause within 30 days of the service U/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993. 1 / - \a \al

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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.

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The defendants have filed rebuttal evidence stated that the bank provided financial assistance to extent of Rs.90 lakh on 29,9.2018 to be repaid in 300 months with repayment holiday of 12 months till 29.9.2019 and the EMI was fixed at Rs.79,596/- p.a. whereas rate of interest was pegged at 7.60% at MCLR compounded monthly. The said loan is secured by mortgage of land. It is further stated that the bank was obliged to give one month prior notice to the defendants before declaration of the account of the defendants as NPA. After issuance of demand notice dated 18.4.2022 and in its reply dated 3.8.2022 to representation u/s 13 (3-A) the bank altered the NPA dated to 28.6.2022. It is further submits that the banks across the board that on acknowledgement of debt and security, revenue stamps are affixed as per stamp act and the reason is that on demand promissory note also the revenue stamp is affixed but here it is a peculiar case wherein the bank has affixed adhesive stamp against the provision and the date on which these Adhesive stamps have been purchased from the vendor is not there. It is submitted that the signatures of the defendants had been obtained on this document at the time of sanctioning of loan itself on 29.9.2018 and they had been made to put their signature on undated blank document. It is further stated that the penal interest is to be charged only once and it must not be capitalized but it appears that it has also been capitalized. The penal interest is not charged on the entire outstanding rather on the irregular amount only, but the bank has brazenly mentioned in the system generated statement of account. In view of the above facts and circumstances the present OA is fit to be dismissed.

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However, the defendants in their written statement have not denied the sanction of loan amount, its utilization and further to secure the loan, execution of relevant documents.

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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:

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OA 84 of 2023 IJI

SI.No	Description of Documents Photocopies	Dateof Execution	Amount	Sigr Executants	IAnn No
1	Loan Application	1.8.2018	Rs. 90 lakh	e no.1to4
2	Sanction Memorandum	29.9.2018	Rs. 90 lakh	b
3	copy ofRegistered MortgageDeed				3
4	O Agreement	29.9.2018	Rs. 90 lakh	Defendant no.1to3	4
5	GuaranteeCovering Letter	29.9.2018	Rs. 90 lakh	Defendant no.4	5
6	Guarantee Agreement	29.9.2018	Rs. 90 lakh	Defendant no.1,3& 4	6
7	t		Rs. 90 lakh	Defendant no. 4	7
8			Rs. 90 lakh	Defendant no.5	8
9	Guarantee Agreement	1 29.9.2018	Rs. 90 lakh	Defendant no.2,3& 5	9
10	Declaration	29.9.2018	Rs. 90lakh	Defendant no.5	10
11	DemandNotice	28.12.2020		Bank	11
12	Letter of Acknowledgement	1.9.2022		Defendants	12
13	DemandNotice	18.4.2022		Bank	13
14	PossessionNotice	30.6.2022		Bank	14
15	Statementofaccount	Ason 26. 12.2022	Rs.1,11,79,448/-	bank	15

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Heard arguments and perused the case record.

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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.

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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.

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II. 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.

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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.

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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.

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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.

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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.

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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.

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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

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where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise.

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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.

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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 interests 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.

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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 and conditions for repayment with interest. The balance amount till 26.12.2022 has been proved to be Rs.1,11,79,448/- 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.

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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.1,11,79,449/- along with pendente-lite and future interest @ 7.60% p.a. with compounded monthly rests from 27.1.2023(The date of filing of this OA) till realization. So the final order may be passed accordingly, to meet the ends of justice.

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ORDER

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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.1,11,79,449/- along with pendente-lite and future interest @ 7.60% p.a. with

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compounded monthly rests from 27.1.2023 (The date of filing of this OA) till realization of the entire sum due and recoverable with costs.

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

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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.

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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 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 mortgage(i/ hypothecated assets as well as other personal movable/immovable assets of the defendants.

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

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

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Dictated &corrected by me.

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[KaushalendraYadav] Presiding Officer Debts Recovery Tribunal, Patna

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FORM NO. 9

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DEB'rs RECOVER\ TRIBUNAL I'ATN A

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[See Regulation 24( 1 )]

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:nd Floor. ( A. B & F Wing) Karpurl Thakur Sadan. Kendrlya Karamchari Parisar (GPOA), Ashiana Digha Road, Patna-80C)025.

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RECOVER' CERTIFICATE UNDER SE(-TION 19(Z) READ WITH $E(-TION 19(B) OF THE REC-OVERY OF DEBTS & BANKRUPTCY ACT, 1993, AS AMENDED FROM TIME TO TIME,

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R(' No. 233/2024 IN Case No: OA/84/2023

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In the Matter ot

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(CH-. 1) C'ANARA BANK HARRAKH NEAR POWER HOUSE CHOWK, P.S.- AND TOWN -

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Applicant(s)

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BFCIUSARA I .BIHAR -0

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Versus

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(CD- 1) KUMAR RUSH AN S/ o Late Dinesh\var Prasad Verlna R o ward No. 33. Kachahal'i Road. Mungcriganj Begusitrai .BIHAR -85 11 0 1

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(CD- 2) KUMARAI{VIND

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S/O LATE DINESHWAR PRASAD VERNI A R/O WARD NO. 33, KA(-HAHARI ROAD. MUNGERIGANJ BEGUSARAI HS 1 10 1

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(CD- 3) KUMAR DEVANSHU VERNI A S/O LATE SRI KRISHNAJEE R/O WARD NO. 33, KA('H AH ARI ROAD. MUNGERIGANJ. BEGUSARAI 851101

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Defendant(s)

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(CD- 4) KUMAR RAJESH S/O LATE DINESHWAR PRASAD VERNI A R/O WARD NO. 33. KACI-1 AH ARI ItoAD. NIUNGERIGANJ. BEGUSA RAI 85 1 101

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(CD- 5) RANJU VERM A

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\V/C) KRISHNAJEE R/o WARD NO. 33, KAC'HAHARI ROAD. MLINGERIGANJ. BEGUSARAI 85 1 101

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Rccovely Certificate for Rs 11179449.00 1 Rupees One Crore Eleven Lakhs Seventy Nine Thousands Four Hundred Forty Nine Only_I

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In terms of final order dated 19/09/2024 passed by this Tribunal in the above mentioned case. it is ordered that the Applicant Certincdte Holder Bank is entitled to recover d sum of Rs. 11179449.00 along with cost, expenses and interest from the 27/0 1/2023 i.c. date oftllinq I \with effective date of the OA/84/2023 and future interest from order date till the date of realisation in fu]1, jointly or severally from the CeItitlcate Debtors, hereinafter referred to as:-

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CDN It	Int.Type/N’lode	Int. Rate	Effective IJIIte	Order Date	Arnount( Rs.)	Liability	Interest (as Order Date)	RC AInt>nnt(Rs.)
UMAR ROSHAN	(Monthly	17.60	r/01/2023	ll 9/09/2024	111179449.00	lointlyAnd rerally	As on O	11179449,00
KURtAR RV1ND	nt,-rest(Monthly	F7.60	1/2023	{19/09/2024	F11179449.oo	}intl)’ And /orally		1]179449.00
KUNIA!< DEVANSHL f VERVIA			7/o1/2023	tl 9/09/2024	79449.oo	lyAnd IIv	[nterest As on )rder Date	11179449.00
KUMARRAJESII			r/o1/2023	419/09/2024	111179449.oo	ly And	As on Date	11 179449.00
JUVERMA	;Int,rcst(Monthlyl7	.60	r/01/2023 :	f 19/09/2024-	Fl1179449.oo	lointjyAnd ly	As on Date	11 179449.00

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In case of fai]urc to pay the aforementioned adjudicated amount within 311 days, same shall be recovered from the sale of the nrortgaged/hypothecated assets as well as other personal lno'able/ Immovable assets of the certitlcate debtors,

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The mortgaged or hypothccated assets to secure the loan in question are hereby attached and shall be subject to the fInal order under the recovely proceeding in pursuance of the Recovely ceNitlcate issued under Section ] 9(22) of Recovel)' of Debts and Bankruptcy Act 1 993

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Panics are directed to appear before ASHISH KUMAR , Recovery' c)nIcer. DEBTS RECOVERY TRIBUNAL PATNA on 04/ 11/2024

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The Recovely Oftlcer shall realize the amount as per this Certificate in the manner and mode prescribed under Sections 25 to 28 of the Recovery of Debts Due to Banks and Financial Institutions Act. 1993 (as amended from time to time) from the above named Certitlcate Debtors

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

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,YO. Rkdstr ar Debts Recovery Trib8ml Patn8

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PRESIDING OFFICER DEBTS RECOVERY TRIBUNAL PATNA

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

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DEBTS RECOVERY TRIBUNAL PATNA

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2nd Floor, ( A. B & F Wing) Karpuri Thakur Sadan, Kendriya Karamchari Parisar (GPOA), Ashiana Digha Road, Patna-800025.