Allowed

Union Bank of India v. M/S C K Garments and Another

DRT12 Nov 2024OA/842/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the application filed by the bank for recovery of a commercial loan amounting to Rs.36,38,880.21 plus interest. The defendants were found liable jointly and severally, and a uniform interest rate of 7.50% p.a. was granted. The order includes issuance of a recovery certificate and directions for execution.

What did the court decide?

Directing defendants to pay principal amount plus 7.50% p.a. interest; issuance of Recovery Certificate; liberty to execute via sale of hypothecated or personal assets.

Union Bank of India versus M/S C K Garments and Another — Execution and Attachment | DRT (2024)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

¶2

ORIGINAL APPLICATION NO.842/2023 PRESIDED OVER BY MRIDULESH KUMAR SINGH

¶3

DATE OF INSTITUTION: 06.06.2023

¶4

DATE OF DECISION: 12.11.2024

¶5

Union Bank of India, a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 having its head office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai and having a branch office inter-alia at, Kesar Ganj, Ludhiana, through duly Authorized Person and Attorney Holder Sh. Rajwant Singh, Credit Manager.

¶6

……..Applicant Versus

¶7

M/s C.K. Garments, 6133, Street No.10½, near Hanuman Mandir, Hargobind nagar, Ludhiana-141008 (Through its prop. Smt. Jaspal Kaur defendant no. 2)

¶8

Smt. Jaspal Kaur W/o Sh. Harpreet Singh, R/o House no.6133, Street No 10½, near Hanuman Mandir, Hargobind Nagar, Ludhiana- 141008 (prop. of M/s C.K. Garments, defendant no. 1)

¶9

………Defendants

¶10

Advocates:

¶11

Argued by Sh. Amod Kumar Thakur, Advocate proxy for Sh. R.K. Chauhan, Advocate for the applicant Sh. Varun Mittal, Advocate for defendants

¶12

FINAL ORDER

¶13

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 Rs.36,38,880.21p (Rupees Thirty Six Lacs Thirty Eight Thousand Eight Hundred Eighty and Paisa Twenty One only). The Original Application has been filed through Sh. Rajwant Singh, Credit Manager of the applicant bank, who is competent to institute the Original Application vide General Power of Attorney dated 13.09.2019, which is Annexure A1 to this OA.

¶14

¶15

The brief facts of the OA are that the defendant No.1 through its proprietor i.e. defendant no.2 had time to time approached the applicant bank for the grant of Cash Credit Limit of Rs.10.00 Lacs under CGTMSE scheme and further for its enhancement to Rs.25.00 Lacs vide Application form for MSEs dated 16.06.2017 and Application for enhancement dated 09.07.2018, which are Annexures A2 & A13 to this OA and further requested for the grant of Term Loan –I (UGECL) of Rs.5.00 Lacs and Term Loan-II (GECL) of Rs.2.50 Lacs vide Request for Guarantee Emergency dated 16.11.2021, which is Annexure A41 to this OA.

¶16

The applicant Bank sanctioned the Cash Credit Limit of Rs.10.00 Lacs under CGTMSE scheme vide Memorandum to Branch Head and sanction Letter both dated 20.06.2017, which are Annexure A3 and A4 to this OA and further sanctioned its enhancement to Rs. 25.00 Lacs vide sanction letter dated 20.06.2017, further applicant sanctioned Term Loan–I (UGECL) of Rs.5.00 Lacs and Term Loan-II (GECL) of Rs.2.50 Lacs vide Sanction Letters dated 09.06.2020 and 20.11.2021, which are Annexures A29 & A42 to this OA and the terms and conditions were duly accepted by the defendants vide Standard Terms and Conditions of Sanction dated 20.07.2018, 06.03.2020 and 17.07.2020, which are Annexures A14, A24, A30 and A33 to this OA.

¶17

Defendant no.1 had hypothecated its movable properties i.e. Stocks, Hosiery Goods and Book Debts vide Hypothecation agreement of Goods and Debts dated 20.06.2017 and 21.07.2018, which are Annexure A7 and A17 to this OA.

¶18

Documents executed:- Demand Promissory Note, Letter of Continuity, AD-02A, Interest Agreement, Letter of Undertaking not to alienate hypothecated goods, Letter of Undertaking from the borrower, Letter of Confirmation all dated 20.06.2017, which are Annexures A5, A6, A8 to A12 to this OA; Demand Promissory note, Letter of continuity, Hypothecation agreement of Goods and Debts, AD-20A, Interest

¶19

¶20

Agreement, undertaking by borrower Annexure-IV, Letter of undertaking from the borrower, Letter of undertaking not to alienate hypothecated goods, Letter of Confirmation all dated 21.07.2018, which are Annexures A15, A16, A18 to A23 to this OA;, Demand Promissory Note, Letter of Continuity, Interest Agreement, Request letter (for EBLR based loan) all dated 06.03.2020, which are Annexures A25 to A28 to this OA; Demand Promissory note, General Term Loan agreement, Terms and conditions of sanction in cash credit limit account of UGECL, Demand Promissory Note, Letter of Continuity, Composite Hypothecation deed, Letter of Undertaking not to alienate hypothecated goods, Letter of undertaking from the borrower all dated 17.07.2020, which are Annexures A31, A32, A34 to A40 to this OA; Demand Promissory note, Letter of continuity, General term Loan Agreement, Composite Hypothecation deed, Text of consent clause, Letter of undertaking by borrower, Letter of Undertaking not to alienate hypothecated goods all dated 22.11.2021, which are Annexures A43 to A49 to this OA; Stock statement by borrower dated 06.09.2022, which is Annexure A50 to this OA; Letter for adjustment of overdue dated 07.09.2019 and 12.11.2022 with postal receipts, which are Annexures A51 to A54 to this OA; Legal Notices dated 30.01.2023 with Postal Receipts, which is Annexure A55 to this OA and Statements of accounts along with the Certificate u/s 65 of Indian Evidence act pertaining to Term Loan account with certificates, which are Annexures A56 to A61 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.36,38,880.21p, 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. 6. The defendants were served notices to appear before this Tribunal and Sh. Varun Mittal Advocate for defendants appeared and

¶21

¶22

filed POA on16.04.2024 but did not filed WS within stipulated period of time. Therefore, opportunity to file WS by defendants stand closed and defense was struck off on 05.11.2024. 7. In support of the OA, affidavit of Sh. Rajwant Singh, Credit Manager, Union Bank of India has been filed. 8. Heard arguments of Ld. Counsel for applicant. Ld. Counsel for defendants has not advanced any arguments. Perused record. 9. 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 A61 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.36,38,880.21p (Rupees Thirty Six Lacs Thirty Eight Thousand Eight Hundred Eighty and Paisa Twenty One 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 @10.50%p.a. in Cash Credit Limit and @7.50%p.a. in Term Loan-I & II plus penal interest @2%p.a. with monthly rests in all, from 01.05.2023 till the realization. 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

¶23

¶24

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 4of 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.36,38,880.21p (Rupees Thirty Six Lacs Thirty Eight Thousand Eight Hundred Eighty and Paisa Twenty One 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. 12. Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly.

¶25

Parties to appear before Learned Recovery Officer of this Tribunal on 05.12.2024.

¶26

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.

¶27

Pronounced by me in the open Tribunal .

¶28

Dated: 12.11.2024
	(MRIDULESH KUMAR SINGH) Presiding Officer,
	DRT-III, Chandigarh

Union Bank of India v. M/S C K Garments and Another

Case brief

What is this about?

What did the court decide?

Union Bank of India v. M/S C K Garments and Another

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

Axis Bank Limited versus Tarlochan Singh and Others

Axis Bank Limited versus Ajmer Singh and Another

Icici Bank Limited versus M/S Himachal Salt Suppliers and Others

Central Bank of India versus Jagjeet Singh and Others

Hdfc Bank Ltd. versus Sukhraj Singh and Others

Punjab National Bank versus Gurpal Singh