Allowed

Union Bank of India v. M/S Malik Electricals and Others

DRT19 Nov 2024OA/882/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant's writless application under Section 19 of the RDBFI Act, 1993. The court declared the defendants liable to pay the outstanding loan amount of Rs. 35,53,347.67 with costs and interest at 8.00% p.a., and directed the issuance of a Recovery Certificate for enforcement.

What did the court decide?

Declaration of liability to pay Rs. 35,53,347.67 with interest at 8% p.a., and order to issue Recovery Certificate.

Union Bank of India versus M/S Malik Electricals and Others — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.882/2023 PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 20.06.2023

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DATE OF DECISION: 19.11.2024

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Union Bank of India, a Government of India undertaking incorporated under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 and having its Head Office at Union Bank Bhawan, 239, Vidhan Bhavan Marg, Backbay Reclamation, Nariman Point, Mumbai carrying on the business of banking at various places, throughout India including a branch at Kharar (Branch code 1877), NH-21, Chandigarh, Main Road, Desumajra, SAS Nagar-140301 through M r. Rahul Kaundal, Branch Manager/Principal Officer/General Attorney.

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……..Applicant

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Versus

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M/s Malik Electricals (Partnership Firm) through its partners Mr. Aslam Khan and Mrs. Neelam Begum having its registered office at SCO No.3, Khushi Enclave, Jhampur, District SAS Nagar (Mohali).

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Mr. Alsam Khan S/o Mr. Sabar Ali, Partner of M/S Malik Electricals, R/o #37, Bhagomajra, Tehsil Kharar, District SAS Nagar (Mohali).

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Mrs. Neelam Begum D/o Roshan Khan, Partner of M/s Malik Electricals, R/o #37, Bhagomajra, Tehsil Kharar, District SAS Nagar(Mohali).

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….……Defendants

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Advocates:

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Argued by Sh. Gaurav Chadda, Advocate for the applicant Defendants are ex-parte

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FINAL ORDER

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Present Original Application was instituted by the applicant under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of

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Rs.35,53,347.67p (Rupees Thirty Five Lac Fifty Three Thousand Three Hundred Forty Seven And Paise Sixty Seven only). The Original Application has been filed through Mr. Rahul Kaundal, Branch Manager, of the applicant, who is competent to institute the Original Application vide Power of Attorney dated 26.08.2019, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendants had approached the applicant for the grant of Cash Credit Limit (Under coverage of CGTMSE) of Rs.45.00 Lacs vide Loan Application dated 01.02.2021, which is Annexure A2 to this OA.

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The applicant sanctioned the Cash Credit Limit (Under coverage of CGTMSE) of Rs.45.00 Lacs vide Credit Sanction dated 05.02.2021, which is Annexure A3 to this OA and the terms and conditions were duly accepted by the defendants. 4. Defendant no.1 had hypothecated its movable assets i.e. Hypothecated the Stocks and Book Debts vide Hypothecation of Goods and Debts Agreement dated 05.02.2021, which is Annexure A7 to this OA. Documents executed:-Demand Promissory Note, Letter of Continuity, Letter of General Lien and Set off AD-02A, , Letter of Undertaking not to Alienate Hypothecated Goods, Letter of Undertaking from Borrowers, Declaration of Partnership, Letter of Undertakings from Partners, Deed of Guarantee all dated 05.02.2021, which are Annexures A4 to A6 and A8 to A12 to this OA; Demand Notice dated 14.12.2021, 01.06.2022 and 17.01.023, which are Annexures A13 to A15 to this OA and Statement of account along with Certificate under Banker’s Book Evidence Act, which are Annexures A16 & A17 to this OA.

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The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs.35,53,347.67p, which is recoverable and the defendants were served recall notices but they did not repay the outstanding

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amount, therefore, the applicant requested to accept the application and to issue Recovery Certificate accordingly.

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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 14.11.2024.

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In support of the OA, affidavit of Mr. Rahul Kaundal, Branch Manager , Union Bank of India has been filed.

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Heard arguments and perused record.

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It was argued by learned counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant had proved its case. From the perusal of all the Annexures A1 to A17 to this OA, it is proved that the defendants approached applicant for availing of the loan facility which was granted to them and for that they had executed all the relevant documents in favour of the applicant. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.35,53,347.67p (Rupees Thirty Five Lac Fifty Three Thousand Three Hundred Forty Seven And Paise Sixty Seven only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the account.

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In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @14.55%p.a. with monthly rests from 01.06.2023 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 interest which have gone drastically downhill in yester years, while exercising the discretion vested in this Tribunal, this Tribunal deems it

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just and appropriate to grant uniform simple interest @8.00%p.a. in the loan account from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly.

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In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.35,53,347.67p (Rupees Thirty Five Lac Fifty Three Thousand Three Hundred Forty Seven And Paise Sixty Seven only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in the loan account from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant 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 applicant 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.

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Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this

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Tribunal on 12.12.2024.

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Copy of this order be given dasti to the applicant 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.

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Pronounced by me in the open Tribunal .

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Dated: 19.11.2024.

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

Union Bank of India v. M/S Malik Electricals and Others

Case brief

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Union Bank of India v. M/S Malik Electricals and Others

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