Allowed

Central Bank of India v. Sh. Harbhagat Singh

DRT19 Aug 2024OA/910/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's application for recovery of Rs. 44.25 lakhs+ interest sanctioning the issue of a Recovery Certificate. The court awarded simple interest at 8% pa considering current market conditions.

What did the court decide?

Recovery Certificate issued; Defendants to pay Rs. 44,25,311 with interest at 8% p.a. Amount recoverable from mortgaged properties or personal assets.

Central Bank of India versus Sh. Harbhagat Singh — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.910/2023

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 24.07.2023

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DATE OF DECISION: 19.08.2024

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Central Bank of India, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its head office at Chander Mukhi Building, Nariman Point, Mumbai 400021 and having one of its Branch situated at Central Bank of India, Mahavir Road, Behind old truck union, Mandi Ahmedgarh, District Malerkotla, Punjab through Mrs. Urvashi Sharma, who is presently working as Senior Manager, Central Bank of India, Regional Office, K.P. Complex, Adj. Hotel Park Plaza, Ferozepur Road, Ludhiana, Punjab constituted Power of Attorney holder of the Bank and Principal Officer

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……..Applicant

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Versus 1. Sh. Harbhagat Singh S/o Sh. Sher Singh, R/o Village Jasowal, Tehsil and District Ludhiana, Punjab (Borrower/Mortgagor) 2. Sh. Amninder Singh S/o Sh. Sh. Jagtar Singh, R/o Village Sirah, Tehsil Payal, District Ludhiana, Punjab (Guarantor) ….……Defendants Advocates: Argued by Ms. Ritika Kansal, Advocate proxy for Sh. Surinder Nath Sharma, Advocate for the applicant (through VC) Defendants are ex-parte FINAL ORDER 1. 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.44,25,311.00 (Rupees Forty Four Lacs Twenty Five Thousand Three Hundred Eleven only). The Original Application has been filed through Mrs. Urvashi Sharma, Senior Manager of the applicant bank, who is competent to institute the Original Application vide Power of Attorney dated 24.03.2014, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant no.1 had approached the applicant bank for the grant of KCC Loan of Rs.25.00 Lacs vide Loan application dated 26.08.2012, which is Annexure A2 to this OA further approached the applicant bank for its renewals.

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The applicant Bank sanctioned the KCC Loan of Rs.25.00 Lacs vide Memorandum of Sanction dated 27.08.2012, which is Annexure A3 to this OA and further renewed the CC Limit of Rs.25.00 Lacs vide Letters of Renewal dated 05.05.2014 and 07.05.2016, which are Annexures A15 and A16 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant No.1 had mortgaged his immovable properties i.e. total land measuring 03 Bigha 04 Biswa situated at Village Kila Raipur, Sub Tehsil Dehlon, District Ludhiana, Punjab vide Registered Mortgaged Deed bearing vasika No.1035 dated 20.09.2012 along with English Translation, which is Annexures A4 and A-4T to this OA. Documents executed:- Advocate Report on Title dated 21.09.2012, which is Annexure A5 to this OA; Agreement for Hypothecation, Supplementary Agreement, D.P. Note, Letter of Waiver, Letter declaring acceptance of consent clause by the Borrower, Guarantor Agreement, Letter declaring acceptance of consent clause by the guarantor, Declaration cum Undertaking by the Guarantor and Letter of Continuity all dated 22.09.2012, which are Annexures A6 to A14 to this OA; Balance Confirmation Letter dated 18.08.2015, which is Annexure A16 to this OA; Letter by Advocate to the Bank regarding verification of Rapat of mortgaged land in loan case of Sh. Harbhagat Singh dated 18.02.2016, which is Annexure A18 to this OA; Agreement for Hypothecation, D.P. Note, Letter of Waiver and Letter of Continuity all dated 04.05.2017, which are Annexures A19 to A22 to this OA; Notice of Recall of Bank’s dues by Advocate dated 08.02.2023 with postal receipts, which is Annexure A23 to this OA and Statement of Account with certificate, which is Annexure A24 to this OA. 5. The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a

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debit of Rs.44,25,311.00, 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.

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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 12.07.2024.

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In support of the OA, affidavit of Mrs. Urvashi Sharma, Senior Manager, Central Bank of India h as been filed.

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Heard ex-parte arguments and perused record. 9. It was argued by learned proxy 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 A24 to this OA, it is proved that the defendants approached applicant bank 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 bank. 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 bank is entitled to recover a sum of Rs.44,25,311.00 (Rupees Forty Four Lacs Twenty Five Thousand Three Hundred Eleven 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 bank in relief clause has claimed interest @12.60%p.a. along with penal interest @2%p.a. with half yearly rests from 16.06.2023 till the realization.

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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

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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 just and appropriate to grant uniform simple interest @08.00%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. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.44,25,311.00 (Rupees Forty Four Lacs Twenty Five Thousand Three Hundred Eleven only) jointly and severally, with costs, current and future simple interest @08.00%p.a. in the loan account from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant 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.

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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 Tribunal on 09.09.2024.

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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.

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Pronounced by me in the open Tribunal. Dated: 19.08.2024

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

Central Bank of India v. Sh. Harbhagat Singh

Case brief

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Central Bank of India v. Sh. Harbhagat Singh

Case brief

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