Allowed

Bank of India, v. M/s Uspc Enterprises Hosiery Complex and Another

DRT6 Dec 2024OA/969/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an original application by Bank of India against M/s USPC Enterprises and Mr. Sanjay Jain for recovery of a loan of Rs. 1.41 crore. The Tribunal observed that the defendants failed to repay the sanctioned loan and proceeded ex-parte. It adjusted the interest rates to 8% p.a. and ordered the recovery of the principal along with interest, costs, and future interes

What did the court decide?

Recovery order for Rs. 1,41,53,700.66 p with costs and simple interest @ 08% p.a. from filing till realization, executable via SARFAESI Act.

Bank of India, versus M/s Uspc Enterprises Hosiery Complex and… — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.969/2022

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 06.06.2022

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DATE OF DECISION: 06.12.2024

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Bank of India, a body corporate constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act,1970, having its Head Office at Star House, C-5, G-Block, Bandra Kurla Complex, Bandra (East) Mumbai-400051 and having its Zonal Office at Surya Kiran Complex, 1^st Floor, Phase-II, The Mall, Near Rakh Bagh, Civil Lines Ludhiana and amongst various branches having its branch at Guru Teg Bahadur Market, 1^st Floor, Clock Tower, Ludhiana, through its duly constituted attorney and authorized officer of applicant Ms. Sarita Kumari.

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……..Applicant Versus

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M/s USPC Enterprises, Hosiery Complex, First Floor, Jain Shawls, & Textile Mills, LOD 50, Noorwala Village, Ludhiana-141007, through its proprietor.

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Mr. Sanjay Jain S/o Om Parkash Jain, proprietor M/s USPC Enterprises, R/o 46, Maya Nagar, Civils Lines, Ludhiana-141001.

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Alternative Address:

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a) M/s USPC Enterprises, Jain Colony, Near Gagandeep Colony, Taraf Karabara, Bahaderke Road, Ludhiana through its Proprietor.

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………. Defendants

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Advocates:

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Argued by Sh. Satish Jaswal, Advocate proxy for Sh. Mohit Goyal, 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 Rs.1,41,53,700.66p (Rupees One Crore Forty One Lacs Fifty Three Thousand Seven Hundred And Paise Sixty Six Only). The Original Application has been filed through Ms. Sarita Kumari, constituted attorney and authorized officer of the applicant, who is competent to institute the Original Application vide Authority Letter dated 04.06.2022, which is Annexure A1 to this OA. 2. The brief facts of the OA are that the defendant No.1 & 2 had approached the applicant for the grant of OCC Limit of Rs.1.25 Crore vide Loan Application Form dated 02.02.2018, which is Annexure A2 to this OA and further for GECL Term Loan of Rs.10.00 Lacs vide Application form dated 17.11.2020, which is Annexure A13 to this OA. 3. The applicant sanctioned OCC Limit of Rs.1.25 Crore & further sanctioned GECL Term Loan of Rs.10.00 Lacs vide Credit Sanction dated 16.03.2018 & 30.01.2021, which are Annexures A3 & A14 to this OA. 4. Defendant no.1 had hypothecated its movable properties i.e. Hypothecated the Stocks, Book Debts and Plant and machinery of the firm vide Hypothecation cum loan Agreement dated 19.03.2018 and Supplemental Loan cum Hypothecation Agreement 30.01.2021, Which are Annexures A7 and A20 to this OA Documents executed:- Demand Promissory Note, Letter of Declaration, Undertaking & Authority, Declarations by borrower, , Format for MCLRAgreement new loans all dated 19.03.2018, which are Annexures A4 to A6, A8 and A9 to this OA; Acknowledgment of Debts & Security dated 31.08.2020, 05.12.2020 & 30.01.2021, Which are Annexures A10 to A12 to this OA; Demand Promissory Note, Letter of Declaration, Undertaking & Authority, Declaration by Borrower,

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Undertaking by borrower to pay installments, Acknowledgment of Debts & Securities all dated 30.01.2021, Which are Annexures A15 to A19 and A21 to this OA; Legal Notice dated 11.05.2022 with postal receipts, which are Annexures A22 to A24 to this OA and Statement of Accounts with Memorandum of Interest along with Certificate under Banker’s Books Evidence, which are Annexures A25 to A27 to this OA.

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The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in both loan accounts there was a debit of Rs.1,41,53,700.66p, which is recoverable and the defendants were served recall notices but they did not repay the outstanding 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 04.12.2024.

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In support of the OA, affidavit of Ms. Sarita Kumari, authorized officer , Bank of India has been filed. 8. Heard arguments and 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 had proved its case. From the perusal of all the Annexures A1 to A27 to this OA, it is proved that the defendants approached applicant 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, accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.1,41,53,700.66p (Rupees One Crore Forty One Lacs Fifty Three Thousand Seven Hundred And Paise Sixty Six Only) along with interest from the

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defendants, jointly and severally, from the date of filing of the present Original Application till realization of the accounts.

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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 @11.75%p.a. in CC Limit and interest @9.90% in Term Loan from 06.06.2022 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 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 both the loan accounts 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.1,41,53,700.66p (Rupees One Crore Forty One Lacs Fifty Three Thousand Seven Hundred And Paise Sixty Six Only) jointly and severally, with costs, current and future simple interest @08.00%p.a. in both the loan accounts 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 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.

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Parties to appear before Learned Recovery Officer of this Tribunal on 17.01.2025. 15. 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. Pronounced by me in the open Tribunal . Dated: 06.12.2024. (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Bank of India, v. M/s Uspc Enterprises Hosiery Complex and Another

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Bank of India, v. M/s Uspc Enterprises Hosiery Complex and Another

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