Allowed

Union Bank of India v. M/S Krishna Box Factory and Others

DRT24 Dec 2024OA/982/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's original application for recovery of an outstanding loan of approximately Rs.51 lakhs. The court awarded simple interest at 8% p.a. instead of the claimed 14.05%, noting drastic changes in market rates.

What did the court decide?

Recovery of Rs.50,98,555.24 with costs and simple interest @8.00% p.a. from filing till realization; Recovery Certificate issued;

Union Bank of India versus M/S Krishna Box Factory and Others — Banking and Recovery | DRT (2024)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.982/2024 PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 02.08.2024

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DATE OF DECISION: 24.12.2024

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Union Bank of India, a body corporate and banking company constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970, having its Head Office at 239, Vidhan Bhavan Marg, Nariman Point, Mumbai-400021 and having a Branch Office inter-alia at, Kesar Ganj, Ludhiana, through its duly authorized person and Power of Attorney Holder Sh. Rohit Chhabra, Branch Head

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……..Applicant

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Versus

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M/s Krishna Box Factory, opposite Century Knitwear, 536/21, DC, Campa Cola Road, Dhandari Kalan, Ludhiana,( through its partners defendant nos.2 and 3)

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Sh. Vivek Gupta S/o Sh. Surinder Gupta

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Smt. Anita Gupta W/o Sh. Surinder Gupta, R/o Flat no.A1/41, Phase-3, Army Flats, Urban Estate Dugri, Basant Avenue Ludhiana Punjab 141013 (both partners of defendant no.1 M/s Krishna Box Factory)

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….……Defendants

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Advocates:

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Argued by Sh. Amod Kumar Thakur, Advocate proxy for Sh. R.K. Chauhan, 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.50,98,555.24p (Rupees Fifty Lacs Ninety Eight Thousand Five Hundred Fifty Five and Twenty Four Paisa only). The Original Application has been filed through Sh. Atul Kumar, Branch Manager, of the applicant, who is competent to institute the Original Application

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vide Power of Attorney dated 10.04.2019, 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 of Rs.50.00 Lacs vide Loan Application dated 27.12.2022, which is Annexure A2 to this OA. 3. The applicant sanctioned the Cash Credit Limit of Rs.50.00 Lacs vide Memorandum and Credit Sanction Letter dated 10.01.2023 and 12.01.2023, which are Annexures A5 and A6 to this OA and the terms and conditions were duly accepted by the defendants vide Acceptance of Term and condition dated 12.01.2023, which is Annexure A7 to this OA.

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Defendant no.1 had Hypothecated its movable assets i.e. Hypothecated the Stock of Boxes, Stock of raw material, Semi furnished goods and Finished Goods and Book Debts vide Hypothecation Agreement of Goods and Debts dated 12.01.2023, which is Annexure A10 to this OA.

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Documents executed:-GST Registration Certificate dated 19.04.2015, which is Annexure A3 to this OA; Udyam Registration Certificate dated 24.12.2022, which is Annexure A4 to this OA; Demand Promissory Note, Letter of Continuity, Letter of Undertaking, AD-02, Declaration of Partnership, Letter of undertaking from Partners, Undertaking from Borrowers, Deed of Guarantee, Letter of undertaking from guarantors dated 12.01.2023, which are Annexures A8, A9, A11 to A17 to this OA; Letter by Defendants dated 04.11.2023, which is Annexure A18 to this OA; Letter for adjustment of overdue dated 07.10.2023, which is Annexure A19 to this OA; Legal Notice dated 18.07.2024 with postal receipts, which is Annexure A20(colly) to this OA and Account statement along with Certificate, which are Annexures A21 and A22 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 the loan account there was a debit of Rs.50,98,555.24p, which is recoverable and the

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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 19.12.2024.

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In support of the OA, affidavit of Sh. Atul Kumar , 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 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 A22 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.50,98,555.24p (Rupees Fifty Lacs Ninety Eight Thousand Five Hundred Fifty Five and Twenty Four Paisa 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 @12.05%p.a. plus panel interest @2.00% with monthly rests from 01.07.2024 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

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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 @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.50,98,555.24p (Rupees Fifty Lacs Ninety Eight Thousand Five Hundred Fifty Five and Twenty Four Paisa 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 Tribunal on 14.02.2025.

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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: 24.12.2024.

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

Union Bank of India v. M/S Krishna Box Factory and Others

Case brief

What is this about?

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Union Bank of India v. M/S Krishna Box Factory and Others

Case brief

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