Allowed

Punjab National Bank v. Pioneer Trading

DRT27 Aug 2024OA/99/2023

Case brief

AI extract

What is this about?

In this DRT application, the Tribunal granted a Recovery Certificate to Punjjab National Bank against three respondents, finding them jointly and severally liable for outstanding loan dues of Rs. 39,09,671.77 with interest and costs, allowing the bank to proceed against secured and personal assets.

What did the court decide?

Issuance of Recovery Certificate for Rs. 39,09,671.77 with pendentelite interest; call on seized property to repay dues; costs of application.

Punjab National Bank versus Pioneer Trading — Banking and Recovery | DRT (2024)

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ga 99zo2gDRr€uw6nan

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IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

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(Norlh Eastern Region)

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(Tribunal of Assam, Nagaland, Meghataya, Manipur, Mj-zoram, Arunachal pradesh & Tnpura)

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O.A. No. 9912023

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ln tho matter of -

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PUNJAB NATIONAL BANK (Erctwhite Unitad Bank of tndia) Tirap Branch, Ledo Bazar, P.O. Ledo

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ln the District of Tinsukia, Assam-78612S.

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..Appticant

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1. PT.NEERTRADTN. '"'

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A Proprietorship Firm,

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Regd. Office, Tikak Set ement Area, P. O. Ledo, District- Tinsukia, Tinsukia-786182, Assam.

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MD. MIZ KHAN

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Proprietor of Pioneer Trading, Son of Late Molla Box, Resident of Tikak Settlement Area, P. O. Ledo, Distric! Tinsukia,

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Tinsukia-786182, Assam.

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SADAT ALI

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Son of Lab Sawkat Ali,

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Resident of Tipong ClL, Tipong Dhalai, P. O. Ledo, District- Tinsukia, Tinsukia-786182, Assam.

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Defe n da nts

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Presgnco of tho Counlel :

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For the Applicant

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For the Defendants No. I & 2

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For the Oefendant No. 3

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Mr. Shoubhik Chanda, Ms. Ranjita Das, Advocates

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Ms Ellora Bharali, Advocates (Wthdrawn Vakalatnama) (Right to file WS cum EA ctosed).

None (Ex-parte)

Dated 2710812024

JUDGMENT

This is an application under section 19 of the Recovery of Debts

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Due to Banks and Financial lnstitutions Act, 1993 liled by the PUNJAB NATIONAL

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BANK (Erstwhile United Bank of lndia), Tirap Branch, Ledo Bazar, p.O. Ledo, ln the *ww

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oA 99/2023/ORr€urf.h.ri

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Oistrict of Tinsukia, Assam-786125, with a prayer to issue Recovery Certificate for the sum of Rs. 39,09,671.77 (Rup3e3 Thirty-Nino L.cs Nine Thousand Six Hundrod SoventyOne and Pai3a Sovonty€even) only as on 31.01.2023 against the defendants with pendentelite and future interest at the contractual rate with monthly rests till realization, along with cost and other relief.

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A few facts giving rise to the present application are as under.

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The Defandant No. 1 is a proprietorship firm and Defendant No. 2 is the sole proprietor of the Oefendant No. I firm engaged in business of purchasing and selling of Coal. Defendanls No. 3 stood as the personal guarantor to lhe loan facility availed of by the Defendant No. 2 in his capacity as the proprietor of the Defendant No.^.l Firm.

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The Applicant Bank states that Defendant No. 2 on behalf of his Defendant No. 1 ,irm had approached before the Applicant Bank and applied for financial assistance for his business of purchasing and selling of Coal and the competent authority of the Applicant Bank after considering the loan application and various other documents, submitted by the Defendant No. 2, vide its Sanction Letter dated 09.02.2013, sanctioned a Cash Credit of Rs. 15.00 Lacs with rate of interest thereon @^{13.95%p.a. wilh monthly rests (i.e. Base Rate +} 3.50% and the then base rate being 10.45%). The Cash Credit is repayable on demand. The Defendant No. 2 as the borrower had signed on the said Sanction Letter, thereby agreeing to the terms and condition laid down thersin.

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Having accepted the terms and conditions of sanction by making endorsement on lhe sanction, the Defendanl No. 2 as the proprietor of the Oefendant No.^.l firm had executed Demand Promissory Note dated 15.02.2013 in terms of the sanction, inter-alia giving due effeci to the terms and condition of sanclion, promising to repay the loan and to secure the dues of Bank. Further, the Defendant No. 2 in his capacity as the proprietor of the Defendant No. 1 Firm signed and executed a Letter of Continuity dated'l 5.02.2013.

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ln connection with the sanction of the loan amount of Rs. 15.00 Lacs only sanctioned by the Applicant Bank and availed of by the Defendant No. 2, the

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following documents mentioned below were signed and executed by the Oefendant No. 2 as the proprietor of the Oefendant No. 1 firm, in favour of the Applicant Bank as security for repayment of the loan thereby not only agreeing to the terms and conditions of the said agreement but also hypothecated the assets created out of bank finance, etc. (more specifically described in Schedule-A of the OA) with the Applicant Bank.

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a) Hypothecation of Debts and Movable Assets dated 15.02.2013 (more specifically described in Schedule -A of the OA)

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b) Hypothecation of Goods dated 15.02.2013 (more specificaly described in Schedule-A of the OA).

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Again, Defendanl No. 2 as the proprietor of the Defendant No. 1 Firm had approached before the Applicant Bank and requested for enhancement of the existing cash credit limit of Rs. 15.00 Lacs to Rs. 25.00 Lacs for his business and the Applicant Bank after considering the said requesl, submitted by the Defendani No. 2 as the^proprietor of Defendant. No. 1 Firm, vide its Sanction Letter dated 24.10.2014 enhanced the existing cash credit limit of Rs. 15.00 Lacs to Rs. 25.00 Lacs with lnterest thereon at Base Rate +3.50% (i.e. 10.25o/o+ 3.50Yo = 13.75olo p.a. with monthly rests) and the same was repayable on demand. The Defendant No. 2 as the borrower had signed on the said Sanction Letter, thereby agreeing to the terms and condition laid down therein. Further, in this regard, th6 Defendant No. 2 in his capacity as the^proprietor of the Defendant No. 1 Firm had also signed and executad an Acknowledgement of Sanction Letter dated 24.'10.2014.

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Having accepted the terms and conditions of sanction by making endorsement on the sanction, the Defendant No. 2 further also executed a Demand Promissory Note dated 24.10.2014 in terms of the sanction, inter-alia giving due effecl to the terms and condition of sanction,^promising to repay the loan and to secure the dues of Bank.

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Further, in conneclion with enhancement of existing cash credit limit of Rs. 15.00 Lacs to Rs. 25.00 Lacs by the Applicant Bank, various loan cum security documents were signed and executed by the Defendant No. 2 in his capacity as the proprietor of the Defendant No.^'1 Firm which are stated below :-

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a) Letter of Lien daled 24j02014

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b) Acceptance Letters datsd 24.10.20'14.

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c) Hypothecation of Oebts and Movable Assets dated 24.10.2014 (more specmcelly described in Schedule - A of the OA)

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d) Hypothacation of Goods dated 24.10.2014 (more speciflcally described in Schedule-A of the OA).

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As security for repayment of the aforesaid loan facility availed of by the Defendant No. 2 in his capacity as tha proprietor of the Defendant No. I Firm, a Guarantee Agreement dated 24.10.2014 was signed and executed by the Oefendant No.3 in his capacity as the personal guarantor.

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Again, the Defendant No, 2 being proprietor of the Defendant No. 'l Firm had approached before the Applicant Bank and vide Application dated 28.04.2015 requested for a Temporary Overdraft of Rs. 5.00 Lacs for his business. The Applicant Bank after considering the said request, vide its Sanction Letter dated 06.05.2015 sanctioned an Ad-hoc limit of Rs. 5.00 Lacs which was to be repaid in 30 Days from the date of sanction. The Defendant No. 2 as the borrower had signed on the said Sanction Letter, thereby agreeing to the terms and condition laid down therein.

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ln connection with the ranewal of existing cash credit limit of Rs. 25.00 Lacs by the Applicant Bank, various loan cum security documents were signed and executed by lhe Defendant No. 2 on 09.08.2017 in his capacity as the proprietor of the Oefendant No. 1 Firm which are siated below-

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.) Letter of Lien dated 09.08.2017.

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b) Acceptance Letter dated 09.08.2017.

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c) Hypothecation Agreement (Goods Book Debts, Plant and Machineries) dated 09.08.2017 (more specifically described in Schedule - A of the OA)

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Again, Defendant No. 2 as the proprietor of the Defendant No. 1 Firm approached before the Applicant Bank and had r6qu6sted for Term Loan facility under PNB Covid-19 Scheme for his business vide Application dated 07 .05.2020.

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The Applicant Bank after considering the said request, submitted by the Oefendant No. 2 as the proprietor of Oefendant No. 1 Firm, vide lts Sanction Letter dated 07.05.2020 sanctioned a Term Loan facility of Rs. 2.50 Lacs under PNB

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Covid-19 Scheme with interest at 9.25%^p.a. and the^{Tarm Loan was to be repaidin} 24 equated monthly lnstallments of Rs. 14,929^^{with a moratoriumof 6 months. The} Defandant No. 2 as the borrower had signed^{on the said Sanction Letter, thereby} agreeing to the terms and condition^{laid down therein.}

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The Applicant Bank stated that on the onslaught of Covid-l9^Pandemic, the Government of lndia had issued certain^{guidelines regardingtherestructuring of the} loan availed by the MSMES and in connection thereof, the^{Applicant bankvide} Sanction Letter dated 29.09.2020 had sanctioned^{a WCTL under GECL, the limit} being Rs. 5,10,409.00, interest RLLR^{+ '1.00%i.e. 7.650/o p.a. to meet operational} liabilities to restart the business affected^{due to Covid-19 and the said WCTL facility} was repayable in 36 equated monthly^{installments includinga moratorium periodof} 12 months and the Defendants No. 2 in his capacity^{as proprietor of the Defendant} No. 1 Firm had acknowledged the said sanction^{and the terms and condilions} thereof. Thereafter, again on 28.06.2021,^{the said CC was restructured under mass} campaign "Resolution Framework^{2.0 for Covid-'l9 Related Stress" and an amount} and an FITL loan was sanctioned amounting to^{Rs. 1,68,050.0012.15ok lot 24} months, the moratorium^period being 6 months^{and no,} of^{lnstallmenlsbeing 18} months and the EMI for FITL, being 10,279,29.

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Further lhe Defendant No. 2 ln capacity as the^proprietor of the^OefendantNo. 1 Firm had also signed and executed various^loan cum security^documentsin connection with the loan facilities availed, which are stated below:-

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a) Hypothecation of Goods to Secure cash Credit Demand dated 29.09.2020 (more specifically described in Schedule - A of the OA)

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b) Mastsr Agreement dated 29.09.2020

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The disbursement of the loans was mad6 on the execution of security documents in favour of the Applicant Bank, by opening various loan accounts Le. CC A/c No. 0861250021395, TL A./c No. 086'120180000003, OLCOV tuc No. 0861306712064 and TL (GECL) A/c No. 0861306712903).

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The Defendant No. 2 as the proprietor of Defendant No. 1 Firm after availing

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the aforesaid linancial assistances from the Applicant Bank, neglected and failed to

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comply with the terms and conditions of the sanctions and was lrregular io repayment of the dues, inspite of repeated demands and requests etc. Subsaquently, the Applicant bank had issued Recall Notice dated 23.03.202,1 and 20.11.202'l to the Defendants. Further, the Applicant Bank had also initiated proceedings under the SARFAESI Act, 2002 by issuing Notice dated 22.02.2022 uls 13(2) of the said Act, but the Defendants did not respond to the same. However, the Defendant No. 2 in his capacity as the proprietor of the Defendant No. 1 Firm had contirmed the outstanding balance in the loan accounts by signing and executing Balance and Security Confirmation Lettars dated 0,t.07 .2021 and 27 .04.2022.

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The Statements of Accounts maintained by the Appticant Bank in the usual and ordinary course of business shows that there is an outstanding balance of Rs. 39,09,671.77 as on 31 .01 .2023.

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The account became N.P.A. on 28.09.2021. The CC A,/c No. 1086i250021395 as on 31.0'1.2023 shows an outstanding batance of Rs. 30,04,876.79. The outstanding balance in the TL A/c No. 0861201800000031 is Rs. 1,95,11.t.00 as on 31.01.2023. The outstanding balance in the TL A,/c No. 08613067.12064 is Rs. 1,67,007.30 as on 31.01.2023. Similarty, the outslanding balance in the TL A,/c No. 0861306712903 is Rs. 5,42,689.00 - Rs. 12.32 (penat tnterest Capitalized) as on 31.01.2023. Therefore, the total outstanding as 3.1.01.2023 comes to Rs. 35,09,671.77 and the Defendants No. 1,2 and 3 are legalty bound, joinfly and severally liable to pay the said amount to the Applicant Bank with pendentelite and future interest till realization with cost and charges, etc.

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The applicant bank thus became @nstrained to lile the present Original Application for lhe recovery of Rs. 39,09,67'1.77 (Rupees Thlrty-Nino Laca Nine Thousend Slx Hundrod Soventy-Ona and Paisa Sevonty€oven) only as on g1.O1.2OZg along with interest and cost of the application.

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After filing of the OA the Tribunal issued notices upon the defendants through registered post and the applicant bank fited service report on^.17.05.2023 and brought on racord the postal receipts along with track consignment report. The learned counsel for defendants No. 1 & 2 have appeared on 19.07.2023 and sought time for

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Presiding

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OA 99/2023VORT4ukh.l,

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filing written statement^{cumevidenceon aftidavitwhichwas duly permitted'} Thereafter the matter^{was listed on severat times,but written statement cum evidence} on affidavit has not^{filed by thedefendantsNo. 1 & 2 Hence,theirright of the file} written statement cum^{evidence on affidavitwas closed on 2'1.092023|t is observsd} that the Tribunal ordered^{paper publication of notice upon the defendantNo 3 and} the applicant bank^{issued notice to the defendant No. 3 through Paper Publicationin} two newspapers namely^{"fhe Times of lndia " and 'Dainik Assam" both dated} 29.11.2023. Even after^{issuing notice through paper publication uponthe} defendant No.^{3 there has been no rePresentationon behalfof the d6fendantNo 3} either by the^{counsel or the personand hence the defendant No3 was set ex-parte} on 29.01.2024. Thereafter^{the matter was posted for hearing on behalfof the applicant} bank.

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Supporting the^{claim of the applicant bank Smt Anjanaoas,Chief Managerof the} Applicant Bank^{has filed evidenceon affidavitcoupledwith the secuntydocuments} marked as Exhibit^{1 to 37, supporting the claimof the applicantbank'}

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Heard the learned^{@unselfor the applicant bank who prayed for issuance of} Recovery Celtilicate^{againstthe defendants as per pleadings madein the ApPlication'} supported by^{evidenceon affidavit of their witnesswho affirmedon oath the execution} ofthesecurityandotherdocumentsbythedefendantandalsoexecutiono'theirown documents relied^{upon, which have been markedexhibits'}

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Considering^{the facls and circumstances of the case, I am of lhe considered} vie,y that the documents^{liledby the applicant bank are supponing the claim of the} applicant bank^{and establishing theliability of the defendants lt is proved that the} defendants arg^{jointlyand severally liable to pay to the applicant bankthe claim} made in the Original^{Application Theloanswere obtained and documentshave} been executed on^{15.02.2013,24j0.2014,0908 2017,07.05.2020& 29092020'} Balance and^{Security Confirmation Letter daled 01 07 2021 & 27 u'2022'The} accounts became^{NPA on 28.09.2021 and the OA has been filedon 16 03 2023'} Hence, the OA^{is filed well within the period of limitationand this Tribunalhavinga} jurisdiction to adjudicatethe orisinalApplication slilkEftT

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DRT, Guwahati

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OA^{gg/2o2ADRT-GqahalL}

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Considering the unchallenged/ unrebutted version of Smt Anjana Das, the applicant's witness and all the documents marked as exhibits,^{including duly certified} copy of the statement of account along with interest calculation^{sheet maintained by} the applicant Bank in it's rcgular cour:ie of business, I hold that the applicant^is entitled to get the Recovery Certiricale as^prayed for.

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ln ths result, the^present Original Application No. 99 of 2023 is allowed with cost as under :-

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i) The defendants No.^'1, 2 & 3 are^jointly and severally^liable to^{pay to the} applicant bank a sum of tu. 39,09,67'1.77^{(RupoesThlrty-NineLacaNine} Thousand Six Hundred Ssventyono and Pal3a Sevonty€even)^{only with} pendentelite and future interest @13.95% per annum with monthly rests from 01.02.2023 till tha date of full^{paymenurealization} and^{also cost of the} application.

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ii) The charge ofthe certificated amount be kept alive on^{hypothecated properties,} as described in Schedule-A of the OA till the amount^{is realizedin full.}

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iii) The applicant bank is entitled to^{proceed against thesecured items towalds} recovery of the debts.

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lv) The applicant bank is also entitled to^{proceed againstthe personal assets and} properties of the defendants towards recovery of the dues.

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v) The applicant bank is entitled to the costs of the^{O.A. which includes the} advocata fees of the applicant bank.^{Applicant is direcledto file the cost memo} within 2 weeks from today.

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vi) lssue Recovery Certificate accordingly for a sum^{Rs.39,09,671.77 (Rupees} Thirty.Nlno Lacs Nine Thousand Sir^{HundrodSsventyOnoand Paisa} Soyonty-Seyon) only in favour of the applicant^{bank againstthedefendants} No. 1,2 & 3.

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vii) Communicate copy of this order to the^{concemed parlies.}

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This order is dictated and corrected by the undersigned.

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DRT, Guwahali

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0 A.^{ggr2o23i/DRT-Gmahatr}

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Judgment dated 27u August 2024,^{signed and pronounced in the Tribunal}

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today under my signature.

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Copy of the JudgmenUFinal Order^{be uploadedin the Tdbunal'sWebsite and ,lle}

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be consigned to Record Room.

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Slrft"^q"IrrsnivsrraraSle$l4 d Presiding Officer DRT, Guwahati.

Punjab National Bank v. Pioneer Trading

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. Pioneer Trading

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

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