Allowed

State Bank of India (E-State Bank of Mysore) v. Sargodha Oil Mills Pvt. Ltd.

DRT19 Apr 2024TA/1856/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an original application filed by two banks against their borrower and guarantors for recovery of outstanding dues of approximately Rs. 92.43 crores along with interest.

What did the court decide?

Defendants directed to pay Rs.92.43 crores with interest within 30 days. Recovery certificate to be issued. Recovery from secured properties if payment not made within period.

State Bank of India (E-State Bank of Mysore) versus Sargodha… — Intellectual Property | DRT (2024)

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T.A. No.1856 of 2022

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Debts Recovery Tribunal-I„ Delhi 4th^{floor, Jeevan Tara Building,} Parliament Street, New Delhi

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Presiding Officer: Shri Govind Ballabh Sharma

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T.A. No. 1856 of 2022

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1.^{State Bank of India(e-State Bank of Mysore)} Stressed Assets Management Branch II 11th^{Floor, STC Building,} 1, Tolstoy Marg, Janpath New Delhi-110001

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Punjab National Bank (e-Oriental Bank of Commerce) M-1,2,3, Connaught Place New Delhi-110001

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Applicant

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Versus

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Sargodha Oil Mills Private Ltd. Through its director Ram Pal Gupta Registered Office:

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C-48/ 1^{, Lawrence Road,}

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Industrial Area, Delhi-110035

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Amir Chand Gupta s/o late Teluram Director/Guarantor R/o PU-105, Pitampura, Delhi-110088

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Ram Lal Gupta s/o Amar Chand Gupta Director/ Guarantor /mortgagor R/o PU-105, Pitampura, Delhi-110088

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Raj Kumar Gupta s/o Amar Chand Gupta Director/ Guarantor /mortgagor R/o PU-105, Pitampura, Delhi-110088

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All also at:

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Defendants 4116, Naya Bazar, Delhi-110006

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Present: Shri Parth Tandon, Counsel for the applicant bank

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T.A. No.1856 of 2022

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Date of Institution: 28.07.2018

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Date of Pronouncement: 19.04.2024

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FINAL ORDER

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This original application has been filed by the applicant bank on 28.07.2018 before DRT-III, Delhi and then transferred to DRT-I, Delhi through Ms.Shalini Sharma and Rattan Chand, authorized representatives of the applicant banks, under Section 19 of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 read with Rule 8 of the Debts Recovery Tribunal Rules 1993 against the defendants for recovery of a sum of Rs.92,43,52,506.00 (Rupees Ninety Two Crores Forty Three Lacs Five Thousand Six only) as on 15.07.2018, out of which Rs.50,11,15,826/-(Rupees Fifty Crores Eleven Lacs Fifteen Thousand Eight Hundred Twenty Six only) to Applicant no.1 together with pendentelite and future interest ©11.65% per annum with monthly rest and Rs.42,32,36,680/- (Rupees Forty Two Crores Thirty Two Lacs Thirty Six Thousand Six Hundred Eighty only) to Applicant No.2 together with pendentelite and future interest ©11.45% per annum interest from 15.07.2018 till the date of realization and costs.

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The brief facts of the case are that Applicants no.1 & 2 are consortium members as per Inter Se agreement and letter of authority dated 15.04.2014 and 15.06.2015 agreeing applicant no.1 as Lead Bank in order to release, ratify whatever acts, deeds lawfully done as lead bank or enforce the securities created in favour of consortium members. The applicant no.1 on the request of defendant no.1, being limited

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T.A. No.1856 of 2022 .

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company carrying out,the business of manufacturing of Agro Commodities, sanctioned Cash Credit facility of Rs.25.00 crores on 02.11.2010 which was renewed from time to time and enhanced to Rs.40.00 crores on 16.04.2015. The Applicant No.2 Bank sanctioned Cash Credit facility of Rs.30.00 crores on 28.02.2014 which was enhanced to Rs.35.00 crores on 05.05.2015. The limits were released as per Board Resolution approved by defendant no.1 dated 03.11.2010, 13.07.2012, 10.04.2014 and 13.06.2015 authorizing defendant no.2 to execute all the necessary documents in favour of consortium members. The limits were sanctioned against hypothecation of all present and future stock, raw materials, book debts and including moveable assets of defendant no.1 as well as equitable mortgage of two properties owned by defendant no.1, 3 and 4 with applicant bank.

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That in order to avail the said loan facilities, the defendant no.1 executed Joint Deed of Hypothecation and defendant no.2 to 4 executed deed of guarantees dated 15.04.2014 and 15.06.2015 creating first charge on currents assets including raw materials, goods and book debts including movable assets as well as hypothecation of moveable assets in favour of consortium members. The defendant no.1 also executed demand promissory notes, letter of undertaking not to create further charge on property and assets, Form 8, Letter of consent for disclosure of information on 09.12.2010, Sanction Letters, Revival Letters Form-II by defendant no.2 to 4 with one Mrs.Shakuntala Devi.

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T.A. No.1856 of 2022

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In order to secure the credit facilities, defendants mortgaged the following properties with the applicant bank :

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a) Factory land and building situated at Industrial Plot No.48/1, Block C, Industrial Area, Lawrence Road, New Delhi admeasuring 1210 sq.yards owned by defendant no.1

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b) Factory land and building situated at Industrial Plot No.518, HSIIDC, Food Park, Rai, Sonepat, Haryana admeasuring 1012.50 sq.metres owned by defendant no.3 and 4.

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The defendant no.1 to 4 executed Balance Confirmation acknowledging an amount of Rs.40,08,74,270.65 towards Applicant no.1 and Rs.35,24,70,644.76 towards applicant no.2 as of 31.05.2016 on 23.06.2016, totaling Rs.75,33,44,915.41 towards both the applicant banks.

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It has been submitted by the applicant banks that after availing the aforesaid loan facilities, the defendants miserably failed and neglected to pay and meet their liabilities and maintain financial discipline as per terms and conditions despite various communications, requests, personal visits and reminders. The Applicants banks also conducted joint lenders meeting with defendant no.2 to 4 on 02.02.2017, 01.03.2017, 15.03.2017 and 24.03.2017 and also conducted inspection. As per Joint Inspection Report dated 20.02.2017, there was no stock available in the godown of the defendant no.1. The account of defendants was classified as NPA on 27.02.2017 and 31.01.2017 by the applicant no.1 and 2 respectively as per RBI guidelines.

Sa-

T.A. No.1856 of 2022

Notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 dated 29.03.2017 for Rs.42,22,90,166.37 was issued by applicant bank No.1 and for Rs.39,42,65,867.76 was issued by applicant bank no.2 on 06.12.2017 for both the properties and hypothecated current assets. The defendants raised objection on 01.06.2017 to the notice of applicant no.1 bank which was replied on 16.06.2017. The applicant no.1 bank taken the possession of both the properties on 10.05.2018 vide possession notice under Section 13(4) along with Section 8(1) of Security Interest (Enforcement) Rules 2002 for Rs.81,65,56,034.13 as per mandate dated 28.02.2018 with applicant no.2 bank.

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Notices of this O.A. were issued to the defendants and despite of proper service the defendants have chosen to absent from the proceedings. As per order dated 11.10.2019, the defendants have been proceeded ex-parte as not appeared before the Tribunal and even no written statement, evidence and affidavit of assets have been filed by the defendants.

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In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Ms Shalini Sharma, authorized representative of the applicant bank no.1 and Ratan Chand, authorized representative of applicant bank No.2, who have proved the documents as Gazette Notification, Power of Attorney, Sanction Letters, Board Resolutions, Agreement for Cash Credit (Agreement for advances • form No.9 and 10), Hypothecation of Moveable Assets, Letters of Undertakings, Form 8, Letters for providing Guarantee without consideration, No Objection Letter, Consent for Disclosure of Information etc., Renewal Letters, 5d-

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T.A. No.1856 of 2022

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Revival letters - Form II with Form I, Balance Confirmation Letter, Confirmation of Mortgage Letters, Inter Se Agreement, Letters of Authority, Consortium Agreement, Joint Deed of Hypothecation, Deeds of Guarantees, Hypothecation of Moveable Assets, Undertakings, Letter of Authority by all Consortium Members, Working Capital Consortium Agreement, Renewal Letters, Title Deeds of Mortgaged Properties, Revival Letters, Balance Confirmations, Minutes of Joint Lenders Meeting, Inspection Report, Notices dated 29.03.2017 under Section 13(2) of SARFAESI Act, Objection Letter & Reply, Possession Notice, Statement of Account of duly Certified under Section 4 of Bankers' Book Evidence Act, being Exhibit AW1/1 to Exhibit AW1/53 and Exhibit AW2/1 to Exhibit Aw2/32 (Colly).

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The applicant bank has fully corroborated the averments made in the O.A. Even otherwise the whole case of the applicant bank is based on the documents and the same have been duly proved.

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The case filed by the applicant bank gone unrebutted and there is no question of disbelieving the case of the applicant bank and the applicant bank has proved its case beyond reasonable doubts

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In the light of the above discussions, the Original Application deserves to be allowed.

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T.A. No.1856 of 2022

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ORDER

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(I) I, allow this OA and direct the defendants, jointly or severally, to pay to the applicant bank within a period of 30 days, a sum of Rs.92,43,52,506.00 (Rupees Ninety Two Crores Forty Three Lacs Five Thousand Six only) as on 15.07.2018, out of which Rs.50,11,15,826/-(Rupees Fifty Crores Eleven Lacs Fifteen Thousand Eight Hundred Twenty Six only) to Applicant no.1 together with pendentelite and future interest @11.65% per annum with monthly rest and Rs.42,32,36,680/- (Rupees Forty Two Crores Thirty Two Lacs Thirty Six Thousand Six Hundred Eighty only) to Applicant No.2 together with pendentelite and future interest @11.45% per annum interest from 15.07.2018 till the date of realization, failing which the aforesaid amount shall be recovered from the sale of hypothecated goods, plant & machinery, book debts etc. of defendant no.1 as well as sale of following mortgaged properties:

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a) Factory land and building situated at Industrial Plot No.48/1, Block C, Industrial Area, Lawrence Road, New Delhi admeasuring 1210 sq.yds. owned by defendant no.1.

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b) Factory land and building situated at Industrial Plot No.518, HSIIDC, Food Park, Rai, Sonepat, Haryana admeasuring 1012.50 sq.mtrs. owned by defendant no.3 and 4.

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In case of shortfall, the same shall be recovered from sale of movable and immovable properties of defendant no. 1 to 4.

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T.A. No.1856 of 2022

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(II) The recovery certificate be issued forthwith and be sent to the Recovery Officer, Debt Recovery Tribunal-I, Delhi.

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(III) Parties are directed to appear before the Recovery Officer, DRT I, Delhi on 18.06.2024.

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(IV) Copies of final order as well as Recovery Certificate are to be sent to all concerned free of cost.

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(GOVIND BALLABH SHARMA) PRESIDING OFFICER DRT-I, DELHI

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(Dictated and pronounced in open court) Dated: 19.04.2024

State Bank of India (E-State Bank of Mysore) v. Sargodha Oil Mills Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

State Bank of India (E-State Bank of Mysore) v. Sargodha Oil Mills Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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