DRT allowed the bank's application for recovery of a KCC loan of Rs. 28,90,805 from the borrowers and guarantor. The court awarded simple interest at 10% p.a. instead of the claimed 12.25% and directed issuance of a recovery certificate.
Recovery of Rs. 28,90,805 jointly and severally with simple interest @10% p.a.; Recovery Certificate issued.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH
TRANSFER APPLICATION NO.5/2023
PRESIDED OVER BY MRIDULESH KUMAR SINGH
DATE OF INSTITUTION: 21.04.2023
DATE OF DECISION: 19.03.2024
Indian Bank, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Head Office at 66, Raja ji Salai, Chennai and Corporate Office at 254-260, Avvai Shanmugam Salai, Royapettah, Chennai, Tamil Nadu, 600014 and having its Zonal Office at Jalandhar and amongst other branches a branch at Kapurthala through its Branch Manager, Sh. Gagandeep Singh duly constituted and Authorised Signatory
……..Applicant
Versus
Advocates:
Argued by Ms. Deepika Mittal, Advocate for the applicant (through VC) Defendants are ex-parte
FINAL ORDER
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competent to institute the Original Application vide Authority Letter dated 22.11.2022, which is Annexure A1 to this OA.
Later the applicant bank renewed the KCC limit vide Renewal application cum Sanction dated 16.11.2017, which is Annexure A9 to this OA and also sanctioned a short term crop loan of Rs.3.00 Lacs.
Documents executed: - Agreement for Hypothecation and Deed of Guarantee both dated 05.06.2017, which are Annexures A4 & A5 to this OA; Disposal of Proceeds Letter and Undertaking Letter to be given by Borrower both dated 16.11.2017, which are Annexures A10 and A11 to this OA; Legal Notice dated 01.12.2022, which is Annexure A12 to this OA; Acknowledgment of Debt dated 30.04.2020, which is Annexure A13 to this OA and Statement of account, which is Annexure A14 to this OA. 5. The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.28,90,805.00, which is recoverable and the defendants were served recall notices but they did not repay the outstanding
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amount, therefore, the applicant bank requested to accept the application and to issue Recovery Certificate accordingly. 6. 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 19.02.2024. 7. In support of the OA, affidavit of Sh. Gagandeep Singh, Branch Manager, Indian Bank h as been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned 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 A14 to this OA, it is proved that the defendants approached applicant bank 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 bank is entitled to recover a sum of Rs.28,90,805.00 (Rupees Twenty Eight Lacs Ninety Thousand Eight Hundred Five 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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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 @10.00%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. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.28,90,805.00 (Rupees Twenty Eight Lacs Ninety Thousand Eight Hundred Five only) jointly and severally, with costs, current and future simple interest @10.00%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 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.
(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh
2 issues framed by the court
Whether the applicant bank is entitled to recover the outstanding dues from the borrowers and guarantor jointly and severally.
Whether interest can be awarded at a rate lower than claimed by the bank.
2 provisions across 2 enactments
Indian Bank
Sh. Gurbaj Singh
Smt. Navdeep Kaur
Mridulesh Kumar Singh
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
