Allowed

Union Bank of India v. Sanco Industries Ltd.

DRT6 Apr 2024TA/2385/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's original application for recovery of dues from a borrower company and its guarantors. Following an uncontested ex-parte proceeding, the court ordered the defendants to pay the debt and permitted enforcement against hypothecated goods and mortgaged properties.

What did the court decide?

Defendants directed to pay Rs.38,18,92,656.15 with interest; recovery to be effected from sale of hypothecated goods and mortgaged properties.

Union Bank of India versus Sanco Industries Ltd. — Company and Corporate | DRT (2024)

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T.A. No.2385 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. 2385 of 2022

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Union Bank of India SCO 13, HUDA Commercial Complex Sector 14, Gurgaon,

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Haryana Applicant

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Versus

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Sanco Industries Ltd. Registered Office: 9/51, Bazar Gall, Vishwas Nagar Delhi-110032

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Corporate Office: Through Company Secretary D-161„ Suraj Mal Vihar Delhi-110092

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Sanjay Gupta s/o Om Prakash Gupta Rio C-56, Suraj Mai Vihar, Delhi-110092

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Mrs.Shakuntala Gupta w/o Om Prakash Gupta R/o C-56, Suraj Mal Vihar, Delhi-110092.

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Sidhant Gupta s/o Sanjay Gupta R/o C-56, Suraj Mal Vihar, Delhi-110092

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Rita Gupta w/o Sanjay Gupta • R/o C-56, Suraj Mal Vihar, Delhi-110092

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Om Prakash Gupta sio Babu Ram R/o C-56, Suraj Mal Vihar, Delhi-110092

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Sc(

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T.A. No.2385 of 2022

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Mansi Gupta D/o Sanjay Gupta R/o C-56, Suraj Mal Vihar, Delhi-110092

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Sanjay Gupta HUF Through its Karta Sanjay Gupta S/o Om Prakash Gupta R/o C-56, Suraj Mal Vihar, Delhi-110092 Defendants

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Present: Shri Janendra Lal, Counsel for the applicant the bank

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Date of Institution: 07.03.2020 Date of Pronouncement: 06.04.2024

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FINAL ORDER

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This original application has been filed by the applicant bank on 07.03.2020 before DRT-II, Delhi and then transferred to DRT-I, Delhi through Shri Rajeev Kumar, authorized representative of the applicant bank, 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.38,18,92,656.15 (Rupees Thirty Eight Crore Eighteen Lacs Ninety Two Thousand Six Hundred Fifty Six and paisa Fifteen only) as on date of filing of this application together with pendentelite and future interest ©11.35% per annum with monthly rest from filing of this 0.A till the date of realization and costs.

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2 The brief facts of the case are that on the request of defendant no.1, being limited company carrying out the business of manufacturing of insulated wires, cables and PVC

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T.A. No.2385 of 2022

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pipes, the applicant bank sanctioned Cash Credit Hypothecation facility of Rs.13.40 crores @12.75% interest per annum and Non Fund based limit of Rs.13.40 crores being Letter of Credit plus Rs.2.00 crores as Performance Guarantee on 02.06.2014 @18% interest per annum. The limits were sanctioned against hypothecation of stocks, book debts as well as equitable mortgage of four properties by defendant no.2 to 6 approved by Board Resolution dated 02.06.2014 authorizing defendant no.2 to execute all documents on behalf of defendant no.1. On the request of defendant no.1, the limits were renewed / enhanced from time to time including adhoc limits and last being sanctioned on 10.11.2017 details are as under:

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Rs.2100.00 lacs Rs.2100.00 lacs

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Cash Credit (H) - Rs.2100.00 lacs Rs.2100.00 lacs Non Fund based - Rs.1540.00 lacs Bank Guarantee - Rs.200.00 lacs

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That in order to avail the said loan facilities, the defendant no.2 to 6 executed letter of personal continuing guarantees on various dates. Further, defendant no.2 executed documents by affixing stamp of defendant no.1 viz. Demand Promissory Notes, Letter of Continuity, Letters of Undertaking, Hypothecation Agreements of Goods and Debts, Hypothecation to stocks of goods at its godown, warehouses etc., Trust Receipts, Letter of Counter Indemnity, Composite Hypothecation Deed, Revised Terms and conditions on 15.10.2014, adhoc limits acceptance, Board Resolutions dated 08.01.2015, 01.10.2015, 23.03.2016 and 21.12.2017, Supplementary Hypothecation Agreement of Goods and Debts, since 05.06.2014 till 28.12.2017 with application bank.

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T.A. No.2385 of 2022

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The defendant no.2 signed and executed debit balance confirmation and acknowledgement of rate of interest counter signed by defendant no.2 to 6 on 01.10.2015. The defendant no.8 was declared Karta and defendant no.2, 4, 5 and 7 as members of joint family.

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In order to secure the credit facilities, defendants created mortgage of following properties by depositing original title deeds with the applicant bank on 08.07.2014, 03.10.2015 and extended the same on various dates' last being on 02.01.2018 with applicant bank and memorandum of extension was duly made:

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a) Factory land & Building being Khata Khatauni No.1/Min/11, Khasra No.151/83/38 at Village Sattiwala Tehsil Paonta Sahib, Distt. Sirmour, HP measuring 5 Bigha 4 Biswas owned by defendant no.1;

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ED) Commercial property No.51, Block-9 (9/51), Khasra No.2293/1^{8 49/3, 3760/1020/69/1, Bazar Gali, Vishwas} Nagar, Shandara, Delhi-32 owned by defendant no.6;

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c)^{Residential House No.C-56, Suraj Mal Vihar, Delhi} measuring 161.65 sq.mtr. owned by defendant no.3 and 5;

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d) 3 Floors i.e.^{1st, 2ndand 3rdfloor with roof rights of D-161,} Suraj Mal Vihar, Delhi-92 measuring 120 sq.mtr. each floor owned by defendant no.3 and 5.

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It has been submitted by the applicant bank that after availing the aforesaid loan facilities, the borrower company failed to maintain financial discipline regularly as per terms

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T.A. No.2385 of 2022

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and conditions as various bills under Import Letters of Credit were not paid and were devolved for payment and after the due dates, account was required to be classified as NPA as per RBI guidelines. As the defendants failed to regularize the account, the applicant bank classified the account as NPA on 30.06.2019 and issued recall notice dated 03.07.2019 for Rs.34,91,07,985.48 to the defendants by recalling the loan facilities but defendants neither responded to the notices nor rectified the shortcomings. Hence, the applicant bank has approached this Tribunal for recovery of their dues.

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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 23.05.2022, 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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Notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 dated 09.07.2019 for outstanding dues of Rs.34,91,07,985.48 as of 30.06.2019 was issued by applicant bank and replied by counsel of defendants on 05.09.2019 and 13.09.2019 requesting not to adjust the margin money held. The applicant bank vide letter dated 04.10.2019 declined the request and demand payment of dues. Further, the applicant bank issued possession notice dated 14.10.2019 for possession of properties on 28.10.2019 and plant & machinery including factory land & building at Paonta Sahib on 24.10.2019.

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T.A. No.2385 of 2022

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In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Shri Rajeev Kumar, authorized representative of the applicant bank who has proved the documents as Sanction Letter, Board Resolutions, Letters of Access to Premises, Lease Agreements, Demand Promissory Notes, Letters of Continuity, Hypothecation Agreements, Trust Receipts, Counter Indemnity, Agreements on Rate of Interest, Declarations, Letter of Undertakings, Composite Hypothecation Deed, Deeds of Guarantees, Modified Terms and Conditions, Supplementary Hypothecation Agreement, Deed of Personal Continuing Guarantee, Letters, Undertaking not to alienate hypothecated goods, Acknowledgement of debts, Declaration of Joint Family, Letter of Confirmation, Notice dated 09.07.2019 under Section 13(2) of SARFAESI Act, Power of Attorney of Authorized Representative of Applicant, Statement of Account of Cash Credit account and Import Letter of Credit Devolved Account, Certificate under Section 2A(b) and 2A(c) under Bankers' Book Evidence Act 1891 being Exhibit AW1/1 to Exhibit AW1/183.

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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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T.A. No.2385 of 2022

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

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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.38,18,92,656.15 (Rupees Thirty Eight Crore Eighteen Lacs Ninety Two Thousand Six Hundred Fifty Six and paisa Fifteen only) together with pendentelite and future interest @11.35% per annum with monthly rests from the date of filing of this O.A. 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 & Building being Khata Khatauni No.1/Min/11, Khasra No.151/83/38 at Village Sattiwala Tehsil Paonta Sahib, Distt. Sirmour, HP measuring 5 Bigha 4 Biswas owned by defendant no,1;

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b)^{Commercial property No.51, Block-9 (9/51), Khasra} No.2293/18 49/3, 3760/1020/69/1, Bazar Gali, Vishwas Nagar, Shandara, Delhi-32 owned by defendant no.6;

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c)^{Residential House No.C-56, Suraj Mal Vihar, Delhi} measuring 161.65 sq.mtr. owned by defendant no.3 and 5;

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T.A. No.2385 of 2022

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d) 3 Floors i.e. 1st, 2nd and 3rd floor with roof rights of D-161, Suraj Mal Vihar, Delhi-92 measuring 120 sq.mtr. each floor owned by defendant no.3 and 5.

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In case of shortfall, the same shall be recovered from sale of movable and immovable properties of defendant no. 2 to 8.

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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 04.06.2024.

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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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5ce--24 (GOVIND BALLA SHARMA) PRESIDING OFFICER DRT-I, DELHI

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(Dictated and pronounced in open court) Dated: 06.04.2024

Union Bank of India v. Sanco Industries Ltd.

Case brief

What is this about?

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Union Bank of India v. Sanco Industries Ltd.

Case brief

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