Allowed

Punjab National Bank v. M/S Baweja Knitwear and Others

DRT8 Jan 2025OA/1073/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an original application by Punjab National Bank for recovery of Rs. 1.21 crore from a proprietorship firm and its promoters. The Tribunal ordered joint and several liability with costs and fixed uniform simple interest at 8% p.a.

What did the court decide?

Recovery of Rs. 1.21 crore with costs and simple interest at 8% p.a. from date of filing till realization; execution from sale of mortgaged and personal assets.

Punjab National Bank versus M/S Baweja Knitwear and Others — Company and Corporate | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1073/2024

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 21.08.2024

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DATE OF DECISION: 08.01.2025

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Punjab National Bank, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at Plot No.4, Sector 10, Dwarka, New Delhi 110075 and Branch Offices, amongst others at Branch Office at Mata Rani Chowk, Ludhiana, Punjab now been filed by Circle Office: Circle Sastra Centre, Ludhiana, Punjab, through its General Power of Attorney Holder Sh. Ravinder Kumar, Sr. Manager of the Applicant Bank.

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……..Applicant Versus

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1.	M/s SH Baweja Knitwear, a Proprietorship firm with principal of
	business place at 272/1, Mangat Street, Hazuri Road, Ludhiana,
	Punjab through its proprietor Sh. Sanjeev Kumar S/o Sh. Lal Chand.
2.	Sh. Sanjeev Kumar S/o Sh. Lal Chand R/o House No.B-5/272/2
	Mangat Street, Hazuri Road, Ward No.20, Old Madhopuri, Ludhiana, Punjab.
3.	Sh. Subhash Chander S/o Sh. Lal Chand R/o House No.B-
	5/272/2 Mangat Street, Hazuri Road, Ward No.20, Old
	Madhopuri, Ludhiana, Punjab.
4.	Smt. Riti Baweja S/o Shri Harish Chander R/o House No.B-
	5/272/2 Mangat Street, Hazuri Road, Ward No.20, Old
	Madhopuri, Ludhiana, Punjab.
5.	Smt. Kriti Baweja W/o Sh. Sanjeev Kumar R/o House No.B-
	5/272/2 Mangat Street, Hazuri Road, Ward No.20, Old
	Madhopuri, Ludhiana, Punjab.

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Smt. Preeti W/o Sh. Subhash Chander R/o House No.B-5/272/2 Mangat Street, Hazuri Road, Ward No.20, Old Madhopuri, Ludhiana, Punjab.

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………. Defendants

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Advocates:

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Argued by Sh. Mohan Prasad, Advocate proxy for Sh. Pancham Sharma, 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.1,21,74,166.89p (Rupees One Crore Twenty One Lacs Seventy Four Thousand One Hundred Sixty Six And Paise Eighty Nine Only). The Original Application has been filed through Sh. Ravinder Kumar, Senior Manager of the applicant, who is competent to institute the Original Application vide General Power of Attorney dated 11.04.2011, which is Annexure A2 to this OA.

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The brief facts of the OA are that the defendant no.1 through its proprietor of defendant no.2 had approached the applicant for CC Limit of Rs.25.00 Lacs and further for its enhancement to Rs.45.00 Lacs and thereafter to Rs.90.00 Lacs. Later, defendant no.1 through its proprietor of defendant no.2 had again approached the applicant for GECL Limit of Rs.24.75 Lacs. Further Defendants approached the applicant for renewal of CC Limit of Rs.90.00 Lacs.

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The applicant sanctioned the CC Limit of Rs.25.00 Lacs and further sanctioned its enhancement to Rs.45.00 Lacs vide Sanction Letter dated 17.02.2020, which is Annexure A7 to this OA and thereafter to Rs.90.00. Later, applicant sanctioned GECL Term Loan of Rs.24.75 Lacs vide Sanction Letter dated 29.12.2021, which is Annexure A14 to this OA Further applicant sanctioned Renewal of CC Limit of Rs.90 Lacs vide Sanction Letter dated 14.09.2022, which is Annexure A18 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant no.2 to 6 had Mortgaged their immovable properties, i.e.

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(i) all part and parcels of land and building measuring 42.25 Sq yards situated at Plot No.3 & 4, M.C. No. B-V-270, Mangat Street, Hazuri Road, Tehsil and District Ludhiana vide Equitable Mortgage of Sale Deed b earing vasika no.12219 dated 22.01.2003, which is Annexure A21 to this OA. (i) all part and parcels of land and building measuring 50 Sq yards situated at M.C. No. B-V-271/1, Mangat Street, Hazuri Road, Tehsil and District Ludhiana vide Equitable Mortgage of T ransfer Deed vasika no.19/106/1/201 dated 27.07.2018 along with its translation, which is Annexure A22 to this OA. Documents executed:-Valuation Report dated 02.06.2007, which is Annexure A1 to this OA; Supplementary Agreement dated 30.03.2017, which is Annexure A3 to this OA; Hypothecation of Goods and Books Debts to Secure cash credit facility, Agreements of Guarantee dated 03.10.2018, which are Annexures A4 to A6 to this OA; Master Agreement, Agreement for Loan/Cash Overdraft, Hypothecation of Goods and Book Debts to secure cash credit facility, Letter of Undertaking, Master Undertaking from the Borrowers and Agreement of Guarantee all dated 17.02.2020, which are Annexures A8 to A13 to this OA; D.P. Note, Master Agreement & Agreement for Working Capital Term Loan (WCTL) dated 30.12.2021, which are Annexures A15 to A17 to this OA; Linkage Agreement dated 14.09.2022, which is Annexure A19 to this OA; Master Agreement dated 28.02.2022, which is Annexure A20 to this OA; Notice u/s 13(2) of SARFAESI Act dated 21.02.2024, which is Annexure A23 to this OA; Balance & Security Confirmation Letters dated 01.06.2016, 24.05.2019, 30.04.2022, which is Annexure A24 to this OA and Statement of Accounts along with Certificates under Banker’s Book Evidence Act, which are Annexures A25 & A26 to this OA. 5. The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in both the loan accounts

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there was a debit of Rs.1,21,74,166.89p, which is recoverable and the 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 04.01.2025.

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In support of the OA, affidavit of Sh. Ravinder Kumar, Senior Manager, Punjab National Bank has been filed.

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Heard arguments and perused record.

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It was argued by learned proxy counsel through Video Conferencing 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 A26 to this OA, it is proved that the defendants approached applicant for availing of the loans 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 is entitled to recover a sum of Rs.1,21,74,166.89p (Rupees One Crore Twenty One Lacs Seventy Four Thousand One Hundred Sixty Six And Paise Eighty Nine Only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the accounts.

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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 @9.65%p.a. in CC Limit and @11.80%p.a. in GECL Term Loan with rests from 30.06.2024 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

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instant case including nature of the mortgaged property, undertaking 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 @08.00%p.a. in 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.

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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.1,21,74,166.89p (Rupees One Crore Twenty One Lacs Seventy Four Thousand One Hundred Sixty Six And Paise Eighty Nine Only) jointly and severally, with costs, current and future simple interest @08.00%p.a. in the loan accounts 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. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 18.02.2025. 15. 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 . Dated: 08.01.2025

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

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Punjab National Bank v. M/S Baweja Knitwear and Others

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. M/S Baweja Knitwear and Others

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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