Allowed

Canara Bank v. M/S Shivalik Tech and Another

DRT20 Jan 2025OA/1131/2024

Case brief

AI extract

What is this about?

The DRT allowed the bank's application for recovery of a student loan amount. After finding the defendants liable jointly and severally, the Tribunal modified the interest rate to 8% per annum and directed the issuance of a recovery certificate and attachment of assets.

What did the court decide?

Recovery of Rs. 38,28,172.79 plus cost, interest at 8% p.a. from filing until realization; recovery certificate issued; attachment of assets if dues remain unsatisfied.

Canara Bank versus M/S Shivalik Tech and Another — Contract and Commercial Disputes | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO. 1131/2024

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 09.09.2024

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DATE OF DECISION: 20.01.2025

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Canara Bank, a body corporate and nationalized Bank under the provisions of The Banking Companies (Acquisition & Transfer of Undertakings) Act of 1970 with its head office at JC Road, Bangalore, and amongst other a Branch Office at MSME Sulabh, Bharat Nagar Chowk, Ludhiana, District Ludhiana Punjab through its constituted Attorney and Manager Sh. Tarun Goyal.

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……..Applicant

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Versus

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M/s Shivalik Tech., a proprietorship concern having its Registered Office at Ground Floor, E-422, Phase-VI, Focal Point, Ludhiana District Ludhiana Punjab through its proprietor Sh. Balkar Singh141010.

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Sh. Balkar Singh Son of Sh. Balwant Singh, Proprietor M/s Shivalik Tech., Registered Office at Ground Floor, E-422, PhaseVI, Focal Point, Ludhiana, District Ludhiana, Punjab

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2^nd Address: House No.2204, Phase-I, Near Ram Lal Bhasin Public School, Urban Estate Dugri, Basant Avenue, Ludhiana, Punjab-141013.

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….……Defendants

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Advocates:

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Argued by Sh. Aseem Kataria, Advocate for Applicant (through VC) 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.38,28,172.79p (Rupees Thirty Eight Lacs Twenty Eight Thousand One Hundred Seventy Two And Seventy Nine Paise only). The Original Application has been filed through Sh. Tarun Goyal, Constituted Attorney

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and Manager of the applicant, who is competent to institute the Original Application vide Copy of Authority letter dated 15.09.2022, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant no.1 & 2 had approached the applicant for the grant of CC Limit under CGTMSE Scheme of Rs.10.00 Lacs & Further for Term Loan (Under CGTMSE Scheme) of Rs.25.00 Lacs vide Loan applications dated 05.02.2023 & 20.06.2023, which are Annexures A2 & A8 to this OA. 3. The applicant sanctioned CC Limit under CGTMSE Scheme of Rs.10.00 Lacs & Further Sanctioned Term Loan (Under CGTMSE Scheme) of Rs.25.00 Lacs vide Sanction Memorandum dated 09.02.2023 & 21.09.2023, which are Annexures A3 & A9 to this OA and the terms and conditions were duly accepted by the defendants. 4. Defendant no.1 had hypothecated its movable assets i.e. all types of stocks of manufacturing of Iron and steel products and Plant & Machinery purchased out of Bank finance and Book Debts etc. Documents executed:-Letter of Proprietorship, Cash Credit agreement, Request for Overdraft Facilities, Pronote, all dated 09.02.2023, which are Annexures A4 to A7 to this OA; Deed of hypothecation Re machinery, Letter of Undertakings re loans/advances, Take delivery letter, Pronote all dated 21.09.2023, which are Annexures A10 to A13 to this OA; Legal notice dated 07.05.2024, which is Annexure A14 to this OA and statements of accounts with Certificate, which are Annexures A15 & A16 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 there was a debit of Rs.38,28,172.79p, which is recoverable and the defendants were served recall notices but they did not repay the outstanding 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 09.01.2025

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In support of the OA, affidavit of Sh. Sh. Tarun Goyal, constituted Attorney and Manager, Canara Bank, has been filed.

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Heard arguments and perused record.

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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 Annexure A1 to A16 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.38,28,172.79p (Rupees Thirty Eight Lacs Twenty Eight Thousand One hundred Seventy Two And Seventy Nine Paise 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. 10. In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @11.65%p.a. (including 2% penal interest) with monthly rests from 01.08.2024 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 instant case including nature of the mortgaged property, undertaking of the defendant, 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 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.

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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.38,28,172.79p (Rupees Thirty Eight Lacs Twenty Eight Thousand One hundred Seventy Two And Seventy Nine Paise only) jointly and severally, with costs, current and future simple interest @8.00%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.

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Any other application pending stands disposed of.

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 01.03.2025. 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. Pronounced by me in the open Tribunal .

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Dated: 20.01.2025

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

Canara Bank v. M/S Shivalik Tech and Another

Case brief

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Canara Bank v. M/S Shivalik Tech and Another

Case brief

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