Allowed

Canara Bank v. Arav Fashions and Another

DRT21 Jan 2025OA/1145/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant's application for recovery of Rs. 1.93 Crores. The defendants were absent, and the court ordered repayment with simple interest at 8% p.a., permitting recovery via sale of mortgaged or hypothecated properties.

What did the court decide?

Recovery of Rs. 1,92,99,774.07 plus costs and uniform simple interest @08.00%p.a. from date of OA till realization, via sale of mortgaged/movable assets if unpaid.

Canara Bank versus Arav Fashions and Another — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1145/2024

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 13.09.2024

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DATE OF DECISION: 21.01.2025

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Canara Bank, a body corporate constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act of 1970 having its Head Office at JC Road, Bangalore-560002 (Karnataka) and a Branch Office, amongst other places known as MSME Sulabh Branch, Bharat Nagar Chowk, Ludhiana-141001, Punjab through Sh. Tarun Goyal, its Authorized Constituted Attorney and Principal Officer.

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……..Applicant Versus

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Arav Fashions, a sole-proprietorship at its Registered Office: B- 34/174, Ist Floor, St No.14, Near Akal Mandal Gurudwara, Sadhu Nagar, Ludhiana-141010, Punjab through its soleproprietor, Sh. Rajinder Kumar, son of Sh. Prem Chand viz. Defendants no.2.

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IInd Address: Arav Fashions, Factory No.539/193, St. No.8, New Shivpuri, Shivpuri-141010, Ludhiana, Punjab.

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Sh. Rajinder Kumar, son of Sh. Prem Chand, Resident of House

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No.3264, Sector 32 A, Jamalpur Awana, Jamalpur-141010, Ludhiana, Punjab.

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….……Defendants

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Advocates:

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Argued by Sh. G.S. Anand, 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.1,92,99,774.07P (Rupees One Crore Ninety Two Lacs Ninety Nine

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Thousand Seven Hundred Seventy Four and Paisa Seven Only). The Original Application has been filed through Sh. Tarun Goyal, Authorized Officer o f the applicant, who is competent to institute the Original Application vide 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 defendants had approached the applicant for the grant of Term Loan of Rs.182 Lacs vide Loan application dated 19.12.2022, which is Annexure A2 to this OA.

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The applicant sanctioned Term Loan of Rs.182 Lacs vide Sanction Memorandum dated 23.12.2022, which is Annexure A3 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendants no.2 had mortgaged his immovable property i.e. (i) Property measuring 55.50 Sq. Yards situated at Village Baranhara, Hadbast No.150, Locality Known as New Enclave, Near Vallabh Vihar, Tehsil & District Ludhiana vide Equitable Mortgage of Sale deed bearing vasika no.2022-23/101/1/8553 dated 23.11.2022, which is Annexure A19 to this OA.

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(ii) Property/House bearing MC No.B-XXXIV-4455/C, measuring 100 Sq. Yards situated at Village Haibowal Kalan, Hadbast No.102, Locality Known as Abadi Durgapuri, Tehsil District Ludhiana vide Equitable Mortgage of Sale deed bearing vasika no.2022-23/101/1/8704 dated 25.11.2022, which is Annexure A20 to this OA.

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(iii) Defendant no.1 had also hypothecated its movable properties/assets i.e. 912 Needle Head area:300*600 new computerized High Speed 4 machines, 10 Ind. Sewing Machines Jack A2, 25 Ind. Folding Machines Pegasus W500, 25 Ind. Elastic Machines Kansai DFB 1408 PMD, 5 Ind. Double Boiler Steam press with 2 table set and 3 Ind. Cutting Machines.

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Documents executed:-Pronote, Take delivery letter to DPN, Common Hypothecation Agreement, Request for disbursements, Undertaking for OD/OCC/Term Loan, Undertaking Letter, Letter re: disclosure of information of defaulters in the event of default, Letter re: consent for disclosure of information to CIBIL in the event of default, Letter re: No objection for mortgage of property put against the various loans availed/to be availed by borrower, Declaration re: value of investment on plant & machinery, Letter of undertaking for waiver of CGTSME cover, Letter of undertaking/consent re: coverage of loan under CGTSME scheme, Letter of proprietorship & Letters evidencing creation of mortgage of immovable property indicated therein and Schedule all dated 23.12.2022, which are Annexures A4 to A6 & A8 to A18 & A21 & A22 to this OA; Particulars of vehicles/Machinery/Livestock/etc. hypothecated dated 31.01.2023, which is Annexure A7 to this OA; CERSAI documents, which is Annexure A23 to this OA; Recall notices along with postal receipts dated 18.03.2024 & 07.05.2024, which are Annexures A24 & A25 to this OA; Demand Notice along with postal receipts dated 01.03.2024, which is Annexure A26 to this OA; Possession Notices along with postal receipts dated 29.05.2024, which is Annexure A27 to this OA and Statement of Account duly Certified, which is Annexure A28 to this OA.

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The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs.1,92,99,774.07P, which is recoverable and the defendants was 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 she was proceeded ex-parte on 10.01.2025.

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In support of the OA, affidavit of Sh. Tarun Goyal, Authorized Officer, Canara Bank h as been filed.

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Heard arguments and perused record.

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It was argued by learned counsel 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 A28 to this OA, it is proved that the defendants approached applicant for availing of the loan facility which was granted to his and for that he 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, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.1,92,99,774.07P (Rupees One Crore, Ninety Two Lacs Ninety Nine Thousand Seven Hundred Seventy Four and Paisa Seven Only) along with interest from the defendants, from the date of filing of the present Original Application till realization of the account.

¶32

In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @14.81%p.a. with monthly rests from 13.09.2024 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 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 account 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 is liable to pay to the applicant a total sum of Rs.1,92,99,774.07P (Rupees One Crore, Ninety Two Lacs Ninety Nine Thousand Seven Hundred Seventy Four and Paisa Seven Only) with costs, current and future simple interest @08.00%p.a. in the loan account 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 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 03.03.2025

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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: 21.01.2025

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

Canara Bank v. Arav Fashions and Another

Case brief

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Canara Bank v. Arav Fashions and Another

Case brief

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