Allowed

Canara Bank v. M/S Gunu Fabrics

DRT18 Feb 2025OA/1156/2024

Case brief

AI extract

What is this about?

DRT allowed Canara Bank's application for recovery of Rs. 27,31,261.40p from Gunu Fabrics and its proprietor ex-parte, directing recovery from hypothecated assets or personal property under the SARFAESI Act, and awarding uniform 8% p.a. interest.

What did the court decide?

Recovery of Rs. 27,31,261.40p with uniform simple interest @8.00% p.a. from filing date; Recovery Certificate issued; execution from hypothecated or personal assets.

Canara Bank versus M/S Gunu Fabrics — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1156/2024 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 22.09.2024

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DATE OF DECISION: 18.02.2025

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Canara Bank, a body corporate and nationalized bank under the provisions of The Banking Companies (Acquisition and Transfer of Undertakings) Act of 1970 with its Head Office at J C Road, Banglore and amongst other a branch office at Rajpura Road, Ludhiana, District Ludhiana, Punjab through its Constituted Attorney and Senior Manager Sh. Parminder Singh.

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……..Applicant

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Versus

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M/s Gunu Fabrics, a proprietorship concern having its registered office at Mahavir Jain Colony, Tajpur road, Ludhiana, District Ludhiana, Punjab through its Proprietor Sh. Mahavir Singh Rawat141007

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2. Sh. Mahavir Singh Rawat S/o Sh. Prem Singh, Proprietor M/s Gunu Fabrics, a proprietorship concern having its Registered Office at Mahavir Jain Colony, Tajpur road, Ludhiana, District Ludhiana, Punjab-141007

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2^nd Address :- Resident House No.153, New Karamsar Colony, New Subhash Nagar, Basti, Jodhewal, Ludhiana District Ludhiana, Punjab.

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………Defendants

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Advocates:

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Argued by Sh. Aseem Kataria, 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.27,31,261.40p (Rupees Twenty Seven Lacs Thirty One Thousand

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Two Hundred Sixty One and Paisa Forty only). The Original Application has been filed through Sh. Parminder Singh, Senior Manager o f the applicant, who is competent to institute the Original Application vide Power of Attorney/Authority Letter dated 11.09.2024, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant No.1 through its proprietor i.e. defendant no.2 had time to time approached the applicant for the grant of Cash Credit Limit covered under CGTMSE of Rs.20.00 Lacs and further for the renewal of the existing limit vide Loan Application dated 22.06.2022 and Letter of Renewal dated 22.06.2022, which are Annexures A20 & A23 to this OA. Defendants once again approached the applicant for the Term Loan-I of Rs.3.50 Lacs vide Loan Application dated 22.06.2020, and Term Loan-II of Rs.3.45 Lacs vide Loan Application dated 10.11.2021, which are Annexures A7 & A15 to this OA.

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The applicant sanctioned the Cash Credit Limit covered under CGTMSE of Rs.20.00 Lacs and also sanctioned its renewal vide Sanction Memorandum dated 11.12.2019, 05.03.2021 and 22.06.2022, which are Annexures A3, A12 & A21 to this OA. Further applicant sanctioned Term Loan-I of Rs.3.50 Lacs vide Sanction Memorandum dated 22.06.2020 and Term Loan-II of Rs.3.45 Lacs vide Sanction Memorandum dated 11.11.2021, which are Annexures A8 & A16 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant no.1 had hypothecated its movable properties/assets i.e. Raw materials such as cotton and textile fabrics, semi furnished goods, furnished goods, machinery purchased from book finance and Book Debts vide Agreement cum Deed of Hypothecation dated 22.06.2020 and 10.11.2021, which are Annexures A9 & A17 to this OA. Documents executed:- Proprietorship Letter, Cash Credit Agreement, Request for Overdraft facilities, Pronote all dated 11.12.2019, which

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are Annexures A2, A4 to A6 to this OA; Pronote, Take Delivery Letter to DPN both dated 22.06.2020, which are Annexures A10 & A11 to this OA; Request for Overdraft facilities and Letter for Renewal both dated 05.03.2021, which are Annexures A13 & A14 to this OA; Pronote, Take Delivery Letter to DPN both dated 10.11.2021, which are Annexures A18 & A19 to this OA; Request for Overdraft facilities dated 22.06.2022, which is Annexure A22 to this OA; Acknowledgement of debt and security letter dated 05.03.2021, 22.06.2022, 08.06.2023 and 17.01.2024, which are Annexures A24 to A27 to this OA; Legal Notice dated 12.06.2023 along with postal receipts, which is Annexure A28 to this OA and Statement of accounts, which are Annexures A29 to A31 to this OA.

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The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in all the loan accounts there was a debit of Rs.27,31,261.40p, 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 15.01.2025.

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In support of the OA, affidavit of Sh. Parminder Singh, Senior Manager, Canara Bank has been filed. 8. Heard arguments and perused record. 9. 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 A31 to this OA, it is proved that the defendants approached applicant 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 applicant. The defendants failed to pay back the loan as per terms and conditions of the agreement between

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the parties. Subsequently, all the 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.27,31,261.40p (Rupees Twenty Seven Lacs Thirty One Thousand Two Hundred Sixty One and Paisa Forty only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of both 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 @10.60%p.a. in Cash Credit plus Penal interest @2.00%p.a. with monthly rests from 01.09.2024, @11.50%p.a. in Term Loan-I (GECL) plus Penal interest @2.00%p.a. with monthly rests from 14.08.2024 and @11.60%p.a. in Term Loan-II (GECL) 1.0 plus Penal interest @2.00%p.a. with monthly rests from 11.09.2024 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 @8.00%p.a. in all 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.27,31,261.40p (Rupees Twenty Seven Lacs Thirty One Thousand Two Hundred Sixty One and Paisa Forty only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in all 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

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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.

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 20.03.2025.

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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 .

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Dated: 18.02.2025

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(MRIDULESH KUMAR SINGH) Presiding Officer,

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DRT-III, Chandigarh

Canara Bank v. M/S Gunu Fabrics

Case brief

What is this about?

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Canara Bank v. M/S Gunu Fabrics

Case brief

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