Allowed

Union Bank of India v. M/S Otakio Knitwear and Another

DRT13 Feb 2025OA/1219/2024

Case brief

AI extract

What is this about?

The DRT allowed the Union Bank's application claiming Rs.45.22 lakhs. The Tribunal reduced the interest rate to 8% p.a. and directed the issuance of a Recovery Certificate and the attachment of hypothecated assets.

What did the court decide?

Recovery of Rs.45,22,287.40p plus costs and 8% simple interest; Issuance of Recovery Certificate with direction to Recovery Officer.

Union Bank of India versus M/S Otakio Knitwear and Another — Execution and Attachment | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1219/2024

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 07.10.2024

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DATE OF DECISION: 13.02.2025

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Union Bank of India, a body corporate, constituted under the Companies (Acquisition and Transfer of Undertakings) Act 1970 having its Head Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai and having a Branch office inter-alia at Kesar Ganj, Ludhiana, through duly authorized person and attorney holder Sh. Rohit Chhabra, Branch Manager.

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……..Applicant

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Versus

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M/s OTAKIO Knitwear, 347/154-C, New Kartar Nagar, near Home Guard Office, Salem Tabri, Ludhiana-141002 (through its proprietor Smt. Rajwinder Pal Kaur)

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Smt. Rajwinder Pal Kaur wife of Sh. Jasbir Singh, resident of house no.53, Royal City, near GMT school, Ward no.1, Bhaura, Ludhiana-141008 (Proprietor of M/s OTAKIO Knitwear).

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…….Defendants

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Advocates:

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Argued by Sh. Varun Verma, Advocate proxy for Sh. R.K. Chauhan, 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.45,22,287.40p (Rupees Forty Five Lacs Twenty Two Thousand Two Hundred Eighty Seven and Paise Forty Only). The Original Application has been filed through Sh. Rohit Chhabra, Branch Manager of the applicant, who is competent to institute the Original Application vide General Power of Attorney dated 25.08.2020, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant no.2 through its proprietor of defendant no.1 had approached the applicant for grant of CC Limit of Rs.19.00 Lacs and Term Loan of Rs.28.50 Lacs vide Loan Application dated 02.02.2023, which is Annexure A2 to this OA.

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The applicant sanctioned CC Limit of Rs.19.00 Lacs and Term Loan of Rs.28.50 Lacs vide Sanction Letter along with Terms and conditions of Sanction both dated 10.02.2023, which are Annexures A5 & A6 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant no.1 had hypothecated its moveable Properties/Assets i.e. Stocks i.e. Knitting yarns used in manufacturing of Caps, Accessories, Semi Finished, Finished and unfinished goods, Book Debts and Machinery purchased out of bank finance etc. vide Hypothecation Agreement, General Term Loan Agreement, Term Loan Agreement, Composite Hypothecation deed dated 10.02.2023, which are Annexures A13, A14, A15 and A16 to this OA

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Documents executed:- Udyam Registration Certificate dated 28.12.2022, which is Annexures A3 to this OA; Memorandum to Chief Manager dated 09.02.2023, which is Annexures A4 to this OA; D.P. Notes, Letters of Continuity, Letter of undertaking not to alienate hypothecated goods, Letter of undertaking from borrower/guarantor, Undertaking from borrower & Deed of Guarantee by Guarantor all dated 10.02.2023, which are Annexures A7 to A12 and A17 to A21 to this OA; Letter by bank of renewal of limit dated 04.01.2024, which is Annexures A22 to this OA; Letter for adjustment of over dues dated 03.02.2024, 02.03.2024, 03.04.2024 & 18.06.2024, which are Annexures A23 to A25 & A29 to this OA; Letter for adjustment of over dues in CC Limit and Term Loan dated 03.05.2024, which are Annexures A26 & A27 to this OA; Letter by bank for adjustment of over dues dated 15.06.2024, which is Annexures A28 to this OA; Legal notice by Advocates along with postal receipts dated 21.06.2024

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& 03.08.2024, which are Annexures A30 & A31 to this OA and Statements of Accounts along with Certificates, which are Annexures A32 to A35 to this OA.

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The loan accounts became irregular and was classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.45,22,287.40p, 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 21.01.2025.

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In support of the OA, affidavit of Sh. Rohit Chhabra, Branch Manager, Union Bank of India h as been filed.

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Heard arguments and perused record.

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It was argued by learned proxy 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 A35 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 bank. The defendants failed to pay back the loans 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.45,22,287.40p (Rupees Forty Five Lacs Twenty Two Thousand Two Hundred Eighty Seven and Paise Forty 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 @12.05%p.a. in Cash Credit and @12.55%p.a. in Term Loan along with penal interest @2.00%p.a. with monthly rests from 01.09.2024 & 05.09.2024 till the realization.

¶30

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 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.45,22,287.40p (Rupees Forty Five Lacs Twenty Two Thousand Two Hundred Eighty Seven and Paise Forty 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. 12. 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 15.03.2025.

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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: 13.02.2025

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

Union Bank of India v. M/S Otakio Knitwear and Another

Case brief

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Union Bank of India v. M/S Otakio Knitwear and Another

Case brief

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