Allowed

Canara Bank v. M/S Vijay International and Another

DRT10 Feb 2025OA/1227/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed Canara Bank's original application for recovery of Rs.22,00,902.77 from defendants who defaulted on sanctioned loans and credit cards. The court fixed a uniform interest rate of 8% and ordered execution proceedings for the recovery of dues.

What did the court decide?

Order for Recovery Certificate; Declaration of liability to pay Rs.22,00,902.77 with uniform simple interest @8.00%p.a.; Authority to recover from hypothecated assets or attachment of personal assets.

Canara Bank versus M/S Vijay International and Another — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1227/2024 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 04.10.2024

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DATE OF DECISION: 10.02.2025

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Canara Bank, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) having its Head Office at J.C. Road, Banglore-560002 and amongst other a Branch Office at Court Road, Ludhiana through its Constituted Attorney and Manager Sh. Ravi Goyal S/o Sh. Krishan Lal Sood.

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……..Applicant

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Versus

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M/s Vijay International, situated at Street No.2, 109, First Floor, Lachman Nagar, Millerganj, Ludhiana, Punjab through its proprietor Sh. Sahil Sood

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Sh. Sahil Sood S/o Sh. Som Nath Sood, R/o House No. 109, Street No. 2, Lachman Nagar, Millerganj, Ludhiana (Punjab)

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………Defendants

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Advocates:

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Argued by Sh. Anup Prajapati, Advocate proxy for Sh. Pushpinder Singh Handa, 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.22,00,902.77p (Rupees Twenty Two Lacs Nine Hundred Two and Paisa Seventy Seven only). The Original Application has been filed through Sh. Ravi Goyal, Manager of the applicant, who is competent to institute the Original Application vide Power of Attorney dated 20.03.2018, 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 i.e. defendant no.2 had time to time approached the applicant for the grant of, Credit Card Limit of Rs.01.00 Lacs and Term Loan of Rs.05.00 Lacs vide Application Form for Credit Card dated 22.10.2020 and Loan Application for Term Loan dated 20.01.2021, which are Annexures A4 & A5 to this OA and further for Cash Credit Limit of Rs.16.00 Lacs. Thereafter for renewal of CC Limit of Rs.16.00 Lacs vide Loan Application for OCC Limit dated 01.08.2022 and Renewal Application dated 21.08.2023, which are Annexures A8 & A14 to this OA.

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The applicant sanctioned the Credit Card Limit of Rs.01.00 Lacs and Term Loan of Rs.05.00 Lacs vide Sanction Letter dated 20.01.2021, which is Annexure A6 to this OA and Applicant also sanctioned OCC Loan of Rs.16.00 Lacs and further for its renewal and enhancement vide Sanction Memorandum dated 05.08.2021 and 21.08.2023, which are Annexures A9 & A15 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendants hypothecated their movable properties i.e. Stock (Bicycle Parts), Raw Material, Work in Process, Finished Goods, Book Debts and Machinery i.e. Power Press 100 Ton and 25 Ton vide Agreement cum deed of hypothecation dated 20.01.2021, which is Annexure A7 to this OA.

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Documents executed:- Stock Agreement dated 30.09.2023, which is Annexure A1 to this OA; Letter of Proprietorship dated 20.01.2021, which is Annexure A3 to this OA; Request for overdraft facilities, Pronote, Letter of Undertaking, Cash Credit Agreement all dated 05.08.2022, which are Annexures A10 to A13 to this OA; Letter of Renewal, Letter of Undertaking both dated 20.08.2023, which are Annexures A16 & A17 to this OA; Acknowledgement of Debt dated

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20.12.2023, which is Annexure A18 to this OA; Legal Notice dated 19.09.2024 along with postal receipts, which is Annexure A19 to this

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OA and Account Statement of (Term Loan, OCC Limit and Credit Card) along with Certificate of bankers book of evidence act, which are Annexures A20 to A22 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.22,00,902.77p, 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 defendant was served notice to appear before this Tribunal but no one appeared on behalf of defendant and he was proceeded exparte on 24.01.2025.

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In support of the OA, affidavit of Sh. Ravi Goyal, Manager, Canara Bank has 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 A22 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 the parties. Subsequently, both 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.22,00,902.77p (Rupees Twenty Two Lacs Nine Hundred Two and Paisa Seventy Seven 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 @13.50%p.a. in OCC Limit, @12.75%p.a. in Term Loan and @2.50%p.m. in Credit Card plus penal interest @2.00%p.a. with monthly rests in all from date of filing this OA 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.22,00,902.77p (Rupees Twenty Two Lacs Nine Hundred Two and Paisa Seventy Seven 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 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

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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 11.03.2025.

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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: 10.02.2025

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

Canara Bank v. M/S Vijay International and Another

Case brief

What is this about?

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Canara Bank v. M/S Vijay International and Another

Case brief

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