Allowed

Canara Bank v. Messrs Eva Knitwear and Another

DRT10 Feb 2025OA/1228/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed Canara Bank's application under Section 19 RDBFI Act for recovery of Rs.23 lakhs against M/s Eva Knitwear. The bank proved its case unopposed. The tribunal granted an 8% interest rate, upheld the claim on hypothecated property, and issued a recovery certificate.

What did the court decide?

The application was allowed and a recovery certificate was issued for Rs.23,85,009.41 with 8% simple interest to be recovered from the sale of hypothecated properties.

Canara Bank versus Messrs Eva Knitwear and Another — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1228/2024

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PRESIDED OVER BYMRIDULESH 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 & Transfer of Undertakings) Act, 1970 (5 of 1970) having its Head Office at JC Road, Bangalore, and amongst others a Branch office at Court Road, Ludhiana through its Constituted Attorney and Manager Sh. Ravi Goyal son of Sh. Krishan Lal Sood.

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……..Applicant Versus

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M/s Eva Knitwear, situated at R-75, Ward No.1, New Grain Market, Jalandhar Bypass, Ludhiana Punjab-141008 through its proprietor Sh. Anmol Vij.

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Sh. Anmol Vij S/o Sh. Sanjeev Kumar Vij, R/o House No.75, Ward No.1, New Grain Market, Jalandhar Bypass, Ludhiana Punjab-141008.

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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 defendant for recovery of Rs.23,85,009.41p (Rupees Twenty Three Lacs Eighty Five Thousand Nine and Paise Forty One Only). The Original Application has been filed

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through Sh. Ravi Goyal, Manager of the applicant, who is competent to institute the Original Application vide General Power of Attorney dated

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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 defendant no.2 had approached the applicant for the grant

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of OCC Limit of Rs.10.00 Lacs vide Loan application dated 22.10.2021, which is Annexure A5 to this OA. Further, defendant no.1 through its proprietor defendant no.2 had approached the applicant for enhancement of OCC Limit from Rs.10.00 Lacs to Rs.20.00 Lacs vide Renewal Application dated 18.11.2022, which is Annexure A11 to this OA and further for its Renewal of OCC Limit of Rs.20.00 Lacs to this OA.

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The applicant sanctioned OCC Limit of Rs.10.00 Lacs vide Sanction Letter dated 22.10.2021, which is Annexure A6 to this OA. Further, applicant sanctioned for enhancement of OCC Limit from Rs.10.00 Lacs to Rs.20.00 Lacs vide Sanction Memorandum dated 18.11.2022, which is Annexure A12 to this OA and further for its Renewal of OCC Limit of Rs.20.00 Lacs vide Letter of Renewal dated 18.11.2022, which is Annexure A15 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 i.e. stocks and Book Debts and other stocks i.e. Fabric, T-shirt, Lower & Accessories etc vide Stock Statement dated 31.03.2023 vide Cash Credit Agreement dated 22.10.2021, which are Annexures A1 and A10 to this OA.

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Documents executed:-Letter of proprietorship dated 22.10.2021, which is Annexure A3 to this OA; Udhyam Registration Certificate dated 13.09.2019, which is Annexure A4 to this OA; Request Letters for Overdrafts Facilities dated 22.10.2021 & 18.11.2022, which are Annexures A7 & A17 to this OA; Pronote, Letter of Undertaking all dated 22.10.2021, which are Annexures A8 and A9 to this OA; Link Letter, Pronote, Supplemental Agreement & Letter of Undertaking all dated 18.11.2022, which are Annexures A13, A14 & A16 & A18 to this OA; Legal Notice along with postal receipts dated 19.09.2024, which is Annexure A19 to this OA and Statement of Account along with Certificate, which is Annexure A20 to this OA.

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The loan account became irregular and was classified as NPA

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and after adjusting debit and credit entries in loan account there was a

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debit of Rs.23,85,009.41p, 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 he was proceeded ex-parte on 24.01.2025.

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In support of the OA, affidavit of Sh. Ravi Goyal, Manager, Canara Bank 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 A20 to this OA, it is proved that the defendants approached applicant for availing of the loan facility which was 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, 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.23,85,009.41p (Rupees Twenty Three Lacs Eighty Five Thousand Nine and Paise Forty One Only) along with interest from the defendants, from the date of filing of the present Original Application till realization of the account.

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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. along with penal interest @2.00%p.a. with monthly rests from 01.09.2024 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

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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 are liable to pay to the applicant a total sum of Rs.23,85,009.41p (Rupees Twenty Three Lacs Eighty Five Thousand Nine and Paise Forty One 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. 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 11.03.2025. 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.

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Pronounced by me in the open Tribunal . Dated: 10.02.2025

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

Canara Bank v. Messrs Eva Knitwear and Another

Case brief

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Canara Bank v. Messrs Eva Knitwear and Another

Case brief

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