Allowed

Bank of Baroda v. Messrs Jain Mobile Centre and Gift Gallery and Another

DRT23 Jan 2025OA/1263/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the applicant bank's original application for recovery of an NPA loan of over Rs. 1.3 crores against a sole proprietorship. The court reduced the claimed interest rate to 8% per annum and ordered the issuance of a Recovery Certificate.

What did the court decide?

Recovery of Rs.1,30,19,249.41 jointly and severally with interest @8% p.a.; Issuance of Recovery Certificate; Liberty to recover attachment/sale of assets.

Bank of Baroda versus Messrs Jain Mobile Centre and Gift… — Company and Corporate | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1263/2023 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 10.10.2023

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DATE OF DECISION: 23.01.2025

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Bank of Baroda, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) act of 1970, having its Registered Head Office at Baroda Bhawan, R.C. Dutt Road, Alkapuri Baroda-390007, Gujarat and having amongst other branches one such branch at SCO 62-63, Bank Square Sector 17-B, Chandigarh through its Constituted Attorney Sh. Naresh Kumar.

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……..Applicant

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Versus

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M/s Jain Mobile Centre and Gift Gallery, Shop No. 20, Main Market Batlana, SAS Nagar, Punjab-140604 through its Proprietor Sh. Adish Jain

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Sh. Adish Jain S/o sh. Mahavir Jain Proprietor M/S Jain Mobile Centre and Gift Gallery, R/o House No. 20, Modern Enclave, Baltana Zirakpur, SAS Nagar, Punjab.

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………Defendants

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Advocates: Argued by Ms. Kanchan Sehgal, Advocate for the applicant (through VC) 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.1,30,19,249.41p (Rupees One Crore Thirty Lacs Nineteen Thousand Two Hundred Forty Nine and Paisa Forty One only). The Original Application has been filed through Sh. Naresh Kumar, Constituted Attorney o f the applicant, who is competent to institute the Original Application vide Authority Letter dated 15.11.2017, which is

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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.95.00 Lacs and again approached for Term Loan of Rs. 45.00 Lacs vide Loan Application dated 20.10.2019, which is Annexure A2 to this OA.

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The applicant sanctioned the Cash Credit Limit (covered under CGTMSE) of Rs.95.00 Lacs and further sanctioned Term Loan of Rs.45.00 Lacs vide Letter of Sanction dated 25.10.2019, which is Annexure A3 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. stock of Mobile Phone Mobile accessories etc. and book debts vide Instrument of Hypothecation of Book debt dated 25.10.2019, which is Annexure A10 to this OA.

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Documents executed:- DP Note, Composite Hypothecation Agreement, Power of Attorney in respect of book-debts facility, Letter of Authority in bank’s favour, Draft Undertaking all dated 25.10.2019, which are Annexures A4, A5, A7 to A9 to this OA; Letter of Sole Proprietorship, LDOC, LDOC Composite Hypothecation Agreement, Letter of Installment, General Undertaking, Letter of Authority, Draft Undertaking all dated 05.11.2019, which are Annexures A6, A11 to A17 to this OA; Letters of Acknowledgement dated 12.04.2022, which are Annexures A18 & A19 to this OA; Legal Notice dated 23.06.2023 along with postal receipts, which are Annexures A20 to A22 to this OA and Statement of accounts with Bankers book, which is Annexure A23 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 both the loan accounts there was a debit of Rs.1,30,19,249.41p, which is recoverable and the defendants were served recall notices but they did not repay the

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outstanding amount, therefore, the applicant requested to accept the application and to issue Recovery Certificate accordingly. 6. 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 26.06.2024. 7. In support of the OA, affidavit of Sh. Naresh Kumar, Constituted Attorney, Bank of India has been filed. 8. Heard arguments and perused record. 9. It was argued by learned counsel (through Video Conferencing) 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 A23 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.1,30,19,249.41p (Rupees One Crore Thirty Lacs Nineteen Thousand Two Hundred Forty Nine and Paisa Forty One 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 @13.10%p.a. in Cash Credit and @11.15%p.a. in Term Loan plus penal interest @2.00%p.a. with monthly rests in both from 28.09.2023 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

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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 both 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.1,30,19,249.41p (Rupees One Crore Thirty Lacs Nineteen Thousand Two Hundred Forty Nine and Paisa Forty One only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in both 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.

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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 05.03.2025.

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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: 23.01.2025

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

Bank of Baroda v. Messrs Jain Mobile Centre and Gift Gallery and Another

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. Messrs Jain Mobile Centre and Gift Gallery and Another

Case brief

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What did the court decide?

What the court decided

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