Allowed

Union Bank of India v. M/s Bhagwati Agencies

DRT3 Mar 2025OA/1296/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an original application filed by Union Bank of India against borrowers defaulting on a commercial credit card limit enhancement. The court declared the debt recoverable and fixed the interest rate.

What did the court decide?

Recovery certificate issued; declare debt of Rs. 26,36,218.48 jointly and severally recoverable with 8% per annum simple interest; authorise recovery from sale of hypothecated properties or attachment

Union Bank of India versus M/s Bhagwati Agencies — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1296/2024

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 04.11.2024

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DATE OF DECISION: 03.03.2025

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Union Bank of India, a body corporate, constituted under the Banking 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 Versus

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M/s Bhagwati Agencies, B-3685, New Tagore Nagar, near Hemraj Aggarwal, Haibowal Kalan, Ludhiana through its prop. Sh. Ashish Kumar, defendant no.2.

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Sh. Ashish Kumar son of Sh. Ashok Kumar resident of House no. 5432/3, Raghubir Park, near Dhand Electronics, Haibowal Kalan, Ludhiana, proprietor of M/s Bhagwati Agencies, Defendant no.1.

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…….Defendants

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Advocates:

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Argued by Sh. Amod Kumar Thakur, 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.26,36,218.48p (Rupees Twenty Six Lacs Thirty Six Thousand Two Hundred Eighteen and Paise Forty Eight 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

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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 defendants had approached the applicant for grant of CC Limit of Rs.10.00 Lacs vide Loan Application dated 30.01.2021, which is Annexure A2 to this OA and further for its enhancement to Rs.25.00 Lacs vide Loan Application dated 22.03.2023, which is Annexure A18 to this OA.

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The applicant sanctioned CC Limit of Rs.10.00 Lacs vide Memorandum of Sanction Letter dated 30.01.2021, which is Annexure A5 to this OA and further sanctioned its enhancement to Rs.25.00 Lacs vide Memorandum of Sanction Letter dated 22.03.2023, which is Annexure A19 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. All kind of stocks of Haldiram Namkeen/related Food items and book debts etc. vide Hypothecation Agreement dated 30.01.2021 and 24.03.2023, which are Annexures A9 and A23 to this OA

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Documents executed:-GST Registration Form dated 17.09.2020, which is Annexures A3 to this OA; Udyam Registration Form dated 21.01.2023, which is Annexures A4 to this OA; Standard terms and conditions for working capital/term loan, D.P. Note, Letter of Continuity, AD-02, Letter of undertaking not to alienate hypothecated goods, Interest Agreement, Request Letter, Letter of undertaking from borrower, Deed of Guarantee by defendant no.2 & Letter of undertaking from guarantor all dated 30.01.2021, which are Annexures A6, A7, A8, A10 to A16 to this OA; Letter dated 31.01.2023, which is Annexures A17 to this OA; Standard terms and conditions for working capital, D.P. Note, Letter of Continuity, Letter of undertaking not to alienate hypothecated goods, Letter of undertaking from borrowers, AD-02 & Deed of Guarantee all dated 24.03.2023,

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which are Annexures A20, A21, A22, A24 to A28 to this OA; Letters of adjustment of overdues dated 07.10.2023, 02.11.2023 & 19.02.2024, which are Annexures A29 to A31 to this OA; Office copy of legal notice along with postal receipts dated 20.07.2024 & 29.07.2024, which is Annexures A32 to this OA and Statements of Account along with Certificate by the Person Incharge of the Computer System, which are Annexures A33 & A34 to this OA.

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The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs.26,36,218.48p, 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 12.02.2025.

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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 A34 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 loans as per

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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.26,36,218.48p (Rupees Twenty Six Lacs Thirty Six Thousand Two Hundred Eighteen and Paise

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Forty Eight Only) along with interest from the defendants, jointly and severally, 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 @11.00%p.a. along with penal interest @2.00%p.a. with monthly rests from 01.10.2024 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 @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.26,36,218.48p (Rupees Twenty Six Lacs Thirty Six Thousand Two Hundred Eighteen and Paise Forty Eight Only) jointly and severally, 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 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 04.04.2025.

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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: 03.03.2025

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

Union Bank of India v. M/s Bhagwati Agencies

Case brief

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Union Bank of India v. M/s Bhagwati Agencies

Case brief

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