Allowed

Bank of Maharashtra v. Messers Ayaan Interior and Wood Products

DRT25 Feb 2025OA/143/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by Bank of Maharashtra for issuance of a Recovery Certificate against two defendants for an outstanding loan amount of Rs. 26,02,019.86. The Tribunal upheld the jurisdiction of the DRT, found the defendants liable based on unchallenged evidence, and issued the certificate with costs.

What did the court decide?

Issuance of Recovery Certificate for Rs. 26,02,019.86 with pendentante and future interest; cost of the application awarded.

Bank of Maharashtra versus Messers Ayaan Interior… — Contract and Commercial Disputes | DRT (2025)

¶1

O A 1432024/ORT.Guwahaii

¶2

IN THE DEBTS RECOVERY TRIBUNAL, GUWAHATI

¶3

(North Eastern Region)

¶4

(Tribunal of Assam, Nagaland, l\4eghalaya, Manipur Mizoram, Arunachal Pradesh & Tripura)

¶5

Before Shri Shiv Sharan Dubev. Presidino Officer

¶6

O.A. No. 143/2024

¶7

ln the mattar of - BANK OF MAHARASHTRA Duliajan Branch, Station Road, Tengakhat, Duliajan-786602, Assam.

¶8

..Applicant

¶9

Vs.

¶10

I. AYAAN INTERIOR AND WOOD PRODUCT ( A Proprietorship Firm) Reod. Office Tipling, Nabajyoti Gaon, Duliajan No.2, Dist.- Dibrugarh, Assam-786602.

¶11

2. SRI RIJU BORA

¶12

(Proprietor of Ayaan lnterior and Wood Product) Son of Sri Deben Bora Resident of Tipling, Nabajyoti Gaon, Ouliajan No.2, Dist.- Dibrugarh, Assam-786602

¶13

Defendants

¶14

Presonco of tho Counsol :

¶15

For the Applicant : Ms. Sanghita Chakraborty, Mr. Sarfaraz Ul Haque, Advocates For the Defendants : None (Ex-parte)

¶16

Daled :2510212025

¶17

JUDGMENT

¶18

This is an application under section 19 of the Recovery of Debts Due to Banks and Financial lnstitutions Act, 1993 filed by the BANK OF MAHAMSHTRA, Duliajan Branch, Station Road, Tengakhat, Ouliajan-786602, Assam, with a prayer to issue Recovery Certificale for the sum of Ra.25,02,019.86 (RupEes Tw6nty€ix Lacs Two Thou3and Ninoteen and Paisa Eighty-Six) only as on 14.03.2024 against the defendants with pendentelite and future interest @1^'l.80OL), @12.30o/o(CC), @9.25%(GECL)^{per annumwith monthly rests till realizalion along with cost and other} relier'

¶19

-Sl"rrllhq!@"2rfu2s 6 >,)<- - f PraBiding Offce. U DRT. Guwahati

¶20

¶21

oA 143/2024lDRT-Gu*.hati

¶22

A few facts giving rise to the present application are as under.

¶23

Tha Defendant. No. I is a proprietorship Firm and the Oefendant No. 2 is the proprietor of Defendant No. 1 Firm engaged in business of lnteriors and wood producls.

¶24

The Defendant No. 2 in his capacity as the proprietor of the Deiendant No.^.l Firm had approached the Applicant Bank and applied for a loan under CGTMSE scheme for business purpose by submitting a Loan Application dald 18.02.2021 and afrer considering the said application, the Applicant Bank vide Sanclion Letter dated 08.03.2021 sancrioned a Term Loan facility For Rs. 13.00 Laos with interest at RLLR. (at the time of sanction stood at 6.90%) + 2.00% + 0.500/0 [BSS] i.e. 9,40% p.a. with monthty rests. The Term Loan was r€payable in 83 monthly instalments of Rs. 1S,7OO/- each. The Oefendant No. 2 in his capacity as the proprietor of the Defendant No. 1 Firm had signed and executed the said Sanclion Lstter thereby accepting all the terms and conditions of the sanc'tion.

¶25

ln conneclion with the sanclion of the Term Loan of Rs. 13.00 Lacs sanctioned by the Applicant Bank and availed of by the Defendant No. 2 in his capacity as proprietor of the Defendant No. 1 Firm, the following security documents were signed and executed by him:

¶26

(a) Demand Promissory Note dated 08.03.202i for Rs. i3.00 Lacs.

¶27

(b) Agreement for Term Loan dabd 08.03.2021 for Rs. 13.00 Lacs.

¶28

(c) M of Hypothecation for Att Facitities dated 08.03.2021 for Rs. 13.00 Lacs (more specifically described in Schedule - A of the OA)

¶29

Again, the Dafendant. No. 2 in his capaclty as the proprietor of the Deiendant No. 'l Firm had approachd the Applicant Bank and requested for a loan vide Application/Request Letter dated [email protected]'l and afrer considering the sai,J application, the Applicanl Bank vide Sanclion Letter dated 19.06.2021 sanc{ioned a Cash Credit facility for Rs. 11.00 Lacs with interest at RLLR lat the time of sanction stood at 6.90%) + 2.50o/o + 0.50Yo [BSS] i.e. 9.90% p.a. with monthly rests. The cash crcdit facility was repayable on demand. The Defendant No. 2 in his capacity as the proprietor of the Defendant No. 1 Firm had signed and executed the said Sanciion Letter thereby, accepting allthe terms and conditions ofthe sanction.

¶30

sl,tat%p,.-n"fu. L- o L.2E n P.6iding Oficsr ORT. cuwaheti

¶31

o.A 1,r3202:roRT4umhatr

¶32

ln conneclion with the^{sanclionol the Cash Credit fadlity of Rs 1100 Lacs} sanclioned by the^{Applicant Bank and availed of by the Defendant No. 2 in his capacity} as^proprietor of the^{Defendant No. 1 Firm,the following securitydocumentsr'veresigned} and executed by^him:

¶33

(a) Demand Promissory Note dated 19 06.2021^{for Rs. 11 00 Lacs.} ibi^{ctean CasnCredit Facility Agreement dated19.06 2021for Rs f 1.00 Lacs.} ici^{Oeeoot Hypothecation for All Facilities dated19.06.2021 for Rs.11.00 Lacs} (more specifically described in Schedule A of^{the OA)}

¶34

The Applicant Bank^{in compliancewith the guidelinesof Govemmentof lndia's} Eme€ency Credit^{Line GuaranEe Scheme (ECLGS) sanctioneda pr+approvedloan} facility under Guaranteed^{Emergency Credit Line (GECL) by which the Oefendant No'1} Firm became eligible^{for a WorkingCapitalTermLoanof Rs.1.70 Lacs being20% of the} aggregate fund based^{outstandingwith th€ ApplicantBank Thesaid WCTL, canied} interest, 2% above^{RLLR which at the tlme of Sanclion stoodat 7.707oper annum and} the effective of the^{interestat the time of sanction stood at 7.750lo perannum and the said} WCTL is to be repaid^{in 36 equal instalments witha moratorium of 24 months in principal} repayment. ln conneclion^{thereof, the Defendant No. 2 in his capacity as the proprietorof} the Defendant No. I^{Firm had signed a Sanction Letterdated 16062022theEby} agreeing to all the^{terms and conditions.Furtherthe Defendant No. 2 in his capacityas} the^proprietor of the^{DefendantNo. 1 Firm had signedand executeda Deedof} Hypothecation dated^{16.06.2022thereby, not only agreeing to all the terms of the same} agreement but also^{hyPothecatedthe stocks, BookDebb, receivables, equipment,etc.} purchased out of Bank finance^(more sp€cifically^{desctibed in Schedule-A of the OA) in} favour of the Applicant^Bank.

¶35

ln this mnneclion, the^{Oeiendant No. 2 in his capacityas proprietor of the} Defendant No. 1 Firm^{had also signed and executeda Demand PromissoryNotedated} 16.0A.2022.

¶36

It is^pleaded by the applicant bank^{thatth€ loan facilities were additionallyseolred} by €stablishing a lien on the^{(CDR)account (A/c No. 6038'1728424)in the name of}

¶37

s(; cl^alo,^^a.J" u zs.!2.2{- I Prerding Offcd \l ORT, Guwahati

¶38

O A 143/2024lDRT-Guwahai

¶39

Oefendant No.^'l Firm, with a value of Rs. 1.50 Lacs which has already been appropriated and adjusted on 10.12.2021 in the cash credit account ofthe Defendant No.^'l Firm.

¶40

The Statemenb of Account maintained by the Applicant Bank in the usual and ordinary course of business shows that there is an outstanding balance of Rs. 10,57,835.85 in the Term Loan Account (A,/c No. 60382355279) as on 31.01.2023. The ac@unt became NPA on 06.02.2023 and the interest (accrued but not applied) from 01.02.20231o 14.03.2024 comes to Rs. 1,48,271.84 and the totial outstanding in the Term Loan Account comes to Rs. 10,57,835.85⁺ Rs. 1,48,271.84^(interest accrued but not applied) - Rs. 85,000.00 (Recovery) = Rs. 11,21,107.69 and an outstanding balance of Rs. 11,23,292.05 in the Cash Credit Loan Account^(A/c No. 60386770325) as on 31.01.2023. The account became N.P.A. on 06.02.2023 and the interest^(accrued but not applied) from 01.02.2023 lo 14.03.2024 comes to Rs. 1,66,385.61 and the total oubtanding in the Cash Credit Account comes to Rs. 11,23,292.05⁺ Rs. 1,66,385.61 (interest accrued but not applied) = Rs. 12,89,677.66 and an outsianding balance of Rs. 1,72,530.00 in the WCTUGECL Loan Account^(A"/C No. 60417361956) as on 31.01.2023. The account became N.P.A. on 06.02.2023 and the interest^(accrued but not applied) from 01.02.20231o 14.03.2024 @mes to Rs. 18,704.51 and the total outstanding in the Term Loan Account comes to Rs. 1,72,530.00⁺ Rs. 18,704.51^(interest accrued but not applied) = Rs. 1,9'1,234.51 and the total outstanding in three loan accounts @mes to-

¶41

Term Loan (A,/c No.60382355279) Rs. l'1,21,107.69 Cash Credit (Alic No. 60386770325) Rs. 12,89,67/.66 WCTUGECL^(A/C No. 60417361956)Rs. 1,91.234.51 Total Rs.26,02,019.86

¶42

and the Defendants No. 1 and 2 are legally bound and^jointly and severally liable to repay the said amount to the Applicant Bank with lnterest till realization together with cost and charges. lt is further certified that no capitalized^penal interest has been charged in the loan a@ount while calculating the total outstanding claim amount and relevant Certificates in connection thereof have been enclosed^{with the Applicalion.}

¶43

The Applicant Bank submits that the there are no tangible securities available for

¶44

jli,lda^r,^a"&,i 2s.b ) '?r I v Prssidrng Ofrcer DRT, Guwahali

¶45

O.A 1,(r2024/oRT.Gwahati

¶46

the liquidation of the hypothecated^{property of the OefendantNo. I Firmand as such the} Applicant Bank is not in a^{positionto incorporateValuation Report and alsosubmitsthat} despite diligent efforts, the secured hypothecated^{property could not be located and} ascertained by the Applicant Bank as the business^{ac{ivityis closed.}

¶47

The applicant bank thus became @nstrained to tile lhe^present Original Application for the recovery of Rs, 26,02,019.86^(Rupse3 Twonty€ix Laca Two Thousand Ninoteon and Pai3a Eighty-Six) only as on 14.03.2024 along with interest and cost of the application.

¶48

After filing of the OA the Tribunal issued noti@s upon the defendants through registered^post and the applicant bank filed service report on 29.05.2024 and brought on record the^postal receipts along with track consignment report which shows that the notices have not been served upon the defendants by name. Thereafter the Tribunal ordered paper publication of notice upon the defendants and the applicant bank issued notice to the defendants through Paper Publication in two newspapeE namely "Ihe Echo of lndia' and 'Amar Asom'both dated 21.06.2024. Even after issuing notice through^{paper publication} upon the defendants there has been no representation on behalf of the defendants either by the counsel or the person and hence the defendants were set ex-parte on 06.09.2024 and the matter was posted for ex-parte hearing on behalf of the applicant bank.

¶49

Supporting the claim of the applicant bank Shri Christopher Watham, Dy Zonal Manager of the Applicant Bank has liled evidence on affidavit coupled with the security documents ma*ed as Exhibit A-l to A-19, suppo(ing the claim of the applicant bank.

¶50

Heard th6 learned counsel for the applicant bank who prayed for issuance of Recovery Certiricate against the defendants as per pleadings made in the Application, supportod by evidence on amdavit of their witness who affirmed on oath the execution of the security and other document by the defendants and also execution of their own documents relied upon, which have been marked exhibits.

¶51

Considering the facts and circumstances of the case, I am of the considered

¶52

view that the documents filed by the applicant bank are supporting tha claim of the

¶53

Sfl.rinldqr^^t"L-,'{. )s.o>.21- / Pre3idino Offic€. DRT, Guwahali

¶54

O A 143/202,roRT-6uwahalr

¶55

applicant bank and establishing the liability of the defendants. lt is proved that the defendants are liable to pay to the applicant bank the claim made in the Original Application. The loans were obtained and documents have been executed on 08.03.2021 & 19.06.2021. The accounts became NPA on 06.02.2023 and the OA has been filed on 21.03.2024. Hence, the OA is filed well within the period of limitation and this Tribunal having a^jurisdiction to adjudicate the OriginalApplication.

¶56

Considering the unchallenged/ unrebutted v€rsion of Shri Christopher Watham, the applicant's witness and all the documents marked as exhibits, including duly certified copy of the statement of ac@unt along with interest calculation sheet maintained by the applicant Bank in it's regular course of business, I hold that the applicant is entilled to get the Recovery Certificate as prayed for.

¶57

ln the result, the present Original Application No. 143 o12024 is allowed with cost as under :-

¶58

i) The defendants No. 1 & 2 are^jointly and severally liable to pay to the applicant bank a sum of Rs. 26,02,019.E6 (Rupeos Twsnty€ix Lecs Two Thousand Ninstoon and Paisa Eighty-Six) only with pendentelite and future interest @1 1.80(TL), @12.300/o(CC), @9.25%(GECL) per annum wilh monthly rests from 15.03.2024 till the date of tull paymenurealization and also cost of the application.

¶59

ii) The charga of the certificated amount be kept alive on hypothecated properties, as described in Schedule-A of the OA till the amount is realized in full.

¶60

iii) The applicant bank is entitled to proceed against the secured items towards recovery of the debts.

¶61

iv) The applicant bank is also entitled to proceed against the personal assets and properties of the defendants towards recovery of the dues.

¶62

v) The applicant bank is entitled to the costs of the O.A. which includes the advocate fees of the applicant bank. Applicant is dhected to file the cost memo within 2 weeks from today.

¶63

Sli,tP,.o^a^"t"fr4, I Pr*idins oF;ro^{! t} DRT, Guwahati

¶64

¶65

oA 143v2024/oRT€w.hari

¶66

vi) lssue Recovery Certificate accordingly^for a sum^{R3. 26,02,019.86 (Rupees} Twenty-Six L.ca Two Thousand Ninotson and Paba Eighty-Six) only in

¶67

favour of the applicant bank against the defendants^{No. 1 & 2.}

¶68

vll) Communicate copy of this order to^{the concerned parties.}

¶69

This order is dictaled and corrected by the undersigned.

¶70

Judgment dated 25u February 2025, signed and^{pronouncedin theTribunal} today under my signature.

¶71

Copy of the JudgmenuFinal Order be uploadedⁱⁿ the^{Tribunal's Websiteand}

¶72

file be consigned to Record Room.

¶73

sUd"^Ov 1f o 2'24- / (Shlv Sh.ran Duboy)^u Prcsldlng Ofiicel ' DRT, Guwahati.

Bank of Maharashtra v. Messers Ayaan Interior and Wood Products

Case brief

What is this about?

What did the court decide?

Bank of Maharashtra v. Messers Ayaan Interior and Wood Products

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Uco Bank versus Messers C B Food Processing Industry

Bank of India versus Sri Subhash Dutta

State Bank of India versus Juniors Hub

Canara Bank versus M/s Tingrai Fisheries and Industries

State Bank of India versus Zakir Alom Shah

Indian Bank versus Ms Porikrama