Allowed

Capital Small Finance Bank Limited v. Rajinder Singh and Another

DRT1 Jan 2025OA/229/2024

Case brief

AI extract

What is this about?

The Applicant, an NBFC, filed an Original Application against two Defendants, who were the primary borrower and guarantor respectively, for recovery of a loan debt of Rs.51,45,451.00. The Defendants failed to appear; the Defense was struck out for non-compliance. The Tribunal allowed the application, declared the Defendants jointly and severally liable for the debt plus interest, and granted it pe

What did the court decide?

The application was allowed; the Defendants were declared liable to pay Rs.51,45,451.00 plus costs and simple interest at 8.00%p.a.; a Recovery Certificate was issued.

Capital Small Finance Bank Limited versus Rajinder Singh and… — Company and Corporate | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.229/2024 PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION:23.01.2024

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DATE OF DECISION:01.01.2025

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Capital Small Finance Bank Limited, (Formerly Known as Capital Local Area Bank Ltd.) having its Registered Office at 37, Midas Corporate Park, IIIrd Floor, G.T. Road, Jalandhar-144001, having one of its Branch office at Khanna, District Ludhiana, Punjab Through its authorized Representative Mr. Munish Sharma.

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……..Applicant

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Versus

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Sh. Rajinder Singh, S/o Sh. Harchand Singh R/o H.No.2838, Village Bhamaddi, Tehsil Khanna, District Ludhiana, Punjab.

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Sh. Gurmit Singh, S/o Sh. Joginder Singh R/o Village Bhamaddi, Tehsil Khanna, District Ludhiana, Punjab.

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….……Defendants Advocates: Argued by Sh. Amandeep Singh Sobti, Advocate proxy for Sh. Manu Mittu Advocate for applicant Sh. Lovish, Advocate proxy for Sh. Dixit Garg, Advocate for Defendant No.1 Defendant No.2 is ex-parte

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FINAL ORDER 1. 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.51,45,451.00p (Rupees Fifty One Lacs Forty Five Thousand Four Hundred Fifty One only). The Original Application has been filed through Mr. Munish Sharma authorized Representative of the applicant, who is competent to institute the Original Application vide Photostat Copy of Power of Attorney dated 20.04.2019, 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 the grant of KCC Limit of Rs.35.00 Lacs

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vide Copy of Loan Application dated 05.09.2016, which is Annexure A2 to this OA. Defendant no.2 stood as a Guarantor

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The applicant sanctioned the KCC Limit of Rs.35.00 Lacs vide Copy of Sanction Letter dated 24.09.2016, which is Annexure A3 to this OA and the terms and conditions were duly accepted by the defendants. 4. Defendant no.1 had mortgaged his immovable properties i.e. Land Measuring 56Kanal-07Marla situated at Village Bhamaddi, Hadbast No.234, Tehsil Khanna, District Ludhiana, Punjab Letter to Sub Registrar for Recording & Mutation of Charge vide Declaration u/s 4(1) dated 26.09.2016 , along with its Translations, which is Annexure A8 to this OA. Documents executed:- Copy of Loan Agreement, Copy of Guarantee Deed, Copy of Letter of Undertaking, Copy of Demand Promissory Note all dated 13.10.2016, which are Annexures A4 to A7 to this OA; Copy of Recall Notice dated 04.01.2024, which is Annexure A9 to this OA; Copy of Postal receipts dated 05.01.2024, which is Annexure A10 to this OA; Statements of accounts with certificate, which are Annexures A11 & A12 to this OA and Copy of Balance & Security Confirmations Letters, which is Annexure A13 to this OA. 5. 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.51,45,451.00p, 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. 6. The defendants were served notices to appear before this Tribunal no one appeared on behalf of defendant no.2 and he was proceeded ex parte on 11.12.2024. Sh. Dixit Garg, advocate appeared for defendant no.1 and filed Power of Attorney but did not filed WS within stipulated period of time. Therefore, opportunity to file WS by defendant no.1 was closed and his defense was struck of on 30.12.2024.

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In support of the OA, affidavit of Mr. Munish Sharma authorized Representativ e, Capital Small Finance Bank Limited, h as been filed. 8. Heard arguments of Ld. Counsel for applicant. Proxy Ld. Counsel for defendant no.1 has not advanced any arguments. None appeared for defendant no.2. perused record. 9. 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 A13 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 applicant. 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.51,45,451.00p (Rupees Fifty One Lacs Forty Five Thousand Four Hundred Fifty One 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 @13.25%p.a. along with penal interest @2.00%p.a. with half yearly rests from 01.10.2023 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 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

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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. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.51,45,451.00p (Rupees Fifty One Lacs Forty Five Thousand Four Hundred Fifty One only) jointly and severally, with costs, current and future simple interest @8.00%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.

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Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 01.02.2025.

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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 . Dated:01.01.2025.

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

Capital Small Finance Bank Limited v. Rajinder Singh and Another

Case brief

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Capital Small Finance Bank Limited v. Rajinder Singh and Another

Case brief

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