Allowed

Union Bank of India v. M/S Jindal Plastic Agency and Others

DRT10 Jan 2025OA/314/2022

Case brief

AI extract

What is this about?

The DRT allowed the bank's application for recovery of a loan of Rs. 1.78 crore. The court adjusted the claimed interest rate to 8% per annum and ordered the issue of a recovery certificate.

What did the court decide?

Recovery of Rs. 1,78,38,855.18p at 8% simple interest with costs; issue of recovery certificate; liberty to execute through sale of mortgaged or personal assets.

Union Bank of India versus M/S Jindal Plastic Agency and Others — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.314/2022

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 12.01.2022

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DATE OF DECISION: 10.01.2025

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Union Bank of India, Body corporate constituted under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at: Union Bank Bhawan, 239, Vidhan Bhawan Marg, Nariman Point, Mumbai, Maharashtra-400021 and Branch Offices, amongst others at Branch Union Bank of India, Kesar Ganj Chowk, Ludhiana, through its Power of Attorney Holder, Sh. Ajay Kaushal, Branch Manager and Constituted attorney.

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……..Applicant

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Versus

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M/s Jindal Plastic Agency situated at Bhagh Khazanchian, B/s Gur Mandi, Ludhiana (PB)-141008 through its Prop. Sh. Joginder Pal.

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Alternate Address: 561, Ahata Sher Jang, Opp. Ram Sharnam Mandir, Near Division No3, Ludhiana, PB-141008.

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Sh. Joginder Pal S/o Sh. Om Parkash, Proprietor R/o Plot No.87, Abadi Madhuban Enclave, Barewal Awana, Ludhiana (PB)- 141001.

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Alternate Address: B-IX-1675, Jindal Market, Talab Mandir

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Road, Ludhiana.

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Sh. Sachin Jindal S/o Sh. Joginder Pal, R/o Plot No.87, Abadi Madhuban Enclave, Barewal Awana, Ludhiana (PB)-141001.

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Alternate Address: B-IX-1675, Jindal Market, Talab Mandir Road, Ludhiana.

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Smt. Kusum Jindal W/o Sh. Joginder Pal, R/o Plot No.87, Abadi Madhuban Enclave, Barewal Awana, Ludhiana (PB)-141001.

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Alternate Address: B-IX-1675, Jindal Market, Talab Mandir Road, Ludhiana.

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………. Defendants

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Advocates:

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Argued by Ms. Seerat, Advocate proxy for Ms. Puja Sharma, Advocate for the applicant None for defendant nos.1,2 & 4 Defendant no.3 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.1,78,38,855.18p (Rupees One Crore Seventy Eight Lacs Thirty Eight Thousand Eight Hundred Fifty Five And Paise Eighteen Only). The Original Application has been filed through Sh. Ajay Kaushal, Branch Manager of the applicant, who is competent to institute the Original Application vide General Power of Attorney dated 26.04.2016, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant no.1 through its proprietor of defendant no.2 had approached the applicant for grant of CC Limit of Rs.1.40 Crore and further for enhancement of CC Limit to Rs.1.65 Crore 3. The applicant sanctioned the CC Limit of Rs.1.40 Crore and further enhanced the CC Limit to Rs.1.65 Crore vide Sanction Letter dated 03.03.2016, which is Annexure A13 to this OA and the terms and conditions were duly accepted by the defendants. 4. Defendant no.2 had mortgaged his immovable properties i.e. land and building measuring 72.50 Sq. Yards situated at B-9-1619/1, Bagh Khazanchian, Dist. Ludhiana vide Equitable Mortgage of Sale Deed bearing vasika no.19609 dated 17.03.2011 along with its translation, which are Annexures A10 & A10T to this OA. Documents executed:-I.T. Return of D-2 for A.Y 2017-18, which is Annexure A2 to this OA; D.P. Note, Letter of Continuity, Hypothecation agreement of goods & debts, Letter of undertaking not

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to alienate hypothecated goods, Letter of guarantee, Letter of Undertaking, Agreement on rate of interest all dated 10.12.2014, which are Annexures A3 to A9 to this OA; Memorandum of deposit of title deed dated 13.12.2014, which is Annexure A11 to this OA; Declaration dated 12.12.2014, which is Annexure A12 to this OA; Letter of Continuity, D.P. Note, Hypothecation agreement of goods & debts, Letter of undertaking not to alienate hypothecated goods, Letter of guarantee, Declaration and memorandum of entry And Agreement on Rate of Interest all dated 16.03.2016, which are Annexures A14 to A21 to this OA; Debit Balance confirmation dated 05.01.2016, which is Annexure A22 to this OA; D.P. Note, Letter of Continuity, Interest Agreement & Letter of Confirmation dated 12.03.2018, which are Annexures A23 to A26 to this OA; Debit Balance Confirmation Letter dated 31.01.2019, which is Annexure A27 to this OA; Recall Notice along with postal receipts dated 23.02.2021, which is Annexure A28 to this OA; Legal Notice dated 17.06.2021, which is Annexure A29 to this OA and Statement of Account along with Demand Notice under section 13(2) of SARFAESI Act, 2002 dated 31.05.2021, which are Annexures A30 & A31 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.1,78,38,855.18p, 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 but no one appeared on behalf of defendant no.3 and he was proceeded ex parte on 31.07.2024. Sh. Gagandeep Singh Virk, Advocate appeared for defendant nos.1, 2 and 4 and filed Power of Attorney but did not file WS within stipulated period. Therefore, opportunity to file WS by defendant nos.1, 2 and 4 was closed and their defense was struck off on 31.07.2024.

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In support of the OA, affidavit of Sh. Ajay Kaushal, Branch Manager, Union Bank of India h as been filed. 8. Heard arguments of Ld. Counsel for applicant. None appeared for defendants for arguments. Perused record. 9. It was argued by learned proxy 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 A31 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.1,78,38,855.18p (Rupees One Crore Seventy Eight Lacs Thirty Eight Thousand Eight Hundred Fifty Five And Paise Eighteen 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. 10. In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @9.85%p.a. along with penal interest @2.00%p.a. with monthly rests from 01.07.2021 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

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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.

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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.1,78,38,855.18p (Rupees One Crore Seventy Eight Lacs Thirty Eight Thousand Eight Hundred Fifty Five And Paise Eighteen 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.

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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 21.02.2025 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 .

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Dated: 10.01.2025

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

Union Bank of India v. M/S Jindal Plastic Agency and Others

Case brief

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Union Bank of India v. M/S Jindal Plastic Agency and Others

Case brief

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