Allowed

Union Bank of India v. M/S Aqua Steel

DRT11 Apr 2025OA/347/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's application for recovery of a loan of Rs. 25.85 Lakhs against the defaulting borrower, rejecting the defense of blank documents and economic crisis.

What did the court decide?

Defendant to pay Rs. 25,85,265.31 with future interest at 13.55% p.a.; bank entitled to realize dues from OA schedule assets and defendant's properties.

Union Bank of India versus M/S Aqua Steel — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-II AT HYDEMBAD DATED THIS THE ELEVENTH DAY OF APRIL, 2025 PRESENT: SH. RAMESHWAR KOTHE, B.com, L.LB. (Hons.). M.A. PRESIDING OFFICER

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ORIGINAL APPLICATION NO. 347 OF 2024

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Union Bank of India Guntakal Branch 10-209, Anjuman Street Thimannacherla Guntakal, Andhra Pradesh Rep by its Chief Manager.

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.......Applicant.

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Versus

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M/s. Aqua Steel Rep by its Prop: Sri Zaki Ahmed Shaik S/o Srilqbal Ahmed Shaik Age about 36 years Occ: Business, 10-91, Sofia Street, Guntakal Ananthapur - 515 801.

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Also at:

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7 i237-b, Bhagya nagar Near Edaga Masjid Guntakal-515 801.

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...... Defendant.

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Counsel for the Applicant : Ms. SanSeeia Jaiswal. Counsel for Defendants : Mr. Md. Baba Tazuddin & Associates.

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:: ORDER::

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The Applicant Bank filed the presenr OA. u/s 19 of The Recovery of Debts & Bankruptcy Act, 1993 for recovery of a sum of Rs.25,85,265.31Ps from the defendant wiih interest @ 13.55o/o

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**(us

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oA.34712024

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p.a. inclusive of penal interest @27o with monthly rests from the date of OA till the date of realisation along with costs and for sale of OA schedule hypothecated assets.

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The averments of applicant bank as^per the OA, briefly, are that defendant availed cash credit facility to a tune of Rs.25,00,000/- on 29,09,2022 to be repayable with a floating rate of interest @ 10.05o/o p.a. by executing all requisite loan documents as^per the details^given in the OA. The loan amount is secured by way of hypothecation of stocks and receivables. However, the defendant did not maintain the loan account as per the terms of sanction stipulated by the applicant bank nor did it liquidate the liability in spite of repeated notices dated 05,01.2023, 0s.72.2023, 0L.09.2023, 04.17.2023 and 18.10.2023, including recall notices dated 18.10.2023 and f9.O6.2O24. Hence, the OA.

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Defendant filed written statement. The relevant averments in the written statements in brief, are that defendant incurred heavy loss due to economical and financial crisis. Defendant was made to execute blank loan documents. In order to keep the business running, defendant's father borrowed from various persons, who could not repay and some of those lenders forcibly took away the material available in the shop. Ultimately defendant closed the business. Applicant bank would have claimed the loan dues under CGTMSE scheme rather than filing the^present OA.

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The applicant bank examined P. Ramudu, Manager. as AW-1 and marked 17 documents through him as Ex. A.1 to Ex. A,17. ow*

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oA.34712024

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Mr. Shaik Zaki Ahmed, proprietor of defendant firm examined as DW.l and marked one document.

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Heard learned counsel for the applicant.^perused the written arguments filed by the defendant and the material placed on record.

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The point that arises for consideration is:-

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Whether the Applicant Bank is entitled for the OA claim against the Defendant and the OA schedule assets?

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According to the learned counsel for the applicant, defendant committed default in repaying the loan amount despite repeated reminders. Defendant did not choose to place any material evidence in support of its contentions. Hence applicant bank is entitled to the OA claim basing on the facts and figures relied on vide Exs. A.1 to A.17 placed before this Tribunal.

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There is no dispute over availment of credit facilities from the applicant bank and default in repayment thereafter. It is not the case of the defendant that it neither made efforts to regularise the loan account nor cleared the dues in spite of notices. The contention that the defendant was made to sign blank loan documents at this stage does not deserve acceptance. Under such circumstances, the Evidence Affidavit of AW.1 coupled with the recitals in Exs. A.1 to A.17 marked on behalf of the applicant bank remains unchallenged and un-rebutted. Hence, I hold that the defendant is liable to pay the qA ctaim to the applicant bank with future interest and costs. ?Y.*9

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oa.34712024

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In the result. the^present Original Application^No.347 /2024^is allowed as under:^-

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i) the defendant is liable to^pay a sum of Rs.25,85.265.31ps to the applicant bank along with future interest @11.55olo P.a. simple from the date of Application till^the date of realization;

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ii) the OA claim is secured by way of hypothecation of assets described in the schedule of the OA and the applicant bank is entitled to proceed against the same for recovery of its dues;

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Ii) the applicant bank is also entitled to^proceed against the person and^properties of defendant for realization of its dues; and

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iv) the applicant bank is entitled for the costs.

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The Applicant Bank is directed to file Cost Memo within 2 weeks from the date of receipt of this Order.

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Issue Recovery Certificate accordingly.

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Communicate a copy of this order to the^parties concerned and upload in Web Portal.

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(Dictated to the steno, signed and pronounced by me in the open court on this the 11th day of April, 2025.)

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,/M"s

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(RAMESHWAR KOTHE) PRESIDING OFFICER

Union Bank of India v. M/S Aqua Steel

Case brief

What is this about?

What did the court decide?

Union Bank of India v. M/S Aqua Steel

Case brief

What is this about?

What did the court decide?

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