Allowed

Canara Bank v. M/s S.K. Enterprises

DRT31 Jan 2025OA/419/2023

Case brief

AI extract

What is this about?

DRT upheld the DRT's ex-parte order and allowed the bank's application under S.19 RDB Act to recover a loan default of Rs. 1.03 crore from borrowers and guarantors who failed to appear in the ex-parte proceeding, determining the debt and issuing a recovery certificate.

What did the court decide?

Recovery certificate issued; Defendants ordered to pay Rs.1.03,97,165/- with interest; mortgaged assets attached.

Canara Bank versus M/s S.K. Enterprises — Banking and Recovery | DRT (2025)

•

OA 419 of20231JI

DRT.PATNA

Debts Recovery Tribunal, Patna

¶5

Karpuri Thakur Sadan, Aashiana Digha Road Patna-800025

¶6

Presiding Officer : Shri Kaushalendra Yadav

¶7

OA Case No. 419 of 2023

¶8

Canara Bank, Branch at Raja Bazar. Ramyatan Complex. AshianaDigha Road. Patna 800014

¶9

....... Applicant

¶10

Vs.

¶11

I. Mis S. K. Enterprises, a Proprietorship Concern through its Proprietor Sushi! Kumar Sio Prahlad Singh [PAN - BCVPK7858JJ, Near NavGautam School, Naharpar. Bailey Road, P.S. Rupaspur. Danapur. Patna 801506.

¶12

Sushil Kumar, S/o Prahlad Singh. [Borrower & Mortgager] [PAN - BCVPK7858J]

¶13

Prahlad Singh, S/o Late Dhaneshwar Singh [Guarantor & Mortgager] [PAN - BZJPS2769F]

¶14

Pankaj Kumar S/o Prahlad Singh, [Guarantor & Mortgager] [PANBCVPK7982H]

¶15

Santu Kumar, S/o Prahlad Singh, [Guarantor & Mortgager] [PANARLPK3592K]

¶16

All residents of Village Jalalpur, P.S. Rupaspur, P.O. Sahay Nagar. District Patna, Pin 801506 at present residing at Flat No.30 I & 302. Dhaneshwar Palace Apartment. Abhimanyu Nagar. P.S. Rupaspur. Patna, Pin 801506.

¶17

" " ". Defendants

¶18

Present:

¶19

For the Applicant Shri Manish Kishore, Advocate For the Defendants None

¶20

Dated:3t.Ot.2025

¶21

JUDGMENT

¶22

I. The Applicant bank has made this application u/s 19of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 21.08.2023 against the defendants to recover its debts from defendants of Rs.1.03.97.165/- as on 31.07.2023 along with pendente-lite and future interest at the contractual rate from 01.08.2023 with costs till realization.

¶23

Pres;r!;7~,,; Olfie.,

PA'l'NA

c ,

OA 419 of 20231,11

DRT, PATNA

The application has been filed with the contention that the applicant bank, is a body corporate, carries on the business and is competent to tile the suit through various branches including the applicant.

¶29

Defendant no. J is a proprietorship concern of which defendant no.2 is the proprietor. Defendant no. 3 to 5 are the guarantors, who approached the applicant bank for finance as Term Loan of Rs.80 Lakh for purchasing equipment, furniture'and for setting up Banquet Hall with Lodging facility with project name "Le Gardenia Convention Center". After considering the request of the defendants, the applicant bank has sanctioned Term Loan of Rs.80 Lakh on 21.09.2020 on various terms and conditions, as stipulated in the sanction letter, which were duly accepted by the defendants. To secure the loan facilities defendants have executed various loan and security documents and also created mortgage in favour of the applicant bank, details of which are given in OA. The transaction of mortgage was duly registered with CERSAL

¶30

The applicant bank on requests of the defendants permitted restructure on 3 J .07.202J as the Banquet Hall could not start in timcframc. It has further been stated that in pursuance of legal notice, the defendants deposited Rs.I.60 Lakh but thereafter ignored to clear the overdue amount.

¶31

After availing the sanctioned credit facility, the defendants became irregular in repayment of their dues as per agreed terms and failed to adhere to the financial norms of the bank and avoiding the repayment of its dues to the bank, in spite of several assurances given by it to the applicant bank resulting in the account turning as NPA on 29.01.2023.

¶32

Since, the defendants failed and neglected in spite of several reminders to make payment of the dues recoverable to the bank, hence this application has been filed by the bank.

¶33

The total liability in the loan account is Rs.1.03,97.165/- as on 3 J .07.2023 with pendente-lite and future interest contractual rate from 01.08.2023 till the realization.

¶34

Presldir» 0 ffit:e, Debt::::::c: overy Tribuna LhTNA

OA 419 of 20231.11

DRT,PATNA

This Tribunal issued summons/notices copies of application & paper book to the defendants by registered/speed post on 25.09.2023, requiring them to show-cause within 30 days of the service U/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993. But the defendants have not appeared, hence, the Registry of this Tribunal has ordered to publish the notice in newspaper and subsequently, substituted service by publication of notice by way of advertisement In newspaper was also made against the defendants on 21.12.2023 in "Prabhat Khabar" newspaper.

¶39

Despite the registered summons/notices and publication of notice in newspaper, the defendants have not appeared before this Tribunal to contest the case. The sufficient time has been given to the defendants to defend their case, but they failed to appear and to file WS, hence, the Tribunal has passed an order to proceed ex-parte against the defendants on 09.07.2024.

¶40

To prove its case, the applicant Bank has referred various certified photocopies of documents before this Tribunal. The applicant bank has also given evidence on affidavit by way of affidavit by Shri Rajiv Kumar, Chief Manager of the applicant bank. The details of documents are as follows:

¶41

SI.Nll	Description of Documents Photocopies	Date of Execution	Amount (In Lakh)	Signature Executants	of	Ex.! Ann. No.
I	Loan Application	15.06.2020	80.00	Defno.I&2		I
2	Sanction Memorandum	21.09.2020	80.00	Bank accepted defno.l&2	and by	2 I
3	Photocopy of simple Mortgage deed	26.09.2020	--	--		1 "
4	Pronote	01.10.2020	80.00	Def.no.I&2		4
5	Common Deed of Hypothecation Agreement	01.10.2020	80.00	Def.no.I&2		5 6
6	Guarantee Covering Letter	01.10.2020	1 80.00	Def.no.3		r- ----
7	Guarantee Agreement	01.10.2020	80.00	Def.no.3		17 ,-
8	Declaration	01.10.2020	80.00	Def.no.3		s---
9	Guarantee Covering Letter	01.10.2020	80.00	Def.no.4		19
10	Guarantee Agreement	01.10.2020	80.00	Def.no.4		10 -
I I	Declaration	01.10.2020	80.00	Def.noX----	-n'

FA'iNA

OA 419 of20231JI

DRT,PATNA

12	Guarantee Covering Letter	01.10.2020	80.00	Def.no.5	12
13	Guarantee Agreement	01.10.2020	80.00	Def.no.5	13
14	Declaration	01.10.2020	80.00	Def.no.5	14
15	Request letter submitted by Sushil Kumar	--	--	Def.no.I&2 ,-	15 f-16	-- --
16 to 18	OverdueNotices	01.12.2021, 07.12.2021 & 14.12.2021	--	Bank	18	to
19	Letter to bank	--	-- ..	Def.no.I&2	19	-
20 & 21	OverdueNotices	23.09.2022 & 09.11.2022	--	Bank	20 21	&
22	Letter/notice	16.11.2022	--	Bank	22
23	LegalNotice	19.11.2022		Bank's adv.	23
24	Notice	25.01.2023	--	Bank	24
25	DemandNotice	30.01.2023	--	Bank	c15 --	--.-
26	PossessionNotice	10.04.2023	--	Bank	26
27	Statements of account	--	--	Bank	27

¶47

Heard arguments and perused the case record.

¶48

Ld. Counsel of applicant bank submitted that the defendants have taken the loan and utilized the same and also executed the various loan documents to secure the loan. Further, submitted that the claim of the bank has been proved by documentary evidence. All the transactions were entered in the ledger of the loan accounts in the name of the defendant duly maintained by the applicant bank in its usual course of business. The interest /compound interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank ofIndia.

¶49

It is further submitted by Id. Counsel of applicant bank that there is no stay granted by any Higher Court, in respect of the proceedings of the present OA and requested to issue recovery certificate. as claimed tor, in ~A.

¶50

II. It has been established that defendants are living and carrying on their business in the state of Bihar. Cause of action also arose in the State of Bihar. The said claim on the date of tiling of application exceeded Rs.20 lacs. The applicant bank is functioning within the jurisdiction of this Tribunal. Therefore. this Tribunal has territorial as well as pecuniary jurisdiction to adjudicate upon the present application.

¶51

~, Prcsidi:'; O ff ice, Oebts r!o::ovory TnDw"., FATNA

OA 419 of 20231.11

DRT. PATNA

On the issue of Limitation, to prove it, the applicant bank has submitted that the applicant bank has declared the account as NPA on 29.01.2023. whereas the present application has been filed on 21.08.2023. Even. it is counted for the purpose of Limitation, then it is established that the applicant bank has tiled the case within the limitation period. As such. it is established that the present application has been tiled well within the period oflimitation.

¶56

Shri Rajiv Kumar, Chief Manager of the applicant bank has tiled the affidavit in support of contents of application and the documents as evidence and proved on oath the pleadings and documents of the applicant bank as stated above.

¶57

Section 19(3) of the Recovery of Debts and Bankruptcy Act. 1993 provides that the application u/s S.19 (I) shall be accompanied with true copies of all the documents relied on in support of the claim.

¶58

The rule 12 (10) of the Debt Recovery Tribunal (Procedure) Rules, 1993. provides that if the defendant denies his liability to pay the claim made by the applicant. the tribunal may act upon the affidavit of the applicant who is acquainted with the facts of the case or who has on verification of the record sworn the affidavit in respect of the contents of the application and the documents as evidence.

¶59

The rule 12 (II) of the aforesaid Rules, provides that the provisions contained in section 4 of the Banker' s Books evidence that Act, 1891 (18 of 1891) shall apply to a certified copy of an entry in a Banker's Books furnished along with application tiled under sub section I of section 19by the applicant. Section 4 of Banker's Books evidence Act, 1891 runs as under- SA. Mode of proof of entriesin bankers' books.~Subiecl 10 the provisions ofthis Act, a certified copy of any entry in a banker's hook shall ill all legalproceedings be received £IS primafacie evidence ofthe existence o{ such entry, and shall be admitted £IS evidence ofthe matters, transactions and accounts therein recorded in every elise where, and to the same extent as, the original entry itselfis 1I0W by law admissible, but notfurther or otherwise.:

¶60

As such the certitied true copies of the documents are admissible in evidence. The statement of account maintained in the ordinary course of business is not only admissible but shall be taken as the correct statement of account, more so sinee the entries in the statement of account have not been challenged.

¶61

Prcsi."..·~()iller, ...._..... '""-0"""'" .,.,..,t,;:,a ....-." , .......] Tribuna, PATNA

OA 419of20231JI

DRT.PATNA

On perusal of the application, documents. affidavit and on consideration of the arguments. it is proved that the defendants have applied for loan and the bank had sanctioned the loan and to secure the loan and for repayment of loan amount with interests etc., the defendants have executed various loan documents. as stated in the application and proved by aforesaid evidence. Defendants have neither denied the utilization of funds advanced by applicant bank nor have pointed out any specific error and discrepancy in the Statement of Account.

¶68

l6. The evidence discussed above goes to establish that the amount of loan as mentioned in the O.A.•was availed by the borrower under the agreed terms and conditions for repayment with interest. The balance amount till 31.07.2023 has been proved to be Rs.1.03,97J65/- only by way of statement of accounts. There is nothing to prove the amount more than that disclosed in the aforementioned statement. As such this amount is recoverable till ful1and final realization of the claim.

¶69

In my view. facts of the case stand proved by evidence of the applicant bank. Accordingly. the applicant bank is entitled to recover from defendants jointly and several1y of Rs.I.03,97,165/- along with pendente-lite and future interest (ii) 12.50% p.a. with compounded monthly rests from 21.08.2023 (The date of filing of this OA) till realization. So the final order may be passed accordingly, to meet the ends of justice.

¶70

ORDER

¶71

In the result, the application of the applicant bank is allowed and debt is determined with costs against the defendants. The defendants are hereby jointly and severally, ordered to pay the applicant bank its debt amounting to Rs.1.03.97.165/- along with pendente-lite and future interest (til 12.50% p.a. with compounded monthly rests from 21.08.2023 (The date of tiling of this OA) till realization of the entire sum due and recoverable with costs.

¶72

It is made clear that any amount deposited by the defendants. be deducted in the claim amount, ifnot deducted.

¶73

Defendants are debarred from transferring. alienating encumbering or otherwise dealing with or disposing of the mortgaged or hypothecated or any

¶74

\ ""slr!ir::; 0 ffic Pl **"'.'1too!...,'"" ...** ":"I!"" J, ....... v ......,/'-'.-:.. r''friUJ.~,:: -........"" . PA'i.u.4

OA 419 of 20231.11

DRT.PATNA

other properties and assets without paying the aforesaid adjudicated dues to the applicant bank to secure the ends of justice. The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to the tinal order under the recovery proceedings in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993.The applicant may submit the certitied copy of this Judgment and the Recovery Certificate before the Registrar/Sub- Registrar to endorse the charge over the secured assets.

¶81

Let a certificate of recovery be drawn up forthwith and put up for signatures in tenns of provisions contained in Section 19(22) of the Act to be issued. on the basis of the order of the Tribunal to the Recovery Otlicer. The Recovery Officer shall realize the amount as per the certiticate in the manner. and mode prescribed under the Act from the defendants. by sale of mortgaged/ hypothecated assets as well as other personal movable/immovable assets of the defendants.

¶82

Parties are directed to appear before the Recovery Officer. DRT. Patna on 11.03.2025. The order be communicated accordingly.

¶83

Judgment signed. sealed. dated and pronounced in the open court"on 31st day of January, 2025.

¶84

Dictated &corrected by me.

¶85

.: '\ [KaushalendraYadav] Pres¥lft}A1cErfficl!' Debts ~~?'teyJfiqI:WtTalAAlQ., r·i:..'.i.'.~A

¶86

mpMNO'

¶87

DEBTS RECOVERY TRIBUNAL PATNA

¶88

2nd Floor, (A. B & F Wins) Karpuri Thakur Sadan. Kcndriya Karamchari Parisar (OPOA), Ashiana Digha Road, Patna-800025.

¶89

Br.coyEBY clRTlQCm UNhER u:crJPN 19(7)BEADWITH SICTION ,"2;, MIRE Rr.c;oVIBY Of QIBIS 4; BANKBJ!PTC)fAct IN AS

¶90

AMINQI!D FB9M DME TO TIME

¶91

Be No- 41Q01S IN

¶92

C... No: OAl4191l013

¶93

In the Matter of: (CJl...I) CANARA BANK BRANCH ATRAJA BAZAR. RAMYATANCOMPLEX, ASHIYANADIOHA ROAD, PATNA.BIHAR -800014

AppliClUlt(I)

----Venus--

To.

(CD-.) MIS S.K. ENTERPRISES a Proprietorship Concern through its Proprietor Sushil Kumar 810PmhIadP.'.-.-. Siop. NcarNavQauaam Sc:booJ. N.,.,.... Bailey Road, PlIlna.BIHAR -801506

¶98

(CD- 2) SUSHIL KUMAR

¶99

SIO- PRAHLAO SINGH, RESIDENT OF VILLAGE-

¶100

JALALPUR. P.S.-RUPASPUR, P.O.-SAHAYNAGAR, DISTRICT- PATNAPIN 801506 AT PRESENT RESIDING AT FLAT NO 301 AND 302, DHANESHWAR PALACE APARTMENT,ABHIMANYU NAGAR, P.8.- RUPASPUR, PATNA,PrN 801506.

¶101

(CD-J) PRAHLAD SINGH SIO LATEDHANESHWAR SINOH, RESIDENT OF VILLAGEJALALPUR, P.S.-RUPASPUR, P.O._SAHAY NAGAR, DISTRICT-PATNAPIN 801506AT PRESENT RESIDING AT FLATNO 301 AND 302, DHANESHWAR PALACE APARTMENT,ABHIMANYU NAGAR, P.8.- RUPASPUR, PATNA,PIN 801506.

¶102

Defendant(s)

¶103

(CD- 4) PANKAJ KUMAR SIO- PRAHL.\I) SINGH, RESIDENT OF VlLLAGEJALALPUR, P.S.- RUPASPUR, P.O.- SAHAY NAGAR, DISTRICT- PATNAPIN 801506AT PRESENT RESIDING AT FLAT NO 301 AND 302, DHANESHWAR PALACE APARTMENT.ABHlMANYU NAGAR, P.8.- RUPASPUR, PA1NA, PIN 801506.

¶104

(CD- 5) SANTU KUMAR

¶105

S/O- PRAHLAD SINGH, RESIDENT OF VILLAGEJALALPUR, P.S.- RUPASPUR, P.O.- SAHAY NAGAR, DISTRlCT- PATNAPIN 801506 ATPRESENT RESIDING AT FLATNO 301 AND 302, DHANESHWAR PALACE APARTMENT.ABHIMANYU NAGAR. P.S.- RUPASPUR. PATNA,PIN 801506.

¶106

Ba:I!m edGSII, 'or & 10397165,00 I 8Upcn OpeergU Dm 'ak. Nlpmey,kYcP Douupd, OpeHUgd"'"SJIIy..fln.Jlab'_J

¶107

In terms of fmal order dated 31101/2025 passed by this Tribunal in the above mentioned. case. it is ordered that the Applicant Certificate Holder Bank is entidcd to recover a sum ofKs. 10397165.00 along with cost, expenses and interest from the 21/0812023 i.e. date of filing 1 with effective date of the ON419f2023 and future interest from order date till the date of realisation in full, joindy or severally from the Certificate Debtors, bcrcinafter referred to 8S:-

¶108

~r.nO co Name L... 11'.. Int. Type/Mode Ra" Int. Erredtvt D... OnIH D." Amounl(Rs.) LlablUty Type InterestOrder Date)(.. on AmoWd(lb.) Re Rema,
RISES (Monthly) Compound Interest 12.50 110812023 1101/2025 10391165.00 ':!.~~~ .. 10397165.00
I> I =, USHlLKUMAR kMooIhIy) In".... 12.50 1/01lI2023 11011202S 10397165.00 And ~~on 10391165.00
PRAHLAD SINGH I- 12.50 110812023 11011202510397165.00 Ointll 1'"'-"''' 10397165.00
(Monthly) everal om...Dalo
PANKAl KUMAR Compound lmerest 12.50 110812023 11011202510397165.00 oinlly And tAson 10397165.00
MooIhIy) ...... lIv DolO
jSANTIJ KUMAR (Monthly) ........ 12.50 II08flO2J 11011202510397165.00 '::I ~"' "'Ie .. 10397165.00

¶109

In case of failure to pay the aforementioned adjudicated amount within 30 days, same shall be recovered from the sale of the mortgagedlhypothecated assets as well as other personal movable! Immovable assets of the certificate debtors.

¶110

The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to the final order under the recovery proceeding in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy Act 1993. P.nies are diTected to appear befo~ ASHISH KUMAR. Recovery Officer, DEBTS RECOVERY TRIBUNAL PATNA on J 110312025.

¶111

'Ihe Recovery Officer shall realize the amount as per this Certificate in the manner and mode prescribed under Sections 25 to 28 of the Recovery of Debts Due to Banks and Financiallnstitutions Act, 1993 (as amended from time to time) from the above named Certificate Debtors.

¶112

Th"G~ ,has been

¶113

,has been issued under my signature and seal oCllft:Tribunal on th is OIl02J202S

¶114

Rexistror Debt,

¶115

PRESIDING OFFICER DEBTS RECOVERY TRIBUNAL PATNA

¶116

P.--.-!..:··.··~0 fJiee, Debt; :-.:;::::.':-. -'~~1 'I'ribun«

t'A·£.I.·~A

..'

FORM NO. 10

[See Regulation 24(2)]

¶121

DEBTS RECOVERY TRIBUNAL PATNA

¶122

2nd Floor, (A. B & F Wing) Karpuri Thakur Sadan, Kendriya Karamchari Parisar (GPGA), Ashiana Digha Road, Patna-800025.

¶123

SCHEDULE TO RECOVERY CERTIFICATE MEMO OF COSTS

¶124

RC No. 4112025

¶125

¶126

Case No: OA/419/2023

¶127

Applicant(s): CANARA BANK

¶128

Versus

¶129

Defendant(s): MIS S.K. ENTERl'IUSES

¶130

~1.·.r.·...••. 1'1._..o. _ lIT	..:.'. JItem of Co=s=ts===============Ii=Am=o=un ..1Fee onthe application	=t=in=Rs='==lI 106000
112	[Process Fees(Inc. Publicati()_n)	0
113. ..	,lAdvocate":~~s m _ ••	0
114:	..... il<::olssioner!~eiv(:r/\lalu~tion/SecurityFee	0
iI5...... ;!PL~	IIM.isc_:!IaneshEe~~___ ~~ ..= ~"'- -------	11106000 0 -I--------~I

Place: PArNA

PRESID~FICER

Dale: 01/02/2025

DEBTS RECOVERY TrI1StJNAL ~A'fiq1{

¶135

Note: Strike out whichever is not applicable

Canara Bank v. M/s S.K. Enterprises

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s S.K. Enterprises

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

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