Allowed

Capital Small Finance Bank Limited v. Sh. Mehma Singh

DRT25 Mar 2025OA/576/2024

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's application for recovery of dues arising from an NPA KCC loan. The defendants were liable to pay the principal amount along with court-granted simple interest at 8% p.a.

What did the court decide?

Declaration of defendants' liability to pay Rs.27,93,398; order for simple interest at 8% p.a.; recovery via sale of mortgaged properties or attachment of personal assets.

Capital Small Finance Bank Limited versus Sh. Mehma Singh — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.576/2024 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 02.03.2024 DATE OF DECISION: 25.03.2025 Capital Small Finance Bank Limited, (Formerly known as Capital Local Area Bank Ltd.) having its Registered Office at 37, Midas Corporate Park, 3^rd Floor, G.T. Road, Jalandhar-144001, having one of its Branch office at Khanna, District Ludhiana Punjab through its authorized representative Mr. Munish Sharma. ……..Applicant Versus 1. Sh. Mehma Singh S/o Sh. Gurcharan Singh R/o Village Jalalgarh, Sub Tehsil Amargarh, District Sangrur, Punjab-148022. 2. Smt. Jaspreet Kaur W/o Sh. Mehma Singh R/o Village Jalalgarh, Sub Tehsil Amargarh, District Sangrur, Punjab-148022. (Borrowers) 3. Sh. Surinderpal Singh S/o Sh. Jarnail Singh R/o Village Lodewal, Tehsil Malerkotla District Sangrur, Punjab-148023. 4. Sh. Bhawandeep Singh S/o Sh. Jagdev Singh R/o Village Jalalgarh, Sub Tehsil Amargarh, District Sangrur, Punjab-148022. (Guarantors) ….……Defendants Advocates: Argued by Sh. Rishi Mittu, Advocate for Applicant (through VC) Defendants are ex parte FINAL ORDER 1. Present Original Application was instituted by the applicant bank under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.27,93,398.00p (Rupees Twenty Seven Lacs Ninety Three Thousand

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Three Hundred Ninety Eight Only). The Original Application has been filed through Mr. Munish Sharma, Authorized Representative of the applicant bank, who is competent to institute the Original Application vide General Power of Attorney dated 20.04.2019, which is Annexure A1 to this OA.

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The brief facts of the OA that the defendant Nos. 1 and 2 had approached the applicant bank for the grant of KCC Limit of Rs.22.50 Lacs vide Loan application dated 17.09.2016, which is Annexure A2 to this OA. Defendant nos. 3 and 4 stood as guarantors. 3. The applicant Bank sanctioned the KCC Limit of Rs.22.50 Lacs vide Sanction Letter dated 20.10.2016, 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. total land measuring 26B-06B-0B (5.47 Acre) situated at Village Jalalgarh, H.B. No. 163, Sub Tehsil Amargarh, District Sangrur, Punjab vide Declaration u/s 4(1) dated 16.12.2016 & Letter to Jt. Sub Registrar bearing No. 499 dated 16.12.2016 for Registration of Rapat of mortgage in revenue record, which is Annexure A8 to this OA. Documents executed: -Loan agreement, Guarantee deed, Letter of Undertaking, Demand promissory Note all dated 17.12.2016, w hich are Annexures A4 to A7 to this OA; Copy of recall notice dated 06.02.2024, which is Annexures A9 to this OA; Copy of Postal receipts, which is Annexures A10 to this OA; Statement of account, which is along with Certificate-Electronic record dated 26.02.2024, which are Annexures A11 & A12 to this OA.

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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.27,93,398.00p, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant bank requested to accept the application and to issue Recovery Certificate accordingly.

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The defendants were served notices to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte on 01.03.2025.

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In support of the OA, affidavit of Mr. Munish Sharma, Authorized Representativ e, Capital Small Finance Bank Ltd. h as been filed. 8. Heard arguments and perused record

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It was argued by learned 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 A12 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 Rs.27,93,398.00p (Rupees Twenty Seven Lacs Ninety Three Thousand Three Hundred Ninety Eight Only) along with interest from the defendants, 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 bank in relief clause has claimed interest @12.75%p.a. along with 2% penal interest 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 @08.00%p.a. in the loan

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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.27,93,398.00p (Rupees Twenty Seven Lacs Ninety Three Thousand Three Hundred Ninety Eight Only) 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 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 23.04.2025 15. Copy of this order be given Dasti to the applicant bank 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. Pronounced by me in the open Tribunal . Dated: 25.03.2025

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

Capital Small Finance Bank Limited v. Sh. Mehma Singh

Case brief

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Capital Small Finance Bank Limited v. Sh. Mehma Singh

Case brief

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