Allowed

Punjab National Bank v. Messrs Guru Nanak Steel Industries

DRT13 Feb 2025OA/632/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application under Section 19 RDBFI Act for recovery of Rs. 56.20 lakhs. The court reduced the claimed interest rate to a uniform 8% p.a. and directed issuance of a recovery certificate and sale of secured assets.

What did the court decide?

Recovery Certificate issued; Defendants to pay Rs. 56,20,699.92 plus costs at 8% p.a. simple interest; Recovery from sale of mortgaged properties.

Punjab National Bank versus Messrs Guru Nanak Steel Industries — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.632/2022

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 27.04.2022

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DATE OF DECISION: 13.02.2025

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Punjab National Bank, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at Plot No.4, Sector-10, Dwarka, New Delhi110075 and its Branch offices throughout India including Branch Office at Punjab National Bank, Model Town Ludhiana, Tehsil and District Ludhiana, Punjab, through its General Power of Attorney, Sh. Ramesh Aggarwal, Deputy Manager, at Punjab National Bank, Shastra Branch, Ludhiana (west), Punjab.

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……..Applicant

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Versus

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M/s Guru Nanak Steel Industries, office at Shop No.18, Guru Nanak Market, Near Post Office, Model Town, Ludhiana through its proprietor Sh. Parbinder Singh son of Sh. Joginder Singh resident of H.No.2589, Phase-1, Urban Estate, Dugari, Ludhiana-141001.

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Sh. Parbinder Singh son of Sh. Joginder Singh resident of H.No.2589, Phase-1, Urban Estate, Dugari, Ludhiana-141001.

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Smt. Gurdarshan Kaur wife of Sh. Parbinder Singh resident of H.No.2589, Phase-1, Urban Estate, Dugari, Ludhiana-141001.

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………. Defendants

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Advocates:

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Argued by Sh. Chirag Bhagat, Advocate proxy for Sh. Neeraj Madan, Advocate for the applicant Defendants are ex-parte

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FINAL ORDER

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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

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Rs.56,20,699.92p (Rupees Fifty Six Lacs Twenty Thousand Six Hundred Ninety Nine and Paise Ninety Two Only). The Original Application has been filed through Sh. Ramesh Aggarwal, Deputy Manager of the applicant, who is competent to institute the Original Application vide General Power of Attorney dated 24.09.2013, 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 CC Limit of Rs.15.00 Lacs. Further, approached the applicant for enhancement of CC Limit from Rs.15.00 Lacs to Rs.22.00 Lacs and again for its enhancement from Rs.22.00 Lacs to Rs.30.00 Lacs. Therafter, defendant no.1 through its proprietor of defendant no.2 had approached the applicant for OD Limit of Rs.20.00 Lacs. Further, defendant no.1 through its proprietor of defendant no.2 had approached the applicant for Renewal of CC Limit of Rs.30.00 Lacs.

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The applicant sanctioned for CC Limit of Rs.15.00 Lacs vide Sanction Letter dated 17.08.2005, which is Annexure A3 to this OA and further applicant sanctioned enhancement of CC Limit from Rs.15.00 Lacs to Rs.22.00 Lacs vide Sanction letter dated 18.01.2012, which is Annexure A10 to this OA and again sanctioned its enhancement from Rs.22.00 Lacs to Rs.30.00 Lacs vide Sanction Letter dated 28.03.2017, which is Annexure A13 to this OA. Further, applicant sanctioned OD limit of Rs.20.00 Lacs vide Sanction Letter dated 06.06.2017, which is Annexure A20 to this OA. Further, applicant sanctioned for Renewal of CC Limit of Rs.30.00 vide Renewal Letter dated 09.01.2019, which is Annexure A19 to this OA and the terms and conditions were duly accepted by the defendants 4. Defendants had mortgaged their immovable properties, i.e. (i) House measuring 272 Sq. Yards situated at Jawadi, H.B. No.160, Tehsil & Distt. Ludhiana vide Registered Sale Deed bearing vasika no.18316 dated 11.08.1994, which are Annexures A25 and A25A, to this OA.

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(ii) House measuring 296 Sq. Yards situated at Jawadi, H.B. No.160, Tehsil & Distt. Ludhiana vide Registered Sale Deed bearing vasika no.9840 dated 09.07.1993 along with their translation, which are Annexures A26 & A26A to this OA. Documents executed:- Gazette Notification dated 04.03.2020, which is Annexure A2 to this OA; Agreement for Hypothecation of Moveable Assets, Agreement for OD Limit, Agreement for Hypothecation of Assets, Common Agreement, Agreement of Guarantee & Consent Clause all dated 09.09.2005, which are Annexures A4 to A9 to this OA; Supplemental Agreement to secure the credit/loan facilities & Agreement of Guarantee both dated 20.01.2012, which are Annexures A11 & A12 to this OA; Sole Proprietorship Letter, Common Agreement, Supplemental Agreement, Undertaking for Assignment of receivables & Guarantee Agreement all dated 28.03.2017, which are Annexures A14 to A18 to this OA; Sole Proprietorship Letter, Common Agreement, Agreement for OD Limit & Agreement of Guarantee all dated 09.06.2017, which are Annexures A21 to A24 to this OA; Letter of Undertaking signed by defendant no.2 dated 09.09.2005, 20.01.2012, 29.03.2017 & 12.06.2017, which are Annexures A27 to A30 to this OA; Revenue record of Rapat which are Annexures A31 to A31/A to this OA Balance and Security Confirmation Letter dated 19.12.2019, which is Annexure A32 to this OA; Notice u/s 13(2) under SARFAESI Act dated 23.03.2021, which is Annexure A33 to this OA and Statements of Accounts along with Certificate, which are Annexures A34 & A35 to this OA. 5. The loan accounts became irregular and was classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.56,20,699.92p, 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.

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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 27.06.2024.

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In support of the OA, affidavit of Sh. Ramesh Aggarwal, Deputy Manager, Punjab National Bank has been filed.

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Heard arguments and perused record.

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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 A35 to this OA, it is proved that the defendants approached applicant for availing of the loans facilities which were 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, accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.56,20,699.92p (Rupees Fifty Six Lacs Twenty Thousand Six Hundred Ninety Nine and Paise Ninety Two Only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the accounts.

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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 @9.60%p.a. in CC Limit and interest @10.85%p.a. in OD Limit with monthly rests from 01.04.2022 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 loans 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

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just and appropriate to grant uniform simple interest @08.00%p.a. in both the loan accounts 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.56,20,699.92p (Rupees Fifty Six Lacs Twenty Thousand Six Hundred Ninety Nine and Paise Ninety Two Only) jointly and severally, with costs, current and future simple interest @08.00%p.a. in both the loan accounts 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. 12. Any other application pending stands disposed of. 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 15.03.2025. 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 . Dated: 13.02.2025

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

Punjab National Bank v. Messrs Guru Nanak Steel Industries

Case brief

What is this about?

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Punjab National Bank v. Messrs Guru Nanak Steel Industries

Case brief

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