Allowed

Uco Bank v. M/S G R Steel Co. and Others

DRT29 May 2025OA/67/2024

Case brief

AI extract

What is this about?

The DRT allowed the bank's Original Application for recovery of Rs. 21.71 lakh against the defendant steel company and its heirs. The court declared the defendants jointly and severally liable to pay the principal amount, costs, and future simple interest at 8% p.a.

What did the court decide?

Recovery of Rs. 21,71,478.72 jointly and severally with costs and future simple interest @ 8% p.a.; Issue of Recovery Certificate.

Uco Bank versus M/S G R Steel Co. and Others — Banking and Recovery | DRT (2025)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

¶2

ORIGINAL APPLICATION NO.67/2024

¶3

PRESIDED OVER BYMRIDULESH KUMAR SINGH

¶4

DATE OF INSTITUTION: 04.12.2023

¶5

DATE OF DECISION: 29.05.2025

¶6

UCO BANK, a body corporate, constituted under the banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 having its head office at Kolkata and branches throughout India and one of its branch office at New Grain Market, Ludhiana through its constituted attorney Sh. Neeraj Sharma, Senior Manager, UCO Bank, New Grain Market Branch, Ludhiana and who is also the principal officer of the plaintiff/applicant.

¶7

……..Applicant

¶8

Versus

¶9

M/s G.R. Steel Co., through Smt. Parveen Rani, Sh. Manoj Kumar and Sh. Sanjeev Kumar, being the legal heir of its sole proprietor Late Sh. Gurbachan Lal (then sole proprietor M/s G.R. Steel Co.), 54, Central Market, Gill Road, Ludhiana.

¶10

Smt. Parveen Rani Wd/o Late Sh. Gurbachan Lal then sole proprietor M/s G.R. Steel Co., Verma auto center, Bhai Himmat Lal Nagar, Dugri Road, Model town, Ludhiana -141002. 2^nd address: House No.129-B, Street No.2, Bhai Himmat Singh Nagar, Block-B-C, Gill, Ludhiana.

¶11

Sh. Manoj Kumar S/o Late Sh. Gurbachan Lal then sole proprietor M/s G.R. Steel Co., Verma Auto Center, Bhai Himmat Lal Nagar, Dugri Road, Model town, Ludhiana -141002. 2^nd address: House No.129-B, Street No.2, Bhai Himmat Singh Nagar, Block-B-C, Gill Ludhiana.

¶12

Sh. Sanjeev Kumar S/o Late Sh. Gurbachan Lal then sole proprietor M/s G.R. Steel Co., Verma Auto Center, Bhai Himmat Lal Nagar, Dugri Road, Model town, Ludhiana -141002. 2^nd address: House No.129-B, Street No.2, Bhai Himmat Singh Nagar, Block-B-C, Gill Ludhiana.

¶13

2 OA NO.67/2024 UCO BANK VS M/S G. R. STEEL CO. AND OTHERS

¶14

….……Defendants

¶15

Advocates:

¶16

Argued by Sh. Ashok Kumar Verma, Advocate for the applicant Defendants are ex parte

¶17

FINAL ORDER

¶18

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.21,71,478.72p (Rupees Twenty One Lacs Seventy One Thousand Four Hundred Seventy Eight & Paise Seventy Two Only). The Original Application has been filed through Sh. Neeraj Sharma, Senior Manager of the applicant bank, who is competent to institute the Original Application vide Circular of the Bank dated 20.07.2012, which is Annexure A1 to this OA. 2. The brief facts of the OA are that the defendant no.1 through its then proprietor Late Sh. Gurbachan Lal had approached the applicant bank for the grant of CC Limit of Rs.20.00 Lacs vide Loan application dated 10.05.2013, which is Annexure A3 to this OA and Further from time to time for several renewals of existing CC Limit of Rs.20.00 Lacs vide Applications for Renewal dated 27.12.2014, 02.03.2017 and 02.03.2020, which are Annexures A10, A17 and A27 to this OA. Thereafter defendant no.1 again approached the applicant for GECL of Rs.2.70 Lacs vide Loan Application dated 09.06.2020, which is Annexure A23 to this OA. 3. The applicant sanctioned the CC Limit of Rs.20.00 Lacs vide Sanction letter dated 14.05.2013, which is Annexure A4 to this OA and further from time to time sanctioned several renewals of existing CC Limit of Rs.20.00 Lacs vide Sanction Letters dated 16.12.2015, 04.05.2019, which are Annexures A11 and A18 to this OA. Thereafter applicant sanctioned the GECL of Rs.2.70 Lacs vide Sanction Letter dated 09.06.2020, which is Annexure A24 to this OA and the terms and conditions were duly accepted by the defendants.

¶19

3 OA NO.67/2024 UCO BANK VS M/S G. R. STEEL CO. AND OTHERS

¶20

Defendant no.1 had hypothecated its movable properties/assets i.e. Stocks of Finished, Semi finished Goods and Raw Material, Different size of pipes, different gauge and different length of pipes stored, to be stored and in transit etc. vide Hypothecation of goods to secure demand cash credit dated 20.05.2013, which is Annexure A8 to this OA Documents executed:- Death certificate, which is Annexure A2 to this OA; DP Note, Letter of waiver, Letter of Continuing, Undertaking all dated 20.05.2013, which are Annexures A5 to A7 and A9 to this OA; DP Note, Letter of waiver Letter of continuity, Hypothecation of goods to secure a demand cash credit, Undertaking all dated 17.12.2015, which are Annexures A12 to A16 to this OA; DP Note, Letter of waiver Letter of continuity, Hypothecation of goods to secure a demand cash credit, Undertaking all dated 04.05.2019, which are Annexures A19 to A22 to this OA; Agreement relating to term loan, Composite Agreement for working capital/term loan facilities both dated 09.06.2020, which are Annexures A25 & A26 to this OA; Recall notice dated 05.09.2023 along with postal receipts, which is Annexures A28 to A32 to this OA and Certified copy of statement of account, which are Annexures A33 and A34 to this OA. 5. The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in both the loan accounts there was a debit of Rs.21,71,478.72p, 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. 6. 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 27.05.2025. 7. In support of the OA, affidavit of Sh. Neeraj Sharma, Senior Manager, UCO BANK, Limited h as been filed.

¶21

4 OA NO.67/2024 UCO BANK VS M/S G. R. STEEL CO. AND OTHERS

¶22

Heard arguments and perused record.

¶23

It was argued by learned counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant bank had proved its case. From the perusal of all the Annexures A1 to A34 to this OA, it is proved that the defendant no.1 through its then proprietor Late Sh. Gurbachan Lal approached applicant bank for availing of the loan facilities which were granted to them and for that they had executed all the relevant documents in favour of the bank. The defendant no.1 failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, accounts of the defendant no.1 were classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.21,71,478.72p (Rupees Twenty One Lacs Seventy One Thousand Four Hundred Seventy Eight & Paise Seventy 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.

¶24

In so far as pendent elite and future rate of interest is concerned, the applicant bank in relief clause has claimed interest @ 10.95%p.a. along with penal interest @2.00% with monthly rests from 02.11.2023 till the realization.

¶25

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 @8.00%p.a. in both the loan accounts from the date of filing of the OA till realization of the amounts ordered vide this final order. It is ordered accordingly.

¶26

5 OA NO.67/2024 UCO BANK VS M/S G. R. STEEL CO. AND OTHERS

¶27

In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.21,71,478.72p (Rupees Twenty One Lacs Seventy One Thousand Four Hundred Seventy Eight & Paise Seventy Two Only) jointly and severally, with costs, current and future simple interest @8.00%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 bank 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 bank 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.

¶28

Any other application pending stands disposed of .

¶29

Issue Recovery Certificate accordingly.

¶30

Parties to appear before Learned Recovery Officer of this Tribunal on 16.06.2025.

¶31

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.

¶32

Pronounced by me in the open Tribunal .

¶33

Dated: 29.05.2025.

¶34

(MRIDULESH KUMAR SINGH) Presiding Officer,

¶35

DRT-III, Chandigarh

Uco Bank v. M/S G R Steel Co. and Others

Case brief

What is this about?

What did the court decide?

Uco Bank v. M/S G R Steel Co. and Others

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

Similar cases

Kotak Mahindra Bank Limited versus Deepak Kumar

Indian Bank versus Smt. Avtar Kaur

Punjab National Bank versus Smt. Surinder Kaur and Another

Uco Bank versus M/S Sat Kartar International and Another

Icici Bank Limited versus Sh. Jaspal Singh and Another

Punjab National Bank versus Mohammad Kamre Alam and Another