Allowed

Union Bank of India v. Messrs Vp Associates and Others

DRT15 Jan 2025OA/706/2023

Case brief

AI extract

What is this about?

In an ex-parte Original Application, the Debts Recovery Tribunal allowed Union Bank of India's claim for Rs.21,05,804.32 from three defendants. The Tribunal adjusted the claimed interest to 8% per annum and directed issuance of a Recovery Certificate.

What did the court decide?

Recovery of Rs.21,05,804.32 plus simple interest @08.00%p.a. from filing till realization; Issuance of Recovery Certificate.

Union Bank of India versus Messrs Vp Associates… — Contract and Commercial Disputes | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.706/2023

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 18.05.2023

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DATE OF DECISION: 15.01.2025

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Union Bank of India, a body corporate, constituted under Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 having its Head Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai and having a Branch office inter-alia at, Civil Lines, Ludhiana, through duly authorized person and attorney holder Sh. Kuljit Saluja, Branch Manager.

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……..Applicant

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Versus

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M/s VP Associates, plot no.14, near Dharamshala, Kakowal, Ludhiana-141007.

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2^nd address : Grewal Colony, Extension Basant Vihar, Noorwala Road, Ludhiana (through its partners defendant no.2 & 3)

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Sh. Vajinder Sharma son of Sh. Gopi Chand resident of house no.27, Gurudwara Street, Ward no.2, Anandpuri Ludhiana141008.

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Sh. Pawan Kumar son of Sh. Gopal Dass resident of House no.14, Village Kakowal, Ludhiana.

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…….Defendants

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Advocates:

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Argued by Sh. Amod Kumar Thakur, Advocate proxy for Sh. R.K. Chauhan, 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 Rs.21,05,804.32P (Rupees Twenty One Lacs Five Thousand Eight Hundred Four And Paise Thirty Two Only). The Original Application has been filed through Sh. Kuljit Saluja, Branch Manager o f the applicant, who is competent to institute the Original Application vide General

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Power of Attorney dated 26.10.2016, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant nos.1, 2 and 3 had approached the applicant for grant of CC Limit of Rs.20.00 Lacs vide Loan Application Form for MSMEs dated 05.02.2022, which is Annexure A2 to this OA.

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The applicant sanctioned CC Limit of Rs.20.00 Lacs vide Sanction Letter dated 25.02.2022, which is Annexure A6 to this OA and the terms and conditions were duly accepted by the defendants. 4. Defendants had hypothecated their movable properties i.e. All stocks of electrical goods like fans, batteries, geysers, wire, coolers etc. of various brands like Havells, Exide, Sonic, Lazer, Panasonic, Okaya etc. and related accessories vide Hypothecation Agreement dated 28.02.2022, which is Annexure A10 to this OA.

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Documents executed:-Registration Certificate of M/S VP Associates dated 21.08.2020, which is Annexure A3 to this OA; UDYAM Registration Certificate dated 26.05.2021, which is Annexure A4 to this OA; Partnership Deed dated 08.02.2022, which is Annexure A5 to this OA; Standard Terms and Conditions for Working Capital, D.P. Note, Letter of Continuity, , Letter of Continuity D-02A, Interest Agreement, Letter of undertaking not to alienate hypothecated goods, Declaration of Partnership by defendant no.2 & 3, Letter of Undertaking from partners, Letters of Undertaking from borrowers/guarantor defendant no.2 & 3, Deed Guarantee by defendant no.2 & 3, all dated 28.02.2022, which are Annexures A7 to A9 and A11 to A21 to this OA; CERSAI Report dated 20.09.2022, which is Annexure A22 to this OA; Letters of Adjustment of overdue dated 02.11.2022 & 02.11.2023, which are Annexures A23 & A24 to this OA and Account Statement along with Certificate under Banker’s Book Evidence Act and Certificate under Section 65-B of Indian Evidence Act, which are Annexures A25 & A26 to this OA. 5. The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a

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debit of Rs.21,05,804.32P, 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 18.06.2024.

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In support of the OA, affidavit of Sh. Kuljit Saluja, Branch Manager, Union Bank of India h as 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 A26 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 loans 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 of Rs.21,05,804.32P (Rupees Twenty One Lacs Five Thousand Eight Hundred Four And Paise Thirty 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 account.

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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 @11.05%p.a. along with penal interest @2.00%p.a. with monthly rests from 24.04.2023 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

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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 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.21,05,804.32P (Rupees Twenty One Lacs Five Thousand Eight Hundred Four And Paise Thirty Two Only) jointly and severally, 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 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.

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Any other application pending stands disposed of.

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 24.02.2025.

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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 .

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Dated: 15.01.2025

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

Union Bank of India v. Messrs Vp Associates and Others

Case brief

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Union Bank of India v. Messrs Vp Associates and Others

Case brief

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