Allowed

Punjab National Bank v. M/s Dhruv Brass Creations

DRT25 Apr 2025TA/1355/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by Punjab National Bank to recover dues of Rs. 56.34 lakhs from M/s. Dhruv Brass Creations and partners. The bank recovered over a Cash Credit facility and agreed its documents were properly signed and interest was charged as per the agreement. The tribunal rejected defenses regarding blank signatures and CGTMSE subsidy, ordering joint and s

What did the court decide?

Order passed allowing the application and directing respondents to jointly and severally pay Rs. 56,34,918.82 along with cost, expenses and interest @14.25% from date of filing till realization within

Punjab National Bank versus M/s Dhruv Brass Creations — Specific Performance | DRT (2025)

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Before SUSHIL KUMAR RASTOGI, Presiding Officer Debts Recovery Tribunal-Il, Delhi

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TA No.l355 OF 2023

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PUNJAB NATIONAL BANK VS M/S DHRUV BRASS CREATIONS & ORS

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Reserued on =^28.02.2025 Pronounced on : 25.04.2O25

Punjab National Bank

-^{Applicant bank}

Vs.

M/s. Dhruv Brass CreaUons

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Sh. Sandeep Gera

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Sh. Sanjeev Gera

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Defendants

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Present: Shri Arun Bhardwaj, Counsel appears^for applicant bank.

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Defendants are exparte since 01.07.2024.

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FINAL ORDER

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This original application has been filed by^the applicant bank, on 09.t2.2014 through Shri^Ravinder Nath, Principal Officer/ Dy. Manager of the applicant bank, under Section 19 of the^RDB Act,^{1993 against} the defendants for recovery of a sum^of Rs.56,34,918.82 together with cost, charges^and pendentellite and future interest @L4.25o/o from date of filing of this O.A. till the realization^{in full.}

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The brief facts of the case are that^{the request of} defendant no.1 through its^{partners i.e. defendant nos.} 2 & 3, the applicant bank sanctioned a Cash^Credit Facility against the hypothecation of stocks^(comprising of various raw material including stocks in^process, s)

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TANO. 1355/2023 2

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semi-finished^goods, finished^goods viz.^bath fittings, brass etc) of Rs.24.80 lacs, under CGTMSE Scheme in order to meet the financial^{requirementsof} their business activities vide sanction^{letter dated} 17.08.2011. The defendants signed and executedⁱⁿ favour of and delivered to the applicant bank^an agreement of hypothecation of^goods and^{book debts} dated 17.08.2011 to secure the aforesaid^{loan facility.} Again, at the request of defendants, the applicant^bank enhanced the aforesaid Cash Credit Facility^from Rs.24.80 lacs to Rs.27.80, vide sanction letter dated 20.10.2012. The defendants signed and executed^an agreement of hypothecation of^goods and^{book debt} dated 20.10.2012 to secure the aforesaid^{cash credit} facility. Again, at the request of defendants, the applicant bank enhanced the said Cash Credit^Limit of Rs.27.80 lacs to Rs.50.00 lacs, vide sanction^letter dated 29.08.2013. The defendants signed^and executed an agreement of hypothecaUon of^{goods and} book debt dated 29.08.2013 to secure the aforesaid cash credit facility. The defendant nos.2 & 3^{stood as} guarantors.

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It is further submitted that the^defendants enjoyed and utilized the Loan facility, but failed to maintain the financial discipline and failed to^repay the due amounts. The applicant bank requested^the defendants to regularize the loan account by^visitsand letters, but there was no response from the defendants, hence the account was classified as^NPA on 30.06.2014. Therefore, the applicant bank^serueda notice dated 23.07.2014 to the defendants but^failed to

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TA NO. 135512023 3

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recover the same Thus, the present O.AffA preferred by the applicant bank to recover its dues.

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On notice by this Tribunal, the defendants^put appearance through counsel and filed^written statement and evidence. Thereafter, the^defendants failed to put appearance, despite^issuance of^default notice. Accordingly, defendants were^proceeded against exparte on 0t.07.2024.

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In their written statement the^{defendantnos. 1} to 3 have denied the facts^{mentioned in the OA. It is} submitted that the applicant bank^{has failed to prove} that the documents have been^{properly executedby} the parties and the O.A. has^not been^{filed within} Limitation^period. In fact, that^{the documentswere} executed in August 2011^{whereas the suit has been} filed on 06.t2.20L4. Thereby the^{limitationhas been} expired by August 2011.^{Therefore,the present O.A. is} barred by time. It^{is furthersubmittedthat Sh. Ravinder} Nath, officer/Dy. Manager of the^{applicant bank is not} duly authorized on the^part of^{the applicant bank to} sign, veriff and institute^{the present O.A.The applicant} bank has failed to^produce on^{the court record any} lawful document in favour of Sh.^{Ravinder Nath which} could have empowered Sh.^{Ravinder Nath to sign,} verify and institute the^{present O.A. It is submittedthat} the officials of the applicant^{bank are guilty of obtaining} the signatures of the defendants on^{various blank} formats which have now been^{converted into loan and} security document with a view to^{institutethe present} O.A. Even no date and signatures of^{the Bank fficial} was available on application formJhe^{alleged loan and}

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c)'''-

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TA NO. 1355/2023 4

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security documents relied upon by the applicant bank does not bear necessary stamp duty and hence the same are liable to be confiscated and impounded by this Hon'ble Tribunal. These documents have no legal sanctity in the eyes of law and hence the O.A. filed by the applicant bank deserves dismissal. It is further submitted that the defendants have never stood as guarantors in the alleged loan account of the defendant no. 1 nor executed any^guarantee agreement in favour of the applicant bank. As^per applicant bank own documents the^{personal/corporateguarantee} is^not applicable. The case is being covered under CGTMSE, as such no collateral security has been proposed/req ui red. If persona l/corporate^g ua rantee is not applicable, how could bank take any^guarantee from the defendants against their own^policy. As^per Bank own documents this case is covered under CGTMSE, as such no collateral security has been required. So, defendants are not liable for any guarantee. It is submitted that the limit was sanctioned under CGTMSE Scheme, the applicant bank is entitled to get subsidy of 75o/o of the Loan/Outstanding amount. Even bank has not mentioned in their O.A., rejoinder of W.S. and evidence that whether they have received any amount/subsidy from CGTMSE and if they have received then how much amount they received. If bank has received any amount from CGTMSE, they are bound to inform the same to this Hon'ble Tribunal and defendants also. It is further submifted that the documents attributed to defendants in the O.A. and in the affidavits filed by the witnesses on behalf of the applicant bank by way of evidence, are forged, fabricated and manipulated documents as such they

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cI .

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TA NO. 135512023 5

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are not valid in the eyes of law and the O.A. should be dismissed on this ground only. The applicant bank is guilty of charging exorbitant rate of interest and debiting various unauthorized charges and overhead expenses in the statement of account of defendant no.l. It appears that the bank was supposed to charge interest rate as per base rate as the RBI Guidelines came into force in the year 2010. Therefore, the interest charge by bank on the loan in on very high side and bank has not come with clean hand. It is^prayed that this Hon'ble Tribunal may be^pleased to dismissed the O.A.

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Both the^parties have filed their^respective evidence and exhibited the documents.

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Heard the Ld. Counsel of applicant bank and perused the record.

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The defendant no 1 to 3 in their WS^has submitted that the bank official has obtained^signature of the defendants on blank^papers and the terms^and conditions of the agreement has not been^{explained to} the defendants. Therefore, applicant bank is^not entitled to recover the same from the^defendants. From perusal of the record it is clear that^the defendants are carrying on business and are^well educated, therefore, it cannot be^said that^{the bank} official has obtained signatures of defendants^{on blank} papers without explaining the terms and conditions of the loan. A businessman cannot be^expected to^sign the papers which are blank, therefore, the^contention of the defendants has no force.

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'"---$..'

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TA NO. 135512023 6

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The next contention of the defendant is that the applicant bank is charging exorbitant rate of interest. From the perusal of the documents it is clear that the bank has charged rate of interest as^per agreement entered into between the parties and therefore, on this^ground the^present OMIA cannot be dismissed. It is fufther submitted that the applicant bank is entitled to^get subsidy of 75o/o as the loan was sanctioned under CGTMSE Scheme, but that cannot be a ground for dismissal of the OA. If any subsidy^is given, the defendant may get the same after complying the terms and conditions of the subsidy but on this ground the defendants cannot be exempted from making repayment of the loan taken by the defendants.

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From perusal of the entire evidence, it is clear that the defendants have failed to^prove their case as claimed in the written statement. On the other^hand, the applicant bank has proved his case against the defendants and therefore, the defendants are liable to pay jointly and severally the amount claimed by the applicant bank and ,6"^gRfl-A of the applicant bank^is liable to be allowed.

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In the light of the above discussions, the^present TA deserves to be allowed.

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ORDER

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I hereby allow this T.A. of the Applicant Bank and direct the defendant nos. 1 to 3 to^{pay jointly} and severally to the applicant bank within 30 days from today, a sum of Rs.56,34,918.82 along with cost, expenses and interest @U.2so/9lrom the date of filing s",

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TA NO. 135512023

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of this O.A which has become TA till the date of realization.

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In case of failure to deposit the above amount within the stipulated period, the same shall be recovered from the sale of hypothecated assets. In case of short fall, the same shall be recovered from the sale of the^personal movable and immovable assets of the defendant nos. 1to 3.

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Recovery Certificate be issued forthwith and be sent to Recovery Officer, Debts Recovery Tribunal-Il, Delhi.

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The registry of this Tribunal is hereby directed to issue free copy of the order and send the same to both the^parties.

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Parties are direct to appear before the Ld. Recovery Officer, DRT-II, Delhion 25.06.2025. Pending LAs, if any, stand disposed of.

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File be consigned to records.

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( s-\ Td-

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(susHrl KUMAR RASTOGT) PRESIDING OFFICER DRT-II, Delhi

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Date: 25.04.2025

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This^judgement has been signed, dated and pronounced in open court.

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Date :25.04.2025

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9"\ <sup>v)- (SUSHIL KUMAR RASTOGI) PRESIDING OFFICER DRT-II, Delhi

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Punjab National Bank v. M/s Dhruv Brass Creations

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Punjab National Bank v. M/s Dhruv Brass Creations

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