Allowed

Canara Bank v. M/S Shree Balaji Timber and Company

DRT18 Jan 2025TA/1693/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal-I, Delhi, allowed an application filed by Canara Bank against three respondents for recovery of outstanding dues. The bank sought recovery of Rs. 67,99,527.48 along with interest and penalties. The respondents, including a proprietorship firm and a guarantor, failed to appear. The Tribunal found the bank's case proven based on documentary evidence, including loan agreements and mortgage deeds. The Tribunal directed payment of the principal amount with interest reduced to 12% per annum.

What did the court decide?

Direction to pay Rs. 67,99,527.48 with pendenteliterate and future interest @ 12.00% per annum with monthly rest from the date of filing of the application till the date of realization.

Canara Bank versus M/S Shree Balaji Timber and Company — Specific Performance | DRT (2025)

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T.A. No.1693 of 2022

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Debts Recovery Tribunal-I, Delhi 4th floor, Jeevan Tara Building, Parliament Street, New Delhi

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Presiding Officer: Shri Govind Ballabh Sharma

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T.A. No. 1693 of 2022

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Canara Bank Haiderpur, New Delhi-110088

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Applicant

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Versus

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Shree Balaji Timber & Company Plot No.8, Govind Vihar II Harsoan Sadarpur Road Ghaziabad, UP-201013

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Sh.Ashok Kumar Goyal s/o Sh.Nand Kishore R/o B-72, GF Swarn Jayanti Puram Ghaziabad, UP

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Sh.Praveen Kumar s/o Satpal Singh Proprietor of M/s Jai Shree Balaji Developers R/o Plot No.9, Govind Vihar II

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Harsoan Sadarpur Road Ghaziabad, UP-201013 Defendants

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Present: Sh.Anshuman Srivastava, Counsel for applicant bank Date of Institution: 06.11.2020 Date of Pronouncement: 18.01.2025

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FINAL ORDER

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This original application has been filed by the applicant bank on 06.11.2020 before DRT-III Delhi & then transferred to DRT-I Delhi through Shri Vipin Kumar Sharma, authorized representative of the applicant bank under Section 19 of

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T.A. No.1693 of 2022

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Recovery of Debts and Bankruptcy Act, 1993 read with Rule 8 of Debt Recovery Tribunal (Procedure) Rules 1993 against the defendants for recovery of a sum of Rs.67,99,527.48 (Rupees Sixty Seven Lacs Ninety Nine Thousand Five Hundred Twenty Seven & paisa Forty Eight only) as on 30.09.2020 along with pendentelite and future interest @16.25% per annum plus 2% penal interest with monthly rest from 01.10.2020 till the date of realization and costs.

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The brief facts of the case are that at the request of defendant no.1 being proprietorship concern of defendant no.2, the applicant bank sanctioned SOD facility of Rs.40.00 lacs on 23.05.2014 ©11.75% interest per annum against hypothecation of stocks and mortgage of property at Ghaziabad, UP. The SOD limit was renewed the credit facilities on 14.12.2016 by the applicant bank. The defendant no.3 stood as guarantor for the loan facility availed by defendant no.1.

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That in order to avail the SOD facility, the defendants executed Composite Hypothecation Agreement with copies of Title Documents, Affidavits, Undertakings, Letter regarding Undrawn Limits, Undertaking of non-payment of unsecured loans, Power of Attorney for Bills, Specimen of Undertaking Letter, Guarantee Agreement all dated 23.05.2014 and 27.12.2016 with the applicant bank.

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Further, in order to secure the loan facility, the defendant no.2 created equitable mortgage of residential property bearing no. B-2, Khasra No.1628, Mohalla R.K.Puram, Near Govind Puram, Village Sadarpur, Ghaziabad, UP admeasuring 100 sq.yds by depositing original title deeds of property.

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T.A. No.1693 of 2022

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It has been submitted by the applicant bank that after availing the aforesaid loan facility, the defendants failed to comply with the terms and conditions, operate the account regularly and made defaults in payment. Ultimately, the applicant bank calling upon the defendant to pay the entire outstanding dues by issuing notice dated 09.06.2017 but the defendants did not clear the dues. The applicant bank classified the account as NPA on 30.04.2018 and issued legal notices on 11.01.2018 and 23.05.2018 but neglected by the defendants, hence approached this Tribunal for recovery of their dues.

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Notices of this O.A. were issued to the defendants and despite of proper service, the defendants have chosen to absent from the proceedings. As per order dated 29.08.2024, the defendants have been proceeded ex-parte & no affidavit of assets have been filed by the defendants.

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Notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 dated 07.12.2018 to the defendants was issued by the applicant bank and possession notice under Section 13(4) on 06.04.2019 duly served on the defendants.

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In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Sh.Vipin Kumar Sharma(AW-1), authorized representative of the applicant bank who has proved the documents as Power of Attorney Ex.AW1/1, Notification Ex.AW1/2, Loan Application Form Ex.AW1/3, Composite Hypothecation Agreement Ex.AW1/4 & 18, Affidavit Ex.AW1/5, Undertaking Ex.AW1/6, Letter regarding Undrawn Limits Ex.AW1/7, Undertaking Ex.AW1/8 & 19, Undertaking for nonpayment of Unsecured Loans Ex.AW1/9, Affidavit 9

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T.A. No.1693 of 2022

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Ex.AW1/10, Power of Attorney Ex.AW1/11, Guarantee Agreement Ex.AW1/12 & 22, Affidavit Ex.AW1/13 & 23, Extension Request Letter Ex.AW1/14, Renewal Request Ex.AW1/15, Application for Renewal Ex.AW1/16, Sanction of Renewal Limit Ex.AW1/17, Specimen of Undertaking Ex.AW1/20, Letter dated 27.12.2016 Ex.AW1/21, Legal Notices Ex.AW1/24, Notice u/s 13(2) Ex.AW1/25, Possession Notice Ex.AW1/26, Statement of Accounts Ex.AW1/27.

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The applicant bank has fully corroborated the averments made in the O.A. Even otherwise the whole case of the applicant bank is based on the documents and the same have been duly proved.

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The case filed by the applicant bank gone unrebutted and there is no question of disbelieving the case of the applicant bank and applicant bank has proved its case beyond reasonable doubts.

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As per the provision of Section 19(20) of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 which is analogous to Section 34 of CPC, on filing of the suit/claim, the contract between the parties comes to an end and the Court/Tribunal has a discretion to award the same depending upon the circumstances of each case. Same principle has been laid down by the Hon'ble Apex Court in the case of Central Bank of India Vs. Ravindra & Others. Taking stock of all the circumstances and keeping in view that there is a drastic fall in rates of interest globally and domestically, I am of the opinion that interest of justice will be served if the interest at the rate of 12% p.a. is awarded.

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T.A. No.1693 of 2022

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In the light of the above discussions, the Original Application deserves to be allowed.

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ORDER

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I, allow this OA and direct the defendants to pay to the applicant bank, jointly or severally, within a period of 30 days, a sum of Rs.67,99,527.48 (Rupees Sixty Seven Lacs Ninety Nine Thousand Five Hundred Twenty Seven & paisa Forty Eight only) together with pendentelite and future interest @12.00% per annum with monthly rest from the date of filing of this application till the date of realization, failing which the aforesaid amount shall be recovered from the sale of hypothecated stocks, book debts and mortgaged Residential property bearing B-2, Khasra No.1628, Mohalla R.K.Puram, Near Govind Puram, Village Sadarpur, Ghaziabad, UP. In case of shortfall, the same shall be recovered from the sale of movable and immovable property/assets of the defendant.

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(II) The recovery certificate be issued forthwith and be sent to the Recovery Officer, Debt Recovery Tribunal-I, Delhi.

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(III) Parties are directed to appear before the Recovery Officer, DRT I, Delhi on 19.03.2025.

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(IV) Copies of final order as well as Recovery Certificate be sent to all concerned free of cost.

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.5-a III -o \

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(GOVIND BALLABH SHARMA) PRESIDING OFFICER DRT-I, DELHI

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(Dictated and pronounced in open court) Dated: 18.01.2025

Canara Bank v. M/S Shree Balaji Timber and Company

Case brief

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Canara Bank v. M/S Shree Balaji Timber and Company

Case brief

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