Allowed

Punjab National Bank v. Ms Sai Coumputer and Stationery

DRT20 Feb 2025TA/18/2022

Case brief

AI extract

What is this about?

The Tribunal allowed an original application by Punjab National Bank for recovery of Rs. 21,85,751.68 plus interest from the proprietors of M/s. Sai Computer & Stationery. The debt amounted to a defaulted cash credit facility which was classified as NPA. Being ex-parte, the Tribunal recorded evidence on behalf of the bank and passed an order for joint and several recovery.

What did the court decide?

Recovery of Rs.21,85,751.68 plus 11.0% compounded interest, joint and several liability imposed, and power to attach hypothecated and personal assets.

Punjab National Bank versus Ms Sai Coumputer and Stationery — Banking and Recovery | DRT (2025)

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TA No.18/2022 (E)

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20.02.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 20^th day of February, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 18 of 2022

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(Originally filed before DRT-II in OA Dy. No.1158/2022 and thereafter transferred to this Tribunal and renumbered as TA No.18 of 2022)

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Punjab National Bank, Circle Sastra Centre, Chennai South, 158, 3^rd Floor, Rayala Tower, Anna Salai, Chennai – 600 002. Rep by its Chief Manager

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….Applicant

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-Vs-

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M/s. Sai Computer & Stationery,

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Rep by its Proprietor Mr. T. Mani,

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Mr. T. Mani S/o. T. K. Muniyandi

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Both having address at:

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(a) No. 1, Grama Street, Nungambakkam, Chennai – 600 034

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(b) New No. 145/1, Old No. 31/2, K.H. Road, Chennai – 600 034.

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(d) No. 302, Kamarajar Salai, Alwarthirunagar, Chennai – 600 087.

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…..Defendants

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Counsels on record / appeared:

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Counsel for Applicant Bank : M/s. E. Kumar

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Defendants 1 & 2 were set ex-parte on 13.02.2023

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TA No.18/2022 (E)

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20.02.2025

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: - FINAL ORDER - :

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This original application is filed on 21.10.2022 by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants for recovery of a total sum of Rs.21,85,751.68p (Rupees Twenty One Lakhs Eighty Five Thousand Seven Hundred Fifty One and Sixty Eight Paise only) due in respect of Cash Credit facility (CC Account No.01654011000901) together with further interest @ 11.10% per annum compounded with monthly rests being the interest calculated on the above said sum from the date of filing of application till the date of realization in full and for costs of this application.

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Brief Facts of the case:

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The Applicant Bank submits that the application is filed within the period of limitation as prescribed under Section 24 of the Recovery of Debts and Bankruptcy Act, 1993, and the subject recovery claim falls within the jurisdiction of this Hon’ble Tribunal.

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The Applicant Bank submitted that initially the loan was granted at Mount Road Branch of Oriental Bank of Commerce. Subsequent to the merger of Oriental Bank of Commerce with Punjab National Bank, as per Gazette Notification No.133 dated 04.03.2020 of the Govt. of India, the NPA accounts are transferred to and maintained by Punjab National Bank, Circle Sastra, Chennai North situated at Anna Salai, Chennai.

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TA No.18/2022 (E)

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20.02.2025

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The case of the Applicant Bank is that the 1^st defendant M/s Sai Computer & Stationery, engaged in the business of Computer Maintenance and Services, represented by its Proprietor, 2^nd defendant herein approached the applicant bank seeking financial assistance for purchase of business expansion and submitted Loan Application on 22.11.2010.

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It is submitted that upon request of defendants, the applicant bank initially had sanctioned the Cash Credit (Hypo.) facility of Rs.7.00 lakhs vide Sanction Letter dated 15.11.2010 and subsequently the limit was enhanced and renewed for Rs.15.00 Lakhs vide sanction letter dated 11.05.2013 and finally enhanced to Rs.18.00 Lakhs vide sanction letter dated 02.03.2017, which was duly acknowledged by the defendants and executed the Agreement of Hypothecation of Assets for the same.

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It is submitted by applicant bank that the loan was covered under the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) of Government of India and as per the CGTMSE cover no security is stipulated.

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The Applicant Bank submits that the Defendants have executed the following loan documents for availing the limit:

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i. Agreement of Hypothecation of Assets dated 22.11.2010.

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ii. Sole Proprietorship letter dated 22.11.2010.

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iii. Common Agreement dated 22.11.2010.

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iv. Common Agreement dated 17.05.2013.

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v. Common Agreement dated 14.03.2017.

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TA No.18/2022 (E)

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20.02.2025

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vi. Supplemental Agreement to secure credit / Loan facilities dated 26.11.2011.

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vii. Supplemental Agreement to secure credit / Loan facilities dated 17.05.2013.

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viii. Supplemental Agreement to secure credit / Loan facilities dated 14.03.2017.

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The Applicant Bank submits that the defendants have executed Balance Confirmation Letter and Confirmation Letter as under:

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a. Balance Confirmation Letter dated 26.11.2011 as on 25.11.2011 – Rs.8,38,751.81

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b. Balance Confirmation Letter dated 17.05.2013 as on 11.05.2013 – Rs.11,99,633.05

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c. Balance Confirmation Letter dated 28.02.2017 as on 28.02.2017 – Rs.15,13,457.78

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d. Balance Confirmation Letter dated 24.08.2021 as on 24.08.2021 – Rs.20,44,371.68

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It is further submitted that over a period of time, after availing the loan, the defendants failed to conduct the account as per the terms of sanction and did not route the proceeds of their business through the Bank. As the account became irregular, it was classified as NPA on 04.06.2020, as per RBI norms. The applicant had sent Recall Notice to defendants on 10.11.2021. But defendants did not repay the dues, despite several reminders. Hence, this Original Application (OA) has been filed to recover the dues from the defendants.

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TA No.18/2022 (E)

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20.02.2025

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After the filing of the OA, summons was sent to the Defendant Nos.1 & 2 through Registered Post with Acknowledgment Due, which was returned as unserved with postal endorsement as ‘Left/Unclaimed’ from Defendants 1 & 2. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 13.02.2023 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 & 2 were placed ex-parte on 13.02.2023.

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Heard the submissions of Applicant Bank and perused the records.

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To prove the case of the Applicant Bank, Shri. S. Srinivasan, Chief Manager, Circle Sastra Centre, Chennai North has filed his Affidavit by way of evidence and same was considered as evidence of AW-1 and list of documents came to be marked as Ex A1 to A17 . As the defendants remained ex-parte, the OA claim remains unchallenged. There is no contra evidence available on record to repudiate the claim of the Applicant Bank.

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With regard to the amount advanced, the interest applied, the conduct and operations in the account and the default committed, this Tribunal comes to the conclusion that the applicant bank is entitled for a final order on the following terms:

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:O R D E R:

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The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from Defendants No.1 and 2 jointly, severally a sum of Rs.21,85,751.68p (Rupees Twenty One Lakhs Eighty Five Thousand Seven Hundred Fifty One and Sixty Eight Paise

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TA No.18/2022 (E)

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20.02.2025

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only) due in respect of Cash Credit facility (CC Account No.01654011000901) together with further interest @ 11.10% per annum compounded with monthly rests being the interest calculated on the above said sum from the date of filing of application till the date of realization in full and for costs of this application.

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(b) In the event of failure of the defendants to pay the aforesaid amount, the bank is at liberty to recover the amount by sale of the hypothecated assets.

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(d) If the sale proceeds of the hypothecated assets are not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to sell the personal assets of the 2^nd defendant (both movable and immovable) to recover the balance dues as required under law for which the Defendants to disclose to the Tribunal particulars of other properties or assets owned by the Defendant;

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(e) The applicant bank shall file the latest memo of calculation of OA amount together with interest, costs etc., to be paid by the defendants duly considering the amounts, if any, paid by the defendants and/or amount realized by sale of assets etc., during the intervening period after the filing of the OA, enabling the Registry to prepare Recovery Certificate for the amount to be paid by defendants to the applicant bank.

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(f) The applicant bank shall file memo of costs within ten days from the date of this final order.

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TA No.18/2022 (E)

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20.02.2025

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(g) Recovery Certificate shall be drawn up and issued to the Recovery Officer

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in terms of the final order.

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A copy of this order be communicated to the parties concerned.

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Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to Steno (Sudhakar), transcribed by him, corrected, signed and pronounced by me on this

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the 20^th day of February, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Shri. S. Srinivasan, Chief Manager, Circle Sastra Centre, Chennai North of

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Applicant Bank.

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
1.	Sanction Letter issued by the Applicant Bank to the Defendants dated15.11.2010	A-1
2.	Sanction Letter issued by the Applicant Bank to the Defendants dated 11.05.2013	A-2
3.	Sanction Letter issued by the Applicant Bank to the Defendants dated 02.03.2017	A-3
4.	Agreement of Hypothecation of Assets Executed by the 1^stDefendant dated22.11.2010	A-4
5.	Sole Proprietorship letter Executed by the 2^nddefendant dated22.11.2010	A-5
6.	Common Agreement Executed by the 1^stDefendant dated22.11.2010	A-6
7.	Common Agreement Executed by the 1^stDefendant dated17.05.2013	A-7
8.	Common Agreement Executed by the 1^stDefendant dated14.03.2017	A-8

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TA No.18/2022 (E)

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20.02.2025

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9.	Supplemental Agreement to secure credit / Loan facilities executed by the1^st defendant dated26.11.2011	A-9
10.	Supplemental Agreement to secure credit / Loan facilities executed by the1^st defendant dated17.05.2013	A-10
11.	Supplemental Agreement to secure credit / Loan facilities executed by the1^st defendant dated14.03.2017	A-11
12.	Balance confirmation letter Executed by the 1^st defendant dated26.11.2011	A-12
13.	Balance confirmation letter Executed by the 1^st defendant dated17.05.2013	A-13
14.	Balance confirmation letter Executed by the 1^st defendant dated28.02.2017	A-14
15.	Balance confirmation letter Executed by the 1^st defendant dated24.08.2021	A-15
16.	Recall Notice to the defendants dated10.11.2021	A-16
17.	Statement of Account for loan Account bearing A/c. No. 01654011000901 for the period from 22.11.2010 to 10.07.2022	A-17

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Witness Examined for the Defendants: -Nil-

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List of Documents Exhibited for the Defendants: -Nil -

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:- SCHEDULE-:

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(As per hypothecation Agreement dated 22.11.2010)

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Hypothecation of Stocks and Receivables

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Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

Punjab National Bank v. Ms Sai Coumputer and Stationery

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. Ms Sai Coumputer and Stationery

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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