Allowed

Karnataka Bank Limited v. M/S the Global Fashion Culture

DRT13 Jan 2025TA/767/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the applicant bank's original application for recovery of over Rs.4.84 crores owed by the respondent firm and its guarantors, who failed to pay dues despite notices. The court directed payment with interest at 12% p.a. and costs.

What did the court decide?

Direct the respondents to pay jointly or severally a sum of Rs.4,84,75,978.88 with interest at 12% p.a. and costs from filing date till realization, failing which recovery from sale of hypothecated an

Karnataka Bank Limited versus M/S the Global Fashion Culture — Execution and Attachment | DRT (2025)

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T.A. No.767 of 2022

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Debts Recovery Tribunal-I, Delhi 4th floor, Jeevan Tara Building, Parliament Street, New Delhi Presiding Officer: Shri Govind Ballabh Sharma T.A. No. 767 of 2022
Karnataka Bank Limited 8-B, Upper Ground Floor Pusa Road, Rajendra Park New Delhi-110060 Applicant
Versus
1.The Global Fashion Culture Through its proprietress Ms Shefali Gupta d/o Sh.Mata Deen Gupta F-287,3rdFloor, New Rajender Nagar New Delhi-110060
Also at: 886, First Floor, Gali Chandi Wali Main Bazar, Paharganj, New Delhi-55
2.Sh.Mata Deen Gupta s/o Kanhaiya Lal Gupta F-287,3rdFloor, New Rajender Nagar New Delhi-110060
Also at: 886, First Floor, Gali Chandi Wali Main Bazar, Paharganj, New Delhi-55
3.Mrs.Beena Gupta w/o Sh.Mata Deen Gupta F-287,3rdFloor, New Rajender Nagar New Delhi-110060
Also at: 886, First Floor, Gali Chandi Wali Main Bazar, Paharganj, New Delhi-55 Defendants
Present: Shri Sumeet Batra, Counsel for applicant bank Date of Institution: 01.02.2021
Date of Pronouncement: 13.01.2025 Sd

T.A. No.767 of 2022

ORDER

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This original application has been filed by the applicant bank on 01.02.2021 through Shri Santhosh Kumar, authorized representative of the applicant bank under Section 19 of Recovery of Debts Due to Banks and Fina:icial Institutions Act, 1993 against the defendants for recovery of a sum of Rs.4,84,75,978.88 (Rupees Four Crores Eighty Four Lacs Seventy Five Thousand Nine Hundred Seventy Eight and paisa Eighty Eight only) as on 31.12.2020, out of which Rs.3,06,56,497/- in Pre Shipment facility, Rs.88,93,553/- in Post-Shipment account with interest @17.10% per annum with monthly rests and Rs.89,25,928.88 Current account @19.75% interest per annum with monthly rests from the date f filing of this application till the final realization along with osts.

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The brief facts of the case are that on the request of efendant no.1, a proprietrix firm of Ms.Shefali Gupta, the pplicant bank sanctioned Pre-Shipment Credit facility of s.300.00 lacs, Renewal of Post Shipment Credit Facility(NLC) f Rs.100.00 lacs, Renewal of Post Shipment Credit (LC) of s.100.00 lacs and Renewal of Forward Contract of Rs.4.00 acs on 14.02.2018 for the purpose of working capital equirement and hedging exchange risk for the business of xport of home furnishing garments against hypothecation of tocks, book debts, and extension of mortgage property at aharganj, New Delhi along with term deposit of Rs.30.00 lacs. he defendant no.2 and 3 stood as guarantors for the credit acilities availed by defendant no.1 from the applicant bank.

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T.A. No.767 of 2022

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In order to avail the said loan facilities, the defendant no.1 through its proprietrix executed Sanction Letter, Account Opening Form for Proprietorship concern, Export Credit Agreement, Letter of Repayment, Take Delivery Letter, Demand Promissory Note, Letter of Authority, Hypothecation of Goods Agreement, Agreement of Bills of Exchange and Declaration, Consent Letters, Cheque Collection Letter etc. on 14.03.2018 in respect of all the credit facilities in favour of the applicant bank. The defendant no.2 and 3 executed Consent Letter and Guarantee letter dated 13.03.2u18 guaranteeing the payment under Forward Contract Facility availed by defendant no.1.

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That in order to secure the credit facilities, the defendant no.1 through its proprietrix hypothecated the assets of stocks in trade, book debts etc. in favour of applicant bank. Further, he defendant no.3 extended equitable mortgage of already ying residential property bearing Municipal No.XV/296-297, ohalla Mantola, Paharganj, Delhi admeasuring 75.24 q.metre by depositing original Sale Deed dated 29.05.1969, 7.11.1971, 31.08.1994, Gift Deed dated 17.09.2010 and Sale eed dated 15.02.2012 along with related documents in favour •f applicant bank on 03.10.2016 to secure the credit facilities availed by defendant no.1.

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It has been submitted by the applicant bank that after wailing the aforesaid loan facilities, the defendants failed to omply with the terms and conditions and despite of several equests by email/letters and reminders, the defendants failed o pay the outstanding dues in time to the applicant bank. The pplicant bank classified the account as NPA on 30.06.2019 nd 1.10.2019 as per RBI guidelines and adjusted the pledged

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T.A. No.767 of 2022

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fixed deposit kept as security and issued recall notice dated 09.07.2019 but the defendants did not clear the dues of the applicant bank, hence the applicant bank has approached this
Tribunal for recovery of their dues.
6. Notices of this O.A. were issued tc the defendants and
despite of proper service, the defendants have chosen to
absent from the proceedings. As per order dated 10.08.2022,
rights to file written statement were closed the defendants have been proceeded ex-parte as not appeared before the Tribunal and even no written statement, evidence and affidavit of assets have been filed by the defendants.

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Notice under Section 13(2) read with Section 13(3) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 dated 30.10.2019 was issued to the defendants to clear the outstanding dues but they neglected.

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In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Shri Santhosh Kumar, authorized representative of the applicant bank who has proved the documents as General Power of Attorney Exb.AW1/1, Sanction Letter Exb.AW1/2, Hypothecation greement Exb.AW1/3, Letter of Authority Exb.AW1/4, Memorandum of Deposit of Title Deed Exb.AW1/5, Sale Deed Exb.AW1/6, Export Credit Agreement Exb.AW1/7, Letter of Repayment Exb.AW1/8, Take Delivery Letter Exb.AW1/9, Demand Promissory Note Exb.AW1/10, Guarantee Letter xb.AW1/11, AW1/17 & AW1/19, Hypothecation Agreement xb.AW1/13, Letter of Authority Exb.AW1/14, Memorandum of eposit of Title Deed Exb.AW1/15, Sale Deed Exb.AW1/16, orward Contract Application Exb.AW1/18, Account Opening

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T.A. No.767 of 2022

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Form Exb.AW1/20, Declaration Exb.AW1/21, Consent Letter Exb.AW1/22 & AW1/23, Cheque Collection Letter Exb.AW1/24, Recall Notice & Demand Notice Exb.AW1/25(colly), Statement of Account Exb.AW1/26.

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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 approved.

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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 the 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 InstituJon 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 •f India Vs. Ravindra & Others. Taking stock of all the ircumstances and keeping in view that there is a drastic fall in ates of interest globally and domestically, I am of the opinion hat interest of justice will be served if the interest at the rate •f 12% p.a. is awarded.

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

T.A. No.767 of 2022

FINAL ORDER

allow this OA and direct the defendants to pay, jointly or severally, to the applicant bank, within 30 days, a sum of Rs.4,84,75,978.88 (Rupees Four Crores Eighty Four Lacs Seventy Five Thousand Nine Hundred Seventy Eight and paisa Eighty Eight only) together with pendentelite and future interest @12.00% per annum along with costs 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 stock, book debts etc. and sale of mortgaged property bearing Municipal No.XV/296-297, Mohalla Mantola, Paharganj, Delhi admeasuring 75.24 sq.metre. In case of shortfall, the same shall be recovered from the sale of moveable and immovable properties of the defendants.

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(II) The recovery certificate be issued forthwith and be sent 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 17.03.2025.

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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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sci

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

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(Dictated and pronounced in open court) Dated: 13.01.2025

Karnataka Bank Limited v. M/S the Global Fashion Culture

Case brief

What is this about?

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Karnataka Bank Limited v. M/S the Global Fashion Culture

Case brief

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