Allowed

Canara Bank v. M/S Shresth Woods Products

DRT18 Jan 2025TA/873/2022

Case brief

AI extract

What is this about?

This Debt Recovery Tribunal allowed an application filed by Canara Bank for recovery of dues totaling approximately Rs. 1.31 crores from M/s Shresth Woods Products and its proprietor. The court directed payment of the principal sum, reduced interest rate of 12% p.a., and recovery from hypothecated assets.

What did the court decide?

Directed defendants to pay Rs. 1,31,14,442 plus interest at 12% p.a. within 30 days, recoverable from sale of hypothecated assets.

Canara Bank versus M/S Shresth Woods Products — Banking and Recovery | DRT (2025)

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T.A. No.873 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. 873 of 2022

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Canara Bank Bara Tooti Chowk Sadar Bazar, Delhi-110006 Applicant

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Versus

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M/s Shresth Woods Products 53/37, Opp. Roop Chand Hospital Mubarakpur Dabas, New Delhi-110086

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Also at: 157-158, Second Floor, Pocket 11 Sector 22, Begumpur, Rohini, Delhi-110085

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And also at: Village Firojpur Bangar Tehsil Kharkhoda, Dist. Sonipat Haryana-131001

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Sh.Susheel Kumar Aggarwal s/o Sh.Suresh Kumar Proprietor M/s Shresth Woods Products 157-158, Second Floor, Pocket 11 Sector 22, Begumpur, Rohini, Delhi-110085

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Also at:

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Village Firojpur Bangar Tehsil Kharkhoda, Dist. Sonipat Haryana-131001 Defendants

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Present: Sh.M.S.Saluja, Counsel for the applicant bank

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Date of Institution: 31.08.2018 Date of Pronouncement: 18.01.2025

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T.A. No.873 of 2022

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FINAL ORDER

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This original application has been filed by the applicant bank on 31.08.2018 before DRT-III Delhi & then transferred to DRT-I Delhi through Shri Mukesh Kumar Soyal, authorized representative of the applicant bank under section 19 of Recovery of Debts and Bankruptcy Act, 1993 read with Rule 8 of Debt Recovery Tribunal (Procedure) Rules 1993 against the defendant for recovery of a sum of Rs.1,31,14,442/- (Rupees One Crore Thirty One Lacs Fourteen Thousand Four Hundred Forty Two only) as on 31.08.2018 along with pendentelite and future interest with monthly rest @17.60% per annum from 31.08.2018 till its realization and costs. Further, the name of Shri Manoj Kumar Pandey was substituted as authorized representative in place of Shri Mukesh Kumar Soyal, erstwhile AR for the applicant bank.

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The brief facts of the case are that at the request of defendant no.1 as proprietorship concern of defendant no.2, the applicant bank sanctioned Cash Credit facility of Rs.70.00 lacs on 21.09.2015 @11.25% interest with monthly rests and Term Loan of Rs.13.50 lacs on @11.25% interest with monthly rests for purchase for Forced Hot Air Treatment Plant ISPN-15 along with accessories against hypothecation of stocks, plant & machinery, book debts covered under CGTMSE scheme. The applicant bank further sanctioned Vehicle Loan of Rs.12.50 lacs on 04.02.2016 for purchase of New TATA 1109 LPT HEX2 22FT HDLB Truck for business purpose against hypothecation. The Term loan was to be repayable in 60 EMI of Rs.23,684/- from January 2016 and Vehicle Loan to be repayable in 84 EMI of Rs.21,667/- from 04.03.2016.

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T.A. No.873 of 2022

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That in order to avail the loan facilities, the defendant no.2 as proprietor of defendant no.1 executed Letter of Proprietorship, Letter of Request for Overdraft Facilities, Pronote, Letter of Undertaking, Cash Credit Agreement, Agreement Re: Collateral Security all dated 21.09.2015. Further, Request Letter for Disbursal of Term Loan and Deed of Hypothecation Re: Machinery and Letter of Undertaking on 28.09.2015 was executed by defendant no.2 as proprietor of defendant no.1. On 05.02.2016, the defendant no.2 also executed Letter of proprietorship, Pronote, Agreement of Collateral Security - Vehicle, Authority Letter on 05.02.2016 and Letter of Undertaking regarding Loans dated 28.09.2015 with the applicant bank.

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That in order to secure the loan facility, the defendant no.1 through its proprietor being defendant no.2 hypothecated the stock, plant & machinery, book debts and vehicle in favour of the applicant bank.

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It has been submitted by the applicant bank that after availing the aforesaid loan facilities, the defendants failed to comply with the terms and conditions and failed to maintain financial discipline and lastly deposited some amounts on 31.03.2017 and 16.05.2017. Ultimately, the applicant bank calling upon the defendants to pay entire outstanding dues to the applicant bank but the defendants failed to clear the dues; ultimately, the accounts were classified as NPA on 30.06.2017 by the applicant bank and issued legal notice on 25.07.2018 but no response from defendants, hence, the applicant has 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

T.A. No.873 of 2022

absent from the proceedings. As per order dated 14.08.2024, the defendants have been proceeded ex-parte & no affidavit of assets have been filed by the defendants.

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In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Shri Manoj Kumar Pandey, authorized representative of the applicant bank who has proved the documents as Power of Attorney of ARs Ex.AW1/1 & Ex.AW1/30, Loan Applications Ex.AW1/2, AW1/13 & AW1/14, Sanction Letter Ex.AW1/3 & AW1/15, Letter of Proprietorship Ex.AW1/4 & AW1/16, Request for Overdraft Ex.AW1/5, Pronote Ex.AW1/6 & AW1/17, Letter of Undertaking Ex.AW1/7, Cash Credit Agreement Ex.AW1/8, Agreement Re Collateral Security Ex.AW1/9 & AW1/18, Request Letter for Disbursement Ex.AW1/10, Deed of Hypothecation Re: Machinery Ex.AW1/11, Letter of Undertaking Ex.AWI/12 & AW1/19, Authority Letter Ex.AW1/20, Legal Notice Ex.AW1/21 Statement of Accounts Ex.AW1/22 to AW1/25, Statement of Accrued Interest Ex.AW1/26 to AW1/29.

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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,

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T.A. No.873 of 2022

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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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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.1,31,14,442/- (Rupees One Crore Thirty One Lacs Fourteen Thousand Four Hundred Forty Two only) together with pendentelite and future interest @12.00% per annum with monthly rest from 31.08.2018 till the date of realization, failing which the aforesaid amount shall be recovered from the sale of hypothecated Stocks, Plant & Machinery i.e. Forced Hot Air Treatment Plant ISPN-15, Book Debts and Vehicle namely TATA 1109 LPT HEX2 22FT HDLB Truck. In case of shortfall/ default, 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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T.A. No.873 of 2022

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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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(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 Shresth Woods Products

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/S Shresth Woods Products

Case brief

What is this about?

What did the court decide?

What the court decided

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