PUNJAB NATIONAL BANK vs M/s. Harsons Overseas and ors on 17 January 2019

FINAL ORDER

(17.01.2019)

1. The applicant bank has filed the OA bearing No.68/2014 on 28.01.2014 before the Ld. DRT- III, Delhi which stands transferred to this Tribunal vide order dated 10.07.2015 passed by Ld. Registrar, DRT- III, Delhi. The OA has been filed for recovery of Rs. 2,85,08,690/- (Rupees Two Crores Eighty Five Lakhs Eight Thousand Six Hundred Ninety only) along with pendentelite and future interest @14.50% p.a. at monthly rest from the date of OA till its realization.

2. Brief facts of the OA are that the present OA is filed by Sh. S.K. Srivastva, Chief Manager of the applicant bank who is fully conversant with the facts of the case as well as competent to sign, verify and institute the present OA by virtue of Power of Attorney dated 11.09.1986 executed by the Applicant Bank in his favour.

3. It has been stated that the defendant No. 1 is a Proprietorship firm and run by its Proprietor Mr. Surinder Singh Chandhok. The defendant no. 1 is engaged in the business of trading of Auto & Motor Parts in the name & style of M/s Harsons Overseas(I). Defendant No.2 stood guarantor in her individual capacity for repayment of loan taken by the Defendant No.1. Therefore, her liability to pay the same is co-extensive, joint and several with that of the principal borrower.

4. It is further submitted that in the month of June, 2006 Defendant No. 1 through its Proprietor and Defendant No.2 approached the applicant bank for grant of Fund Based working capital facility known as Cash Credit (Hyp. of Stocks & Book Debts) limit under Super Trade Scheme and the applicant bank acceded to the request of the borrower and granted the Fund Based limit of Rs.375.00 lacs (Rupees Three Crores Seventy Five Lakhs only) vide sanction letter dated 29.06.2006 and the Defendant No.1 executed and delivered Deed of Hypothecation dated 29.06.2006, Agreement of Hypothecation of Book Debts dated 29.06.2006, Copy of Agreement of Guarantee dated 29.06.2006 duly executed by Defendant No.2 in favour of the applicant bank to secure the aforesaid credit limit. Subsequently, at the request of defendant no.1, the applicant bank also sanctioned a car loan of Rs.7.45 lakhs (Rupees Seven Lakhs Forty Five Thousand only) upon executing the loan documents dated 07.03.2007 by the Defendant No.1 viz Loan Application and Letter of

Hypothecation dated 07.03.2007, which was also guaranteed by Defendant No.2 vide Agreement of Guarantee dated 07.03.2007.

5. It is further stated that the Defendant No.2 in order to secure the aforesaid credit facilities, mortgaged the following properties by depositing the original title deeds and link deeds with the applicant bank along with letter dated 02.06.2007 duly executed by Defendant No.2: i) Residential Building J-5/152, Basement, Rajouri Garden, New Delhi-27. ii) Residential Building J-5/152, 2nd Floor, Rajouri Garden, New Delhi-27. iii) Residential Building J-5/152, 3rd Floor, Rajouri Garden, New Delhi-27 iv) Residential Building J-7/53, Rajauri Garden, New Delhi- 110027

6. It is also stated that that the Defendant No.1 in order to secure the aforesaid credit facilities, mortgaged the following properties by depositing the original title deeds with the applicant bank.

(i) Free Hold, residential Flat No.C-129, situated in the layout plan of farmers Co-op, group Housing Society Ltd. Plot No.8, Sector-13, Rohini, Delhi.

(ii) Lease hold plots No.F-3, F-4, Industrial Area at Site No.1, Village Jagannathpur, Tehsil Bazpur, District Udhampur Nagar area measuring 90-0 sq. meters.

(iii) Residential Buidling J-5/151, Basement Rajouri Garden, New Delhi-110027

7. However, the defendants failed to maintain the financial discipline and have violated the terms and conditions of the loan documents/agreements.

8. It is further submitted by the applicant bank that due to failure of defendants to clear the outstanding amount, the applicant bank issued Notice dated 22.04.2009 recalling the entire outstanding amount from the defendants and thereafter initiated proceedings of the SARFAESI Act by sending the notice under section 13(2) of the said Act. It is further submitted that in accordance with the agreement (including car loan) the amount of Rs.2,85,08,690/- along with pendent lite and future interest become due and payable by the defendants to the applicant bank as on 30.11.2013. Hence, this present OA filed on 28.01.2014.

9. It is further submitted that the possession of mortgaged of immovable properties of the defendant No.2 (mentioned in 5 of the final order) was taken on 5.11.2009 and 10.11.2009 and auction was scheduled for 18.2.2010, 19.2.2010 and 24.2.2010. However, defendants hereto filed an SA before the DRT-III and the Hon’ble DRT-III vide order dated 18.02.2010 restrained the applicant bank from proceeding under SARFAESI Act.

10. It is further submitted that the applicant bank followed up with the defendants and after long follow up/meetings, on the request of defendants hereto, a compromise of Rs.163.00 lakhs was approved by the competent authority of the applicant bank and the said amount was to be paid by 31.07.2010, which was further extended upto 31.03.2011 at the request of defendants. Hereto, the defendants were failed to make the payment and the said OTS was cancelled on 25.4.2011.

11. Notice was issued to the defendants. Defendants appeared through counsel and filed their WS.

12. In the WS defendants admitted the availment of credit facilities and have raised the following objections that;

(i) The present application has been filed by the applicant bank beyond the period of limitation.

(ii) The applicant bank has obtained signatures of the defendants on blank documents.

(iii) The present OA has been filed by the applicant bank without any attorney or authorisation.

(iv) The applicant has filed the present OA despite knowing the global recession and ignored the guidelines issued by the RBI dated 02.01.2009.

(v) The applicant bank has not provided the correct information to the defendants and categorically failed to upgrade the account as standard account and to remove the NPA tag.

13. The Applicant Bank has filed its rejoinder to the WS filed by the defendants and denied all the allegations made in the WS and reiterated the averments made in the OA.

14. The applicant bank has filed its evidence by way of affidavit of Shri S.K. Srivastava, Chief Manager of the applicant bank who has proved the various loaning and security documents such as Ex. PW- 1/1 to Ex. PW1/25.

15. Defendants Smt. Harleen Kaur and Sh. Surinder Singh filed their evidence by way of Affidavit however, no documents has been exhibited by them.

16. I have heard the Ld. Counsel for the applicant bank and perused the record. Now I would like to decide the objections raised by the defendants in their WS:

(i) The first objection raised by the defendants is that the present application has been filed by the application bank beyond the period of limitation. I have not find any force in the above submission. The present OA has been filed on 28.01.2014. The last balance confirmation of defendants received vide letter dated 10.02.2011. The present OA has been filed on 28.01.2014. The Hon’ble High Court of Delhi in the matter of Mr. Sanjeev Chopra vs. All Wear Clothing (India) P. Ltd. and Anr. (02.02.2012 - DELHC) has held as under:- “20. This court in the case of Rajesh Kumari (supra) held that "a payment by cheque satisfies the requirement of Section 19, in as much as the acknowledgment of payment appears in the handwriting of or in a writing signed by the person making the payment in the form of a cheque." In the said case, it was further clarified that on the language of Section 19 itself, it is clear that the payment may be made either against the principal or on account of the interest. In either case, the payment will be on account of the debt, which is all that the provision requires. Once "payment by cheque" is accepted by the plaintiff, the plaintiff will RFA No. 108/2009 be entitled to the extended period of limitation under Section 19 of the Limitation Act, 1963 and the said advantage cannot be wiped off or undone by the tortuous act of the defendant withholding the payment of the cheque. It was also observed that it is settled that "this provision is to be interpreted liberally so as to save the suits from being barred by limitation so long as its benefits can reasonably be extended to assist a claim, otherwise legal and sustainable.” In view of the above, I am of the view that the OA is well within time.

(ii) The next objection raised by the defendants is that the applicant bank has obtained signatures of the defendants on blank documents. With the ratio laid down by the Hon’ble High Court of Delhi in the matter of Indian Bank Vs Cheese Wafers India Pvt. Ltd., that a person who raised this objection should have approached higher authorities first before he could raise this objection, this objection seems to be an after-thought only. The defendants have not brought on record anything to suggest that this plea was taken to higher authorities earlier; hence this objection is also dismissed.

(iii) The next objection raised by the defendants is that the present OA has been filed by the applicant bank without any attorney or authorization. The Applicant Bank has filed this OA through its authorized representative Sh. S.K. Srivastava, Chief Manager of the applicant bank who institute the present OA by virtue of Power of Attorney

dated 11.09.1986 executed by the Applicant Bank in his favour vide Board Resolution dated 09.06.2014, which is proved as Ex. AW-1/1. Therefore, the objection raised by the defendants is rejected.

(iv) The next objection raised by the defendants is that the applicant has filed the present OA despite knowing the global recession and ignored the guidelines issued by the RBI dated 02.01.2009. I have not find any force in the above submission. The applicant bank after considering the global recession and guidelines issued by the RBI and also at the request of defendants, gave a compromise offer (OTS) of Rs.163.00 lakhs to the defendants, to be paid by 31.07.2010, which was further extended upto 31.03.2011 at the request of defendants. But the defendants failed to avail the opportunity and have not deposited any amount. In view of the above facts on record, the objection raised by the defendants is rejected.

(v) The next objection raised by the defendants is that the applicant bank has not provided the correct information to the defendants and categorically failed to upgrade the account as standard account and to remove the NPA tag. Per Contra, the Ld. Counsel for the applicant has submitted that the account was overdrawn for considerable period, the amount deposited by the defendants is also reflected in the statement of account and as per RBI guidelines, the applicant had no option but to classify the same as NPA. I have perused the statement of account (Exhibit No. PW-1/25) and found the contention of the applicant to be correct. Therefore, this objection of the defendants is also declined.

17. The witness of the applicant bank has fully corroborated the averments made in the OA. Even otherwise the whole case of the applicant bank is based on documents and the witness has duly proved all these documents. In my view there is no question of disbelieving the evidence lead by the applicant bank and the applicant bank has proved its case beyond reasonable doubts. The liability of both the defendants is jointly and severally.

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

ORDER

(i) I allow this OA and direct the defendant No.1 & 2 jointly and severally to pay to the applicant bank, within a period of 30 days, a sum of Rs. Rs. 2,85,08,690/- (Rupees Two Crores Eighty Five Lakhs Eight Thousand Six Hundred Ninety only) along with pendentelite and future interest @14.50% p.a. at monthly rest from the date of OA till its realization, failing which the aforesaid amount shall be recovered from the sale of mortgage property of the defendant No.1 (as mentioned in para 6 of this order) as well as other personal moveable and immoveable assets of the defendants. The cost of litigation be also borne by the defendants. The applicant bank is also directed to file the revised statement of account before the Ld. Recovery Officer of this Tribunal.

(ii) The recovery certificate be issued forthwith and be sent to the Recovery Officer, DRT-I Delhi.

(iii) Parties are directed to appear before the Recovery Officer, DRT-I Delhi on 11.03.2019.

(iv) Copy of this Order and recovery certificate be sent to all the parties free of cost by registered post.

(Dr. REKHA G. DHAKAR) PRESIDING OFFICER, DRT-I, DELHI

ANNOUNCED IN OPEN COURT January 17, 2019