CANARA BANK vs M/s Vandana Enterprises. on 22 February 2019

JUDGMENT

( 22.02.2019)

1. The applicant Bank has filed the present OA on 03.02.2015 under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ’RDDB&FI Act, 1993’) for recovery of a total sum of Rs. 10,47,434.16 (Rupees Ten Lakhs, Forty Seven Thousand, Four Hundred Thirty Four and Paise Sixteen only) along with pendentelite and future interest @ 13.5% p.a. compounded monthly rests from the date of filing the present OA till realization alongwith costs and other expenses and to appoint a Receiver to take possession of Industrial Plot No. 362, situated at Sector B, Bawana-II in the name of defendant no. 2 & to sell the same by public auction or otherwise.

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2. It is pertinent to mention here that the original OA (No. 154/2015) was filed with the Hon’ble DRT-III on 03.02.2015 and was transferred to this Tribunal on 13.07.2015, as per Govt. notification dated 11.05.2015 on jurisdiction and was allotted TA no. 61/2015.

3. Facts as succinctly set out in the OA are that the present O.A. is filed by Sh. Vinod Kumar Oad, Senior Manager of the applicant bank who holds a power of attorney and is competent to sign, verify and institute the present OA.

4. It is stated that the defendant No. 1, was sanctioned a Term Loan under the Scheme for Loans to Micro & Small Enterprises of Rs. 15.0 Lakhs vide sanction letter dated 30.06.2011 on the request of the defendants and the defendants executed various loaning documents on 30.06.2011 viz., Demand Promissory Note, Agreement of Loan, Letter of Hypothecation of Machinery &/or vehicles, Undertaking, acknowledgement of Sanction letter, Letter of Proprietorship. Defendant No. 2 & 3 stood as Guarantors for advances granted to defendant no. 1 and executed Guarantee Agreement.

5. It is also stated that in consideration of availing the said loan facility, the defendant No. 2 deposited the photocopy of allotment letter of his immoveable property located at Industrial Plot No. 362, situated at Bawana-II and promised to deposit the original conveyance deed, allotment letter and other documents with the applicant bank as collateral security, but with malafide intentions did not deposit them as promised and cheated the applicant bank into disbursing the loan based on false representation.

6. It is further stated that defendant no. 1 failed to maintain financial discipline despite reminders dated 26.09.2013, 11.10.2013, 18.01.2014, 08.03.2014, 21.04.2014 & 13.10.2014 and the account was classified as 3 TA No. 61/2015

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NPA on 02.05.2014 as per RBI norms. The applicant was constrained to recall the credit facility, therefore, the applicant bank served a legal notice on 09.10.2014 to the defendants for the payment of entire outstanding amount of Rs. 10,02,877.16 as on 30.09.2014 along with interest @ 13.5% p.a., but the defendants failed to make the payment. Thus, the present O.A. is preferred by the applicant bank to recover its dues.

7. Notice was issued to the defendants. Defendant nos. 1 to 3 caused appearance and filed their joint written statement.

8. Defendant nos. 1 to 3 in their written statements have stated that due to change in Govt. policy i.e. ban on plastic shopping bags the defendant no. 1 incurred huge losses and despite several requests to the applicant for further assistance to meet the demand of the allotting authority, it did not come forward with help, hence the allotted industrial unit was resumed by the authorities concerned. They also raised the following objections:

(i) That the OA has not been signed, verified and instituted by a duly authorized and competent person.

(ii) That the OA is barred by limitation.

(iii) That the applicant bank has charged interest at excessive rates above the contractual rate.

(iv) That the applicant bank obtained their signatures on blank and standard forms, which the defendants had no choice to opt for.

(v) That the defendants are also entitled to a set-off of Rs. 10.0 Lakhs on account of losses suffered due to negligent attitude of the applicant bank.

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9. The applicant bank filed filed its rejoinder to the reply submitted by defendants nos. 1 to 3 denying all the allegations made in the written statement, stating that the defendants do not have any defence and are taking baseless pleas to mislead this Tribunal and reiterating the averments made in the OA.

10. The applicant bank filed its evidence by way of affidavit of Sh. Vinod Kumar Oad, Senior Manager of the Bank and proved its documents as Exhb. AW-A, AW-1/1 to Exhb. AW- 1/16.

11. The defendants have also filed their evidence by way of affidavit of Sh. Vijay Batra/defendant no. 2 and submitted their document as Exhb. A-1, (ITR of defendant no. 2 for the AY 2014-15), in support of their contentions.

12. Heard the rival submissions and perused the record.

13. I have considered the submissions made by the defendant No. 1 to 3 and the applicant bank on the objections raised by the defendant nos. 1 to 3. Now I shall deal with them individually.

14. The first objection of the defendants is that the OA has not been signed, verified and instituted by a duly authorized and competent person. The applicant has placed on record the General Power of Attorney (Exhibit No. AW-A), which is a complete document authorizing Sh. Vinod Kumar Oad to initiate proceedings in any Court of Law. Hence, this objection of the defendants has no merits, and is hereby rejected.

15. The second objection is that the applicant bank has charged interest at excessive rates above the contractual rate.

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Record reveals that the defendant no. 2 on behalf of defendant no. 1, had executed Term Loan Agreement (Exhibit No. AW-1/7 Colly) and Pronote dated 30.06.2011 (Exhibit No. AW-1//8), thereby giving an undertaking to pay interest @ 3% above the ongoing base rate, with a minimum of 13.50% p.a. The applicant has submitted that the interest has been charged as per contractual terms. The defendants have made a bald statement, without specifying the amount of actual interest due vis-à-vis the charged amount. Thus, this objection is also not sustainable and is hereby rejected.

16. The third objection of the defendants is that the applicant bank obtained their signatures on blank and standard forms, which the defendants had no choice to opt for. These defendants have not claimed that they are illiterate persons. Once the signature on a document is admitted, it stands proved. In such an eventuality, the burden of proof that the documents were not executed or they were executed blank, shifts on the defendants. Except bald statement in their written statement, the defendants have failed to produce any cogent and independent evidence on record to show that the documents were blank when the same were signed by the defendants. Defendants are grown up persons and are doing business. It is highly improbable that they would have signed blank documents merely on the asking of the bank officials. No documentary evidence has been placed on record to show that during the period the defendants were availing the credit facilities any such protest was lodged with the higher officials of the bank or any other government agency to this effect. This plea is otherwise also a sham plea as has been held by the Hon’ble Delhi High Court in a case titled ‘Indian Bank Vs. M/s. Cheese Wafers (India) Pvt. Ltd.’ reported in 76(1998) DLT

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Thus, this objection of the defendants does not hold any water and is hereby dismissed.

17. The last plea raised by the defendants is that the defendants are also entitled to a set-off of Rs. 10.0 Lakhs on account of losses suffered due to negligent attitude of the applicant bank. Since none of the objections raised by the defendants have been found to be convincing, the set-off claim made by them is also not sustainable Thus, this contention is also dismissed.

18. 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 applicant bank has claimed interest at the rate of 13.5% which is allowed in terms of order dated 23.01.2019 of the Hon’ble DRAT, Delhi in Appeal No. 368/2018 titled as M/s Duncan ICICI Bank Ltd. Vs. Mecheill Power India Limited & Ors.

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

ORDER

i) I allow this OA and direct the defendants No. 1 to 3 to pay to the applicant bank within a period of 30 days, a sum of Rs. Rs. 10,47,434.16 (Rupees Ten Lakhs, Forty Seven Thousand, Four Hundred Thirty Four and Paise Sixteen only) along with pendentelite and future interest @ 13.5% p.a. compounded at monthly rests from the date of filing the present OA till realization failing which the aforesaid amount shall be recovered from the personal moveable and immoveable assets of the defendants. ii) The cost of litigation be also borne by the defendants.

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iii) The applicant is also directed to file the revised statement of account before the Ld. Recovery Officer of this Tribunal.. iv) The recovery certificate be issued forthwith and be sent to the Recovery Officer, DRT-I Delhi. v) The parties are directed to appear before the Ld. Recovery Officer on 28.03.2019. vi) Copy of this judgment and recovery certificate be sent to all the parties free of cost by registered post.

vii) File be consigned to record room.

(Dr. REKHA G. DHAKAR) PRESIDING OFFICER DRT-I, DELHI ANNOUNCED IN OPEN COURT February 22, 2019