BANK OF BARODA vs Gulati (India) Sales Pvt. Ltd. on 7 May 2025

FINAL ORDER

This original application has been filed by the applicant bank, on 15.07'2015 through Mr' Debashis Bakshi, Chief Manager of the applicant bank, under Section 19 of the RDB Act, 1993 against the defendants for recovery of a sum of Rs.8,61,43,515/- together with cost, charges and pendentellite and future interest @ eA'

TNt72712023

13.25 o/o p.a. from date of filing of this O.A. till the realization in full.

2. The brief facts of the case are that at the request of the defendant no.1, the applicant bank sanctioned a Cash Credit Hypothecation (stocks/book debts) Limit Facility of Rs.600 lacs and also inland/foreign guarantee (performance/financial) with limit of Rs.30 lacs, vide sanction letter dated 09.07.2010. The defendants executed all necessary loaning documents on 23'07.2010. The defendant nos. 2 to 4 stood as guarantors. The defendant no.4 executed/creation of equitable mortgage qua his property atC-ZlL38,Janakpuri, New Delhi-110058 in respect of the facility extended to the defendant no.1' Declaration in LDOC 90(C) dated 05.08.2010 in the sum of Rs.630 lacs executed by defendant no.4. Again, at the request of defendant no.1, the applicant bank enhanced the limits in respect of the Cash Credit (stocks/book debts) with the limit from Rs.600 lacs to Rs.755 lacs, vide sanction letter dated 25.11.2011. The defendant nos. 2 to 4 stood as guarantors. The defendants executed all necessry loaning documents on 29.11.2011. The letter of conflrmation of creation/extension of mortgage in LDOC 90(P) dated 29.11.2011 was executed by defendant no.4. Thereafter the conduct in the account except for certain initial period stafted becoming sticky. The interest could not be seruiced. On 21.05.2013 the applicant informed the defendant no.1 that due to diversion of funds, discontinuation of the transaction in the account and the operations in the account were stopped, the applicant could not favourbly consider the request for grant of FITL in the sum of Rs.12 Lacs. The applicant bank vide its letter dated 19.06.a013 reminded the defendant q'

TN172712023 3 no.1 of its actual obligation, there was no response. The account was remained sticky. On 15.07.2013 the applicant bank issued demand notice under Section 13(2) of the SARFAESI Act. The defendants, however, did not discharged their liabilities. Thereafter, again, at the request of defendant no.1, the applicant bank sanctioned FITL for Rs'40 lacs on 30.06.2014. The defendants executed all necessary loaning documents on 30.05.2014. The defendant no.4 further executed letter of confirmation of creation/extension of mortgage in LDOC 90(P) dated 30.06.2014, letter of confirmation of moftgage in LDOC 90(D) dated 30.06.2014.

3. It is further submitted that the defendants enjoyed and utilized the Loan facility, but failed to maintain the financial discipline and failed to repay the due amounts' The applicant bank requested the defendants to regularize the loan account by visits and letters, but there was no response from the defendants, hence, the account was classified as NPA on 31.12.2012. Therefore, the applicant bank served demand notice dated 15.07.2013 and 09.10.2014 to the defendants, demanding the amount due as on that date, but failed to recover the same. Thus, the present O.AfI.A. is preferred by the applicant bank to recover its dues.

4. On notice by this Tribunal, the defendant nos.1 to 4 put appearance through counsel and filed WS and evidence. During the pendency of the OA, the defendant no.4 died and his LRs were impleaded in the mafter.

5. In their written statement the defendant nos.1 to 3 have denied the facts mentignedjp the OA. It is submitted (I

I il that applicant bank has tried to make out a case against the defendants despite the fact that the terms have been varied without concurrence and acceptance of the defendants in the capacity of the guarantors nor any letters as alleged in the application of the applicant bank have been given nor any report has been given. The original application of the applicant bank had not been supported by a proper and valid affidavit, as the affidavit is silent about date of joining the branch. It is submitted that the applicant bank is not entitled to claim contractual rate of interest, rather the same time to time by the RBI and has not complied with the provisions of Regulation Accounts Act. It is further submifted that the documents were got signed from the defendants, the same were blank and the documents have now been manipulated and presented before this Hontle Tribunal. The defendants had no choice or right in the matter of altering any terms and conditions of the printed forms furnished by the applicant bank, the said contract is void, ab inito and non- est in the eyes of law. It is submitted that the applicant bank has not filed complete statement of account as envisaged under Rule 9 of The DRT (Procedure) Rules,1993 and cannot claim that the applicant is entitle for the amount as claimed in the OA more pafticular for the reason that the statement of account which has been filed by the applicant bank is not complete statement of account and started from the balance brought forward and.whereas the applicant bank thus, waive off its rights to claim any amount prior to that, therefore, OA deserves to be dismissed. It is further submitted that the applicant bank has purposely not averred about the status of the amount which have been received by the applicant bank after declaration of the account 9NPA on 31'03.2013 and sl TN172712023 s thereafter, the applicant bank has not permitted the defendants to operate the account wherein all the irregularities were cleared upon deposit of the amount and there was no irregularity in the account. The applicant bank has wrongly classified the account as NPA as mentioned in the OA. It is submitted that the applicant bank has claimed that the defendants no.2 and 3 have executed certain documents but the bare perusal of the specific documents which have not been signed and executed by the defendants no.3, the signatures on the said documents are forged and fabricated. Therefore, it is prayed that the present OA may be dismissed.

6. The applicant bank as well as defendant nos'1 to 3 have filed their respective evidence.

7. The Ld. Counsel for LRs of defendant no. 4(a) and 4(c) appeared on 10.03.2025 and sought 10 days time to file written arguments but no written arguments has been filed.

8. Heard the Ld. Counsel of both the parties and perused the record and written arguments filed by the applicant bank.

9. The main contention of the LRs of defendant no'4

(a) and (c) is that they have not inherited any property from the defendant no'4 and therefore, they are not liable for any repayment. He has further submitted that liability of the legal heirs is limited only to the odent of the property inherited by him from the deceased defendant no.4. There is no dispute tltalthe liability of the legal \- d heirs is limited only to the extent of the propefi inherited from the borrower/guarantor. The legal heirs cannot be held personally liable for repayment of the debt. Therefore, the contention of the LRs of defendant no.4 is liable to be accepted and their liability shall be limited only to the extent of the properties inherited from the deceased defendant no.4. Whether he has inherited any property or not cannot be decided in the present OA' When the RC is issued the same may be decided at the time of the execution of the RC.

10. The defendant no. 1 to 3 has filed their written statement and has submitted that the signatures have been obtained on blank papers and there was no authority to defendants to negotiate the terms of the contract and therefore, the contract of guarantee is totally invalid' But the contention of the defendants has no force' The defendants have signed the papers after going through the documents. All the defendants are well educated person and engaged in business activities' Therefore, it cannot be said that they were forced to sign the papers' There are terms of the bank for giving the loan and if the borrower and the guarantor are agreed on such terms, the bank gives loan to the borrower. Therefore, it cannot be said that defendants have not got any power to negotiate the terms of the loan. The loan was availed by the borrower after admitting the terms of the bank' Therefore, the contention of the defendants has no force' The next contention of the defendant no'1 to 3 is that the applicant bank is charging exorbitant rate of interest' It is submitted that the applicant bank can charge the rate of interest as per RBI guidelines and not as per agreement' But the contention of the d$ldants has no force' The -r>1

bank fixes the rate of interest in compliance of the RBI guidelines and gives different rate of interest on the basis of different situations. When the defendants agreed to such terms, they will be bound to pay the interest as agreed between the parties. From perusal of the record it is clear that the bank is charging the rate of interest as per agreement entered into between the parties and as per RBI guidelines and there is no violation of any guideline of the RBI.

11. The next contention of defendant nos. 1 to 3 is that the applicant bank has not filed the complete statement of account along with the OA and therefore, the guarantee is discharged and they are not liable to pay any dues. But the contention of the defendants has no force. From perusal of the record it is clear that the bank has filed the statement of account and the same has been proved as per provisions. Therefore, the contention of the defendants has no force. L2. From perusal of the entire evidence, it is clear that the applicant bank has proved his case against the defendants and therefore, the defendants are liable to pay the amount claimed by the applicant bank and the OAffA of the applicant bank is liable to be allowed' On the basis of above discussion, the O.M.A of the applicant bank is liable to be allowed. -,-=..--.2 €A ''

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ORDER

1) I hereby allow this T.A. of the Applicant Bank and direct the defendant nos. (i) to (iii) and defendant no.(iv)

(1) & (2) to pay jointly and severally to the applicant bank within 30 days from today, a sum of Rs.8,61,43,515/- along with cost, expenses and interest @11'50o/o from the date of filing of this OA which has become T.A. till the date of realization. However, the liability of LRs of defendant no.(iv) (1) & (2) shall be restricted to the extent of assets inherited by them from deceased Sunder Shyam Gulati' The defendant no.(ii) and (iii) as LRs of deceased Sunder Shyam Gulati/defendant no'(iv) are also liable to pay to the applicant bank the amount to the extent of assets inherited by them from deceased Sunder Shyam Gulati'

2) In case of failure to deposit the above amount within the stipulated period, the same shall be recovered from sale of hypothecated assets and mortgaged property bearing no C-2l138, Janakpuri, New Delhi-110058' In case of short fall, the same shall be recovered from sale of personal movable and immovable assets of the defendant nos. (i) to (iii) and LRs of defendant no'(iv) (1) & (2).

3) Recovery Certificate be issued forthwith and be sent to Recovery Officer, Debts Recovery Tribunal-Il, Delhi'

4) The registry of this Tribunal is hereby directed to issue free copy of the order and send the same to both the parties. -;.--

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5) Pafties are direct to appear before the Ld. Recovery Officer, DRT-II, Delhi on 07.07.2025' Pending IAs, if any, stand disPosed of. File be consigned to records. \94 (susHr L KU MAR'iaErbGI) PRESIDING OFFICER DRT-II, Delhi This judgement has been signed, dated and pronounced in oPen court. '| Date : 07.05.2025 Date : 07.05.2025 qJ .-? **ueil (SUSHIL KUMAR PRESIDING OFRCER DRT-II, Delhi T (