STATE BANK OF INDIA vs M/s. Trust Motors Pvt. Ltd. And Others on 6 May 2025

FINAL ORDER

This original application has been filed by the applicant bank, on 10.08.2016 through Sh. Sudhir Kumar Kaul, Chief Manager and Principal Officer of the applicant bank, under Section 19 of the RDB Act, 1993 against the defendants for recovery of a sum of Rs.1,81,83,576l- together with cost, charges and pendentellite and future interest @ 11.85 o/o p.a. from date of filing of this O.A. till the realization in fuil.

2. The brief facts of the case are that at the request of the defendant no.1 through its directors/promoters i.€., defendant nos. 2 to 4, the applicant bank sanctioned a Cash Credil yrder Electronic Dealer s)

Financingscheme(E-DFS)(Hypothecation) Limit Facility of Rs.500 lacs for smooth running of its business of selling of Fiat Motor's vehicle, vide sanction letter dated 21.09.2013. The defendants executed all necessary loaning documents dated 23.09.2013. The defendant no.1 hypothecated and created first charge on the entire stocks comprising of vehicles, (including vehicles in transit), receivables, etc. The defendant nos' 2 to 5 stood as guarantors. The defendant no'5 moftgaged its property bearing All that Plot of Land Being the Plot No.113, measuring 440 Sq. mtrs', in Block BG in the layout Plan of Sanjay Gandhi Transport Nagar, Delhi-l10042. The officers of the applicant bank time and again approached the defendant to submit the audit balance sheet as on 31.03.2014 as well as financial data for availing the limit but the defendants failed to do, hence, the applicant bank reduced the Cash Credit Limit of Rs'500 lacs to Rs.230 lacs since 16.02.2015.

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 01.07.2016. Therefore, the applicant bank served demand notice dated 16.07.2016 and legal notice dated 27.07.20L6 to the defendants, demanding the amount due as on that date, but failed to recover the same' Thus, the present O.MI.A. is preferred by the applicant bank to recover its dues. ^,. s;\

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4. On notice by this Tribunal, the defendant nos.1 to 4 put appearance through counsel but failed to file WS and evidence. Thereafter, the defendant nos'1 to 4 failed to put appearance. Accordingly, defendant nos. 1 to 4 were proceeded against exparte on 26.04.2017. The defendant no.5 put appearance through counsel and filed Written Statement and evidence.

5. In the written statement the defendant no'5 has denied the facts mentioned in the OA. It is submitted that the original application has neither been signed, verified nor instituted by a duly authorized and competent person and the original application is based on false, fabricated and manufactured documents' It is submitted that the original application has not been valued properly for the purpose of application fee' The applicant bank has charged interest at exorbitant, excessive and usurious rates. It is submitted that the erstwhile applicant banVinstitution has miserably failed to disclose the nature of entries/purpose thereof, which is evident from the perusal of the entire purported statement of accounts' It is further submitted that the records including vouchers and other papers in relations to the transactions mentioned in the statement of account are in actual and physical possession of the applicant bank, therefore the bank is required to produce the relevant papers/documents to prove and establish the transactions upon which liabilities are sought to be fastened upon the defendant no'5' It is submitted that the applicant bank is guilty of various acts of commission and omission and has been totally negligent even qua the alleged securities it claims to have got created in its favour. It is further submitted that alleged mortgage, *en_gmbrance and alleged q TN2055/2023

charge was created over the properties of the defendant without in any manner admitting creation of any such charge, encumbrance, hypothecation or mortgage in respect of any of the assets. The defendant is not created a contracVagreement of personal guarantee in favour of erstwhile applicant bank as alleged. It is further submitted that no one on its behalf had ever visited the offices of the applicant banVinstitution and least of all signed or executed any alleged documents in favour of the applicant bank and least of all in any of the applicant's premises. Therefore, it is prayed that this Hontle Tribunal be pleased to dismiss the present Original Application.

6. The applicant bank as well as defendant no'5 have filed their respective evidence.

7. Heard the Ld. counsel of applicant bank and perused the record.

8. The main contention of the defendant no' 5 in written statement is that the OA has not been flled by the person authorized to sign and verify the OA' No valid power of attorney has been filed and therefore, the OA is liable to be dismissed. From perusal of the record it is clear that the OA has been filed by the authorized person and valid authorization letter has been filed by the applicant bank.

9. The next contention of the defendant no'5 is that the loan documents including the guarantee documents are false and fabricated and manufactured documents' It is submitted that the documents contains blank columns and they were subsequently filled after getting the signatures of the defendant qd therefore, they shall be e^

deemed to be forged. But the contention of the defendant has no force. The defendant is a well educated person and has signed all papers after going through the same. He is running a business and therefore, he cannot be deemed to sign the papers without going through the contents of the documents. Therefore, the contention of the defendant has no force.

10. . The next contention of defendant no.5 is that the applicant bank is charging exorbitant rate of interest and other penal charges. It is submitted that there is clear violation of mandate given by the Honble Supreme Court in Central Bank of India Vs. Ravindra. In this regard I have gone through the record and perused the statement of account. From perusal of the statement of account it is clear that the applicant bank has charged the rate of interest as per agreement entered between the parties' The penal charges and other charges has also been levelled as per agreement, therefore, it cannot be said that the applicant bank has charged exorbitant rate of interest and other charges.

11. The next contention of the defendant is that the applicant bank is himself negligent and has not properly debited the amount deposited by the borrower and therefore, the guarantee shall be deemed to be discharged. From perusal of the record it is clear that there is no negligence on the part of the applicant bank and therefore, it cannot be deemed that the guarantee has discharged due to the negligence of the bank' Therefore, the contention of the defendant has no force' t2. From perusal of the entire evidence, it is clear that the applicant bank has proved- his case against the e.\

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.MI.A of the applicant bank is liable to be allowed.

ORDER

1) I hereby allow this T.A. of the Applicant Bank and direct the defendant nos. 1 to 5 to pay jointly and severally to the applicant bank within 30 days from today, a total principal sum of Rs.1,81,83,5761- along with cost, expenses and interest @9.95olo from the date of filing of this OA which has become T.A. till the date of realization.

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 All that Plot of Land being the Plot No.113, measuring zl40 Sq. mtrs., in Block BG in the layout Plan of Sanjay Gandhi Transport Nagar, Delhi-l10042. In case of short fall, the same shall be recovered from sale of personal movable and immovable assets of the defendant nos' 1 to 5.

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. c\

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. Date : 06.05.2025 a---- r t (SUSHIL KUMAR RASTOGI) PRESIDING OFFICER DRT-II, Delhi This judgement has been signed, dated and pronounced in open couft. 9A o ! q n{- ( 1-)l- Date : 06.05.2025 (susHrl KUMAR RASTOGT) PRESIDING OFFICER DRT-II, Delhi T