BANK OF BARODA vs M/s. Boom Agro India pvt. ltd. on 13 May 2025

FINAL ORDER

This original application has been filed by the applicant ban( on 20.05.2016 through Shri Rakesh Jha, Chief Manager of the applicant bank, under Section 19 of the RDB Act, 1993 against the defendants for recovery of a sum of Rs.4,37,18,9361- together with cost, charges and pendentellite and future interest @13.15olo compounded monthly plus2o/o penal interest per annum with simple interest in the Cash Credit and @ 15.15% on ILC/FLC accountfrom 11.05.2016 till the realization in full.

2. The brief facts of the case are that the request of defendant no.1 through its director, the applicant bank sanctioned a Cash Credit_ facility (Hypothecation of <A

TANO.55712024 2 stocks and book debts) of Rs.250 lacs and ILC/FLC Facility of Rs.150 lacs, vide sanction letter dated 18.10.2013. The defendant no.1 through its director, executed all necessary loaning documents dated 24.12.2013. The defendant nos.2 & 3, executed in favour of and delivered to the applicant bank, a General Form of Guarantee datd 24.12.2013. The defendant no.4, vide resolution dated 21.12.2013 agreed to extend corporate guarantee to defendant no.l and to act as corporate guarantor for the above mentioned facilities. The defendant no.3, created equitable moftgage of the respective property in favour of applicant bank i.e., (a). Equitable mortgage of the freehold residential property situated at Mohalla Asaltpur, Bhudaka Chauraha, Moradabad, Uttar Pradesh as known as new municipal ward no.6, block no.16 H. No. 91 (H. No. 6/16/91). (b) Equitable moftgage of the freehold residential property situated at Mohalla Asaltpur, Bhudaka Chauraha, Moradabaad, Uttar Pradesh as known as new municipal ward no.6, block no.16 H. No. 104 as allotted by Nagar Nigam. (c). Equitable moftgage of the freehold residential property situated at entire third floor with terrace right, one car parking along with proportionate right in the land underneath of property bearing no. 121 Pocket A-8, Kalakji Extension New Delhi 110019.

3. It is further submitted that the defendanb enjoyed and utilized the Loan facility, but failed to maintain the financial discipline and faibd 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 11.09.2015. <"I.'

Therefore, the applicant bank served a demand notice dated 10.11.2015 and legal notice dated 07.04.20L6 to the defendants but failed to recover the same Thus, the present O.M[A is preferred by the applicant bank to recover its dues.

4. On notice by this Tribunal, the defendants put appearance through counsel and filed written statement and evidence.

5. In their written statement the defendant nos. 1 to 4 have denied the facts mentioned in the OA. It is submitted that as per the allegations of the bank, Mr. Rakesh Singh and M/s Boom Buying tut. Ltd. had borrowed the money from the bank and to secure the said credit facilities granted by the bank to Mr. Rakesh Singh and M/s Boom Buying h Ltd, Mr. Rakesh Singh, Sh. Gulab Singh and Ms. Laxmi Devi had mortgaged their properties with the bank. The applicant bank is claiming to have sanctioned to M/s Boom Buying h/t Ltd a CC Limit of Rs.5 Cr. and ILC/FLC limit of Rs.4 Cr. It is fufther submitted that to secure the said credit facilities, Mr. Rakesh Singh mortgaged his property being the part basement at E-986, Chitranjan Park, New Delhi; property at Mohalla Asalatpur, Bhuda Ka Chauraha, Moradabad; properfy at Mohalla Asalatpur, Budha Ka Chauraha Moradabad property being 3rd floor with terrace rights and one car parking out of the property bearing 121, Pocket A-8, Kalkaji Extension, New Delhi. It is submitted that it is further case of the bank is that Sh. Gulab Singh and Ms. Laxmi Devi has mortgaged the property bearing No. 18, Pocket-2, Block-B, Sector-11, Rohini, Delhi with the applicant bank. It is submitted that it has sanctioned the CC limit of Rs.250 lacs and ILFC limit of Rs. 150 lacs to the t!/s Boom Agro h/t Ltd <A I I I I :l I i i I l i i I I I I I I I I I I I I I I I i I I I ! I I I

I i i i i and to secure the same, Sh. Rakesh Singh has mortgaged its properties Moradabad First Property; Moradabad Second Property and House at Kalkaji Extension. The alleged credit facilities sanctioned to M/s Boom Buying h Ltd the Bank issued the notice u/s 13(2) of the SARFAESI Act dated 31.07.2015 detailing therein that the interest payable was 13.257o per annum and demanded the payment of Rs.9,57,02,849.45. The Bank has also served the Notice dated 10.11.2015 u/s 13(2) of the SARFAESI Act for the alleged dues in the account of M/s Boom Agro h/t. Ltd. On M/s Boom Agro h/t. Ltd. and Sh. Rakesh Singh, admitting therein the interest @ 3.50o/o above Base Rate and claiming amount of Rs.3,94,99,127.Lt.Itis submifted that the Sh. Gulab Singh and Ms. Laxmi Devi vide letter dated 15.04.2014 withdrawn their personal guarantee and the security of the moftgaged and requested the bank to discharge Sh. Gulab Singh and Ms. Laxmi Devi and to return the papers of the propefi. The bank vide letter dated 15.05.2014 has advised the Sh. Gulab Singh and Ms Laxmi Devi about the receipt of the letter/communication and sought the confirmation from Sh. Rakesh Singh, Sh. Gulab Singh and Ms. Laxmi of writing the letter dated 15.04.2014. The Sh. Gulab Singh and Ms. Laxmi Devi vide the mail dated 30.05.2014 has confirmed the withdrawal of the guarantee and accordingly, the guarantee of Sh. Gulab Singh and Ms. Laxmi Devi and their only residential house stands discharged from the liability of the bank. It is an admitted case of the applicant bank that the liability which the bank is claiming has incurred in the accounts subsequent to 15.04.2014. It is further submitted that the Sh. Gulab Singh and Ms. Laxmi Devi on the receipt of the notice datgd 3L.07.2015 u/s 13(2) ("\

filed their objections dated 07.09.2015 to the bank therein advising the bank about their withdrawal of the guarantee and further asked the bank to supply the accounts statement. This request was also made by the Sh. Gulab Singh and Ms. Laxmi Devi prior to the objection. The authorized officer of the applicant bank has not dealt with the objections of Sh. Gulab Singh and Ms. Laxmi Devi as required under the law and as per Section 13(3A). The bank intentionally has not supplied this account statement because with the supply thereof the bank will get exposed. Even before the notice dated 31.07.2015 the Sh. Gulab Singh has written a letter dated 28.06.2014 recording therein his grievance that despite various personal visits of the son of Sh. Gulab Singh the bank has not supplied the copies of the statement of account. It is submitted that Sh. Rakesh Singh, and M/s Boom Buying h/t. Ltd. & M/s Boom Agro h/t. Ltd. have also repeatedly requested the bank for the settlement of the accounts and even shown its intention to settle with the ban( but the bank has not paid any heed to the same. The claim of the bank is highly ambiguous. In the loan account of M/s Boom Buying h/t. Ltd., applicant bank vide letter dated 24.02.20L5 has written to the Sh. Rakesh Singh, Sh. Gulab Singh and Ms. Laxmi Devi that the account has been classified as NPA on 31.01.2015. In the letters dated 29.06.2015 and 01.07.2015 the bank advised that the account is overdrawn since 31.03.2015, it means up to 31.03.2015 the account was regular. In the notice issued under Section 13(2) of SARFAESI Act, 2002, the bank has conveyed that the account has become NPA on 30.06.2015. As per the Reserve Bank of India guidelines there cannot be more than one date of NPA and there can be only one NPA date. The (,\

TA NO. 557t2024 6 account of the M/s Boom Buying h/t. Ltd. was not NPA. On 24.07.20L5 the bank has received Rs.21,46,8791-, on 07.09.2015 the Sh. Rakesh Singh, Sh. Gulab Singh and Ms. Laxmi Devi deposited another sum of Rs.30 Lakhs. Similarly, in the loan account of M/s Boom Agro tut. Ltd. applicant bank vide letter dated24.02.2015 has written that the account has been classified as NPA on 31.01.2015. In the letters dated 29.06.2015 the bank advised that the account is overdrawn since 31.03.2015 it means up to 31.03.2015 the account was regular. In the 13(2) notice the bank has conveyed that the account was regular till 11.06.2015 and has become NPA on 11.09.2015. As per the Reserue Bank of India guidelines there cannot be more than one date of NPA and there can be only one NPA date. The account of the M/s Boom Agro h/t. Ltd. was not NPA. On 30.06.2015 the bank has received Rs.10,00,000 l-, on 02.07 .2015 the bank received a sum of Rs.22,75,000/- in the account. It is submitted that M/s Boom Buying h/t Ltd. Company was the best pedormer of the bank. It has turnover of Rs.19.86 Cr. in the Financial Year 2010-2011; turnover of Rs.66.94 Cr. in the Financial Year 2011- 2012; turnover of Rs.83.99 Cr. in the Financial Year 2012-2013 and turnover of Rs.19.00Cr. in the Financial Year 2013- 2014. Similarly, the performance of M/s Boom Agro M. Ltd. was also excellent in the Financial Year 2013-2014 its turnover was Rs. 23.94 Cr. M/s Boom Buying tut. Ltd. and M/s Boom Agro tut. Ltd. never had been the willful defaulters and has also not diverted the funds. These companies are doing the business of trading of Agro Commodities and Chemicals etc. In domestic as well as in international markets. Sh. Rakesh Singh has purchased one propefi al P-aqchim Vihar, Plot No. D- <^

94, UC Colony, Jiwan Niketan, Delhi from one Sh. Amit Kumar Lakra and raised a loan of Rs.3.45 Cr. from M/s Capital First. It is fufther submitted that the said Sh. Amit Kumar Lakra has played a fraud on Sh. Rakesh Singh because he was not the actual owner of the propefi and Smt. Sunita Garg claimed that she is the actual owner and Mr. Lakra has sold out the property on the basis of the various documents to Sh. Rakesh Singh, Smt. Sunita Garg then lodged a FIR with the Police Station, Mianwali Nagar against Sh. Amit Kumar Lakra and Sh. Rakesh Singh and his accomplices, who were arrested by the police. However, Sh. Rakesh Singh was granted the Anticipatory Bail by the Hon'ble High Court. The negative impact of the said criminal action was that the Criminal Court has freezed all the accounts of Sh. Rakesh Singh. Thereafter, this received a serious setback to the business of Sh. Rakesh Singh, Mr. Amit Kumar Lakra has further managed to build pressure on Sh. Rakesh Singh and had got lodged two false FIR 's u/s 376 IPC. The Sh. Rakesh Singh got bail from the Criminal Court. Because of the said action the Sh. Rakesh Singh has also filed the FIR with the Police Station at Greater Kailash-l, New Delhi being FIR No. 2712016 against the persons involved including the ladies with the Police and the Police is investigating into the conspiracy hatched against Sh. Rakesh Singh. It is submitted that the Sh. Rakesh Singh still has the goodwill in the market and is trying hard to revive the business and for the purpose the Sh. Rakesh Singh has approached the bank for the restructuring of the account. Unfortunately, the bank has not considered the same despite knowing very well the difficulties of the Sh. Rakesh Singh, Sh. Gulab Singh and Ms. Laxmi Devi and the borrower, On 19p4.2016 the Sh. Rakesh c^

Singh has received the notice from Sh. Chander Mohan Kapoor, Advocate who has been appointed as the Receiver by the Ld. CMM, South East, Saket New Delhi for taking over of the possession of the property at Kalkaji Extension, New Delhi on 03.05.2016. The applicant has also received on 19.04.2016 a letter from Sh. Aditya Chandra, Advocate who also has been appointed as the Receiver by the Couft of Chief Metropolitan Magistrate, South East, Saket, New Delhi for taking over of the possession of the property at Kalkaji Extension Basement Property on 05.05.2016 in the loan account of M/s Boom Buying tut Ltd. Along with the notices the receiver has also annexed the respective orders passed by the Court of the Chief Metropolitan Magistrate wherein specific directions to the Receiver has been given to serve the advance possession notice of more than 15 days to Mr. Rakesh Singh. The borrowers have tracked the postal records and according to it, the notices have been delivered at the concerned Post Office on 19.04.2016. Hence, the Receiver has also violated the order. It is submifted that after the receipt of the notice on 31.07.2015 M/s Boom Buying h/t Ltd has deposited Rs. 30 lacs with the bank also to show its bona-fide. The borrowers have been requesting the bank repeatedly for the supply of the statement of account which the bank has never supplied. The only reason for non-supplying of the same is that the claim of the bank is highly exaggerated and not the genuine one. The bank has not given the due credit of the amounts deposited by the borrowers from time to tirhe. Furthermore, the bank has applied the applied the interest at the much higher than rate, as compared to agreed rate of interest. It is further submitted that the principal borrgwer M/s Boom Buying tt\

.{

h/t. Ltd., who is the respondent no.4 i.e. in the present appeal, approached to the applicant Bank of Baroda for regularizing its NPA Accounts being the accounts in issue and gave a letter dated 31.08.2016 for its NPA accounts. The applicant bank vide its letter dated 06.09.2016 informed the principal borrower/Ms Boom Buying h/t Ltd that the applicant bank is ready to consider the reasonable OTS (One time Settlement) offer to settle the account of principal borrower/ M/s Boom Buying h/t Ltd, M/s Boom Agro India h/t. Ltd. And Sh Rakesh Singh, but in any way this offer should not be less than Rs. 6 Cr. The principal borrower/ M/s Boom Buying h/t. Ltd. vide its proposal letter dated 21.09.2016 gave OTS (One f ime Settlement) proposal to the Bank of Baroda for NPA advance account (i) M/s Boom Buying M. Ltd. (principal borrower), (ii) M/s Boom Agro India tut. Ltd. (iii) Sh Rakesh Singh, to the tune of Rs 6 Cr. With bifurcation of payments and further requested to release all their balance and properties which are equitable mortgaged with the applicant bank after receiving full & final OTS amount including the property of guarantors. The said letter was duly received by the Bank of Baroda. Thereupon, the bank of Baroda further sought bifurcation of OTS amount from the principal borrower/ M/s Boom Buying h/t Ltd for all the three heads (accounts). It is further submitted that the principal borrower/ M/s Boom Buying h/t Ltd proposal for OTS to the Bank of Baroda for all its liabilities including other companies as well as personal liability of Mr. Rakesh Singh and has also given the payment schedule and assured the Bank of Baroda for payments according to the payment schedule and further requested to the Bank of Baroda to release all their collateral mortgage.and personal guarantee of e^

TANO.5s7l2024 10 directors as well as guarantors after receiving the complete OTS amount. The bank of Baroda in pursuant thereto got valuation of all mortgaged property of Principal Borrower/ Boom Buying h/t. Ltd., Boom Agro India tut. Ltd. & Mr. Rakesh Singh as well as propefi in question of guarantors. In the terms of the said valuation of the properties the property of the guarantors which is lease hold property from DDA has been value at the market prices Rs.2.5 Cr., and realizable value of @ Rs.1.92 Cr. While @ circle value it is Rs. 85.821acs. It is submitted that the applicant bank has charged exorbitant rate of interest and has inflated the amount by debiting illegal charges by applying he interest at the rate higher than the agreed rate and by applying the penal interest. Therefore, it is prayed that the present O.A. is liable to be dismissed.

6. Both the pafties have filed their respective evidence.

7. Heard the Ld. Counsels of both the parties and perused the record.

8. The main contention of the Ld. counsel of the defendants is that Shri Gulab Singh and Mrs. Laxmi Devi has withdrawn their personal guarantee vide letter dated 15.04.2014 and has asked for the return of the property paper. It is submitted that the applicant bank has admitted the receipt of the letter. Shri Gulab Singh and Mrs. Laxmi Devi vide e.mail dated 30.05.2014 has confirmed the withdrawal of the guarantee. Accordingly, the guarantee of Shri Gulab Singh Mrs. Laxmi Devi and his residential house stands discharged. It is submitted that on receipt of the notice under Section 13(2) of the SARFAESI Act Shri Gulab Singh and Mrs. Laxmi Devi has infogned the applicant bank (^

TANO.557/2024 11 regarding the same and has asked for the supply of the account statement. But the objection of the Sh. Gulab Singh and Mrs. Laxmi Devi has not been disposed of and therefore, they are not responsible for any dues. In this regard I have gone through the record. Once the guarantor has taken a guarantee, he cannot unilaterally discharge himself from the guarantee. The guarantee can be discharged only when the creditor gives his consent and releases the guarantee. Therefore, it is clear that the guarantee of Shri Gulab Singh and Mrs. Laxmi Devi has never been discharged and on this ground the OA cannot be dismissed against them.

9. The next contention of the defendant is that Shri Amit Kumar Lakra has played a fraud with defendant no.3 and has lodged an FIR against the defendant no.3. He has also managed to got two FIRs lodged under Section 376IPC and therefore, the defendant no.3 has suffered a great loss in goodwill and business was badly hampered. Therefore, the defendant could not repay the debt. It is submitted that the defendants have given OTS for the settlement and has also filed SA against the applicant bank against the action taken by the bank under provisions of the SARFAESI Act. It is submitted that the defendant is not a wilful defaulter, therefore, the OA may be dismissed. But the contention of the defendants cannot be accepted. What was the reason for non payment of the debt cannot exonerate the defendants from making the repayment of the debt. It is clear that the debt has not been repaid and therefore, the defendants are liable to repay the same. If the defendants have given any OTS to the bank, it is the prerogative of the bank to either accept or not. Therefore, on this ground that the defendant has given the OTS, the OA canno! be dismissed. fI a

{

10. 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. In the light of the above discussions, the present TA deserves to be allowed.

ORDER

1) I hereby allow this T.A. of the Applicant Bank and direct the defendant nos. 1 to 4 to pay jointly and severally to the applicant bank within 30 days from today, a sum of Rs.4,37,18,9361- along with cost, expenses and interest @L3.75o/o from the date of filing of this O.A which has become TA 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 the sale of hypothecated assets and the sale of mortgaged properties being (a). Freehold residential property situated at Mohalla Asaltpur, Bhudaka Chauraha, Moradabaad, Uttar Pradesh as known as new municipal ward no.6, block no.16 H. No. 91 (H. No. 6/16/91). (b). Freehold residential property situated at Mohalla Asaltpur, Bhudaka Chauraha, Moradabaad, Uttar Pradesh as known as new municipal ward no.6, block no.16, H. No. 104 (c). Freehold residential property situated at entire third floor with terrace right, one car parking along with proportionate right in the land underearth of propefi bearing no. 121 Pocket A-8, Kalakji Extension New Delhi 110019. In case of short fall, the same shall be recovered from the sale ,.-..-./ E)..- t3 of the personal movable and immovable assets of the defendant nos. 1 to 4.

3) Recovery Certificate be issued forthwith and be sent to Recovery fficer, 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.

5) Pafties are direct to appear before the Ld. Recovery Officer, DRT-II, Delhion 74.07.2025. Pending IAs, if any, stand disposed of. File be consigned to records. Date: 13.05.2025 Jg"\r (susHrL KUMAR RASTOGT) PRESIDING OFFICER DRT-II, De|hi This judgement has been signed, dated and pronounced in open court. a Date:13.05.2025 sA (susHrl KUMAR RASTOGT) PRESIDING OFFICER DRT-II, Delhi T