UNION BANK OF INDIA vs M/s Jayna Traders on 30 May 2025

FINAL ORDER

This original application has been filed by the applicant bank, on 26.08.2015 through Mr.G Raveendran, Chief Manager of the applicant bank, under Section 19 of the RDB Act, 1993 against the defendants for recovery of a sum of Rs.3,23,70,017.33 together with cost, charges and pendentellite and future interest @15.50o/o from date of filing of this O.A. tillthe realization in full.

2. The brief facts of the case are that the request of defendants, the applicant bank sanctioned a Cash Credit Facility of Rs.300 lacs for working capital requirement, vide sanction letter dated 08.12.2012. The defendants executed all necessary loaning documents on 24.12.2012. The afore-sai{Cash Credit Facility was rA a

TANO. 149412022 2 secured by mortgage of property i.e Property Bearing No. 87, Block-E, area measuring 135.8 Sq. yads in the lay out plan of the displaced Jain Co-operative House Building Society Ltd, Veer Nagar, Jain Colony, Delhi-O7 owned by Sh. Devinder Kumar Jain and executed Memorandum of Deposit of Original Title Deeds in favour of applicant bank. It is submitted by the Ld.counsel of the applicant bank that the mortgaged property has been sold for Rs.3.56 Crores.

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 23.03.2015. Therefore, the applicant bank served a demand notice dated 30.03.2015 to the defendants but failed to recover the same Thus, the present O.AffA 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 3 have denied the facts mentioned in the OA. It is submitted that the applicant bank has given credit of amount of Rs.20.00 lacs to one M/s Sky Airways vide cheque no. 638701 dated 11.05.2013, wherein the said cheque is still lying with the defendants. It is submitted that despite several vetbal discussions with the g.I'

TA NO. 149412022 3 applicant bank, the said amount is neither reversed nor the interest charged on the said amount is reversed by the Bank. The defendants submits that the defendants have also made written request to the applicant bank vide letter dated 27.03.20L4 informed the applicant bank about the said wrong entry for an amount of Rs.20.00 lacs, but the applicant bank never replied or reversed the said amount till date. The business of the defendants drastically slowdown in the year 2015 and get deteriorated but the applicant bank didn't help the defendants in any manner. Even the wrong entry of the amount of Rs.20.00 lacs never been returned to the defendants. It is further submifted that the applicant bank is itself responsible for the loss of the business of the defendants. It is submitted that since May, 2013 the applicant bank has not returned the said money to the defendants and it is fufther submitted that as on date around Rs.rl0.00 lacs amount would be the illegal interest charged by the respondent bank in the said illegal transaction of Rs.20.00 lacs. It is submitted that said amount is required to be credited by the applicant bank in the account of the defendants and if the said amount is credited in the account of the defendants, the account of the defendants cannot be declared NPA on 23.03.2015 as alleged by the applicant bank in the present case and also issued the alleged 13(2) notice dated 31.03.2015 against defendants. The defendants have also responded to the 13(2) notice given by the applicant bank, under Section 13(34) of the SARFAESI ACT, 2002 vide reply dated 21.05.2015 dispatched dated 22.05.2015 through speed post. It is submitted that the applicant bank in response has also given its reply to the objection vide reply dated 8.6.2015, although the sapne has been received by the e\

TA NO. 149412022 4 defendants only on 17.06.2015. It is submitted that the reply to the objection has not been given by the applicant bank within the stipulated period as stated by the respondent bank in its reply, hence cannot be accepted. Fufther, the applicant bank has merely denied the averments but never given any response to the said averments on merits and also on the wrong entry of Rs.20.00 lacs dated 11.05.2013. The defendants have also given response to the reply filed by the applicant bank vide their reply dated 21.6.2015. The applicant bank has also charged rate of interest excessively and sometimes illegal other charges are also been charged by the applicant bank and these charges should be reversed or given due credit to the defendants in the present account ofthe defendants. It is submitted that the applicant bank is responsible for the loss of business of the defendants as well as in declaring the account of the defendants as NPA. It is submitted that as per the statement of account given by the applicant bank to the defendants, it is submitted that there is one entry of Rs.1,60,540.00 on 10.11.2014, which is illegal and required to be reversed as no clarification given by the applicant bank till date despite the objection raised by the defendants in its reply in the S.A. The applicant bank subsequent to the aforesaid also issued possession notice dated 27.07.2015 against the defendants but the same was affixed by the applicant bank at the site of the mortgaged property at later stage. The defendants without prejudice to their rights submits that they have deposited an amount of Rs.4.00 lacs subsequently i.e. after the alleged NPA as claimed by the applicant bank. The defendants are aggrieved by the illegal and arbitrary action of the applicant bank and its authorized e\

TA NO. 149412022 5 officer and the erring employees of the bank for the alleged proceedings against the defendants. The defendants tried their best to enhance the limit from the applicant bank, but they refused to help the defendants in any manner. It is submitted that the applicant bank has declared the account of the defendants NPA and for the same the erring officers of the applicant bank is responsible. It is very strange on the part of the applicant bank that they transferred the amount of Rs.20.00 lacs in a wrongful manner and without the directions of the defendants. It is submitted that for the same the concerned officer is required to be cross-examined. It is money of the defendants and how an amount of Rs. 20.00 lacs get rooted from the account of the defendants to some unknown person through cheque, which is still in the custody of the defendants. It is submitted that, when something went wrong by the applicant bank from the account of the defendants, it created tension in the mind of the defendants and this is one of the reason for the loss of the business of the defendants. It is submifted that if the said disputed amount along with interest would be refunded to the defendants the defendants would try to get the matter settled with the applicant bank with the help of his relatives and friends. It is submitted that the applicant bank has deliberately failed to provide the material particulars as to the varying rates of interests, penal interests and capitalization thereof for the various periods in the statement of accounts. It is further submitted that the applicant bank due to satisfactory credentials, good future prospects of the defendants and also being satisfied with the potential and credit worthiness of the defendants, the applicant bank allegedly sanctioned credit facilities to the defendants. C.\'

TA NO. 149412022 6 The defendant no. lwas enjoying facilities and the entire account were running smoothly. The defendanb had excellent banking relation since the commencement of the bank with the applicant bank. The defendants were seruicing the interest on the credit facilities as its utmost priorities and there was not default ever committed or pointed out in the defendant's account till the end of year, 2014. It is submitted that the present account cannot be declared NPA and no cluse of action arose against the defendants till the end 2014. The applicant bank thereafter in perpetuation of its pressuring tactics served a demand notice dated 30.03.2015 under Section 13(2) of the SARFAESI Act, 2002 upon the company defendants and the same was objected by the defendants under Section 13(3A) of the SARFAESI and also filed an S.A., which is pending disposal before the Hon'ble Tribunal, DRT-III, Delhi. The applicant bank has taken possession of the alleged mortgaged property in question except the ground and first floor of the alleged mortgaged property as per the direction of the Hon'ble Tribunal passed on 11.01.2016. It is submitted that the Hon'ble Tribunal has fufther directed the applicant bank to sale the alleged mortgaged property in question as per law and the defendant no. t has been directed to hand over the remaining portion i.e. ground and first floor within 30 days from the sale of the alleged mortgaged propefi in question. It is further submitted that plaintiff bank has obviously taken advantage of holding on to certain documents being unfilled and undated printed Performa's, blank letter heads, stamp papers etc. which were obtained in respect of the facilities granted to said answering defendants, evidently the erring officials of the plaintiff/applicant A

TA NO. 149412022 7 bank have illegally, arbitrarily and fraudulently intermingled, interpolated and caused material alterations by adding words, figures and dates as well as typed matters, so as to conjure a fabricated and fraudulent cause of action qua the defendants. The plaint/original application has not been signed, verified nor instituted by duly authorized and competent person. It submitted that the Power, knowledge and competence of Mr. G. Raveendran, the alleged Chief Manager, is specifically denied and disputed. It is submitted that no cause of action can arise upon such false and fabricated documents as the plaintiff has sought in the present case. The documents on which the applicant bank is seeking to fasten the alleged liabilities and claims upon the defendants and their properties including the alleged documents allegedly signed and executed by the answering defendants being heavily relied upon by the plaintiff/applicant bank being fabricated, manufactured tainted and replete with material alterations cannot be and ought not to be allowed to be received as evidence. It is submitted that the purported statement of accounts and each and every entry therein is totally wrong and disputed individually and specifically. The alleged statement of accounts and the alleged books being the alleged source of such alleged entries relied upon by the applicant bank, have clearly not been maintained in the ordinary course of banking business. The purported statements of accounts are denied individually and specifically. It is fufther submitted that the applicant bank has played fraud on the defendants by fraudulently retaining some documents of the defendants and those on which signatures were got appended and subsequently using the same to make up ("\'

TA NO. 149412022 8 a case against the defendants. The applicant bank has charged and apparently debited from time-to- time interests at exorbitant, excessive, illegal and usurious rates and has apparently capitalized penal interest even on such interests and previously claimed/debited penal interest. The applicant bank is not entitled to either charge or claim interest and/or penal interest at the rates and rests claimed in the present original application as also those rates and rests that have been interpolated and illegally inserted in the documents relied upon by the applicant bank. Accordingly, it is prayed that this Honble Tribunal may dismiss the present original application.

6. Both the parties have filed their respective evidence and exhibited the documents.

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

8. The main defense of the Ld. counsel of the defendants is that the bank has given credit of an amount of Rs.20 Lacs to M/s Sky Airways vide cheque no.638701 dated 11.05.2013 wherein the said cheque is still lying with the defendants. It is submitted that the applicant has made request to the bank to reverse the entry but the bank has not done so and due to this act of the bank the account of the defendants has become irregular. On the other hand the Ld. counsel of the applicant bank has submitted that the defendant in connivance with the Sky Airways is making wrong submissions. The debit entry has been made as per instructions of the defendants. In this regard I have perused the record. From perusalof the record it is clear that an entry of Rs.20 Lacs has been credited in the account of M/s Sky Airways through cheque no.638701 EA

TA NO. t49412022 9 on 11.05.2013. The defendant has not made any complaint to the higher authorities regarding the wrong entry and has not made any complaint before the police authorities regarding the wrong debit of the amount. The account was declared as NPA in the year 2015 and therefore, it cannot be said that the account has become irregular due to the wrong debit entry made by the bank.

9. The next contention of the defendant is that the applicant is charging exorbitant rate of interest and imposed illegal charges. But the contention of the defendants has no force. From perusal of the record it is clear that the applicant bank has charged the rate of interest as per agreement entered into between the parties.

10. The Ld. counsel of the defendants has further contended that one entry of Rs.1,60,540/- on 10.11.2014 is also illegal and is required to be reversed. But on what basis it is illegal has not been explained. Therefore, there is no ground to presume that this entry is illegal.

11. The next contention of the defendants is that the defendants tried to pursue the bank to enhance the limit with a view to run his business but the applicant bank has failed to enhance the limit and therefore, the account has become irregular. Merely because the bank has refused to enhance the limit, the defendant cannot be permitted to refuse to repay the loan granted by the applicant bank.

10. The next contention of the defendants is that the applicant bank has issued notice under Section 13(2) of the SARFAESI Act and illegally sold the property of the e\ I

TANO. 149412022 l0 defendants. But the contention of the defendants has no force. The defendants has also filed an SA which has been dismissed by the Tribunal and therefore, the SARFAESI action taken by the applicant bank cannot be deemed to be invalid.

11. From perusal of the entire evidence, it is clear that the defendants have failed to prove their case as claimed in the written statement. On the other hand, the applicant bank has proved his case against the defendants and therefore, the defendants are liable to pay jointly and severally the amount claimed by the applicant bank and ,5" g4fl-A 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 3 to pay jointly and severally to the applicant bank within 30 days from today, a sum of Rs.3,23,70,017.33 along with cost, expenses and interest @13.50o/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 the personal movable and immovable assets of the defendant nos. 1 to 3.

3) Recovery Certificate be issued forthwith and be sent to Recovery Officer, Debts Recovery Tribunal-Il, Delhi. 9A i a TA NO. 1494/2022 l I

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 30.07.2025. Pending IAs, if any, stand disposed of. File be consigned to records. Date: 30.05.2025 €sAx- (susHrL KTIMAR RI\SrdGI) PRESIDING OFFICER DRT-II, Delhi This judgement has been signed, dated and pronounced in open court. (sr\{ Date :30.05.2025 (SUSHIL KL,MAR RASTOGi) PRESIDING OFFICER DRT-II, DCIhi T