PUNJAB NATIONAL BANK vs SMT. USHA PANDEY, on 10 September 2024

**JUDGMENT**

1- The Applicant bank has made this application u/s 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 now Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 21.01.2016, against the defendant to recover its debts from defendant of Rs. 14,11,095/- alongwith pendentelite and future interest @10% per annum with monthly rests from 01.01.2016 with costs till realization. Pursuant to Gazette Notification No. 454(E), dated 15.02.2017 of the Ministry of Finance, Department of Financial Services, New Delhi, this OA bearing No. 135/2016 was transferred from DRT, Lucknow to this Tribunal.

2- The application has been duly registered and numbered as above.

3- The brief facts of the case of the applicant bank as stated in the application are as under- The Applicant Bank is a Banking Company and a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act V of 1970 having its Head Office at 7, Bhikhaji Cama Place, New Delhi and one of the branch office known as KNIT Branch at District Sultanpur, through duly constituted attorney/Officer of the Bank.

The facts of the case as contained in the application are that defendant is engaged in the Dairy Business and availed the financial assistance from the applicant Bank since 2009. The defendant requested to the applicant Bank to provide/enhance the financial assistance in the nature of Cash Credit (Hypotheccation of Stocks) Limit of DRT, ALLAHABAD2TA 05 of 2019 [J]

In order to secure the due repayment of the applicant Bank in respect of aforesaid credit facilities together with all interests, costs, charges and expenses, the defendant had signed, executed and delivered several security documents on 09.09.2011 to the applicant Bank at its Branch.

The defendant had signed and executed the Balance and Security Confirmation Letter dated 20.08.2014 thereby acknowledged the debt due in her account.

3. The defendant availed the aforesaid facilities but failed to repay the dues of the bank as per agreed terms, they failed to adhere the financial discipline of the applicant bank, the accounts of the defendant became irregular and sticky and were declared NPA on 28.07.2015. The applicant Bank sent Legal/ demand notice on 27.05.2015 to the defendant but despite receipt of the same, the defendant failed to liquidate bank's dues. All these acts and conduct on the part of the defendant is contrary to the terms and conditions of the documents signed and executed by defendant. Accordingly the applicant bank has moved this O.A. to recover public money.

The total outstanding due in the accounts comes to Rs. 14,11,095/- inclusive of interests which has been claimed by means of present O.A.

The interest /compound interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

Since, the defendant has failed and neglected in spite of several reminders to make payment of the dues recoverable to bank, hence this application has been filed by the bank.

4- U/s 19 (4) of the Act & Rule 11 of the DRT [Procedure] Rules, 1993, copies of application & paper book were sent by this Tribunal to the defendant by registered/speed post on 23.12.2022, and summons/notices issued requiring the defendant to show-cause within 30 days of the service of summons/notices as to why relief prayed for, should not be granted.

On perusal of the case records, it is seen that on 23.12.2022, summon/notice was sent to the defendant, but the defendant has not appeared, hence, this Tribunal has ordered to publish the notice in newspaper and subsequently, substituted service by publication of notice by way of advertisement in newspaper was also made against the defendant on 05.03.2024 in "Amar Ujala", newspaper.

Despite the registered summons/notices and publication of notice in newspaper, the defendant has not appeared before this Tribunal to contest the case. The sufficient time has been given to the defendant to defend her case, but she failed to appear and to file WS, hence, the Tribunal has passed an order to proceed exparte against the defendant on 09.09.2024.

5- To prove its case, the applicant Bank has referred attested copies of various documents before this Tribunal on 21.01.2016. The applicant bank has also given evidence on affidavit by way of affidavit of Shri 3DRT, ALLAHABADTA 05 of 2019 [JI]

Nagesh Kumar Mishra, Constituted Attorney & Officer of the applicant bank. The details of documents are as follows. :- <table border="1"> <thead> <tr> <th>Sl.No</th> <th>Description of Documents(Attested copies)</th> <th>Date of Execution</th> <th>Amount [In lacs]</th> <th>Signature of executants</th> <th>Ex./ Ann. No.</th> </tr> </thead> <tbody> <tr> <td>1</td> <td>Copy of the Power of Attorney</td> <td>--</td> <td>--</td>

<td>A- 1</td> </tr> <tr> <td>2</td> <td>Copy of the Application Form, Limit Proposal – Fresh Borrower and Interview Form along with Sanction (Colly).</td> <td>01.09.2011</td> <td>20.00</td> <td>Def.</td> <td>A- 2</td> </tr> <tr> <td>3</td> <td>Copy of the Agreement for Loan/Cash Credit/Overdraft</td> <td>09.09.2011</td> <td>20.00</td> <td>Def.</td> <td>A- 3</td> </tr> <tr> <td>4</td> <td>Copy of the Loan Agreement</td> <td>09.09.2011</td> <td>10.00</td> <td>Def.</td> <td>A- 4</td> </tr> <tr> <td>5</td> <td>Copy of the Priority Sector Term Loan Agreement</td> <td>09.09.2011</td> <td>10.00</td> <td>Def.</td> <td>A- 5</td> </tr> <tr> <td>6</td> <td>Copy of the Letter of Undertaking</td> <td>09.09.2011</td> <td>10.00</td> <td>Def.</td> <td>A- 6</td> </tr> <tr> <td>7</td> <td>Copy of the Balance &amp; Security Confirmation Letter</td> <td>20.08.2014</td> <td>10.11</td> <td>Def.</td> <td>A- 7</td> </tr> <tr> <td>8</td> <td>Copy of the Bank's Notices</td> <td>31.07.2013<br/>16.08.2013<br/>10.08.2015</td> <td>10.11<br/>8.24<br/>10.11<br/>8.24<br/>--</td> <td>--</td> <td>A- 8</td> </tr> <tr> <td>9</td> <td>Copy of the Legal Notice</td> <td>27.05.2015</td> <td>11.01<br/>2.11</td> <td>--</td> <td>A- 9</td> </tr> <tr> <td>10</td> <td>Copy of the Statement of Account of Cash Credit Account duly certified by Bankers Book of Evidence Act,</td> <td>--</td> <td>--</td>

<td>A- 10</td> </tr> <tr> <td>11</td> <td>Copy of the Statement of Account of Term Loan Account duly certified by Bankers Book of Evidence Act,</td> <td>--</td> <td>--</td> <td>Bank</td> <td>A- 11</td> </tr> </tbody> </table>

6- Opportunity of hearing has been fully given to both the parties, but despite several opportunities given to defendant, the defendant has not appeared to contest the case, hence, the exparte arguments of learned counsel for applicant bank were heard. Perused the case record and considered.

Ld. counsel of applicant bank submitted that the defendant has taken the loan and utilized the same and also executed the various loan documents to secure the loan. Further submitted that the claim of the bank has been proved by documentary and oral evidence. Ld. Counsel for the applicant bank has further submitted that the defendant has not deposited any amount, after filing of the OA.

It is further submitted by ld. Counsel of applicant bank that there is no any stay granted by any Higher Court, in respect of the proceedings of the present OA and requested to issue recovery certificate, as claimed for, in OA.

7- It has been established that defendant is living and carrying on her business in the state of Uttar Pradesh. Cause of action also arose in the State of Uttar Pradesh. The said claim on the date of filing of application exceeded Rs.10 lacs. The applicant bank is functioning within jurisdiction of this Tribunal. Therefore, this Tribunal has territorial as well as pecuniary jurisdiction to adjudicate upon the present application.

8- On the issue of Limitation, to prove it, the applicant bank has submitted that the applicant bank has declared the account as NPA on 28.07.2015, whereas the present application has been filed on 21.01.2016. Even, it is counted for the purpose of Limitation, then it is established that the applicant bank has filed the case within the limitation period from the date of declaring the account as NPA. As such, it is established that present application has been filed well within the period of limitation.

9- In the affidavit of Shri Nagesh Kumar Mishra, Constituted Attorney & Officer of the applicant bank, has stated that he is well acquainted with the facts of the case and has on verification of record, sworn in the affidavit in support of contents of application and the documents as evidence and established on oath the pleadings and documents of the applicant bank as stated above.

The documents as stated above reveal that the defendant has applied for loan and the bank had sanctioned the loan and to secure the loan and for repayment of loan amount with interests etc., the defendant has executed various loan documents, which strength the case of the applicant bank.

The applicant bank has also furnished statement of account as above, which is not only admissible but shall be taken as correct statement of account, more so since the entries in the statement of account has not been challenged.

10- Since, the defendant was proceeded exparte, all contentions raised and documents produced by plaintiff remained unrebuted and the tribunal may act upon the affidavit of the applicant as per law. Defendant has neither denied the utilization of funds advanced by applicant bank nor have pointed out any specific error and discrepancy in the Statement of Account, which is kept in due course of business, evidence on affidavit, which has supported the claim of the applicant bank, established to have fully correct and believable. Provisions contained in Section 4 of the Banker's Books Evidence Act, 1891 apply to certified copies of entries in banker's book furnished along with the application filed under section 19[1] of the Act. Hence, the entries in the Statement of Account are also proved.

11- On consideration of the arguments and on perusal of the application, documents and affidavit, it is proved that the applicant bank has granted the loan facilities, documents were executed by the defendant and facilities were availed by the defendant as stated in the application.

12- Now, whether interest has been charged as per agreement and as per R.B.I. Guidelines?

13- The applicant bank has sought for recovery of a sum of Rs. 14,11,095/- with cost and further interest @10% per annum with monthly rest from 01.01.2016 till realization.

14- Learned Advocate appearing for applicant bank submits that the applicant bank has charged interest in terms of the agreements and that interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

15- On consideration of the arguments and on perusal of the pleadings, documents and affidavit, it appears that the applicant has not charged interest against defendant in terms of documents and as per directives of R B I. It is to mention here that the Base Rate has been introduced in the year of 2010 which was always remain below 10%. Likewise the MCLR has been introduced in the year 2016 which was also remain below 8.50%, therefore, the Applicant Bank has charged the rate of interest on very higher side and against the guidelines of the RBI, issued by time to time. Accordingly, the defendant deserve some leniency in the rate of interest.

16- The defendant failed to appear before the Tribunal to contest the claim made by the applicant, therefore, it necessarily goes to establish that the claim made by the applicant bank is genuine and true. It is manifest that the defendant has not disputed the claim, therefore, the claim referred to the Tribunal is recoverable till full and final realization of the claim.

17- In Indian Bank Vs. Blue Jagers Estates Limited and others [2010] 8 SCC 129, the Hon'ble Supreme Court of India has observed as under- "The Court cannot lose sight of the fact that the bank is a trustee of public fund. It cannot compromise the public interest for benefiting private individuals. Those who take loan and avail financial facilities from the bank are duty bound to repay the amount strictly in accordance with the terms of the contract. Any lapse in such matters has to be viewed seriously and the bank is not only entitled but duty bound to recover the amount by adopting all legally permissible methods. Parliament enacted the act because it was found that legal mechanism available till then was wholly insufficient for recovery of the outstanding dues of the banks and Financial Institutions."

18- Facts of the case, in my view, are well proved by evidence of the applicant bank. The applicant bank is entitled to receive its debts from defendant Rs. 14,11,095/- alongwith pendentelite and future interest @10% Simple per annum from 01.01.2016 till realization. So the final order may be passed accordingly, to meet the ends of justice.

**ORDER**

In the result, the application of the applicant bank is, allowed and debt is determined with costs against the defendant and it is, hereby, ordered that the applicant bank is entitled to receive its debts from defendant, it's debts with interest, amounting to Rs. 14,11,095/- alongwith pendentelite and future interest @10% Simple per annum from 01.01.2016 till realization of the entire sum due and recoverable with costs.

In case of failure to repay the aforementioned adjudicated amount within 30 days, same shall be recovered from the sale of the *hypothecated assets / mortgaged properties of the Defendant in execution proceedings*. The amount, if any, already recovered by sale of any hypothecated assets / mortgage properties or otherwise shall be adjusted towards the debt and only the balance amount shall be recoverable. If the dues of Applicant Bank still remain unsatisfied, the same shall be recovered by attachment and sale of the personal movable and immovable assets of the Defendant. The cost of litigation be also borne by the Defendant.

The Defendant is hereby restrained by means of injunction from depleting, transferring, encumbering, alienating, selling or otherwise dealing with hypothecated assets/ mortgage properties or his other immovable/movable properties/estates without first paying the above claim of Applicant Bank/Certificate Holder.

In case, the Defendant expires, the legal representatives shall be liable to pay in proportion to the inheritance.

Let a certificate of recovery be drawn up forthwith and put up for signatures in terms of provisions contained in Section 19(22) of the Act to be issued, on the basis of the order of the Tribunal to the Recovery Officer. The Recovery Officer shall realize the amount as per the certificate in the manner and mode prescribed under the Act from the defendant.

Pending I. As., if any, stands disposed off.

Parties are directed to appear before the Recovery Officer, DRT, Allahabad on 16.11.2024. The order be communicated accordingly.

Judgment signed, sealed, dated and pronounced in the open court on this 10^th Day of September, 2024.

Dictated & Corrected by me.

[R. M. Kushawaha] Presiding Officer Debts Recovery Tribunal, Allahabad

[R. M. Kushawaha] Presiding Officer Debts Recovery Tribunal, Allahabad

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