BANK OF BARODA vs M/S GOLDEN TRANSPORT CO. on 1 February 2023

**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 29.11.2013, against the defendants to recover its debts from defendants of Rs. 45,08,564/- upto 10.11.2013 alongwith pendentelite and future interest @ 3.25% above base rate @ 13.50% in truck Loan and @ 3.00% above base rate current applicable rate being 13.25% per annum with monthly rest plus penal interest @ 2% per annum in Term Loan and Car Loan respectively from the date of filing of OA with costs till realization.

Subsequently, the case record of the present Original Application No. 575 of 2013 has been transferred to this Tribunal in view of Notification of Government of India, Ministry of Finance dated 15.02.2017 thus the case has been re-numbered as TA 63 of 2018.

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 body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act V, 1970, having its Head Office in Mandvi Baroda in the State of Gujarat, and Corporate Office at Baroda Corporate Centre, C-26, G-Block, Bandra – Kurla Complex, Bandra (East), Mumbai – 400051 and among others places a branch known Ayodhya Branch, Naya Ghat, Ayodhya, Faizabad-224123, U.P.

The brief facts of the case as contained in its original application are that the Defendant No. 1 is a proprietorship firm of which Defendant No. 2 is the sole proprietor and borrower of the Defendant No. 1 firm and Defendant No. 3 stood as guarantor for the said credit facilities. The Defendant No. 2 for self and on behalf of Defendant No. 1 approached the Applicant Bank for grant of financial assistance in the shape of Term Loans of Rs. 13.00 Lacs for purchase of Truck and submitted loan application.

After considering the loan application and verification of the loan documents, the Applicant Bank sanctioned a Term Loan (Vehicle) of Rs. 13.00 Lacs for purchase of vehicle to the Defendants against primary security of hypothecation of Vehicle together with interest vide sanction letter dated 27.03.2010. The Term Loan was repayable in monthly equated installments.

Upon sanctioning of the aforesaid loans facilities, the Defendant No. 1 & 2 as borrower and Defendant No. 3 as guarantor executed and signed various security loan documents and guarantee agreement on 27.03.2010 in favour of Applicant Bank.

In order to secure the dues repayment of the Applicant Bank in respect of the aforesaid Term Loan Facilities, the defendants hypothecated the vehicle bearing registration No. UP42 T 8692, having Chasis No. MB1CTDYC8AAVA9988 and Engine No. VAH618641 in favour of the Applicant Bank.

Further, the Defendant No. 2 for Defendant No. 1 approached the applicant bank and requested another Term Loan of Rs. 29.25 Lacs for purchase of Leyland Truck and submitted loan application dated 07.09.2010. The Applicant Bank considered the request and sanctioned Term Loan of Rs. 29.25 Lacs for purchase of Ashok Leyland Truck together with interest vide sanction letter dated 28.09.2010 and in consideration thereof, the defendants executed and signed various loan documents and guarantee agreement in favour of the Applicant Bank.

In order to further secure the dues repayment of the Applicant Bank in respect of the another Term Loan Facilities, the defendants hypothecated the vehicles bearing registration No. UP42 T 9328 & UP 429329 having Chasis No. MB1CTDYC1AALB97734 & MB1CTDYC9AALB99309 and Engine No. LAH655123 & LAH654170 in favour of the Applicant Bank.

Further, the Defendant No. 2 for Defendant No. 1 approached the applicant bank and again requested for Term Loan of Rs. 6.65 Lacs for purchase of Xylo Car and submitted loan application dated 01.11.2010. The Applicant Bank considered the request and sanctioned Term Loan of Rs. 6.65 Lacs for purchase of Mahindra Xylo B2 MDI CRDe2WD together with interest vide sanction letter dated 02.11.2010 and in consideration thereof, the defendants executed and signed various loan documents and guarantee agreement in favour of the Applicant Bank.

In order to further secure the dues repayment of the Applicant Bank in respect of the Car Loan Facilities, the defendants hypothecated the vehicles bearing registration No. UP42 R 2492 having Chasis No. 4261570 and Engine No. GA4H22157 in favour of the Applicant Bank.

The Defendants availed the aforesaid Term Loan facilities, but failed to maintain financial discipline as per terms and conditions of the loan agreement due to which loan account became irregular. Despite repeated reminders and persuasion, the Defendants failed to regularize the loan account. Consequently, the said account of the Defendants were classified as NPA on 27.12.2012 & 31.03.2013 and recalled by Applicant Bank. On 16.10.2012 & 31.01.2013, in respect of Truck Loan the defendants executed and delivered letter of Acknowledgement of debt and security by which acknowledged and admitted his indebtedness with further interest thereon. Thereafter, Applicant Bank served Demand Notice dated 30.12.2012 & 01.05.2013, u/s 13(2) of SARFAESI Act, 2002 to the Defendant to repay the outstanding dues. In respect of Demand Notice, the Defendant No. 2 responded vide reply dated 06.02.2013 stating that payment of installments shall be made from March or April, 2013 but the said defendants failed to pay. This offer was declined by the Applicant Bank. Accordingly, the applicant Bank has moved this O.A. to recover public money.

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 defendants have 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 defendants by registered/speed post on 02.07.2019, and summons/notices issued requiring the defendants 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 02.07.2019, summons/notices were sent to the defendants, but the defendants have 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 defendants on 25.11.2022 in "Hindustan" Lucknow edition, newspaper.

Despite the registered summons/notices and publication of notice in newspaper, the defendants have not appeared before this Tribunal to contest the case. The sufficient time has been given to the defendants to defend their case, but they failed to appear and to file WS, hence, the Tribunal has passed an order to proceed exparte against the defendants on 09.01.2023.

5- To prove its case, the applicant Bank has referred attested copies of various documents before this Tribunal on 29.11.2013. The applicant bank has also given evidence on affidavit by way of affidavit of Shri Anil Kumar Srivastava, Senior Branch Manager of the applicant bank. The details of documents are as follows. :-

<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 Loan Application</td> <td>26.03.2010</td> <td>Rs. 13.00</td> <td>Def. No. 1 &amp; 2</td> <td>A- 1</td> </tr> <tr> <td>2</td> <td>Copy of Sanction Letter</td> <td>27.03.2010</td>

<td>A- 2</td> </tr> <tr> <td>3</td> <td>Copy of Letter of Sole Proprietorship</td> <td>27.03.2010</td> <td>-----</td> <td>Def. No. 2</td> <td>A- 3</td> </tr> <tr> <td>4</td> <td>Copy of Declaration cum undertaking cum Authority</td> <td>27.03.2010</td> <td>-----</td> <td>Def. No. 1 &amp; 2</td> <td>A- 4</td> </tr> <tr> <td>5</td> <td>Copy of an instrument of Hypothecation</td> <td>27.03.2010</td> <td>Rs. 13.00</td> <td>Def. No. 1 &amp; 2</td> <td>A- 5</td> </tr> <tr> <td>6</td> <td>Copy of Irrevocable power of Attorney</td> <td>29.03.2010</td> <td>-----</td> <td>Def. No. 1 &amp; 2</td> <td>A- 6</td> </tr> <tr> <td>7</td> <td>True copy affidavit</td> <td>-----</td> <td>-----</td> <td>-----</td> <td>A-6A</td> </tr> <tr> <td>8</td> <td>Copy of Registration Certificate of Truck No. UP 42 T 8692</td> <td>20.04.20</td> <td>-----</td> <td>-----</td> <td>A- 7</td> </tr> <tr> <td>9</td> <td>Copy of Goods Carriage Permit</td> <td>-----</td> <td>--</td> <td>-----</td> <td>A- 8</td> </tr> <tr> <td>10</td> <td>Copy of Sale invoice and delivery receipt</td> <td>15.03.2010</td> <td>Rs. 14,05,000</td> <td>Def. No. 1 &amp; 2</td> <td>A- 9</td> </tr> <tr> <td>11</td> <td>Copy of Loan application</td> <td>07.09.2010</td> <td>Rs. 33.00</td> <td>Def. No. 1 &amp; 2</td> <td>A-9A</td> </tr> <tr> <td>12</td>

<td>28.09.2020</td> <td>Rs. 29.25</td> <td>Def. No. 1 &amp; 2 and Bank</td> <td>A- 10</td> </tr> <tr> <td>13</td> <td>Copy of Demand Promissory Note</td> <td>28.09.2010</td> <td>Rs. 29.25</td> <td>Def. No. 1 &amp; 2</td> <td>A- 11</td> </tr> <tr> <td>14</td> <td>Copy of Letter of Sole Proprietorship</td> <td>28.09.2010</td> <td>-----</td> <td>Def. No. </td></tr></tbody></table>

<thead> <tr> <th></th> <th>undertaking cum Authority</th> <th></th> <th></th> <th>&amp; 2</th> <th></th> </tr> </thead> <tbody> <tr> <td>17</td> <td>Copy of Letter of authority to make payment directly to the dealers (LDOC-72)</td> <td>28.09.2010</td> <td>Rs. 29.25</td> <td>Def. No. 1 &amp; 2</td> <td>A- 15</td> </tr> <tr> <td>18</td> <td>Copy of an instrument of Hypothecation</td> <td>28.09.2010</td> <td>Rs. 29.25</td> <td>Def. No. 1 &amp; 2</td> <td>A- 16</td> </tr> <tr> <td>19</td> <td>Copy of Irrevocable power of Attorney (LDOC-101)</td> <td>28.09.2010</td> <td>-----</td> <td>Def. No. 1 &amp; 2</td> <td>A- 17</td> </tr> <tr> <td>20</td> <td>Copy of Affidavit and undertaking</td> <td>24.09.2010</td> <td>-----</td> <td>-----</td> <td>A- 18</td> </tr> <tr> <td>21</td> <td>Copy of Registration certificate of Truck</td> <td>23.10.2010</td> <td>-----</td> <td>-----</td> <td>A- 19</td> </tr> <tr> <td>22</td> <td>Copy of Goods Carriage permit</td> <td>23.10.2010</td> <td>-----</td> <td>-----</td> <td>A- 20</td> </tr> <tr> <td>23</td> <td>Copy of Quotation cum performa Invoice</td> <td>09.09.2010</td> <td>Rs. 30,16,000/-</td> <td>-----</td> <td>A-21</td> </tr> <tr> <td>24</td> <td>Copy of Quotation of Expenses for making of complete body truck</td> <td>09.09.2010</td> <td>Rs. 685784/-</td> <td>-----</td> <td>A-22</td> </tr> <tr> <td>25</td> <td>Copy of Loan application</td> <td>01.11.2010</td> <td>Rs. 6.65</td> <td>Def No. 1 &amp; 2</td> <td>A-23</td> </tr> <tr> <td>26</td>

<td>02.11.2010</td> <td>Rs. 6.65</td> <td>Def. No. 1 &amp; 2 and Bank</td> <td>A-24</td> </tr> <tr> <td>27</td> <td>Copy of Demand Promissory Note</td> <td>02.11.2010</td> <td>Rs. 6.65</td> <td>Def No. 1 &amp; 2</td> <td>A-25</td> </tr> <tr> <td>28</td> <td>Copy of Letter of Installments with acceleration clause</td> <td>02.11.2010</td> <td>Rs. 6.65</td> <td>Def No. 1 &amp; 2</td> <td>A-26</td> </tr> <tr> <td>29</td> <td>Copy of Letter of authority to make payment directly to the dealers (LDOC-72)</td> <td>02.11.2010</td> <td>Rs. 6.65</td> <td>Def No. 1 &amp; 2</td> <td>A-27</td> </tr> <tr> <td>30</td>

<td>02.11.2010</td> <td>Rs. 6.65</td> <td>Def No. 1 &amp; 2</td> <td>A-28</td> </tr> <tr> <td>31</td> <td>Copy of Declaration cum undertaking cum Authority</td> <td>02.11.2010</td> <td>-----</td> <td>Def No. 2 &amp; 3</td> <td>A-29</td> </tr> <tr> <td>32</td> <td>Copy of General form of Guarantee</td> <td>02.11.2010</td> <td>Rs. 6.65</td> <td>Def No. 3</td> <td>A-30</td> </tr> <tr> <td>33</td> </tr></tbody></table>

<tr> <td>38</td> <td>Copy of Letter of Acknowledgement of debt Security</td> <td>30.01.2013</td> <td>Rs.<br/>578681.04<br/>ps.</td> <td>Def No. 1 &amp; 2 and Bank</td> <td>A-36</td> </tr> <tr> <td>39</td> <td>Copy of the Notice</td> <td>30.12.2012</td> <td>Rs.<br/>633564.04</td> <td>Bank</td> <td>A-37</td> </tr> <tr> <td>40</td> <td>Copy of the Notice</td> <td>04.02.2013<br/>&amp;<br/>04.06.2013</td> <td>Rs.<br/>640978.04<br/>&amp; Rs.<br/>984968.80<br/>ps.</td> <td>Bank</td> <td>A-38</td> </tr> <tr> <td>41</td> <td>Copy of reply and response by the Applicant Bank</td> <td>06.02.2013<br/>&amp;<br/>27.02.2013</td> <td>-----</td> <td>Def No. 2 and Bank</td> <td>A-39</td> </tr> <tr> <td>42</td> <td>Copy of Statement of account in truck Loan</td> <td>-----<br/>-</td> <td>-----</td> <td>Bank</td> <td>A-40</td> </tr> <tr> <td>43</td> <td>Copy of Statement of account in truck Loan</td> <td>-----</td> <td>-----</td> <td>Bank</td> <td>A-41</td> </tr> <tr> <td>44</td> <td>Copy of Statement of account in Car Loan</td> <td>-----</td> <td>-----</td> <td>Bank</td> <td>A-42</td> </tr> </table>

6- Opportunity of hearing has been fully given to both the parties, but despite several opportunities given to defendants, the defendants have 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 defendants have taken the loans and utilized the same and also executed the various loans documents to secure the loans. Further submitted that the claim of the bank has been proved by documentary and oral evidence. Ld. Counsel for the applicant bank further submitted that the defendants have not deposited any amount, after filing of the TA.

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 TA and requested to issue recovery certificate, as claimed for, in TA.

7- It has been established that defendants are living and carrying on their 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. 20 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 27.12.2012 & 31.03.2013, whereas the present application has been filed on 29.11.2013. Even, it is counted for the purpose of Limitation, then it is established that the applicant bank has filed the case within the limitation DRT, ALLAHABAD7TA 63 of 2018 [J]

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 Anil Kumar Srivastava, Senior Branch Manager 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 defendants have applied for loans and the bank had sanctioned the loans and to secure the loans and for repayment of loans amount with interests etc., the defendants have executed various loans 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 defendants were 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. Defendants have 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 defendants and facilities were availed by the defendants 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. 45,08,564/- with cost and further interest @ 3.25% above base rate @ 13.50% in truck Loan and @ 3.00% above base rate current applicable rate being 13.25% per annum with monthly rest plus penal interest @ 2% per annum in Term Loan and Car Loan respectively from the date of filing of OA till realization.

DRT, ALLAHABAD8TA 63 of 2018 [J]

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 is proved that the applicant has charged interest against defendants in terms of documents and as per directives of R B I, but keeping the facts and circumstances of the case in mind, the defendants deserve some leniency in the rate of interest.

16- None of the defendants appeared 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 defendants have 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 Jaggers 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 with interest, from defendants, jointly and severally **Rs. 45,08,564/-** alongwith pendentelite and future interest @ 9% simple per annum from the date of filing of OA i.e. 29.11.2013 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 exparte and debt is determined with costs against the defendants and it is, hereby, ordered that the applicant bank is entitled to receive its debts with interest, from defendants, jointly and severally, amounting to **Rs. 45,08,564/-** alongwith pendentelite and future interest @ 9% simple per annum from the date of filing of OA i.e. 29.11.2013 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 Defendants in execution proceedings*. *The amount, if any, already recovered by sale of any hypothecated assets*

9TA 63 of 2018 [J]DRT, ALLAHABAD

/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 Defendants jointly or severally. The cost of litigation be also borne by the Defendants.

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

In case, any of the Defendants expire, 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 defendants.

Parties are directed to appear before the Recovery Officer, DRT, Allahabad on 11.04.2023. The order be communicated accordingly.

Judgment signed, sealed, dated and pronounced in the open court on this 01^st Day of February, 2023.

Dictated & Corrected by me.

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

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

SS