BANK OF BARODA vs AWADH KUMAR SHUKLA, on 2 February 2023

1DRT, ALLAHABADTA 46 of 2019 [J]**Debts Recovery Tribunal, Allahabad,**

9/2A, Panna Lal Road Allahabad

Presiding Officer : **Shri R. M. Kushawaha****TA Case No. : 46 OF 2019**

Bank of Baroda, a body Corporate constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970, having its Head Office at Mandvi, Baroda, in the State of Gujrat, and amongst other places & branch office a branch office at Dharmganj, Post-Palia Pratap Shah, District-Faizabad through its Chief Manager & Constituted Attorney Holder of Bank of Baroda Shri Arun Kumar Shukla, aged about 58 years, S/o Late Krishna Bihari Shukla, posted at, Bank of Baroda, Branch-Niyawan, District Faizabad.

.....Applicant -Bank

Vs.

Awadh Kumar Shukla, S/o Shri Shiv Baran Shukla, R/o Vill. Vishunpur, post Deeh, District-Sultanpur.

.....Defendant

Present:

**For the Applicant**

: Shri Ajal Krishna, Advocate

**For the Defendant**

: None

**Dated : 02.02.2023****JUDGMENT**

1- The Applicant bank had preferred this original 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) before the DRT, Lucknow on 15.12.2014 and subsequently on account of change in territorial jurisdiction and pursuant to the notification No. 454(E), dated 15.02.2017 of the Ministry of Finance, Govt. of India, this case was transferred to this Tribunal on 19.05.2018. The present TA has been preferred by the applicant Bank against the defendant to recover its debts of Rs. 19,42,236.00 alongwith future and pendentelite interest @ 14% per annum with monthly rests from 01.12.2014 with costs till realization.

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 & Transfer of Undertakings) Act, 1970, having its Head Office at Mandvi, Baroda, in the State of Gujrat, and amongst other places & branch office a branch office at Dharmganj, Post-Palia Pratap Shah, District-Faizabad through its Chief Manager & Constituted Attorney Holder of Bank of Baroda Shri Arun Kumar Shukla.

The facts of the case as contained in its original application are that the defendant being borrower approached the applicant Bank and applied for Term (Truck) Loan Facility for the limit of Rs. 20.60 lacs for the purpose of purchase of new truck under Credit Guarantee Trust for Medium & Small Enterprises' Scheme.

facility sanctioned by the applicant Bank, the defendant has furnished the Form No. 135, particulars to be supplied by the applicant/guarantor for advances. In order to further secure the above facility, the defendant has executed the following documents:-

- (i) LDOC 2; D. P. Note for Individuals, dated 22.06.2011.

- (ii) LDOC 57; Letter of installment with acceleration clause dated 22.06.2011.

- (iii) LDOC 20; Instrument of Hypothecation of Vehicle dated 22.06.2011.

- (iv) LDOC 72; Letter of Authority to make payment directly to the dealers dated 22.06.2011.

The defendant has further executed the LDOC 134; Draft undertaking dated 22.06.2011 to secure the aforesaid sanction limit. By availing the aforesaid sanctioned limit, the defendant has purchased the Vehicle/Truck having Reg. No. UP 42 AT 0429 Engine No. WBH689118, Chassis No. MB1KADYCOBAWC9528 which is ensured with the National Insurance Company. The defendant has also executed the LDOC No. 59; Letter of Acknowledgement of Debt, dated 08.03.2011 whereby he has acknowledged his liabilities.

The defendant availed the said Term (Truck) Loan facility 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 account of the defendant became irregular and sticky and was declared NPA on 30.04.2014. The applicant Bank sent Legal dated 12.09.2014 and Demand Notice dated 06.09.2014 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 them. Accordingly the applicant bank has moved this T.A. to recover public money.

The total outstanding due in both the accounts comes to Rs. 19,42,236/- inclusive of interests which has been claimed by means of present T.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 07.08.2019, 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 07.08.2019, 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 25.11.2022 in "Hindustan", newspaper.

Despite the registered summon/notice 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 his case, but he failed to appear and to file WS, hence, the Tribunal has passed an order to proceed exparte against the defendant on 09.01.2023.

5- To prove its case, the applicant Bank has referred attested copies of various documents before this Tribunal on 15.12.2014. The applicant bank has also given evidence by way of affidavit of Shri Arun Kumar Shukla, Authorized Officer/Power of Attorney Holder 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>Power of Attorney</td> <td>12.03.2014</td> <td>--</td> <td>---Bank---</td> <td>A- 1</td> </tr> <tr> <td>2</td> <td>Application Form submitted by the defendant</td> <td>--</td> <td>20.60</td> <td>Defendant</td> <td>A- 2</td> </tr> <tr> <td>3</td> <td>Sanction letter</td> <td>30.05.2011</td> <td>20.60</td> <td>Defendant</td> <td>A- 3</td> </tr> <tr> <td>4</td> <td>Form No. 135, particulars to be supplied by the applicant/Guarantor For Advance</td> <td>--</td> <td>--</td> <td>Defendant</td> <td>A- 4</td> </tr> <tr> <td>5</td> <td>LDOC 2, D. P. Note For Individual</td> <td>22.06.2011</td> <td>--</td> <td>Defendant</td> <td>A- 5</td> </tr> <tr> <td>6</td> <td>LDOC 57; Letter of installment with acceleration clause dated 22.06.2011</td> <td>22.06.2011</td> <td>20.60</td> <td>Defendant</td> <td>A- 6</td> </tr> <tr> <td>7</td> <td>LDOC 20; Instrument of Hypothecation of Vehicle dated 22.06.2011</td> <td>22.06.2011</td> <td>20.60</td> <td>Defendant</td> <td>A- 7</td> </tr> <tr> <td>8</td> <td>LDOC 72; Letter of Authority to make payment directly to the dealers dated 22.06.2011</td> <td>22.06.2011</td> <td>20.60</td> <td>Defendant</td> <td>A-8</td> </tr> <tr> <td>9</td> <td>LDOC 134; Draft undertaking dated 22.06.2011</td> <td>22.06.2011</td> <td>----</td> <td>Defendant</td> <td>A-9</td> </tr> <tr> <td>10</td> <td>Form of Certificate of Registration</td> <td>11.06.2011</td> <td>--</td> <td>--</td> <td>A-10</td> </tr> <tr> <td>11</td> <td>Cover Note of the Insurance Policy</td> <td>--</td> <td>--</td> <td>--</td> <td>A-11</td> </tr> <tr> <td>12</td> <td>LDOC 59, Letter of Acknowledgement of debt</td> <td>03.10.2013</td> <td>20.60</td> <td>Defendant</td> <td>A-12</td> </tr> <tr> <td>13</td> <td>Legal Notice</td> <td>12.09.2014</td> <td>1483967.11</td> <td>---</td> <td>A-13</td> </tr> <tr> <td>14</td> <td>Demand Notice</td> <td>06.09.2014</td> <td>3098496.14</td> <td>--</td> <td>A-14</td> </tr> <tr> <td>15</td> <td>Copy of the relevant ledger duly certified in terms of section 4 of the Banker's Books Evidence Act, 1891.</td> <td>---&lt;/</td></tr></tbody></table>

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 further submitted that the defendant has 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 defendant is living and carrying on his 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 30.04.2014, whereas the present application has been filed on 15.12.2014. 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 Arun Kumar Shukla, Authorized Officer/Power of Attorney Holder 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.

5TA 46 of 2019 [J]DRT, ALLAHABAD

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 facility was 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. 19,42,236/- with cost and further interest @ 14% per annum with monthly rests from 01.12.2014 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 is proved that the applicant has charged interest against defendant in terms of documents and as per directives of R B I, but keeping the facts and circumstances of the case in mind, the defendant deserve some leniency in the rate of interest.

16- The defendant did not 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, jointly and severally Rs. 19,42,236/- alongwith pendentelite and future interest @ 9% simple from 15.12.2014 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 defendant and it is, hereby, ordered that the applicant bank is entitled to receive its debts from defendant, jointly and severally, it's debts with interest, amounting to Rs. 19,42,236/- alongwith pendentelite and future interest @ 9% simple from 15.12.2014 till realization of the entire sum due and recoverable with costs.

6DRT, ALLAHABADTA 46 of 2019 [J]

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 jointly or severally. 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 their other immovable/movable properties/estates without first paying the above claim of Applicant Bank/Certificate Holder.

In case, the Defendant expired, 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.

Parties are directed to appear before the Recovery Officer, DRT, Allahabad on 05.04.2023. The order be communicated accordingly.

Judgment signed, sealed, dated and pronounced in the open court on this 2^nd 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

VK