BANK OF BARODA vs CHAUDHARI MAN SINGH, on 22 July 2022

**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 (here-in-after referred to as Act) on 15.06.2015, against the defendant to recover **Rs.18,90,494/- (Rs. Eighteen lac ninety thousand four hundred ninety four only)** alongwith pendentelite and future interest @ 2.75% over base rate of the bank as sanction which was applicable at that time @ 13.25% per annum with monthly rest from 28.05.2015 till realization. Subsequently, the case record of the present has been transferred to this Tribunal in view of Notification of Govt. of India, Ministry of Finance dated 15.02.2017 thus the case has been re-numbered as TA 153 of 2018.

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

2DRT, ALLAHABADOA of |J|T.A. 153/2018

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 Undertaking) Act 1970, having its Head Office at Mandvi, Baroda, State of Gujrat and Branch office amongst the other places one of its branch known as Main Branch, 13-M.G. Road, Agra which has under the Administrative Control of a Regional Office at Sanjai Place Agra.

The brief history of the case as gathered from the Original Application are that the defendant, approached the applicant bank for grant of financial assistance in the shape of Car Loan. The applicant bank considered the request of the defendant and sanctioned a Car Loan of Rs. 11.20 lac together with interest vide its sanction letter dated 07.11.2012. The said credit facility was repayable in monthly instalments together with interest thereon @ 2.75% over base rate of the bank as sanction which was applicable at that time @ 13.25% per annum with monthly rest for both accounts commencing from December, 2012.

Upon sanctioning of the said credit facilities, the defendant signed and executed bank's security documents on 08.11.2012 in favour of the applicant bank.

At further request of the defendant, the Applicant Bank sanction a Vehicle Loan of Rs. 11.50 lac vide its sanction dated 28.02.2013 and inconsideration thereof the defendant executed and signed various security and loan documents on 28.02.2013 in favour of the Applicant Bank.

In order to secure the said credit facilities, the defendant created charge of hypothecation of entire vehicles in favour of the Applicant Bank.

It is further submitted that the applicant bank had disbursed the loans amount in favour of defendant. It is further submitted that the defendant executed and signed various loans documents in favour of the applicant bank on 28.02.2013 and on 08.11.2012. In terms of Agreement it was agreed that the said credit facilities were repayable together with interest at the rate of @ 2.75% over base rate of the bank as sanction which was applicable at that time @ 13.25% per annum with monthly rest thus the rate of interest was agreed @ 2.75% over base rate of the bank as sanction which was applicable at that time @ 13.25% per annum with monthly rest.

The defendant availed the said credit facilities but could not adhere with the terms and conditions of the said advance and failed to deposit the monthly instalment regularly and punctually as agreed. The defendant also failed to comply with the terms and conditions mentioned in guarantee agreement and as such a huge amount have become due against 3DRT, ALLAHABADOA of JJT.A. 153/2018

the defendants. As a result the account became very sticky in operation and became non performing assets on 30.09.2014. However, the defendants signed and executed various loans documents and confirmed the debt.

4. The applicant bank requested the defendant for adjusting the bank's dues but the defendant neither approached the bank nor paid the dues. Thus, the applicant bank sent a Demand Notices dated 08.11,2012, 28.02.2013 and on 05.11.2014 to the defendant by registered post. Despite service of notices, the defendant failed to comply with the terms of the said notices.

5 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.

6. 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 08.10.2018 requiring the defendant to show-cause within 30 days of the service of summon/notice as to why relief prayed for, should not be granted but the defendants did not turn up. Thereafter the notice was published in the daily news paper namely "Dainik Jagran, Agra Edition dated 15.07.2021.

7. Despite the registered summon/notice and publication of notice in the daily news paper, 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 21.09.2021.

8. To prove its case, the applicant Bank has referred attested copies of various documents before this Tribunal with its Original Application on 15.06.2015. The applicant bank also filed Affidavit in Evidence of Shri Rama Shanker Pathak, Constituted Attorney. 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></td> <td></td> <td>Bank</td> <td>1</td> </tr> <tr> <td>2</td> <td>Loan Application</td> <td></td> <td></td> <td>Defendant</td> <td>2</td> </tr> <tr> <td>3</td> <td>Sanction letter</td> <td>07.11.2012</td> <td>11.20</td> <td>Bank</td> <td>3</td> </tr> <tr> <td>4</td> <td>Demand Promissory Note</td> <td>08.11.2012</td> <td>11.20</td> <td>Defendant</td> <td>4</td> </tr> <tr> <td>5</td> <td>Letter of installment</td> <td>08.11.2012</td> <td>11.20</td> <td>Defendant</td> <td>5</td> </tr> <tr> <td>6</td> <td>Instrument of Hypothecation of vehicle</td> <td>08.11.2012</td> <td>11.20</td> <td>Defendant</td> <td>6</td> </tr> <tr> <td>7</td> <td>Letter of authority</td> <td>08.11.2012</td> <td>11.20</td> <td>Defendant</td> <td>7</td> </tr> <tr> <td>8.</td> <td>Letter of undertaking</td> <td>08.11.2012</td> <td>11.20</td> <td>Defendant</td> <td>8</td> </tr> </tbody> </table>

4DRT, ALLAHABADOA of J.T.A. 153/2018

<table border="1"> <tr> <td>9.</td> <td>Irrevocable Power of attorney</td> <td>08.11.2012</td> <td>11.20</td> <td>Defendant</td> <td>9</td> </tr> <tr> <td>10.</td> <td>Declaration cum undertaking</td> <td>08.11.2012</td> <td>11.20</td> <td>Defendant</td> <td>10</td> </tr> <tr> <td>11.</td> <td>Registration certificate</td> <td>08.11.2012</td> <td>11.20</td> <td>Defendant</td> <td>11</td> </tr> <tr> <td>12.</td> <td>Loan Application &amp; Sanction letter</td> <td>28.02.2013</td> <td>11.50</td> <td>Defendant &amp; Bank</td> <td>12 &amp; 13</td> </tr> <tr> <td>13.</td> <td>Demand Promissory note</td> <td>28.02.2013</td> <td>11.50</td> <td>Defendant</td> <td>14</td> </tr> <tr> <td>14.</td> <td>Letter off installments</td> <td>28.02.2013</td> <td>11.50</td> <td>Defendant</td> <td>15</td> </tr> <tr> <td>15.</td> <td>Instrument oif Hypothecation of vehicle</td> <td>28.02.2013</td> <td>11.50</td> <td>Defendant</td> <td>16</td> </tr> <tr> <td>16.</td> <td>Letter of authority</td> <td>28.02.2013</td> <td>11.50</td> <td>Defendant</td> <td>17</td> </tr> <tr> <td>17.</td> <td>Letter of undertaking</td> <td>28.02.2013</td> <td>11.50</td> <td>Defendant</td> <td>18</td> </tr> <tr> <td>18.</td> <td>Irrevocable power of attorney</td> <td>28.02.2013</td> <td>11.50</td> <td>Defendant</td> <td>19</td> </tr> <tr> <td>19.</td> <td>Composite Undertaking cum declaration</td> <td>28.02.2013</td> <td>11.50</td> <td>Defendant</td> <td>20</td> </tr> <tr> <td>21.</td> <td>Draft undertaking</td> <td>28.02.2013</td> <td>11.50</td> <td>Defendant</td> <td>21</td> </tr> <tr> <td>22.</td> <td>Registration certificate</td> <td>28.02.2013</td> <td>11.50</td> <td>Defendant</td> <td>22</td> </tr> <tr> <td>23.</td> <td>Demand Notice and Possession Notice</td> <td>05.11.2014<br/>13.01.2015</td> <td></td> <td>Bank</td> <td>23 &amp; 24</td> </tr> <tr> <td>24.</td> <td>Statement of accounts</td> <td></td> <td></td> <td>Bank</td> <td>25</td> </tr> </table>

9. 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.

10. Ld. Counsel of applicant bank submitted that the defendant has taken the loans and utilized the same and also executed the various loan 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 defendant has not deposited any amount, after filing of the OA.

11. 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.

5DRT, ALLAHABADOA of JJT.A. 153/2018

13. On the issue of Limitation, to prove it, the applicant bank has submitted that the applicant bank has declared that the account as NPA on 30.09.2014 whereas the present application has been filed on 15.06.2015. 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.

14. In the affidavit of Shri Rama Shanker Pathak, Constituted Attorney 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.

15. The documents as stated above reveal that the defendant has applied for the 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 loan documents and hypothecated the entire goods, which strengthen the case of the applicant bank.

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

17. Since, the defendant was proceeded exparte, 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 Accounts, 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.

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

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

20. The applicant bank has sought for recovery of following sum with costs till realization:

(i) **Rs. 8,86,634/- outstanding in Term Loan Account I ; and**

6DRT, ALLAHABADOA of J/T.A. 153/2018

(ii) **Rs. 10,04,160/- outstanding in Term Loan Account** IItogether with interest @ 2.75% over base rate of the bank as sanction which was applicable at that time @ 13.25% per annum with monthly rest from 28.05.2015. (Against defendant).

**Total amounting to Rs.18,90,494/-**

21. Learned Advocate appearing for the 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.

22. 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 deserves some leniency in the rate of interest.

23. 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.

24. 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 loans 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."*

25. In my view, the case of the bank is well proved by evidence of the applicant bank. The applicant bank is entitled to receive **Rs.18,90,494/- (Rs. Eighteen lac ninety thousand four hundred ninety four only)** from the defendant alongwith pendentelite and future interest @10% simple from 28.05.2015 till realization. So the final order may be passed accordingly, to meet the ends of justice.

7DRT, ALLAHABADOA of [J]T.A. 153/2018**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 **Rs.18,90,494/- (Rs. Eighteen lac ninety thousand four hundred ninety four only)** from the defendant alongwith pendentelite and future interest @10% simple from 28.05.2018 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 properties of the Defendant in execution proceedings. The amount, if any, already recovered by sale of hypothecated goods 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 property or his other immovable/movable property/estates without first paying the above claim of Applicant Bank/Certificate Holder.

In case, any of the Defendant 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 defendant.

Parties are directed to appear before the Recovery Officer, DRT, Allahabad on 27.09.2022. The order be communicated accordingly.

Judgment signed, sealed, dated and pronounced in the open court on this. 22^nd Day of July, 2022.

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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