ORIENTAL BANK OF COMMERCE vs KRISHNA PAL SINGH on 19 October 2022

1. 1. Dr. Krishan Pal Singh, S/o Late Shri Padam Singh (deceased) (Died on 16.12.2006) leaving behind the following Legal Heirs. 1/1 Smt. Pushplata Singh, W/o Late Shri Krishan Pal Singh 1/2 Shri Pushpendra Singh, S/o Late Shri Krishan Pal Singh 1/3 Shri Satish, S/o Late Shri Krishan Pal Singh 1/4 Shri Rahul, S/o Late Shri Krishan Pal Singh 1/5 Smt. Vineeta, D/o Late Shri Krishan Pal Singh, All Legal Heirs of Late Dr. Krishan Pal Singh, S/o Shri Padam Singh, R/o Deo Nagar, Gali No. 4, Firozabad (U.P.).

2. 2. Sh. Ram Kishan Yadav, S/o Bhola Singh, R/o Thekawai Gali, Himayupur, Firozabad (U.P.).

.....Defendants.

Present:

**For the Applicant**

: Shri P. N. Dixit, Advocate

**For the Defendants**

: None

**Dated : 19.10.2022****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) on 03.07.2009 before DRT, Lucknow, against the defendants to recover its debts from defendants of Rs. 17,62,310/- alongwith future and pendentelite interest @ 13.5% and 12.5% per annum with compounded monthly rests respectively along with panel interest @ 2% per annum from 01.06.2009 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, the present OA bearing No. 251/2009 was transferred from DRT, Lucknow to DRT, Allahabad.

2- The T. A. 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-</

(40 of 1980) having its office at Harsha Bhawan, E-Block, Connaught Place, New Delhi and one of the Regional Office situated at 'Ispat Bhawan' IInd Floor, 85/4, Sanjay Place Agra, having amongst other Branches, and one Branch Office situated at 57, Agra Gate, Firozabad.

The facts of the case as contained in its original application are that on 26.02.2002 Dr. Krishan Pal Singh (since deceased) approached to the applicant Bank and submitted a Term Loan application for a sum of Rs. 1,82,000/- for the purpose of purchase of X-Ray Machine and accordingly the applicant Bank sanctioned the same on 18.04.2002 whereupon, Late Dr. Krishan Pal Singh signed and executed an agreement of Term Loan on 18.04.2002. The deceased borrower also handed over a letter agreeing thereby, to deposit the title deed of his owned property to create equitable mortgage. Thereafter, deceased Dr. Krishan Pal Singh submitted an application for individual housing loan application form on 23.09.2002 and the defendant no. 2 stood as guarantor to the aforesaid housing loan to the tune of Rs. 9,98,000/- obtained by the deceased Dr. K. P. Singh which was sanctioned by the applicant Bank on 26.09.2002 and was initially disbursed on 01.10.2002. Upon which on 26.09.2002, the deceased borrower signed and executed the (i) irrevocable power of attorney (ii) undertaking (iii) Agreement of term loan for immovable property (iv) Agreement of Guarantee. The deceased borrower also submitted Balance security confirmation letter on 28.02.2005. The deceased defendant Dr. K. P. Singh wrote letter dated 17.02.2006 showing his inability to make the payment as per the schedule fixed for the repayment of the loan accounts and requested for recalling the notice under section 13(2) dated 21.01.2006 sent by the applicant Bank. Thereafter, Dr. Krishan Pal Singh expired on 16.12.2006 leaving behind his widow, 3 sons and 2 daughters as Legal heirs and successors and accordingly, the applicant Bank has arrayed the legal heirs of Late borrower Dr. Krishan Pal Singh.

3. The defendants availed the said 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 defendants became irregular and sticky and were declared NPA on 30.06.2005. The applicant Bank sent Legal/ demand notice on 21.01.2006 and 03.03.2008 to the defendants but despite receipt of the same, the defendants failed to liquidate bank's dues. All these acts and conduct on the part of the defendants are contrary to the terms and conditions of the documents signed and executed by defendants. Accordingly the applicant bank has moved this T.A. to recover public money.

The total outstanding due in both the accounts comes to Rs. 17,62,310/- 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 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 24.02.2020 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 24.02.2020 summons/notices were sent to the defendants, but the defendants have not appeared.

Despite the registered summons/notices, 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 21.09.2022.

5- To prove its case, the applicant Bank has referred attested copies of various documents before this Tribunal on 05.08.2022. The applicant bank has also given evidence on affidavit by way of affidavit of Shri Kailash Chandra Gupta, Branch Manager 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>Authorization letter</td> <td>19.06.2009</td> <td>----</td> <td>--Bank--</td> <td>A- 1</td> </tr> <tr> <td>2</td> <td>Loan Application Form</td> <td>26.02.2002</td> <td>1.82</td> <td>Dr. Krishan Pal Singh</td> <td>A- 2</td> </tr> <tr> <td>3</td> <td>Notarized Affidavit of deceased borrower</td> <td>19.03.2002</td> <td>----</td> <td>Dr. Krishan Pal Singh</td> <td>A- 3</td> </tr> <tr> <td>4</td> <td>Agreement of Term Loan DOC-5</td> <td>18.04.2002</td> <td>1.82</td> <td>Dr. Krishan Pal Singh</td> <td>A- 4</td> </tr> <tr> <td>5</td> <td>Letter regarding confirmation of equitable mortgage</td> <td>19.04.2002</td> <td>1.82</td> <td>Dr. Krishan Pal Singh</td> <td>A- 5 to A - 10</td> </tr> <tr> <td>6</td> <td>Equitable mortgage Register</td> <td>18.04.2002</td> <td>1.82</td> <td>Dr. Krishan Pal Singh</td> <td>A- 11</td> </tr> <tr> <td>7</td> <td>Sale Deed</td> <td>06.02.2089</td> <td>....</td> <td>....</td> <td>A-12</td> </tr> <tr> <td>8</td> <td>Transfer Voucher</td> <td>18.04.2002</td> <td>1.82</td> <td>Bank</td> <td>A-13</td> </tr> <tr> <td>9</td> <td>Individual Housing Loan Application Form</td> <td>23.09.2002</td> <td>11.12</td> <td>Dr. Krishan Pal Singh</td> <td>A-14&amp; A-15</td> </tr> <tr> <td>10</td> <td>Notarized Affidavit of deceased borrower</td> <td>17.09.2002</td> <td></td> <td>Dr. Krishan Pal Singh</td> <td>A-16</td> </tr> <tr> <td>11</td> <td>Power of Attorney of deceased borrower</td> <td>26.09.2002</td> <td></td> <td>Dr. Krishan Pal Singh</td> <td>A-17</td> </tr> </tbody></table>

<table border="1"> <tr> <td>15</td> <td>Agreement of Guarantee</td> <td>26.09.2002</td> <td>9.98</td> <td>Def. No. 2</td> <td>A-21</td> </tr> <tr> <td>16</td> <td>Letter of deceased borrower expressing consent for creation of the Equitable mortgage</td> <td>28.09.2002</td> <td>9.98</td> <td>Dr. Krishan Pal Singh</td> <td>A-22 to A-27</td> </tr> <tr> <td>17</td> <td>Equitable mortgage Register</td> <td>26.09.2002</td> <td>9.98</td> <td>----Bank----</td> <td>A-28</td> </tr> <tr> <td>18</td> <td>Sale Deed</td> <td>02.09.2002</td>

<td>----</td> <td>A-29</td> </tr> <tr> <td>19</td> <td>Balance &amp; Security Confirmation DOC-20</td> <td>28.02.2005</td> <td>11.76</td> <td>Dr. Krishan Pal Singh</td> <td>A-30</td> </tr> <tr> <td>20</td> <td>Balance &amp; Security Confirmation DOC-20</td> <td>04.07.2006</td> <td>1319684</td> <td>Dr. Krishan Pal Singh</td> <td>A-31</td> </tr> <tr> <td>21</td> <td>Letter of deceased borrower acknowledging the receipt of the notice U/s 13 (2) of the SARFAESI Act, 2002</td> <td>17.03.2006</td> <td>----</td> <td>Dr. Krishan Pal Singh</td> <td>A-32</td> </tr> <tr> <td>22</td> <td>Letter of Smt. Pushplata Singh &amp; Smt. Girija Sharma protesting the Physical possession in pursuant to notice U/s 13 (4) of the SARFAESI Act, 2002</td> <td>29.03.2006</td> <td>----</td> <td>-----</td> <td>A-33</td> </tr> <tr> <td>23</td> <td>Death Certificate of deceased borrower Dr. K. P. Singh</td> <td>20.02.2007</td> <td>----</td> <td>-----</td> <td>A-34</td> </tr> <tr> <td>24</td> <td>Legal Notice</td> <td>03.03.2008</td> <td>12.60</td> <td>-----</td> <td>A-35</td> </tr> <tr> <td>25</td> <td>Reply of the Legal Notice sent on behalf of the Bank</td> <td>18.04.2008</td> <td>9.98</td> <td>----</td> <td>A-36</td> </tr> <tr> <td>26</td> <td>Statement of Account of the First Term Loan obtained by the deceased borrower</td> <td>02.07.2009</td>

<td>A-37</td> </tr> <tr> <td>27</td> <td>Statement of Account of Housing Term Loan Account</td> <td>02.07.2009</td> <td>----</td> <td>-----</td> <td>A-38</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 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 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 does not exceed to 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 30.06.2005, whereas the present application has been filed on 03.07.2009. 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 Kailash Chandra Gupta, 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 loan and the bank had sanctioned the loan and to secure the loan and for repayment of loan amount with interests etc., the defendants have 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 defendants were proceeded exparte, all contentions raised and documents produced by plaintiff remained unrebutted 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. 17,62,310/- alongwith future and pendentelite interest @ 13.5% & 12.5% per annum with monthly rest from 01.06.2009 with costs 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 defendants in terms of documents and as per directives of R B I.

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 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 defendants, jointly and severally of Rs. 17,62,310/- alongwith future and pendentelite interest @ 8.50% simple per annum from 01.06.2009 with costs 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 ex-parte and debt is determined with costs against the defendants and it is, hereby, ordered that the applicant bank is entitled to receive its debts from defendants, jointly and severally, it's debts with interest, amounting to Rs. 17,62,310/- alongwith future and pendentelite interest @ 8.50% simple per annum from 01.06.2009 with costs 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 /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 21.12.2022. The order be communicated accordingly.

Judgment signed, sealed, dated and pronounced in the open court on this 19^th Day of October, 2022.

Dictated & Corrected by me.

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

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

VK