UNION BANK OF INDIA vs M S PAL NURSERY on 24 April 2024

1. 1. **M/s Pal Nursery**, Proprietor: Sri Abhijit Pal, having its principal place of business at Village – Makhalia, P.O.- Bakrahat, P.S.- Bishnupur, Dist.- South 24-Parganas, Pin – 743377, West Bengal.

2. 2. **Sri Abhijit Pal**, Proprietor of M/s Pal Nursery, Son of Sri Pradyut Kumar Pal, having its residence at Village – Makhalia, P.O.- Bakrahat, P.S.- Bishnupur, Dist.- South 24-Parganas, Pin – 743377, West Bengal.

3. 3. **Srri Sanjay Kumar Pal**, having its residence at Village – Makhalia, P.O.- Bakrahat, P.S.- Bishnupur, Dist.- South 24-Parganas, Pin – 743377, West Bengal.

..... Defendants

Counsel for parties:

For the Applicant Bank : Ms. Smruti Rekha Mishra, Ld. Advocate For the Defendants : *Ex-Parte***FINAL ORDER / JUDGMENT**

Delivered on 24.04.2024

Applicant (Union Bank of India), erstwhile Corporation Bank instituted the present Application being the Original Application No.362 of 2018 filed in DRT-3, Kolkata on 14.05.2018 against three Defendants under Section 19(1) of the Recovery of Debts & Bankruptcy Act, 1993 (amended from time to time) for recovery of Rs.15,03,959.00 (Rupees fifteen lacs three thousand nine hundred fifty nine) as on 31.03.2018 along with interest @ 10.55% per annum, till realization of the entire due in full. Subsequently, the instant case has been transferred to DRT-2, Kolkata vide the Hon'ble Chairperson DRAT, Kolkata's direction vide letter No.4/6/DRAT/KOL/2018(pt.) dated 16.09.2019, such has been recorded vide Ld. Registrar, Kolkata DRT-3's Order dated 21.10.2019 and the same has been renumbered as T.A./ 80 of 2020 vide Ld. Registrar's order dated 05.11.2019.

2. Corporation Bank has been merged / amalgamated into Union Bank of India vide Gazette Notification dated March 04, 2020, issued by the Government of India published under Extraordinary Part-II, Section 3, sub-section (i) in the Gazette of India in terms of Section 9 of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970. In view of the merger / amalgamation of Corporation Bank into Union Bank of India, the Applicant Name in this case should be read / inserted as Union Bank of India instead of Corporation Bank.

3. In accordance with the Notice dated 30.07.2020 of this Tribunal, Ld. Advocate for Union Bank of India has filed a Memo praying for amendment of Cause Title in view of amalgamation of Corporation Bank with Union Bank of India vide G.O.I. Notification dated 04.03.2020; and in accordance with the direction of the Tribunal necessary amendment in cause title has been carried out by Ld. Advocate of the Applicant Bank on 09.10.2020, such has been recorded in Ld. Registrar's order dated 09.10.2020.

4. The brief facts of the case as set out by the Applicant Bank in its Original Application, as under:

(i) The Defendant No.1, M/s Pal Nursery, Proprietor: Sri Abhijit Pal and the defendant No.2, proprietor of defendant No.1 executed all the banking documents as a borrower and the defendant No.3 executed all the banking documents as a guarantor. At the request of defendant No. 2 being the proprietor of defendant No.1 vide an application dated 10.10.2013 applied the applicant Bank for financial assistance; upon consideration of loan application, applicant Bank was pleased to grant / sanction a Agricultural Cash Credit limit of Rs.10,00,000/- (Rupees ten lacs) in favour of the defendants No.1 & 2 against the hypothecation of entire stock and book debts and equitable mortgage of immovable property(s) as a collateral security, vide sanction letter dated 10.10.2013, copies of loan application and sanction letter are annexed and marked as Annexure 'A-1' & 'A-2' respectively.

(ii) In consideration of the aforesaid cash credit facility of Rs.10.00 lakhs availed by Defendants No.1 & 2, the defendants executed the following security documents in favour of applicant Bank all dated 10.10.2013

- (a) Letter of Proprietorship;

- (b) Request for Overdraft facility;

- (c) Letter of undertaking / declaration from borrower(s);

- (d) Deed of hypothecation agreement;

- (e) Agreement of hypothecated Crop;

- (f) Demand Promissory Note;

- (g) D.P. Note;

- (h) Letter of Defendant No.1.

Copies of said documents are annexed and marked as Annexure 'A-3' to 'A-10' respectively.

(iii) In consideration of the aforesaid credit facility granted, the defendants No.1, 2 & 3 duly guaranteed for due repayment of all sums that would become due and payable by M/s Pal Nursery and executed and delivered a Guarantee Agreement dated 10.10.2013 and declared that the said guarantee would be a continuing guarantee. Copy of Guarantee Agreement is annexed and marked as Annexure 'A-11'. For further security, he defendant No.2 being the proprietor of defendant No.1 created equitable mortgage in respect of his immovable property (described in Schedule 'X-1' & 'X-2' at page 26 of the O.A.) by depositing title deeds being No.6017 for the year 2012 and No.5800 for the year 2012 with the applicant Bank and stand in the name of Sri Abhijit Pal; copy of Deeds being No.6017 and No.5800 are annexed and marked as Annexure 'A-12' & 'A-13'. Further, the defendant No.1 confirmed the creation of equitable mortgage of immovable property by executed and confirmed vide Memorandum of Deposit of Title Deeds dated 10.10.2013; copies of said Memorandum of deposit of Title Deeds is annexed and marked as Annexure 'A-14'.

(iv) Applicant Bank got valued the mortgaged secured property through its empanelled valuer and the valuer submitted its valuation report to the applicant bank; copy of said valuation report is annexed and marked as Annexure 'A-15'.

(v) In consideration of said cash credit facility, the defendant No.1 (proprietorship business of defendant No.2) and for the purpose of securing repayment of debit balance, the defendants executed and delivered two 'Acknowledgement of Debt / Liability" dated 10.19.2014 and 09.09.2017 in favour of applicant Bank; copies of the same are annexed and marked as Annexure 'A-16 & 'A-17 respectively.

5. The Defendants enjoyed the aforementioned cash credit facility by opening Account in Defendant No.1's name (M/s Pal Nursery) in Applicant Bank's Amtala Branch, P.O.- Kanya Nagar, South 24-Parganas. However, the defendants failed and neglected to abide by the terms and conditions of the term loan facility. The Defendants did not repay the outstanding Bank's dues and overdue interests in the loan Account. Inspite of repeated requests and personal contact made by the Applicant Bank, the defendants failed to regularize the loan Account. Since the defendants did not pay any attention to regularize the Account, the Account became out of order and was classified as N.P.A. on 07.04.2017. Thereafter, the applicant Bank issued a re-call / demand notice dated 05.05.2018 through its Advocate demanding to repay the outstanding Bank's dues, but the defendants did not comply the said notice; copy of notice is annexed and marked as Annexure 'A-18'. Certified copies of Statement of Accounts along with Certificate under Bankers' Books Evidence Act, with Statement of Claim, have been filed to show and prove the dues (Annexure 'A-19'), and future interest @ 10.55% per annum, from 01.04.2018. till realization of the entire due in full, has been prayed. Applicant Bank submitted that their claim in the Application is within limitation.

6. The notices / summons were sent to the Defendants No.1, 2 & 3 by the Tribunal; service of Notices / summons upon all the Defendants has been successfully completed, such has been recorded vide Ld. Registrar's order dated 03.01.2023. Despite service, the defendants did not appear nor filed the written statement; thus, all the defendants were ordered to be proceeded *ex-parte* vide order dated 21.03.2024. Ld. Counsel for Applicant Bank praying for amendment of Cause Title in view of amalgamation of Corporation Bank with Union Bank of India vide G.O.I. Notification dated 04.03.2020; and in accordance with the direction of the Tribunal necessary amendment in cause title has been carried out by Ld. Counsel for Applicant

Bank on 09.10.2020, such has been recorded in Ld. Registrar's order dated 09.10.2020. An I.A. being I.A./363 of 2022 along with put-up I.A./362 of 2022 dated 08.03.2022 has been filed by the applicant Bank praying to allow for verification of original documents. It is observed vide order dated 15.03.2022 that applicant Bank has produced the original documents for verification of evidence, and the same has been completed on behalf of applicant Bank on 15.03.2022; thus both the I.A. petitions being I.A./363 of 2022 along with put-up I.A./362 of 2022 are disposed of accordingly. Ld. Counsel of the applicant Bank submitted arguments on 21.03.2024.

7. Applicant Bank has filed the evidence-on-affidavit affirmed by Shyamalendu Sarkar, Branch Manager of Applicant Bank's Amtala Branch, N.D. Road, P.O.- Kannya Nagar, south 24-Parganas, Pin – 743503 along with the copy of original documents executed by the Defendants. Original documents have been produced by the Applicant Bank; the same have been verified with copies of the documents annexed with O.A. and after verification the original documents have been returned to Sri Naqui Imam, Sr. Manager (Law) of Applicant Bank on 15.03.2022, such has been recorded in Ld. Registrar's order dated 15.03.2022. The documents produced by the Applicant Bank are exhibited and annexed at 'A-1' to 'A-19'.

I have heard the Ld. Advocate for the Applicant Bank and perused the records.

8. Evidence-on-Affidavit, filed by the Applicant Bank is supported by copies of the documents (Original documents verified by the Registry and returned to Sri Naqui Imam, Sr. Manager (Law) of Applicant Bank on 15.03.2022). Applicant Bank has corroborated the averments made in the O.A. Applicant Bank has proved the sanction of Agricultural cash credit limit of Rs.10.00 lakhs. Applicant Bank has proved the creation of equitable mortgage of immovable property(s).

9. Evidence-on-affidavit, filed by Applicant Bank, has remained unchallenged, un-rebutted and its veracity cannot be put to dispute. Applicant Bank has proved the averments made in the O.A.

10. Applicant Bank has stated that the outstanding debit balance in the Account (inclusive of accrued interest and other charges as calculated upto 31.03.2018) is **Rs.15,03,959.00** (Rupees fifteen lacs three thousand nine hundred fifty nine) as on 31.03.2018, which is the amount claimed by the applicant Bank in the original Application, and the defendants No.1, 2 & 3 are liable to pay, jointly and/or severally, the said amount to the applicant Bank with *pendente lite* and future interest, till realization of the entire due in full. I allow the claim as made by the applicant Bank in the original Application. Applicant Bank has prayed future interest @ 10.55% per annum, while in sanction letter and Demand Promissory Note dated 10.10.2013 the rate of interest @ 10.85% per annum has been mentioned. Therefore, in my view, the *pendente lite* & future rate of interest which has been claimed by applicant Bank in O.A., i.e. @ 10.55% per annum, from 01.04.2018, is allowed.

11. On the point of limitation, Loan has been sanctioned on 10.10.2013; documents have been executed on 10.10.2013; original Application has been filed on 14.05.2018. The defendants executed and delivered the 'Acknowledgement of Debt/ Liability' dated 09.09.2017 in favour of applicant Bank confirming the outstanding balance in loan account. As such, the original Application appears to have been filed well within the period of limitation.

12. The matter also falls within the territorial as well as pecuniary jurisdiction of this Tribunal. The Applicant, Bank has proved to claim made in the O.A./T.A. The T.A. being T.A./80 of 2020 (arising out of O.A./362 of 2018) deserves to be allowed; hence allowed.

13. In view of the above, I pass the following order :-

ORDER

(i) T.A./80 of 2020 (arising out of O.A./362 of 2018), filed by the Applicant Bank, is allowed and debt is determined with cost against the Defendants No.1, 2 & 3. It is hereby ordered that the Defendants No.1, 2 & 3 are hereby directed to pay, jointly and / or severally the total debt amount of **Rs.15,03,959.00** (Rupees fifteen lacs three thousand nine hundred fifty nine) due and payable, inclusive of interest and other charges as calculated upto 31.03.2018; and interest for the period *pendente lite* and future rate, i.e. @ 10.55% per annum, from 01.04.2018, till realization of the entire sum due and recoverable.

(ii) Amount, if any, paid by the Defendants in the loan account or amount, if any, recovered by the Applicant Bank after filing of the Original Application, the same may be taken into account while arriving at the exact amount of dues/debt payable by the Defendants No.1, 2 & 3. Accordingly, the *pendente lite* and future interest shall be calculated on the reduced amount.

(iii) The defendants No.1, 2 & 3 are debarred from transferring, alienating, encumbering or disposing of the mortgage immovable property(s); described in 'Schedule – X-1' & 'X-2' at page 26 of the original Application, are as under –

"ALL THAT total both the land measuring 109 decimals at Bishnupur, Post Office – Bakrahat, L.R. No.645,486/646/737,647/736, L.R. Khatian No.412, Mouza – Jhikuberia, R.S. No.59, J.L. No.9, Touzi No.107, Pargana – Magura, ADSRO – Bishnupur, District – South 24-Parganas, Municipality – Bakrahat Gram Panchayat and total both the land 109 decimal land recorded as Book-I, Volume Number – 17, Pages – 1773 to 1791, Being No.6017 for the year 2012 and further in Block –I, volume Number – 16, Pages – 4347 to 4359, Being No.5800 for the year 2012 and stand in the name of Sri Abhijit Pal, Son of Sri Pradyut Kumar Pal."

The Defendants No.1, 2 & 3 are also debarred from transferring, alienating, encumbering or disposing any other property(s) either movable or immovable and assets belonging to them till the aforesaid adjudicated debt amount are recovered from the Defendants.

(iv) The defendants No.1, 2 & 3 are given a time of thirty days from the date of this Final Order / Judgment for repayment of the above mentioned dues, so intimated to them. In case the Defendants fail to pay the dues within the above mentioned time, the Applicant Bank is entitled to recover its dues by sale of secured properties, as aforesaid. Applicant Bank is also entitled to proceed against personal properties of the Defendants No.2 & 3 both moveable and immovable and also proceed against the Defendants personally to recover the dues, in accordance with law.

(v) Let the Certificate of Recovery be drawn up by Ld. Registrar forthwith in terms of Final Order / Judgment for issuance of the same against the Defendants No.1, 2 & 3 in favour of Applicant Bank under Section 19(22) of the Recovery of Debts and Bankruptcy Act, 1993 (amended from time to time) and put up the same for signature for issuance.

(vi) Ld. Recovery Officer shall realize the amount as per the Recovery Certificate from the Defendants No.1, 2 & 3, in accordance with law.

(vii) Ld. Registrar of this Tribunal is directed to place Recovery Certificate in terms of this Final Order / Judgment under section 19(22) of the Act of 1993.

**Accordingly, the Original Application, being T.A./80 of 2020 (arising out of O.A./362 of 2018) is allowed and stands disposed of.**

This order is dictated and corrected by the undersigned and pronounced on this the 24^th day of April, 2024.

Copy of the Final Order / Judgment be uploaded in the Tribunal's Website.

(Arbind Madhav) Presiding Officer DRT-2, Kolkata

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