UCO BANK vs SRI SUNIL KUMAR KHERIA on 1 May 2024

Page No.

KOLKATA DEBTS RECOVERY TRIBUNAL NO. 2

ORDER SHEET

(Continuation)

TA/487 of 2020 (OA/960 of 2018)

UCO Bank

Case No. \_\_\_\_\_

Vs

Sri Sunil Kumar Kheria

<table border="1"> <thead> <tr> <th data-bbox="104 193 181 258">Date of Order</th> <th data-bbox="181 193 752 258">Order with Signature</th> <th data-bbox="752 193 880 258">Office action with date and dated Signature of parties when necessary</th> </tr> </thead> <tbody> <tr> <td data-bbox="104 258 181 908"> <p>16<br/>01.05.2024</p> </td> <td data-bbox="181 258 752 908"> <p>Counsel for the parties:<br/> Ms. Sanjukta Ray, Ld. Advocate for the applicant Bank.<br/> None appears for the defendants.<br/> T.A./487 of 2020 (arising out of O.A./960 of 2018) is allowed and disposed of.<br/> Final order / Judgment is in separate sheet.<br/> File be consigned to record room.<br/> Order be uploaded on the Tribunal's website.</p> <p style="text-align: right;"> <br/> (Arbind Madhav)<br/> Presiding Officer<br/> DRT-2, Kolkata </p> </td> <td data-bbox="752 258 880 908"></td> </tr> </tbody> </table>

1

TA/487 of 2020 – DRT-2/Kol

**DEBTS RECOVERY TRIBUNAL - 2, KOLKATA**

Jeevan Sudha Bldg. 07^th Floor, 42/C, J.L. Nehru Road, Kolkata – 700071

**Before Shri Arbind Madhav, Presiding Officer**

**T.A. No. 487 of 2020**

(arising out of O.A./960 of 2018)

**In the matter of** -

**UCO Bank**, a body corporate constituted under the provisions of the Banking Companies (Acquisition and Transfer of Undertaking Act, 1970), having its Head Office at 10, B.T.M. Sarani, Kolkata – 700001, carrying on business, *inter-alia*, having its Baghbazar Branch at 532, Rabindra Sarani, Baghbazar, P.S.- Shyampukur, Kolkata – 700003.

..... Applicant Bank

-Versus-

- 1. **Sri Sunil Kumar Kheria**, Son of Sri Basantlal Kheria, being the sole proprietor of M/s SMN Udyog, carrying on business from RGM-2/21, BL-M, East Berabari, Rajarhat, P.S.- Airport, Kolkata – 700136, 24-Parganas North, and residing at Flat No.D 3A, 52/6, Parvati Vihar, V.I.P. Road, Baguiati, P.S.- Baguiati, Kolkata – 700059.

..... Defendant

Counsel for parties:

For the Applicant Bank : Ms. Sanjukta Ray and Mr. Jay Manna, Ld. Advocate.

For the Defendant : *Ex-Parte*

**FINAL ORDER / JUDGMENT**

Delivered on 01.05.2024

Applicant, UCO Bank instituted the present Application being the Original Application No.960 of 2018 filed in DRT-3, Kolkata on 27.11.2018 against single Defendant under Section 19(1) of the Recovery of Debts & Bankruptcy Act, 1993 (amended from time to time) for recovery of Rs.84,46,576.75 (Rupees eighty four lacs forty six thousand five hundred seventy six and paise seventy five) as on 30.09.2018 together with further interest @ 9.70% per annum from 01.10.2018, till realization of the entire dues. 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 15.11.2019 and the same has been renumbered as T.A./ 487 of 2020 vide Ld. Registrar's order dated 07.07.2020.

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

(i) That the Defendant has been carrying on the sole proprietorship business of manufacture of Agarbatties in the name and style of M/s SMN Udyog. The defendant had applied and approached before the applicant Bank for financial assistance vide loan application dated 30.06.2016. On consideration of loan application, applicant Bank was pleased to grant / sanction and disbursed a cash credit hypothecation facility of Rs.35.00 lakhs (Rupees thirty five lakhs) and a Term Loan of Rs.40.00 lakhs (Rupees forty lacs) in favour of the defendant vide sanction letter dated 22.07.2016. Copy of loan application and sanction letter are annexed and marked with Letter 'A' & 'B' respectively.

(ii) In consideration of the applicant bank granting the said cash credit limit of Rs.35.00 lakhs to the sole proprietorship business of the defendant, the defendant executed and delivered a Deed of Hypothecation & Book Debts to secure the demand cash credit of Rs.35.00 lakhs dated 19.08.2016; copy of the same is annexed and marked as Letter 'C'.

(iii) In consideration of the aforesaid Term Loan facility of Rs.40.00 lakhs, the defendant executed and delivered the following security documents all dated 19.08.2016:

- (a) Demand Promissory Note for Rs.40.00 lakhs;

- (b) Letter of Waiver for Rs.40.00 lakhs;

- (c) Agreement relating to Term Loan for Rs.40.00 lakhs;

- (d) Deed of Hypothecation of movable plant & machinery to secure the Term Loan of Rs.40.00 lakhs.

Copies of said documents are annexed and marked with Letters 'D', 'D-1', 'D-2' & 'D-3' respectively.

(iv) By the said Agreement of Hypothecation of movable plant & machinery dated 19.08.2016 the defendant hypothecated his entire plant and machinery in favour of applicant Bank. By the said Agreement for Term Loan, the entire Term Loan disbursed to the defendant to the tune of Rs.40,00,000/-; the term loan is to be repaid in 60 equal monthly installments (EMI) of Rs.88,500/- each to commence after a moratorium period of 6 months and the interest chargeable to the said loan was to be 11.70% per annum. The defendant gave draft Letter of Undertaking being Annexure III, IV and V for disclosing the name of the defendant with CIBIL or any other authority or agency as may be necessary to do so by the bank in connection with the total loan of Rs.75,00,000/- advanced by the applicant to the defendant. Copies of said Letter of Undertaking all dated 19.08.2016 are annexed and marked as Letter 'E', 'F' & 'G' respectively.

(v) Both the cash credit and Term Loan accounts of the defendant started showing irregularity since November 2016. In this connection, the letter of the defendant dated 13.04.2017 acknowledging the irregularity thereby assuring to overcome the irregularities within April 2017 is annexed and marked as Letter 'H'.

3. The Defendant availed and enjoyed the said credit facilities by opening Account in Defendant's name in Bank's Baghbazar Branch, 532, Rabindra Sarani, Baghbazar, Kolkata. However, the defendant failed and neglected to abide by the terms and conditions of the facilities. The Defendant did not repay the outstanding Bank's dues, agreed EMIs in Term Loan account and overdue interests in loan Accounts. In spite of repeated requests and personal contact made by the Applicant Bank, the defendant failed to regularize the loan Accounts. Since the defendant did not pay any attention to regularize the Accounts, the Accounts became out of order and were classified as N.P.A. on and from 30.06.2017. The applicant Bank finding no other alternative issued demand Notices dated 05.06.2017 & 23.06.2017 and thereafter issued Recall notice dated 03.07.2017 upon the defendant thereby recalling the entire outstanding balance of Rs.40,07,920/- in Term Loan Account and Rs.36,12,682.75 in the cash credit Account and vide the same letter informed the defendant that the accounts of the defendant had turned NPA on 30.06.2017, but the defendant did not comply the said notices; copy of demand notices and Recall Notice are annexed and marked with Letters 'I', 'J' & 'K' respectively. After several opportunities the defendant failed to regularize the account in spite of repeated assurances, the applicant bank issued a Letter dated 01.08.2018 through its Advocate thereby demanding payment of the entire dues of the bank in two accounts; copy of advocate's letter dated 01.08.2018 is annexed and marked as Letters 'L' & 'L-1' respectively. 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 (Letter 'M', 'N' & 'O'), and future interest @ 9.70% per annum from 01.10.2018 together with costs etc. till realization, has been prayed. Applicant Bank submitted that their claim in the Application is within limitation.

4. The notice / summons was sent to the Defendant by the Tribunal; service of Notice / summons upon the Defendant by postal service / hand delivery has not been effected., such has been recorded vide Ld. Registrar's order dated 10.08.2023. At the request of Ld. Advocate of the applicant Bank, Ld. Tribunal was directed to serve the summons / notice upon the defendant by way of substituted service vide order dated 10.08.2023. Ld. Advocate for applicant Bank has brought on record the affidavit of service on publication upon the Defendant along with relevant portion of paper cuttings in two newspapers, namely (i) *'The Telegraph'* in English and (ii) *'Dainik Statesman'* in Bengali, both dated 14.10.2023, such has been recorded vide Ld. Registrar's order dated 22.11.2023. Vide order dated 25.04.2022 Ld. Advocate of the applicant Bank submits that all the documents as exhibited 'A-2' to 'A-19' is seized by Shyampukur Police Station on 09.09.2020 and prays for granting leave of the Tribunal to lead the secondary evidence. An Application being I.A./1132 of 2022 dated 20.07.2022 has been filed by the applicant Bank for adducing secondary evidence as the originals have been seized by the police authority in criminal matter; in the I.A. petition copy of seizer list has also been annexed which confirms the seizer of nine documents and Bank is relying on all these nine documents; the said I.A. was allowed and disposed of vide order dated 24.11.2022. Despite service, the sole defendant did not appear nor filed the written statement; thus, the defendant was ordered to be proceeded *ex-parte* vide order dated 13.03.2024. Ld. Advocate of the applicant Bank has submitted arguments on 13.03.2024.

5. Applicant Bank has filed the evidence-on-affidavit affirmed by Naveen Kumar Jha, Branch Manager of Bank's Baghbazar Branch, 532, Rabindra Sarani, Kolkata – 700003 along with the copy of documents executed by the Defendant. Copy of seizure of nine documents and other documents have been produced by the Applicant Bank; the same have been verified with copies of the documents annexed with O.A. and the seizure documents after verification have been returned to Ms. Jayosree Halder, Sr. Manager of the applicant Bank's Bagbazar Branch, such has been recorded in Ld. Registrar's order dated 14.12.2022. The documents produced by the Applicant Bank are exhibited and annexed at 'A-1' to 'A-19'.

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

6. Evidence-on-Affidavit, filed by the Applicant Bank is supported by copies of the documents (Documents verified by the Registry and returned to Ms. Jayosree Halder, Sr. Manager of the applicant Bank's Bagbazar Branch on 14.12.2022). Applicant Bank has corroborated the averments made in the O.A. Applicant Bank has proved the sanction of cash credit limit and Term Loan aggregating to Rs.75.00 lakhs.

Applicant Bank has proved the hypothecation & book debts to secure demand cash credit of Rs.35.00 lakhs and hypothecation of movable plant & machinery to secure a Term Loan of Rs.40.00 lakhs.

7. 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.

8. On the point of limitation, Loan has been sanctioned on 22.07.2016, security documents have been executed on 19.08.2016 and original Application has been filed on 27.11.2018. As such, the original Application appears to have been filed well within the period of limitation.

9. Applicant Bank has stated that the outstanding balance in cash credit Account and Term Loan Account (inclusive of accrued interests calculated upto 30.09.2018) an aggregate sum of **Rs.84,46,576.75** (Rupees eighty four lacs forty six thousand five hundred seventy six and paise seventy five) as on 30.09.2018, which is the amount claimed by the applicant Bank in the original Application, and the defendant is liable to repay the said amount to the applicant Bank with *pendente lite* and future interest, till realization. I allow the claim as made by the applicant Bank in the original Application. Applicant Bank has prayed future interest @ 9.70% per annum from 01.10.2018, while in the sanction letter dated 22.07.2016 the rate of interest @ 11.70% per annum, with monthly rests, has been mentioned. Therefore, in my view, the *pendente lite* & future rate of interest which have been claimed by applicant Bank in Original Application, i.e. @ 9.70% per annum, from 01.10.2018, is allowed.

10. 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./487 of 2020 (arising out of O.A./960 of 2018) deserves to be allowed; hence allowed.

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

ORDER

(i) T.A./487 of 2020 (arising out of O.A./960 of 2018), filed by the Applicant Bank, is allowed and debt is determined with cost against the sole Defendant. It is hereby ordered that the Defendant is hereby directed to pay the total debt amount of **Rs.84,46,576.75** (Rupees eighty four lacs forty six thousand five hundred seventy six and paise seventy five) due and payable, inclusive of interest and other charges as calculated upto 30.09.2018; and interest for the period *pendente lite* and future rate @ 9.70% per annum, from 01.10.2018, till realization of the entire sum due and recoverable.

(ii) Amount, if any, paid by the Defendant 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 Defendant. Accordingly, the *pendente lite* and future interest shall be calculated on the reduced amount.

(iii) The defendant debarred from transferring, alienating, encumbering or disposing of the hypothecated movable assets, as under –

*"Hypothecation of Book Debts to secure a demand cash credit of Rs.35.00 lakhs and hypothecation of movable plant & machinery to secure Term Loan of Rs.40.00 lakhs"*

The Defendant is also debarred from transferring, alienating, encumbering or disposing any other property(s) either movable or immovable and assets belonging to him till the aforesaid adjudicated debt amount are recovered from the Defendant.

(iv) The defendant is given a time of thirty days from the date of this Final Order / Judgment for repayment of the above mentioned dues, so intimated to him. In case the Defendant fails 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 Defendant both moveable and immovable and also proceed against the sole Defendant 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 Defendant 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 sole Defendant, 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./487 of 2020 (arising out of O.A./960 of 2018) is allowed and stands disposed of.**

This order is dictated and corrected by the undersigned and pronounced on this the 01^st day of May, 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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