UNION BANK OF INDIA vs M/S RAJU TAILORS . on 10 May 2024

1. 1. **M/s Raju Tailors**, a Proprietorship business of Sri Raj Kumar Khanra, having its principal place of business at Vill. & P.O.- Bakhrahat, Police Station – Bishnupur, Dist.- 24-Parganas South, Pin – 743377, West Bengal.

2. 2. **Sri Raj Kumar Khanra**, Son of Sri Swapan Kumar Khanra, proprietor of M/s Raju Tailors, having its principal place of business at Vill. & P.O.- Bakhrahat, Police Station – Bishnupur, Dist.- 24-Parganas South, Pin – 743377, West Bengal.

3. 3. **Smt. Kuntala Khanra**, wife of Sri Swapan Kumar Khanra, having its principal place of business and/or residence at Vill. & P.O.- Bakhrahat, Police Station – Bishnupur, Dist.- 24-Parganas South, Pin – 743377, West Bengal.

4. 4. **Sri Sukumar Khanra**, Son of Sri Swapan Kumar Khanra, having its principal place of business and/or residence at Vill. & P.O.- Bakhrahat, Police Station – Bishnupur, Dist.- 24-Parganas South, 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 10.05.2024

Applicant (Union Bank of India), erstwhile Corporation Bank instituted the present Application being the Original Application No.887 of 2018 filed in DRT-3, Kolkata on 05.11.2018 against four Defendants under Section 19(1) of the Recovery of Debts & Bankruptcy Act, 1993 (amended from time to time) for recovery of Rs.11,36,244.00 (Rupees eleven lacs thirty six thousand two hundred forty four) as on 30.06.2018 together with further interest @ 12.25% 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 13.11.2019 and the same has been renumbered as T.A./ 634 of 2020 vide Ld. Registrar's order dated 09.12.2020.

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 an I.A. being I.A./367 of 2022 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 for Applicant Bank on 11.04.2022, such has been recorded in Ld. Registrar's order dated 04.05.2022.

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

(i) The Defendants No.1 & 2 are the borrower; and defendants No.3 & 4 are the guarantors. The defendant No.1 through its proprietor, Sri Raj Kumar Khanra (defendant No.2) approached the applicant Bank for financial assistance vide an application dated 17.11.2012, Upon consideration of loan application, applicant Bank was pleased to grant / sanction a Cash Credit facility to the limit of Rs.6,00,000/- (Rupees six lacs) in favour of the defendants vide sanction letter dated 01.12.2012 against the hypothecation of entire stock and book debts and equitable mortgage of immovable property as a collateral security upon the terms and conditions mentioned in the said sanction letter; copies of loan application dated 17.11.2012 and sanction letter dated 01.12.2012 are annexed and marked as Annexure 'A-1' & 'A-2' respectively.

(ii) In consideration of the aforesaid cash credit facility of Rs.6.00 lakhs availed by Defendants, the defendant No.2, proprietor of defendant No.1 executed the following security documents dated 01.12.2012:

- (a) Common Deed of Hypothecation;

- (b) Demand Promissory Note for Rs.6,00,000/-;

- (c) Take Delivery Letter.

Copies of said documents are annexed and marked as Annexure 'A-3', 'A-4' & 'A-5' respectively.

(iii) In consideration of the aforesaid credit facility granted to defendants No.1 & 2, the defendants No.3 & 4 duly guaranteed due repayment of all sums that would become due and payable by M/s Raju Tailors (defendant No.1), a proprietorship business of Sri Raj Kumar Khanra (defendant No.2) by executing and delivering a Guarantee Agreement dated 01.12.2012 in favour applicant Bank; copy of said guarantee agreement is annexed and marked as Annexure 'A-6'.

(iv) To secure the aforesaid cash credit facility of Rs.6.00 lakhs, the defendants No.2, 3 & 4 was duly been created equitable mortgage in respect of their immovable property (morefully described in Schedule 'X-1' at page 26 of the O.A.) by depositing title deed being No.00806 for the year 2011 with the applicant Bank; copy of said Deed being No.00806 for the year 2011 is annexed and marked as Annexure 'A-7'. Further, the defendants No.2, 3 & 4 confirmed the creation of equitable mortgage by deposit of said Title Deed being No.00806 for the year 2011 in favour of applicant Bank, vide a Memorandum of Deposit of Title Deeds dated 01.12.2012; copy of said Memorandum of deposit of Title Deed is annexed and marked as Annexure 'A-8'.

(v) Further the applicant Bank got valued the mortgaged secured property through its empanelled valuer and the valuer submitted its report to the applicant Bank; copies of valuation report is annexed and marked as Annexure 'A-9'.

(vi) In consideration and in acknowledgement of the said credit limit in favour of the defendant No.1, the defendants executed and delivered an Acknowledgement of Debt / Liability dated 05.12.2017 in favour of applicant Bank; copy of the same is annexed and marked as Annexure 'A-10'.

5. The Defendants enjoyed the aforementioned Cash Credit facility by opening Account in Defendant No.1's name (M/s Raju Tailors) in Applicant Bank's Amtala Branch, N.D. Road, P.O.- Kanya Nagar, Dist.- 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 11.07.2014. Considering the default and violation of the terms and conditions of the credit facility, applicant Bank issued a re-call / demand notice dated 24.10.2018 through its Ld. Advocate calling upon the defendants 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-11'. Certified copies of Statement of Accounts along with Certificate under Bankers' Books Evidence Act, with interest calculation sheet, have been filed to show and prove the dues (Annexure 'A-12'), and future interest @ 12.25% per annum, from 01.07.2018. 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 to 4 by the Tribunal; service of Notices / summons upon all the Defendants has been successfully completed, such has been recorded vide order dated 23.12.2021. 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 23.04.2024. Ld. Advocate for Union Bank of India has filed an I.A. being I.A./367 of 2022 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 for Applicant Bank on 11.04.2022, such has been recorded in Ld. Registrar's order dated 04.05.2022. Ld. Counsel of the applicant Bank submitted arguments on 23.04.2024.

7. Applicant Bank has filed the evidence-on-affidavit affirmed by Shyamalendu Sardar, Branch Manager of Applicant Bank's Amtala Branch, N.D. Road, P.O.- Kanya Nagar, Dist.- South 24-Parganas along with copy of original documents executed by the Defendant. Original documents have been produced by the Applicant Bank; the same have been verified with copies of the documents annexed with O.A. and the original documents have been returned to Shri Ujjwal Kumar, Branch Manager of Applicant Bank's Amtala Branch on 03.03.2021, such has been recorded in Ld. Registrar's order dated 03.03.2021. The documents produced by the Applicant Bank are exhibited and annexed at 'A-1' to 'A-12'.

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

8. Evidence-on-affidavit, filed by Applicant Bank, has remained unchallenged, un-rebutted and its veracity cannot be put to dispute. Applicant Bank has corroborated the averments made in the O.A. Applicant Bank has proved the sanction of Cash Credit facility of Rs.6.00 lakhs. Applicant Bank has proved the creation of equitable mortgage of immovable property.

9. On the point of limitation, Loan has been sanctioned on 01.12.2012; documents have been executed on 01.12.2012; original Application has been filed on 05.11.2018. The defendants executed and delivered an 'Acknowledgement of Debt / Liability' dated 05.12.2017 in favour of applicant Bank admitting and confirming the outstanding balance in loan account. As such, the original Application appears to have been filed well within the period of limitation.

10. Applicant Bank has stated that the outstanding debit balance in the Cash Credit Account (inclusive of accrued interest and other charges as calculated upto 30.06.2018) is **Rs.11,36,244.00** (Rupees eleven lacs thirty six thousand two hundred forty four) as on 30.06.2018, which is the amount claimed by the applicant Bank in the original Application, and the defendants No.1 to 4 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 @ 12.25% per annum, while in sanction letter and Demand Promissory Note dated 01.12.2012 the rate of interest @ 12.25% 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. @ 12.25% per annum with quarterly rests, from 01.07.2018, is allowed.

11. 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./634 of 2020 (arising out of O.A./887 of 2018) deserves to be allowed; hence allowed.

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

ORDER

(i) T.A./634 of 2020 (arising out of O.A./887 of 2018), filed by the Applicant Bank, is allowed and debt is determined with cost against the Defendants No.1 to 4. It is hereby ordered that the Defendants No.1, 2, 3 & 4 are hereby directed to pay, jointly and / or severally the total debt amount of **Rs.11,36,244.00** (Rupees eleven lacs thirty six thousand two hundred forty four) due and payable, inclusive of interest and other charges as calculated upto 30.06.2018; and interest for the period *pendente lite* and future rate i.e. @ 12.25% per annum, with quarterly rests, from 01.07.2018, 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. Accordingly, the *pendente lite* and future interest shall be calculated on the reduced amount.

(iii) The defendants No.1 to 4 are debarred from transferring, alienating, encumbering or disposing of the mortgage immovable property, described in 'Schedule – X-1' at page 26 of the original Application, are as under –

"ALL THAT vacant land measuring about 7/10 Satak or 304.00 Square Feet or 0.42 Cottah along with building at Village & Post Office – Bakhrahat, Police Station – Bishnupur, Mouza – Bakhrahat, J.L. No.46, R.S. Khatian No.977, 978, 979, Dag No.449, Touzi No.1070/2834, District – South 24-Parganas, West Bengal, and registered before Additional District Sub-Registrar, Bishnupur, 24-Parganas (South), and Recorded vide Book-I, CD Volume No.3, Pages – 4654 to 4675, being No.00806 for the year 2011 and registered in favour of Smt. Kuntala Khanra (Defendant No.3 herein), Sri Raj Kumar Khanra (Defendant No.2' herein) and Sri Sukumar Khanra (Defendant No.4 herein). "

The Defendants No.1 to 4 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 to 4 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.1 to 4 both moveable and immoveable and also proceed against the Defendants No.2, 3 & 4 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 & 4 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 & 4, 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./634 of 2020 (arising out of O.A./887 of 2018) is allowed and stands disposed of.**

This order is dictated and corrected by the undersigned and pronounced on this the 10^th day of May, 2024.

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

Arbind Madhav (Arbind Madhav) Presiding Officer DRT-2, Kolkata

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