STATE BANK OF INDIA vs SRI BIJAY AGARWAL on 21 May 2024

1. **Sri Bijay Agarwal**, Son of Late Khajan Mal Agarwal, carrying on business as proprietor under the name and style of M/s Jay Creation from 19, Sir Hariram Goenka Street, Kolkata – 700007, and residing at BH 6/1A, Jangra Ghoshpara, Pin – 733124, West Bengal.

.. .. Defendant

Counsel for parties:

For the Applicant Bank : Mr. Anirban Pramanick, Ld. Advocate For the Defendant : *Ex-Parte***FINAL ORDER / JUDGMENT**

Delivered on 21.05.2024

Applicant, State Bank of India (formerly State Bank of Bikaner & Jaipur), instituted the present Application being the Original Application No.462 of 2018 filed in DRT-3, Kolkata on 05.06.2018 against single Defendant under Section 19(1) of the Recovery of Debts & Bankruptcy Act, 1993 (amended from time to time) for recovery of Rs.11,62,942.00 (Rupees eleven lacs sixty two thousand nine hundred forty two) as on 08.05.2018 together with further interest @ 18% per annum, 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 24.10.2019 and the same has been renumbered as T.A./ 27 of 2020 vide Ld. Registrar's order dated 04.11.2019.

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

(i) That the Defendant is the borrower of the loan account. On 21.05.2016 the defendant had applied and approached before State Bank of Bikaner & Jaipur, Vivekananda Road Branch, P.S.- Girish Park, Kolkata – 700006 which has now merged into State Bank of India as per the Gazette of India notification dated 22.02.2017 with effect from 01.04.2017 for cash credit facility aggregating to a sum of Rs.10,00,000/- under Pradhan Mantri Mudra Yojana (PMMY) scheme for expansion of business, and in pursuant of the above, applicant Bank was pleased to grant / sanction a Cash Credit facility to a sum of Rs.10,00,000/- (Rupees ten lacs) in favour of the defendant vide sanction letter dated 21.05.2016. At the time of sanctioning of said credit facility, the applicable rate of interest was @ 10.80% per annum with monthly rests. The primary security for the advance was hypothecation of stocks and book debts. Copy of loan application form dated 21.05.2016 is annexed and marked with letter 'A' and Exhibit AW-1; copy of sanction letter dated 21.05.2016 is annexed and marked with letter 'B' and Exhibit AW-2.

(ii) In respect of aforesaid cash credit facility of Rs.10.00 lakhs, the defendant executed the following security document dated 23.05.2016:

(a) Agreement of Loan-cum-hypothecation.

Copy of said document is annexed and marked with Letter 'C' Exhibit – AW-3.

3. The Defendant availed and enjoyed the cash credit facility by opening Account in Bank's Vivekananda Road Branch, Bidhan Sarani, Kolkata – 700006. However, the defendant failed and neglected to abide by the terms and conditions of the facility. The Defendant did not repay the outstanding Bank's dues and overdue interests in loan Account. In spite of repeated requests and personal contact made by the Applicant Bank, the defendant failed to regularize the loan Account. Since the defendant did not pay any attention to regularize the Account, the Account became out of order and was classified as N.P.A. on 28.07.2017. However, these requests were ignored by the defendant and the applicant Bank finding no other alternative issued a legal notice dated 22.05.2018 by its Advocate demanding payment of a sum of Rs.11,62,942.00 inclusive of accrued interest calculated upto 08.05.2018, but the defendant did not comply the said notice; copy of Advocate's letter is annexed and marked with letter 'E' and Exhibit AW-5. Certified copies of Statement of Account along with Certificate under Bankers' Books Evidence Act, with Statement of Claim, have been filed to show and prove the dues (Letter 'D' and Exhibit AW-4), and future interest @ 18% per annum 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 could not be effected vide order dated 08.03.2019 & 28.04.2022. At the request of Ld. Advocate of the applicant Bank, Ld. Tribunal is directed to serve the summons upon both the defendants by way of paper publication; and 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 Indian Express' in English and (ii) 'Yugashanka' in Bengali, both dated 05.04.2023, such has been recorded vide Ld. Registrar's order dated 25.09.2023. 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 29.04.2024. Written notes of arguments has been filed on behalf of applicant Bank on 21.05.2024 wherein stated the brief facts of this case as has been narrated in the original application.

5. Applicant Bank has filed the evidence-on-affidavit affirmed by Diptendu Kumar Rakshit, Deputy Manager of Bank's SMECCC, 1, Strand Road, Samriddhi Bhawan, Annexe Building, Kolkata – 700001 along with the 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 after verification the original documents have been returned to Ms. Ritasree Mitra, Deputy Manager of Bank's SMECCC, 1, Strand Road, Samriddhi Bhawan, Annexe Building, Kolkata on 08.03.2019, such has been recorded in Ld. Registrar, DRT-3's order dated 08.03.2019. The documents produced by the Applicant Bank are exhibited and annexed at 'AW-1' to 'AW-5'.

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

6. 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.10.00 lakhs. Applicant Bank has proved the hypothecated movable assets, morefully described in 'Schedule' at page 12 of the O.A.

7. On the point of limitation, Loan has been sanctioned on 21.05.2016, security documents have been executed on 23.05.2016 and original Application has been filed on 05.06.2018. As such, the original Application appears to have been filed well within the period of limitation.

8. Applicant Bank has stated that the outstanding balance in Cash Credit Account as on 08.05.2018 (Interest applied upto 28.07.2017) is Rs.10,15,993.97 and accrued interest calculated from 29.07.2017 to 08.05.2018 is Rs.1,46,948.03 has been added / debited in the Account; thus the outstanding claim amount comes to **Rs.11,62,942.00** (Rupees eleven lacs sixty two thousand nine hundred forty two) as on 08.05.2018, 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 @ 18% per annum, while at the time of sanctioning of Loan the applicable rate of interest was @ 10.80% per annum, with monthly rests. Therefore, in my view, the *pendente lite* & future rate of interest @ 10.80% per annum, with quarterly rests, from 09.05.2018, is allowed.

9. 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./27 of 2020 (arising out of O.A./462 of 2018) deserves to be allowed; hence allowed.

(A)

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

**ORDER**

(i) T.A./27 of 2020 (arising out of O.A./462 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.11,62,942.00** (Rupees eleven lacs sixty two thousand nine hundred forty two) due and payable, inclusive of interest and other charges as calculated upto 08.05.2018; and interest for the period *pendente lite* and future rate @ 10.80% per annum, with quarterly rests, from 09.05.2018, 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; described in 'Schedule' at page 12 of the original Application, are as under –

*"Stocks and book debts lying at M/s Jay Creation at 19, Sir Hariram Goenka Street, Kolkata – 700007."*

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./27 of 2020 (arising out of O.A./462 of 2018) is allowed and stands disposed of.**

This order is dictated and corrected by the undersigned and pronounced on this the 21^st 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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