INDIAN OVERSEAS BANK vs SK AKHTAR ALI on 19 June 2024

1. **Sk. Akhtar Ali**, Son of Late Kurban Ali, 29, Sarat Bose Road, Rajbari, P.O. & P.S.-Airport, Kolkata – 700081.

..... Defendant

Counsel for parties:

For the Applicant Bank : Ms. Sangeetha Ghosh, Ld. Advocate, Amicus Legal Associates For the Defendant : *Ex-Parte*

**FINAL ORDER / JUDGMENT**

Delivered on 19.06.2024

Applicant, Indian Overseas Bank instituted the present Application being the Original Application No.233 of 2018 filed in DRT-3, Kolkata on 31.03.2018 against single Defendant under Section 19(1) of the Recovery of Debts & Bankruptcy Act, 1993 (amended from time to time) for recovery of Rs.17,40,133.10 (Rupees seventeen lacs forty thousand one hundred thirty three and paise ten) as on 28.02.2018 together with further interest, with monthly rests, till realization. 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 19.10.2019 and the same has been renumbered as T.A./ 239 of 2019 vide Ld. Registrar's order dated 28.10.2019.

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

(i) The defendant had applied and approached the applicant Bank in the month of June, 2004 for availing credit accommodation in the nature of 'Pushpaka Loan' for Rs.3,40,000/- vide loan Application dated 09.06.2004; copy of said loan Application is annexed and marked as Annexure 'A'. Relying upon the loan application, applicant Bank was pleased to grant / sanction the credit facility in the nature of Term Loan for a sum of Rs.3,40,000/- (Rupees three lakhs forty thousand) in favour of the defendant for purchase of Hyundai Santro Car against the hypothecation of defendant's vehicle wherein Jahanara Bibi, wife of the Defendant stood as guarantor for defendant, vide sanction advice dated 10.06.2004. Copy of sanction advice dated 10.06.2004 is annexed and marked as Annexure 'B'.

(ii) In consideration of the applicant bank granting the said Term Loan of Rs.3.40 lakhs to the defendant, the defendant executed and delivered the following security documents all dated 10.06.2004:

- (a) Demand Promissory Note for Rs.3,40,000/-;

- (b) Letter of authorization duly signed by defendant for Rs.3.40 lacs;

- (c) Letter of Undertaking for Rs.3.40 lacs;

- (d) Deed of Hypothecation;

- (e) Guarantee for cash credit duly signed by Jahanara Bibi thereby jointly guaranteeing the payment upto but not exceeding the aggregate sum of Rs.3,40,000/- together with interest and charges thereon.

Copies of said documents are annexed and marked as Annexure 'C-1 to C-5' respectively.

(iii) The defendant registered the financed vehicle with R.T.O. – Calcutta on 22.06.2004. Copy of Sale Certificate and Tax Receipt is annexed and marked as Annexure 'D'.

(iv) Thereafter, the Defendant as proprietor of M/s Jyoti Electronics approached the applicant Bank in the month of November, 2004 with a request for small business loan for Rs.40,000/- vide Application dated 01.11.2004. Copy of loan application dated 01.11.2004 is annexed and marked as Annexure 'E'. Relying upon the representation made by the defendant, the applicant Bank was pleased to grant / sanction for a credit limit of Rs.40,000/- (Rupees forty thousand) in the nature of Small Loan for the proprietorship firm, namely M/s Jyoti Electronics on certain terms and conditions, vide sanction advice dated 01.11.2004. Copy of said sanction advice dated 01.11.2004 is annexed and marked as Annexure 'F'.

(v) In consideration of the applicant bank granting the Small Loan of Rs.40,000/- to the defendant, the defendant executed and delivered the following security documents all dated 01.11.2004:

- (a) Demand Promissory Note for Rs.40,000/-;

- (b) Letter of Undertaking for Rs.40,000/-;

- (c) Agreement of Term Loan and Hypothecation for an amount of Rs.40,000/-; Copies of said documents are annexed and marked as Annexure 'G-1 to G-3' respectively.

(vi) The defendant again approached the applicant Bank in the month of January, 2005 with a request for small business loan for an amount of Rs.50,000/- vide Application dated 10.01.2005; copy of said application dated 10.01.2005 is annexed and marked as Annexure 'H'. Relying upon the representation made by the defendant, the applicant Bank was pleased to grant / sanction for a credit limit of Rs.50,000/- (Rupees fifty thousand) in the nature of Small Loan on certain terms and conditions, vide sanction advice dated 10.01.2005. Copy of said sanction advice dated 10.01.2005 is annexed and marked as Annexure 'I'.

(vii) In consideration of the applicant bank granting the Small Loan of Rs.50,000/- to the defendant, the defendant executed and delivered the following security documents all dated 10.01.2005:

- (a) Demand Promissory Note for Rs.50,000/-;

- (b) Letter of Undertaking for Rs.50,000/-;

- (c) Agreement of Term Loan and Hypothecation for an amount of Rs.50,000/-; Copies of said documents are annexed and marked as Annexure 'J-1 to J-3' respectively.

(viii) The defendant acknowledging and admitting the liability for the said credit facilities by executing Revival Letters from time to time dated 05.06.2007, 10.10.2007, 27.05.2010, 25.05.2013 and 11.04.2016 confirming the outstanding balance in the Accounts. Copy of said Revival Letters are annexed and marked as Annexure 'K'.

3. The Defendant availed and enjoyed the said credit facility by opening Account in Bank's Tegharia Branch, 137, VIP Road, P.S.- Baguiati, Kolkata – 700052. However, the defendant committed breach of terms and conditions of the Agreement and made defaults in payment even after several requests from the applicant Bank. The Defendant did not repay the outstanding Bank's dues, agreed EMIs in Term Loan account and overdue interests in loan Account. The Account became out of order and was classified as N.P.A. on 31.03.2005. The applicant Bank finding no other alternative issued recall demand Notice dated 21.07.2017 upon the defendant through their Advocate calling upon him to repay the outstanding amount of Rs.16,55,067.10 as on 30.06.2017, but the defendant did not comply the said notice; copy of said recall notice is annexed and marked as Annexure 'L'. 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 (Annexure 'N' & 'M'), and future interest @ 11.50% per annum in respect of Term Loan and @ 13% & @ 13.50% per annum in respect of two Nos. Small Loans, with monthly rests, 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 has made successful, such has been recorded vide Ld. Registrar's order dated 07.07.2022. 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 16.01.2024. Ld. Advocate of the applicant Bank has filed the written notes of argument on 03.05.2024 stated therein the brief facts of the case as has been narrated in the original application.

5. Applicant Bank has filed the evidence-on-affidavit affirmed by Sri Prashant Kumar Sinha, Manager of Bank's Tegharia Branch, 137, VIP Road, P.S.- Baguiati, Kolkata – 700052 along with the copy of documents executed by the Defendant. Copy of 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 same have been returned to Sri Kaushik Chandra Roy, Assistant Manager of Bank's Tegharia Branch, 137, VIP Road, Baguiati, Kolkata on 25.06.2019 such has been recorded in Ld. Registrar, Kolkata DRT-3's order dated 25.06.2019. The documents produced by the Applicant Bank are exhibited and annexed at 'A-1' to 'A-21'.

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 Term Loan of Rs.3,40,000/- and sanction of two Nos. Small Loans of Rs.40,000/- and Rs.50,000/-. Applicant Bank has proved the hypothecation goods vehicle, Hyundai Motors India Ltd. being Registration No. WB – 02TE 1007.

7. On the point of limitation, Loan has been sanctioned on 10.06.2004, subsequently sanctioned on 01.11.2004 & 10.01.2005, security documents have been executed on 10.06.2004, 01.11.2004 & 10.01.2005 and original Application has been filed on 31.03.2018. The defendant executed the last set of Revival Letter dated 11.04.2016 admitting and confirming the outstanding due4s in the Accounts. 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 the Accounts (inclusive of accrued interests calculated upto 28.02.2018) for a sum of **Rs.17,40,133.10** (Rupees seventeen lacs forty thousand one hundred thirty three and paise ten) as on 28.02.2018, 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 the future interest, till realization. I allow the claim as made by the applicant Bank in the original Application. Applicant Bank has prayed future interest @ 11.50% per annum in respect of Term Loan and @ 13% & @ 13.50% per annum in respect of two Nos. Small Loans, with monthly rests, while in the Demand Promissory Notes dated 10.06.2004, 01.11.2004 & 10.01.2005 the rate of interest @ 9.50%, 11% & 11.50% per annum, have been mentioned. Therefore, in my view, the *pendente lite* & future rate of interest @ 9.50% per annum, with quarterly rests, from 01.03.2018, 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./239 of 2019 (arising out of O.A./233 of 2018) deserves to be allowed; hence allowed.

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

ORDER

(i) T.A./239 of 2019 (arising out of O.A./233 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.17,40,133.10** (Rupees seventeen lacs forty thousand one hundred thirty three and paise ten) due and payable, inclusive of interest and other charges as calculated upto 28.02.2018; and interest for the period *pendente lite* and future rate @ 9.50% per annum, with quarterly rests, from 01.03.2018, 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 –

"Hypothecated goods vehicle being Registration No. WB – 02TE 1007 Hyundai Motors India Ltd., Santro, Chassis No. MALAA51HR4M481495, Engine No. G4HD4D62583, Year of Manufacture – 2004."

Schedule 'B' at page 25 of the O.A. –

Part – I : "the whole of borrowers present and future stocks of goods lying at 29, Sarat Bose Road, Rajbari, P.O. & P.S.- Airport, Kolkata – 700081 together with all store components and spares which now belong to or may hereafter from time to time during the continuance of this security belong to the borrower and which are or shall or may be brought into stores or be in or upon or about the borrower's godown, or wherever else the same may be situated, stored or lying or being, including any such raw material articles or goods, stores, spares and components or other similar moveable property in course of transit or delivery to the borrower (and all of which herein after for brevity's sake referred to as "the said goods")."

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 forty-five 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./239 of 2019 (arising out of O.A./233 of 2018) is allowed and stands disposed of.**

This order is dictated and corrected by the undersigned and pronounced on this the 19^th day of June, 2024.

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

(Arbind Madhav) Presiding Officer DRT-2, Kolkata

tb