Punjab National Bank vs M/s Krishna Garments on 20 June 2024

1. 1. **M/s Krishna Garments**, a proprietorship of Smt. Krishna Das Sarkar, having its office and/or principal place of business one at 24, Girish Vidyaratna Lane, P.O.- Rajpur, P.S.- Sonarpur, Dist.- South 24-Parganas, Kolkata, Pin – 700149.

2. 2. **Smt. Krishna Das Sarkar**, Wife of Pratap Mondal, proprietor of Laxmi Food Store, having its office and/or principal place of business and/or resides at 24, Girish Vidyaratna Lane, P.O.- Rajpur, P.S.- Sonarpur, Dist.- South 24-Parganas, Kolkata, Pin – 700149.

3. 3. **Sri Pratap Mondal**, Son of Sachin Kr. Mondal, having its office and/or principal place of business one at 24, Girish Vidyaratna Lane, P.O.- Rajpur, P.S.- Sonarpur, Dist.- South 24-Parganas, Kolkata, Pin – 700149.

..... Defendants

Counsel for parties:

For the Applicant Bank : Mr. Soudip Pal Choudhuri, Ld. Advocate For the Defendants : *Ex-Parte*

**FINAL ORDER / JUDGMENT**

Delivered on 20.06.2024

Applicant (Punjab National Bank), erstwhile United Bank of India instituted the present Application being the Original Application No.724 of 2018 on 31.08.2018 against three Defendants under Section 19(1) of the Recovery of Debts & Bankruptcy Act, 1993 (amended from time to time) for recovery of Rs.21,24,903.44 (Rupees twenty one lacs twenty four thousand nine hundred three and paise forty four) as on 31.03.2018 together with further interest thereon @ 11.75% per annum with monthly rests, 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 30.10.2019 and the same has been renumbered as T.A./ 378 of 2020 vide Ld. Registrar's order dated 20.06.2020.

2. United Bank of Commerce has been merged / amalgamated into Punjab National Bank 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 United Bank of India into Punjab National Bank, the Applicant Name in this case should be read / inserted as Punjab National Bank instead of United Bank of India.

3. In accordance with the Notice dated 30.07.2020 of this Tribunal; Ld. Advocate for Punjab National Bank has filed a Petition (I.A./1060/2021) along with put-up Petition (I.A./1059/2021)) praying for amendment of Cause Title in view of amalgamation of United Bank of India with Punjab National Bank 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 27.09.2021, such has been recorded in Ld. Registrar-in-Charge's order dated 27.09.2021.

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

(i) That the Defendant No.1 is the proprietorship of defendant No.2. At the request of defendant No.1 through its proprietor, i.e. defendant No.2 for financial assistance. Upon consideration of defendant No.1's request, Applicant Bank was pleased to grant / sanction a Cash Credit facility to the limit of Rs.12,00,000/- (Rupees twelve lacs) in favour of the defendant No.1, vide sanction letter dated 27.10.2016. The defendant No.1 the proprietorship firm of the defendant No.2 duly accepted the terms and conditions of the loan facility. Copy of sole proprietorship letter and copy of sanction letter are annexed and marked with Letter 'A' & 'A-1' respectively.

(ii) In consideration of the aforesaid cash credit facility of Rs.12.00 lakhs availed by Defendant No.1, the defendant No.2 being the proprietor of defendant No.1 executed the following security documents all dated 27.10.2016:

- (a) One Demand Promissory Note for Rs. 12.00 lacs;

- (b) One Agreement to pledge of goods to secure demand cash credit Loan;

- (c) One Letter of Lien;

- (d) One Letter of Continuity;

- (e) One Hypothecation Agreement;

- (f) One Text of consent clause.

Copies of said documents are annexed and marked with Letters 'A-2' to 'A-7' respectively.

(iii) Again, the defendant No.1 is the proprietorship of the defendant No.2 approached the applicant Bank for financial accommodation; at the request of the defendant No.1, applicant Bank was pleased to grant / sanction one Cash Credit facility to the limit of Rs.8,44,881/- (Rupees eight lacs forty four thousand eight hundred eighty one) to purchase Lodgy 85 PS RXE vide sanction letter dated 05.11.2016 on certain terms and conditions mentioned in the sanction letter. Copy of said sanction letter dated 05.11.2016 is annexed and marked with Letter 'A-8'.

(iv) In consideration of the aforesaid cash credit facility of Rs.12.00 lakhs availed by Defendant No.1, the defendant No.2 being the proprietor of defendant No.1 executed the following security documents all dated 05.11.2016:

- (a) One Deed of Hypothecation (Transport Equipment);

- (b) One Letter of Undertaking;

- (c) Letter of lien;

- (d) One Text of the Consent Clause.

Copies of said documents are annexed and marked with Letters 'A-9' to 'A-12' respectively.

(v) In consideration of granting loan to the defendant No.1, proprietorship firm of defendant No.2, the defendant No.3 stood as a Guarantor by executing a Guarantee Agreement dated 05.11.2016 for due repayment of all monies along with interest cost and charges that would become due to the defendant No.1. Copy of Guarantee Agreement dated 05.11.2016 and copy of consent clause dated 05.11.2016 are annexed and marked with Letter 'A-13' & 'A-14' respectively.

(vi) The defendant agreed to repay the loan after one month from the date of disbursement of the loan and the loan is to be repaid in 84 EMIs of Rs.13847/- each.

5. The Defendants enjoyed and utilized the aforementioned credit facilities by opening Account in Applicant Bank's Lake Garden Branch, 162/A/89, Lake Gardens, Kolkata – 700045. However, the defendants failed and neglected to abide by the terms and conditions of the facilities. The Defendants did not repay the outstanding Bank's dues, agreed EMIs and overdue interests in loan Accounts. Since the defendants did not pay any attention to regularize the Account inspite of repeated requests made by the Applicant Bank, the Account became out of order and was classified as N.P.A. Considering aforesaid default and violation of the terms and conditions of the credit facilities, the applicant Bank on 24.07.2011, 12.10.2017, 09.11.2017 and 04.01.2018 through the branch Manager and on 01.06.2018 through its Ld. Advocate served demand and/or recall Notice upon the defendants demanding to repay the outstanding Bank's dues, but all were in vain. Copy of said Notices are annexed and collectively marked with letter 'A-15'. 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 (Letter 'A-16'), and future interest @ 11.75% per annum with monthly rests 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 the Defendants by postal service has been successfully completed, such has been recorded vide order dated 03.08.2023. Despite service, the defendants did not appear nor filed the written statement; thus, the defendants No.1 to 3 were ordered to be proceeded *ex-parte* vide order dated 03.05.2024. Ld. Advocate for Punjab National Bank has filed a Petition (I.A./1060/2021) along with put-up Petition (I.A./1059/2021)) praying for amendment of Cause Title in view of amalgamation of United Bank of India with Punjab National Bank 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 27.09.2021. Ld. Counsel of the applicant Bank submitted arguments on 03.05.2024.

7. Applicant Bank has filed the evidence-on-affidavit affirmed by Ms. Jui Das, Manager of erstwhile Bank's Lake Garden Branch, 162/A/89, Lake Gardens, Kolkata – 700045 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 Ms. Kajarika Karmakar, Dy. Manager of Bank's Lake Garden Branch, 162/A/89, Lake Gardens, Kolkata – 700045 on 06.12.2022, such has been recorded in Ld. Registrar's order dated 06.12.2022. The documents produced by the Applicant Bank are exhibited and annexed at 'A' & 'A-1' to 'A-16'.

I have heard the Ld. Advocate for 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 limit of Rs.12.00 lakhs on 27.10.2016 and Rs.8,44,881/- on 05.11.2016. Applicant Bank has proved the hypothecated movable assets by executing Agreement to Pledge of goods and Deed of Hypothecation (Transport Equipment) to secure demand cash credit.

9. On the point of limitation, Loan has been sanctioned on 27.10.2016, subsequently sanctioned on 05.11.2016; documents have been executed on 27.10.2016 and 05.11.2016; original Application has been filed on 31.08.2018. 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 Loan Accounts (inclusive of accrued interest calculated upto 31.03.2018) is an aggregated sum of **Rs.21,24,903.44** (Rupees twenty one lacs twenty four thousand nine hundred three and paise forty four) 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, jointly and/or severally, 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 @ 11.75% per annum, while in Demand Promissory Note dated 27.10.2016 the rate of interest @ 12.40% per annum, has been mentioned. Therefore, the *pendente lite* & future rate of interest which has been claimed by applicant Bank in O.A., i.e. @ 11.75% per annum, with quarterly rests, from 01.04.2018, 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./378 of 2020 (arising out of O.A./724 of 2018) deserves to be allowed; hence allowed.

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

ORDER

(i) T.A./378 of 2020 (arising out of O.A./724 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.21,24,903.44** (Rupees twenty one lacs twenty four thousand nine hundred three and paise forty four) 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 @ 11.75% per annum, with quarterly rests, 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. 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 hypothecated movable assets, as under –

*"Hypothecated goods and Transport Equipment; described at page 9 & 10 of the original application"*

The Defendants is 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 Defendant.

(iv) The defendants No.1, 2 & 3 are 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 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, 2 & 3 both moveable and immoveable and also proceed against the Defendants No.2 & 3 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./378 of 2020 (arising out of O.A./724 of 2018) is allowed and stands disposed of.**

This order is dictated and corrected by the undersigned and pronounced on this the 20^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

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