UNION BANK OF INDIA vs M/S KALIKA NURSERY on 25 July 2024

1. 1. **M/s Kalika Nursery**, a proprietorship business of Smt. Kabita Adak, having its principal place of business at Vill.- Gotalahat, P.O.- Krishnapur, P.S.- Bishnupur, Dist.- South 24-Parganas, Pin – 743503, West Bengal.

2. 2. **Smt. Kabita Adak**, proprietor of M/s Kalika Nursery, having its principal place of business at Vill.- Gotalahat, P.O.- Krishnapur, P.S.- Bishnupur, Dist.- South 24-Parganas, Pin – 743503, West Bengal.

3. 3. **Sri Sufal Chandra Adak**, having its principal place of business and/or residence at Vill.- Gotalahat, P.O.- Krishnapur, P.S.- Bishnupur, Dist.- South 24-Parganas, Pin – 743503, West Bengal.

..... Defendants

Counsel for parties:

For the Applicant Bank : Smruti Rekha Mishra, Ld. Advocate For the Defendants : *Ex-Parte*

**FINAL ORDER / JUDGMENT**

Delivered on 25.07.2024

Applicant (Union Bank of India), erstwhile Corporation Bank instituted the present Application being the Original Application No.918 of 2018 filed in DRT-3, Kolkata on 09.11.2018 against three Defendants under Section 19(1) of the Recovery of Debts & Bankruptcy Act, 1993 (amended from time to time) for recovery of Rs.17,60,822.50 (Rupees seventeen lacs sixty thousand eight hundred twenty two and paise fifty) as on 31.03.2018 together with further interest thereon @ 11.50% 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./518 of 2020 vide Ld. Registrar's order dated 21.10.2020.

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 a Petition being I.A./761 of 2022 along with put-up I.A./760 of 2022 dated 13.05.2022 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 of the applicant Bank on 14.09.2022, such has been recorded in Ld. Registrar's order dated 14.09.2022.

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 business of defendant No.2; and the defendant No.3 is the guarantor. The defendant No.1 (M/s Kalika Nursery) through its proprietress, Smt. Kabita Adak, the defendant No.2 herein approached and applied before the applicant Bank for financial assistance vide loan Application dated 09.11.2011. At the request of defendant No.1 through its proprietress, i.e. defendant No.2, applicant Bank was pleased to grant / sanction a Credit facility to the limit of Rs.10,00,000/- (Rupees ten lacs) in favour of the defendant No.1, vide sanction letter dated 02.12.2011 against the hypothecation of entire stock and book debts and equitable mortgage of immovable property as a collateral security. Copy of loan Application and sanction letter dated 02.12.2011 are annexed and marked as Annexure 'A-1' & 'A-2' respectively.

(ii) In consideration of the aforesaid credit facility of Rs.10.00 lakhs availed by Defendant No.1, the defendants executed the following security documents all dated 02.12.2011:

- (a) Common Deed of Hypothecation;

- (b) Demand Promissory Note for Rs.10.00 lacs;

- (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 granting loan to the defendant No.1, proprietorship firm of defendant No.2, the defendant No.3 stood as a Guarantor and executed and delivered Guarantee Agreement dated 02.12.2011 for due repayment of all sums that would become due and payable by defendant No.1 a proprietorship business of defendant No.2 together with interest, costs, charges etc. and declared that the said guarantee would be a continuing guarantee. Copy of Guarantee Agreement dated 02.12.2011 is annexed and marked as Annexure 'A-6'.

(iv) To secure the aforesaid credit facility of Rs.10.00 lacs granted to the defendant No.1 by the applicant Bank, the defendant No.2, Smt. Kabita Adak created equitable mortgage in respect of her immovable property, morefully described in Schedule 'X-1' at page 25 and para 3A at page 8 & 9 of the O.A., by depositing three Title Deeds (a) being No.4274 for the year 2002, standing in the name of Sri Sufal Chandra Adak, (b) being No.3203 for the year 2006, standing in the name of Smt. Kabita Adak and (c) being No.7892 for the year 2006, standing in the name of Smt. Kabita Adak, with the applicant Bank. Copy of said Deeds are annexed and marked as Annexure 'A-7', 'A-8' & 'A-8A' respectively. Further, the respective mortgagors confirmed the creation of equitable mortgage by deposit of said Deeds being No.4274 for the year 2002, being No.3203 for the year 2006 and being No.7892 for the year 2006 by executing two Memorandum of deposit of Title Deeds dated 02.12.2011 in favour of applicant Bank; copy of said Memorandum of Deposit of Title Deeds dated 02.12.2011 is annexed and marked as Annexure 'A-9' & 'A-9A'.

(v) Applicant Bank has got valued the mortgaged secured property(s) through its empanelled valuer and the valuer submitted its report to the applicant bank; copy of said Valuation Report is annexed and marked as Annexure 'A-10'.

(vi) For the purpose of securing repayment of the debit balance lying outstanding from time to time in the said credit facility, the defendants / borrower(s) executed and delivered an Acknowledgement of Debt / Liability dated 07.11.2014 and 04.10.2017 in favour of the applicant Bank. Copies of said Acknowledgement of Debt / Liability dated 07.11.2014 and 04.10.2017 are annexed and marked as Annexure 'A-11' & 'A-12' respectively.

5. The Defendants enjoyed and utilized the said credit facility by opening Account in Bank's Amtala Branch, N.D. Road, P.O.- Kanya Nagar, South 24-Parganas. However, the defendants failed and neglected to abide by the terms and conditions of the facility. The Defendants did not repay the outstanding Bank's dues and overdue interests in loan Account. 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. on 03.10.2016. Considering aforesaid default and violation of the terms and conditions of the credit facility, the applicant Bank was compelled to issue recall / demand Notice dated 29.10.2018 upon the defendants through its Ld. Advocate demanding to repay the outstanding Bank's dues, but the defendants has failed and neglected to comply with the said notice; copy of said demand notice dated 29.10.2018 is annexed and marked with Annexure 'A-13'. Certified copies of Statement of Account along with Certificate under Bankers' Books Evidence Act, with interest calculation sheet, have been filed to show and prove the dues (Annexure 'A-14'), and future interest @ 11.50% per annum 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 Ld. Registrar's order dated 22.11.2022. 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 18.12.2023. Ld. Advocate for Union Bank of India has filed a Petition being I.A./761 of 2022 along with put-up I.A./760 of 2022 dated 13.05.2022 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 of the applicant Bank on 14.09.2022. Ld. Advocate of the applicant Bank has filed the English translation copy of Bengali Deeds by way of Affidavit dated 26.04.2022. Ld. Advocate of the applicant Bank has submitted arguments on 01.03.2024.

7. Applicant Bank has filed the evidence-on-affidavit affirmed by Shyamalendu Sardar, Branch Manager of erstwhile Bank's Amtala Branch, N.D. Road, Amtala, P.O.- Kanya Nagar, Dist.- South 24-Parganas 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 Shri Swarup Halder, Asstt. Manager of Bank's Amtala Branch, N.D. Road, Amtala, Dist.- South 24-Pargana on 25.03.2021, such has been recorded in Ld. Registrar-in-Charge's order dated 25.03.2021. The documents produced by the Applicant Bank are exhibited and annexed at 'A-1' to 'A-14'.

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 credit facility to the limit of Rs.10.00 lakhs vide sanction letter dated 02.12.2011. Applicant Bank has proved the creation of equitable mortgage of immovable property(s); morefully described in Schedule 'X-1' at page 25 and para 3A at page 8 & 9 of the original application.

9. On the point of limitation, Loan has been sanctioned on 02.12.2011; documents have been executed on 02.12.2011; original Application has been filed on 09.11.2018. Further, the defendants / borrower(s) have executed and delivered the Acknowledgement of Debt / Liability on 07.11.2014 and 04.10.2017. As such, the original Application appears to have been filed well within the period of limitation.

10. Applicant Bank has stated that the outstanding balance in Loan Account (inclusive of accrued interest and other charges as calculated upto 31.03.2018) for a sum of **Rs.17,60,822.50** (Rupees seventeen lacs sixty thousand eight hundred twenty two and paise fifty) 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 @ 11.50% per annum, while in the sanction letter dated 02.12.2011 the same rate of interest @ 11.50% 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. @ 11.50% 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./518 of 2020 (arising out of O.A./918 of 2018) deserves to be allowed; hence allowed.

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

ORDER

(i) T.A./518 of 2020 (arising out of O.A./918 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.17,60,822.50** (Rupees seventeen lacs sixty thousand eight hundred twenty two and paise fifty) 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 @ 11.50% 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 mortgaged immovable property(s); morefully described in Schedule 'X-1' at page 25 and para 3A at page 8 & 9 of the original application., as under –

"ALL THAT land measuring about 44 Decimal or 26.64 cottah be the same little more or less along with a single storied building at Village – Gotalahat, Post Office – Krishnapur, Police Station – Bishnupur, Mouza – Krishnapur, J.L. No.67, Dag No.203, 201, 207, 237/861, 209, Khatian No.322, 493, 299, 4274, 3203, District – South 24-Parganas, West Bengal and registered in favour of Smt. Kabita Adak (Defendant No.2 herein) vide Two Deeds before Additional District A.D.S.R. Bishnupur, 24-Parganas (South), West Bengal. Recorded as Being No.4274 for the year 2002 (in the name of Sufal Chandra Adak) and Being No.3203 for the year 2006 (in the name of Kabita Adak) and Being No.7892 for the year 2006 (in the name of Kabita Adak)."

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 Defendants.

(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./518 of 2020 (arising out of O.A./918 of 2018) is allowed and stands disposed of.**

This order is dictated and corrected by the undersigned and pronounced on this the 25^th day of July, 2024.

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

25-7-24 (Arbind Madhav) Presiding Officer DRT-2, Kolkata

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