STATE BANK OF INDIA vs MD NISAR on 6 November 2024

Page No.

KOLKATA DEBTS RECOVERY TRIBUNAL NO. 2

ORDER SHEET

(Continuation)

T.A./268 of 2020

State Bank of India

Case No. \_\_\_\_\_

Vs

Md. Nisar

<table border="1"><thead><tr><th data-bbox="81 193 156 256">Date of Order</th><th data-bbox="156 193 751 256">Order with Signature</th><th data-bbox="751 193 881 256">Office action with date and dated Signature of parties when necessary</th></tr></thead><tbody><tr><td data-bbox="81 256 156 904">12<br/>06.11.2024</td><td data-bbox="156 256 751 904"><p>Counsel for the parties:<br/>Ms. Ahana Rakshit, Ld. Advocate representing Mr. Anirban Pramanick, Ld. Counsel for the applicant Bank.<br/>None for the defendant.</p><p>T.A./268 of 2020 (arising out of O.A./601 of 2018) is allowed and disposed of.</p><p>Final order / Judgment is in separate sheet of 5 pages.<br/>File be consigned to record room.<br/>Order be uploaded on the Tribunal's website.</p><p style="text-align: right;"><br/>(Arbind Madhav)<br/>Presiding Officer<br/>DRT-2, Kolkata</p></td><td data-bbox="751 256 881 904"></td></tr></tbody></table>

1

T.A./268 of 2020 – DRT-2/Kol

**DEBTS RECOVERY TRIBUNAL - 2, KOLKATA**

JeevanSudha Bldg. 07^th Floor, 42/C, J.L. Nehru Road, Kolkata – 700071

Before Shri Arbind Madhav, Presiding Officer **T.A. No. 268 of 2020**

(arising out of O.A./601 of 2018)

In the matter of -

**State Bank of India** (formerly State Bank of Travancore), a banking institution and a body corporate constituted, incorporated and formed by and under the provisions of the State Bank of India Act 1955, and carrying on their banking business, *inter-alia*, amongst others at their Rajarhat Branch, Swagat Chinar Complex, Block-A, Rajarhat Expressway, P.S.-Baguihati, Kolkata – 700059, District – 24 Parganas (North), represented by Small and Medium Enterprises City Credit Centre, commonly known as "SMECCC" 1, Strand Road, Samriddhi Bhavan, Annexe Building, 4^th Floor, P.S.- Hare Street, Kolkata – 700001.

..... Applicant Bank

-Versus-

**1. Md. Nisar**, Son of Late Md. Shabuddin, carrying on business as proprietor under the name and style of M/s All Ali garments from T 169/3, Mitha Talab Lane, Bara Bagan, Metiabruz, P.S.- Rajabagan, Kolkata – 700044.

..... Defendant

Counsel for parties:

For the Applicant Bank : Mr. Anirban Pramanick.

For the Defendant : *Ex-Parte*

**FINAL ORDER / JUDGMENT**

Delivered on 06.11.2024

Applicant, State Bank of India instituted the present Application being the Original Application No.601 of 2018 filed in DRT-3, Kolkata on 18.07.2018 against single Defendant under Section 19(1) of the Recovery of Debts & Bankruptcy Act, 1993 (amended from time to time) for recovery of Rs.20,31,352.00 (Rupees twenty lacs thirty one thousand three hundred fifty two) as on 20.06.2018 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 26.10.2019 and the same has been renumbered as T.A./ 268 of 2020 vide Ld. Registrar's order dated 10.06.2020.

**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 or about 29.06.2016 the defendant had applied and approached before the applicant Bank for term loan (Mudra Loan) to the tune of Rs10,00,000.00 (Rupees ten lacs) and cash credit facility to a sum of Rs.10,00,000.00 (Rupees ten lacs) for the purpose of purchase of machinery and for expansion of his business. Upon consideration of loan application, applicant Bank was pleased to grant / sanction by way of term loan and cash credit facility aggregating to a sum of Rs.20,00,000.00 (Rupees twenty lacs) in favour of the defendant, vide Arrangement Letter dated 13.07.2016. At the time of sanctioning of said credit facility, the effective rate of interest was @ 9.65% per annum with monthly rests. The primary security for the advance was the hypothecation of stocks and receivables be it present or future in the name of the firm. Copy of loan application form and Bio-data form dated 29.06.2016 is annexed and marked with letter 'A' and Exhibit AW-1; copy of Arrangement Letter dated 13.07.2016 is annexed and marked with letter 'B' and Exhibit AW-2.

(iii) In consideration of the aforesaid credit facilities of Rs.20.00 lakhs, the defendant executed and delivered the following security documents all dated 20.07.2016 in favour of applicant bank:

- (a) Term Loan Agreement;

- (b) Hypothecation agreement for term loan;

- (c) Hypothecation cum working capital agreement.

Said documents dated 20.07.2016 are annexed and marked with letter "C", "D" & 'E" and Exhibit – AW-3, AW-4 & AW-5.

3. The Defendant availed and enjoyed the said credit facility by opening Account in Defendant's name in Bank's Rajarhat Branch, Block-A, Rajarhat Expressway, Kolkata – 700059. However the defendant failed and neglected to abide by the terms and conditions of the facilities. The Defendant did not repay the outstanding Bank's dues and overdue interests in loan Accounts. In spite of repeated requests and personal contact made by the Applicant Bank, the defendant failed to regularize the loan Accounts. Since the defendant did not pay any attention to regularize the Accounts, the Accounts became out of order and was classified as N.P.A. on 20.09.2017. Thereafter, the applicant bank issued a letter dated 21.08.2017 to the defendant demanding payment of the dues, but he did not do so; copy of applicant's letter dated 21.08.2017 is annexed and marked with letter "F" and Exhibit – AW-6. The defendant by its letter dated 18.05.2018 admitted the entire dues and requested for some more time to pay off the outstanding loan amount, but the defendant failed and neglected to repay the Bank's dues; copy of said letter dated 18.05.2018 is annexed and marked with letter "G" and Exhibit – AW-7. Thereafter, the applicant discovered in the month of May 2018 that the business of the defendant has been shut down and machineries has been siphoned off, and the applicant Bank has lodged an F.I.R. against the defendant; copy of said FIR lodged on 14.06.2018 is annexed and marked with "H" and Exhibit – AW-8. The applicant Bank finding no other alternative issued a legal notice dated 26.06.2018 by its Advocate demanding to repay the outstanding Bank's dues, but the defendant did not comply the said notice; copy of Advocate's letter dated 26.06.2018 is annexed and marked with letter 'J' and Exhibit AW-10. 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 'I' and Exhibit AW-9), 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 has not been effected, such has been recorded vide Ld. Registrar's order dated 06.09.2023. At the request of Ld. Advocate of the applicant Bank, Ld. Tribunal is directed to serve the summons upon the defendant by way of paper publication; and Ld. Advocate for applicant Bank has brought on record the affidavit of service on publication dated 21.09.2023 upon the Defendant along with relevant portion of paper cuttings in two newspapers, namely (i) '*Indian Express*' in English and (ii) '*Aajkal*' in Bengali, both dated 17.09.2023, such has been recorded vide Ld. Registrar's order dated 08.02.2024. 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 21.05.2024. Written notes of argument has been filed by the applicant Bank on 06.11.2024, wherein stated 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 Diptendu Kumar Rakshit, Deputy Manager of Bank's SMECCC, 1, Strand Road, Samriddhi Bhavan, 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 the original documents have been returned to Mr. A. Kumar, Manager of Bank's SMECCC, Samriddhi Bhavan, Kolkata-700001 on 29.08.2022, such has been recorded in Ld. Registrar's order dated 29.08.2022. The documents produced by the Applicant Bank are exhibited and annexed at 'AW-1' to 'AW-10'.

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 (Mudra Loan) and cash credit facility aggregating to a sum of Rs.20.00 lakhs. Applicant Bank has proved the hypothecated movable assets, described in Schedule at page 13 of the original application.

7. On the point of limitation, Loan has been sanctioned on 13.07.2016, security documents have been executed on 20.07.2016 and original Application has been filed on 18.07.2018. 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 Loan Accounts (inclusive of accrued & unapplied Interest and penal interest calculated upto 20.06.2018) for an aggregate sum of **Rs.20,31,352.00** (Rupees twenty lacs thirty one thousand three hundred fifty two) as on 20.06.2018, 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 *pendentelite* 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 in the Arrangement / sanction letter the rate of interest @ 9.65% per annum, at monthly rests, has been mentioned. Therefore, in my view, the *pendente lite* & future rate of interest @ 9.65% per annum, with quarterly rests, from 21.06.2018, 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./268 of 2020 (arising out of O.A./601 of 2018) deserves to be allowed; hence allowed.

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

ORDER

(i) T.A. /268 of 2020 (arising out of O.A./601 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.20,31,352.00** (Rupees twenty lacs thirty one thousand three hundred fifty two) due and payable, inclusive of interest and other charges as calculated up to 20.06.2018; and interest for the period *pendentelite* and future rate @ 9.65% per annum, with quarterly rests, from 21.06.2018, 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 *pendentelite* and future interest shall be calculated on the reduced amount.

(iii) The defendant debarred from transferring, alienating, encumbering or disposing of the hypothecated moveable assets; described in 'Schedule' at page 13 of the original Application, as under –

*"Hypothecation of stocks and receivables be it present or future in the name of the firm M/s Ali Ali Garments situated at T 169/3, Mitua Talab Lane, Bara Bagan, Metiabruz, P.S.- Rajabagan, Kolkata – 700044."*

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 favor 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./268 of 2020 (arising out of O.A./601 of 2018) is allowed and stands disposed of.**

This order is dictated and corrected by the undersigned and pronounced on this the 06^th day of November, 2024.

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

(Arbind Madhav) 6.11.24 Presiding Officer DRT-2, Kolkata

kb