STATE BANK OF INDIA vs MS POPY PAL on 2 December 2024

1. **Ms. Popy Pal**, carrying on business as proprietress under the name & style of M/s R.L. Trading Co. from AC-131, Salt Lake, Sector-I, Kolkata – 700064.

.. ..... Defendant

Counsel for parties:

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

**FINAL ORDER / JUDGMENT**

Delivered on 02.12.2024

Applicant (State Bank of India), erstwhile State Bank of Mysore instituted the present Application being the Original Application No.175 of 2018 filed in DRT-3, Kolkata on 14.03.2018 against single Defendant under Section 19(1) of the Recovery of Debts & Bankruptcy Act, 1993 (amended from time to time) for recovery of **Rs.11,25,079.00** (Rupees eleven lacs twenty five thousand seventy nine) as on 06.02.2018 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 17.10.2019 and the same has been renumbered as T.A./ 93 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) That the sole Defendant is the proprietress of the loan account. On 07.08.2015 the defendant had applied and approached the State Bank of Mysore (SBM), Salt Lake Sector – III Branch, Salt Lake, Kolkata – 700106, which has been merged into State Bank of India as per Gazette of India Notification dated 22.02.2017, with effect from 01.04.2017, for cash credit facility aggregating a sum of Rs.5,00,000/-, and upon consideration of Loan Application, applicant Bank was pleased to grant / sanction a Cash Credit facility to the limit of Rs.5,00,000/- (Rupees five lacs) in favour of the defendant for the purpose of expansion of her business under Pradhanmantri Mudra Loan Yojna vide letter of arrangement dated 04.09.2015.

(ii) At the time of sanctioning of said credit facility, the effective rate of interest was @ 11.25% per annum at monthly rests. The primary security for the advance was hypothecation over stocks and assignment over book debts (described in Schedule at page 14 of the O.A.). Copy of loan application dated 07.08.2015 is annexed and marked with letter 'A' and Exhibit-1; copy of letter of arrangement dated 04.09.2015 is annexed and marked with letter 'B' and Exhibit-2.

(iii) In consideration of the aforesaid cash credit facility of Rs.5.00 lakhs, the defendant executed the following security documents in favour of applicant Bank on dated 04.09.2015:

- (a) Agreement of Loan-cum-Hypothecation;

- (b) Letter of undertaking.

Copy of said documents dated 04.09.2015 are annexed and marked with Letter 'C' & 'D' and Exhibit-3 & 4 respectively.

(iv) Again on 19.09.2016 the defendant had applied and approached the applicant Bank for cash credit facility aggregating a sum of Rs.9,50,000/- for the purpose of expansion of her business under Pradhanmantri Mudra Loan Yojna, and upon consideration of Loan Application, applicant Bank was pleased to grant / sanction a Cash Credit facility to the limit of Rs:9,50,000/- (Rupees nine lacs fifty thousand) in favour of the defendant vide letter of arrangement dated 21.09.2016.

(v) At the time of sanctioning of said credit facility, the effective rate of interest was @ 11.25% per annum at monthly rests. The primary security for the advance was hypothecation over stocks and assignment over book debts (described in Schedule at page 14 of the O.A.). Copy of loan application dated 19.09.2016 is annexed and marked with letter 'E' and Exhibit-5; copy of letter of arrangement dated 21.09.2016 is annexed and marked with letter 'F' and Exhibit-6.

(vi) In consideration of the aforesaid cash credit facility of Rs.9.50 lakhs, the defendant executed the following security documents in favour of applicant Bank on dated 21.09.2016:

- (a) Agreement of Loan-cum-Hypothecation;

- (b) Letter of undertaking.

Copy of said documents dated 21.09.2016 are annexed and marked with Letter 'G' & 'H' and Exhibit-7 & 8 respectively.

(vii) The applicant bank by its letter dated 12.12.2017 requested the defendant to regularize the Account; copy of said letter dated 12.12.2017 is annexed and marked with Letter 'I' and Exhibit-9.

3. The Defendant availed and enjoyed the said cash credit facilities by opening Account in Bank's Salt Lake Sector-III Branch, Salt Lake, Kolkata – 700106. 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 10.04.2017. Thereafter, the applicant Bank issued legal notice dated 19.02.2018 through its Advocate demanding to repay the outstanding Bank's dues, but the defendant did not comply the said notice; copy of Advocate's notice dated 19.02.2018 is annexed and marked with letter 'K' and Exhibit-11. 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 'J' and Exhibit-10), 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 been successfully effected, such has been recorded vide Ld. Registrar's order dated 21.04.2022. 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 06.07.2022. Written notes of arguments has been filed by the applicant Bank on 20.06.2024 wherein stated the brief facts of the case as has been narrated in the original application, but in para 12 & 14 of the written notes the applicant bank has mentioned the claim amount for a sum of Rs.14,94,063.00. Ld. Advocate of the applicant Bank has submitted arguments on 20.06.2024.

5. Applicant Bank has filed the evidence-on-affidavit affirmed by Sambhu Nath Sarkar, City Case Officer of Bank's SARB, Kankaria Centre, 2/1, Russel Street, Kolkata – 700071 along with the copies of original documents executed by the Defendant. Original documents have been produced by the Applicant Bank; the same have been verified with copies of documents annexed with O.A. and after verification the original documents have been returned to Shri Sambhu Nath Sarkar, City Case Officer of Bank's SARB, Kankaria Centre, 2/1, Russel Street, Kolkata – 700071 on 07.01.2020, such has been recorded in Ld. Registrar's order dated 07.01.2020. The documents produced by the Applicant Bank are exhibited and annexed at AW-1 to AW-11.

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

7. 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 to the limit of Rs.5.00 lakhs and Rs.9.50 lakhs vide letters of arrangement dated 04.09.2015 and 21.09.2016 respectively. Applicant Bank has proved the hypothecated movable assets, i.e. stocks and book debts, morefully described in Schedule at page 14 and para 3A at page 3 of O.A.

8. On the point of limitation, Loan has been sanctioned on 04.09.2015 & 21.09.2016, security documents have been executed and delivered on 04.09.2015 & 21.09.2016; and original Application has been filed on 14.03.2018. As such, the original Application appears to have been filed well within the period of limitation. .

9. Applicant Bank has stated that the outstanding balance in Cash Credit Account (inclusive of Interest and other charges calculated upto 06.02.2018) is **Rs.11,25,079.00** (Rupees eleven lacs twenty five thousand seventy nine) as on 06.02.2018, 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 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 letter of arrangements dated 04.09.2015 and 21.09.2016 the rate of interest @ 11.25% per annum, at monthly rests, have been mentioned. Therefore, in my view, the *pendente lite* & future rate of interest @ 11.25% per annum, with quarterly rests, from 07.02.2018, is allowed.

10. 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./93 of 2019 (arising out of O.A./175 of 2018) deserves to be allowed; hence allowed.

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

ORDER

(i) T.A./93 of 2019 (arising out of O.A./175 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.11,25,079.00** (Rupees eleven lacs twenty five thousand seventy nine) due and payable, inclusive of interest and other charges as calculated upto 06.02.2018; and interest for the period *pendente lite* and future rate @ 11.25% per annum, with quarterly rests, from 07.02.2018, 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 14 and para 3A at page 3 of the original Application, as under –

*"All that stocks lying at M/s R.L. Trading Co. situated at AC-131, Salt Lake Sector-I, Kolkata – 700064."*

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./93 of 2019 (arising out of O.A./175 of 2018) is allowed and stands disposed of.**

This order is dictated and corrected by the undersigned and pronounced on this the 02^nd day of December, 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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