UNION BANK OF INDIA (CORPORATION BANK) vs M/S KALPANA BHANDER on 7 July 2022

1. 1. **M/s Kalpana Bhandar**, a proprietorship business at Smt. Kalpana Garai, having its place of business at Vill.- Purba Patharberia, P.O.- Ramchandranagar, P.S.- Bishnupur, Dist.- 24- Parganas (South), Pin – 743503, West Bengal.

2. 2. **Smt. Kalpana Garai**, Proprietor of M/s Kalpana Bhandar, having its principal place of business at Vill.- Purba Patharberia, P.O.- Ramchandranagar, P.S.- Bishnupur, Dist.- 24- Parganas (South), Pin – 743503.

3. 3. **Sri Ajay Garai**, having its principal place of business and/or residence at Vill.- Purba Patharberia, P.O.- Ramchandranagar, P.S.- Bishnupur, Dist.- 24- Parganas (South), Pin – 743503.

..... Defendants

Counsel for parties:

For the Applicant Bank : Ms. Smruti Rekha Mishra For the Defendants : *Ex parte*.

**FINAL ORDER / JUDGMENT**

Delivered on 07.07.2022

Applicant (Union Bank of India), erstwhile Corporation Bank has instituted this Application, being O.A. No.890 of 2018 on 05.11.2018 filed in DRT-3, Kolkata against three defendants under Section 19 of the Recovery of Debts & Bankruptcy Act, 1993 (amended from time to time) for recovery of a sum of Rs.12,95,030.75 (Rupees twelve lakhs ninety five thousand thirty and paise seventy five) is due and payable upto 30.06.2018 and further interest @ 12% per annum from 01.07.2018, till realization in full and costs etc. 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 in Ld. Registrar, Kolkata DRT-3's Order dated 13.11.2019 and the same has been renumbered as T.A./566 of 2020 vide Ld. Registrar's order dated 16.11.2020.

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. Counsel for Applicant Bank has filed an I.A. being I.A./54 of 2021 dated 13.01.2021 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. Counsel for Applicant Bank on 12.02.2021, such has been recorded in Ld. Registrar's order dated 12.02.2021.

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

(i) The defendant No.1 is a proprietorship concern, the defendant No.2 is the proprietress of defendant No.1. The defendant No.3 is the guarantor. The defendant No.1 through its proprietor (defendant No.2) had approached and applied to the applicant Bank for financial assistance vide an application dated 29.04.2013. Upon relying on the Application, the applicant Bank was pleased to grant / sanction a credit facility to the limit of Rs.10,00,000/- (Rupees ten lakhs) to the defendant No.1 vide sanction letter dated 22.05.2013. The terms and conditions of the said sanction were duly accepted and acknowledged by the Defendants. Copy of said Application and sanction letter are annexed and marked as Annexure 'A-1' & 'A-2' respectively.

(ii) In respect of the said credit facility of Rs.10.00 lakhs, the defendant No.2 being the proprietress of the defendant No.1 had executed the following security documents on 22.05.2013 in favour of applicant Bank:

- (a) Common Deed of Hypothecation;

- (b) Demand Promissory Note for Rs.10,00,000/-;

- (c) Take Delivery Letter.

Copy of said document are annexed and marked as Annexure 'A-3', 'A-4' & 'A-5' respectively.

(iii) To secure the said credit facility granted to the defendant No.1, the defendant No.3 guaranteed the due payment of all present and future indebtedness and liabilities of the defendants to the applicant Bank by executing a 'Guarantee Agreement' dated 22.05.2013 for Rs.10,00,000/-, and declared that the said guarantee would be a continuing guarantee. Copy of said Guarantee Agreement is annexed and marked as Annexure 'A-6'.

(iv) For the purpose of securing the repayment of such loans / advances, the defendant No.2 created equitable mortgage in respect of her immovable property(s), i.e.

ALL THAT land measuring in total about 79 decimal be the same little more or less at Village – Chak Sukdevpur, Post Office – Bakrahat, Police Station – Bishnupur, Mouza – Chak Sukdevpur, J.L. No.45, CS Khatian No.417, RS Dag No.305, 306, 521, Touzi No.118, District – South 24 Parganas, West Bengal, and registered in favour of Smt. Kalpana Garai (Defendant No.2 herein) vide THREE separate Deeds registered before Additional District Sub-Registrar, Bishnupur, 24-Parganas (South), West Bengal, Recorded as (1) Book – 1, Volume No.98, Pages – 141 to 146 Being No.6987 for the year 1987, (2) Book - 1, Volume No.98, Pages – 153 to 158 Being No.6989 for the year 1987, (3) Book – 1, Volume No.1, Pages – 25 to 32 Being No.5 for the year 1988, and stands in the name of Smt. Kalpana Garai (defendant No.2 herein); described in Schedule at page 25 of the original Application, by depositing title deeds with the applicant Bank; copies of aforesaid title deeds are annexed and marked as Annexures 'A-7', 'A-8' & 'A-9' respectively. The Defendant No.2 confirmed the creation of equitable mortgage by deposit of said Title Deeds being No.4269 for the year 1977, being No.4271 for the year 1977 and being No.4273 for the year 1977 vide a Memorandum of Deposit of Title Deeds dated 22.05.2013 in favour of applicant Bank, copy of said Memorandum of deposit of Title Deed is annexed and marked as Annexure 'A-10'. Further, the applicant Bank got valued the mortgaged secured property through its empanelled valuer; copy of the Valuation Report is annexed and marked as Annexure 'A-11'.

(v) For the purpose of securing repayment of the debit balance lying outstanding in the aforesaid credit limit, the defendant No.2 / borrower(s) have executed and delivered an 'Acknowledgement of Debt / Liability' dated 10.09.2014 & 08.08.2017 in favour of applicant Bank thereby confirming the outstanding debit balance in the account. Copies of said Acknowledgement of Debt / Liability are annexed and marked as Annexure 'A-12' & 'A-13' respectively.

5. The Defendants enjoyed the aforesaid credit facilities by opening Account in Defendant No.1's name (M/s Kalpana Bhandar) in Applicant Bank's Amtala Branch, N.D. Road, Amtala, P.O.- Kanya Nagar, South 24-Parganas. 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 and overdue interests in the loan Account. In spite of several reminders and requests made by the Bank, the defendants failed to regularize the loan Account. Since the defendants did not pay any attention to regularize the Account, the Account became irregular and was classified as N.P.A. on 30.05.2016. Thereafter, the applicant Bank issued recall demand Notice dated 29.10.2018 upon the defendants / borrower(s) through its Advocate calling upon them to repay the outstanding Bank's dues but the defendants failed and neglected to pay the outstanding loan amounts; copy of such Notice dated 29.10.2018 along with photocopies of postal receipts are annexed and marked as Annexure 'A-14'. Certified copies of Statements of Account along with Certificate under Bankers' Books Evidence Act, with Interest calculation sheet, have been filed to show and prove the dues (Annexure '15'), and further interest @ 12%

per annum, till realization, has been prayed. Applicant Bank submitted that their claim in the Application is within limitation.

6. After filing of this Application, being O.A. No.890 of 2018 on 05.11.2018 filed in DRT-3; 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 in Ld. Registrar, Kolkata DRT-3's Order dated 13.11.2019 and the same has been renumbered as T.A./566 of 2020 vide Ld. Registrar's order dated 16.11.2020. Ld. Counsel for Applicant Bank has filed an I.A. being I.A./54 of 2021 dated 13.01.2021 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. Counsel for Applicant Bank on 12.02.2021, such has been recorded in Ld. Registrar's order dated 12.02.2021. Ld. Counsel for applicant Bank has served the amended copy of the O.A. to defendants No.1, 2 & 3; service of amended copy of the O.A. upon the defendants is completed, such has been recorded vide Ld. Registrar's order dated 17.02.2022. Service of Notices upon the Defendants are complete as is evident from the Affidavit-of-service filed by the applicant Bank. Despite service, the defendants did not appear nor filed the written statement; hence, all the defendants were ordered to be proceeded *ex-parte* vide order dated 06.04.2022. Ld. Counsel for applicant Bank has submitted arguments on 20.06.2022.

7. Applicant Bank has filed the evidence-on-affidavit affirmed by Mr. Shyamalendu Sardar, Branch Manager of erstwhile Applicant Bank's Amtala Branch, N.D. Road, Amtala, P.O.- Kannyanagar, South 24-Parganas, Pin – 743503 along with the original documents executed by the Defendants. Original documents have been produced by the Applicant Bank; the same have been verified with the true certified copies of documents annexed with O.A. and the original documents have been returned to Shri Ujjal Kumar, Sr. Manager of applicant Bank's Amtala Branch, N.D. Road, P.O.- Kannyanagar, South 24-Parganas on 13.01.2021, such has been recorded in Ld. Registrar's order dated 13.01.2021. The documents produced by the Applicant Bank are exhibited and annexed at Exhibit 'A-1' to 'A-15'.

I have heard the Ld. Counsel for the Applicant Bank and perused the records.

8. Evidence-on-affidavit filed by the Applicant Bank is supported by the copies of documents (original documents verified by the Registry and returned to Shri Ujjal Kumar, Sr. Manager of applicant Bank's Amtala Branch, N.D. Road, P.O.- Kannyanagar, South 24-Parganas on 13.01.2021). Applicant Bank has corroborated the averments made in the T.A./566 of 2020 (arising out of O.A./890 of 2018 – DRT-3/Kol). Applicant Bank has proved the sanction of credit facility of Rs.10,00,000/-.

Applicant Bank has proved the mortgaged immovable property(s) remain as mortgaged, described in 'Schedule of Mortgage Property' at Page 25 of the T.A./O.A. The defendant No.2 has confirmed the creation of mortgage by deposit of title deeds by executing a Memorandum of Deposit of Title Deeds dated 22.05.2013 in favour of applicant Bank.

9. Evidence-on-affidavit, filed by the Applicant Bank, has remained unchallenged, un-rebutted and its veracity cannot be put to dispute. Applicant Bank has proved the averments made in the original Application.

10. Applicant Bank has filed the Statements of Account along with Certificate under Bankers' Books Evidence Act. Upon perusal on statement of Account, it is seen that the outstanding balance in Loan Account (inclusive of accrued interests calculated upto 30.06.2018) is **Rs.12,95,030.75** (Rupees twelve lakhs ninety five thousand thirty and paise seventy five) as on 30.06.2018, 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 @ 12% per annum, while in the D.P. Note dated 22.05.2013 the rate of interest @ 12% per annum, has been mentioned. Therefore, the *pendente lite* & future rate of interest which has been claimed by the Applicant Bank, i.e. @ 12% per annum, simple from 01.07.2018, is allowed.

11. On the point of limitation, Loan has been sanctioned on 22.05.2013; documents have been executed on 22.05.2013; and the original Application has been filed on 05.11.2018. It is observed that the defendant No.2 being the proprietress of defendant No.1 admitted and acknowledged her debt & liabilities by executing 'Acknowledgement of Debt / Liability' dated 10.09.2014 & 08.08.2017 confirming the outstanding balance in loan Account. As such, the original Application appears to have been filed well within the period of limitation.

12. 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 original Application. The original application being T.A. No.566 of 2020 (arising out of O.A./890 of 2018 – DRT-3/Kol) deserves to be allowed; hence allowed.

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

ORDER

(i) T.A. No.566 of 2020 (arising out of O.A./890 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 directed to pay, jointly and/or severally, the total debt amount of **Rs.12,95,030.75** (Rupees twelve lakhs ninety five thousand thirty and paise seventy five) due and payable, inclusive of interest and other charges as calculated upto 30.06.2018; and interest for the period *pendente lite* and future @ 12% per annum with monthly rests from 01.07.2018, till realization of the entire sum due and recoverable.

(ii) Amount, if any, paid by the defendants in the loan account or amount 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 are debarred from transferring, alienating, encumbering or disposing of the mortgaged immovable property(s), described in 'Schedule of Mortgaged Property' at page 25 of the Original Application.

The defendants No.2 & 3 are also debarred from transferring, alienating, encumbering or disposing any other property(s) and assets belonging to them, either movable and/or immovable, till the aforesaid adjudicated debt amount are recovered from the defendants.

(iv) The defendants No. 1, 2 & 3 are given a time of thirty 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 both moveable and immovable 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 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. No.566 of 2020 (arising out of O.A./890 of 2018) is allowed and stands disposed of.**

File be consigned to Record room.

This order is dictated and corrected by the undersigned and pronounced on this the 07^th day of July, 2022 in the presence of Ld. Advocate for the applicant Bank, Ms. Gitasree Chatterjee on behalf of Ld. Counsel, Ms. S.R. Mishra.

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

Sd/-

(Makena Srinivasa Rao) Presiding Officer DRT-2, Kolkata