CENTRAL BANK OF INDIA vs M/S IRIN TEXTILE AND FASTNERS AND ORS on 27 July 2020

JUDGEMENT

This is an Original Application made under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 initiated by the applicant against the defendants praying for issuance of Recovery CertiRcate to the tune of Rs. 11,53,947l- together with interest, cost and other usual rellefs. The instant Originat Application being Case T.A. No. 368 of 2014 arising out of No. O.A. 469 of 2Ot2 was filed on 19.04.2010 before the

2. DRT-II, Kolkata for recovery of a sum of Rs. 11,53,847l- due and payable from the defendants No. 2 and 3 jointly and severally, being the partners of the Defendant No. l and the principal borrower, towards outstanding dues as on 28.02.2010 in respect of the credit facllities to the tune of Rs. 10,00,000/- sanctioned and granted by the Appllcant Bank to the Borrower/Defendant No. 1 as an over draft account. The instant O.A. No. 468 of 2010 had been filed before the DRT-II, Kolkata within the period of limitation and within the jurisdiction of the Hon'ble Tribunal. Subsequently, the O.A. has been transferred to this Hon'ble DRT-UI, Kolkata and renumbered as T.A. No. 368 of 2014. The brief facts of the case as made out in the Original Application by the applicant bank is that the defendant No. 2 & 3 on behalf of the Defendant No. 1 made a request to the applicant's branch at 54A, Pratapaditya Road, Pratapaditya Road Branch, Kolkata-700026 on or about 03.01.2007 for cash credit facilities of Rs. 10,00,000/- and submitted requisite information by way of equltable mortgage of the landed and resldential building, D.P. Notes dated 29.01.2008 and signing of over draft agreement dated 29.01.2008 and also letter of declaration of undertaking to secure the loan. The Defendant No.4 as guarantor, furnished his personal information including equitable mortgage charge on property as commercial space at 57, Sarsuna Bagpota Road, Kolkata-700061. The Applicant Bank having given due consideration and after proper scrutiny of the application dated 3'd January,2007 submitted by the Borrowers, being the Defendant No. 2 & 3 on behalf of the Defendant No. 1, backed by guarantee provided by the Guarantor being the Defendant No.4, sanctioned a cash credit facilitles for limit of Rs. 10,00,000/- only vide its sanction letter dated 24.01.2008 to the Borrower. o-

4. The defendant on acceptance of the terms and conditions as contained in the sanction letters dated 24.01.2008 and as stiputated in Annexure-'A' executed certain documents backed by guarantee provided by the guarantor, being Defendant No.4 and a Demand Promissory Notes for Rs. 10,00,000/-, as stipulated along with AnnexurerA', with a promise to pay a total sum of Rs. 10,00,000/- to the Applicant Bank on demand with interest thereon with monthly rest.

5. The defendant No. 2 & 3 on behalf of the Defendant No. 1, to secure the said cash credit loan facilities, executed Over Draft Agreement on 29.01.2008 and the Defendant No.4 executed mortgage confirma on letter on 29.01.2008 in favour of the applicant for Rs. 10,00,000/- agreeing to pay interest @ 1olo p€r annum over the Allahabad Bank,s Prime Lending Rate whlch w6s 13olo with monthly rests and deposited several Title Deeds of immovable properties situated at 57, Sarsuna, Bagpota Road, Kolkata-700061, which would be kept as security as stipulated in Annexure -'B'and Annexure -'C'.

6. To secure the loan of defendant No. 1 with the applicant, the defendants No. 2 & 3 agreed and guaranteed for payment of Rs. 10,00,000/- together with interest thereon or on such sum as might be due or at such other rate of interest. The defendant No. 2 & 3 agreed to make payment and discharge on demand of all amount due and payable by the defendant No. 1 to the applicant at any time in respect of Cash Credit loan facilities availed of by the defendant No. 1 as stipulated in Annexure -'85'.

7. The defendants No. 2 & 3 as borrowers had executed the following banking documents on behalf of the Defendant No. 1: q

i) Agreement relating 24.01.2008 Demand Promissory 29.01.2008 to properties so mortgaged dated Notes by the Defendant No.2 & 3 dated over Draft Agreement dated 29.01.2008 Letter of declaration dated 29.01.2010. The defendant No. 4 executed guarantee documents of Rs. 1O,OOO/- dated 29.01.2008 to secure due repayment of the loan and advances granted to the said firm inter-alia, and stated that this guarantee shall be as a continuing guarantee irrespective of any sum or sums which may be paid lnto the account of the said firm at any time during the continuance of the guarantee. The defendant enjoyed the money from the aforesaid loan but failed to operate the Cash Credit Loan accounts effectively and as a result of which the loan accounts became irregular NpA and for which the Applicant had issued tetter dated 08.10.2009 under Section 13(2) of the SARFAESI Act, 2002 demanding a payment of Rs. 11,11,743l- towards the loan outstanding as on 08.10.2009. The Borrower being the Defendant No. 1 and the Guarantor being the Defendant No. 4 failed and neglected to pay their outstanding amount in spite of Legal Notice served on 08.10.2009 as stipulated in Annexure -'D,. A sum of Rs. 77,53,847/- is due against the defendant which the defendants had not paid despite repeated demands and requests. Ftnding no other way to recover the dues of the bank. the applicant bank had filed this Original Application for the recovery of the aforesaid amount and for the issuance of Recovery Certificate against the defendants. Notices were issued to the defendants to show cause as to why the relief prayed for by the applicant bank be not granted. After issuance q. ii) iii) iv)

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10. of the notlce, the defendant appeared through their Counsel and prayed time for filing of W.S. But no W.S. was filed on behalf of the sole defendant as a result of which they were proceeded exparte vide order dated 03.01.2020 of this Tribunal. The Tribunal had no other option but to hear ex-parte against the defendants. I have heard the learned counsel for the applicant bank and have perused the relevant documents. The defendant had not contested the case of the applicant bank. Thus, the point for determination in this case is (l) whether the claim of the applicant bank is within time? (ii) Whether the defendant had utilized the loan facilities granted by the bank? (ili) whether the defendant is liable to pay the amount due to the applicant bank or not?

13. The applicant bank by oral and documentary evidence has established its case. The documentary evidence comprises from Annexure/Exhibit- 'A' to Annexure 'I', which are available in paper book filed by the applicant bank. From the perusal of the documents referred above and the certified copy of the statement of account, which is filed as Annexure 'A' - 'F', it is established that the defendant had availed the financial facilities from the applicant bank and had withdrawn the amount through the account. The oral testimony comprises of an affidavit of Shri RaJ Kumar Verma, working as Assistant General Manager of the Appllcant Bank' The averments in the application and the facts stated by the witness of the applicant ln this affidavit are un-rebutted.

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16. From the perusal of the Statement of Account which is at Annexure'F, the total outstanding comes to Rs, 77,53,847/- as on 01.03.2010, which the applicant bank is entitled to recover from the defendant.

77. In view of the above discussion and after considering the entire evidence-on-affidavit of the applicant bank and the documents filed by the applicant bank, I have no hesitation to hold that the applicant bank is entitled to recover a sum of Rs. 11,53,847l- from the defendants who are liable for the same. The applicant bank shall also be entiued to pendentelite and future interest on the said amount @ 1olo per annum over the Allahabad Bank's Prime Lending Rate whlch was 130/o with monthly rests compounded from the date of filing of the Original Application till the date of realization.

ORDER

(1) T.A. No. 368 of 2014 filed by the Applicant Bank is allowed and debt is determined wlth cost against the Oefenaan$}t is hereby ordered that applicant bank is entitled to recover from the defendants the total amount to the tune of Rs. 11,53,847l- (Rupees eleven lakhs fifty three thousand elght hundred and forty seven only) with pendentelite and future interest @ 1olo per annum over the Allahabad Bank's Prime Lending Rate which was 13olo with monthly rests with slmple on the amount due from the date of filing of the Original Application, i.e. 19.04.2010 till full and final realization of the clalm amount.

Amount, if any, paid by the defendanEin the loan accounts or amount, if any, recovered by the Applicant Bank after filing of the O.A. the same be taken into account while arriving at the exact amount of dues/debt payable by the defendants.

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Accordingly, pendentelite and future interest shall be calculated on the reduced a mount.

(3) Defendants are debarred from disposing, alienating or dealing with any of the properties belonging to them till the aforesaid decretal debt is recovered from the defendants.

Defendanfare given a time of thirty days from the date of the Judgement/Final Order for repaying of the above mentioned dues, so intimated to them. In case the defendants fail to pay the dues within the above mentloned time, the appllcant bank is entitled to recover its dues by sale of secured assets, if any. Applicant bank is also entitled to proceed against personal properties of the defendants (both movable and immovable) and also proceed against the defendants personally to recover the dues in accordance with Law.

(5) Let the Certificate of Recovery be drawn up by Ld. Registrar forthwith in terms of Judgement for issuance of the same against defendants in favour of the applicant bank under Section 19 (22) of the Recovery of Debts and Bankruptcy Act, 1993 and put up the same for issuance of the Certiflcate.

Ld. Recovery Offlcer shall realize the amount as per the Recovery Certificate from the defendants in accordance with law.

(7) Ld. Registrar of this Tribunal is directed to deliver recovery certificate In term of the Rnal order /Judgement for recovery of the sum against the defendants in favour of the Applicant Bank under Section 19 (22) of the Recovery of Debts due to the Bank and Financial Institutions Act, 1993 now known as Recovery of Oebts and Bankruptcy Act, 1993. C\

(8) The partles are directed to appear before the Recovery Officer on 28.09.2020 for further action in accordance with law in the event the entire amount ts not paid by the said date. Accordingly, the Originat Application being T.A. No. 368 of 2014 is allowed and stands disposed of. Copy of the Judgement/Final Order be uploaded in the Tribunal,s website. File is consigned to the Record Room. ( Dictated to Steno, trarlr.Clllpg( Jy him, corrected., sign&d and pronounced by me in thePpen Court on this the,]// 67 ) 2020) A'r*cx'"*t* t ^-',.--tgHl,SHlYlJf'' )

Order Sheet (Continuation) Case No. TA No, 368 of 2Ol4 Central Bank of India Vs. Irin Textile & Fastners Date of

Order

Order with sig nature Offlce action with date and dated Signature of parties when naccs5ary Order pronounced (Vide separate sheets), In the result, T.A. No. 368 of 2014 is allowed Issue Recovery Certiflcate accordingly. with costs. A'*' c't^'x'Yr't ,, (A.K,Chaturvedif"'/ Presiding Officer DRT-3,Kolkata I