INDIAN OVERSEAS BANK vs M/S CITI POLYMERS AND ORS on 27 July 2020

JUDGEMENT

1. This is an Original Application under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 initiated by the applicant against the defendant Nos. 1, 2 and 3 praying for issuance of Recovery Certificate to the tune of Rs. 11,37,448.94p together with interest, cost and other usual reliefs.

2. The brief facts of the case as made out in the Original Application by the applicant bank is that the defendant No. 1 is a partnership concern in the name and style of lvl/s Citi polymers, Defendant Nos. 2 and 3 CL

are the partners of Defendant No. 1 and carrying on business at the addresses as mentioned in the cause title. The Defendant No. 2 & 3 are also the Guarantors for defendant No. l and residing at the addresses as mentioned in the cause title. The Defendants are engaged in business of manufacturing of plastic films from polymers. The defendant No. 2 and 3 being the guarantors for defendant No. 1 have executed guarantee agreement inter alia, unconditionally guaranteeing the repayment of all the amounts advanced and all the liabilities arising out of the credit facilities extended to Defendant No. 1 as and when called upon to do so by the Applicant in the event of default committed by Defendant No.1.

3. The defendant No. 1 through Defendant No. 2 & 3 approached the Applicant in the month of lvlay, 2010 with a request for financial assistance for the amount of Rs. 10,00,000/- in the nature of Cash Credit limit for the partnership firm.

4. The Applicant relying upon the representation made by the defendants, sanctioned Credit Facllities of the nature of cash credit for the limit of Rs. 10,00,000/- on terms and conditions inter alia, against hypothecation of present and future stock of finished products and raw materials in the unit and also plant machineries engaged in production. The defendant has availed the said credit facility under CGTMSE Guarantee scheme.

5. The Applicant submits that in respect of credit facility granted Defendant in May 2010, the following documents were executed the defendant No. 2 & 3. Demand Promissory Note dated 31.05.2020 for the amount of Rs.10,00,000/- ( Rupees Ten Lakhs). 6\ to by

(a)

(b) Letter of continuity dated 31.05.2020 for an amount Rs.10,00,000/- duly executed by Defendant No. 2 & 3. Letter of Hypothecation dated 31.05.2010 for an amount

(c) Rs.10,00,000/-.

(d) Letter of Hypothecation (for securing machineries/ vehicles Goods/ Book Debts) dated 31.05.2020 for an amount of Rs. 10,00,000/- duly executed by Defendant No 2 & 3. The Applicant submits that Defendant No.2 have executed a Guarantee for cash credit dated 31.05.2010 in favour of the Applicant. The Applicant submits that Defendant No.3 have executed a Guarantee for Cash Credit dated 31.05.2010 in favour of the Applicant thereby jointly and severally guaranteeing to the aPplicant the payment of Rs. 100,000/-. The Applicant further submits that Defendant No.2 and 3 for Defendant No. 1 lastly signed and executed a Revival Letter dated 13.06.2012 thereby acknowledging the indebtedness and liabilities with interest thereon towards the credit facilities sanctioned to defendant No. 1 on earlier various dates by the Applicant by virtue of respective a greements. The Applicant submits that the defendants committed a breach of terms and conditions of the Agreement and made defaults in payment, even after several requests from the Applicant Bank. The Applicant was constrained to declare the account of Defendant as NPA on 01 .0 5.2013. After availing the loan, the defendant had utilized the said loan amounts in his business and operated the loan accounts at the initial stage but subsequently the defendant had failed to operate the said loan accounts in terms of the agreement between the parties as a of of

6.

7.

9. a-

result of which the loan (aoccounts became irregular. A sum of Rs.11,37,448.94 (Rupees eleven lakh thirty seven thousand four hundred forty eight and ninety four paise) is due against the defendants which the defendants had not paid despite of repeated demands and request. Finding no other way to recover the dues of the bank, the appllcant bank had filed this Original Application for the recovery of the aforesaid amount and for the issuance of Recovery Certificate against the defendant.

10. Notices were issued to the defendant to show cause as to why the relief prayed for by the applicant bank be not granted. After issuance of the notice, the defendant had appeared through their Counsel but the defendant failed to flle the show cause reply and absented himself from the proceedings. Consequently, the said defendant was set ex- parte. The Tribunal had no other option but to hear ex-parte against the defendant.

12. I have heard the learned Counsel perused the relevant documents. The defendants had not contested Thus, the point for determination in of the applicant bank is within time utilized the loan facilities granted defendants are liable to the amount for the applicant bank and have the case of the applicant bank. this case is (i) Whether the claim ? (ii) Whether the defendants had by the bank ? (iii) Whether the 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-A to Annexure-H, 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 H, it is t4. Or

15. t7.

16.

(s) established that the defendants had availed the financial facitities from the applicant bank and had withdrawn the amount throuoh the accou nt. The oral testimony comprises of an affidavit of Ms. Shashi prava Parida, Daughter of Mr. H. 8. parida, working as Manager of the Applicant Banks office at t32A/ 18, Raja Rajendra Lal Mitra Road, Kolkata 700010 (Phutbagan Branch). The averments in the application and the facts stated by the witness of the appltcant in his amdavit are un rebutted. From the perusal of the Statement of Account which is Annexure/Exhibit-H, the total outstanding comes to Rs.77,37,44A.94 (Rupees eleven lakh thirty seven thousand four hundred forty eight and ninety four paise) which the applicant bank ls entifled to recover from the defendants. In view of the above discussion and after evidence-on-affidavit of the applicant bank and considering the entire the documents filed by allowed and It is hereby the the applicant bank, I have no hesitation to hold that the appticant bank is entitled to recover a sum of Rs.11,37,44g.94 (Rupees eleven lakh thirty seven thousand four hundred forty eight and ninety four paise) from the defendants who are liable for the same. The appticant bank shall also be entiued to pendentelite and future interest on the said amount @ 12olo per annum with simple from the date of filing of the Original Application tilt the date of realization.

ORDER

T.A. No.1233 of 2014 fited by the Appticant Bank is debt is determined with cost against the defendants. ordered that applicant bank is enti ed to recover from a\

defendants the total amount to the tune of Rs.11,37,448.94 (Rupees eleven lakh thirty seven thousand four hundred forty eight and ninety four paise) with pendentelite and future interest @ 12olo per annum with simple on the amount due from the date of filing of the Original Application, i.e. 12.11.2013 till futl and finat realization of the claim amount. Amount, if any, paid by the defendants in 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. Accordingly, pendentelite and future interest shall be calculated on the reduced amount. Defendants are debarred from disposing, alienating or dealing with any of the properties belonging to defendants till the aforesaid decretal debt is recovered from the defendants. Defendants are 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 mentioned time, the applicant 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. 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

(s) d- the Recovery of Debts and Bankruptcy Act, 1993 and put up the same for issuance of the Certificate.

(6) Ld. Recovery Officer 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 final order/judgement for recovery of the sum against the defendant 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 Debts and Ba n kruptcy Act, 1993.

(8) The parties are directed to appear before the Recovery Officer on 16.10.2020 for further action in accordance with law in the event the entire amount is not paid by the said date. Accordingly, the Original Apptication being T,A. No. 1233 of 2014 is allowed and stands disposed of. Copy of the ludgement/Finat Order be uploaded in the Tribunat,s we bs ite. ( Dictated to Steno, trar\sra.bfAb& her, corrected, signed and q pronounced by me in tne/6p6h CoLirt on this the 27-.) - 2O2O) A 'l< c,l^s-'r'^-l ( ANIL KUMAR CHATURVEDI ) PRESIDING OFFICER.

Order Sheet (Continuation) case No. TA No. 1233 of 2014 Indian overseas bank Vs. f4/s Citi Polymers & Ors. Date of

Order

order with signature Office action with dat€ and dated Signature of parties when order No. I ut-tt 14 Order pronounced (Vide separate sheets). In the result, T.A. No. 1233 of 2014 is allowed Issue Recovery Certiflcate accordingly. with costs. ^,\c (A.K.Chaturvedi) Presiding Offlcer DRT-3,Kolkata