INDIAN OVERSEAS BANK vs M/S HILTON TRADE LINKS PVT. LTD AND ORS on 28 October 2020

JUDGEMENT

This is a Transfer Application under Section 19 of the Recovery of Debts Due to Banks and Financiat Institutions Act, 1993 initiated by the applicant against the defendants praying for issuance of Recovery Certificate to the tune of Rs.10,51,161/- together with interest, cost and other usual reliefs. Original applicant Bharat Overseas Bank Ltd. has flled this application and subsequently in terms of notification issued by Government of India dated 72-03-2007 Bharat Overseas Bank Ltd. has been merged with the Indian Overseas Bank. The said amendment was allowed vide order no.9 dated 20.07,?007 by the Tribunal. The brief facts of the case as made out in the Transfer Application by the applicant bank is that the defendant no.1 represented through its Directors Satyanarayan Jalan and Dr. Binod More had approached the applicant bank on 27.10.2003 for grant of financial assistance for its business. The applicant bank after examining the feasibility of the said proposal had sanctioned a Cheque purchase facitity of Rs.7.50 lakhs on 23.03.2004 in favour of pawan Singhania sole proprietor of M/s Shree Venkatesha Udyog vide cheque No.O8422O dated 20.03.2004 drawn on Syndicate Bank,Rourkela Branch,Orissa with certain terms and conditions, which was accepted by the defendants. To avail the above loan, the defendants had executed various loan documents on

23. O3.2004 in favour of the applicant bank. There are four Defendants, Defendant no.1,2 and 3 are the main defendants and defendant no.4 is proforma defendant. Defendant no.1 is borrower company, defendant nos. 2 and 3 are Directors and defendant no.4 is a proforma defendant. Defendant nos. 1,2 and 3 have agreed to purchase a cheque for Rs.7.50 lakh drawn in their favour by proforma defendant no.4 and proprietor of M/s Shree Venkateswara Udyog being cheque No.O8422O dated 20.03.2004

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5. drawn on Syndicate Bank,Rourkela Branch,Orissa on 23.03.2004 was dishonoured with the remarks Fund Insufficient and was returned to the original applicant memo order dated 2Z.O4.ZOO4. Originat applicant has filed a separate proceedings under section 13g of the Negotiable Insdtruments Act 1881 and is pending for adjudication at the time of filing of this original application. Defendant No.1 by a letter dated 23.03.2OO4 executed a document giving consent to dtsclose their name by the Bank to Credit Information Bureau (India) Ltd. or any other agency as may be specified by Reserve Bank of India in relation to default, if any, committed by it. on 23.03.2004 at the request of the defendant no.1 the applicant purchased a cheque No.084220 dated 20.03.2004 drawn by one Shree Venkatesh Udyog . The Applicant on 23.03.3004 sent the said cheque to Syndicate Bank Rourkela Branch under its reference DBPC No.14l04 with a request to remit the proceeds to eliminate the debit item in the Applicant,s books of account. The said cheque when presented was dishonoured with the remarks .'Fund Insufficient." The applicant states that proforma Defendant No.4 had issued the cheque in favour of the defendant no.1 which was purchased by the applicant bank. The Applicant states that proforma defendant is a necessary party for proper adjudication. The applicant Bank prays for no reliefs against the said proforma defendant no.4 herein. Original applicant completed the service upon defendant nos. 1,2 and 4 by paper publication. The defendant nos. 1,2 and 4 never appeared before this Tribunal. The service was completed vide publication dated 13.7.2015. On 21.01.2016 the matter was set exparte in respect of the defendant nos. 1,2 and 4. The defendant no.3 has appeared and filed written statement on 21.01.2016. The evidence has already been filed by original applicant. The defendant no.3 though has f ed written

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8. statement but has failed to file counter evidence was closed by 2020. counter evidence and his right to file Tribunal vide order dated O2-01_ After availing the loan, the defendant no.1 had utilized the said loan amount in his business and operated the loan account at the initial stage but subsequenuy the defendants had failed to operate the said loan account in terms of the agreement between the parties as a result of which the loan account became irregular. A sum of Rs.10,51,161/- is due against the defendants which the defendants had not paid despite repeated demands and request. Finding no other way to recover the dues of the bank, the applicant bank had filed this Transfer 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 jssuance of the notice, the defendants had neither appeared nor had fited their show cause reply. Defendant No.3 filed W,S. on 21.01.2016 but no counter evidence is filed. His right to file the counter evidence is closed. Consequenuy, the defendants No. 1,2 and 4 were set ex_parte on 21.01.2016. The Tribunal had no other option but to hear ex-parte against the defendants no. 1,2 and 4. The defendants have failed to file any evidence in this matter hence this Tribunal has not relied any of the facts or pleadings in the written statement which are not very filed in the manner provided in sub- section 10(A), sub-section 1O(B) of section 19 of the Recovery of Debts and Bankruptcy Act,1993. Hence, this Tribunal is not relied on facts or preadings or any of the matter set out herein by the defendant no.3 in the written statement and rejected.

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11. 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 ?

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13. The applicant bank by oral and documentary evidence has established its case. The documentary evidence comprises from Annexure/Exhibit- A-1 to Annexure/Exhibit-G, 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/Exhibit- A -1 to G, it is established that the defendants 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 Rama Chandra Sahul, S/o. Late B.B.Sahu, working as Senior Manager of the Applicant Bank. The averments in the application and the facts stated by the witness of the applicant in his affidavit are unrebutted.

16. From the perusal of the Statement of Account which is Annexure/Exhibit-G, the total outstanding comes to Rs.10,51,161/- which the applicant bank is entitled to recover from the defendants. t7. 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.10,51,161/- from the defendants who are liable for the same. The applicant bank shall also

15. Z)- be entitled to pendentelite and future interest on the said amount @ 14.7 5o/o per annum with simple from the date of filing of the Original Application till the date of realization.

ORDER

(1) T.A. No.228 of 2013 filed by the Applicant Bank is attowed and debt is determined with cost against the defendants no.1 to 3. It is hereby ordered that applicant bank is entitled to recover from the defendants the total amount to the tune of Rs.10,51,161/- (Rupees Ten Lakhs Fifty One Thousand One Hundred Sixty One only) with pendentelite and future interest @ 14.75o/o per annum with simple on the amount due from the date of filing of the Transfer Application, i.e. 12.01.2007 (i.e. O.A. No. 3 of 2007) till fult and final realization of the claim amount.

(2) Relief against proforma defendant no.4 has not claimed by the applicant. Hence, rejected.

(3) Amount, if any, paid by the defendants in the loan account or amount, if any, recovered by the Applicant Bank after filing of the T.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.

(4) 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.

(5) Defendants are glven a time of thirty days from the date of the Judgement/Final Order for repaying of the above mentioned dues, so intimated to them. 1n case the defendants fails to pay the dues within the above mentioned time, the applicant bank is entitled to recover lts 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.

(6) Let the Certiflcate of Recovery be drawn up by Ld. Registrar forthwith in terms of ludgement for issuance of the same against defendants in favour of the applicant bank under

Section 19 (22) of the Recovery of Oebts and Bankruptcy Act, 1993 and put up the same for issuance of the Certificate.

(7) Ld. Recovery Officer shall realize the amount as per the Recovery Certificate from the defendants in accordance wlth law.

(8) Ld. Registrar of this Tribunal is directed to deliver recovery certificate in term of the final ordey'judgement for recovery of the sum against the defendants in favour of the Applicant Bank under Section L9 (22) of the Recovery of Debts due to the Bank and Financial Institutions Act, 1993 now known as Recovery of Debts and Bankruptcy Act, 1993.

(9) The parties are directed to appear before the Recovery Officer on

27. Lf .2020 for further action in accordance with law in the event the entire amount ls not paid by the said date. Accordingly, the Original Application being T.A. No.228 of 2013 arising out of O.A. No.3 of 2007 is allowed and stands disposed of. Copy of the Judgement/Final order be upload in the Tribunal's website. File is conslgned to the Record Room. ( Dictated to P.S., transcribed by him, corrected, siqned and q pronounced by me in the virtual ior.t on this ttie 2Sr day of October, 2020 ) A'xc;^s""-'t ( ANIL KUMAR CHATURVEDI ) PRESIDING OFFICER.

Order Sheet (Continuation) India n Overseas Bank CaSe NO. TA No.228 of2013 Vs M/s Hilton Trade Links Pvt. Ltd.& Ors. Date ol

Order

Order with signature Office action with date and dated signature of parties when Order No.28 >t. 23to.zo Order pronounced (Vide separate sheets, page no.1 to 7). In the result, T.A. No.228 of 2013 arising out of O.A. No.3 of 2007 is allowed with costs in virtual court. Issue Recovery Certificate accordingly. A'xcr^6*.n (A.K.Chaturvedi) Presiding Officer DRT-3, Kolkata