UCO BANK vs MD. NAZRUL ISLAM AND ANR on 5 November 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 Certificate to the tune of Rs. 11,61,111.64p together with interest, cost and other usual reliefs. d

2. The instant Original Application being Case No. T'A. 634 of 2014 arising out of No. O.A. f1O4 of 2014 was filed on 04.09.2014 before the DRT-II, Kolkata for recovery of a sum of Rs. 11,61,111 64p due and payable from the defendants No. 1 towards outstanding dues as on 31st July, 2014 in respect of Cash Credit Hypothecation Loan facilities for the limit of Rs. 5,50,000/- sanctioned and granted by the Applicant Bank to the Borrower/Defendant No. 1 for enhancing the working capital for their business and trade. The instant O'A' No 1104 of 2014 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-III' Kolkata and renumbered as T.A No. 634 of 20L4' The brief facts of the case as made out in the Original Application by the applicant bank is that the Defendant No' 1is the principal borrower, whereas the Defendant No. 2 stood as a guarantor and promised to repay all the indebtedness and liabilities of the said Defendant No. 1 to the applicant Bank in respect of the Cash Credit Hypothecation Loan granted to the Defendant No l' On 17 '05'2005' the Defendant No. 1 made a request to the applicant's branch at Basirhat Branch, Itinda Road, P.O. & P'S Basirhat, Dist 24 Parganas North, Pin -7434!l for a cash credit Limit of Rs 2,00,000/-' which was subsequently enhanced to Rs' 5,5O,OOO/', for boosting their working capital in the readymade garments business and submitted the requisite information by way of exclusive hyPothecation of entire stock, book debts and current assets of the firm, both present and future to secure the loan. The Defendant No 2 as guarantor' furnished her personal information including equitable mortgage conflrmation dated 18.05.2005 by depositing original Title Deed of the property

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4. situated at Mouza Basirhat, JL No. 43, Khatian No. 1827 within the Basirhat Municipality, ADSR Office at Basirhat, Dist. North 24 Parganas and Oemand Promissory Notes duly executed by the Defendant No. 1 for Rs. 2,00,000/- dated 23.07.2004 and Rs. 5,50,000/- dated 19.05.2005 to secure the Demand Cash Credit. The Applicant Bank having given due consideration and after proper scrutiny of the application dated 17.05.2005 submitted by the Defendant No. 1, the principal borrower, backed by guarantee provided by the Defendant No. 2, sanctioned the cash credit Facility with a limit of Rs. 2,00,000/- and subsequently enhanced it to Rs, 5,50,000/- to the Borrowers for the purpose of enhancement of thelr working capital to boost trade in Readymade Garments vide its Sanction Letter/Facility Agreement dated on 23'd July, 2004 and again on 20.05.2005 as stipulated in Annexure - A. The defendants on acceptance of the terms and conditions as contained in the sanction letters dated 23.07.2004 and also on 20.05.2005 as stipulated in Annexure-A of the said letter sanctioning the Cash Credit Loan Account, executed certain documents backed by guarantee provided by the guarantor, being the Defendant No. 2 and Demand Promissory Notes for Rs. 2,00,0001- dated 23.07.2004 and Rs. 5,50,OOO/- dated 19.05.2005 as stipulated in Annexure-D, with a promise to pay a total sum of Rs. 5,50,000/- to the Applicant Bank on demand with interest thereon with monthly rest. The Defendant No.2, to secure the said Credit Loan executed the Deed of Guarantee agreement on 19th May, 2005 in favour of the applicant for Rs. 5,50,000/- agreeing to pay interest @ 11olo per annum with monthly rests.

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6. On 20.05.2005, the Defendants while availing credit facilities with the Applicant Bank in accordance with the terms and conditions had executed the following banking documents: i) A Demand Promissory Note for Rs. 5,50,000/- dated 19th May,2oo5. ii) Deed of Mortgage Conformation of the assets dated 18th l'4ay, 200 s. Deed of Guarantee dated 19th May, 2005 executed by the Defendant No. 2.

7. The Defendants had agreed to pay interest @ 1170 per annum with monthly rests frcm 23.07.2004 till the date of actual payment. Rate of interest is subject to change from tlme to time.

8. The Defendant enjoyed the money from the aforesaid loan but failed to operate Cash Credit Loan accounts effectively and as a result of which the loan accounts became irregular NPA and for which the Applicant had issued letter dated 16.03.2014 Under section 13(2) of the SARFAESI Act, 2002 demanding a payment of Rs. 10,87,182/- as on 14.02.20L4. The Borrower, being the Defendant No. 1 and the Guarantor being the Defendant No. 2 failed and neglected to pay their outstanding amount in spite of Legal Notice/Recall Notice served on 16.03.2or4 asking for a sum of Rs. 10,87,182/- as stipulated in Annexure - 'G'. A sum of Rs. 11,61,111.64P. due against the defendants which they had not paid despite repeated demands and requests. Finding 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. iii) o-

s 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 appeared through their Counsel and prayed time for filing of W.S. But no W.S. was filed on behalf of the defendants as a result of which they were proceeded ex-parte vide order dated 09.01.2020 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 detendant had not contested the case of the applicant bank' Thus, the point for determination in this case is (i) whether the claim of the applicant bank is within time? (ii) Whether the defendants had utilized the toan facilities granted by the bank? (iii) Whether the defendants are liable to pay the amount due to the applicant bank or not? The applicant bank bY oral its case. The documentary 'A' to Annexure 'l', which applicant bank. and documentary evidence has established evidence comprises from Annexure/Exhibit- are available in paper book filed by the From the perusal of the documents referred above and the certified copy of the statement of account, which are filed as Annexure'F" it is established that the defendants had availed the financial facilities from the applicant bank and had withdrawn the amount through the account.

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13. The oral testimony comprises of Mandal, working as Manager of the the application and the facts stated his affidavit are un-rebutted. C'_ an affldavit of Shri Debangshu Applicant Bank. The averments in by the wltness of the aPPlicant in

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From the perusal of the of the Statements of Accounts which are at Annexure'F', the total outstanding comes to Rs' 11,61,111.64p as on 31.07.2074, which the applicant bank is entitled to recover from the defendants. In view of the above discussion and after considering the entire evidence-on-affidavit of the applicant bank and the documents flled by the applicant bank, I have no hesitation to hold that the applicant bank is entitled to recover a sum of Rs. 11,61,111.64p from the defendants who are liable for the same. The applicant bank shall also be entitled to pendentellte and future interest on the said amount @ 11olo Per annum with slmple from the date of filing of the Original Application till the date of realization.

ORDER

(1) T.A. No. 634 of 2014 filed by the Applicant Bank is allowed and debt is determined with cost against the defendant lt is hereby ordered that applicant bank is entitled to recover from the defendants the total amount to the tune of Rs 11,61'111 64p (Rupees eleven lakhs slxty one thousands one hundred eleven and Paise sixty four only) with pendentelite and future interest @ 11olo Der annum with simple rate of interest on the amount due from the date of filing of the Original Application' i e' 04.09.2014 till full and final realizatlon 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.

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Defendants are debarred from dlsposing, alienating or dealing with any of the properties belonging to them 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 lntimated to them. In case the defendants fall 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 ludgement 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 Certificate' Ld. Recovery Offlcer shall Recovery Certlficate from the reallze the amount as Per the defendants in accordance with law'

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(7) Ld. Registrar of this Tribunal is directed to deliver recovery certificate in terms of the final order fudgement 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 Debts and Bankruptcy Act, 1993' o\

(8) The parties are directed to aPpear before the Recovery Offlcer on 78,72.2020 for further action in accordance with law in the event the entire amount is not paid by the said date. Accordingly, the Original Application being T.A' No. 634 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, transcribed by him, correcte9-r !914 und pronounced by me in the Virtual Court on this, ' 51" N'v 2o20) A'\<' ox'="^r..^ ( ANIL KUMAR CHATURVEDI ) PRESIDING OFFICER.

Order Sheet (Continuation) case No. TA No,634 of 2014 UCO Bank Vs, Md. Nazrul Islam & Anr. Date of order Order with signature office action with date and dated signature of parties when Order No. o!. ,5:)) -l' Order pronounced (Vide separate sheetsl. 'r' yirAJ C*5 In the result, T.A. No. 634 of 2014 is allowed with costs. Issue Recovery Certifi cate accordingly. A"*, clffilDl (A. K.Chaturvedi) Presiding officer DRT-3,Kolkata L--L