State Bank of India vs Shree Hanuman Rice Mill And Others on 16 January 2020

**J U D G M E N T**

**(Delivered on 16^th January 2020)**

The Applicant is a body corporate, constituted under the provisions of State Bank of India Act, 1955 and carries on banking business. In the instant case the transaction between the applicant bank and the defendants took place at Kaliyaganj Branch, Uttar Dinajpur of the applicant bank and due to default for payment of the loan outstanding dues by the defendants the said loan was declared as NPA and as such the said loan account is transferred to Stressed Assets Management Branch, Nagaland House (8^th Floor), 11 7 13, Shakespeare Sarani, Kolkata – 700071 for realization of the outstanding dues from the defendants.

The facts in brief, giving rise to the present application as pleaded are as under.

**Presiding Officer

Siliguri**

(Contd...)

The defendant No.1 is a partnership firm of which the defendants No. 2, 3 & 5 are the partners.

At the request of the defendants, the applicant bank on 26/3/2004 sanctioned a Cash Credit facility to the limit of Rs. 74.40 for business, vide Sanction Letter dated 26/3/2004.

In acknowledgment of grant of the said facility, the defendants duly executed General Agreement for grant of Small Industrial Advances (Working Capital) and hypothecation of movables, book debts and other assets, Agreement for grant of small industrial advances (Working Capital Finance), Agreement for grant of small industrial advances (Working Capital Finance) Specimen No. 5, Letter of undertaking not to create any further charge over their property and assets, including uncalled capital, Form of Agreement with Power of Attorney, Partnership Letter, all dated, 26/3/2004 in favour of the applicant.

The defendants No. 2, 3, 4 & 5 in their personal capacity stood as guarantors and executed Guarantee Agreement of Small Industrial advances (Working Capital Finance) dated 26/3/2004 in favour of the applicant bank.

To secure the credit facility granted to the defendant No.1, the defendants No. 2, 3, 4 & 5 mortgaged the title deeds of the properties mentioned in the schedule of the application.

Thereafter, at the request of the defendants the applicant bank enhanced the credit limit from Rs. 74.40 lakhs to Rs. 104.00 lakhs vide Sanction Letter dated 9/2/2005 against the hypothecation of existing plant and machinery, cash collateral by way of STDR/NSC/KVP/LIC of Rs. 8.00 lakhs including the existing Rs. 5.00 lakhs, equitable mortgage of landed property valued Rs. 80.42 lakhs and the individual guarantee note from the defendants No. 2, 3, 4 & 5.

In acknowledgment of grant of the said enhanced credit facility, the defendants. No. 2, 3, 4 & 5 further executed Supplemental Loaning Documents like Supplemental General Agreement for the grant of Small Industrial Advances and Hypothecation of Movables, Book Debts and other Assets, Agreement for the grant of Small Industrial Advances, Agreement for the grant of Small Industrial Advances, Guarantee Agreement for small Industrial Advances, Demand Promissory Note and Form of Agreement with Power of Attorney, all dated 9/2/2005 in favour of the applicant bank.

On 31^st January, 2008 the defendants No. 2, 3, 4 & 5 executed a Revival letter for confirming the loan documents which was executed on 26/3/2004 and 9/2/2005.

(Contd...)

Sikkim

It is the contention of the applicant bank that the defendants availed of the aforesaid credit facilities but neglected to repay the same, as a result of which, the account turned highly irregular. Consequently, the account was classified as NPA.

According to the applicant bank, after giving credit for all sum of moneys paid by and on behalf of the defendants in the said loan account there becomes due from the defendants to the Applicant Bank altogether a sum of Rs. 1,26,93,733.35p with interest calculated upto 30/07/2010.

The defendant No. 2 appeared through one counsel but did not file any written statement against the claim of the applicant bank. The defendants No.1, 3, 4 & 5 neither appeared nor filed any written statement. Hence, the matter is proceeding ex-parte against all the defendants.

The Applicant Bank in support of its case has filed evidence by way of affidavit as affirmed by Sri. Sanjoy Kumar, the Assistant Manager, Kaliyaganj Branch of the applicant bank and also relied upon the following documents:- <table border="1"> <thead> <tr> <th>Sl. No.</th> <th>Name of the documents</th> <th>Exhibit No.</th> </tr> </thead> <tbody> <tr> <td>1.</td> <td>Sanction Letter dated 26/3/2004</td> <td>1</td> </tr> <tr> <td>2.</td> <td>General Agreement for grant of small industrial advances (Working Capital) and hypothecation of movables, book debts and other assets dated 26/3/2004</td> <td>2</td> </tr> <tr> <td>3.</td> <td>Agreement for grant of small industrial advances (Working Capital) dated 26/3/2004</td> <td>3</td> </tr> <tr> <td>4.</td> <td>Agreement for grant of small industrial advances (Working Capital Finance) Specimen No.5 dated 26/3/2004</td> <td>4</td> </tr> <tr> <td>5.</td> <td>Letter of undertaking not to create any further charge over their property and assets, including uncalled capital, dated 26/3/2004</td> <td>5</td> </tr> <tr> <td>6.</td> <td>Form of Agreement with Power of Attorney</td> <td>6</td> </tr> <tr> <td>7.</td> <td>Partnership Letter dated 26/3/2004</td> <td>7</td> </tr> <tr> <td>8.</td> <td>Guarantee Agreement dated 26/3/2004</td> <td>8</td> </tr> <tr> <td>9.</td> <td>Deed of Conveyance being Nos. 1120 for the year 1985, 1119 for the year 1985, 1121 for the year 1985, 1122 for the year 1985, 1118 for the year 1985, 1117 for the year 1985, 7753 for the year 1981, 7754 for the year 1981 and 7752 for the year 1981.</td> <td>9 to 18 respectively</td> </tr> <tr> <td>10.</td> <td>Sanction Letter dated 9/2/2005</td> <td>19</td> </tr> <tr> <td>11.</td> <td>Supplementary General Agreement for the grant of Small Industrial Advances and Hypothecation of Movables, Book Debts and other Assets dated 9/2/2005</td> <td>20</td> </tr> </tbody> </table>

(Contd...)

Siliguri

<table border="1"> <tr> <td>12.</td> <td>Agreement for the grant of Small Industrial Advances dated 9/2/2005</td> <td>21</td> </tr> <tr> <td>13.</td> <td>Agreement for the grant of Small Industrial Advances dated 9/2/2005</td> <td>22</td> </tr> <tr> <td>14.</td> <td>Demand Promissory Note dated 9/2/2005</td> <td>23</td> </tr> <tr> <td>15.</td> <td>Form of Agreement with Power of Attorney dated 9/2/2005</td> <td>24</td> </tr> <tr> <td>16.</td> <td>Guarantee Agreement of Small Industrial Advances dated 9/2/2005</td> <td>25</td> </tr> <tr> <td>17.</td> <td>Letters of confirmation for creation of equitable mortgage of the properties.</td> <td>26 to 34 respectively</td> </tr> <tr> <td>18.</td> <td>Revival Letter dated 31/1/2008</td> <td>35</td> </tr> <tr> <td>19.</td> <td>Demand Notices dated 12/7/2010</td> <td>36 &amp; 37</td> </tr> <tr> <td>20.</td> <td>Statement of loan account</td> <td>38</td> </tr> </table>

I have heard the learned counsel for the applicant bank and perused the documents and Evidence filed by applicant bank. By the said evidence on affidavit, the Applicant bank has proved its claim. It is settled law that an averment which is not denied by the opposite party i.e. defendants in the present matter, by way of filing written statement or by producing evidence must be taken by the Tribunal/ Court to have admitted by the defendants. In the present matter the defendants have neither filed the written statement nor produced any evidence in his support to challenge the claim of applicant bank.

The claim of the Applicant bank is within the limitation and within the jurisdiction of this Tribunal. The applicant has sufficient cause of action for filing the instant application due to disbursement/availment of loan to/by the defendants and on default in repayment of the loan by the defendants, in spite of demands made, as per exhibited documents filed by the applicant bank.

In the above circumstances, it is ordered:

ORDER

T.O.A. No. 257/2017 arising out of O.A. No. 1024/2010 filed by the Applicant Bank is allowed against the defendants No. 1, 2, 3, 4 & 5 jointly and severally and it is hereby ordered that the Applicant Bank is entitled to recover from the above said defendants the total debt amount for Rs. 1,26,93,733.35p (Rupees one crore twenty six lakhs ninety three thousand seven hundred thirty three and paise thirty five) only with further interest thereon

Siliguri

(Contd...)

@12.25%.p.a. with quarterly rests from the date of filing of the application till realization of entire balance.

Amount, if any, paid by the defendants in the loan accounts or amount recovered by the applicant bank, if any, made towards the loan accounts after filing of the O.A be taken into account while arriving at the exact amount of outstanding payable by the defendants.

The properties hypothecated with the applicant bank and the mortgaged properties being (1) (a) All that piece and parcel of land measuring more or less 20 Satak within Dag No. 42, Khatian No. 48, J.L. No. 108, Mouza-Suhari, District-West Dinajpur, Touzi No. 73/494 along with a rice mill standing thereon ; (b) All that piece and parcel of land measuring more or less 16 Satak within Dag No. 43 and 45, Khatian No. 46, J.L. No. 108, Mouza-Suhari, District-West Dinajpur along with a rice mill standing thereon ; (c) All that piece and parcel of land measuring more or less 5 Satak within Dag No. 44, Khatian No. 169, J.L. No. 108, Mouza-Suhari, District-West Dinajpur, along with a rice mill standing thereon. All total land measuring more or less 41 Satak [Deed of Sale being No. 1119 for the year 1985 dated 7/2/1985]; (2) (a) All that piece and parcel of land measuring more or less 20 Satak within Dag No. 42, Khatian No. 38, J.L. No. 108, Mouza-Suhari, District-West Dinajpur, Touzi No. 73/494 along with a rice mill standing thereon ; (b) All that piece and parcel of land measuring more or less 16 Satak within Dag No. 43 and 45, Khatian No. 46, J.L. No. 108, Mouza-Suhari, District-West Dinajpur along with a rice mill standing thereon ; (c) All that piece and parcel of land measuring more or less 4 Satak within Dag No. 44, Khatian No. 169, J.L. No. 108, Mouza-Suhari, District-West Dinajpur, along with a rice mill standing thereon. All total land measuring more or less 40 Satak [Deed of Sale being No. 1120 for the year 1985 dated 7/2/1985]; (3) (a) All that piece and parcel of land measuring more or less 20 Satak within Dag No. 42, Khatian No. 38, J.L. No. 108, Mouza-Suhari, District-West Dinajpur, Touzi No. 73/494 along with a rice mill standing thereon ; (b) All that piece and parcel of land measuring more or less 16 Satak within Dag No. 43 and 45, Khatian No. 46, J.L. No. 108, Mouza-Suhari, District-West Dinajpur along with a rice mill standing thereon ; (c) All that piece and parcel of land measuring more or less 5 Satak within Dag No. 44, Khatian No. 169, J.L. No. 108, Mouza-Suhari, District-West Dinajpur, along with a rice mill standing thereon. All total land measuring more or less 41 Satak [Deed of Sale being No. 1121 for the year 1985 dated (Contd...)

Siliguri

7/2/1985]; (4) (a) All that piece and parcel of land measuring more or less 20 Satak within Dag No. 42, Khatian No. 38, J.L. No. 108, Mouza-Suhari, District-West Dinajpur, Touzi No. 73/494 along with a rice mill standing thereon ; (b) All that piece and parcel of land measuring more or less 16 Satak within Dag No. 43 and 45, Khatian No. 46, J.L. No. 108, Mouza-Suhari, District-West Dinajpur along with a rice mill standing thereon ; (c) All that piece and parcel of land measuring more or less 5 Satak within Dag No. 44, Khatian No. 169, J.L. No. 108, Mouza-Suhari, District-West Dinajpur, along with a rice mill standing thereon. All total land measuring more or less 41 Satak [Deed of Sale being No. 1122 for the year 1985 dated 7/2/1985]; (5) (a) All that piece and parcel of land measuring more or less 20 Satak within Dag No. 42, Khatian No. 38, J.L. No. 108, Mouza-Suhari, District-West Dinajpur, Touzi No. 73/494 along with a rice mill standing thereon ; (b) All that piece and parcel of land measuring more or less 16 Satak within Dag No. 43 and 45, Khatian No. 46, J.L. No. 108, Mouza-Suhari, District-West Dinajpur along with a rice mill standing thereon ; (c) All that piece and parcel of land measuring more or less 4 Satak within Dag No. 44, Khatian No. 169, J.L. No. 108, Mouza-Suhari, District-West Dinajpur, along with a rice mill standing thereon. All total land measuring more or less 40 Satak [Deed of Sale being No. 1118 for the year 1985 dated 7/2/1985]; (6) (a) All that piece and parcel of land measuring more or less 20 Satak within Dag No. 42, Khatian No. 38, J.L. No. 108, Mouza-Suhari, District-West Dinajpur, Touzi No. 73/494 along with a rice mill standing thereon ; (b) All that piece and parcel of land measuring more or less 16 Satak within Dag No. 43 and 45, Khatian No. 46, J.L. No. 108, Mouza-Suhari, District-West Dinajpur along with a rice mill standing thereon ; (c) All that piece and parcel of land measuring more or less 5 Satak within Dag No. 44, Khatian No. 169, J.L. No. 108, Mouza-Suhari, District-West Dinajpur, along with a rice mill standing thereon. All total land measuring more or less 41 Satak [Deed of Sale being No. 1117 for the year 1985 dated 7/2/1985]; (7) All that 1/6^th share of the entire property i.e. 1/3^rd share of the vendors right title interest of the land measuring more or less 2.71 decimal lying and situated at mouza-Suhari, Plot No. 42, 43, 45, 44, Khatian No. 38, 46, 169, J.L. No. 108, Touzi No. 73/494, Pargana – Kardaha, P.S. Tapan, District – West Dinajpur along with a rice mill standing thereon [Deed of Sale being No. 7753 for the year 1981 dated 10/8/1981]; (8) All that 1/6^th share of the entire property i.e. 1/3^rd share of the vendors right title interest of the land measuring more or less (Contd...)

Siliguri

2.71 decimal lying and situated at Mouza-Suhari, Plot No. 42, 43, 45, 44, Khatian No. 38, 46, 169, J.L. No. 108, Touzi No.73/494, Pargana – Kardaha, P.S. Tapan, District – West Dinajpur along with a rice mill standing thereon [Deed of Sale being No. 7754 for the year 1981 dated 10/8/1981]; (9) All that 1/6^th share of the entire property i.e. 1/3^rd share of the vendors right title interest of the land measuring more or less 2.71 decimal lying and situated at Mouza-Suhari, Plot No. 42, 43, 45, 44, Khatian No. 38, 46, 169, J.L. No. 108, Touzi No.73/494, Pargana – Kardaha, P.S. Tapan, District – West Dinajpur along with a rice mill standing thereon [Deed of Sale being No. 7752 for the year 1981 dated 10/8/1981]; shall remain charged to the Applicant Bank and the Applicant Bank shall have paramount charge thereon.

The defendants are debarred from transferring; alienating, encumbering or disposing of the hypothecated/mortgaged properties or any other property and assets belonging to the defendants till the aforesaid adjudicated debt amount is recovered from the defendants.

The defendants are given a time of thirty days from the date of this judgment/final order for repayment of the above mentioned dues, so initiated to them. In case of failure of said defendants to pay the dues within the time as aforesaid, the Applicant Bank is entitled to recover its dues by sale of the hypothecated/mortgaged property and is also entitled to proceed against the said defendants personally and/or personal properties to recover the dues in accordance with law.

Let the certificate of Recovery be drawn up by Learned Registrar in charge forthwith in terms of judgment for issuance of the same against the defendants in favour of Applicant Bank under Sub-Section 7 and 22 of Section-19 of The Recovery of Debts and Bankruptcy Act, 1993 and put up the same for signature for issuance.

This judgment is signed and pronounced in the open Tribunal on this day the 16^th day of January, 2020.

Copy of the judgment/final order be given/sent to the parties.

(D.S. MAHRA)

DRT, Siliguri.

**Presiding Officer Debts Recovery Tribunal Siliguri**