STATE BANK OF INDIA vs M/S Deal O Car on 26 February 2020

J U D G M E N T

(Delivered on 26^th February 2020)

The Applicant is a body corporation, constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1955 and it has been carrying on the business of banking ever since it was constituted through its various offices including the one at Sevoke Road, known as 'SMECC' Sky Star Building, P.O. & P.S. Siliguri, District-Darjeeling, West Bengal.

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

The defendant No.1 is a proprietorship firm and the defendant No.2 is the borrower. The defendant No.2 applied to the applicant bank for a Cash Credit Loan for

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his business and the applicant bank sanctioned a Cash Credit Loan amounting to Rs. 12,00,000/- to the defendant vide Sanction Letter dated 29/4/2008.

In compliance with the terms and conditions of the Sanction, on 29/4/2008 the defendant No.2 executed Letter of Arrangement, Agreement of Loan-cum-Hypothecation, Agreement and Power of Attorney and Letter of Confirmation for creation of Mortgage by Deposit of title deeds in favour of the applicant bank as security.

Thereafter, on 18/2/2011 the defendant No.2 applied to the applicant bank for enhancement of the existing Cash Credit facility from Rs. 12,00,000/- to Rs. 20,00,000/- and a Fresh SLC for Rs. 3,00,000/-. Considering the request of the defendant No.2, the applicant bank enhanced the cash credit facility to Rs. 20,00,000/- and sanctioned a fresh SLC amounting to Rs. 3,00,000/- to the defendant vide Letter of Sanction dated 2/3/2011.

In order to avail the said enhanced Cash Credit limit of Rs. 20,00,000/- the defendant No.2 on 2/3/2011 executed Letter of Arrangement, Supplemental Agreement of Loan-cum-Hypothecation and Letter of Confirmation for Extension of Mortgage by deposit of title deeds.

The applicant bank disbursed entirely the said loan under loan account being Cash Credit No. 30374517043 and Term Loan No. 31726703293.

The defendant No.2 created an equitable mortgage by deposit of the title deed of his immovable property described in Schedule-X annexed to the original application.

The defendant No.2 in his personal capacity stood as guarantor to the limit of Rs.23,00,000/-.

It is the contention of the applicant bank that the defendants availed of the loan facilities but despite requests and reminders, the defendants did not keep regularized the said accounts and neglected to repay the dues of the said loan account as per terms and conditions thereof, as a result of which the cash credit loan account as well as Term Loan account was classified as NPA. However, the defendant No.1 executed a Revival Letter on 28/2/2013.

The applicant bank stated that on 22/3/2014 it came to the knowledge of the applicant bank that the defendant No.2 who stood as guarantor and also mortgaged his immovable property sold and transferred a part of the mortgaged landed property

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measuring 5 Katha out of the out of 12 Katha to Md. Ali Mosharraf, S/o Azizul Haque and Md. Mosarrat Jahan, W/o Md. Ali Mosharraf, the defendant No.3 and 4 by virtue of Deed of Sale being No.I-4829 for the year 2011. The defendant No.2 also sworn a false statement in the form of Affidavit on 23/3/2014 that he has not sold the said property which is still mortgaged with the applicant to and in favour of the defendants No.3 and 4.

Thereafter, the applicant bank issued a Demand Notice dated 29/3/2014 u/s 13(2) of the SARFAESI Act, 2002 to the defendant No.2 and subsequently the applicant bank issued possession Notice dated 7/8/2014 u/s 13(4) of the SARFAESI Act, 2002 and took possession of the secured assets.

On 2/6/2014 the defendant No.2 wrote a letter to the applicant bank praying for three month's time to repay the loan amount.

The applicant bank on 15/12/2014 issued a Demand Notice through its lawyer to all the defendants, but the defendants did not make any payment towards the loan amount.

According to the applicant bank, after giving credit for all amounts paid by the Defendants there becomes due from and owing by the Defendants to the Applicant Bank a sum of Rs. 29,20,146.89p [Rs. 20,40,576.00 (Cash Credit Account) + Rs.5,16,599.89(unapplied interest of CC) + Rs. 2,79,857.00(Term Loan Account) + Rs.83,114.00 (unapplied interest of TL)] inclusive of interest calculated upto 27/11/2014.

The defendants appeared through their counsel before this Tribunal on two dates, but thereafter they neither appeared nor filed any written statement against the claim of the applicant bank. Hence, the defendants were ordered to be proceeded ex-parte on 20/6/2018.

The Applicant Bank in support of its case has filed evidence by way of affidavit as affirmed by Sri. Adarsh Modi, the Deputy Manager 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>Letter of Arrangement dated 29/4/2008</td> <td>1</td> </tr> <tr> <td>2.</td> <td>Agreement of Loan-cum-Hypothecation dated 29/4/2008</td> <td>2</td> </tr> <tr> <td>3.</td> <td>Deed of Sale Being No. 294 for the year 2008</td> <td>3</td> </tr> <tr> <td>4.</td> <td>Letter of Confirmation for creation of Mortgage by Deposit of Title Deed dated 2/5/2008</td> <td>4</td> </tr> </tbody> </table>

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<table border="1"> <tr> <td>5.</td> <td>Agreement with Power of Attorney dated 29/4/2008</td> <td>5</td> </tr> <tr> <td>6.</td> <td>Letter of Arrangement dated 2/3/2011</td> <td>6</td> </tr> <tr> <td>7.</td> <td>Supplemental Agreement of Loan-cum-Hypothecation dated 2/3/2011</td> <td>7</td> </tr> <tr> <td>8.</td> <td>Letter of Confirmation for extension of Mortgage by Deposit of Title Deed dated 2/3/2011</td> <td>8</td> </tr> <tr> <td>9.</td> <td>Revival letter dated 28/2/2013</td> <td>9</td> </tr> <tr> <td>10.</td> <td>Deed of Sale Being No. I-4829 for the year 2011</td> <td>10</td> </tr> <tr> <td>11.</td> <td>Affidavit dated 23/3/2014</td> <td>11</td> </tr> <tr> <td>12.</td> <td>Demand Notice dated 29/3/2014 u/s 13(2) of the SARFAESI Act, 2002</td> <td>12</td> </tr> <tr> <td>13.</td> <td>Notice dated 7/8/2014 u/s 13(4) of the SARFAESI Act, 2002</td> <td>13</td> </tr> <tr> <td>14.</td> <td>Letter dated 2/6/2014 by the defendant No.2</td> <td>14</td> </tr> <tr> <td>15.</td> <td>FIR dated 28/11/2014</td> <td>15</td> </tr> <tr> <td>16.</td> <td>Demand Notice dated 15/12/2014 along with connected Postal receipt</td> <td>16</td> </tr> <tr> <td>17.</td> <td>Statement of accounts</td> <td>17 &amp; 18</td> </tr> </table>

I have heard the learned counsel for 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.A. No. 25/2017 arising out of O.A. No. 110/2015 filed by the Applicant Bank is allowed against the defendants No. 1, 2, 3 & 4 jointly and severally and it is hereby

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ordered that the Applicant Bank is entitled to recover from the above said defendants the total debt amount for Rs. 29,20,146.89p (Rupees twenty nine lakhs twenty thousand one hundred forty six and paise eighty nine) only with further interest @11.00% per annum 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 hypothecated properties and mortgaged properties being all that piece and parcel of land measuring 0.21 Acres or 12 Kathas 9 Chhataks situated under Khatian No.1159 (new), 629(old), Plot No. 470 & 471 (new) 25/86 (old), J.L. No. 02, Sheet No. 4, Mouza Dabgram, Pargana Baikunthapur, Police Station Bhaktinagar, District – Jalpaiguri, which is butted and bounded by North-Sold land of Gobardhan Das, South-12 Feet wide Road, East-Sold land of Rabi Lal Roy, West-Land of Barna Baskujur, [Deed of Conveyance executed on 24/12/2007 and registered on 7/2/2008, Being No. 294 for the year 2008], as mentioned in the Schedule-X of the application, 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 as aforesaid 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 forthwith in terms of judgment for issuance of the same against the defendants in favour of Applicant

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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 26^th day of February, 2020.

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

**(D.S. MAHRA)** **Presiding Officer** **DRT, Siliguri.**

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