BANK OF BARODA (VIJAYA BANK) vs BENGAL MILLS STORES PVT LTD on 23 February 2024

J U D G M E N T

1. The Original Application has been filed by the Applicant on 20.05.2011 before the Ld. DRT-II, Mumbai, which stands transferred to this Tribunal on 05.05.2021 as per order of Hon’ble DRAT, Mumbai. The OA has been filed against the Defendants for recovery of Rs.2,02,47,153.77 (Rupees Two Crores Two Lakhs Forty Seven Thousand One Hundred Fifty Three and paise Seventy Seven only) with further interest @18.25% p.a. compounded with monthly rests from the date of filing of the present OA till its realization.

2. Facts as succinctly set out in the OA are that the Defendant No.1 is the Borrower and Defendant No.2 to 7 are Guarantors and the Mortgagors having mortgaged the residential Flat No.3 in Meenaxi Building in Shrihind CHS Ltd., situated at 23 Duncan Causeway Road, Sion, Mumbai-400022. The Defendant No.8 to 10 are Co- parceners of Defendant No.7 and Defendant No.7 through its Karta Mr. Mahendra Chunilal Doshi has mortgaged the said flat. Defendant No.5 is also one of the Co-parcener of Defendant No.7 who is added as Defendant No.5 in his three different capacity i.e. as Guarantor, Mortgagor and Co-parcener of Defendant No.7.

3. It is stated that the Defendant No.1 as Borrower and Defendant No.2 to 7 as Guarantors have approached the Applicant Bank in the year 2008 and requested for CCM Limit of Rs.990 lakhs, CC Hypothecation of Rs.80 lakhs & Bills Purchase Facility/BD of Rs.360 lakhs vide loan application dated 17.12.2007. The said request was considered by the Applicant and sanctioned the aforesaid loan vide sanction letter dated 09.06.2008.

4. In consideration of sanction the aforesaid loan, the Defendant No.1 to 4 & 6 have executed the following loaning and security documents:

(i) Extract of Board Resolution passed by the Defendant No.1 Company in the meeting held on 04.06.2008;

(ii) Hypothecation Agreement dated 09.06.2008 executed by Defendant No.1;

(iii) Respective Guarantee Agreements dated 09.06.2008 executed by Defendant No.2, 4 & 6.

5. It is further stated that on 05.12.2008, the Defendant No.1 approached the Applicant and submitted their Application for L/C of Rs.7.90 crores. The said request was considered by the Applicant and sanctioned the said L/C Limit of Rs.6 crores to the Defendant No.1 favouring M/s Welspun Gujarat Stahi Rohren Ltd.

6. It is further stated that the Defendant No.1 passed a Board Resolution dated 04.12.2008 for the purpose of the opening the said Inland LC in favour of M/s Welpun Gujarat Stahl Rohren Ltd. for a sum of Rs.7.90 crores with the Applicant Bank. Accordingly, the Applicant

Bank issued Inland Irrevocable Documentary Credit (Revolving) bearing ILC dated 08.12.2008 for Rs.6 crores and forwarded the said L/C along with copies to the Advising Bank viz. ICICI Bank Ltd., Nariman Point, Mumbai-21 as requested by the Defendant No.1..

7. It is further stated that the Defendant No.1 vide their letter dated 15.12.2008 requested the Applicant to modify/issue Amendment by mentioning the Delivery Address of Defendant No.1 being Survey No.37, Mumbai-Panvel Road, Dahisar Mori, Near Mangalmurti Petrol Pump (H.P.). The Applicant vide their Amendment dated 15.12.2008, issued Amendment No.1 addressed to ICIC Bank Ltd. as requested by the Defendant No.1 by changing the Delivery Address as stated therein. Thereafter, the Defendant No.1 once again vide their letter dated 01.01.2009 requested the Applicant to amend the said L/C as contained therein. At the said request, the Applicant vide Amendment dated 02.01.2009 once again modified certain terms of the said L/C vide Amendment No.2. Thereafter, the Defendant No.1 once again vide their letter dated 31.01.2009 requested to Amend the said L/C as contained therein, which was also considered by the Applicant and vide Amendment dated 03.02.2009 again modified certain terms of the said L/C vide amendment No.2.

8. It is further stated that the Applicant thereafter, issued its Regular Sanction Letter dated 20.03.2009 in respect of the said ILC Limit of Rs.600 lakhs together with other limits, and the Defendants duly accepted the terms and conditions of the said sanction.

9. It is further stated that though the Applicant sanctioned three other limits to the Defendant No.1 in addition to the ILC Rs.600 lakhs as contained in the said sanction letter dated 20.03.2009, as on date there is no liability/dues in respect of the other limit from the

Defendant No.1 and as on date there is dues/liability only in respect of the ILC Limit from the Defendant No.1.

10. It is further stated that in respect of the L/C Limit of Rs.6 crores, the Defendant No. 2 to 7 executed their Respective Letter of Guarantee dated 29.07.2009.

11. Further, the Defendant No.1 vide their Authorization Letter bearing Ref. No. BMSPL/Welpun/LC have authorized the Applicant Bank to debit payments in the sum of Rs.4,81,89,660.36 in respect of 7 Bills as listed therein. Again the Defendant No.1 vide their Authorization Letter bearing Ref. No. BMSPL/Welpun/LC authorized the Applicant Bank to debit payment in the sum of Rs.1,46,92,811.19 in respect of a Bill mentioned therein.

12. It is further stated that the Defendant No.1 have also executed a Trust Receipt in favour of the Applicant and thereby agreed and undertook to abide by the terms and conditions. The Defendant No.1 also executed a General Power of Attorney dated 12.08.2009 in favour of the Applicant for the purpose of collection of book debts and other powers and authorities mentioned therein.

13. It is further stated that on 01.08.2009, the Defendant No.5 to 7, through its Karta i.e. Defendant No.3 have created equitable mortgage in respect of their Flat No.9 in Krishnakunj Building in SHRIHIND CHS Ltd., owned by Defendant No.6 and Flat No.3 in Meenaxi Building in the SHRIHIND CHS Ltd. situated at 23 Duncan Causeway Road, Sion, Mumbai-400022 owned and mortgaged by Defendant No.5 & 7 as a security in respect of the aforesaid limit by executing the Memorandum dated 01.08.2009.

14. It is further stated that 5 Bills under the aforesaid L/C issued by the beneficiary which is m/s Welspun Gujarat Sthal Rohren Ltd which were devolved upon the Applicant and the Applicant had to make the payment to the beneficiaries as per the terms and conditions of the L/C. The Applicant further stated that despite repeated requests and pressing demands, the Defendant No.1 failed and neglected to reimburse/repay fully the said amount to the Applicant. Therefore, the account was classified as NPA on 16.04.2009. Thereafter, the Applicant issued notice under Section 13(2) of the SARFAESI Act, 2002 dated 12.08.2009 and called upon the Defendants to pay the sum of Rs.4,09,61,097.95 with interest but the Defendants failed to pay the said amount. Further, the Applicant taken possession and sold the Flat No.9 in Krishnakunj Building by public auction held on 20.07.2010 and realized a sum of Rs.1,32,00,000/- and sold under the SARFAESI Act, 2002 on 20.07.2010 by public auction for Rs.1,32,00,000/-. In respect of the mortgaged Flat No.3 Meenaxi Building, the Applicant has taken possession under the SARFAESI Act, 2002 and Defendant No.10 through his mother i.e. Defendant No.9 filed an SA No.06/2010 before Ld. DRT-II, and by order dated 01.04.2010, Ld. DRT-II, Mumbai had ordered the Applicant Bank to continue to be in symbolic possession but shall immediately redeliver the possession of the said flat to Defendant No.10 to the extent of his share. Being aggrieved by the said order, the Applicant filed Appeal (L) No.581/2010 before Hon’ble DRAT, Mumbai which is pending for hearing.

15. It is further stated that the Applicant have also taken possession of the hypothecated movables such as Steel Pipes etc. under the provisions of the SARFAESI Act, 2002 from the Defendant No.1 and so far, the Defendant No.1 have lifted goods worth Rs.46,72,811/-

from the Applicant Bank from time to time by making payments to the Applicant in respect thereof.

16. It is further stated that after adjustment of the payment received by sale of the flat and movables in respect of ILC Account, a sum of Rs.2,02,17,153.77 is still due and payable by the Defendant No.1 to the Applicant with further liability of interest thereon @18.25% p.a. compounded with monthly rests. Hence, the present OA.

17. Notices were issued to the Defendants. Defendants put their appearance through counsel. Defendants moved an Application (Exb.28) dated 20.04.2012 for decree on admission which was allowed by Ld. DRT-II, Mumbai on 04.05.2012. The said order was challenged before the Hon’ble DRAT, Mumbai in Appeal No.151/2012. The Hon’ble DRAT vide order dated 08.08.2017 set aside the order dated 04.05.2012 and remanded back the OA for hearing and converted the said (Exb.28) into the Written Statements of Defendants. Subsequently, the same was challenged before the Hon’ble High Court of Bombay in Writ Petition No.9435 of 2018 and Hon’ble High Court vide order dated 10.09.2018 granted liberty to the Defendants to file Additional Written Statement. Thereafter, the Defendants filed the Additional Written Statement.

18. In the Additional Written Statement, the Defendants have raised the objection that the Applicant failed to give credit in the statement of account for the amount paid between 01.08.2009 to 31.03.2011. It is also stated that in the sanction letter dated 09.06.2008, the rate of interest is not mentioned however, the Applicant falsely claiming amount with interest at the rate of 18.5% p.a. It is also stated that the Defendant No.1 has paid Rs.41,58,456/- on 28.05.2011 till August, 2014, as per order dated 04.05.2012 passed in the OA, therefore, the

Applicant is not entitled to claim any amount and on the other hand, the Defendant No.1 is entitled for refund amount. Further it is stated that the Applicant sold the hypothecated goods at very less price for Rs.1,24,00,0000/- in the month of October, 2018 whereas the correct value of the said goods is Rs.3 crores as recorded in order dated 09.06.2021 passed by Hon’ble DRAT, Mumbai in Appeal No.101/2010, therefore, the Defendant No.1 suffered loss of Rs.1,75,00,000/-. It is stated that the said goods were kept at Warehouse, the rate of said Warehouse was paid by the Defendant No.1 of Rs.2 lakhs per month from year 2009 till November 2018, therefore, the Applicant is liable to pay said rent, security guard charges of Rs.3 crores. It is also stated that the Applicant has failed to give credit of Fixed Deposit Receipts of Rs.1.50 crores which was matured on December, 2008. It is stated that the Defendant is entitled for credit of interest on amount of Rs.1.50 crores from December, 2008 till realization.

19. It is further stated that the Defendant No.1 had supplied the goods value Rs.9.50 crores to one Company viz. PSL Limited. This Defendant No.1 has given power of attorney to the Applicant to recover the dues of the Defendant No.1 directly from his debotrs PSL however, the Applicant has written a letter to the PSL not to deliver or make payment to Defendant No.1 worth Rs.8,08,32,878. Due to negative approach of the Applicant, the Applicant did not permit Defendant No.1 to sell the said goods through PSL Limited in the market and realize the value of the same. Ultimately, the said goods were deteriorated and the value of the same becomes zero, therefore, the Defendant No.1 incurred loss of total Rs.14.12 crores including interest approximately by way of value of the said goods which were supplied through the Applicant, thus, the Applicant is liable to pay the amount of total Rs.14.12 crores including interest to Defendant No.1.

20. During the pendency of the OA, the Applicant moved an application i.e. IA No.2674/2023 for bring on record the Statement of Account by annexing the same to OA and to amend its claim by adding the further amount of Rs.9,79,36,224.05 to the claim of the Applicant. The Statement of Account provided by the Applicant is taken on record however, the prayer for amendment of OA at this stage, is not acceptable.

21. The Applicant has filed the all the loaning and security documents alongwith other relevant documents through their Manager-Law, Sanjeev Kumar.

22. The Defendant No.1 to 9 have filed their Joint CAOD alongwith the relevant documents to prove the allegations made in the OA.

23. I have heard the Ld. Counsel for the parties and perused the record.

24. In the written statement as well as during the course of the arguments, the following objection raises by the Defendants. (A) Whether the Applicant Bank is entitled to claim amount mentioned in the present OA with further interest; (B) Whether the Defendants have paid amount of Rs.3,59,82,890 which is total satisfaction of claim of Applicant Bank; (C) Whether the Applicant sold the hypothecated goods at very less price?

(D) Whether Flat No.3, Meenaxi Building, Shrihind CHS Ltd., 23, Duncan Causeway Road, Sion, Mumbai-22 is mortgaged to Applicant? (E) Whether the OA is signed by the Authorized person?

25. Now hereinafter, I would like to decide the issue raised by the Defendants in their written statement. (A) Whether the Applicant Bank is entitled to claim amount mentioned in the present OA with further interest?

(i) Ld. Counsel for the Defendants has submitted that the present OA is filed only in respect of Inland Letter Credit Facility (ILC) of Rs.2,02,17,153.77 with further interest @18.25% p.a. He submits that the Applicant is not entitled to charge interest more than 6% since the sanction letter does not mention about any interest thus, the alleged outstanding cannot be termed as legally recoverable debt as per Section 2(g) of the RDB Act and thus, the present OA deserves to be dismissed. He also submitted that Applicant has failed and neglected to provide details such as principal amount, rate of interest charged, penal interest as laid down by the Hon’ble Supreme Court in the matter of Central Bank of India Vs. Ravindra and Ors.

(ii) Per contra, Ld. Counsel for the Applicant has submitted that the interest rate in respect of the ILC is governed by the RBI Guidelines which changed from time to time, therefore, the Applicant charged the interest at the rate of 16.25%, 17.25% & 17.75%. He further submitted that the Defendants have failed to counter to prove that such rate of interest was never allowed by the RBI to enable the Applicant to charge, therefore, the objection of the Defendants of over interest charge is false and liable to be rejected.

(iii) Record reveals that as per the sanction letter dated 20.03.2009 (Exhibit “F”) of list of documents, the Defendants were agreed for interest as applicable rate of interest as per RBI guidelines. As per Statement of Account (Exhibit “O” of list of documents), the Applicant Bank charged the rate of interest at the rate of 16.25%, 17.25% & 17.75% and in the present OA, the Applicant is claiming future interest @18.25% p.a. compounded with monthly rests from the date of filing of the present OA till its realization.

(iv) The contract between the Applicant and the Defendants comes to an end. After the filing of OA, as per the provisions of section 19(20) of the Recovery of Debts and Bankruptcy Act, 1993, which is analogous to Section 34 of the CPC, the Tribunal/Court has discretion in awarding pendentelite and future interest. In the cases reported in State Bank of India vs. Sarathi Textiles & Ors. 2008(3) SCALE 409, C. K. Sansankan Vs. Dhanlakshmi Bank Ltd. 2009(2) D.R.T.C. 320 S.C. and Sardar Associates and Others Vs. Punjab & Sind Bank and others, AIR 2010 (SC) 218 it was held that it is the discretion of the court toward the pendentelite and future interest which has to be exercised fairly. I am also supported the view taken by Hon’ble Supreme Court in Central Bank of India Vs. Ravindra and others reported in 2001 SC page 3095. On the basis of the fore going discussion and considering the present fall in rate of interest, I am of the opinion that interest of justice will be served if pendentelite and future interest is awarded at the rate of 15% p.a. (simple) from the date of filing of the present OA till its realization.

(v) In view of the above, the objection of the Defendants is hereby disposed off. (B) Whether the Defendants have paid amount of Rs.3,59,82,890 which is total satisfaction of claim of Applicant Bank?

(i) Ld. Counsel for the Defendants has submitted that as per notice under Section 13(2) of the SARFAESI Act, 2002 dated 12.08.2009, the Applicant has claimed amount of Rs.4,09,61,097.95 with accrued interest thereof under ILC facility. Further, the Applicant issued notice dated 17.04.2010 for Rs.3,06,01,940/- without interest from 01.08.2009 and the present OA has been filed for amount of Rs.1,89,92,208.77 under ILC facility with interest upto 19.05.2011 and for further interest at the rate of 18.25% p.a. and amount of Rs.12,54,945/- payable towards cost and charges, total amount of Rs.2,02,47,155.77. He submitted that the Defendant No.1 have paid Rs.3,63,14,413/- from 29.07.2010 to 09.08.2011, therefore, nothing is due and payable to the Bank. He further submitted that the Applicant cannot charge exorbitant interest 18.25% on the same amount after 09.08.2011.

(ii) He further stated that the Applicant has failed to give credit of Fixed Deposit Receipts of amount Rs.1.50 crores which was matured on December, 2008, thus, the Defendant No.1 is entitled for credit of interest on amount of Rs.1.50 crores from December, 2008 till realization. He also submitted that the Bank is holding a sum of Rs.10 lakhs in Fixed Deposit since 01.02.2009 by way of margin money in respect of the Bank Guarantee that has been issued on behalf of the Defendant No.1 in favour of one Alstom India Pvt. Ltd. The same is not likely to be involved as the Defendant No.1 has been duly discharged from the obligation towards the said party.

(iii) Ld. Counsel for the Defendants also submitted that the Applicant has not produced statement of account with correct rate of interest as per the sanction letter. In the absence of any clear statement of account, the bank is not entitled to claim any amount.

(iv) On the other hand, Ld. Counsel for the Applicant has submitted that the Applicant has produced the statement of claim to show the credits for Rs.3,59,82,890/- paid between 01.08.2009 to 23.05.2014, given by the Applicant to various amount being paid by the Defendant No.1 and after giving due consideration, a total sum of Rs.9,79,36,224.05 (as on 21.08.2020) is due and payable by the Defendant.

(v) I have gone through the record, it reveals that the Applicant issued notice under Section 13(2) of the SARFAESI Act, 2002 on 12.08.2009 and demanded a sum of Rs.3,26,88,974/- in respect of the ILC, with further interest at the contractual rate of interest from 01.08.2009. The Applicant also issued notice dated 17.04.2010 to the Defendants and called upon the Defendants to pay the sum of Rs.3,06,01,940/- in respect of the ILC with interest, and the present OA has been filed on 20.05.2011 for recovery of amount of Rs.2,02,47,153.77

in respect of the ILC Loan with interest @18.25% p.a. compounded with monthly rests.

(vi) The statement of accounts (Exhibit “O” of list of documents) produced by the Applicant reveals that the Defendant No.1 paid the following amount from 12.08.2009 to 20.05.2011: Sr. No. Date Amount (in Rs.)

1. 30.12.2010 106,41,731/-

2. 11.01.2011 250,978/-

3. 12.01.2011 29,500/-

4. 17.01.2011 6,93,104/-

5. 18.01.2011 1,31,052/-

6. 10.03.2011 15,96,000/-

7. 10.03.2011 3,20,017/-

8. 31.03.2011 1,02,36,484/-

Total 2,38,98,866/-

(vii) As per the statement of account, the amount paid by the Defendants as well as amount recovered from the secured assets is Rs.2,38,98,866/- whereas the demand notice under Section 13(2) of the SARFAESI Act, 2002 was issued for an amount of Rs.3,26,88,974/- alongwith interest in respect of ILC.

(viii) The present OA has been filed on 20.05.2011 for recovery of amount of Rs.2,02,47,153.77 in respect of the ILC Loan with interest @18.25% p.a. compounded with monthly rests. After filing the present OA, the Defendants paid the following amounts: Sr. No. Date Amount (in Rs.)

1. 22.07.2011 2,78,190

2. 01.08.2011 3,48,496/-

3. 15.05.2012 26,04,446/-

4. 01.06.2012 8,36,231/-

5. 01.06.2012 3,17,991/-

6. 19.07.2012 9,13,960/-

Total 52,99,314/-

(ix) The Defendant No.1 paid an amount of Rs.52,99,314/- out of the total claim amount of OA i.e. Rs.2,02,47,153.77.

(x) Admittedly, in the claim affidavit filed by the Applicant on 16.08.2013, it is stated that the Defendant No.1 have lifted certain hypothecated Pipes against payment from the Applicant and that so far, the Applicant have received a sum of Rs.52,99,314/- from the sale of hypothecated pipes through the Defendant No.1 thus, it is prayed to issue recovery certificate for an amount of Rs.1,49,17,839.77 in respect of the ILC Loan with interest 18.25% p.a. compounded with monthly rests from the date of filing of the OA.

(xi) In these facts and circumstances, the present OA deserves to be allowed against the Defendant No.1 to 7 for an amount of Rs.1,49,17,839.77 (Rupees One Crore Forty Nine Lakhs Seventeen Thousand Eight Hundred Thirty Nine and paise Seventy Seven only) in respect of the ILC Loan with interest 15% p.a. from the date of filing of the OA, till its realization.

(xii) It is important to note here that during the pendency of the OA, the Applicant received an amount of Rs.1,24,10,288/- from the sale of hypothecated goods however, the said amount was deposited with the Ld. Registrar, DRT-II, Mumbai.

(xiii) Therefore, the Applicant shall first adjust the amount of Rs.1,24,10,288/-, and the remaining amount shall be recovered from the FDRs which are lying with the Applicant Bank. Short fall, if any, shall be recovered from the sale of personal moveable and immovable assets of the Defendants.

(C) Whether the Applicant sold the hypothecated goods at very less price?

(i) Ld. Counsel for the Defendants has submitted that the Applicant sold the hypothecated goods at very less price for Rs.1,24,000,000/- whereas the actual price of Rs.3 crores, therefore, the Defendant No.1 incurred loss of Rs.1,75,00,000/- . Further, he submitted that the said hypothecated goods were kept in the security guard provided by Defendant No.1 but under control of the Applicant, the Defendant No.1 had taken over house on rent of Rs.2 lakhs per month from year 2009 till November, 2018 for the said hypothecated goods. He also submitted that the Applicant is negligent in not selling the said hypothecated goods from year 2009 till November, 2018, therefore, the Applicant is liable to pay the charges of the said security guard and rent from year 2009 till November, 2018 which comes to Rs.3 crore approximately, therefore, the Applicant is liable to reimburse the amount of Rs.3 crores to Defendant No.1.

(ii) He also stated that the Defendant No.1 had supplied the goods value of Rs.9.50 crores to one Company viz. PSL Limited. The Defendant No.1 has given power of attorney to the Applicant to recover the dues of the Defendant No.1 directly from his debtors PSL however, the Applicant has wrote a letter to the PSL not to deliver or make payment to Defendant No.1 worth Rs.8,08,32,878/-. Due to negative approach of the Applicant, the Applicant did not permit the Defendant No.1 to sell the said goods through PSL Limited in the market and realize the value of the same. Ultimately, the said goods were deteriorated and the value of the same becomes zero.

(iii) He further submitted that the Defendant No.1 filed Suit No.149/2017 before the Hon’ble High Court against the Applicant claiming amount of Rs.16,94,69,360/- with further interest on Rs.10,03,10,858/- at the rate 24% p.a., for negligence of Applicant towards hypothecated goods sold to PSL Ltd. and the said goods deteriorated/damaged without any realize value. The said suit is still pending before the Hon’ble High Court of Bombay.

(iv) Per contra, Ld. Counsel for the Applicant bring on record the deposit of aforesaid sum of Rs.1,24,10,288/- which was realized from the auction of the hypothecated steel. He submitted that since the Defendants were given liberty to participate in the said auction thus, the objection of the Defendants that the Applicant had auctioned the hypothecated assets at a very less price, could not be acceptable.

(v) I have gone through the record, it reveals that the Applicant has sold the hypothecated goods for an amount of Rs.1,24,10,288/- in terms of the order dated 21.08.2018 passed by the Hon’ble Bombay High Court. The Applicant deposited the said amount with the Registrar, DRT-II, Mumbai. Even otherwise, the Defendants were given liberty to participate in the said auction. Therefore, the objection of the Defendant No.1 to 7 is not sustainable.

(vi) Insofar as objection pertaining to the gods supplied to PSL Limited is concerned, since the suit pertaining to the alleged goods supplied to PSL Limited, is pending before the Hon’ble High Court of Bombay. Therefore, the objection raised by the Defendants is not maintainable hence, rejected. (D) Whether Flat No.3, Meenaxi Building, Shrihind CHS Ltd., 23, Duncan Causeway Road, Sion, Mumbai-22 is mortgaged to Applicant?

(i) Ld. Counsel for the Applicant submitted that the Applicant took possession of Flat No.3. The Defendant No.10 through his mother and natural Guardian Mrs. Mousami H. Doshi (Defendant No.9) filed SA No.6/2010 before Ld. DRT-II, Mumbai. The Ld. DRT-II, vide order dated 01.04.2010 allowed the Applicant to continuing symbolic possession and redeliver for possession of the said Flat to Defendant No.10 to the extent of his share and restrained the Applicant not to proceed under SARFAESI Act, until decision of Hon’ble High Court. The said matter is disposed of by Ld. DRT-II, on 30.10.2012. Being aggrieved by the said order dated 01.04.2010, the Applicant filed Appeal (L) No.581/2010 before the Hon’ble DRAT, Mumbai which is pending for hearing.

(ii) Since, the SARFAESI action of the Applicant Bank in respect of the above property is under challenged, therefore, no order is passed in respect of the said property. (E) Whether the OA is signed by the Authorized person?

Record reveals that the present OA is filed by Shri H.S. Krishnamurthy, Chief Manager & Power of Attorney Holder of the Applicant who is fully conversant with the facts of the case and is competent to sign, verify and institute the present OA. Even otherwise, the OA cannot be dismissed on this technical ground as held by Hon’ble Supreme Court in UBI Vs Naresh Kumar & Ors., AIR 1997 SC 3. Therefore, the objection raised by the Defendant No.2 is declined.

26. The witness of the Applicant has fully corroborated the averments made in the OA/TA, even otherwise the whole case of the Applicant is based on documents and the witness has duly proved all these documents as against the Defendants. In my view there is no question of disbelieving the evidence led by the Applicant and the Applicant has proved its case beyond reasonable doubt. The liability of Defendant No.1 to 7 is joint and several. The Defendant No.8 to 10 are the co-parceners and the mortgage property belonging to them is under challenged before the Hon’ble DRAT, Mumbai, therefore, no order is passed against the property of these Defendants.

27. In the light of above discussions, the Original Application deserves to be allowed against the Defendant No.1 to 7.

O R D E R

(i) The present O.A. is hereby allowed and Defendant No.1 to 7 are hereby directed to pay to the Applicant Bank, within a period of 60 days, a sum of Rs.1,49,17,839.77 (Rupees One Crore Forty Nine Lakhs Seventeen Thousand Eight Hundred Thirty Nine and paise Seventy Seven only) in respect of the ILC Loan with interest 15% p.a. from the date of filing of the OA, till its realization (after adjusting the amount recovered by the Applicant from the sale of the hypothecated goods for an amount of Rs.1,24,10,288/-).

(ii) The remaining amount shall be recovered from the FDRs lying with the Applicant Bank. Short fall, if any, shall be recovered from the sale of personal moveable and immovable assets of the Defendant No.1 to 7.

(iii) Defendant No.1 to 7 are hereby directed not to deal with their properties till further direction of Ld. Recovery Officer.

(iv) The Applicant Bank is hereby directed to file the revised statement of account before the Ld. Recovery Officer of this Tribunal.

(v) Defendant No.1 to 7 shall also pay the cost and expenses of the OA/TA.

(vi) Recovery Certificate be issued forthwith and be sent to the Recovery Officer of this Tribunal. Copy of this order be sent to the parties as per rules. File be consigned to record.

Place: Mumbai.

(Dr. Rekha G. Dhakar) Date: 23.02.2024

Presiding Officer,

DRT-1, Mumbai

SC/-