BANK OF BARODA vs HER COMPLETE WOMEN on 22 February 2024

J U D G M E N T

1. The Original Application has been filed by the Applicant against the Defendants for recovery of following amounts: i. Rs. 10,98,907.16 (Rupees Ten Lakh Ninety Eight Thousand Nine Hundred Seven and Paise Sixteen Only) under the Cash Credit facility with further interest mentioned herein below. ii. Rs. 9,47,274.31 (Rupees Nine Lakh Forty Seven Thousand Two Hundred Seventy Four and Paise Thirty One Only) under Term Loan account with further interest mentioned herein below. Aggregating to Rs. 20,46,181.47 (Rupees Twenty Lakh Forty Six Thousand One Hundred Eighty One and Paise Forty Seven Only) with further interest at the rate of 12.40 % p.a. & 10.50 % p.a. respectively with monthly rest plus 2% penal interest from the date of filing Original Application till its realisation.

2. Facts as succinctly set out in the present OA/TA are that Defendant No. 1 is a proprietorship concern represented by its proprietress, Defendant No. 2. Defendant No. 3 to 5 are the Guarantors of Defendant No. 1 & 2.

3. It is stated that in or about 16.03.2015 at the request of Defendant No. 1 through its proprietress i.e. Defendant No. 2. Pursuant to the said request, Applicant Bank vide sanction letter dated 16.03.2015 has sanctioned and granted cash credit (Hypothecation of stock and book debts) limit of Rs. 9.90 Lakh and Term Loan of Rs. 15 Lakh, aggregating to Rs. 24.90 Lakh to the Defendant No. 1 & 2.

4. In consideration of sanction the aforesaid facilities, Defendants executed following loaning and security documents on 17.03.2015 in favour of the Applicant: i. Demand Promissory Note in respect of cash credit facility & Term Loan facility ii. Letter of Sole Proprietorship iii. Letter of Continuing Security in respect of Cash Credit facility & Term Loan facility iv. Letter of Installment with acceleration clause v. Letter of Undertaking in respect of Term Loan & cash credit. vi. Letter of Pledge in respect of Term Loan & Cash Credit vii. Composite Hypothecation Agreement (For Stocks/ Book Debts/ Vehicles/ Movable Machinery) in respect of Term Loan & Cash Credit viii. Composite Undertaking cum declaration in respect of cash credit & Term Loan ix. Power of Attorney in respect of Book Debts.

5. In order to further secure the aforesaid facility, Defendant No. 3 & 5 executed General Form of guarantee in respect of Term Laon and Cash credit.

6. It is further stated that on 23.03.2017, the Defendants have acknowledged their liability in respect of the cash credit and term loan facilities.

7. However, after availing the aforesaid facility, the Defendants failed to regularise the accounts and pay the equated monthly installment with interest thus, the account was classified as NPA on 29.05.2017. Thereafter, the Applicant through their Advocate Notice dated 22.11.2017 called upon the Defendants to pay to outstanding dues, but failed to do so. Hence, the present OA has been filed.

8. Notice was issued to the Defendants. Despite service, none appeared for the Defendant No. 1 to 5 nor filed the WS thus, they were proceeded ex-parte vide order dated 24.08.2022.

9. The Applicant Bank has produced all the Original Loan documents and other relevant documents along with their Claim Affidavit filed on 20.06.2022 through Chief Manager Mr. Jayaraman.

10. I have heard the Ld. Counsel for the Applicant Bank and perused the record.

11. The witness of the Applicant Bank has fully corroborated the averments made in the OA, even otherwise the whole case of the Applicant Bank 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 Bank and the Applicant Bank has proved its case beyond reasonable doubt. The liability of Defendant No. 1 to 5 is joint and several.

12. In view of the submission made herein above the Original Application filed by the Applicant Bank deserves to be allowed against the Defendant No. 1 to 5.

13. The Applicant claiming penal interest @ 2% p.a. with respect of term loan and cash credit facilities, however, the same is hereby declined.

O R D E R

(i) I allow the present O.A. and direct the Defendant No. 1 to 5, to pay to the Applicant, jointly and severally, within a period of 60 days, a sum of following amount:

a. Rs. 10,98,907.16 (Rupees Ten Lakh Ninety Eight Thousand Nine Hundred Seven and Paise Sixteen Only) under the Cash Credit facility with further interest mentioned herein below.

b. Rs. 9,47,274.31 (Rupees Nine Lakh Forty Seven Thousand Two Hundred Seventy Four and Paise Thirty One Only) under Term Loan account with further interest mentioned herein below. Aggregating to Rs. 20,46,181.47 (Rupees Twenty Lakh Forty Six Thousand One Hundred Eighty One and Paise Forty Seven Only) with further interest at the rate of 12.40

% p.a. & 10.50 % p.a. respectively from the date of filing Original Application till its realisation.

(ii) Failing which the aforesaid amount shall be recovered from the sale of hypothecated assets, immoveable assets as well as other personal moveable of the Defendants.

(iii) Defendants are hereby directed not to deal with their properties till further direction of Ld. Recovery Officer.

(iv) Defendants shall also pay the cost and expenses of the OA.

(v) 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 : 22.02.2024

Presiding Officer, DRT-1, Mumbai.

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